What changed in this filing

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Item 1A. Risk Factors

2026-02-12 compared with 2025-02-13 · 54 added, 69 removed, 329 unchanged (27% of the section changed)

23 unchanged sentences

This could result in customer order cancellations or create adverse publicity that may have a material adverse effect on our ability to market our products successfully and on our business, reputation and prospects.

There have been recent outbreaks of both high- and low-pathogenic strains of avian influenza (“HPAI” and “LPAI”, respectively) in Europe, the U.S., the U.K., and in Mexico.

There have been recent outbreaks of both high- and low-pathogenic strains of avian influenza (“HPAI” and “LPAI”, respectively) and other bird diseases in Europe, the U.S., the U.K., and in Mexico.

Outbreaks of both HPAI and LPAI are increasingly common.

For example, HPAI H5 has been detected in a number of states in the U.S.

predominantly in poultry flocks but also more recently in dairy cattle, wild birds and mammals, as well as in farm workers directly exposed to infected animals.

Even if no additional highly pathogenic or highly contagious strains of avian influenza are confirmed in Europe, the U.S., the U.K.

or Mexico, there can be no assurance that outbreaks elsewhere will not materially adversely affect international demand for poultry produced in our operating countries.

Additionally, should any of these strains spread to or within Europe, the U.S., the U.K.

Additionally, should any of these strains spread further within Europe, the U.S., the U.K.

or Mexico, there can be no assurance that it would not significantly affect our ability to conduct our operations and/or demand for our products, in each case in a manner having a material adverse effect on our business, reputation and/or prospects.

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We have significant operations and assets located in Mexico, the U.K., the Republic of Ireland, and continental Europe and may participate in or acquire operations and assets in other foreign countries in the future.

Foreign operations may be exposed to a number of special risks such as currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and changes in laws and policies, including tax laws and laws governing foreign-owned operations.

Foreign operations may be exposed to a number of special risks such as currency exchange rate fluctuations, tariffs, trade barriers, exchange controls, expropriation and changes in laws and policies, including tax laws and laws governing foreign-owned operations.

Currency exchange rate fluctuations have had adverse effects on us in the past.

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and elsewhere.

For example, in 2018, the European Union (the “E.U.”) recently commenced enforcement of the General Data Protection Regulation (the “GDPR”).

For example, in 2018, the E.U.

recently commenced enforcement of the General Data Protection Regulation (the “GDPR”).

The GDPR imposes significant additional compliance obligations on companies regarding the handling of personal data and provides certain individual privacy rights to persons whose data is stored.

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For example, the implementation of new tariff schemes by various governments, such as those implemented by the U.S.

and China in recent years, could increase the costs of our operations and ultimately increase the cost of products sold from one country into another country.

In addition, disruptions may be caused by outbreaks of diseases—either in our flocks and herds or elsewhere in the world—and resulting changes in consumer preferences.

Mexico, European countries, and China in recent years, could increase the costs of our operations and ultimately increase the cost of products sold from one country into another country, or otherwise adversely impact our operations.

In addition, disruptions may be caused by outbreaks of diseases—either in our flocks and herds or elsewhere in the world—and resulting border closings or changes in consumer preferences.

One or more of these or other disruptions in the international markets and distribution channels could adversely affect our business.

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Further, there is some competition with non-vertically integrated further processors in the prepared chicken business.

In the Mexico retail and foodservice markets, where product differentiation has traditionally been limited, product quality and price have been the most critical competitive factors.

In the Mexico retail and foodservice markets, where product differentiation has

traditionally been limited, product quality and price have been the most critical competitive factors.

In the U.K., the Republic of Ireland, and continental Europe retail and food service markets, key competitive factors include price, delivering consistent levels of the highest quality, service level, and delivering strong innovation.

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and continental Europe market primarily consists of retailer private label products.

fresh market is primarily sourced from within the U.K., making

vertical integration a prerequisite for operating in that market.

fresh market is primarily sourced from within the U.K., making vertical integration a prerequisite for operating in that market.

prepared foods market is less exclusively sourced from within the U.K.

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Our success depends in part on our ability to manage costs and be efficient in the highly competitive poultry and pork industries, and our failure to do so may materially and adversely affect our business, financial condition, and results of operations.

Media campaigns related to food production;

regulatory and customer focus on environmental, social and governance responsibility;

and recent increased focus and attention by the U.S.

government on market dynamics in the meat processing industry could expose us to additional costs or risks.

Media campaigns related to food production, regulatory and customer focus on sustainability, and recent increased focus and attention by the U.S.

government on market dynamics and other facets of the meat processing industry could expose us to additional costs or risks.

Individuals or organizations can use social media platforms to publicize inappropriate or inaccurate stories or perceptions about the food production industry or our company.

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This damage could adversely affect our financial results.

In addition, regulators, stockholders, customers and other interested parties have focused increasingly on the environmental, social and governance practices of companies.

In addition, regulators, stockholders, customers and other interested parties have focused increasingly on the sustainability practices of companies.

This has led to an increase in regulations and may continue to cause us to be subject to additional regulations in the future.

Our customers or other interested parties may also require us to implement certain environmental, social or governance procedures or standards before doing or continuing to do business with us.

Our customers or other interested parties may also require us to implement certain sustainability procedures or standards before doing, or continuing to do, business with us.

Also, the U.S.

government has increased its focus on market dynamics within the meat industry.

government has increased its focus on market dynamics or other facets of the meat industry.

government has conducted inquiries related to the meat processing industry on matters such as market pricing and processor relationships with the farming community.

This increased attention on environmental, social, and governance practices could cause us to incur additional compliance costs, divert management attention from operating our business, impair our access to capital among certain investors, and subject us to litigation risk for disclosures we make and practices we adopt regarding these issues.

This increased attention on sustainability practices and other facets of the meatpacking industry could cause us to incur additional compliance costs, divert management attention from operating our business, impair our access to capital among certain investors, and subject us to litigation risk for disclosures we make and practices we adopt regarding these issues.

This in turn could have a material adverse effect on our business, financial condition, and the results of operations.

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To date, none of these actual or attempted cyber-attacks has had a material adverse effect on our operations or financial condition.

For example, as disclosed in prior filings, we were the target of an organized cybersecurity attack in 2021 that affected some of the servers supporting our global IT systems.

For example, as disclosed in prior filings, we were the target of an organized cybersecurity attack in 2021 that affected some of the servers supporting our global information technology systems.

Our encrypted backup servers allowed for a return to full operation within two days and the loss of food produced was limited to less than one day of production.

In total, we incurred a loss of approximately $10.0 million related to the cyberattack during the second quarter of 2021, which included an allocation of $2.4 million of the total $11.0 million ransom paid by our parent company.

In total, we incurred a loss of approximately $10.0 million related to the cyber-attack during the second quarter of 2021, which included an allocation of $2.4 million of the total $11.0 million ransom paid by our parent company.

However, there can be no assurances that future attacks would not have an adverse effect on our operations of financial condition.

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The potential consequences of a material cyber-security incident include reputational damage, litigation with third parties, regulatory actions, disruption of plant operations, and increased cyber-security protection and remediation costs.

We cannot assure that we will be able to prevent all of the rapidly evolving forms of increasingly sophisticated and frequent cyber-attacks.

We cannot assure that we will be able to prevent all of the rapidly evolving forms of increasingly

sophisticated and frequent cyber-attacks.

Moreover, our efforts to address network security vulnerabilities may not be successful, resulting potentially in the theft, loss, destruction, or corruption of information we store electronically, as well as unexpected interruptions, delays, or cessation of service, any of which could cause harm to our business operations.

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Trends in litigation may include class actions involving consumers, shareholders, employees, or injured persons, and claims relating to commercial, labor, employment, antitrust, securities, or environmental matters.

Litigation trends and the outcome of litigation cannot be predicted with certainty, and adverse litigation trends and outcomes could result in material damages, which could adversely affect our financial condition and results of operations.

Claims in the future may also arise.

For example, in December 2025, President Trump signed an executive order directing the Justice Department and Federal Trade Commission to antitrust investigations across the food supply sector.

The long-term impact of this executive order, litigation trends and the outcome of litigation, cannot be predicted with certainty, and adverse litigation trends and outcomes could result in material damages, which could adversely affect our financial condition and results of operations.

For example, between September 2, 2016 and October 13, 2016, a series of purported class action lawsuits were brought against the Company and other defendants by and on behalf of direct and indirect purchasers of broiler chickens alleging violations of antitrust and unfair competition laws.

The complaints seek, among other relief, treble damages for an alleged conspiracy among defendants to reduce output and increase prices of broiler chickens from the period of January 2008 to 2019.

The complaints sought, among other relief, treble damages for an alleged conspiracy among defendants to reduce output and increase prices of broiler chickens from the period of January 2008 to 2019.

For additional information on this and other litigation matters, see Part II, Item 8, Notes to Consolidated Financial Statements, “Note 21.

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Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products.

Increasing concern over climate change also may adversely impact demand for our products due to changes in consumer preferences and result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.

Concern over climate change also may adversely impact demand for our products due to changes in consumer preferences and result in additional legal or regulatory requirements designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.

In addition, climate change could affect our ability to procure needed commodities at reasonable costs and in quantities we currently experience and may require us to make additional unplanned capital expenditures.

Increased energy or compliance costs and expenses due to increased legal or regulatory requirements could be prohibitively costly and may cause disruptions in, or an increase in, the costs associated with, the running of our production facilities.

Furthermore, compliance with any such legal or regulatory requirements could necessitate significant changes to our business operations and strategy, which may require substantial time, attention and resources.

There is no assurance that we will not be subject to significant fines if such laws and regulations are interpreted and applied in a manner inconsistent with our practices.

The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.

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If we fail to meet these targeted reductions in 2025, the interest rate applied to these Senior Notes will increase.

Finally, from time to time we establish and publicly announce goals and targets to reduce our carbon footprint.

If we fail to achieve, adequately specify or accurately report on our progress toward achieving our carbon emissions reduction goals and targets, we could be subject to lawsuits, investigations, government actions, or other claims made by public or private entities, each of which could have a material impact on our business, financial condition, results of operations and prospects.

Finally, from time to time we establish, assess, and publicly announce aspirations to reduce our carbon footprint.

If we fail to achieve or accurately report on our progress toward achieving our carbon emissions reduction goals and targets, we could be subject to lawsuits, investigations, government actions, or other claims made by public or private entities, each of which could have a material impact on our business, financial condition, results of operations and prospects.

In addition, the resulting negative publicity from any such allegations could adversely affect consumer preference for our products.

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There is no certainty that enforcement efforts by governmental authorities will not disrupt a portion of our workforce or operations at one or more facilities, which could negatively impact our business.

Also, no assurance can be given that further enforcement efforts by governmental authorities will not result in the assessment of fines that could adversely affect our financial position, operating results or cash flows.

For example, we have historically increased headcounts in certain facilities to avoid disruptions to our operations.

Also, no assurance can be given that further enforcement efforts by governmental authorities will not result in the assessment of fines or other increases in cash outlays that could adversely affect our financial position, operating results or cash flows.

Environmental, Health and Safety

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We are upgrading wastewater treatment facilities at a number of these locations, either pursuant to consent agreements with regulatory authorities or on a voluntary basis in anticipation of future permit requirements.

For example, the EPA has proposed Meat and Poultry Products Effluent Guidelines and Standards, which may increase requirements and necessitate further upgrades to existing facilities.

In the past, we have acquired businesses with operations such as pesticide and fertilizer production that involved greater use of hazardous materials and generation of more hazardous wastes than our current operations.

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In the absence of an agreement, we may become subject to labor disruption at one or more of these locations, which could have an adverse effect on our financial results.

Loss of essential employees or material increase in employee turnover could have a significant negative impact on our business.

Our success is largely dependent on the skills, experience, and efforts of our management and other employees.

The loss of the services of one or more members of our senior management or of numerous employees with essential skills could have a negative effect on our business, financial condition and results of operations.

If we are not able to retain or attract talented, committed individuals to fill vacant positions when needs arise, it may adversely affect our ability to achieve our business objectives.

Loss of skilled employees, labor shortages, or a material increase in employee turnover could have a significant negative impact on our business and adverse effects on our profitability.

We also rely on an adequate supply of skilled employees at our processing and food facilities.

Trained and experienced personnel in our industry are in high demand, and we have experienced high turnover and difficulty retaining employees with appropriate training and skills.

We cannot predict whether we will be able to attract, motivate and maintain an adequate skilled workforce necessary to operate our existing and future facilities efficiently, or that labor expenses will not increase as a result of a shortage in the supply of skilled personnel, thereby adversely impacting our financial performance.

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.

Labor shortages and increased turnover or increases in employee and employee-related costs could have adverse effects on our profitability.

We and our third-party vendors have experienced increased labor shortages at some of our production facilities and other locations.

Several factors have had and may continue to have adverse effects on the labor force available to us and our third-party vendors, including government regulations, which include laws and regulations related to workers’ health and safety, wage and hour practices and work authorization.

Labor shortages and increased turnover rates within the Company and our third-party vendors have led to and could in the future lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees and could negatively affect our ability to efficiently operate our production facilities or otherwise operate at full capacity and could result in downtime of our production facilities.

An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation for any of the foregoing reasons could have a material adverse impact on our operations, results of operations, reputation, liquidity or cash flows.

If we are unable to attract, hire or retain key team members or a highly skilled and diverse global workforce, it could have a negative impact on our business, financial condition or results of operations.

Our continued growth requires us to attract, hire, retain and develop key team members, including our executive officers and senior management team, and maintain a highly skilled and diverse global workforce.

Trained and experienced personnel in our industry are in high demand, and we and our third-party vendors have experienced high turnover and difficulty retaining employees with appropriate training and skills.

This has led to, and could in the future continue to lead to, increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, and could negatively affect our ability to efficiently operate our production facilities or otherwise operate at full capacity or result in downtime of our production facilities.

Several factors have had and may continue to have adverse effects on the labor force available to us and our third-party vendors, including immigration laws and government regulations, which include laws and regulations related to workers;

health and safety, wage, and hour practices and work authorization.

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.

If we are unable to attract, hire or retain key team members, it could have a negative impact on our business, financial condition or results of operations.

We compete to attract and hire highly skilled team members and our own team members are highly sought after by our competitors and other companies.

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In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members.

The loss of the services of one or more members of our senior management or of similarly positioned employees with essential skills could have a negative effect on our business, financial condition and results of operations.

If we are not able to retain or attract talented, committed individuals to fill vacant positions when needs arise, it may also adversely affect our ability to achieve our business objectives.

Stock Ownership and Financial Risk Factors

JBS USA beneficially owns a majority of our common stock and has the ability to control the vote on most matters brought before the holders of our common stock.

JBS USA Food Company Holdings, Inc.

(“JBS USA Holdings”) beneficially and indirectly owns a majority of the shares and voting power of our common stock and is entitled to appoint a majority of the members of our Board of Directors.

JBS USA Food Company Holdings (“JBS USA Holdings”) beneficially and indirectly owns a majority of the shares and voting power of our common stock and is entitled to appoint a majority of the members of our Board of Directors.

As a result, subject to restrictions on voting power and actions in the Stockholders Agreement with JBS USA Holding Lux S.a.r.l.

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JBS USA Holdings may have interests that are different from other shareholders and may vote in a way that may be adverse to our other shareholders’ interests.

JBS USA Holding’s concentration of ownership could also have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our common stock to decline or prevent our shareholders from realizing a premium over the market price for their common stock.

JBS USA Holdings’ concentration of ownership could also have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which could cause the market price of our common stock to decline or prevent our shareholders from realizing a premium over the market price for their common stock.

We are subject to reputational risk in connection with U.S.

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Pursuant to the Leniency Agreement, J&F agreed to pay a fine of R$8.0 billion and contribute an additional R$2.3 billion to social projects in Brazil, each adjusted for inflation, over a 25-year period.

The total fine was subsequently reduced to R$3.5 billion (equivalent to approximately US$630 million, converted using the

foreign exchange rate as of June 30, 2024).

The total fine was subsequently reduced to R$3.5 billion (equivalent to approximately US$630 million, converted using the foreign exchange rate as of June 30, 2024).

In December 2023, the Brazilian Supreme Court ( Supremo Tribunal Federal ) justice overseeing the case suspended J&F’s obligation to make additional installment payments under the Leniency Agreement following a petition from J&F that cited potential misconduct by enforcement authorities in connection with entering into the Leniency Agreement.

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was ordered to pay disgorgement to the SEC in the amount of US$26.9 million, and each of our ultimate controlling shareholders was ordered to pay a civil penalty of US$550,000, each of which payment has been made in full.

Also in 2020, J&F reached a plea agreement with the Department of Justice (“DOJ”) in which J&F pled guilty to one count of conspiracy to violate the FCPA in relation to the circumstances and payments that were the subject of the Collaboration Agreements and Leniency Agreement and agreed to pay a criminal penalty of US$256.5 million, payable in two installments of approximately US$128.2 million each.

Also in 2020, J&F reached a plea agreement with the Department of Justice (the “DOJ”) in which J&F pled guilty to one count of conspiracy to violate the FCPA in relation to the circumstances and payments that were the subject of the Collaboration Agreements and Leniency Agreement and agreed to pay a criminal penalty of US$256.5 million, payable in two installments of approximately US$128.2 million each.

J&F paid US$128.2 million to the U.S.

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GAAP”), goodwill and other identifiable intangible assets with indefinite lives must be evaluated for impairment annually or more frequently if events indicate it is warranted.

If the carrying value of our reporting units exceeds their current fair value as determined based on the discounted future cash flows of the related business, the goodwill is considered impaired and is reduced to fair value by a non-cash charge to earnings.

If the carrying value of our reporting units exceeds their current fair value as determined based on the discounted future cash flows of

the related business, the goodwill is considered impaired and is reduced to fair value by a non-cash charge to earnings.

For indefinite-lived intangible assets, an impairment loss is recognized if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value of that intangible asset.

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Our business may be negatively impacted by economic or other consequences from Russia’s war against Ukraine and the sanctions imposed as a response to that action.

We face risks related to the ongoing Russia-Ukraine war that began in February 2022.

The impact of the ongoing war and sanctions will likely not be limited to businesses that operate in Russia and Ukraine and may negatively impact other global economic markets including where we operate.

The impacts have included and may continue to include, but are not limited to, higher prices for commodities, such as food products, ingredients and energy products, increasing inflation in some countries, and disrupted trade and supply chains.

The conflict has disrupted shipments of grains, vegetable oils, fertilizer and energy products.

The impact on the agriculture markets falls into two main categories:

(1) the effect on Ukrainian crop production, as the region is key in global grain production;

and (2) the duration of the disruption in trade flows.

Safety and financing concerns in the region are restricting export execution, which is in turn forcing grain and oil demand to find alternative supply.

The duration of the war and related volatility makes global markets extremely sensitive to growing-season weather in other global grain producing regions and has led to a large risk premium in futures prices.

Moreover, Russia’s suspension of the Black Sea Grain Initiative in June 2023 may further pressure on trade flows in the region.

The continued volatility in the global markets, in part as a result of the war, has adversely impacted our costs by driving up prices, raising inflation and increasing pressure on the supply of feed ingredients and energy products throughout the global markets.

In addition, the U.S.

government and other governments in jurisdictions in which we operate have imposed sanctions and export controls against Russia, Belarus and interests therein and threatened additional sanctions and controls.

The impact of these measures, now and in the future, could adversely affect our business, supply chain or customers.

Finally, there may be increased risk of cyberattack as a result of the ongoing conflict.

We have not seen any new or heightened risk of potential cyberattacks since the outbreak of the Russia-Ukraine war.

We face continued risks related to the ongoing Russia-Ukraine war that began in February 2022.

The war’s impact on the global feed ingredient and energy markets continues to be less pronounced than during the initial onset of the war, but there remain many risks and uncertainties that may and have impacted global markets.

There is also an ongoing risk of a cyber-attack as a result of the ongoing conflict, although we have not to date seen any new or heightened risk of such potential attacks.

Extreme weather, natural disasters or other events beyond our control as well as interruption by man-made problems such as power disruptions could negatively impact our business.

Bioterrorism, fire, pandemic, extreme weather or natural disasters, including droughts, floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of our flocks, production or availability of feed ingredients, or interfere with our operations due to power outages, fuel shortages, damage to our production and processing facilities or disruption of transportation channels, among other things.

Bioterrorism, fire, pandemic, extreme weather or natural disasters, including droughts, floods, tornados, excessive cold or heat, hurricanes or other storms, could impair the health or growth of our flocks, production or availability of feed ingredients, or interfere with our operations due to power outages, fuel shortages, damage to our production and processing facilities or disruption of transportation channels, among other things.

Any of these factors could have an adverse effect on our operations or financial results.

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Although we maintain incident management and disaster response plans, in the event of a major disruption caused by a man-made problem such as a power disruption, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our development activities, lengthy interruptions in service, breaches of data security and loss of critical data, and our insurance may not cover such events or may be insufficient to compensate us for the potentially significant losses we may incur.

Our use of artificial intelligence and machine learning may result in legal and regulatory risks.

While we currently have limited use cases for artificial intelligence, to the extent we use technology more broadly in the future, its use entails significant legal risks, including the breach of a data or software license, website terms of service claims, claimed violations of privacy rights or other tort claims.

The regulatory landscape surrounding artificial intelligence is also evolving, and expanded use of machine learning technologies may become subject to regulation under new laws or new applications of existing laws.

Compliance with these regulations may increase costs, and violations of these laws and regulations could result in fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, and damage to our reputation.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors