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What changed in SMITHFIELD FOODS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SMITHFIELD FOODS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+522 added−523 removedSource: 10-K (2026-03-24) vs 10-K (2025-03-25)

Top changes in SMITHFIELD FOODS INC's 2025 10-K

522 paragraphs added · 523 removed · 362 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

75 edited+52 added−57 removed49 unchanged
Biggest changeFor more information regarding environmental regulation of our operations, see “Risk Factors—Risks Relating to Government Regulations—Governmental authorities may take further action restricting our ability to produce and/or sell livestock or adopt new regulations impacting our production or processing operations, which could adversely affect our business.” We follow a number of other policies and protocols to reduce the impact of our hog production operations on the environment, including: • the employment of environmental management systems; • ongoing employee training regarding environmental controls; • walk-around inspections at all sites by trained personnel; • formal emergency response plans that are regularly updated; and • collaboration with manufacturers regarding testing and developing new equipment.
Biggest changeFor more information regarding environmental regulation of our operations, see “Risk Factors—Risks Relating to Government Regulations—Governmental authorities may take further action restricting our ability to produce and/or sell livestock or adopt new regulations impacting our production or processing operations, which could adversely affect our business.” Our Mexican operations also are subject to regulation by Mexican environmental authorities.
We reward innovation among our employees through an annual competition in which team members who have been the impetus for improvements that led to cost savings or greater efficiency receive cash awards. 11 • We offer our team members and their families a range of benefits, including medical, dental and vision insurance, prescription drug plans, retirement savings, paid vacation and sick time, paid leave, wellness and mental health programs, employee assistance services and other resources to support their health and wellness.
We reward innovation among our employees through an annual competition in which team members who have been the impetus for improvements that led to cost savings or greater efficiency receive cash awards. • We offer our team members and their families a range of benefits, including medical, dental and vision insurance, prescription drug plans, retirement savings, paid vacation and sick time, paid leave, wellness and mental health programs, employee assistance services and other resources to support their health and wellness.
Our Growth Strategies 3 The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth. Drive Growth of Packaged Meats Our Packaged Meats segment is core to our growth strategy and has been a major driver in transforming our business since 2014.
Our Growth Strategies The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth. Drive Growth of Packaged Meats Our Packaged Meats segment is core to our growth strategy and has been a major driver in transforming our business since 2014.
We will supply animal feed and other supplies and provide certain support services to Murphy Family Farms. • On February 24, 2025, we became a member of a North Carolina-based company, VisionAg Hog Production, LLC (“VisionAg”), by contributing $450,000 in cash in exchange for a 9% minority interest.
We supply animal feed and other supplies and provide certain support services to Murphy Family Farms. • On February 24, 2025, we became a member of a North Carolina-based company, VisionAg Hog Production, LLC (“VisionAg”), by contributing $450,000 in cash in exchange for a 9% minority interest.
In our logistics and distribution network, we have reduced transportation and warehousing costs through transportation efficiencies, maximizing utilization of our storage and trucking assets, improving supply and demand 5 planning and optimizing inventory levels. These actions increase profitability and improve customer service levels, which we believe is essential to being a supplier of choice.
In our logistics and distribution network, we have reduced transportation and warehousing costs through transportation efficiencies, maximizing utilization of our storage and trucking assets, improving supply and demand planning and optimizing inventory levels. These actions increase profitability and improve customer service levels, which we believe is essential to being a supplier of choice.
As a leading food company, we believe that we effectively compete through our high-quality products, leading brands, expansive channel reach, scaled distribution network, our significant focus on controlling our input costs 10 (including through internally sourced hogs) and our strong financial profile.
As a leading food company, we believe that we effectively compete through our high-quality products, leading brands, expansive channel reach, scaled distribution network, our significant focus on controlling our input costs (including through internally sourced hogs) and our strong financial profile.
We undertake no obligation to update any forward-looking statements made in this Annual Report on Form 10-K to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events, except as required by law. 18
We undertake no obligation to update any forward-looking statements made in this Annual Report on Form 10-K to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events, except as required by law.
From the process’s origin at the grain farms to the ultimate step of delivering hogs to our processing plants, we monitor the vertically integrated process at every juncture to ensure a premium level of product, assurance of supply and control of input costs.
From the process’s origin at the grain farms to the ultimate step of delivering hogs 7 to our processing plants, we monitor the vertically integrated process at every juncture to ensure a premium level of product, assurance of supply and control of input costs.
Private Securities Litigation Reform Act of 1995 about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market 16 growth, are forward-looking statements.
Private Securities Litigation Reform Act of 1995 about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements regarding our strategy, future financial condition, future operations, projected costs, prospects, plans, objectives of management, and expected market 14 growth, are forward-looking statements.
Smithfield is an American food company that employs approximately 34,000 people in the U.S. and 2,500 people in Mexico. Smithfield’s portfolio includes high-quality iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. Smithfield is a majority owned subsidiary of Hong Kong-based WH Group Limited (“WH Group”). Our Mission Good food.
Smithfield is an American food company that employs approximately 32,000 people in the U.S. and 2,500 people in Mexico. Smithfield’s portfolio includes high-quality iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. Smithfield is a majority owned subsidiary of Hong Kong-based WH Group Limited (“WH Group”). Our Mission Good food.
Regulatory enforcement actions for violations of federal, state and local regulations may include seizure and condemnation of products, product recalls, cease and desist orders, injunctions and monetary, civil or criminal penalties. Policies and Procedures Our plants, as well as those of our hog suppliers, have all developed quality programs following the standards set in the USDA’s Process Verified Program (“PVP”).
Regulatory enforcement actions for violations of federal, state and local regulations may include seizure and condemnation of products, product recalls, cease and desist orders, injunctions and monetary, civil or criminal penalties. Our plants, as well as those of our hog suppliers, have all developed quality programs following the standards set in the USDA’s Process Verified Program (“PVP”).
We sell our branded and private label packaged meats and fresh pork products through a variety of channels, including: • national and regional retailers (primarily grocery supermarket chains, independent grocers and club stores); • the foodservice industry, including foodservice distributors, fast food and other restaurants, hotel chains and other institutional customers; • industrial customers who use our products as raw materials in their finished goods production, including prepared meals, byproducts for pharmaceutical production and pet food treats and ingredients; and • export sales to international retailers and wholesale distributors, primarily in North American, Asian, Latin American and other emerging markets.
We sell our branded and private label packaged meats and fresh pork products through a variety of channels, including: • national and regional retailers (primarily grocery supermarket chains, independent grocers and club stores); 5 • the foodservice industry, including foodservice distributors, fast food and other restaurants, hotel chains and other institutional customers; • industrial customers who use our products as raw materials in their finished goods production, including prepared meals, by-products for pharmaceutical production and pet food treats and ingredients; and • export sales to international retailers and wholesale distributors, primarily in North American, Asian, Latin American and other emerging markets.
Hog Production Segment The Hog Production segment consists of our hog production operations in the U.S., which produce and raise our hogs on numerous company-owned farms and farms that are owned and operated by third-party contract farmers. Nearly all of the hogs produced by this segment are processed by our Fresh Pork segment.
Hog Production Segment The Hog Production segment consists of our hog production operations in the U.S., which produce and raise our hogs on numerous company-owned farms and farms that are owned and operated by contract farmers. Nearly all of the hogs produced by this segment are processed by our Fresh Pork segment.
Availability of Securities and Exchange Commission (“SEC”) and Corporate Governance Documents The Company makes available its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 on its website at investors.smithfieldfoods.com.
Availability of Securities and Exchange Commission Documents The Company makes available its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 on its website at investors.smithfieldfoods.com.
These reports are accessible under the caption, “Investors – SEC Filings” on the Company’s website and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. These filings are also available on the SEC’s website at www.sec.gov.
These reports are accessible under the caption, “Investors – SEC Filings” on the Company’s website and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”). These filings are also available on the SEC’s website at www.sec.gov.
We produce packaged meats products across 31 processing plants in 18 states. • Fresh pork . We process hogs at eight processing plants in six states, with the aggregate processing capacity of our collective processing plants of approximately 108,000 hogs per day. • Value-added items.
We produce packaged meats products across 30 processing plants in 17 states. • Fresh pork . We process hogs at eight processing plants in six states, with the aggregate processing capacity of our collective processing plants of approximately 108,000 hogs per day. • Value-added items.
Our facilities are also designed to promote regulatory compliance and worker safety, as well as reduced waste and emissions, while seeking to comply with applicable environmental standards. Our Mexico operations produce 1.8 million hogs annually at 115 company-owned farms and processes 1.5 million hogs at one manufacturing plant.
Our facilities are also designed to promote regulatory compliance and worker safety, as well as reduced waste and emissions, while seeking to comply with applicable environmental standards. 6 Our Mexico operations produce 1.8 million hogs annually at 134 company-owned farms and processes 1.4 million hogs at one manufacturing plant.
Recent Developments Initial Public Offering On January 29, 2025, we completed our initial public offering (“IPO”) of 26,086,958 shares of common stock, which represents 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711.
Initial Public Offering On January 29, 2025, we completed our initial public offering (“IPO”) of 26,086,958 shares of common stock, representing 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711.
Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about: • our ability to capture synergies between our Packaged Meats and Fresh Pork segments; • our ability to execute on our strategy to optimize the size of our hog production operations; • our ability to anticipate and meet consumer trends and interests through product innovation; • the size of our addressable markets, market share and market trends, including our ability to drive organic growth in our business through our Packaged Meats and Fresh Pork segments; • anticipated trends, developments and challenges in our industry, business and the highly competitive markets in which we operate; • our ability to mitigate higher input costs through productivity improvements in our operations (including analytics and task automation), various procurement strategies and the use of derivative instruments; • our dependence on third-party suppliers and our ability to mitigate any disruption or inefficiency in our supply chain and/or operations; • our expectations regarding our hog production transformation strategy and our ability to achieve segment production targets; • fluctuations in our quarterly results of operations due to the seasonal nature of our business; • our ability to attract and retain employees and maintain our corporate culture; • our ability to prevent cyberattacks, other cyber-incidents, security breaches or other disruptions of our information technology systems; • our ability to defend litigation brought against us successfully and the sufficiency of our accruals for related contingent losses; • compliance with laws and regulations, including environmental, cybersecurity and tax laws and regulations, that currently apply or may become applicable to our business both in the United States and Mexico and our expectations regarding various laws and restrictions that relate to our business; • our ability to capitalize on export markets; • our ability to execute on acquisitions, joint ventures and divestitures; • legal, regulatory, or market measures to address climate change and our ability to achieve our climate-related goals and strategies; • future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; • the sufficiency of our cash and cash equivalents and the availability of our committed credit facilities to meet our liquidity needs; • our ability to achieve our financial and operational targets; 17 • our ability to maintain our investment grade ratings; • our expectations regarding expenses, such as stock-based compensation expenses; • fluctuations in the values of our open derivative contracts and pension obligations and related assets; • impairment in the carrying value of our goodwill or intangible assets; • our ability to achieve or maintain our targeted Ratio of Net Debt to Adjusted EBITDA and minimum liquidity levels; and • our dividend policy and our ability to pay dividends.
Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about: • our ability to capture synergies between our Packaged Meats and Fresh Pork segments; • our ability to execute on our strategy to optimize the size of our hog production operations; • our ability to anticipate and meet consumer trends and interests through product innovation; • the size of our addressable markets, market share and market trends, including our ability to drive organic growth in our business through our Packaged Meats and Fresh Pork segments; • anticipated trends, developments and challenges in our industry, business and the highly competitive markets in which we operate; • our ability to mitigate higher input costs through productivity improvements in our operations (including analytics and task automation), various procurement strategies and the use of derivative instruments; • our dependence on third-party suppliers and our ability to mitigate any disruption or inefficiency in our supply chain and/or operations; • our expectations regarding our hog production transformation strategy and our ability to achieve segment production targets; • fluctuations in our quarterly results of operations due to the seasonal nature of our business; • our ability to attract and retain employees and maintain our corporate culture; • our ability to prevent cyberattacks, other cyber-incidents, security breaches or other disruptions of our information technology (“IT”) systems; • our ability to defend litigation brought against us successfully and the sufficiency of our accruals for related contingent losses; • compliance with laws and regulations, including environmental, cybersecurity and tax laws and regulations, that currently apply or may become applicable to our business both in the U.S. and Mexico and our expectations regarding various laws and restrictions that relate to our business; • our ability to capitalize on export markets; • our ability to execute on acquisitions, joint ventures and divestitures, including without limitation our ability to close our pending transaction with Nathan’s, which remains subject to regulatory approval from CFIUS and other closing conditions; • legal, regulatory, or market measures to address climate change and our ability to achieve our climate-related goals and strategies; • future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; • the sufficiency of our cash and cash equivalents and the availability of our committed credit facilities to meet our liquidity needs; 15 • our ability to achieve our financial and operational targets; • our ability to maintain our investment grade ratings; • our expectations regarding expenses, such as stock-based compensation expenses; • fluctuations in the values of our open derivative contracts and pension obligations and related assets; • impairment in the carrying value of our goodwill or intangible assets; • our ability to achieve or maintain our targeted ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) and minimum liquidity levels; and • our dividend policy and our ability to pay dividends.
We 7 believe that annual total capital expenditures in the near term are likely to be in the range of $400 million to $500 million inclusive of both repairs and maintenance and profit improvement projects. Capital expenditures could be more in certain years to ensure continuity of production in our older assets.
We believe that annual total capital expenditures in the near term are likely to be in the range of $350 million to $450 million inclusive of both repairs and maintenance and profit improvement projects. Capital expenditures could be more in certain years to ensure continuity of production in our older assets.
We coordinate deliveries and use backhauling to reduce overall transportation costs. Raw Materials Feed for Internally Sourced Hogs The primary raw materials for hog production are corn, soybean meal and wheat. Hogs consume grain during the grow-out period from wean to finish, which takes six months on average.
We coordinate deliveries and use backhauling to reduce overall transportation costs. Raw Materials Feed for Internally Sourced Hogs The primary raw materials for hog production are corn, soybean meal and wheat. Hogs consume grain during the grow-out period from wean to finish, which takes six months on average. Feed costs account for approximately 60% of our Hog Production raising cost.
Optimize Our Operations and Supply Chain to Decrease Our Cost Basis We have implemented many initiatives over the past several years to reduce costs and realize operational efficiencies. These initiatives have enabled us to offset inflation and enhance margins across our entire business.
Optimize Our Operations and Supply Chain to Decrease Our Cost Basis As part of our culture of continuous improvement, we have implemented many initiatives over the past several years to reduce costs and realize operational efficiencies. These initiatives have enabled us to offset inflation and enhance margins across our entire business.
Competing large, multi-brand consumer packaged food companies include Tyson Foods, Hormel Foods, Kraft Heinz, Pilgrims Pride, Maple Leaf Foods, Premium Brands and Conagra. These competitors are scaled, multinational corporations with substantial financial, marketing, research and development and other resources. Private, category-focused companies that we compete with include Boar’s Head and Johnsonville.
The protein industry is highly competitive. Competing large, multi-brand consumer packaged food companies include Tyson Foods, Hormel Foods, Kraft Heinz, Pilgrims Pride, Maple Leaf Foods, Premium Brands and Conagra. These competitors are scaled, multinational corporations with substantial financial, marketing, research and development (“R&D”) and other resources. Private, category-focused companies that we compete with include Boar’s Head and Johnsonville.
In connection with the transaction, we sold approximately 28,000 sows and the associated commercial hog inventories located on certain company-owned and contract farms in North Carolina to VisionAg. VisionAg is now a hog supplier to us and will supply approximately 600,000 hogs annually. In addition, we will supply animal feed and provide certain support services to VisionAg.
We additionally sold approximately 28,000 sows and the associated commercial hog inventories located on certain Company-owned and contract farms in North Carolina to VisionAg. VisionAg is now a hog supplier to us and supplies approximately 600,000 hogs annually. We supply animal feed and provide certain support services to VisionAg.
In our hog production operations, we use genetic lines of breeding stock that we own, which are considered trade secrets, as well as genetic lines that we license from third parties. We also sublicense rights to some of our strategic hog production partners. Sustainability Smithfield was an early mover in sustainability.
In our hog production operations, we use genetic lines of breeding stock that we own, which are considered trade secrets, as well as genetic lines that we license from third parties. We also sublicense rights to some of our strategic hog production partners.
Cumulatively, our top ten customers accounted for 38%, 37% and 36% of our consolidated sales in fiscal years 2024, 2023 and 2022. Manufacturing Facilities We manufacture packaged meats, fresh pork and value-added items at 39 processing plants across 19 different states: • Packaged meats .
Cumulatively, our top ten customers accounted for 42%, 39% and 39% of our consolidated sales in fiscal years 2025, 2024 and 2023. Manufacturing Facilities We manufacture packaged meats, fresh pork and value-added items at 38 processing plants across 18 different states: • Packaged meats .
(“Walmart”) is a customer of our Packaged Meats and Fresh Pork segments and accounted for approximately 13%, 12% and 12% of our consolidated sales in fiscal years 2024, 2023 and 2022, respectively. Walmart has been our customer for multiple decades. No other customer accounted for 10% or more of our consolidated sales during fiscal years 2024, 2023 and 2022.
(collectively “Walmart”), is a customer of our Packaged Meats and Fresh Pork segments and accounted for approximately 15%, 16% and 15% of our consolidated sales in fiscal years 2025, 2024 and 2023, respectively. Walmart has been our customer for multiple decades. No other customer accounted for 10% or more of our consolidated sales during fiscal years 2025, 2024 and 2023.
Our Mexican operations also are subject to regulation by Mexican environmental authorities. The Mexican federal, state and local authorities may, from time to time, adopt revisions to environmental rules and regulations, and/or changes in the terms and conditions of our environmental permits, with which we must comply.
The Mexican federal, state and local authorities may, from time to time, adopt revisions to environmental rules and regulations, and/or changes in the terms and conditions of our environmental permits, with which we must comply.
For more information regarding our Mexican operations, see “Item 1A. Risk Factors—Risks Relating to Our Business and Operations—We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy.” It is our policy to comply with all applicable law in the jurisdictions in which we do business.
Risk Factors—Risks Relating to Our Business and Operations—We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy.” It is our policy to comply with all applicable law in the jurisdictions in which we do business.
We pursue the registration of certain of our trademarks in the U.S. and in certain locations outside the U.S. to protect our brand names, products, and services around the world. Trademark registrations can generally be renewed as long as the trademarks are in use. 12 In December 2012, we entered into a license agreement with Nathan’s Famous.
We pursue the registration of certain of our trademarks in the U.S. and in certain locations outside the U.S. to protect our brand names, products, and services around the world. Trademark registrations can generally be renewed as long as the trademarks are in use.
We primarily use company-employed salespersons to sell our products, and we also engage independent brokers who work on a commission basis. Customers In fiscal year 2024, we sold our products to approximately 5,600 customers. Walmart Inc.
We primarily use company-employed salespersons to sell our products, and we also engage independent brokers who work on a commission basis. Customers In fiscal year 2025, we sold our products to approximately 4,300 customers. Walmart Inc., including its subsidiary Sam’s West, Inc.
We purchase the majority of our packaging materials under contracts with pricing formulas based on published raw material indices for the primary components of our packaging, which are typically resin and paperboard. We purchase most of the seasonings for our Packaged Meats segment from Saratoga Food Specialties, LLC (“Saratoga”).
We purchase the majority of our packaging materials under contracts with pricing formulas based on published raw material indices for the primary components of our packaging, which are typically resin and paperboard.
We are subject to recalls of our meat products in the event of suspected contamination or adulteration that could constitute a food safety hazard. We maintain a rigorous program of interventions, inspections and testing to reduce the likelihood of food safety hazards. Compliance with federal, state and local regulation is costly and time-consuming but remains one of our top priorities.
We are subject to recalls of our meat products in the event of suspected contamination or adulteration that could constitute a food safety hazard. We maintain a rigorous program of interventions, inspections and testing to reduce the likelihood of food safety hazards.
We employ automation in all of our plants to redeploy labor to higher value tasks, improve yields and drive efficiency by reducing complexity to lower our cost basis and help offset inflationary pressures.
This includes advancing technology and automation and strategically redeploying labor. We employ automation in our plants to redeploy labor to higher value tasks, improve yields and drive efficiency by reducing complexity. This lowers our cost basis and helps offset inflationary pressures.
Our ability to compete effectively depends on our capacity to execute across the following primary competitive factors: • taste; • product quality; • nutritional profile and dietary attributes; • product availability; • convenience; • price; • brand recognition and loyalty; and • the ability to identify and satisfy emerging consumer preferences. The protein industry is highly competitive.
We believe our diverse branded and private label product offerings allow us to compete effectively across channels and customer price points. 8 Our ability to compete effectively depends on our capacity to execute across the following primary competitive factors: • taste; • product quality; • nutritional profile and dietary attributes; • product availability; • convenience; • price; • brand recognition and loyalty; and • the ability to identify and satisfy emerging consumer preferences.
Approximately one-third of our fresh pork products, including the majority of hams, bellies and trimmings, is transferred to our Packaged Meats segment. Externally, we sell our fresh pork products to domestic retail, foodservice and industrial customers, as well as to export markets, including, among others, China, Mexico, Japan, South Korea and Canada.
Externally, we sell our fresh pork products to domestic retail, foodservice and industrial customers, as well as to export markets, including, among others, China, Mexico, Japan, South Korea and Canada.
Research and Development We conduct research and development activities to develop new and improved products for our customers, incorporate innovative ingredients, develop advanced pork processing equipment and methods and enhance the survival, health, growth and well-being of our animals.
Research and Development We conduct R&D activities to develop new and improved products for our customers, incorporate innovative ingredients, develop advanced pork processing equipment and methods and enhance the survival, health, growth and well-being of our animals. Our in-house food science R&D team consists of approximately 35 professionals focused on developing new and improved products and enhancing plant productivity.
Regulation We are subject to regulations relating to animal treatment, including the Humane Methods of Slaughter Act of 1978 governing our processing plants. Our processing facilities are subject to regular on-site examination, inspection and regulation by the USDA, and regular internal and third-party audits are conducted throughout the year.
Our processing facilities are subject to regular on-site examination, inspection and regulation by the USDA, and regular internal and third-party audits are conducted throughout the year.
The Hog Production segment also sells grains to external customers. Other Segments 2 Mexico. In Mexico, we own a 66% interest in Granjas Carroll de Mexico, S. de R.L. de C.V. (“Altosano”), which raises hogs and produces fresh pork products that are sold primarily to customers in Mexico.
The Hog Production segment also sells livestock feed and grains and provides transportation and other ancillary services to external customers. 2 Other Segments Mexico. In Mexico, we own a 66% interest in Granjas Carroll de Mexico, S. de R.L. de C.V.
Approximately 46% of our employees are covered by collective bargaining agreements or are members of labor unions, and approximately 8,000 of our employees are covered by collective bargaining agreements that will expire in 2025. Our corporate culture emphasizes responsibility, operational excellence and innovation at all levels, and consequently encourages input, initiative and new ideas.
Human Capital As of December 28, 2025, we employed approximately 32,000 individuals in the U.S. and approximately 2,500 in Mexico. Approximately 44% of our employees are covered by collective bargaining agreements or are members of labor unions. Our corporate culture emphasizes responsibility, operational excellence and innovation at all levels, 9 and consequently encourages input, initiative and new ideas.
Bioscience: Our Bioscience operations use raw materials from hogs that we process to manufacture heparin products, including an active pharmaceutical ingredient that mitigates the risk of blood clots. These intermediate products are sold to the healthcare industry for use in pharmaceutical drugs and medical devices.
(commonly known as “Altosano”), which raises hogs and produces fresh pork products that are sold primarily to customers in Mexico. Bioscience. Our Bioscience operations use raw materials from hogs that we process to manufacture heparin products, including an active pharmaceutical ingredient that mitigates the risk of blood clots.
In fiscal year 2024, the Fresh Pork segment sourced approximately half of its raw materials from our Hog Production segment and half from independent farmers with whom we partner across the U.S.
In fiscal year 2025, the Fresh Pork segment sourced approximately 40% of its raw materials from our Hog Production segment and the remainder from farmers with whom we partner across the U.S. Approximately one-third of our fresh pork products, including the majority of hams, bellies and trimmings, is transferred to our Packaged Meats segment.
Further Enhance Fresh Pork We continually seek greater efficiencies as we manufacture and market fresh pork products. Our capabilities and supply chain allow us to provide differentiated products and high service levels to our customers. We deliver a high-quality, consistently available supply to our Packaged Meats segment and maximize the value of our raw materials.
We believe that these proven strategies will drive profitable organic growth in our Packaged Meats segment. Further Enhance Fresh Pork We continually seek greater efficiencies as we manufacture and market fresh pork products. Our capabilities and supply chain allow us to provide differentiated products and high service levels to our customers.
Our Mexican processing plants are also subject to on-site examination, inspection and regulation by Mexican governmental agencies that perform functions similar to those performed by the USDA and the FDA. We believe that we are in substantial compliance with all applicable laws and regulations relating to the operations of our facilities.
Our Mexican processing plants are also subject to on-site examination, inspection and regulation by Mexican governmental agencies that perform functions similar to those performed by the USDA and the FDA. For more information regarding our Mexican operations, see “Item 1A.
We are also subject to state laws governing the care of livestock that is used in certain meat products sold within those states, including California Proposition 12 and Massachusetts Question 3. We believe that we are in substantial compliance with all applicable laws and regulations relating to the operations of our facilities.
We are also subject to state laws governing the care of livestock that is used in certain meat products sold within those states, including California’s Farm Animal Confinement Initiative (“Proposition 12”) and Massachusetts Question 3.
We develop breeding stock, optimize diets for our hogs at each stage of the growth process, feed our hogs and design hog containment facilities.
Contract farmers provide the initial facility investment, labor and front-line management through a pre-determined economic and commercial arrangement, and we provide the animals and the feed. We develop breeding stock, optimize diets for our hogs at each stage of the growth process, feed our hogs and design hog containment facilities.
According to the USDA, total U.S. pork product export volume was 3.2 million tons in 2024. 6 Sales and Marketing Our goal is to provide quality and value to the ultimate consumers of our packaged meats and fresh pork products.
Sales and Marketing Our goal is to provide quality and value to the ultimate consumers of our packaged meats and fresh pork products.
Workplace Safety The safety of our team members is paramount, and safety is embedded into our culture. Safety training starts on Day 1 and continues throughout employment. We require strict adherence to our rigorous health and safety policies from every team member and visitor at our facilities.
Safety training starts on Day 1 and continues throughout employment. We require strict adherence to our rigorous health and safety policies from every team member and visitor at our facilities. We practice a “stop work authority” policy, which empowers all our team members to halt production, without fear of retribution, if they believe something is unsafe.
SIPS is designed to provide the guidance needed to comply with regulatory standards, prevent injuries, manage risks and promote continuous improvement throughout our business. Performance is measured through various metrics, including internal improvement goals and external benchmarks, such as the annual U.S. Bureau of Labor Statistics Report.
SIPS is designed to provide the guidance needed to comply with regulatory standards, prevent injuries, manage risks and promote continuous improvement throughout our business.
Externally Sourced Hogs We procure hogs that we process in our Fresh Pork segment through multi-year, market-based supply agreements with independent suppliers, which provide us with a stable supply of high-quality hogs at market-indexed prices. The loss of any one supplier would not materially impact our business or operations.
Externally Sourced Hogs We procure hogs that we process in our Fresh Pork segment through multi-year, market-based supply agreements with independent suppliers, which provide us with a stable supply of high-quality hogs at market-indexed prices. A portion of our external hog supply is sourced from joint‑venture partners in which we hold minority interests, and which operate under long‑term supply arrangements.
We have methodically shifted our business mix to focus on this higher-margin segment over time. The segment contributed 59% of our sales and 105% of our overall operating profit in fiscal year 2024.
We have methodically shifted our business mix to focus on this higher-margin segment over time. The segment contributed 56% of our sales and 85% of our overall operating profit in fiscal year 2025. Our Packaged Meats segment is meeting consumers’ demand for protein with convenience, flavor and value, through our strong brand portfolio and private label offerings.
We continue to optimize the size of our company-owned hog production operations and procure a greater mix of hogs from independent suppliers with market-based supply agreements. Additionally, we continue to implement cost-saving initiatives in our retained hog production operations to improve our cost structure.
We are also focused on maximizing the best sales opportunity across more than 30 export markets around the world. Achieve Best-In-Class Hog Production Operations We continue to optimize the size of our company-owned hog production operations and procure a greater mix of hogs from independent suppliers with market-based supply agreements.
Our employee discount program offers discounts and savings in more than 25 categories, including electronics, food and entertainment. Benefits are available to all full-time team members but may vary because of geographic location or collective bargaining agreements. • We emphasize our team members’ professional development.
Benefits are available to all full-time team members but may vary because of geographic location or collective bargaining agreements. • We emphasize our team members’ professional development. We offer instructor-led training programs to promote and support the development of the next generation of leaders.
In connection with the transaction, we sold approximately 150,000 sows and the associated commercial hog inventories located on company-owned and contract farms in North Carolina to Murphy Family Farms. Murphy Family Farms is now a hog supplier to us and will supply approximately 3.2 million hogs annually.
We additionally sold approximately 150,000 sows and related inventories located on Company-owned and contract farms in North Carolina to Murphy Family Farms. Subsequent to the end of fiscal year 2024, on December 30, 2024, we sold the commercial hog inventories associated with such sows to Murphy Family Farms.
We will remain disciplined in our acquisition approach and maintaining our investment grade ratings, while pursuing opportunities that we believe will prove accretive to earnings and enhance our operational profile. Trends in Market Demand We operate in the large and growing global packaged and fresh meats market, which includes value-added fresh, refrigerated and frozen proteins.
We remain committed to optimizing our operations and supply chain. Trends in Market Demand We operate in the large and growing global packaged and fresh meats market, which includes value-added fresh, refrigerated and frozen proteins.
This technologically advanced facility is dedicated to developing new products, enhancing food safety and quality, exploring consumer insights and preferences and evaluating both our products and those of our competitors. Our animal scientists conduct research at farms across the country to improve the performance and well-being of our animals.
In 2011, we opened Smithfield’s Innovation Center near our headquarters in Smithfield, Virginia. This technologically advanced facility is dedicated to developing new products, enhancing food safety and quality, exploring consumer insights and preferences and evaluating both our products and those of our competitors.
In addition, we conduct genetic and genomic research to advance the proprietary genetics of our animals and foster specific traits that improve their overall performance. Human Capital As of March 13, 2025, we employed approximately 34,000 individuals in the U.S. and approximately 2,500 in Mexico.
Our animal scientists conduct research at farms across the country to improve the performance and well-being of our animals. In addition, we conduct genetic and genomic research to advance the proprietary genetics of our animals and foster specific traits that improve their overall performance.
Hog Production Reform We have taken a number of actions over the last couple of years to restructure and optimize the size of our hog production operations, including: • In May 2023, we made a decision to cease operations on a number of sow farms in Missouri.
Hog Production Reform We have taken a number of actions over the last couple of years to restructure and optimize the size of our hog production operations, including ceasing certain farm operations, terminating certain agreements with 3 underperforming contract farmers and reducing the size of our hog production business (“Hog Production Reform”).
Competition In our business, we participate across the value chain—from farm to finished products. We believe our diverse branded and private label product offerings allow us to compete effectively across channels and customer price points.
Competition In our business, we participate across the value chain—from farm to finished products.
Feed costs account for approximately 60% to 65% of our Hog Production raising cost. We have over 50 locations used for feed production and feed storage in the U.S., which are located near our farms, where we convert purchased grain into feed for our animals.
We have 49 locations used for feed production and feed storage in the U.S., which are located near our farms, where we convert purchased grain into feed for our animals. Feed grains are readily available from numerous sources at competitive prices, and we believe such raw materials to be in adequate supply.
These efforts range from buying lower-cost corn from local farmers near our feed mills to importing grain or soybean meal from South America from time to time. We seek to mitigate higher input costs through productivity initiatives to improve feed conversion, procurement initiatives and the use of derivative instruments to hedge a portion of forecasted future consumption economically.
We seek to mitigate higher input costs through productivity initiatives to improve feed conversion, procurement initiatives and the use of derivative instruments to hedge a portion of forecasted future consumption economically. We seek to stabilize pricing generally by purchasing grains through forward purchase contracts.
The remaining 13,043,479 shares of common stock were sold by our existing shareholder. Our existing shareholder granted the underwriters a 30-day option to purchase up to 3,913,042 additional shares of our common stock. On February 20, 2025, the underwriters partially exercised such option and purchased 2,506,936 additional shares of common stock from our existing shareholder.
The remaining 13,043,479 shares of common stock were sold by WH Group, through its indirect wholly owned subsidiary SFDS UK Holdings Limited (“SFDS UK”), our only shareholder at the time. WH Group granted the underwriters a 30-day option to purchase up to 3,913,042 additional shares of our common stock.
These regulations require, among other things, maintenance of separation distances between farms and nearby residences, schools, churches, public use areas, businesses, rivers, streams and wells and adherence to required construction standards. New or more stringent environmental laws or regulations that impose additional requirements on our operations or on us could increase the cost of doing business for us.
New or more stringent environmental laws or regulations that impose additional requirements on our operations or on us could increase the cost of doing business for us.
Quality Assurance and Food Safety Producing safe, wholesome products for our customers and ultimate consumers is our focus, and we operate under programs and policies that promote regulatory compliance and food safety and quality at every step of our value chain. 13 Regulation We are subject to extensive food safety regulation, including the Federal Meat Inspection Act of 1906, the U.S.
Regulation Quality Assurance and Food Safety We are subject to extensive food safety regulation, including the Federal Meat Inspection Act of 1906, the U.S.
Intellectual Property We rely on a combination of intellectual property laws, internal procedures and policies and contractual provisions to protect our intellectual property and proprietary rights.
While these programs are not new, we renewed our emphasis on education and awareness in 2025, ensuring employees are aware of all the resources that are available to promote health and wellness. 10 Intellectual Property We rely on a combination of intellectual property laws, internal procedures and policies and contractual provisions to protect our intellectual property and proprietary rights.
On our farms, innovative approaches to animal nutrition are increasing feed conversion and lowering our cost basis. Byproducts that were once considered waste are now used to create renewable natural gas through our biogas joint ventures and lifesaving pharmaceuticals through our bioscience business. Our culture of responsibility, operational excellence and innovation serves as a catalyst for our ongoing business transformation.
In addition, by-products that were once considered waste are now used to create renewable natural gas through our biogas joint ventures and lifesaving pharmaceuticals through our bioscience business.
We practice a “stop work authority” policy, which empowers all our team members to halt production, without fear of retribution, if they believe something is unsafe. We have implemented our Smithfield Injury Prevention System (“SIPS”), a comprehensive management system that outlines our safety and health policy requirements and includes rigorous validation of the management process.
We have zero tolerance for human rights abuses, including the use of child, forced or compulsory labor. We have implemented our Smithfield Injury Prevention System (“SIPS”), a comprehensive management system that outlines our safety and health policy requirements and includes rigorous validation of the management process.
Our Hog Production segment consists of more than 250 company-owned farms and more than 1,300 contract farms in the U.S. that raise our hogs for processing. Contract farmers provide the initial facility investment, labor and front-line management through a pre-determined economic and commercial arrangement, and we provide the animals and the feed.
Raw Materials for Fresh Pork Segment Internally Sourced Hogs In fiscal year 2025, we sourced approximately 40% of the hogs processed in our Fresh Pork segment’s facilities from our Hog Production segment. Our Hog Production segment consists of more than 240 company-owned farms and more than 1,300 contract farms in the U.S. that raise our hogs for processing.
We also require our ingredient suppliers to undergo annual food safety audits, the majority of which, to our knowledge, meet the requirements of a GFSI benchmarked standard. To drive adherence to these programs and policies, we employ data analytics to monitor food safety indicators and take corrective action if necessary.
We also require our ingredient suppliers to undergo annual 11 food safety audits, the majority of which, to our knowledge, meet the requirements of a GFSI benchmarked standard. Animal Care We are subject to regulations relating to animal treatment, including the Humane Methods of Slaughter Act of 1978 governing our processing plants.
The decision was driven by persistent livestock disease issues, underperforming operations and shifting industry supply and demand dynamics. • In fiscal years 2023 and 2024, we terminated certain agreements with underperforming contract farmers and closed certain farms in the eastern U.S. • On December 27, 2024, we became a member of a North Carolina-based company, Murphy Family Farms LLC (“Murphy Family Farms”), by contributing $3 million in cash in exchange for a 25% minority interest.
More recently, our efforts have included the following strategic actions: • In the fourth quarter of fiscal year 2024, we became a member of a North Carolina-based company, Murphy Family Farms LLC (“Murphy Family Farms”), by contributing $3 million in cash in exchange for a 25% minority interest.
Department of Agriculture (“USDA”), the U.S. share of the global pork export market increased to 26% in 2022 from 2% in 1990. While the European Union is currently the world’s largest pork exporter, the U.S., at number two, is emerging as a more cost-effective alternative due to lower feed and labor costs, according to the Agriculture and Horticulture Development Board.
Department of Agriculture (“USDA”), the U.S. share of the global pork export market increased to 30% in 2025 from 2% in 1990. In 2024, the U.S. surpassed the European Union to become the world’s largest pork exporter. According to the USDA, total U.S. pork product export volume was 3.5 million tons in 2025.
We also extend educational opportunities to team members’ dependents: in 2024, the Smithfield Scholarship Program awarded nearly $800,000 in college scholarships to 126 dependents of team members at 15 schools across eight states. • Our apprenticeship program, now in its fifth year, provides apprenticeship opportunities to internal and external candidates, high school graduates and military veterans, with the goal of developing the next generation of experienced tradespeople in our industry.
We also extend educational opportunities to team members’ dependents: in 2025, the Smithfield Scholarship Program awarded $576,000 in college scholarships to more than 100 students at 11 schools across seven states. • We want our team members to be proud of their part in supporting the places where we work and live.
We received net proceeds from the IPO of approximately $236 million after deducting underwriting discounts, commissions and fees. As a result of the IPO, our common stock is listed on the Nasdaq Global Select Market under the ticker “SFD.” European Carve-Out On August 26, 2024, we completed a carve-out and transfer of our European operations to WH Group.
On February 20, 2025, the underwriters partially exercised such option and purchased 2,506,936 additional shares of common stock from WH Group. We received net proceeds from the IPO of $236 million after deducting underwriting discounts, commissions and fees.
To attract and retain employees committed to these values, we recognize the importance of training and development, competitive compensation, and an uncompromising commitment to safety. • We value every person who contributes to our mission, regardless of age, color, disability, family or marital status, gender, national origin, veteran status or any other characteristic protected by applicable laws.
To attract and retain employees committed to these values, we recognize the importance of training and development, competitive compensation, and an uncompromising commitment to safety. The following highlights key aspects of our human capital management approach: • We strive to provide competitive compensation packages and to reward high performers.
Feed grains are readily available from numerous sources at competitive prices, and we believe such raw materials to be in adequate supply. We take an active role in the physical markets for grain and other feed ingredients throughout the world.
We take an active role in the physical markets for grain and other feed ingredients throughout the world. These efforts range from buying lower-cost corn from local farmers near our feed mills to importing grain or soybean meal from South America from time to time.
Removed
In fiscal year 2025, we expect that approximately 40% of the hogs processed by the Fresh Pork segment will be sourced from the Hog Production segment as a result of our new partnerships in Murphy Family Farms and VisionAg, which are described under “Recent Developments—Hog Production Reform” below.
Added
These intermediate products are sold to the healthcare industry for use in pharmaceutical drugs and medical devices. Recent Developments Sioux Falls Plant Construction On February 16, 2026, we announced that we had initiated the approval process to construct a new state-of-the-art combined fresh pork and packaged meats processing facility in Sioux Falls, South Dakota.
Removed
The European carve-out represents a strategic shift in our geographical footprint. Accordingly, the results of operations, assets and liabilities, and cash flows of the European operations have been condensed and reported as discontinued operations in the consolidated financial statements for all periods presented.
Added
The proposed facility would replace our existing 117-year-old plant currently located in Sioux Falls, South Dakota. Our preliminary estimate of the proposed investment is up to $1.3 billion over the next three years. This investment is contingent on approval by the Company’s board of directors as well as permitting and other regulatory approvals.
Removed
We plan to accelerate the growth of our Packaged Meats segment through several strategic initiatives, including: • continuing to shift our portfolio toward a higher mix of value-added and premium products, such as: • converting one-time seasonal commodity bone-in ham purchase occasions to increased unit sales of everyday, convenient products such as quarter-weight ham, Anytime Favorites ham and Prime Fresh sliced lunch meat; and • increasing penetration of higher-margin dry sausage products through expanding distribution points and manufacturing capacity; • harnessing our powerful brands to continue to expand product offerings and drive awareness, loyalty and increased market share; • leveraging the breadth of our platform and national and specialty brands to further penetrate dayparts and households; • expanding in under-indexed geographical locations and moving into new categories; • attracting new consumers, particularly younger demographics, through product and packaging innovation and effective and appealing marketing strategies while maintaining our promise to consumers to offer high-quality products for every budget; and • deepening our presence across our distribution channels through our integrated sales force, which leverages our scale and breadth to provide a unified, reliable and consistent customer experience.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA summary of our risks includes, but is not limited to, the following: • Our results of operations are cyclical and could be adversely affected by fluctuations in the commodity prices for meat, livestock (primarily hogs) and feed ingredients. • Disruption of our supply chain could adversely affect our business, financial condition and results of operations. • An inability to realize savings and efficiency gains could adversely affect profitability and we may be unable to achieve any or all of our financial and operational targets. • The food industry in which we operate is highly competitive, and our inability to compete successfully, or the effects of such competition, could adversely affect our business, financial condition and results of operations. • Changes in consumer preferences and failure to maintain favorable consumer perception of our brands and products could negatively impact our business. • Outbreaks of disease among or attributed to livestock can significantly affect production, the supply of raw materials, demand for our products and our business. • Our operations are subject to the general risks associated with the food industry, including perceived or real health risks related to our products or the food industry generally and risks associated with government regulations. • Product liability claims or product recalls can adversely affect our business reputation, expose us to increased scrutiny by federal and state regulators and may not be covered by insurance. • Any disruption of operations at one or more of our production facilities, distribution centers or cold storage facilities, including as a result of natural disasters, public health crises, political crises and instability, civil unrest and other catastrophic events or events outside of our control, could adversely affect our business, financial condition and results of operations. • Our reliance on third-party service providers can have an adverse effect on our business. • Due to seasonality or changes in our promotional activities, our revenue and operating results may vary from quarter to quarter. • Significant increases in the cost of distribution could adversely affect our business, financial condition and results of operations. • We are increasingly dependent on information technology, and our business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our information technology systems are otherwise disrupted. 19 • Our operations are subject to the risks associated with acquisitions, investments in joint ventures and divestitures. • We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy. • We depend on availability of, and satisfactory relations with, our employees. • We are subject to various risks relating to worker employment and health and safety. • We depend upon the continued services of certain key members of our senior management team, without whom our business operations could be significantly disrupted. • The consolidation of customers and/or the loss of our customers could adversely impact our business. • Impairment in the carrying value of goodwill or intangible assets could negatively impact our consolidated results of operations and net worth. • The loss of any trademark or other intellectual property right could enable other companies to compete more effectively with us. • Deterioration of economic conditions could negatively impact our business. • If tax laws change or we experience adverse outcomes resulting from examination of our tax returns or disagreements with taxing authorities, it could adversely affect our business, financial condition and results of operations. • We face risks associated with the long-term trend toward increased activism against companies in the food products industry. • We are subject to extensive governmental regulations, which require significant compliance expenditures. • Governmental authorities may take further action restricting our ability to produce and/or sell livestock or adopt new regulations impacting our production or processing operations, which could adversely affect our business. • We are, and could become, subject to legal proceedings and regulatory investigations that may result in significant expenses, fines and reputational damage. • Government antitrust and foreign investment policies and regulations may limit our strategic growth opportunities, including certain acquisitions and joint ventures. • Environmental regulation and related litigation and commitments could have a material adverse effect on us. • Climate change, or legal, regulatory, voluntary or market measures to address climate change, may negatively affect our business, operations or reputation. • We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result rely on exemptions from certain corporate governance requirements.
Biggest changeA summary of our risks includes, but is not limited to, the following: • Our results of operations are cyclical and could be adversely affected by fluctuations in the commodity prices for meat, livestock (primarily hogs) and feed ingredients. • Disruption of our supply chain could adversely affect our business, financial condition and results of operations. • An inability to realize savings and efficiency gains could adversely affect profitability and we may be unable to achieve any or all of our financial and operational targets. • The food industry in which we operate is highly competitive, and our inability to compete successfully, or the effects of such competition, could adversely affect our business, financial condition and results of operations. • Changes in consumer preferences and failure to maintain favorable consumer perception of our brands and products could negatively impact our business. • Outbreaks of disease among or attributed to livestock can significantly affect production, the supply of raw materials, demand for our products and our business. 16 • Our operations are subject to the general risks associated with the food industry, including perceived or real health risks related to our products or the food industry generally and risks associated with government regulations. • Product liability claims or product recalls can adversely affect our business reputation, expose us to increased scrutiny by federal and state regulators and may not be covered by insurance. • Any disruption of operations at one or more of our production facilities, distribution centers or cold storage facilities, including as a result of natural disasters, public health crises, political crises and instability, civil unrest and other catastrophic events or events outside of our control, could adversely affect our business, financial condition and results of operations. • Our reliance on third-party service providers can have an adverse effect on our business. • Due to seasonality or changes in our promotional activities, our revenue and operating results may vary from quarter to quarter. • Significant increases in the cost of distribution could adversely affect our business, financial condition and results of operations. • We are increasingly dependent on IT, and our business and reputation could suffer if we are unable to protect our IT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our IT systems are otherwise disrupted. • Our operations are subject to the risks associated with acquisitions, investments in joint ventures and divestitures. • Climate change, or legal, regulatory, voluntary or market measures to address climate change, may negatively affect our business, operations or reputation. • We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy. • We depend on availability of, and satisfactory relations with, our employees. • We are subject to various risks relating to worker employment and health and safety. • We depend upon the continued services of certain key members of our senior management team, without whom our business operations could be significantly disrupted. • The consolidation of customers and/or the loss of our customers could adversely impact our business. • Impairment in the carrying value of goodwill or intangible assets could negatively impact our consolidated results of operations and net worth. • The loss of any trademark or other intellectual property right could enable other companies to compete more effectively with us. • Deterioration of economic conditions could negatively impact our business. • If tax laws change or we experience adverse outcomes resulting from examination of our tax returns or disagreements with taxing authorities, it could adversely affect our business, financial condition and results of operations. • We face risks associated with the long-term trend toward increased activism against companies in the food products industry. • We are subject to extensive governmental regulations, which require significant compliance expenditures. 17 • Governmental authorities may take further action restricting our ability to produce and/or sell livestock or adopt new regulations impacting our production or processing operations, which could adversely affect our business. • We may be impacted by legislation targeting foreign ownership of land, or foreign ownership or operation of facilities, located in the U.S. • We are, and could become, subject to legal proceedings and regulatory investigations that may result in significant expenses, fines and reputational damage. • Government antitrust and foreign investment policies and regulations may limit our strategic growth opportunities, including certain acquisitions and joint ventures. • Environmental regulation and related litigation and commitments could have a material adverse effect on us. • WH Group controls us, and their interests may conflict with ours or yours in the future. • We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result rely on exemptions from certain corporate governance requirements.
These provisions provide for, among other things: • a classified board of directors, as a result of which our board will be divided into three classes, with each class serving for staggered three-year terms; • the ability of our board to issue one or more classes or series of preferred stock and to determine the preferences, rights and limitations of those shares without shareholder approval; 52 • advance notice requirements for nominations of directors and proposals of other business by shareholders to be considered at our annual or special meetings; • at any time after WH Group ceases to own directly or indirectly a majority of the combined voting power of our then-outstanding shares of common stock entitled to vote generally in director elections (the “WHG Trigger Event”), our shareholders will not be able to act by less-than-unanimous written consent without a duly called annual or special meeting of our shareholders; • at any time after the WHG Trigger Event, special meetings may only be called by the Chair of the board, the President or the board; • from and after the WHG Trigger Event, our directors may only be removed for cause, by the affirmative vote of holders of a majority of the voting power of the shares of common stock outstanding and entitled to vote on the election of directors; • restrictions on engaging in mergers, share exchanges, certain dispositions of corporate assets and other transactions with an interested shareholder (generally defined as any person, other than any member of WH Group or any entity that acquires a majority of our then outstanding shares of common stock directly from any member of WH Group that is a shareholder of our company, that acquires more than 10% of any class of our outstanding voting shares without the approval of a majority of our disinterested directors) unless the transaction is approved by a majority of our disinterested directors and holders of two-thirds of our voting shares (excluding shares owned by the interested shareholder); and • that our amended and restated articles of incorporation and amended and restated bylaws may be amended by the affirmative vote of the holders of at least a majority of the total voting power of the outstanding shares of common stock entitled to vote.
These provisions provide for, among other things: • a classified board of directors, as a result of which our board will be divided into three classes, with each class serving for staggered three-year terms; • the ability of our board to issue one or more classes or series of preferred stock and to determine the preferences, rights and limitations of those shares without shareholder approval; • advance notice requirements for nominations of directors and proposals of other business by shareholders to be considered at our annual or special meetings; • at any time after WH Group ceases to own directly or indirectly a majority of the combined voting power of our then-outstanding shares of common stock entitled to vote generally in director elections (“WHG Trigger Event”), our shareholders will not be able to act by less-than-unanimous written consent without a duly called annual or special meeting of our shareholders; • at any time after the WHG Trigger Event, special meetings may only be called by the Chair of the board, the President or the board; • from and after the WHG Trigger Event, our directors may only be removed for cause, by the affirmative vote of holders of a majority of the voting power of the shares of common stock outstanding and entitled to vote on the election of directors; • restrictions on engaging in mergers, share exchanges, certain dispositions of corporate assets and other transactions with an interested shareholder (generally defined as any person, other than any member of WH Group or any entity that acquires a majority of our then outstanding shares of common stock directly from any member of WH Group that is a shareholder of our company, that acquires more than 10% of any class of our outstanding voting shares without the approval of a majority of our disinterested directors) unless the transaction is approved by a majority of our disinterested directors and holders of two-thirds of our voting shares (excluding shares owned by the interested shareholder); and • that our amended and restated articles of incorporation and amended and restated bylaws may be amended by the affirmative vote of the holders of at least a majority of the total voting power of the outstanding shares of common stock entitled to vote.
These transactions present financial, managerial and operational challenges, including: • diversion of management attention from managing our existing business; • difficulty with integrating businesses, operations, personnel and financial and other systems; • lack of experience in operating in the geographical or product markets of the acquired business; • new or additional regulatory requirements; • failure to realize any or all of the anticipated benefits, including cost synergies; • increased levels of debt potentially leading to associated reduction in ratings of our debt securities and adverse impact on our various financial ratios; • the requirement that we periodically review the value at which we carry our investments in joint ventures and, in the event we determine that the value at which we carry a joint venture investment has been impaired, the requirement to record a non-cash impairment charge, which charge could substantially affect our reported earnings in the period of such charge, would negatively impact our financial ratios and could limit our ability to obtain financing in the future; • potential loss of key employees and customers of the acquired business; • assumption of and exposure to unknown or contingent liabilities of acquired businesses; • potential disputes with the sellers; and 29 • for our investments, potential lack of common business goals and strategies with, and cooperation of, our joint venture partners.
These transactions present financial, managerial and operational challenges, including: • diversion of management attention from managing our existing business; • difficulty with integrating businesses, operations, personnel and financial and other systems; • lack of experience in operating in the geographical or product markets of the acquired business; • new or additional regulatory requirements; • failure to realize any or all of the anticipated benefits, including cost synergies; • increased levels of debt potentially leading to associated reduction in ratings of our debt securities and adverse impact on our various financial ratios; • the requirement that we periodically review the value at which we carry our investments in joint ventures and, in the event we determine that the value at which we carry a joint venture investment has been impaired, the requirement to record a non-cash impairment charge, which charge could substantially affect our reported earnings in the period of such charge, would negatively impact our financial ratios and could limit our ability to obtain financing in the future; • potential loss of key employees and customers of the acquired business; • assumption of and exposure to unknown or contingent liabilities of acquired businesses; • potential disputes with the sellers; and • for our investments, potential lack of common business goals and strategies with, and cooperation of, our joint venture partners.
Other factors that may impact commodity prices and our results of operations include, but are not limited to: • competing demand for feed ingredients, such as competing demand for corn for use in the manufacture of ethanol or other alternative fuels; • environmental regulations; • changes in governmental agricultural programs; • tariffs and other import and export restrictions, such as trade barriers resulting from, among other things, developments in international relations and food safety concerns; • transportation interruptions or increases in diesel fuel costs; • an increase in pork processing capacity, adversely impacting fresh meat values; • adverse weather conditions, including the impact of climate change and weather on our water supply and the availability and pricing of feed ingredients; • energy prices, including the effect of changes in energy prices on our transportation costs and the cost of feed; • contamination with mold or bacteria; • the impact of COVID-19 pandemic and other similar disruptions in the future; and • labor strikes, industrial accidents, occupational health and safety issues and animal welfare or food safety issues (including the real or perceived outbreak of food-borne illnesses or outbreaks of diseases among livestock).
Other factors that may impact commodity prices and our results of operations include, but are not limited to: 18 • competing demand for feed ingredients, such as competing demand for corn for use in the manufacture of ethanol or other alternative fuels; • environmental regulations; • changes in governmental agricultural programs; • tariffs and other import and export restrictions, such as trade barriers resulting from, among other things, developments in international relations and food safety concerns; • transportation interruptions or increases in diesel fuel costs; • an increase in pork processing capacity, adversely impacting fresh meat values; • adverse weather conditions, including the impact of climate change and weather on our water supply and the availability and pricing of feed ingredients; • energy prices, including the effect of changes in energy prices on our transportation costs and the cost of feed; • contamination with mold or bacteria; • the impact of COVID-19 pandemic and other similar disruptions in the future; and • labor strikes, industrial accidents, occupational health and safety issues and animal welfare or food safety issues (including the real or perceived outbreak of food-borne illnesses or outbreaks of diseases among livestock).
The market price of our common stock may be highly volatile and could be subject to wide fluctuations due to a number of factors such as those listed elsewhere in this section and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; • changes in market valuations of, or earnings and other announcements by, companies in our industries; • declines in the market prices of stocks generally, particularly those of companies in our industry; • additions or departures of key management personnel; • strategic actions by us or our competitors; 49 • announcements by us or our competitors of significant contracts, price reductions, new services, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; • changes in our market share; • an increase in our indebtedness or the interest rates applicable to our indebtedness; • changes in general economic or market conditions or trends in our industries or the economy as a whole; • changes in business or regulatory conditions; • future sales of our common stock or other securities; • actions by WH Group or other institutional shareholders; • investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives; • changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industries; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • announcements relating to litigation or governmental investigations; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • the development and sustainability of an active trading market for our common stock; • changes in accounting principles; and • other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, war, acts of terrorism, civil unrest, or responses to these events.
The market price of our common stock may be highly volatile and could be subject to wide fluctuations due to a number of factors such as those listed elsewhere in this section and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; • changes in market valuations of, or earnings and other announcements by, companies in our industries; • declines in the market prices of stocks generally, particularly those of companies in our industry; • additions or departures of key management personnel; • strategic actions by us or our competitors; • announcements by us or our competitors of significant contracts, price reductions, new services, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; • changes in our market share; • an increase in our indebtedness or the interest rates applicable to our indebtedness; • changes in general economic or market conditions or trends in our industries or the economy as a whole; • changes in business or regulatory conditions; • future sales of our common stock or other securities; • actions by WH Group or other institutional shareholders; • investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives; • changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industries; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business; • announcements relating to litigation or governmental investigations; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • the development and sustainability of an active trading market for our common stock; • changes in accounting principles; and 47 • other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, war, acts of terrorism, civil unrest, or responses to these events.
District Court for the Eastern District of Virginia does not have jurisdiction over certain action, the Circuit Court of Henrico County) is the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of a duty owed by any of our directors, officers or shareholders to us or our shareholders, (3) any action asserting a claim arising pursuant to the Virginia Stock Corporation Act, our amended and restated articles of incorporation or our amended and restated bylaws or (4) any action asserting a claim 53 governed by the internal affairs doctrine.
District Court for the Eastern District of Virginia does not have jurisdiction over certain action, the Circuit Court of Henrico County) is the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of a duty owed by any of our directors, officers or shareholders to us or our shareholders, (3) any action asserting a claim arising pursuant to the Virginia Stock Corporation Act, our amended and restated articles of incorporation or our amended and restated bylaws or (4) any action asserting a claim governed by the internal affairs doctrine.
Depending on the function 27 involved, such errors have in the past led to and can in the future lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation or remediation costs, damage to our reputation, all of which can adversely affect our business.
Depending on the function involved, such errors have in the past led to and can in the future lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation or remediation costs and damage to our reputation, all of which can adversely affect our business.
In addition, we have ongoing initiatives to improve profitability and efficiency gains of the Hog Production segment, including genetic transformation, herd health improvements, procurement and nutrition savings. However, our cost-savings expectations are based upon several assumptions and estimates that are difficult to predict, necessarily speculative in nature and subject to significant business, operational, economic and competitive 22 uncertainties and contingencies.
In addition, we have ongoing initiatives to improve profitability and efficiency gains of the Hog Production segment, including genetic transformation, herd health improvements, procurement and nutrition savings. However, our cost-savings expectations are based upon several assumptions and estimates that are difficult to predict, necessarily speculative in nature and subject to significant business, operational, economic and competitive uncertainties and contingencies.
In certain jurisdictions, we receive access to third-party intellectual property. In particular, we have a license agreement with Nathan’s Famous for the exclusive right to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs and sausages in refrigerated consumer packages to be resold through retail channels within the U.S. until March 2032.
In certain jurisdictions, we receive access to third-party intellectual property. In particular, we have a license agreement with Nathan’s for the exclusive right to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs and sausages in refrigerated consumer packages to be resold through retail channels within the U.S. until March 2032.
We cannot guarantee that our controlling shareholder will be able to successfully or timely obtain any of the approvals needed to permit us to undertake any of the corporate actions as required under the applicable listing rules, and the failure to do so may have a material adverse effect on our business, financial condition or results of operations.
We cannot guarantee that our controlling shareholder 45 will be able to successfully or timely obtain any of the approvals needed to permit us to undertake any of the corporate actions as required under the applicable listing rules, and the failure to do so may have a material adverse effect on our business, financial condition or results of operations.
Our future ability to comply with financial covenants and other conditions, make scheduled payments of principal and interest, or refinance existing borrowings depends on our future business performance which is subject to economic, financial, competitive and other factors, including the other risks set forth in this section, and may be affected by events beyond our control.
Our future ability to comply with financial covenants and other conditions, make scheduled payments of principal and interest, or refinance existing borrowings depends on our future business performance which is subject to economic, financial, competitive and other factors, including the other risks set forth in this section, and may be 41 affected by events beyond our control.
Risks Relating to Our Relationship with WH Group We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of other companies that are subject to such requirements.
Risks Relating to our Relationship with WH Group 42 We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of other companies that are subject to such requirements.
For the purpose of determining ownership of our common stock for these purposes, references to WH Group include WH Group, its successors by way of merger or transfer of all or substantially all of its assets, any entity that is 50% beneficially owned by WH 45 Group, and any entity that acquires a majority of our then outstanding shares of common stock directly from any of the foregoing that is a shareholder of our company.
For the purpose of determining ownership of our common stock for these purposes, references to WH Group include WH Group, its successors by way of merger or transfer of all or substantially all of its assets, any entity that is 50% beneficially owned by WH Group, and any entity that acquires a majority of our then outstanding shares of common stock directly from any of the foregoing that is a shareholder of our company.
While our b oard believes that, given its size and structure, such actual or potential conflicts of interest can be managed adequately, including that the independent members of our b oard may meet in the absence of senior 46 executive officers or non-independent directors in respect of the relevant matter, the actual or perceived conflicts of interest that may arise could cause reputational or other harm.
While our b oard believes that, given its size and structure, such actual or potential conflicts of interest can be managed adequately, including that the independent members of our b oard may meet in the absence of senior executive officers or non-independent directors in respect of the relevant matter, the actual or perceived conflicts of interest that may arise could cause reputational or other harm.
In addition, we cannot give any assurance that our reputation will not be adversely affected by non-compliance, governmental investigations or other inquiries in the future. 32 We depend upon the continued services of certain key members of our senior management team, without whom our business operations could be significantly disrupted.
In addition, we cannot give any assurance that our reputation will not be adversely affected by non-compliance, governmental investigations or other inquiries in the future. We depend upon the continued services of certain key members of our senior management team, without whom our business operations could be significantly disrupted.
See “—Risks Relating to Government Regulations—Environmental regulation and related litigation and commitments could have a material adverse effect on us” for further information regarding ligation involving environmental matters. 38 Government antitrust and foreign investment policies and regulations may limit our strategic growth opportunities, including certain acquisitions and joint ventures.
See “—Risks Relating to Government Regulations—Environmental regulation and related litigation and commitments could have a material adverse effect on us” for further information regarding ligation involving environmental matters. Government antitrust and foreign investment policies and regulations may limit our strategic growth opportunities, including certain acquisitions and joint ventures.
While our industry generally operates with high employee turnover, any material increases in employee turnover rates or any widespread employee dissatisfaction could also have a material adverse effect on our business, financial condition and results of operations. We are subject to various risks relating to worker employment and health and safety.
While our industry generally operates with high employee 29 turnover, any material increases in employee turnover rates or any widespread employee dissatisfaction could also have a material adverse effect on our business, financial condition and results of operations. We are subject to various risks relating to worker employment and health and safety.
Competitive considerations and customer resistance to price increases may delay or make us unable to adjust our selling prices. To the extent we are unable to either re-engineer or otherwise offset increased costs or are unwilling or unable to build price increases into a higher quoted price or negotiating higher prices, our margins will be negatively affected.
Competitive considerations and customer resistance to price increases may delay or make us unable to adjust our selling prices. To the extent we are 19 unable to either re-engineer or otherwise offset increased costs or are unwilling or unable to build price increases into a higher quoted price or negotiating higher prices, our margins will be negatively affected.
We are subject to risks affecting the food industry generally, including risks posed by the following: • food spoilage; • food contamination; • food allergens; • consumer nutritional and health-related concerns; • consumer product liability claims; • product tampering; • product labeling errors; • the expense and possible unavailability of product liability insurance; and • the potential cost and disruption of a product recall or withdrawal.
We are subject to risks affecting the food industry generally, including risks posed by the following: • food spoilage; • food contamination; • food allergens; 22 • consumer nutritional and health-related concerns; • consumer product liability claims; • product tampering; • product labeling errors; • the expense and possible unavailability of product liability insurance; and • the potential cost and disruption of a product recall or withdrawal.
China, Mexico and Canada are three of our largest export markets. Tariffs imposed on U.S. pork exports could increase U.S. pork supplies, which would also affect the price of pork in the U.S. We could also experience a decrease in demand or lose customers due to anti-American sentiment.
China, Mexico and Canada are three of our largest export markets. Tariffs imposed on U.S. pork exports could increase U.S. pork supplies, which would also affect the price of pork in the U.S. We could also experience a decrease in demand or lose customers due 28 to anti-American sentiment.
For indefinite life intangible assets, an impairment loss is recognized if 33 the carrying amount of an indefinite life intangible asset exceeds the estimated fair value of that intangible asset. Identified intangible assets with definite lives are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
For indefinite life intangible assets, an impairment loss is recognized if the carrying amount of an indefinite life intangible asset exceeds the estimated fair value of that intangible asset. Identified intangible assets with definite lives are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
Competitive pressures or other factors could cause us to lose sales, which may require us to lower prices, increase the use of discounting or 23 promotional programs, or increase marketing expenditures, each of which would adversely affect our margins and could result in a decrease in our operating results and profitability.
Competitive pressures or other factors could cause us to lose sales, which may require us to lower prices, increase the use of discounting or promotional programs, or increase marketing expenditures, each of which would adversely affect our margins and could result in a decrease in our operating results and profitability.
Prolonged negative perceptions concerning the health implications of certain food products or ingredients or loss of confidence in the food safety system generally could influence consumer preferences and acceptance of our products and marketing programs. Prolonged negative perceptions and failure to satisfy consumer preferences could materially and adversely affect our business, financial condition and results of operations.
Prolonged negative perceptions concerning the health implications of certain food products or ingredients or loss of confidence in the food safety system generally could influence consumer preferences and acceptance of our products 21 and marketing programs. Prolonged negative perceptions and failure to satisfy consumer preferences could materially and adversely affect our business, financial condition and results of operations.
If we fail to effectively manage our inventories or fluctuations in business as a result of promotional activities or other factors, seasonality could have a material adverse effect on our business, financial condition and results of operations. Significant increases in the cost of distribution could adversely affect our business, financial condition and results of operations.
If we fail to effectively manage our 25 inventories or fluctuations in business as a result of promotional activities or other factors, seasonality could have a material adverse effect on our business, financial condition and results of operations. Significant increases in the cost of distribution could adversely affect our business, financial condition and results of operations.
Failure to protect our trademark rights could 34 prevent us in the future from using certain brands or from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brands and products.
Failure to protect our trademark rights could prevent us in the future from using certain brands or from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brands and products.
Our past and present business operations and properties are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to protection of the environment, including: • the treatment of hazardous materials and the discharge of such materials into the environment; 39 • the handling and disposition of manure and liquid and solid wastes; and • air emissions.
Our past and present business operations and properties are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to protection of the environment, including: • the treatment of hazardous materials and the discharge of such materials into the environment; • the handling and disposition of manure and liquid and solid wastes; and • air emissions.
Our divestiture activities may present financial, managerial and operational risks, and could adversely affect our business, financial condition and results of operations. We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy.
Our divestiture activities may present financial, managerial and operational risks, and could adversely affect our business, financial condition and results of operations. 27 We are subject to risks associated with our international sales, including disruptions to the worldwide economy due to changes in U.S. trade policy.
Pork and poultry products may be subject to contamination by foreign materials, exposure to chemicals of concern from packaging or environmental exposure, or disease-producing organisms or pathogens, such as Listeria 25 monocytogenes, Salmonella, Campylobacter and generic E.coli, Yersinia enterocolitica and Staphylococcus aureus.
Pork and poultry products may be subject to contamination by foreign materials, exposure to chemicals of concern from packaging or environmental exposure, or disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella, Campylobacter and generic E.coli, Yersinia enterocolitica and Staphylococcus aureus.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, 48 it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.
If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.
An inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to acquire other companies by using our shares of common stock as consideration . Our stock price may fluctuate significantly, and you could lose all or part of your investment as a result.
An inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to acquire other companies by using our shares of common stock as consideration . 46 Our stock price may fluctuate significantly, and you could lose all or part of your investment as a result.
If new immigration legislation is enacted, such laws may contain provisions that could increase our costs in recruiting, training and retaining employees, increase our costs of complying with federal law in reviewing employees’ 31 immigration status and create employee shortages.
If new immigration legislation is enacted, such laws may contain provisions that could increase our costs in recruiting, training and retaining employees, increase our costs of complying with federal law in reviewing employees’ immigration status and create employee shortages.
The sale or issuance of substantial amounts of shares of our common stock or other securities convertible or exchangeable into shares of our common stock in the public market, or the perception that such sales or issuances could occur, including sales by our existing shareholders, could harm the prevailing market price of shares of our common stock.
The sale or issuance of substantial amounts of shares of our common stock or other securities convertible or exchangeable into shares of our common stock in the public market, or the perception that such sales or issuances could occur, including sales by our existing shareholders, could harm the prevailing market price of shares of our 48 common stock.
If we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to us or to our business partners, customers, consumers or suppliers.
If we are unable to prevent security breaches, we may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information belonging to 26 us or to our business partners, customers, consumers or suppliers.
Applicable statutes and regulations governing food products include rules for labeling the content of specific types of foods, the nutritional value of that food and its serving size, as well as rules that protect against contamination of products by food-borne pathogens.
Applicable statutes and regulations governing food products include rules for labeling the content of specific types of foods, the nutritional value of that food and its serving size, as well as rules that protect against contamination of 34 products by food-borne pathogens.
The preferences, rights and limitations of these classes or series of preferred stock may be senior to or on parity with our common stock, which may reduce the value of our common stock. Our amended and restated bylaws designate the U.S.
The preferences, rights and limitations of these classes or series of preferred stock may be senior to or on parity with our common stock, which may reduce the value of our common stock. 50 Our amended and restated bylaws designate the U.S.
If we were unable to repay 43 our secured indebtedness to our lenders, these lenders could proceed against the collateral securing that indebtedness, which could include substantially all of our accounts receivable assets in the U.S.
If we were unable to repay our secured indebtedness to our lenders, these lenders could proceed against the collateral securing that indebtedness, which could include substantially all of our accounts receivable assets in the U.S.
It is not possible at this time to predict the complete structure or outcome of any future legislative or regulatory efforts to address GHG emissions and climate change or whether costs of compliance with such efforts will have a material adverse effect on our financial position or results of operations. 40 Climate change, or legal, regulatory, voluntary or market measures to address climate change, may negatively affect our business, operations or reputation.
It is not possible at this time to predict the complete structure or outcome of any future legislative or regulatory efforts to address GHG emissions and climate change or whether costs of compliance with such efforts will have a material adverse effect on our financial position or results of operations. 38 Climate change, or legal, regulatory, voluntary or market measures to address climate change, may negatively affect our business, operations or reputation.
The costs associated with product recalls could be exacerbated by issues encountered in tracing affected products either within our facilities or in the hands of third parties.
The costs associated with product recalls could be exacerbated by 23 issues encountered in tracing affected products either within our facilities or in the hands of third parties.
Examples of such factors include, but are not limited to, evolving regulatory and other standards, processes and assumptions, the pace of scientific and technological developments, 41 increased costs and the availability of requisite financing, market trends that may alter business opportunities, the conduct of third-party manufacturers and suppliers, constraints or disruptions to our supply chain and changes in carbon markets or carbon taxes.
Examples of such factors include, but are not limited to, evolving regulatory and other standards, processes and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, market trends that may alter business opportunities, the conduct of third-party manufacturers and suppliers, constraints or disruptions to our supply chain and changes in 39 carbon markets or carbon taxes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Accounts Receivable Securitization Facility”) (after giving effect to $22 million of issued but undrawn letters of credit). Because the borrowing capacity under the Securitization Facility depends, in part, on accounts receivable levels, which fluctuate from time to time, such amounts may not reflect actual borrowing capacity.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Accounts Receivable Securitization Facility”) (after giving effect to $27 million of issued but undrawn letters of credit). Because the borrowing capacity under the Securitization Facility depends, in part, on accounts receivable levels, which fluctuate from time to time, such amounts may not reflect actual borrowing capacity.
Our indebtedness may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expenditures and potential acquisitions or joint ventures. In addition, due to the 42 volatile nature of the commodities markets, we may need to borrow significant amounts to cover any margin calls under our risk management and hedging programs.
Our indebtedness may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expenditures, dividends and potential acquisitions or joint ventures. In addition, due to the volatile nature of the commodities markets, we may need to borrow significant amounts to cover any margin calls under our risk management and hedging programs.
If drawn upon, our current variable rate indebtedness would subject us to interest rate risk, which could cause our debt service obligations to increase. Our Senior Revolving Credit Facility and Securitization Facility have variable interest rates. Market interest rates have increased over the past several years and may increase in the future as a result of action by the U.S.
If drawn upon, our current variable rate indebtedness would subject us to interest rate risk, which could cause our debt service obligations to increase. Our Senior Revolving Credit Facility and Securitization Facility have variable interest rates. Market interest rates have fluctuated over the past several years and may increase in the future as a result of action by the U.S.
Our amended and restated articles of incorporation authorizes our board, without the approval of our shareholders, to issue up to 100,000,000 shares of our preferred stock, subject to limitations prescribed by applicable law and the provisions of our amended and restated articles of incorporation, in one or more classes or series, to establish from time to time the number of shares to be included in each such class or series and to fix the preferences, rights and limitations of the shares of each such class or series.
Our amended and restated articles of incorporation authorize our board, without the approval of our shareholders, to issue up to 100,000,000 shares of our preferred stock, subject to limitations prescribed by applicable law and the provisions of our amended and restated articles of incorporation, in one or more classes or series, to establish from time to time the number of shares to be included in each such class or series and to fix the preferences, rights and limitations of the shares of each such class or series.
For example, we have been reducing the number of hogs we own and 21 raise and increasing the number of hogs we purchase from contract farmers under market agreements.
For example, we have been reducing the number of hogs we own and raise and increasing the number of hogs we purchase from contract farmers under market agreements.
Information technology is an important part of our business operations, and we increasingly rely on information technology systems to manage business data and increase efficiencies in our production and distribution facilities and inventory management processes. We also use information technology to process financial information and results of operations and to comply with regulatory, legal and tax requirements.
IT is an important part of our business operations, and we increasingly rely on IT systems to manage business data and increase efficiencies in our production and distribution facilities and inventory management processes. We also use IT to process financial information and results of operations and to comply with regulatory, legal and tax requirements.
In addition, our amended and restated articles of incorporation provides that at any time that WH Group owns at least a majority of our then outstanding shares of common stock, shareholders are permitted to take action by written consent.
In addition, our amended and restated articles of incorporation provide that at any time that WH Group owns at least a majority of our then outstanding shares of common stock, shareholders are permitted to take action by written consent.
There is no single shareholder or group of shareholders which owns 50% or more of the voting power of WH Group as of March 24, 2025. As a result, WH Group is not considered a controlled company within the meaning of the corporate governance standards of Nasdaq.
There is no single shareholder or group of shareholders which owns 50% or more of the voting power of WH Group as of March 24, 2026. As a result, WH Group is not considered a controlled company within the meaning of the corporate governance standards of Nasdaq.
Even when WH Group ceases to own a majority of our then outstanding shares of common stock, for so long as WH Group continues to own, in the aggregate, at least 10% of our then outstanding shares of common stock, WH Group shall be entitled to designate, for inclusion in the slate of directors nominated by the board for election to our board, a number of the total number of directors entitled to serve on the board proportionate to the percentage of our outstanding common stock owned by WH Group, rounded up to the nearest whole number.
Even when WH Group ceases to own a majority of our then outstanding shares of common stock, for so long as WH Group continues to own, in the aggregate, at least 10% of our then outstanding shares of common stock, WH Group is entitled to designate, for inclusion in the slate of directors nominated by the board for election to our board, a number of the total number of directors entitled to serve on the board proportionate to the percentage of our outstanding common stock owned by WH Group, rounded up to the nearest whole number.
Under the HKEx Listing Rules, WH Group is obligated to obtain approval from its board of directors and/or shareholders for certain transactions in which we, as a subsidiary of WH Group, engage, such as the purchase or sale of assets, mergers and acquisitions, lending, leasing of assets, donation or acceptance of assets, debt restructuring, license agreements, research and development joint ventures, and transactions with connected persons (as defined under the HKEx Listing Rules) of WH Group, the value of which exceeds certain financial thresholds established by the applicable listing rules and/or otherwise not exempted under the applicable listing rules.
Under the HKEx Listing Rules, WH Group is obligated to obtain approval from its board of directors and/or shareholders for certain transactions in which we, as a subsidiary of WH Group, engage, such as the purchase or sale of assets, mergers and acquisitions, lending, leasing of assets, donation or acceptance of assets, debt restructuring, license agreements, R&D joint ventures, and transactions with connected persons (as defined under the HKEx Listing Rules) of WH Group, the value of which exceeds certain financial thresholds established by the applicable listing rules and/or otherwise not exempted under the applicable listing rules.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Senior Unsecured Revolving Credit Facility”) and $203 million million under the Securitization Facility (as defined in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Senior Unsecured Revolving Credit Facility”) and $198 million under the Securitization Facility (as defined in “Item 7.
Quantitative and Qualitative Disclosures About Market Risk” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report for the effects of derivative instruments on our consolidated statements of income. Furthermore, we may be unable to price our products to cover increased costs.
Quantitative and Qualitative Disclosures About Market Risk” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effects of derivative instruments on our consolidated statements of income. Furthermore, we may be unable to price our products to cover increased costs.
Like other companies, our information technology systems are vulnerable to a variety of disruptions, including, but not limited to, the process of upgrading or replacing software, databases or components thereof, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyberattacks, hackers, unauthorized access attempts and other security issues.
Like other companies, our IT systems are vulnerable to a variety of disruptions, including, but not limited to, the process of upgrading or replacing software, databases or components thereof, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyberattacks, hackers, unauthorized access attempts and other security issues.
For so long as WH Group owns, in the aggregate, a majority of our then outstanding shares of our common stock, WH Group shall have the right to designate, for inclusion in the slate of directors nominated by our board for election to our board, a majority of the directors on our board and control the composition of our board and the approval of actions requiring shareholder approval through its voting power.
For so long as WH Group owns, in the aggregate, a majority of our then outstanding shares of our common stock, WH Group has the right to designate, for inclusion in the slate of directors nominated by our board for election to our board, a majority of the directors on our board and control the composition of our board and the approval of actions requiring shareholder approval through its voting power.
Despite current indebtedness levels and restrictive covenants, we may incur additional indebtedness. This could further exacerbate the risks associated with our financial leverage. Despite current indebtedness levels and restrictive covenants, we expect to incur additional indebtedness and may incur other indebtedness to finance our operations and other capital needs.
This could further exacerbate the risks associated with our financial leverage. Despite current indebtedness levels and restrictive covenants, we may incur other indebtedness to finance our operations and other capital needs.
WH Group is listed on The Stock Exchange of Hong Kong Limited and is therefore subject to the applicable Hong Kong laws and regulations, including but not limited to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “HKEx Listing Rules.”).
WH Group is listed on The Stock Exchange of Hong Kong Limited and is therefore subject to the applicable Hong Kong laws and regulations, including but not limited to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“HKEx Listing Rules”).
The costs to address cybersecurity risks or risks on information technology failure, both before and after an incident, have in the past been and could in the future be significant, regardless of whether incidents result or resulted from an attack on us directly, or on third-party vendors upon which we rely.
The costs to address cybersecurity risks or risks on IT failure, both before and after an incident, have in the past been and could in the future be significant, regardless of whether incidents result or resulted from an attack on us directly, or on third-party vendors upon which we rely.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including requirements that: • a majority of our board consist of “independent directors” as defined under the rules of Nasdaq; • our director nominees be selected, or recommended for our board’s selection, by a nominating and governance committee comprised solely of independent directors; • the compensation of our executive officers be determined, or recommended to our board for determination, by a compensation committee comprised solely of independent directors; and • an annual performance evaluation of the nominating and governance and compensation committees be performed.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including requirements that: • a majority of our board consist of “independent directors” as defined under the rules of Nasdaq; • our director nominees be selected, or recommended for our board’s selection, by a nominating and governance committee comprised solely of independent directors; and • the compensation of our executive officers be determined, or recommended to our board for determination, by a compensation committee comprised solely of independent directors.
In addition, the HKEx Listing Rules require our controlling shareholder to obtain shareholders’ approval for certain corporate actions that we undertake, including but not limited to (1) any issuance of shares by us that results in a reduction of WH Group’s equity interest in us in excess of certain dilution thresholds and (2) the implementation of a share option and/or award scheme involving the issuance of new shares by us.
In addition, the HKEx Listing Rules require our controlling shareholder to obtain shareholders’ approval for certain corporate actions that we undertake, including but not limited to (i) any issuance of shares by us that results in a reduction of WH Group’s equity interest in us in excess of certain dilution thresholds and (ii) the implementation of a share option and/or award scheme involving the issuance of new shares by us.
Some of our competitors have greater scale, marketing resources, name recognition, research and development capabilities and/or other resources (financial and otherwise) than we do, and some of the companies may be more innovative and able to bring new products to market faster and more quickly exploit and serve niche markets or new or burgeoning consumer preferences than us.
Some of our competitors have greater scale, marketing resources, name recognition, R&D capabilities and/or other resources (financial and otherwise) than we do, and some of the companies may be more innovative and able to bring new products to market faster and more quickly exploit and serve niche markets or new or burgeoning consumer preferences than us.
The ability of these entities to refinance or amend their facilities on a successful and satisfactory basis, and to comply with the covenants in their financing facilities, affects our assessment of the carrying value of any individual investment. As of December 29, 2024, none of our equity investments represented more than 5% of our total consolidated assets.
The ability of these entities to refinance or amend their facilities on a successful and satisfactory basis, and to comply with the covenants in their financing facilities, affects our assessment of the carrying value of any individual investment. As of December 28, 2025, none of our equity investments represented more than 5% of our total consolidated assets.
Our international sales and investments operations are subject to various risks related to economic or political uncertainties, including, but not limited to, the following risks: • general economic and political conditions; • imposition of tariffs, quotas, trade barriers and other trade protection measures by various countries; • import or export licensing requirements imposed by various countries; • the closing of borders by foreign countries to the import of our products due to, among other things, animal disease or other perceived health or safety issues; • difficulties and costs associated with complying with, and enforcing remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including anti-corruption laws, export controls and sanctions laws and anti-money laundering laws; • the risk that the parties with which we do business, including parties that may resell our products in foreign countries, may not comply with all applicable laws, treaties and regulations, including import and export licensing requirements, anti-corruption laws (including, but not limited to, the U.S.
Our international sales and investments operations are subject to various risks related to economic or political uncertainties, including, but not limited to, the following risks: • general economic and political conditions; • imposition of tariffs, quotas, trade barriers and other trade protection measures by various countries; • investigations or enforcement actions by foreign governments in jurisdictions where we do business related to alleged unfair trade practices; • import or export licensing requirements imposed by various countries; • the closing of borders by foreign countries to the import of our products due to, among other things, animal disease or other perceived health or safety issues; • difficulties and costs associated with complying with, and enforcing remedies under, a wide variety of complex domestic and international laws, treaties and regulations, including anti-corruption laws, export controls and sanctions laws and anti-money laundering laws; • the risk that the parties with which we do business, including parties that may resell our products in foreign countries, may not comply with all applicable laws, treaties and regulations, including import and export licensing requirements, anti-corruption laws (including, but not limited to, the U.S.
The U.S. government, including its agencies such as the SEC, has made statements and taken certain actions that have led to, and may in the future make statements or take actions that would lead to, changes in relations between the U.S. and the PRC, which statements and actions could impact companies, including us, with connections to the PRC.
The U.S. government, including its agencies such as the SEC, and state and local governments have made statements and taken certain actions that have led to, and may in the future make statements or take actions that would lead to, changes in relations between the U.S. and the PRC, which statements and actions could impact companies, including us, with connections to the PRC.
Such terms may obligate us to pay significant amounts in connection with potential losses arising from claims and related legal proceedings, and any such claims could also affect our reputation and our relationship with customers. Our ten largest customers represented approximately 38% of net sales of fiscal year 2024.
Such terms may obligate us to pay significant amounts in connection with potential losses arising from claims and related legal proceedings, and any such claims could also affect our reputation and our relationship with customers. Our ten largest customers represented approximately 42% of net sales of fiscal year 2025.
We are increasingly dependent on information technology, and our business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our information technology systems are otherwise disrupted.
We are increasingly dependent on IT, and our business and reputation could suffer if we are unable to protect our IT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our IT systems are otherwise disrupted.
These fluctuations can be significant, as shown in recent years, with average lean hog prices published by the Chicago Mercantile Exchange, Inc. (“CME”), decreasing from $98 per hundredweight in fiscal year 2022 to $81 per hundredweight in fiscal year 2023 and then increasing to $85 per hundredweight in fiscal year 2024.
These fluctuations can be significant, as shown in recent years, with average lean hog prices published by the Chicago Mercantile Exchange, Inc. (“CME”), decreasing from $98 per hundredweight in fiscal year 2022 to $81 per hundredweight in fiscal year 2023 and then increasing to $94 per hundredweight in fiscal year 2025.
Our consolidated indebtedness level could significantly affect our business and the value of our common stock because: • it may, together with the financial and other affirmative and negative covenants in the agreements governing our indebtedness, limit or impair our ability in the future to obtain financing, refinance any of our indebtedness, sell assets or raise equity or debt on commercially reasonable terms or at all, which could cause us to default on our obligations, materially impair our liquidity or otherwise adversely affect our business and the value of our common stock; • a downgrade in our credit rating (including the loss of our investment grade credit ratings) could restrict or impede our ability to access capital markets at attractive rates and increase the cost of future borrowings; • it may, through event of default provisions, limit our ability to enter into change of control transactions, which may impede our ability to enter into certain transactions; • it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business opportunities that may arise; • it may place us at a competitive disadvantage relative to some of our competitors that have less indebtedness than we do; • a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes, which amount could increase if prevailing interest rates rise or if we incur additional indebtedness; • substantially all of our accounts receivable in the U.S. secure the Securitization Facility, all of which could limit our ability to dispose of such assets or utilize the proceeds of such dispositions and, upon an event of default under any such secured indebtedness, the lender thereunder could foreclose upon our pledged assets; and • it could make us more vulnerable to downturns in general economic or industry conditions or in our business.
Over the past three years, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $121 million. 40 Our consolidated indebtedness level could significantly affect our business and the value of our common stock because: • it may, together with the financial and other affirmative and negative covenants in the agreements governing our indebtedness, limit or impair our ability in the future to obtain financing, refinance any of our indebtedness, sell assets or raise equity or debt on commercially reasonable terms or at all, which could cause us to default on our obligations, materially impair our liquidity or otherwise adversely affect our business and the value of our common stock; • a downgrade in our credit rating (including the loss of our investment grade credit ratings) could restrict or impede our ability to access capital markets at attractive rates and increase the cost of future borrowings; • it may, through event of default provisions, limit our ability to enter into change of control transactions, which may impede our ability to enter into certain transactions; • it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business opportunities that may arise; • it may place us at a competitive disadvantage relative to some of our competitors that have less indebtedness than we do; • a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes, which amount could increase if prevailing interest rates rise or if we incur additional indebtedness; • substantially all of our accounts receivable in the U.S. secure the Securitization Facility, all of which could limit our ability to dispose of such assets or utilize the proceeds of such dispositions and, upon an event of default under any such secured indebtedness, the lender thereunder could foreclose upon our pledged assets; and • it could make us more vulnerable to downturns in general economic or industry conditions or in our business.
The U.S. and many non-U.S. jurisdictions have laws designed to protect national security or to restrict foreign direct investment. In the U.S. , the Committee on Foreign Investment in the U.S. (“CFIUS”) has the authority to review transactions that afford foreign investors the ability to “control” a U.S. business, as well as certain non-controlling investments.
The U.S. and many non-U.S. jurisdictions have laws designed to protect national security or to restrict foreign direct investment. In the U.S. , CFIUS has the authority to review transactions that afford foreign investors the ability to “control” a U.S. business, as well as certain non-controlling investments.
These sales or issuances, or the possibility that these sales or issuances may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of March 24, 2025, WH Group beneficially owned approximately 92.7% of our outstanding shares of common stock.
These sales or issuances, or the possibility that these sales or issuances may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. As of March 24, 2026, WH Group beneficially owned approximately 87% of our outstanding shares of common stock.
Significant upgrades related to our direct and indirect wastewater discharge streams, including to treatment systems at our Sioux City and Denison, Iowa, Sioux Falls, South Dakota and Tar Heel, North Carolina centers, would be required to meet the standards as proposed, which we estimate would require material capital expenditures in the aggregate.
Significant upgrades related to our direct and indirect wastewater discharge streams, including to treatment systems at our Sioux City and Denison, Iowa, Sioux Falls, South Dakota and Tar Heel, North Carolina facilities, would be required to meet the standards that were proposed, which we estimate would require material capital expenditures in the aggregate.
Our registered and unregistered trademarks are valuable assets that reflect the goodwill of our brands and consumers’ favorable perception of our products. We have invested a significant amount of money in establishing, promoting and protecting our brands.
We utilize intellectual property in our business. Our registered and unregistered trademarks are valuable assets that reflect the goodwill of our brands and consumers’ favorable perception of our products. We have invested a significant amount of money in establishing, promoting and protecting our brands.
As of February 28, 2025, we had approximately 34,000 employees in the U.S. and approximately 2,500 in Mexico, with approximately 46% of our total workforce covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability, retention and relative costs of labor and maintaining satisfactory relations with employees and the labor unions.
As of December 28, 2025, we had approximately 32,000 employees in the U.S. and approximately 2,500 in Mexico, with approximately 44% of our total workforce covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability, retention and relative costs of labor and maintaining satisfactory relations with employees and the labor unions.
Certain provisions of our amended and restated articles of incorporation and our amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a shareholder might consider to be in its best interest, including those attempts that might result in a premium over the market price for the shares held by our shareholders.
Anti-takeover provisions in our organizational documents and provisions in existing and future debt agreements could delay or prevent a change of control. 49 Certain provisions of our amended and restated articles of incorporation and our amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a shareholder might consider to be in its best interest, including those attempts that might result in a premium over the market price for the shares held by our shareholders.
See “Note 9: Equity Method Investments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report for a discussion of the accounting treatment of our equity investments. The loss of any trademark or other intellectual property right could enable other companies to compete more effectively with us. We utilize intellectual property in our business.
See “Note 9: Equity Method Investments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of the accounting treatment of our equity investments. The loss of any trademark or other intellectual property right could enable other companies to compete more effectively with us.
For example, in March 2024 the SEC published its final rules to enhance and standardize climate-related disclosures, requiring covered entities, including us, to disclose certain climate-related metrics and GHG emissions data, information about climate-related targets and goals and climate-related risks and obtain attestation requirements.
For example, in March 2024 the SEC published its final rules to enhance and standardize climate-related disclosures, requiring covered entities, including us, to disclose certain climate-related metrics and GHG emissions data, information about climate-related targets and goals and climate-related risks and obtain attestation requirements. The rules were subsequently withdrawn by the new administration .
The consolidation of customers and/or the loss of our customers could adversely impact our business. Continued consolidation within the retail industry, including among supermarkets, warehouse clubs and food distributors, has resulted in an increasingly concentrated retail base and increased our exposure to loss of certain customers.
Continued consolidation within the retail industry, including among supermarkets, warehouse clubs and food distributors, has resulted in an increasingly concentrated retail base and increased our exposure to loss of certain customers.
In addition, we depend on information technology for digital marketing and electronic communications among our facilities, personnel, customers and suppliers.
In addition, we depend on IT for digital marketing and electronic communications among our facilities, personnel, customers and suppliers.
As of March 24, 2025, WH Group beneficially owned approximately 92.7% of our outstanding shares of common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq.
As of March 24, 2026, WH Group beneficially owned approximately 87% of our outstanding shares of common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq.
Foreign Corrupt Practices Act, due to our operations in Mexico), sanctions laws, anti-bribery laws and anti-money laundering laws, and that any such non-compliance may have direct or indirect consequences on us, such as reputational harm and subjecting us to government investigations or penalties; • different regulatory structures and unexpected changes in regulatory environments; • tax rates that may exceed those in the U.S. and earnings that may be subject to withholding requirements and incremental taxes upon repatriation; • potentially negative consequences from changes in tax laws; • increased distribution costs, disruptions in shipping or reduced availability of freight transportation; and • disruptions or halts in operations at ports in the U.S. 30 The U.S. has recently signaled its intention to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreements and leveraging tariffs.
Foreign Corrupt Practices Act, due to our operations in Mexico), sanctions laws, anti-bribery laws and anti-money laundering laws, and that any such non-compliance may have direct or indirect consequences on us, such as reputational harm and subjecting us to government investigations or penalties; • different regulatory structures and unexpected changes in regulatory environments; • tax rates that may exceed those in the U.S . and earnings that may be subject to withholding requirements and incremental taxes upon repatriation; • potentially negative consequences from changes in tax laws; • increased distribution costs, disruptions in shipping or reduced availability of freight transportation; and • disruptions or halts in operations at ports in the U.S.
There are inherent uncertainties related to these factors and to management’s judgment in applying these factors to the assessment of goodwill recoverability. Goodwill reviews are prepared using estimates of the fair value of reporting units based on market multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”) and/or on the estimated present value of future cash flows.
There are inherent uncertainties related to these factors and to management’s judgment in applying these factors to the assessment of goodwill recoverability. Goodwill reviews are prepared using estimates of the fair value of reporting units based on market multiples of EBITDA and/or on the estimated present value of future cash flows.
To the extent we draw from our Senior Revolving Credit Facility, we may subject to interest rate risk which could cause our debt service obligations to increase. We may also enter into additional variable rate indebtedness in the future.
To the extent we draw from our Senior Revolving Credit Facility, we may subject to interest rate risk which could cause our debt service obligations to increase. We may also enter into additional variable rate indebtedness in the future. Despite current indebtedness levels and restrictive covenants, we may incur additional indebtedness.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeInvestments in security technology include vulnerability management tools, malicious software protection, email security, and around-the-clock monitoring. Our cybersecurity team continuously monitors network activity using advanced threat detection tools. Through automated alerts, behavioral analytics, and threat intelligence, security anomalies are identified in a timely manner.
Biggest changeOur cybersecurity team continuously monitors network activity using advanced threat detection and exposure management. Through advanced analytics, automated alerts, behavioral analytics, threat intelligence and artificial intelligence, security anomalies are identified in a timely manner. Routine vulnerability scanning and independent penetration testing further enhance our ability to detect weaknesses before they can be exploited.
Additionally, we conduct periodic business impact analyses to strengthen resilience and inform risk-based decision-making. The cybersecurity program incorporates multiple layers of security controls to safeguard our systems and data. Access controls are established based on the principle of least privilege, and all employees engage in cybersecurity 54 awareness training to cultivate a security-conscious culture.
Additionally, we conduct periodic business impact analyses to strengthen resilience and inform risk-based decision-making. The cybersecurity program incorporates multiple layers of security controls to safeguard our systems and data. Access controls are established based on the principle of least privilege, and all employees engage in cybersecurity awareness training to cultivate a security-conscious culture.
Risk Factors—Risks Relating to Our Business and Operations—We are increasingly dependent on information technology, and our business and reputation could suffer if we are unable to protect our information technology systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our information technology systems are otherwise disrupted,” which should be read in conjunction with the foregoing information.
Risk Factors—Risks Relating to Our Business and Operations—We are increasingly dependent on IT, and our business and reputation could suffer if we are unable to protect our IT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our IT systems are otherwise disrupted,” which should be read in conjunction with the foregoing information.
We proactively evaluate and refine our security controls by utilizing best practices and threat intelligence to mitigate cyber risks. The Company also utilizes third parties for some cybersecurity services, including managed security services, external penetration testing, and social engineering tests.
We proactively evaluate and refine our security controls by utilizing best practices and threat intelligence to mitigate cyber risks. We also utilize third parties for some cybersecurity services, including managed security services, external penetration testing, and social engineering tests.
This framework guides our efforts to protect critical assets, identify potential threats, respond to incidents, and strengthen resilience, while simultaneously allowing us to assess and enhance the maturity of our program. The cybersecurity program is informed by our Enterprise Risk Management (“ERM”) process and relies on internal and external expertise.
This framework guides our efforts to protect critical assets, identify potential threats, respond to incidents, and strengthen resilience, while simultaneously allowing us to assess and enhance the maturity of our program. The cybersecurity program is an integral part of our Enterprise Risk Management (“ERM”) process and relies on internal and external expertise.
Impact of Cybersecurity Risks and Threats While some of the Company’s third-party service providers have experienced cybersecurity incidents and the Company has experienced threats to its data and systems, as of the date of this report, the Company’s management is not aware of any cybersecurity threats or incidents that have materially affected its business strategy, results of operations, or financial condition.
Impact of Cybersecurity Risks and Threats While some of our third-party service providers have experienced cybersecurity incidents and we have experienced threats to our data and systems, as of the date of this report, our management is not aware of any cybersecurity threats or incidents that have materially affected our business strategy, results of operations, or financial condition.
This team includes our Information Technology Security Services Department and incorporates input from personnel from different functions, levels, and operating regions to support a high level of visibility and accountability throughout the company and to incorporate multiple vantage points on risks and potential mitigations.
This team includes our Cybersecurity Department and incorporates input from personnel from different functions, levels, and operating regions to support a high level of visibility and accountability throughout our company and to incorporate multiple vantage points on risks and potential mitigations.
The Company has an internal team that is supported by security technologies, third-party experts, and threat intelligence resources in support of cybersecurity risk reduction. Our SVPIT oversees the team responsible for leading the enterprise-wide information technology strategy, policy, standards, architecture, and processes.
We have an internal team that is supported by cybersecurity technologies, third-party experts, and threat intelligence resources in support of cybersecurity risk reduction. Our SVPIT oversees the team responsible for leading the enterprise-wide IT strategy, policy, standards, architecture, and processes.
Governance Board of Directors and Audit Committee Our Board of Directors has delegated oversight of the Company’s ERM program, including cybersecurity, to the Audit Committee. The Audit Committee receives updates from our Senior Vice President, Information Technology (“SVPIT”) and members of our Information Technology Security Services Department regarding our enterprise-wide cybersecurity programs at least on a quarterly basis.
Governance Board of Directors and Audit Committee Our Board of Directors has delegated oversight of the Company’s ERM program, including cybersecurity, to the Audit Committee. The Audit Committee receives updates regarding our enterprise-wide cybersecurity programs on a quarterly basis from our Senior Vice President, Information Technology (“SVPIT”) or Chief Information Security Officer (“CISO”).
These updates may address data management and security initiatives, significant existing and emerging cybersecurity risks, and any material cybersecurity incidents and their impact on the Company and its stakeholders. Management 55 The Company’s management is responsible for identifying, assessing, and managing the Company’s exposure to cybersecurity risk.
These updates may address data management and security initiatives, significant existing and emerging cybersecurity risks, and any material cybersecurity incidents and their impact on us and our stakeholders. 52 Management Our management is responsible for identifying, assessing, and managing our exposure to cybersecurity risk.
We maintain secure, redundant backups and regularly test them for integrity and availability. Our recovery strategies prioritize minimizing downtime and rapid service restoration. We strive to incorporate lessons learned from past incidents, strengthening our resilience against future threats. Third-party risk management is a critical component of IT risk management.
Recovery strategies are in place and supervised by a crisis management plan to restore critical operations following a cybersecurity event. We maintain secure, redundant backups and regularly test them for integrity and availability. Our recovery strategies prioritize minimizing downtime and rapid service restoration. We strive to incorporate lessons learned from past incidents, strengthening our resilience against future threats.
Additionally, we maintain an incident response plan that aligns with industry standards to ensure timely detection, containment, and remediation of security incidents. Cybersecurity Program Components Our cybersecurity program includes a focus on governance, process, technology and people. Key components include prevention, detection, and response capabilities, employee training programs, threat intelligence monitoring, and the implementation of an array of technologies.
Additionally, we maintain an incident response plan that aligns with industry standards to ensure timely detection, containment, and remediation of security incidents. 51 Cybersecurity Program Components Our cybersecurity program is focused on exposure management, business resilience and governance through people, process and technology.
We evaluate new vendors before onboarding to identify and manage potential risks and establish contractual requirements for security controls and notification. We also strive to monitor emerging risks associated with those third-party service providers. Assessment of these providers includes completing a standardized questionnaire and conducting risk evaluations for financial, reputational, information security, cybersecurity, and business resiliency risks.
Third-party risk management is a core component of our IT risk framework. We evaluate new vendors to identify potential risks and to establish required security and notification obligations. We also monitor risks associated with existing providers. Our assessments include a standardized questionnaire and evaluations of financial, reputational, information security, cybersecurity and business resiliency risks.
For example, to effectively manage cybersecurity risks, we maintain an asset inventory and classify critical systems to ensure appropriate protection measures. Our risk management processes include regular assessments of internal and third-party risks, which are aligned with our ERM strategy. We enforce cybersecurity policies, standards, and governance practices, ensuring they align with regulatory requirements and industry best practices.
Key components include incident prevention, detection, containment and response capabilities, employee training programs, threat intelligence monitoring, and the implementation of advanced technologies. Our risk management processes include regular assessments of internal and third-party risks, which are aligned with our ERM strategy. We enforce cybersecurity policies, standards, and governance practices, ensuring they align with regulatory requirements and industry best practices.
Our Information Technology Security Services Department is responsible for overseeing the execution of cybersecurity strategy and maturing the Company’s cybersecurity posture. Our SVPIT has over 20 years of experience in the IT industry, including change management, cybersecurity, and enterprise architecture.
Our Cybersecurity Department is led by the CISO, who reports to the SVPIT and is responsible for overseeing the execution of cybersecurity strategy and maturing the Company’s cybersecurity posture. The Cybersecurity Department has extensive experience in cybersecurity, including graduate degrees in information security and Certified Information Security Systems Professional certifications.
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Routine vulnerability scanning and independent penetration testing further enhance our ability to detect weaknesses before they can be exploited. We have an established incident response plan that aligns with NIST guidelines, ensuring a structured approach to identifying, containing, eradicating, and recovering from security incidents. The plan includes defined escalation procedures to engage executive leadership and regulatory authorities as necessary.
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Our SVPIT has over 20 years of experience in the IT industry, and our CISO has over 30 years of experience in cybersecurity, providing a firm foundation from which IT and cybersecurity decisions and strategies can be made.
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Our cybersecurity team conducts regular incident response exercises to enhance response readiness. Additionally, we have a process in place to perform post-incident reviews to refine processes and prevent recurrence. Recovery strategies are in place and supervised by a crisis management plan to restore critical operations following a cybersecurity event.
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We have established an Executive Cybersecurity Committee, comprised of interdisciplinary executive leadership, that meets quarterly and provides oversight for cyber protection, cybersecurity programs, exposure management, and risk tolerance.
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Our cybersecurity team also includes our Cybersecurity Operations Center, which is comprised of cybersecurity professionals and is responsible for the detection, analysis, and response to cybersecurity events, including threats and incidents, and is overseen by the Director of Cybersecurity Operations.
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Cybersecurity considerations are incorporated into our disclosure controls and procedures, and our Disclosure Committee is notified of cybersecurity incidents that could require evaluation under SEC reporting standards, ensuring timely assessment of potential materiality. 53
Removed
The Information Technology Security Services Department has extensive experience in cybersecurity, including graduate degrees in information security and Certified Information Security Systems Professional certifications.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeHog Production Farms (3) 260 1,384 (2) 1,644 Colorado (26), Iowa (410), Illinois (15), Missouri (204), North Carolina (875), Oklahoma (11), South Carolina (28), South Dakota (9), Utah (23), Virginia (43) 11,500 Hogs annually Feed facilities 26 25 51 Colorado (1), Iowa (3), Indiana (1), Kansas (1), Missouri (9), North Carolina (26), Ohio (2), South Carolina (5), Utah (1), Virginia (2) 708.4/32.9 Capacity in tons of feed storage / daily feed production Distribution Network Distribution Centers (4) 2 3 5 Indiana (1), Kansas (1), Maryland (1), Nebraska (1), North Carolina (1) 201.0 Pallet capacity 56 Number of Facilities Segment/Type of Facilities Owned Leased Total State (5) Capacity ( in thousand ) Unit of Measurement Direct-to-Store Delivery Facilities 6 7 13 Indiana (3), Kentucky (1), Maryland (1), Michigan (2), Ohio (3), Pennsylvania (1), Texas (3) 152.1 Square feet Other Mexico Fresh Pork Processing 1 — 1 Puebla, MX 5.0 Head of hogs daily Farms 115 6 (2) 121 Puebla (79), Veracruz (42), MX 1,800 Hogs annually Corporate 1 Puebla, MX 13.3 Square feet Bioscience 1 — 1 Ohio 34.5 Square feet U.S.
Biggest changeHog Production Farms (3) 245 1,388 (2) 1,633 Colorado (25), Iowa (397), Illinois (15), Missouri (202), North Carolina (879), Oklahoma (11), South Carolina (30), South Dakota (8), Utah (25), Virginia (41) 11,500 Hogs annually Feed facilities 26 23 49 Colorado (1), Iowa (2), Indiana (1), Kansas (1), Missouri (9), North Carolina (25), Ohio (2), South Carolina (5), Utah (1), Virginia (2) 654/33 Capacity in tons of feed storage / daily feed production Distribution Network Distribution Centers (4) 2 3 5 Indiana (1), Kansas (1), Maryland (1), Nebraska (1), North Carolina (1) 201 Pallet capacity Direct-to-Store Delivery Facilities 6 7 13 Indiana (3), Kentucky (1), Michigan (2), Ohio (3), Pennsylvania (1), Texas (3) 152 Square feet Other Mexico Fresh Pork Processing 1 — 1 Puebla, MX 5 Head of hogs daily Hog Production 134 6 (2) 140 Puebla (86), Veracruz (54), MX 1,800 Hogs annually Corporate — — 1 Puebla, MX 13 Square feet Bioscience 1 — 1 Ohio 34 Square feet U.S.
They are counted separately under each segment heading. We operate a total of 39 facilities that process fresh pork and packaged meats in the U.S. (2) Consists of contract farms. (3) Does not include a limited number of inactive farms. (4) Distribution centers serve both our Packaged Meats and Fresh Pork segments.
They are counted separately under each segment heading. We operate a total of 38 facilities that process fresh pork and packaged meats in the U.S. (2) Consists of contract farms. (3) Does not include a limited number of inactive farms. (4) Distribution centers serve both our Packaged Meats and Fresh Pork segments.
Fresh Pork (1) Processing 8 — 8 Iowa (2), Illinois (1), Missouri (1), Nebraska (1), North Carolina (2), South Dakota (1) 107.9 Head of hogs daily Other 5 1 6 Iowa (2), North Carolina (2), Utah (1), Virginia (1) 2,500 Daily production lbs.
Fresh Pork (1) Processing 8 — 8 Iowa (2), Illinois (1), Missouri (1), Nebraska (1), North Carolina (2), South Dakota (1) 108 Head of hogs daily Other 5 1 6 Iowa (2), North Carolina (2), Utah (1), Virginia (1) 2,200 Daily production lbs.
We also have access to over 45 cold storage locations via contractual arrangements with third parties. Our contracts are either pay-for-use or commit us to a specific annual amount irrespective of usage. (5) Numbers in parentheses represent total number of facilities for each jurisdiction. 57 The map below shows the expansive footprint of our facilities and properties:
We also have access to over 45 cold storage locations via contractual arrangements with third parties. Our contracts are either pay-for-use or commit us to a specific annual amount irrespective of usage. (5) Numbers in parentheses represent total number of facilities for each jurisdiction.
PROPERTIES The table below summarizes information about our owned and leased properties as of February 28, 2025: Number of Facilities Segment/Type of Facilities Owned Leased Total State (5) Capacity ( in thousand ) Unit of Measurement Packaged Meats (1) Production 29 2 31 Georgia (1), Iowa (5), Illinois (2), Indiana (1), Kansas (2), Kentucky (2), Massachusetts (1), Minnesota (1), Missouri (2), North Carolina (3), Nebraska (3), New Jersey (1), Ohio (2), Pennsylvania (1) , South Dakota (1), Tennessee (1), Virginia (1), Wisconsin (1) 13,100 Daily production lbs.
PROPERTIES The table below summarizes information about our owned and leased properties as of January 28, 2026: Number of Facilities Segment/Type of Facilities Owned Leased Total State (5) Capacity ( in thousand ) Unit of Measurement Packaged Meats (1) Production 29 1 30 Georgia (1), Iowa (5), Illinois (2), Indiana (1), Kansas (2), Kentucky (2), Massachusetts (1), Minnesota (1), Missouri (2), North Carolina (3), Nebraska (3), Ohio (2), Pennsylvania (1) , South Dakota (1), Tennessee (1), Virginia (1), Wisconsin (1) 12,500 Daily production lbs.
Administrative Headquarters 1 — 1 Virginia 132.3 Square feet Satellite offices 1 3 4 Illinois (1), Missouri (1), North Carolina (1), Virginia (1) 135.2 Square feet Sales offices — 5 5 Idaho (1), Ohio (1), Michigan (1) California (1), Arkansas (1) 32.0 Square feet ________________ (1) Certain of our fresh pork facilities are co-located with packaged meats production facilities.
Administrative Headquarters 1 — 1 Virginia 148 Square feet 54 Number of Facilities Segment/Type of Facilities Owned Leased Total State (5) Capacity ( in thousand ) Unit of Measurement Satellite offices 1 3 4 Illinois (1), Missouri (1), North Carolina (1), Virginia (1) 183 Square feet Sales offices — 5 5 Idaho (1), Ohio (1), Michigan (1) California (1), Arkansas (1) 32 Square feet ________________ (1) Certain of our fresh pork facilities are co-located with packaged meats production facilities.
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The map below shows the expansive footprint of our facilities and properties: ________________ (1) Certain of our fresh pork facilities are co-located with packaged meats production facilities. (2) Other includes our Smithfield Bioscience facility and our fresh pork facility in Mexico. 55

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information called for by this item is incorporated herein by reference to “Note 18: Commitments and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information called for by this item is incorporated herein by reference to “Note 19: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMine Safety Disclosures 58 Part II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 Item 6 Selected Financial Data 59 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A Quantitative and Qualitative Disclosures About Market Risk 84 Item 8 Financial Statements and Supplementary Data 86 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 141 Item 9A Controls and Procedures 141 Item 9B Other Information 142 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 142 Part III Item 10 Directors, Executive Officers and Corporate Governance 142 Item 11 Executive Compensation 143 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 143 Item 13 Certain Relationships and Related Transactions, and Director Independence 143 Item 14 Principal Accountant Fees and Services 143 Part IV Item 15 Exhibits, Financial Statement Schedules 143 Item 16 Form 10-K Summary 146
Biggest changeMine Safety Disclosures 56 Part II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 56 Item 6 Reserved 57 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A Quantitative and Qualitative Disclosures About Market Risk 83 Item 8 Financial Statements and Supplementary Data 86 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 142 Item 9A Controls and Procedures 143 Item 9B Other Information 144 Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 144 Part III Item 10 Directors, Executive Officers and Corporate Governance 144 Item 11 Executive Compensation 144 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 144 Item 13 Certain Relationships and Related Transactions, and Director Independence 145 Item 14 Principal Accountant Fees and Services 145 Part IV Item 15 Exhibits, Financial Statement Schedules 145 Item 16 Form 10-K Summary 148 Signatures 149 PART I

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We have historically paid dividends to WH Group annually, along with special dividends in some years. On March 24, 2025, our Board declared a quarterly cash dividend of $0.25 per share of common stock, which is payable on April 22, 2025, to shareholders of record on April 10, 2025.
Biggest changeOn March 23, 2026, our Board declared a quarterly cash dividend of $0.3125 per share of common stock, which is payable on April 21, 2026, to shareholders of record on April 7, 2026.
We anticipate the remaining quarterly dividends in fiscal 2025 will be $0.25 per share, resulting in an annual dividend rate in fiscal 2025 of $1.00 per share.
We anticipate the remaining quarterly dividends in fiscal year 2026 will be $0.3125 per share, resulting in an annual dividend rate in fiscal year 2026 of $1.25 per share.
WH Group is listed on the Hong Kong Exchange. 58 Holders As of March 5, 2025, there were approximately two record holders of the Company’s common stock and approximately 5,995 holders whose shares were held in street name by brokerage firms and financial institutions. Issuer Purchases of Equity Securities None.
WH Group is listed on the Hong Kong Exchange. Holders As of March 4, 2026, there was one record holder of the Company’s common stock and approximately 23,346 holders whose shares were held in street name by brokerage firms and financial institutions. Issuer Purchases of Equity Securities None. Dividends In fiscal year 2025, we paid dividends of $1.00 per share.
Removed
Securities Authorized for Issuance under Equity Compensation Plans For information relating to securities authorized for issuance under equity compensation plans, see Part III, Item 12 of this Form 10-K. Use of Proceeds On January 21, 2025, our Registration Statement on Form S-1, as amended (File 333-284141), was declared effective.
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Securities Authorized for Issuance under Equity Compensation Plans For information relating to securities authorized for issuance under equity compensation plans, see Part III, Item 12 of this Form 10-K. 56 Shareholder Return Performance Graph The following graph compares the cumulative total shareholder return on Smithfield’s common stock from our initial trading date through the end of fiscal year 2025 to the cumulative total returns on the Standard & Poor’s (“S&P”) 500 index and the S&P Composite 1500 Food Products index.
Removed
On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, which represents 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711. The remaining 13,043,479 shares of common stock were sold by our existing shareholders.
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The comparison assumes $100 was invested on January 28, 2025 in shares of our common stock and in each of the indices shown and assumes that all of the dividends were reinvested.
Removed
Our existing shareholder granted the underwriters a 30-day option to purchase up to 3,913,042 additional shares of our common stock. On February 20, 2025, the underwriters partially exercised such option and purchased 2,506,936 additional shares of common stock from our existing shareholder. The acting representatives for the underwriters were Morgan Stanley & Co.
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January 28, 2025 March 30, 2025 June 29, 2025 September 28, 2025 December 28, 2025 Smithfield Foods, Inc. $ 100 $ 102 $ 120 $ 122 $ 119 S&P 500 100 92 102 110 116 S&P Composite 1500 Food Products 100 106 101 100 96 The information in this section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934.
Removed
LLC, BofA Securities, Inc. and Goldman Sachs & Co.LLC. We received net proceeds from the IPO of approximately $236 million after deducting underwriting discounts, commissions and fees of $13 million. Upon receipt, the net proceeds from the initial public offering were held in cash and cash equivalents and marketable securities.
Removed
There has been no material change in the planned use of proceeds from our IPO from that described in our Prospectus on Form 424B 4, filed with the SEC on January 29, 2025. Shareholder Return Performance Graph Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs such, EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations are not intended to be alternatives to net income from continuing operations or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges. 77 Fiscal Year 2024 2023 Affected Income Statement Account (in millions, except percentages) Net income (loss) from continuing operations $ 798 $ (133) Interest expense, net 66 76 Income tax expense (benefit) 271 (41) Depreciation and amortization 339 427 EBITDA from continuing operations $ 1,474 $ 329 Employee Retention Tax Credits (86) — Cost of sales Employee Retention Tax Credits (1) — SG&A West Coast Exit and Hog Production Reform (38) — Operating gains West Coast Exit and Hog Production Reform (1) 29 110 Cost of sales West Coast Exit and Hog Production Reform — 49 (Income) loss from equity method investments Insurance recoveries (4) (5) Operating gains Incremental costs from destruction of property 4 3 Cost of sales Litigation charges — 208 SG&A Gain on sale of Vernon, California facility — (86) Operating gains Adjusted EBITDA from continuing operations $ 1,379 $ 610 Net income (loss) margin from continuing operations 5.6 % (0.9) % Adjusted EBITDA margin from continuing operations 9.7 % 4.2 % (1) Excludes accelerated depreciation and amortization charges of $2 million and $85 million for fiscal years 2024 and 2023, respectively, as such charges are included in the depreciation and amortization line in this table.
Biggest changeAs such, adjusted net income from continuing operations attributable to Smithfield and adjusted net income from continuing operations per common share attributable to Smithfield are not intended to be alternatives to net income from continuing operations, net income from continuing operations per common share or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges. 74 Fiscal Year Affected income statement account 2025 2024 (in millions, except per share data) Net income from continuing operations attributable to Smithfield $ 987 $ 783 Litigation charges 73 — SG&A Reduction in workforce (1) 9 — SG&A Reduction in workforce (1) 2 — Cost of sales Office closures (2) 4 — SG&A Hog Production Reform (3) 5 31 Cost of sales Hog Production Reform (4) (4) (38) Operating gains Plant closure 2 — Cost of sales Incremental costs from destruction of property — 4 Cost of sales Employee retention tax credits (5) (10) (86) Cost of sales Employee retention tax credits (5) — (1) SG&A Insurance recoveries (6) (36) (4) Operating gains Company-owned life insurance gain (7) (17) — Non-operating gains Income tax effect of non-GAAP adjustments (8) (11) 24 Income tax expense Adjusted net income from continuing operations attributable to Smithfield $ 1,002 $ 714 Net income from continuing operations attributable to Smithfield per diluted common share $ 2.51 $ 2.06 Adjusted net income from continuing operations attributable to Smithfield per diluted common share $ 2.55 $ 1.88 ________________ (1) Consists of severance costs associated with workforce reduction initiatives.
Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield The following table provides a reconciliation of net income from continuing operations to adjusted net income from continuing operations attributable to Smithfield.
Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield The following table provides a reconciliation of net income from continuing operations attributable to Smithfield to adjusted net income from continuing operations attributable to Smithfield.
While not all inclusive, examples of these items include: • loss contingencies, due to the difficulty in predicting future events, their timing and size; • transactions or events that are not part of our core business activities or are unusual in their nature (whether gains or losses); and 75 • the tax effects of the foregoing items.
While not all inclusive, examples of these items include: • loss contingencies, due to the difficulty in predicting future events, their timing and size; • transactions or events that are not part of our core business activities or are unusual in their nature (whether gains or losses); and • the tax effects of the foregoing items.
We believe adjusted EBITDA margin from continuing operations is a useful measure as it evaluates overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities. We believe these non-GAAP measures provide a more comparable year-over-year analysis.
We believe adjusted EBITDA margin from continuing operations is a useful measure as it evaluates overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities. 75 We believe these non-GAAP measures provide a more comparable year-over-year analysis.
Cost Factors Our cost as a percentage of sales varies based on fluctuations of raw materials prices, as well as manufacturing, distribution and marketing costs. Raw materials are the largest component of our total cost of goods sold, with feed ingredients and hogs accounting for the majority share.
Cost Factors Our cost as a percentage of sales varies based on fluctuations of raw material prices, as well as manufacturing, distribution and marketing costs. Raw materials are the largest component of our total cost of goods sold, with feed ingredients and hogs accounting for the majority share.
If it is, a quantitative goodwill impairment test is performed to measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. 81 To identify if an impairment exists, we compare the fair value of a reporting unit with its carrying amount, including goodwill.
If it is, a quantitative goodwill impairment test is performed to measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. To identify if an impairment exists, we compare the fair value of a reporting unit with its carrying amount, including goodwill.
As part of the Securitization Facility, certain accounts receivable of our major domestic meat processing subsidiaries are 69 sold to a wholly owned “bankruptcy remote” special purpose vehicle (“SPV”).
As part of the Securitization Facility, certain accounts receivable of our major domestic meat processing subsidiaries are sold to a wholly-owned “bankruptcy remote” special purpose vehicle (“SPV”).
Overview We are an American food company that employs approximately 34,000 people in the U.S. and 2,500 people in Mexico. We boast a portfolio of high-quality, iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. We are a majority owned subsidiary of Hong Kong-based WH Group.
Overview We are an American food company that employs approximately 32,000 people in the U.S. and 2,500 people in Mexico. We boast a portfolio of high-quality, iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. We are an indirect, majority-owned subsidiary of Hong Kong-based WH Group.
Prepaid expenses and other current assets increased in fiscal year 2024 largely due to an increase in income taxes receivable, which was primarily driven by a tax benefit recognized in connection with the carve-out of our European operations, and an increase in prepaid deposits for grain in Mexico.
Prepaid expenses and other current assets increased in fiscal year 2024 largely due to an increase in income taxes receivable, which was primarily driven by a tax 69 benefit recognized in connection with the carve-out of our European operations, and an increase in prepaid deposits for grain in Mexico. • Accounts payable .
We additionally sold approximately 28,000 sows and the associated commercial hog inventories located on certain company-owned and contract farms in North Carolina to VisionAg. VisionAg is now a hog supplier to us and will supply approximately 600,000 hogs annually. In addition, we will supply animal feed and provide certain support services to VisionAg.
We additionally sold approximately 28,000 sows and the associated commercial hog inventories located on certain Company-owned and contract farms in North Carolina to VisionAg. VisionAg is now a hog supplier to us and supplies approximately 600,000 hogs annually. We supply animal feed and provide certain support services to VisionAg.
Our goodwill is included in the following reporting units: • Packaged Meats: $1,503 million; • Mexico: $69 million; • Fresh Pork: $34 million; • Hog Production:$4 million; and • Bioscience: $4 million. We have not recognized an impairment of goodwill or other intangible assets in the past three fiscal years.
Our goodwill is included in the following reporting units: • Packaged Meats: $1,503 million • Mexico: $79 million • Fresh Pork: $34 million • Hog Production: $4 million • Bioscience: $4 million We have not recognized an impairment of goodwill or other intangible assets in the past three fiscal years.
As a result of the IPO, our common stock is listed on the Nasdaq Global Select Market under the ticker “SFD.” In connection with the IPO, we granted to our directors and certain of our employees and certain directors and employees of WH Group: • options to purchase 9,822,467 shares with an exercise price equal to the IPO price and an aggregate grant date fair value of $30 million; and • 1,527,000 restricted stock units (“RSUs”) with an aggregate grant date fair value of $31 million.
As a result of the IPO, our common stock is listed on the Nasdaq Global Select Market under the ticker “SFD.” In connection with the IPO, we granted to certain of our directors and employees and certain directors and employees of WH Group: (1) options to purchase 9,822,467 shares of common stock with an exercise price equal to the IPO price of $20.00 per share with an aggregate grant date fair value of $30 million and (2) 1,527,000 restricted stock units (“RSUs”) with an aggregate grant date fair value of $31 million.
See “Note 14: Pension and Other Retirement Plans” to the consolidated financial statements included in Part II, Item 8 of this Annual Report for further information about our accounting for pension and retirement plans. Derivative Accounting We are exposed to market risks primarily from changes in commodity prices.
See “Note 14: Pension and Other Retirement Plans” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for further information about our accounting for pension and retirement plans. Derivative Accounting We are exposed to market risks primarily from changes in commodity prices.
For more information on contingencies, refer to “Note 18: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report . Risk Management Activities We are exposed to market risks primarily from changes in commodity prices, and to a lesser degree, interest rates and foreign exchange rates.
For more information on contingencies, refer to “Note 19: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K . Risk Management Activities We are exposed to market risks primarily from changes in commodity prices, and to a lesser degree, interest rates and foreign exchange rates.
The Senior Revolving Credit Facility bears interest at the SOFR plus a margin ranging from 0.875% to 1.50% per annum, or, at our election, at a base rate plus a margin ranging from 0.00% to 0.50% per annum, in each case depending on our senior unsecured debt ratings.
The Senior Revolving Credit Facility bears interest at the Secured Overnight Financing Rate plus a margin ranging from 0.875% to 1.50% per annum, or, at our election, at a base rate plus a margin ranging from 0.00% to 0.50% per annum, in each case depending on our senior unsecured debt ratings.
Our accounting policies are more fully discussed in “Note 1: Summary of Significant Accounting Policies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report. 80 Revenue Recognition Our revenue (sales) is primarily derived from contracts with customers for the purchase of our products.
Our accounting policies are more fully discussed in “Note 1: Summary of Significant Accounting Policies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Revenue Recognition Our revenue (sales) is primarily derived from contracts with customers for the purchase of our products.
Assumptions about royalty rates are based on the rates at which similar brands and trademarks are licensed in the marketplace. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions. As of December 29, 2024, we had $1,613 million of goodwill and $1,216 million of non-amortizable trademarks.
Assumptions about royalty rates are based on the rates at which similar brands and trademarks are licensed in the marketplace. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions. As of December 28, 2025, we had $1,623 million of goodwill and $1,216 million of non-amortizable trademarks.
We consider all these factors to be level 3 inputs, as defined in “Note 16: Fair Value Measurements” to the consolidated financial statements included in Part II, Item 8 of this Annual Report. The fair values of our trademarks have been estimated using a royalty rate method.
We consider all these factors to be level 3 inputs, as defined in “Note 17: Fair Value Measurements” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. The fair values of our trademarks have been estimated using a royalty rate method.
As such, adjusted net income from continuing operations attributable to Smithfield and adjusted net income from continuing operations per common share attributable to Smithfield are not intended to be alternatives to net income from continuing operations, net income from continuing operations per common share or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges.
As such, EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations are not intended to be alternatives to net income from continuing operations or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges.
We additionally sold approximately 150,000 sows and related inventories located on company-owned and contract farms in North Carolina to Murphy Family Farms and recorded a gain of $6 million on the sale. Subsequent to the end of fiscal year 2024, on December 30, 2024, we sold the commercial hog inventories associated with such sows to Murphy Family Farms.
We additionally sold approximately 150,000 sows and related inventories located on Company-owned and contract farms in North Carolina to Murphy Family Farms. Subsequent to the end of fiscal year 2024, on December 30, 2024, we sold the commercial hog inventories associated with such sows to Murphy Family Farms.
We recognized $(25) million, $18 million and $(10) million in gains (losses) on derivatives accounted for under the mark-to-market method in fiscal years 2024, 2023 and 2022, respectively.
We recognized $8 million, $(25) million and $18 million in gains (losses) on derivatives accounted for under the mark-to-market method in fiscal years 2025, 2024, and 2023, respectively.
We believe EBITDA from continuing operations is a useful measure to our stakeholders because it excludes the effects of financing and investing activities by eliminating interest and depreciation costs to provide a comparable year-over-year analysis.
EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations are non-GAAP measures. We believe EBITDA from continuing operations is a useful measure to our stakeholders because it excludes the effects of financing and investing activities by eliminating interest and depreciation costs to provide a comparable year-over-year analysis.
Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill and non-amortizable intangible assets are tested for impairment annually in the fourth quarter, or sooner if impairment indicators arise.
Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill and non-amortizable intangible assets are tested for impairment annually on the first day of the fourth quarter, or sooner if impairment indicators arise.
We enter into hedging transactions for these commodities when we determine conditions are appropriate to mitigate the inherent price risks. While this hedging may limit our ability to participate in gains from favorable commodity fluctuations, it also reduces the risk of loss from adverse changes in raw material prices.
We enter into hedging transactions for commodities such as feed ingredients, hogs and fuel when we determine conditions are appropriate to mitigate the inherent price risks. While this hedging may limit our ability to participate in gains from favorable commodity fluctuations, it also reduces the risk of loss from adverse changes in raw material prices.
Lastly, we have a capital support agreement with Murphy Family Farms whereby we are committed to advance up to $50 million to cover operating costs of Murphy Family Farms if certain conditions are 73 met. No such advances have been made. We are unable to reliably estimate if or when any of these commitments will be drawn upon.
Lastly, we have capital support agreements with Murphy Family Farms and VisionAg whereby we are committed to advance up to $50 million and $15 million, respectively, to cover operating costs if certain conditions are met. No such advances have been made. We are unable to reliably estimate if or when any of these commitments will be drawn upon.
A 0.50% decrease in expected return on plan assets would have resulted in an additional $7 million in net pension cost in fiscal year 2024.
A 0.50% decrease in expected return on plan assets would have resulted in an additional $8 million in net pension cost in fiscal year 2025.
We have estimated our obligation based on expected hogs delivered from these farmers. (8) Includes fixed-price forward grain purchase contracts totaling $76 million. Also includes unpriced forward grain purchase contracts which, if valued using market prices as of December 29, 2024, would be $102 million. These forward grain contracts are accounted for as normal purchases.
We have estimated our obligation based on expected hogs delivered from these farmers. (8) Includes fixed-price forward grain purchase contracts totaling $67 million. Also includes unpriced forward grain purchase contracts which, if valued using market prices as of December 28, 2025, would be $33 million. These forward grain contracts are accounted for as normal purchases.
To mitigate these risks, we utilize derivative instruments to hedge our exposure to changing prices and rates, as more fully described in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.
To mitigate these risks, we utilize derivative instruments to hedge our exposure to changing prices and rates, as more fully described in “Quantitative and Qualitative Disclosures About Market Risk” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
As a result, they are not recorded in the balance sheet. (9) Other long-term liabilities consist of long-term casualty insurance reserves, deferred compensation, contingent liabilities, and asset retirement obligations, among others. We are unable to estimate reliably the timing of settlement of these liabilities.
As a result, they are not recorded in the balance sheet. (9) Other long-term liabilities consist of long-term casualty insurance reserves, deferred compensation and unrecognized tax benefits, among others. We are unable to estimate reliably the timing of settlement of these liabilities.
However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent. As of December 29, 2024, the SPV held $374 million of accounts receivable.
However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent. As of December 28, 2025, the SPV held $654 million of accounts receivable.
This discussion and analysis includes the results of operations and financial conditions, including year-over-year comparisons, for fiscal years 2024 and 2023.
This discussion and analysis includes the results of operations and financial condition, including year-over-year comparisons, for fiscal years 2025 and 2024.
Non-GAAP Measures In arriving at our presentation of non-GAAP financial measures, we exclude items that have an impact on our income statement that, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not identified, potentially cause investors to extrapolate future performance from an improper base.
Smithfield was released from the guaranty and no longer provides a guaranty of Monarch’s debt. 73 Non-GAAP Measures In arriving at our presentation of non-GAAP financial measures, we exclude items that have an impact on our income statement that, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not identified, potentially cause investors to extrapolate future performance from an improper base.
As part of the new agreement, there are no longer any subsidiary guarantors under the Senior Revolving Credit Facility which also released the subsidiary guarantors from our senior unsecured notes.
The Senior Revolving Credit Facility capacity remains at $2,100 million. As part of the new agreement, there are no longer any subsidiary guarantors under the Senior Revolving Credit Facility which also released the subsidiary guarantors from our Senior Unsecured Notes.
For additional information on derivatives, refer to “Note 1: Summary of Significant Accounting Policies” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report, which includes detailed discussions of our accounting for and use of derivative instruments.
For additional information on derivatives, refer to “Note 1: Summary of Significant Accounting Policies” and “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which includes detailed discussions of our accounting for and use of derivative instruments. 82 Recently Issued Accounting Pronouncements For a description of recently issued accounting pronouncements, refer to “Note 1: Summary of Significant Accounting Policies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Monarch Sale Notice On January 16, 2025, TPG Rise Climate, one of the other two equal joint venture partners in Monarch, delivered a sale notice under the joint venture agreement, pursuant to which Monarch must pursue a sale of the joint venture.
Monarch Sale Notice On January 16, 2025, TPG Rise Climate (“TPG”), one of the other two equal joint venture partners in Monarch Bio Energy, LLC (“Monarch”), delivered a sale notice under the joint venture agreement, which required Monarch to pursue a sale of the joint venture.
The increase in inter-segment sales by our Fresh Pork segment was attributable to higher market values for fresh pork components sold to our Packaged Meats segment. • Hog Production.
The increase in inter-segment sales by our Fresh Pork segment was attributable to higher market values for fresh pork components sold to our Packaged Meats segment, partially offset by a 0.6% decrease in sales volume. • Hog Production.
Inventories and accounts payable decreased in fiscal year 2024 primarily due to lower commodity prices for feed grains and lower inventory volumes attributable to Hog Production reform decisions.
Inventories decreased in fiscal year 2024 primarily due to lower commodity prices for feed grains and lower inventory volumes attributable to Hog Production Reform decisions. • Prepaid expenses and other current assets.
On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, which represents 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711. The remaining 13,043,479 shares of common stock were sold by our existing shareholder.
Initial Public Offering On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, representing 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711.
We will supply animal feed and other supplies and provide certain support services to Murphy Family Farms. 63 • On February 24, 2025, we became a member of a North Carolina-based company, VisionAg, by contributing $450,000 in cash in exchange for a 9% minority interest.
Murphy Family Farms is now a hog supplier to us and supplies approximately 3.2 million hogs annually. We supply animal feed and other supplies and provide certain support services to Murphy Family Farms. On February 24, 2025, we became a member of a North Carolina-based company, VisionAg, by contributing $450,000 in cash in exchange for a 9% minority interest.
Our Senior Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on our ability and that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets subject to their security interest, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness or enter into transactions with affiliates, each subject to certain exceptions as set forth therein.
Our Senior Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on our ability and that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets subject to their security interest, or enter into transactions with affiliates, each subject to certain exceptions as set forth therein.
We must maintain certain ratios related to the collection of our receivables as a condition of the Securitization Facility agreement. As of December 29, 2024, we had $22 million in letters of credit issued under the Securitization Facility. None of the letters of credit were drawn upon.
We must maintain certain ratios related to the collection of our receivables as a condition of the Securitization Facility agreement. As of December 28, 2025, we had $27 million in letters of credit issued under the Securitization Facility.
Our results of operations will continue to depend on our ability to (1) manage raw material cost movements through optimizing our hog production operations, hedging, forward purchasing, strategic sourcing negotiations and passing inflationary cost increases to customers, (2) operate our manufacturing and logistics footprint efficiently and competitively and (3) continue to attract and retain customers and consumers through effective sales and marketing spend. 61 Tariffs We export our products to over 30 countries, including China, Mexico and Canada, and we are engaged in a joint venture in Mexico.
Our results of operations will continue to depend on our ability to (1) manage raw material cost movements through optimizing our hog production operations, hedging, forward purchasing, strategic sourcing negotiations and passing inflationary cost increases to customers, (2) operate our manufacturing and logistics footprint efficiently and competitively and (3) continue to attract and retain customers and consumers through effective sales and marketing spend.
Included in the $31 million of charges recognized in fiscal year 2024 was a $4 million loss on the sale of certain hog farms in Missouri from which we received $32 million in proceeds.
We recognized charges totaling $31 million in cost of sales in fiscal year 2024 as a result of this initiative, including a $4 million loss on the sale of certain hog farms in Missouri, from which we received $32 million in proceeds.
These non-GAAP measures are not intended to be alternatives to operating profit, operating profit margin or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges. 79 Fiscal Year 2024 Packaged Meats Fresh Pork Hog Production Other (1) Corporate (2) Unallocated (3) Consolidated (in millions, except percentages) Operating profit (loss) $ 1,168 $ 266 $ (144) $ 35 $ (153) $ (55) $ 1,118 Employee retention tax credits (38) (41) (8) — — — (87) West Coast Exit and Hog Production Reform — — — — — (7) (7) Insurance recoveries — — — — — (4) (4) Incremental costs from destruction of property — — — — — 4 4 Adjusted operating profit (loss) $ 1,130 $ 225 $ (152) $ 35 $ (153) $ (61) $ 1,024 Operating profit (loss) margin 14.0 % 3.4 % (4.8) % 7.4 % NM NM 7.9 % Adjusted operating profit (loss) margin 13.6 % 2.9 % (5.0) % 7.4 % NM NM 7.2 % Fiscal Year 2023 Packaged Meats Fresh Pork Hog Production Other (1) Corporate (2) Unallocated (3) Consolidated (in millions, except percentages) Operating profit (loss) $ 1,066 $ 117 $ (756) $ (4) $ (107) $ (371) $ (56) Litigation charges — — — — — 208 208 West Coast Exit and Hog Production Reform — — — — — 195 195 Gain on sale of Vernon, California facility — — — — — (86) (86) Insurance recoveries — — — — — (5) (5) Incremental costs from destruction of property — — — — — 3 3 Adjusted operating profit (loss) $ 1,066 $ 117 $ (756) $ (4) $ (107) $ (56) $ 258 Operating profit (loss) margin 12.9 % 1.5 % (22.8) % (0.8) % NM NM (0.4) % Adjusted operating profit (loss) margin 12.9 % 1.5 % (22.8) % (0.8) % NM NM 1.8 % ________________ (1) Includes our Mexico and Bioscience operations.
These non-GAAP measures are not intended to be alternatives to operating profit, operating profit margin or any other performance measures derived in accordance with GAAP and should not be used by investors or other users of our financial statements in isolation for formulating decisions as they exclude a number of important cash and non-cash charges. 77 Fiscal Year 2025 Packaged Meats Fresh Pork Hog Production Other (1) Corporate (2) Unallocated (3) Consolidated (in millions, except percentages) Operating profit (loss) $ 1,094 $ 214 $ 176 $ 45 $ (128) $ (109) $ 1,292 Litigation charges — — — — — 73 73 Reduction in workforce (4) — — — — — 12 12 Office closures (5) — — — — — 4 4 Plant closure — — — — — 2 2 Hog Production Reform — — — — — 1 1 Employee retention tax credits (6) (5) (5) — — — — (10) Insurance recoveries (7) — — — — — (36) (36) Adjusted operating profit (loss) $ 1,089 $ 209 $ 176 $ 45 $ (128) $ (55) $ 1,336 Operating profit margin 12.5 % 2.6 % 5.2 % 8.6 % NM NM 8.3 % Adjusted operating profit margin 12.4 % 2.5 % 5.2 % 8.6 % NM NM 8.6 % Fiscal Year 2024 Packaged Meats Fresh Pork Hog Production Other (1) Corporate (2) Unallocated (3) Consolidated (in millions, except percentages) Operating profit (loss) $ 1,168 $ 266 $ (144) $ 35 $ (153) $ (55) $ 1,118 Incremental costs from destruction of property — — — — — 4 4 Insurance recoveries (7) — — — — — (4) (4) Hog Production Reform (8) — — — — — (7) (7) Employee retention tax credits (6) (38) (41) (8) — — — (87) Adjusted operating profit (loss) $ 1,130 $ 225 $ (152) $ 35 $ (153) $ (61) $ 1,024 Operating profit (loss) margin 14.0 % 3.4 % (4.8) % 7.4 % NM NM 7.9 % Adjusted operating profit (loss) margin 13.6 % 2.9 % (5.0) % 7.4 % NM NM 7.2 % ________________ (1) Includes our Mexico and Bioscience operations.
The decrease in inter-segment sales by our Hog Production segment was attributable to our Hog Production Reform activities, which reduced the number of hogs sold to our Fresh Pork segment, partially offset by an increase in the average sales price.
The decrease in inter-segment sales by our Hog Production segment was attributable to our strategic initiative to optimize our hog production operations, which reduced the number of hogs produced by our Hog Production segment, partially offset by an increase in the average sales price.
As of December 29, 2024, we had $3,245 million of available liquidity consisting of $943 million in cash and cash equivalents and $2,303 million of availability under our committed credit facilities. Availability under our committed credit facilities is reduced by the principal amount of our outstanding commercial paper.
As of December 28, 2025, we had $3,837 million of available liquidity consisting of $1,539 million in cash and cash equivalents and $2,298 million of availability under our committed credit facilities. Availability under our committed credit facilities is reduced by the principal amount of any outstanding commercial 67 paper.
We have reduced the size of our internal hog production from a peak of 17.6 million head in 2019 to 14.6 million head in 2024, and we continue to explore opportunities for reduced internal production. We expect to produce approximately 11.5 million head in 2025, which would represent approximately 40% of the hogs processed by our Fresh Pork segment.
We have reduced the size of our internal hog production from a peak of 17.6 million head in 2019 to 11.1 million head in 2025, which represents approximately 40% of the hogs processed by our Fresh Pork segment. We continue to explore opportunities to reduce internal production over the medium term.
We have shifted our portfolio towards a higher mix of value-added and margin accretive products while leveraging the breadth of our offerings to further penetrate across dayparts.
As a result, we have pursued strategies that we believe best align our products with consumer trends and behavior. We have shifted our portfolio towards a higher mix of value-added and margin accretive products while leveraging the breadth of our offerings to further penetrate across dayparts.
Additionally, legal expenses incurred in our and our subsidiaries’ defense of these claims and any payments made to plaintiffs through unfavorable verdicts or otherwise could negatively impact our cash flows and our liquidity position.
Contingent Losses The consolidated financial statements reflect accruals for contingent losses associated with various claims. Legal expenses incurred in our and our subsidiaries’ defense of these claims and any payments made to plaintiffs through unfavorable verdicts or otherwise could negatively impact our cash flows and our liquidity position.
No gain or loss was recognized on the transaction. The historical results of operations, assets and liabilities, and cash flows of the European operations have been condensed and reported as discontinued operations in the consolidated financial statements for all periods presented. Dry Sausage Facility Acquisition.
The historical results of operations, assets and liabilities, and cash flows of the European operations have been condensed and reported as discontinued operations in the consolidated financial statements for all periods presented.
In the second quarter of 2023, we sold our Vernon, California facility for $205 million and recognized a gain of $86 million in operating gains in the consolidated statement of income. On December 17, 2024, we sold our hog production assets in Utah, excluding the live animals, for $58 million.
Additionally, on December 17, 2024, we sold our hog production assets in Utah, excluding the live animals, for $58 million. The transaction resulted in a gain of $32 million, which was recognized in operating gains in the 62 consolidated statement of income in the fourth quarter of 2024.
Over the past three fiscal years, we have recognized $76 million of income tax expense in years subsequent to the initial recognition and measurement of an uncertain tax position and we paid $17 million to tax authorities in fiscal year 2024 upon the ultimate resolution of uncertain tax positions taken in prior years.
Over the past three fiscal years, we have recognized $66 million of income tax expense in years subsequent to the initial recognition and measurement of an unrecognized tax benefit. No payments were made to tax authorities in fiscal year 2025 upon the ultimate resolution of unrecognized tax benefits taken in prior years.
We also expect to contribute $23 million to our non-qualified pension plans to cover expected benefit payments. We are unable to reliably estimate the amount and timing of the remaining payments beyond fiscal year 2025, therefore we have only the estimated funding for fiscal year 2025 and the total liability as of December 29, 2024 in the table above.
We are unable to reliably estimate the amount and timing of the remaining payments beyond fiscal year 2026, therefore we have only the estimated funding for fiscal year 2026 and the total liability as of December 28, 2025 in the table above.
If actual results are not consistent with the estimates or assumptions used to develop our accruals for contingent losses, we may be exposed to gains or losses that could have a material effect on our future results of operations and cash flows.
However, legal expenses incurred in our defense of legal matters and any payments made to plaintiffs through unfavorable verdicts or otherwise will negatively impact our cash flows and our liquidity position. 79 If actual results are not consistent with the estimates or assumptions used to develop our accruals for contingent losses, we may be exposed to gains or losses that could have a material effect on our future results of operations and cash flows.
Credit Facilities December 29, 2024 Facility Capacity Borrowing Base Adjustment Outstanding Borrowings Commercial Paper Borrowings Outstanding Letters of Credit Amount Available (in millions) Senior Revolving Credit Facility $ 2,100 $ — $ — $ — $ — $ 2,100 Securitization Facility 225 — — — (22) 203 Total credit facilities $ 2,325 $ — $ — $ — $ (22) $ 2,303 Senior Unsecured Revolving Credit Facility In February 2025, we refinanced our $2,100 million senior unsecured revolving credit facility (“Senior Revolving Credit Facility”) extending the maturity date from May 21, 2027 to February 12, 2030.
Credit Facilities December 28, 2025 Facility Capacity Borrowing Base Adjustment Outstanding Borrowings Commercial Paper Borrowings Outstanding Letters of Credit Amount Available (in millions) Senior Revolving Credit Facility $ 2,100 $ — $ — $ — $ — $ 2,100 Securitization Facility 225 — — — (27) 198 Total credit facilities $ 2,325 $ — $ — $ — $ (27) $ 2,298 Senior Unsecured Revolving Credit Facility In February 2025, we refinanced our $2,100 million senior unsecured revolving credit facility (“Senior Revolving Credit Facility”), extending the maturity date from May 21, 2027 to February 12, 2030 with the option to extend the maturity date for up to two one-year periods, subject to obtaining the lenders’ consent and satisfaction of certain other conditions.
We conduct our operations through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production. We also conduct operations that do not constitute reportable segments, which include our Mexico and Bioscience operations. Our fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31. Fiscal years 2024 and 2023 each consisted of 52-weeks.
We conduct our operations through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production. We also conduct operations through two other operating segments, Mexico and Bioscience, which are aggregated and reported as “Other.” Our fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31.
We plan to continue to support the business in 2025 through capital expenditures in the range of $400 million to $500 million, inclusive of profit improvement projects, such as packaged meats capacity expansion and automation, as well as repairs and maintenance. Dividends Returning cash to shareholders in the form of dividends is also a top priority for the Company.
We plan to continue to support the business in 2026 through capital expenditures in the range of $350 million to $450 million, inclusive of profit improvement projects, such as packaged meats capacity expansion and automation, as well as repairs and maintenance.
When the value of our open derivative contracts decreases, we may be required to post margin deposits with our brokers and counterparties to cover a portion of the decrease. Conversely, when the value of our open derivative contracts increases, our brokers may be required to deliver margin deposits to us for a portion of the increase.
Our liquidity position may be positively or negatively affected by changes in the value of our derivative portfolio. When the value of our open derivative contracts decreases, we may be required to post margin deposits with our brokers and counterparties to cover a portion of the decrease.
See “Note 13: Income Taxes” to the consolidated financial statements included in Part II, Item 8 of this Annual Report. Pension Accounting We historically provided the majority of our U.S. employees with pension benefits. In the second quarter of 2021, we amended our qualified pension plans to freeze the benefit accrual for all non-union participants as of June 30, 2021.
See “Note 13: Income Taxes” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Pension Accounting We historically provided the majority of our U.S. employees with pension benefits.
The values of our pension obligation and related assets may fluctuate significantly, which may in turn lead to a larger underfunded status in our pension plans and a higher funding requirement. The funding requirement for our qualified pension plans in fiscal year 2025 is expected to be $6 million.
Funding requirements for our pension plans are determined based on the funded status measured at the end of each year. The values of our pension obligation and related assets may fluctuate significantly, which may in turn lead to a larger underfunded status in our pension plans and a higher funding requirement.
Due to the complexity and inherent uncertainties surrounding income tax positions, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.
Our analysis of unrecognized tax benefits requires considerable judgment about the likelihood and amount of benefit that would be sustained upon examination by tax authorities. Due to the complexity and inherent uncertainties surrounding income tax positions, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities.
The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items. Changes in current tax laws and rates could affect recorded tax assets and liabilities in the future.
Significant judgment is required in assessing the timing and amounts of deductible and taxable items. Changes in current tax laws and rates could affect recorded tax assets and liabilities in the future. In addition, changes in projected future earnings could affect the recorded valuation allowances in the future.
EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations The following table provides a reconciliation of net income from continuing operations to EBITDA from continuing operations and adjusted EBITDA from continuing operations. EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations are non-GAAP measures.
(8) Represents the tax effects of the non-GAAP adjustments based on a statutory tax rate of 25.7%. EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations The following table provides a reconciliation of net income from continuing operations to EBITDA from continuing operations and adjusted EBITDA from continuing operations.
Segment sales increased by $39 million, or 0.5%, as a 3.1% increase in average sales price more than offset a 2.5% decrease in sales volume. The increase in average sales price was primarily due to higher raw material costs, which translated into higher sales prices of our packaged meats products, as well as an improvement in product mix.
Segment sales increased by $438 million, or 5.3%, primarily as a result of a 5.6% increase in average sales price. The increase in average sales price was primarily due to higher raw material costs, which translated into higher sales prices of our packaged meats products. Volume remained relatively consistent year-over-year. Fresh Pork.
The charges associated with the closing were not material. Altoona was accounted for in the Fresh Pork segment. European Carve-Out. On August 26, 2024, we completed a carve-out and transfer of our European operations to WH Group. As a result, we derecognized the assets and liabilities of our former European operations through equity.
European Carve-Out On August 26, 2024, we completed a carve-out and transfer of our European operations to WH Group. As a result, we derecognized the assets and liabilities of our former European operations through equity. No gain or loss was recognized on the transaction.
For a more comprehensive overview of our company and operations, refer to “Item 1. Business” in this Annual Report on Form 10-K. Growth Strategies The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth.
Growth Strategies The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth. We have several strategic initiatives to grow our business, reduce costs and enhance our profitability and margins. For a comprehensive discussion of our growth strategies, refer to “Item 1.
In fiscal year 2024, we received $58 million and $32 million for the sale of hog farms in Utah and Missouri, respectively. In fiscal year 2023, we received $205 million in proceeds for the sale of our Vernon, California facility.
In fiscal year 2025, we received $7 million for the sale of hog farms in Missouri. In fiscal year 2024, we received $58 million and $32 million for the sale of hog farms in Utah and Missouri, respectively. • Cash receipts on notes receivable .
Sales Drivers We are focused on driving profitable growth through our Packaged Meats segment. Within the Packaged Meats segment, the primary factors impacting sales of our brands are household penetration, consumption levels, price 60 point and product offerings. As a result, we have pursued strategies that we believe best align our products with consumer trends and behavior.
Business—Our Growth Strategies in this Annual Report on Form 10-K. Sales Drivers We are focused on driving profitable growth through our Packaged Meats segment. Within the Packaged Meats segment, the primary factors impacting sales of our brands are household penetration, consumption levels, price point and product offerings.
The following weighted average assumptions were used to determine our benefit obligation and net benefit cost for fiscal year 2024 : • 5.57% – Discount rate to determine net benefit cost; • 5.78% – Discount rate to determine pension benefit obligation; and • 7.05% – Expected return on plan assets.
Changes in assumptions and future investment returns could potentially have a material impact on our expenses and related funding requirements. 81 The following weighted average assumptions were used to determine our benefit obligation and net benefit cost for fiscal year 2025: • 5.78% – Discount rate to determine net benefit cost; • 5.69% – Discount rate to determine pension benefit obligation; and • 7.25% – Expected return on plan assets.
The effects of actual results differing from these assumptions are accumulated and amortized over future periods and, therefore, generally affect our recognized expense in such future periods. 83 An additional 0.50% decrease in the discount rate used to measure our projected benefit obligation would have further reduced the funded status by $103 million as of December 29, 2024, and would have resulted in an additional $3 million in net pension cost in fiscal year 2024.
A 0.50% decrease in the discount rate used to measure our projected benefit obligation would have further reduced the funded status by $100 million as of December 28, 2025, and would have resulted in an additional $3 million in net pension cost in fiscal year 2025.
Over the past two fiscal years, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $97 million. The effects, positive or negative, on liquidity resulting from our risk management activities historically have tended to be mitigated by offsetting changes in cash prices in our core business.
The effects, positive or negative, on liquidity resulting from our risk management activities historically have tended to be mitigated by offsetting changes in cash prices in our core business.
Accrued expenses and other current liabilities decreased in fiscal year 2024 largely due to payments related to litigation settlements and our West Coast exit and Hog Production reform activities.
Accrued expenses and other current liabilities decreased in fiscal year 2025 largely due to lower accrued payroll expenses resulting from recent reductions in workforce and a change in our policies for paid time off. Accrued expenses and other current liabilities decreased in fiscal year 2024 largely due to payments related to litigation settlements and our Hog Production Reform activities.
Additionally, we have committed to contribute up to $25 million to the TPG Rise Climate investment fund through July 2027. As of December 29, 2024, we had contributed $17 million in capital toward this commitment.
Should the board, of which we have 50% of the voting power, choose not to approve additional projects, the remaining contributions would not be required. Additionally, we have committed to contribute up to $25 million to the TPG Rise Climate investment fund through July 2027. As of December 28, 2025, we had contributed $21 million in capital toward this commitment.
In addition to the prior initiatives, we also seek to increase sales in packaged meats products by driving volumes of our private label and foodservice products, by expanding our customer relationships and by offering quality selections across the value chain.
In addition, we seek to increase sales in packaged meats products by driving volumes of our private label and foodservice products, by expanding our customer relationships and by offering quality selections across the value chain. 58 The U.S. packaged meats market is supported by long-term secular tailwinds, including consumer demand for high-protein diets, high-quality nutrition, product versatility and convenience.
Federal income taxes include an estimate for taxes on earnings of foreign subsidiaries expected to be remitted to the U.S. and be taxable, but not for earnings considered indefinitely invested in the foreign subsidiary. We account for the global intangible low-taxed income inclusion from foreign subsidiaries in the period in which it is incurred.
Income Taxes We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income. 80 Federal income taxes include an estimate for taxes on earnings of foreign subsidiaries expected to be remitted to the U.S. and be taxable, but not for earnings considered indefinitely invested in the foreign subsidiary.
Cost of sales in our Packaged Meats segment decreased by $33 million, or 0.5%, driven by the following factors, which more than offset a $75 million increase in raw material costs attributable to the net effect of higher meat prices and lower sales volume: • A $71 million decrease in manufacturing and distribution costs primarily due to cost improvement initiatives and lower sales volume. • The recognition of $38 million in employee retention tax credits in the second quarter of 2024.
Cost of sales in our Packaged Meats segment increased by $536 million, or 7.9%, driven primarily by the following factors, which more than offset lower freight and cold storage costs: • A $525 million increase in raw material costs primarily attributable to the effect of higher fresh pork market prices. • A $32 million decrease in employee retention tax credits.
The U.S. packaged meats market is supported by long-term secular tailwinds, including consumer demand for high-protein diets, high-quality nutrition, product versatility and convenience. We expect these tailwinds to continue to drive increases in overall meat consumption. Nevertheless, changes in market trends and consumer preferences could adversely affect our results of operations.
We expect these tailwinds to continue to drive increases in overall meat consumption. Nevertheless, changes in market trends and consumer preferences could adversely affect our results of operations.
For more information about the employee retention tax credits, see “Note 7: Employee Retention Tax Credits” to the consolidated financial statements included in Part II, Item 8 of this Annual Report. (2) Includes a $32 million gain on sale of our Utah hog farms and a $6 million gain on the sale of breeding stock to Murphy Family Farms.
For more information, see “Note 7: Employee Retention Tax Credits” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.
Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations The following table provides a reconciliation of total debt and finance lease obligations to net debt, the ratio of total debt and finance lease obligations to net income from continuing operations, and the ratio of net debt to adjusted EBITDA from continuing operations.
(8) Consists of a gain recognized in the third quarter of 2025 for a one-time benefit on company-owned life insurance policies. 76 Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations The following table provides a reconciliation of total debt and finance lease obligations to net debt, the ratio of total debt and finance lease obligations to net income from continuing operations, and the ratio of net debt to adjusted EBITDA from continuing operations.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+5 added−1 removed8 unchanged
Biggest changeThe following table presents the sensitivity of the fair value of our open commodity derivative contracts to a hypothetical 10% change in market prices, as of December 29, 2024 and December 31, 2023: December 29, 2024 December 31, 2023 Livestock 64 28 Grains 11 3 Energy 4 5 85 Interest Rate Risk The following table presents the fair values and carrying values of our fixed-rate debt as of December 29, 2024 and December 31, 2023: December 29, 2024 December 31, 2023 Fair Value Carrying Value Fair Value Carrying Value Debt $ 1,821 $ 1,983 $ 1,758 $ 1,979 We determine the fair value of fixed-rate debt using Level 2 inputs based on quoted market prices.
Biggest changeDecember 28, 2025 December 29, 2024 (in millions) Livestock $ 46 $ 64 Grains — 11 Energy 1 4 Foreign Currency 3 — Interest Rate Risk The following table presents the fair values and carrying values of our fixed-rate debt as of December 28, 2025 and December 29, 2024.
See “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report for the effects of derivative instruments on our consolidated statements of income.
See “Note 8: Derivative Financial Instruments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for the effects of derivative instruments on our consolidated statements of income.
Foreign Currency Exchange Risk Our revenues are primarily generated from transactions denominated in U.S. dollars. However, we also generate revenues from transactions denominated in Japanese yen, Canadian dollars and Australian dollars, among others. We employ foreign currency exchange forward contracts to manage the exposure to foreign currency exchange risk.
Foreign Currency Exchange Risk Our revenues are primarily generated from transactions denominated in U.S. dollars. However, we also generate revenues from transactions denominated in Mexican Pesos, Japanese yen, Canadian dollars and Australian dollars, among others. We employ foreign currency exchange forward contracts to manage a portion of the exposure to foreign currency exchange risk.
The fair values of foreign currency exchange forward contracts as of December 29, 2024 and December 31, 2023 was not material. Concentration of Credit Risk Our financial instruments are exposed to concentrations of credit risk primarily through our cash and cash equivalents, accounts receivable and derivatives.
The fair values of foreign currency exchange forward contracts as of December 28, 2025 and December 29, 2024 were not material. Concentration of Credit Risk Our financial instruments are exposed to concentrations of credit risk primarily through our cash and cash equivalents, accounts receivable and derivatives.
The following table presents the fair values of our open derivative financial instruments in the consolidated balance sheets: December 29, 2024 December 31, 2023 Livestock (1) (30) 27 Grains 6 1 Energy (1) (5) (21) ________________ (1) Negative amount represents net liabilities.
The following table presents the fair values of our open derivative financial instruments in the consolidated balance sheets. December 28, 2025 December 29, 2024 (in millions) Livestock (1) $ 21 $ (30) Grains (1) 3 6 Energy (1) 1 (5) ________________ (1) Negative amount represents net liabilities.
A hypothetical 10% change in interest rates would impact the fair value of our fixed-rate debt by $43 million and $53 million as of December 29, 2024 and December 31, 2023, respectively.
A hypothetical 10% change in interest rates would have impacted the fair value of our fixed-rate debt by $28 million and $43 million as of December 28, 2025 and December 29, 2024, respectively.
We periodically enter into interest rate swaps to hedge our exposure to changes in interest rates on certain financial instruments and to manage the overall mix of fixed rate and floating rate debt instruments. The fair values of interest rate swaps as of December 29, 2024, and December 31, 2023 were not material.
We periodically enter into interest rate swaps to hedge our exposure to changes in interest rates on certain financial instruments and to manage the overall mix of fixed rate and floating rate debt instruments. There were no interest rate swaps outstanding as of December 28, 2025 and December 29, 2024.
From time to time, we may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. We have not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to its cash and cash equivalents.
From time to time, we may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. We require banks with which we make deposits to maintain minimum credits ratings. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk related to our cash and cash equivalents.
The estimate is based on the current expected credit loss model and is determined based on the age of receivable balances, the financial health of the customer, historical experience, current economic conditions and expectations about future performance. The valuation allowance as of December 29, 2024 and December 31, 2023 was not material. 86
An estimate of expected credit losses is recognized as a valuation allowance and adjusted each reporting period. The estimate is based on the current expected credit loss model and is determined based on the age of receivable balances, the financial health of the customer, historical experience, current economic conditions and expectations about future performance.
With regards to derivatives used to hedge commodities, foreign exchange and interest rates, we bear risk of nonperformance by counterparties. Our trading relationships are governed by international swaps and derivatives agreements and we mitigate risk by diversifying counterparties and monitoring credit ratings. An estimate of expected credit losses is recognized as a valuation allowance and adjusted each reporting period.
No other single customer or customer group represented 10% or greater of our accounts receivable. With regards to derivatives used to hedge commodities, foreign exchange and interest rates, we bear risk of nonperformance by counterparties. Our trading relationships are governed by international swaps and derivatives agreements and we mitigate risk by diversifying counterparties and monitoring credit ratings.
However, under the “mark-to-market” method described above, these offsetting changes do not always occur in the same period, which could result in volatility in our results of operations.
However, under the “mark-to-market” method described above, these offsetting changes do not always occur in the same period, which could result in volatility in our results of operations. 83 The following table presents the sensitivity of the fair value of our open commodity derivative contracts to a hypothetical 10% change in market prices, as of December 28, 2025 and December 29, 2024.
Removed
Concentrations of credit risk with respect to accounts receivable are limited due to our large number of customers. As of December 29, 2024 and December 31, 2023, 12.8% and 12.5%, respectively, of our accounts receivable balance was due from Walmart. No other single customer or customer group represented 10% or greater of our accounts receivable.
Added
December 28, 2025 December 29, 2024 Fair Value Carrying Value Fair Value Carrying Value (in millions) Total debt $ 1,909 $ 1,986 $ 1,821 $ 1,983 We determine the fair value of fixed-rate debt using Level 2 inputs based on quoted market prices.
Added
Concentrations of credit risk with respect to accounts and notes receivable are limited due to our large number of customers. We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral. As of December 28, 2025, we had accounts and notes receivable from Murphy Family Farms and VisionAg totaling $218 million and $47 million, respectively.
Added
A portion of these balances are secured by the breeding stock and inventories owned by Murphy Family Farms and VisionAg.
Added
We have an agreement to purchase 3.2 million and 600,000 market hogs annually from Murphy Family Farms and VisionAg, respectively, which further mitigates our exposure to potential credit risk. 84 Additionally, as of December 28, 2025, 11% of our accounts receivable balance was due from Walmart.
Added
The valuation allowance as of December 28, 2025 and December 29, 2024 was not material. 85