What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-24 compared with 2025-03-25 · 362 added, 340 removed, 456 unchanged (61% of the section changed)

1 unchanged sentence

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Annual Report on Form 10-K.

This discussion and analysis includes the results of operations and financial conditions, including year-over-year comparisons, for fiscal years 2024 and 2023.

For discussion and analysis of fiscal year 2022, including a year-over-year comparison of fiscal years 2023 and 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our final prospectus, dated January 27, 2025, for our IPO, filed with the SEC under Rule 424(b) of the Securities Act on January 29, 2025.

This discussion and analysis includes the results of operations and financial condition, including year-over-year comparisons, for fiscal years 2025 and 2024.

For discussion and analysis of fiscal year 2023 , including a year-over-year comparison of fiscal years 2024 and 2023 , see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ou r Annual Report on Form 10-K for fiscal year 2024.

The information reflects all normal recurring adjustments which we believe are necessary to present fairly the financial position and results of operations for all periods included.

4 unchanged sentences

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.

We are an indirect, majority-owned subsidiary of Hong Kong-based WH Group.

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.

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.

2 unchanged sentences

Business” in this Annual Report on Form 10-K.

Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition

The following are key factors that have influenced our results of operations in the past and/or may influence our results in the future.

Growth Strategies

1 unchanged sentence

We have several strategic initiatives to grow our business, reduce costs and enhance our profitability and margins.

These include:

• driving growth in our Packaged Meats segment;

• further enhancing the profitability of our Fresh Pork segment;

• continuing to invest in innovation;

• optimizing operational and supply chain efficiencies;

• executing synergistic and complementary mergers and acquisitions.

For a more comprehensive discussion of our growth strategies, refer to “Item 1.

For a comprehensive discussion of our growth strategies, refer to “Item 1.

Business—Our Growth Strategies in this Annual Report on Form 10-K.

Key Factors Affecting Our Results of Operations and Financial Condition

The following are key factors that have influenced our results of operations in the past and may influence our results in the future.

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.

Within the Packaged Meats segment, the primary factors impacting sales of our brands are household penetration, consumption levels, price point and product offerings.

As a result, we have pursued strategies that we believe best align our products with consumer trends and behavior.

2 unchanged sentences

We have also expanded to new categories and grown distribution of under-indexed brands in under-penetrated locations.

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.

packaged meats market is supported by long-term secular tailwinds, including consumer demand for high-protein diets, high-quality nutrition, product versatility and convenience.

4 unchanged sentences

We also seek to capitalize on export markets as an outlet for increasing the value of raw materials through whole-hog utilization and by appealing to differentiated, global tastes and preferences.

Our cost as a percentage of sales varies based on fluctuations of raw materials prices, as well as manufacturing, distribution and marketing costs.

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.

Approximately 80% of the raw materials used in the Packaged Meats segment is sourced internally from our Fresh Pork segment, and about half of the hogs used in the Fresh Pork segment are supplied by our Hog Production segment.

In the Hog Production segment, in fiscal year 2024, approximately 60% of cost of goods sold was from animal feed, which is derived primarily from corn and soybean meal.

The price of feed ingredients, hogs and pork fluctuates based on market dynamics which can affect our margins.

We enter into hedging transactions for these commodities when we determine conditions are appropriate to mitigate the inherent price risks.

The prices of feed ingredients, hogs and pork fluctuate based on market dynamics which can affect our margins.

In addition, our distribution costs are affected by fuel prices, which also fluctuate based on market dynamics and may contribute to higher prices for feed ingredients and other inputs.

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.

We continue to optimize the size of our hog production operations and procure a greater mix of hogs from independent suppliers with market-based supply agreements in order to supply 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 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 are pursuing best-in-class manufacturing principles in our plants by employing automation to redeploy labor to higher value tasks, increasing yields and driving efficiency by reducing complexity.

1 unchanged sentence

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.

We export our products to over 30 countries, including China, Mexico and Canada, and we are engaged in a joint venture in Mexico.

For the year ended December 29, 2024, U.S.

export sales accounted for 13% of our total sales.

Because of the growing market share of U.S.

pork products in the international markets, U.S.

exporters are increasingly being affected by measures taken by importing countries to protect local producers.

Our international sales and operations are subject to various risks related to economic or political uncertainties, including, but not limited to, the risks posed by the imposition of tariffs, quotas, trade barriers and other trade protection measures that may be taken by various countries.

In February 2025, the current U.S.

administration issued executive orders announcing a 10% tariff on most imported goods from China and 25% tariffs on most imported goods from Mexico and Canada.

The China tariff went into effect on February 4, 2025 and the tariffs on Mexico and Canada went into effect on March 4, 2025.

The China tariff was increased by an additional 10% effective March 4, 2025.

However, on March 6, 2025, President Trump announced that the proposed tariffs on imported goods from Canada and Mexico that are covered by the United States-Mexico-Canada Agreement will be suspended until April 2, 2025.

China responded by imposing an additional 15% tariff on U.S.

chicken, wheat, corn and cotton products and an additional 10% tariff on pork, among other products, increasing the tariff rate on pork from 37% to 47%.

Officials from Mexico and Canada have announced that they anticipate imposing retaliatory tariffs.

Our primary raw materials, including hogs, feed grains and meat, are sourced primarily in the U.S.

Tariffs imposed on U.S.

exports of these items could increase U.S.

supplies of these items and therefore, reduce our raw material costs.

On the other hand, the U.S.

pork industry depends on free and open export markets to support growth.

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.

Any of the above could materially affect our business, financial condition and results of operations.

Recent Developments

The following events and transactions have had, and/or will have, an impact on our results of operations and/or financial condition:

Initial Public Offering

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.

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.

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.

We received net proceeds from the IPO of approximately $236 million after deducting underwriting discounts, commissions and fees.

The remaining 13,043,479 shares of common stock were sold by WH Group, through its indirect wholly owned subsidiary SFDS UK, our only shareholder at the time.

We received net proceeds from the IPO of $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.”

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;

• 1,527,000 restricted stock units (“RSUs”) with an aggregate grant date fair value of $31 million.

Both the options and RSUs vest over a five year period, with 20% vesting each year.

We expect to recognize an aggregate of $49 million in compensation expense over the five-year vesting period of these awards, of which we estimate that the amount recognized in 2025 will be $9 million.

Altoona, Iowa Facility Closure.

On August 30, 2024, we closed our Altoona, Iowa ham boning facility and consolidated production volume into other locations to improve manufacturing efficiencies.

Costs associated with closing the plant primarily include operating lease assets and equipment that we disposed of prior to the expiration of the lease term or end of the asset’s useful life.

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.

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.

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.

The options and substantially all RSUs vest over a five year period, with 20% vesting each year.

We recognized compensation expense totaling $9 million

associated with these equity instruments in fiscal year 2025.

Unrecognized compensation expense totaled $37 million as of December 28, 2025, which is expected to be recognized on a straight-line basis over the remaining vesting period of 4.1 years.

We export our products to over 30 countries, including China.

Those exports primarily consist of fresh pork offal products.

For fiscal year 2025, our export sales into China accounted for approximately 2% of our total sales.

As of December 28, 2025, products we export to China faced tariffs that ranged from 25% to 47%, with most products subject to 47% tariff rates.

Trade relations between the U.S.

and China are fluid.

China previously had proposed imposing tariff rates on our products ranging from 140% to 172%, but implementation of those increased rates have been repeatedly paused.

It is impossible for us to predict whether tariff rates imposed on our products by China will increase, decrease or stay the same, or whether China will ban imports from the U.S.

altogether, and we will adjust our sales strategy accordingly.

Geopolitical Conflicts and Market Volatility

Recent hostilities and geopolitical tensions in multiple regions, including the Middle East, Ukraine, and parts of Central and South America, have contributed to increased volatility in global oil, energy, commodity and transportation markets.

Ongoing sanctions, export controls, and other governmental actions associated with these conflicts have impacted and may continue to impact the price and availability of oil and other key inputs.

Because energy prices directly influence freight, logistics and certain raw material costs across our supply chain, sustained volatility or disruptions may increase our operating costs.

In addition, these conditions may disrupt trade flows and contribute to broader macroeconomic uncertainty, which could impact demand for our products.

The duration and overall impact of these conflicts remain uncertain.

We will continue to monitor developments and take measures to minimize the impact on our operations.

Like other participants in our industry, we are subject to various laws and regulations administered by federal, state and other government entities, including the EPA and corresponding state agencies, as well as the USDA, the Grain Inspection, Packers and Stockyard Administration, the FDA, OSHA, the Commodity Futures Trading Commission and similar agencies in foreign countries.

We, from time-to-time, receive notices and inquiries from regulatory authorities and others asserting that we are not in compliance with such laws and regulations.

In some instances, litigation ensues.

In addition, individuals may initiate litigation against us.

As of December 28, 2025 and December 29, 2024, we had contingent liabilities totaling $149 million and $141 million, respectively, in accrued expenses and other current liabilities on the consolidated balance sheets related to litigation matters.

Charges totaling $80 million were recorded in fiscal year 2025 and are included in selling, general and administrative expenses (“SG&A”) in the consolidated statements of income.

We did not record any significant charges for litigation matters in fiscal year 2024.

These matters will not affect our profits or losses in future periods unless our accruals prove to be insufficient or excessive.

It is reasonably possible that a change in our estimates may occur in the near term and that our accruals could be insufficient.

We are unable to estimate the amount of possible loss in excess of our accruals, which could be material.

Additionally, in the second quarter of 2025, we settled a claim against an insurance carrier and received $29 million in proceeds for the recovery of losses we incurred in connection with past litigation.

As a result, we recognized a $29 million gain on the insurance recovery in the second quarter of 2025.

The gain was recognized in operating gains in the consolidated statement of income and the proceeds were classified in operating activities in the consolidated statement of cash flows in the second quarter of 2025.

For further information related to our litigation matters, 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.

Employee Retention Tax Credits

In the second quarters of 2025 and 2024, we recognized $10 million and $87 million, respectively, of employee retention tax credits, substantially all of which were classified in cost of sales in the consolidated statements of income.

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.

One Big Beautiful Bill

On July 4, 2025, the Tax Relief for American Families and Workers Act of 2025 (commonly known as the “One Big Beautiful Bill” or “OBBB”) was signed into law.

This comprehensive legislation made several significant changes to federal tax law, including:

• Permanently reinstating 100% bonus depreciation and adding 100% bonus deprecation for real property placed in service after January 19, 2025 and used in production activity.

• Permanently reinstating the immediate expensing of R&D in the U.S for years 2022 and beyond.

• Permanently restoring the EBITDA-based limitations for interest deduction under the IRS Tax Code.

In the third quarter of 2025, following the enactment of the OBBB, we reclassified approximately $77 million of deferred tax assets related to R&D capitalization to prepaid expenses and other current assets.

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.

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.

If approved, construction is anticipated to begin in the first half of 2027 with production estimated to commence by the end of 2028.

Additionally, if the project moves forward, we plan to accelerate depreciation and may incur other incremental costs related to closing the existing plant, which are currently under evaluation.

Nathan’s Famous

On January 20, 2026, we entered into an agreement to acquire all of the issued and outstanding shares of Nathan’s for $102.00 per share in cash.

The acquisition is expected to be funded using cash on hand.

Since March 2014, we have held an exclusive license to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs, sausages, corned beef and certain other ancillary products through retail outlets in the U.S.

and Canada and Sam’s Clubs in Mexico.

The license is scheduled to expire in March 2032.

The closing of the transaction is expected to occur in the first half of 2026, subject to satisfaction of certain conditions set forth in the merger agreement, including obtaining approval by the holders of a majority of the outstanding Nathan’s common stock, approval from CFIUS and other customary closing conditions.

Nashville, Tennessee Facility

On July 30, 2024, we acquired a dry sausage production facility located in Nashville, Tennessee from Cargill Meat Solutions Corporation for $38 million.

The acquisition is part of our strategy to grow our value-added packaged meats business and serve the growing demand for high-quality pepperoni, salami, charcuterie and other dry sausage products.

Employee Retention Tax Credit.

In the second quarter of 2024, we recognized $86 million and $1 million of employee retention credits in cost of sales and selling, general and administrative expenses (“SG&A”), respectively, in the consolidated statement of income.

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.

American Skin.

On December 28, 2023, we acquired the remaining 15% interest in American Skin Food Group, LLC for $15 million.

West Coast Exit and Hog Production Reform.

We have undertaken a number of steps to exit our operations in California where high taxes, high utility costs and a challenging regulatory environment negatively impact our ability to operate efficiently and profitably.

We also undertook a number of other actions in furtherance of our efforts to optimize the size of our Hog Production segment’s operations and improve its cost structure:

• West Coast Exit.

In May 2022, we announced a decision to close our Vernon, California processing facility, exit farm operations in Arizona and California and reduce our sow herd in Utah.

Additionally, in December 2023, we made a decision to terminate a number of agreements with contract farmers and closed several company-owned nursery farms in Utah as a result of the Vernon, California facility closure in early fiscal year 2023.

Restructuring and Optimization

Springfield, Massachusetts Facility

On February 6, 2026, we announced our decision to exit our leased Springfield, Massachusetts dry sausage production facility by the end of August 2026 and consolidate production across our network, including at our recently acquired Nashville, Tennessee facility.

The decision to close the Springfield facility is part of the Company’s ongoing efforts to optimize its manufacturing footprint and improve operational and cost efficiencies.

The costs to close the facility are estimated to be approximately $10 million and primarily represent asset write-downs.

Elizabeth, New Jersey Facility

On June 30, 2025, we exited our leased Elizabeth, New Jersey facility, a small specialty dry sausage production facility, and consolidated production across our network.

Costs associated with closing the plant primarily include equipment that we disposed of prior to the end of the asset’s useful life.

The charges associated with the closing were not material.

Altoona, Iowa Facility

On August 30, 2024, we exited our leased Altoona, Iowa ham boning facility and consolidated production volume into other locations to improve manufacturing efficiencies.

Charges associated with the closing were not material.

Administrative Process Optimization

In the fourth quarter of 2025, we commenced an initiative to modernize and optimize certain of our administrative and transactional processes.

As part of this initiative, we will employ new and advanced technologies, including artificial intelligence and robotic process automation, that will allow us to drive significant improvements in operational efficiency and productivity.

As a result of this initiative, we recognized $3 million in employee termination benefit costs in SG&A in the fourth quarter of fiscal year 2025 and anticipate additional one-time restructuring costs totaling approximately $11 million in fiscal year 2026.

Office Closures

In the second quarter of 2025, we announced a plan to close our satellite offices in Lisle, Illinois and Kansas City, Missouri and move work performed at those locations to our headquarters in Smithfield, Virginia.

As a result, we estimated and accrued $4 million of employee termination benefit costs in SG&A in the consolidated statement of income in the second quarter of 2025 for personnel who are not expected to relocate.

Workforce Reduction

In the first quarter of 2025, we implemented a reduction in workforce initiative to streamline our operations and reduce operating expenses.

We eliminated certain corporate and plant positions and recognized employee termination benefit costs totaling $9 million in the consolidated statement of income in the first quarter of 2025 with $6 million classified in SG&A and $2 million classified in cost of sales.

Hog Production Reform

We have taken the following actions to further 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.

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, by contributing $3 million in cash in exchange for a 25% minority interest.

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.

Beginning in 2023, as part of our Hog Production Reform initiative, we took a number of actions to optimize the size of our Hog Production segment’s operations and improve its cost structure, including ceasing certain farm operations, terminating certain agreements with underperforming contract farmers and reducing the size of our hog production business.

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.

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

consolidated statement of income in the fourth quarter of 2024.

As part of the agreement, we leased back certain farm and feed properties that we continue to operate.

In the fourth quarter of fiscal year 2024, we became a member of a North Carolina-based company, Murphy Family Farms, by contributing $3 million in cash in exchange for a 25% minority interest.

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.

Murphy Family Farms is now a hog supplier to us and will supply approximately 3.2 million hogs annually.

We will supply animal feed and other supplies and provide certain support services to Murphy Family Farms.

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.

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.

As a result of these decisions, we incurred various exit costs and disposal charges.

We recognized charges totaling $31 million and $195 million in cost of sales in fiscal years 2024 and 2023, respectively.

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.

Additionally, in the fourth quarter of 2023, certain biogas assets owned by our joint venture, Align, were impaired as a result of our decision in December 2023 to terminate hog grower contracts and close farms in Utah.

As a result, we recognized our share of the impairment totaling $35 million in (income) loss from equity method investments in the consolidated income statement.

Also in the fourth quarter of 2023, we incurred $14 million in costs associated with biogas assets owned by our joint venture, Monarch, in connection with the farms in Missouri that were closed in fiscal year 2023.

These costs were recognized in (income) loss from equity method investments in the consolidated statement of income.

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.

The transaction resulted in a gain of $32 million, which was recognized in operating gains in the consolidated statement of income in the fourth quarter of 2024.

As part of the agreement, we leased back certain farm and feed properties that we continue to operate.

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.

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.

Results of Operations

Consolidated Results of Continuing Operations

2024 2023 $ Change

2025 2024 $ Change % Change

(in millions)

4 unchanged sentences

Operating gains (52) (60) 8 (12.9) %

(60) (105) 45

Operating profit (loss) 1,118 (56) 1,174

Operating profit 1,292 1,118 175 15.6 %

Interest expense, net 41 66 (25) (38.1) %

Non-operating gains (18) (9) (9) 103.3 %

Income (loss) from continuing operations before income taxes 1,061 (129) 1,189

Income tax expense (benefit) 271 (41) 312

(Income) loss from equity method investments (8) 46 (53)

Net income (loss) from continuing operations 798 (133) 930

Income from continuing operations before income taxes 1,270 1,061 209 19.7 %

Income tax expense 283 271 12 4.5 %

Income from equity method investments (12) (8) (4) 51.9 %

Net income from continuing operations 998 798 201 25.2 %

Net income from continuing operations attributable to noncontrolling interests 11 14 (3) (21.7) %

Net income (loss) from continuing operations attributable to Smithfield

$ 783 $ (138) $ 921

Net income from continuing operations attributable to Smithfield $ 987 $ 783 $ 204 26.0 %

Operating Profit (Loss) by Segment

2024 2023 $ Change

2025 2024 $ Change % Change

(in millions)

1 unchanged sentence

$ 1,094 $ 1,168 $ (74) (6.4) %

214 266 (52) (19.7) %

Hog Production

176 (144) 320 NM

45 35 10 29.1 %

Corporate expenses (128) (153) 26 16.8 %

(153) (107) (46)

Unallocated (1)

(109) (55) (55) (99.2) %

Operating profit (loss)

Operating profit $ 1,292 $ 1,118 $ 175 15.6 %

________________

We recently removed income from equity method investments from the measure of segment profit reviewed by our Chief Operating Decision Maker.

Accordingly, the historical segment results presented herein have been retrospectively adjusted to remove income from equity method investments.

(1) We do not allocate certain items to our operating segments such as litigation charges, exit and disposal costs, insurance recoveries, gains and losses on the sale of property, plant and equipment and other assets, accelerated depreciation, and employee termination benefits, among others.

Results of Operations Analysis

The following discussion provides an analysis of our results of operations for fiscal year 2024 compared to fiscal year 2023.

The following discussion provides an analysis of our results of operations for the fiscal year of 2025 compared to the fiscal year of 2024.

2025 2024 $ Change % Change

14 unchanged sentences

Packaged Meats.

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.

The decrease in volume was mainly due to lower bacon sales associated with the group housing legislation in California and Massachusetts, which requires pork producers nationwide to comply with certain production standards in order to sell pork products into these states, and lower holiday ham sales.

Segment sales increased by $42 million, or 0.5%, as a 5.4% increase in our average sales price more than offset a 4.7% decrease in volume.

The increase in our average sales price reflects strong demand for U.S.

pork, which was supported by higher relative prices for competing proteins and strength in export markets.

In fiscal year

2024, fresh pork cut-out values reported by the USDA averaged $0.96 per pound, up 6.5% from fiscal 2023.

The decrease in Fresh Pork volume was largely due to a strategic plan to optimize production levels.

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.

Segment sales increased by $471 million, or 6.0%, primarily attributable to a 5.8% increase in our average sales price.

The increase in the average sales price is directionally aligned with the 7.4% increase in the cut-

out values reported by the USDA, which averaged $1.03 per pound in 2025, primarily due to lower U.S.

pork production coupled with continued strong demand for pork.

Volume remained relatively consistent year-over-year.

Hog Production.

Segment sales decreased by $315 million, or 9.5%, largely due to an 7.8% decrease in the number of hogs sold and a $171 million decrease in grain sales, partially offset by a 6.2% increase in our average hog sales price, including the effects of hedging.

The decrease in the number of hogs sold by the segment was largely attributable to Hog Production Reform activities aimed at reducing the number of hogs we produce.

Segment sales decreased by $88 million, or 15.7%, predominantly attributable to our Mexico operations due in part to an 8.3% decline in volume.

Segment sales increased by $391 million, or 13.0%, primarily due to the following factors, which more than offset an approximately 3.4 million, or 23.4%, decrease in the number of market hogs sold due to our Hog Production Reform initiative:

• Sales of commercial hog inventories, transportation services and other ancillary goods and services to Murphy Family Farms and VisionAg totaling $363 million in 2025.

• A $411 million increase in grain and feed sales primarily attributable to our livestock feed supply agreements with Murphy Family Farms and VisionAg.

• An 8.9% increase in our average market hog sales price, inclusive of the effects of hedging, driven by an increase in the lean hog price index published by the CME.

Segment sales increased by $58 million, or 12.2%, primarily due to an 11.5% increase in average sales price and a 6.4% increase in volume in our Mexico operations.

The increase was partially offset by lower sales in our Bioscience operations.

Inter-segment Eliminations

• Fresh Pork.

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.

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.

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.

Cost of Sales

7 unchanged sentences

458 412 47 11.4 %

74 222 (148) (66.6) %

Unallocated 36 74 (38) (51.1) %

Inter-segment eliminations (5,492) (5,524) 32 (0.6) %

Cost of sales $ 13,442 $ 12,244 $ 1,197 9.8 %

$ 12,244 $ 13,751 $ (1,507) (11.0) %

Packaged Meats.

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 Fresh Pork segment decreased by $105 million, or 1.4%, due to the following factors, which more than offset a $111 million increase in raw material costs driven by the net effect of higher market hog prices and lower sales volume:

• A $175 million decrease in manufacturing and distribution costs largely due to cost improvement initiatives and lower sales volume.

• The recognition of $41 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.

Cost of sales in our Fresh Pork segment increased by $545 million, or 7.3%, driven primarily by the following factors, which more than offset lower manufacturing, freight and cold storage costs:

• A $579 million increase in raw material costs primarily attributable to higher market prices for hogs.

• A $35 million decrease in employee retention tax credits.

Hog Production.

Cost of sales in our Hog Production segment decreased by $920 million, or 22.9%, primarily due to the following factors:

• A $717 million decrease in raw material costs largely due to lower prices for feed ingredients, a reduction in the number of hogs produced and lower external grain sales.

• A $195 million decrease in operating costs largely attributable to the effects of our Hog Production Reform activities on both volume and cost improvements, as well as lower external grain sales.

• The recognition of $8 million in employee retention tax credits in the second quarter of 2024.

Cost of sales in our Other segments decreased by $125 million, or 23.3%, which was primarily attributable to lower raw material costs in our Mexico operations driven by lower market prices for feed ingredients and lower sales volume.

The unallocated costs primarily represent costs associated with our West Coast Exit and Hog Production Reform activities.

Cost of sales in our Hog Production segment increased by $75 million, or 2.4%, due to:

• A $412 million increase in the cost of grain and feed sales primarily attributable to our livestock feed supply agreements with Murphy Family Farms and VisionAg.

• The sale of commercial hog inventories, transportation services and other ancillary goods and services to Murphy Family Farms and VisionAg, which increased cost of sales by $319 million in fiscal year 2025.

• An $8 million decrease in employee retention tax credits.

These increases were partially offset by a $427 million decrease in raw material costs, a $174 million decrease in operating costs and a $62 million decrease in the cost of breeding stock sales, largely attributable to the reduction in the size of our hog production operations.

Cost of sales in our Other segments increased by $47 million, or 11.4%, driven primarily by a $56 million increase in raw material costs in our Mexico operations.

The increase was partially offset by a decrease in raw material costs in our Bioscience operations primarily due to lower sales volume.

Unallocated cost of sales decreased by $38 million, or 51.1%, primarily due to lower exit and disposal costs associated with Hog Production Reform.

Selling, General and Administrative Expenses

7 unchanged sentences

25 24 — 2.0 %

Unallocated 38 254 (215) (84.9) %

Corporate expenses

128 154 (26) (16.8) %

Unallocated 125 38 87 227.9 %

Selling, general and administrative expenses $ 849 $ 840 $ 9 1.1 %

$ 840 $ 1,050 $ (211) (20.1) %

SG&A decreased by $211 million, or 20.1%, primarily driven by the following factors, which more than offset a $44 million increase in variable compensation expenses attributable to the improvement in our results of operations (reflected primarily in corporate expenses):

• A $211 million decrease in accruals for litigation matters described in “Note 18:

Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8.

of this Annual Report.

This decrease is reflected in unallocated expenses in the table above.

• A $27 million decrease in marketing and advertising expenses due to an increased focus on the effectiveness of our spending, largely attributable to our Packaged Meats and Fresh Pork segments.

• The impact of foreign exchange transactions, which decreased SG&A by $14 million.

Gains and losses on foreign exchange transactions are included in unallocated expenses in the table above.

SG&A increased by $9 million, or 1.1%, in fiscal year 2025, primarily due to the following factors, which more than offset various broad-based expense savings, including those attributable to our workforce reduction initiative:

• A $75 million increase in litigation charges in fiscal year 2025, which were not allocated to our operating segments.

• Accruals for employee termination benefits totaling $14 million in fiscal year 2025 related to our workforce reduction initiative and the decision to close our satellite offices in Lisle, Illinois and Kansas City, Missouri.

These charges were not allocated to our operating segments.

Operating Gains

Operating gains consists of the following items:

The following table provides details of operating gains.

(in millions)

Packaged Meats $ (2) $ —

Gain on disposal of assets (1)

Insurance recoveries (1)

Gain on disposal of assets (2)

Other operating gains (8) (8)

Total operating gains

$ (60) $ (105)

Operating gains $ (52) $ (60)

________________

(1) Fiscal year 2024 includes a $32 million gain on the sale of hog farms in Utah and a $6 million gain on the sale of assets to Murphy Family Farms.

Fiscal year 2023 includes an $86 million gain on the sale of our Vernon, California plant.

(1) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

(2) Fiscal year 2024 includes a $32 million gain on the sale of hog farms in Utah and a $6 million gain on the sale of assets to Murphy Family Farms in the fourth quarter of 2024.

Interest Expense, Net

Interest expense, net decreased by $10 million to $66 million from $76 million, or 13.1%, due to higher levels of cash and cash equivalents earning interest at higher rates in fiscal year 2024 as compared to fiscal year 2023, while interest rates on borrowings were largely fixed.

Interest expense, net decreased by $25 million, or 38.1%, due to higher levels of cash and cash equivalents earning interest in the current year, which more than offset the impact of earning lower interest rates.

Non-Operating Gains

Non-operating gains consists of the following items:

The following table provides details of non-operating (gains) losses.

(in millions)

Gain on nonqualified retirement plan assets

Gain on assets held in rabbi trusts (1)

$ (34) $ (16)

Net pension and postretirement benefits cost (2)

Other non-operating gains (1) (2)

Non-operating gains $ (18) $ (9)

________________

(1) Consists of assets held in rabbi trusts used to fund nonqualified defined benefit pension plans and deferred compensation plans.

Fiscal year 2025 includes a $17 million gain recognized in the third quarter of 2025 for a one-time benefit on company-owned life insurance policies.

(2) Includes the components of net pension and postretirement benefits cost other than service cost, which is included in operating profit.

These components consist of interest cost, expected return on plan assets, amortization of actuarial gains/losses and prior service costs/credits, and curtailment gains.

Income Tax Expense (Benefit)

Income tax expense (benefit) increased to an expense of $271 million in fiscal year 2024 from a benefit of $41 million in fiscal year 2023 primarily due to the significant pre-tax income recognized in fiscal year 2024, compared to a loss recognized in fiscal year 2023.

The effective tax rate was 25.5% in fiscal year 2024 compared to 32.2% in fiscal year 2023.

The impact of the reconciling items between the federal statutory rate and our effective tax rate were more pronounced in fiscal year 2023 largely due to the pre-tax loss of $129 million in fiscal year 2023 compared to pre-tax income of $1,061 million in fiscal year 2024.

See “Note 13:

Income Taxes” to the consolidated financial statements included in Part II, Item 8 of this Annual Report, for further information.

(Income) Loss from Equity Method Investments

(Income) loss from equity method investments increased to income of $8 million in fiscal year 2024 from a loss of $46 million in fiscal year 2023.

Fiscal year 2023 included $49 million in impairments and other costs associated with our biogas joint ventures as a result of our West Coast Exit and Hog Production Reform actions.

Income Tax Expense

Income tax expense increased by $12 million, or 4.5%, in fiscal year 2025, primarily due to higher earnings year-over-year.

Our effective tax rate attributable to continuing operations decreased to 22.3% in fiscal year 2025 compared to 25.5% in fiscal year 2024 primarily due to the conclusion of certain U.S.

federal income tax matters in fiscal year 2024 and by a non-taxable gain recognized in fiscal year 2025 for a one-time benefit on company-owned life insurance policies.

The decrease was partially offset by limitations on the deductibility of certain executive compensation.

Liquidity and Capital Resources

1 unchanged sentence

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 our outstanding commercial paper.

Availability under our committed credit facilities is reduced by the principal amount of any outstanding commercial

We believe that our current liquidity position is strong and that our cash flows from operations and availability under our credit facilities will be sufficient to meet our working capital needs and financial obligations and commitments for at least the next twelve months.

3 unchanged sentences

Adjustment Outstanding

Borrowings Commercial

Borrowings Outstanding

2 unchanged sentences

Senior Revolving Credit Facility $ 2,100 $ — $ — $ — $ — $ 2,100

$ 2,100 $ — $ — $ — $ — $ 2,100

Securitization Facility 225 — — — (27) 198

225 — — — (22) 203

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.

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.

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.

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.

The Senior Revolving Credit Facility also contains financial maintenance covenants requiring us to maintain a maximum total consolidated leverage ratio (ratio of consolidated funded debt to consolidated capitalization, each as defined in the Senior Revolving Credit Facility) of 0.50 to 1.00 (which we may elect to increase to 0.55 to 1.00 with respect to any fiscal quarter in which a material acquisition is consummated and the immediately following three consecutive fiscal quarters, subject to certain restrictions) and a minimum interest coverage ratio (ratio of EBITDA to consolidated interest expense, each as defined in the Senior Revolving Credit Facility) of 3.50 to 1.00.

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 are currently in compliance with the covenants under our Senior Revolving Credit Facility.

We have a commercial paper program, which is supported by the Senior Revolving Credit Facility, that provides access to a low-cost source of borrowing to fund general corporate purposes, including working capital.

The maximum issuance capacity under our commercial paper program is $1,750 million.

The maturity of commercial paper issued under the program varies but does not exceed 397 days from the date of issuance.

Our ability to access the commercial paper market in the future is dependent on maintaining investment grade credit ratings and market conditions.

Accounts Receivable Securitization Facility

In November 2024, we refinanced our accounts receivable securitization facility (the “Securitization Facility”), which extended the maturity date to November 22, 2027, and reduced the borrowing capacity to $225 million.

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”).

We maintain a $225 million accounts receivable securitization facility (“Securitization Facility”), which matures in November 2027.

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”).

The SPV pledges all such accounts receivable not otherwise sold pursuant to the Monetization Facility (as defined below) as security for loans made, and letters of credit issued, by participating lenders under the Securitization Facility.

5 unchanged sentences

None of the letters of credit were drawn upon.

Under the Securitization Facility, we and the SPV, as applicable, are subject to certain customary covenants, including, but not limited to, restrictions on our ability to sell, assign or otherwise dispose of any collateral or assign any right to receive income with respect thereto, use proceeds for any purpose other than those set forth in the Securitization Facility, make certain payments on junior indebtedness, incur debt or merge or consolidate, subject to certain exceptions set forth therein.

The SPV is also prohibited from issuing any LCR Security (as defined in the Securitization Facility agreement).

We are currently in compliance with the covenants under the Securitization Facility.

Monetization Facility

In addition to the Securitization Facility, we maintain an uncommitted $250 million accounts receivable monetization facility (the “Monetization Facility”).

At Smithfield’s election and subject to the purchasing banks’ approval, certain accounts receivable may be sold by the SPV to purchasing banks, so long as the uncollected outstanding amount of accounts receivable sold pursuant to the Monetization Facility does not exceed $250 million in the aggregate at any time, among other limitations.

In the event of a sale, the purchasing banks assume all credit risk related to the receivables while we maintain risk associated with customer disputes.

We account for the sale of receivables to a purchasing bank by derecognizing the receivables from our consolidated balance sheet upon transfer of control to the purchasing bank, and recognizing a discount on the sale in SG&A in the consolidated statement of income.

The proceeds from the sale of receivables are included in net cash flows from operating activities in the consolidated statement of cash flows.

On behalf of the purchasing banks, we continue to service all receivables sold under the Monetization Facility.

As of December 29, 2024, the uncollected balance of receivables that had been sold to purchasing banks was $230 million.

We had no servicing asset or liability outstanding as of December 29, 2024.

In the first quarter of fiscal year 2023, we sold $227 million of accounts receivable at a discount and received proceeds totaling $225 million.

Subsequently, we reinvested $4,094 million and $3,431 million of cash collections from customers in the revolving sale of accounts receivable to purchasing banks in fiscal years 2024 and 2023, respectively.

We recognized charges totaling $15 million and $12 million in fiscal years 2024 and 2023, respectively, attributable to the discount on the sale of accounts receivable in SG&A in the consolidated statement of income.

On July 22, 2025, we terminated an uncommitted $250 million accounts receivable monetization facility (“Monetization Facility”) and paid $232 million to participating banks to reacquire the outstanding balance of accounts receivable previously sold under the facility.

The Monetization Facility was originally established to provide us with additional liquidity and working capital flexibility.

In light of our liquidity position and internal capital resources as of July 22, 2025, we determined that the Monetization Facility was no longer cost-effective or necessary.

There were no early termination penalties or other material exit costs incurred in connection with the termination of the Monetization Facility.

Cash Flows From Operating Activities of Continuing Operations

(in millions)

Cash flows from operating activities:

Net income $ 998 $ 970

Net income from discontinued operations — (172)

Net income (loss) from continuing operations $ 798 $ (133)

Net income from continuing operations $ 998 $ 798

Adjustments to reconcile net income from continuing operations to net cash flows from operating activities of continuing operations:

Depreciation and amortization 332 339

Deferred income taxes 91 (130)

Impairment of assets 1 1

(Income) loss from equity method investments (8) 46

(Gain) loss on sale of other assets 15 11

(Gain) loss on sale of property, plant and equipment (35) (85)

Deferred income tax expense 94 91

Stock compensation expense 9 —

(Gain) loss on sale of property, plant and equipment and other assets 12 (21)

Income from equity method investments (12) (8)

Gain on assets held in rabbi trusts (34) (16)

Change in accounts receivable (470) (6)

3 unchanged sentences

Change in accrued expenses and other current liabilities (63) (261)

Other 17 (32)

Net cash flows from operating activities of continuing operations $ 1,059 $ 916

Net cash flows from operating activities of continuing operations increased by $228 million to $916 million in fiscal year 2024 from $688 million in fiscal year 2023.

This increase was primarily driven by higher earnings and changes on deferred income taxes, partially offset by changes in working capital.

The increase in net cash flows from operating activities of continuing operations year-over-year was primarily driven by higher earnings, partially offset by changes in working capital.

The following describes the significant changes in working capital:

• Accounts receivable.

Accounts receivable decreased in fiscal year 2023 primarily due to the monetization of receivables under the Monetization Facility.

• Inventories and accounts payable.

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 and accounts payable decreased in fiscal year 2023 primarily due to lower inventory volumes largely attributable to the West Coast exit and Hog Production reform decisions as well as lower commodity prices for meat and feed grains.

Accounts receivable increased in fiscal year 2025 primarily driven by the termination of our Monetization Facility in July 2025 and the sale of commercial hog inventories and feed to Murphy Family Farms and VisionAg.

• Inventories.

Inventories decreased in fiscal year 2025 primarily driven by lower hog inventory volumes, reflecting the sale of commercial hog inventories to Murphy Family Farms and VisionAg, partially offset by higher meat inventories primarily driven by higher market prices.

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.

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 decreased in fiscal year 2023 largely due to a decrease in an escrow balance related to a litigation settlement.

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.

• Accounts payable .

Accounts payable increased in fiscal year 2025 primarily due to purchases of commercial hog inventories from Murphy Family Farms and VisionAg.

• Accrued expenses and other current liabilities.

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 increased in fiscal year 2023 largely due to accruals for litigation and our West Coast exit and Hog Production reform activities, partially offset by litigation settlements.

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.

Cash Flows From Investing Activities of Continuing Operations

(in millions)

Cash flows from investing activities:

Capital expenditures $ (341) $ (350)

1 unchanged sentence

Investments in partnerships and other assets (12) (13)

Business dispositions — 13

Proceeds from sale of property, plant and equipment and other assets 14 99

Cash receipts on notes receivable 25 —

Net cash flows used in investing activities of continuing operations $ (309) $ (298)

$ (298) $ (194)

Net cash used in investing activities of continuing operations increased by $104 million to $298 million in fiscal year 2024 from $194 million in fiscal year 2023.

The following items explain this increase and the significant cash flows from investing activities:

The following items explain the significant investing activities:

• Capital expenditures.

Fiscal year 2024 includes $33 million for the purchase of a dry sausage production facility located in Nashville, Tennessee.

The remaining capital expenditures for both fiscal years 2024 and 2023 consisted primarily of various plant expansion, automation and improvement projects.

Capital expenditures for both periods consisted primarily of various plant automation and improvement projects.

Fiscal year 2024 also includes $33 million for the purchase of a dry sausage production facility located in Nashville, Tennessee.

• Investments in partnerships and other assets.

We made capital contributions totaling $5 million and $21 million to our biogas joint ventures in fiscal years 2024 and 2023, respectively.

We made capital contributions totaling $7 million and $5 million to a biogas joint venture in fiscal years 2025 and 2024, respectively.

Also, in fiscal year 2024, we became a member of, and contributed $3 million to, Murphy Family Farms.

• Business dispositions.

In fiscal year 2023, we received a $7 million final settlement for the sale of a business in fiscal year 2022, $4 million for the sale of a retail business and a $2 million final settlement for the sale of hog farms in California.

• Proceeds from the sale of property, plant and equipment and other assets.

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.

In fiscal year 2023, we received $205 million in proceeds for the sale of our Vernon, California facility.

• Cash receipts on notes receivable .

Cash receipts on notes receivable primarily consists of payments from Murphy Family Farms and VisionAg related to sales of breeding stock and related assets, which we financed through interest-bearing notes.

Cash Flows From Financing Activities of Continuing Operations

(in millions)

Cash flows from financing activities:

Payment of dividends $ (396) $ (288)

Principal payments on long-term debt and finance lease obligations (3) (24)

Payment of deferred purchase consideration for acquisition (2) (2)

Repayments to Securitization Facility — (14)

Proceeds from Securitization Facility — 14

Purchase of redeemable noncontrolling interest — (15)

Net repayments to revolving credit facilities — (8)

Principal payments on long-term debt and finance lease obligations (24) (4)

Payment of deferred purchase consideration for acquisition

Net proceeds from issuance of common stock 236 —

Net cash flows used in financing activities of continuing operations $ (164) $ (321)

$ (321) $ (353)

Net cash used in financing activities of continuing operations decreased by $32 million to $321 million in fiscal year 2024 from $353 million in fiscal year 2023.

The following items explain certain significant cash flows from financing activities during the periods presented:

Dividends in fiscal year 2023 included a $100 million special dividend from the proceeds from the sale of our Vernon, California facility.

• Purchase of redeemable noncontrolling interest.

In fiscal year 2023, we paid $15 million for the remaining 15% interest in American Skin.

The following items explain the significant financing activities:

• Payment of dividends.

In both periods, $1 million of dividends was paid to the noncontrolling interest (“NCI”) holder of our consolidated subsidiary, Altosano, and the remainder was paid to our shareholders.

• Net proceeds from issuance of common stock .

In the first quarter of 2025, we received $236 million in net proceeds from our IPO after deducting underwriting discounts, commissions and fees.

Contractual Obligations and Commitments

23 unchanged sentences

Other long-term liabilities (9)

— — — — — — 174

Total $ 3,640 $ 2,734 $ 1,662 $ 1,751 $ 1,408 $ 1,802 $ 13,546

2 unchanged sentences

(2) Represents guaranteed royalty payments to license the Nathan’s Famous brand.

These payments would cease if the acquisition of Nathan’s is successfully completed.

(3) Amounts presented for lease obligations represent the undiscounted contractual lease payments for our operating and finance lease obligations.

For more information on leases, see “Note 12:

Lease Obligations, Commitments and Guarantees” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Lease Obligations, Commitments and Guarantees” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

(4) We historically provided the majority of our U.S.

6 unchanged sentences

For more information, see “Note 14:

Pension and Other Retirement Plans” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

(5) In 2019, we announced that we planned to contribute up to $250 million to Align through 2028 to fund various projects as approved by Align’s board from time to time.

Pension and Other Retirement Plans” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

(5) In 2019, we announced that we planned to contribute up to $250 million to our joint venture, Align RNG, LLC (“Align”) through 2028 to fund various projects as approved by Align’s board from time to time.

As of December 28, 2025, we had contributed $121 million in capital toward these planned contributions.

2 unchanged sentences

As of December 28, 2025, we had contributed $21 million in capital toward this commitment.

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

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.

13 unchanged sentences

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.

(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.

3 unchanged sentences

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.

If approved by our board of directors and completed on the expected schedule, we estimate that our investment in a new fresh pork and packaged meats processing facility in Sioux Falls, South Dakota will be up to $1.3 billion over the next three years.

Nathan’s Famous

We expect to pay approximately $450 to $500 million for our pending acquisition of Nathan’s, including transaction costs and the payoff of assumed debt.

The transaction is expected to close during the first half of 2026, subject to obtaining regulatory approvals and other customary closing conditions.

Returning cash to shareholders in the form of dividends is also a top priority for the Company.

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.

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.

In fiscal year 2025, we paid dividends of $1.00 per share.

On 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 year 2026 will be $0.3125 per share, resulting in an annual dividend rate in fiscal year 2026 of $1.25 per share.

The declaration of dividends is subject to the discretion of our Board and depends on various factors, including our net income, financial condition, cash requirements, business prospects, and other factors that our Board deems relevant to its analysis and decision making.

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.

In the event that a sale of Monarch is not consummated before January 17, 2026, TPG Rise Climate may require that Monarch purchase TPG Rise Climate’s ownership interests in Monarch.

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.

A sale has not yet occurred and as a result, TPG may require that Monarch purchase TPG’s ownership interest in Monarch.

Altosano Redeemable Noncontrolling Interest

After December 31, 2024, our noncontrolling interest (“NCI”) holders in Altosano have the right to exercise a put option that would obligate us to redeem 40% of their interest.

After December 31, 2027 the NCI holders in Altosano have the right to exercise a put option for the remainder of their interest.

The NCI holder in Altosano currently has the right to exercise a put option that would obligate us to redeem 40% of their interest.

After December 31, 2027 the NCI holder in Altosano has the right to exercise a put option for the remainder of their interest.

The redemption value for the NCI is fair value.

1 unchanged sentence

Contingent Losses

Like other participants in our industry, we are subject to various laws and regulations administered by federal, state and other government entities, including the U.S.

Environmental Protection Agency and corresponding state agencies, as well as the Grain Inspection, Packers and Stockyard Administration, the USDA, the OSHA, the Commodity Futures Trading Commission and similar agencies in foreign countries.

We, from time to time, receive

notices and inquiries from regulatory authorities and others asserting that we are not in compliance with such laws and regulations.

In some instances, litigation ensues.

In addition, individuals may initiate litigation against us.

The consolidated financial statements reflect accruals for contingent losses associated with various claims.

These matters will not affect our profits or losses in future periods unless our accruals prove to be insufficient or excessive.

It is reasonably possible that a change in our estimates may occur in the near term and that our accruals could be insufficient.

We are unable to estimate the amount of possible loss in excess of our accruals, which could be material.

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.

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.

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 .

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.

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.

See these sections for more information on the effects of derivative instruments on our consolidated statements of income.

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.

Our liquidity position may be positively or negatively affected by changes in the value of our derivative portfolio.

1 unchanged sentence

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.

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.

Over the past three years, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $121 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.

1 unchanged sentence

These offsetting changes do not always occur, however, in the same amounts or in the same period, with lag times of as much as twelve months.

We and certain other joint venture partners in Monarch joint and severally guarantee Monarch’s debt, interest and fees.

As of December 29, 2024, the maximum amount of loans that could be outstanding under Monarch’s debt agreements was $61 million and the loans mature in June 2025.

Monarch’s outstanding debt was $43 million as of the end of fiscal year 2024.

The guarantee involves elements of performance and credit risk and is not included in the consolidated balance sheets.

We could become liable in connection with Monarch’s obligation depending on the ability of Monarch to perform on its obligation.

If we consider it probable that we will become responsible for the obligation, we would record the liability on our consolidated balance sheet.

In the second quarter of 2025, Monarch refinanced its debt, repaying a debt facility of up to $61 million that Smithfield and certain other joint ventures partners in Monarch had joint and severally guaranteed.

Smithfield was released from the guaranty and no longer provides a guaranty of Monarch’s debt.

Non-GAAP Measures

5 unchanged sentences

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.

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.

Adjusted net income from continuing operations attributable to Smithfield and adjusted net income from continuing operations per common share attributable to Smithfield are non-GAAP measures.

2 unchanged sentences

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.

2024 2023 Affected income statement

Fiscal Year Affected income statement

(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)

2 — Cost of sales

Office closures (2)

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)

1 unchanged sentence

Employee retention tax credits (5)

West Coast Exit and Hog Production Reform (2)

Insurance recoveries (6)

(36) (4) Operating gains

West Coast Exit and Hog Production Reform (3)

31 195 Cost of sales

West Coast Exit and Hog Production Reform (4)

— 49 (Income) loss from equity method investments

Insurance recoveries (4) (5) Operating gains

Litigation charges (5)

Gain on sale of Vernon, California facility — (86) Operating gains

Incremental costs from destruction of property 4 3 Cost of sales

Company-owned life insurance gain (7)

(17) — Non-operating gains

Income tax effect of non-GAAP adjustments (8)

24 (94) Income tax expense (benefit)

(11) 24 Income tax expense

Adjusted net income from continuing operations attributable to Smithfield $ 1,002 $ 714

Net income (loss) from continuing operations attributable to Smithfield per common share (basic and diluted)

$ 2.06 $ (0.36)

Adjusted net income from continuing operations attributable to Smithfield per common share (basic and diluted) $ 1.88 $ 0.35

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) In the second quarter of 2024, we recognized $86 million and $1 million of employee retention tax credits in cost of sales and SG&A, respectively.

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.

(3) Consists of costs related to the closure of our Vernon, California processing facility, the closure and/or reduction of certain farms in Arizona, California, Missouri and Utah and certain residual operating and restructuring expenses, including the termination of a number of agreements with contract farmers, workforce reduction, and accelerated depreciation of

machinery equipment with no future alternative use, due to discontinuation of operations in the West Coast and efforts to improve the cost structure of our Hog Production segment.

(4) Includes an impairment of certain biogas assets recognized by our joint venture, Align, and costs incurred in connection with the closure of certain farms in Missouri that impacted assets owned by our joint venture, Monarch.

(5) Consists of accruals for the antitrust price-fixing and antitrust wage-fixing litigation matters that are described in “Note 18:

Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

(1) Consists of severance costs associated with workforce reduction initiatives.

Total severance costs round up to $12 million.

(2) Consists of severance costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(3) Consists of contract termination costs, loss on asset disposals, employee termination benefits, accelerated depreciation charges and other exit costs associated with our Hog Production Reform initiative.

(4) Fiscal year 2025 includes a $3 million gain on the sale of certain of our hog farms in Missouri.

Fiscal year 2024 includes a $32 million gain on the sale of hog farms in Utah and a $6 million gain on the sale of assets to Murphy Family Farms.

(5) Represents the recognition of employee retention tax credits received under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act.

(6) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

(7) Consists of a gain recognized in the third quarter of 2025 for a one-time benefit on company-owned life insurance policies.

(8) Represents the tax effects of the non-GAAP adjustments based on a statutory tax rate of 25.7%.

8 unchanged sentences

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.

2024 2023 Affected Income Statement

Fiscal Year Affected Income Statement Account

(in millions, except percentages)

Net income (loss) from continuing operations $ 798 $ (133)

Net income from continuing operations $ 998 $ 798

Interest expense, net 41 66

Income tax expense (benefit) 271 (41)

Income tax expense 283 271

Depreciation and amortization

EBITDA from continuing operations $ 1,654 $ 1,474

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)

Litigation charges 73 — SG&A

Reduction in workforce (1)

2 — Cost of sales

West Coast Exit and Hog Production Reform — 49 (Income) loss from equity method investments

Insurance recoveries (4) (5) Operating gains

Office closures (2)

Hog Production Reform (3)

3 29 Cost of sales

Hog Production Reform (4)

(4) (38) Operating gains

Plant closure (5)

1 — Cost of sales

Incremental costs from destruction of property — 4 Cost of sales

Litigation charges — 208 SG&A

Gain on sale of Vernon, California facility — (86) Operating gains

Employee retention tax credits (6)

(10) (86) Cost of sales

Employee retention tax credits (6)

Insurance recoveries (7)

(36) (4) Operating gains

Company-owned life insurance gain (8)

(17) — Non-operating gains

Adjusted EBITDA from continuing operations $ 1,677 $ 1,379

Net income (loss) margin from continuing operations

5.6 % (0.9) %

Net income margin from continuing operations 6.4 % 5.6 %

Adjusted EBITDA margin from continuing operations 10.8 % 9.7 %

(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.

________________

(1) Consists of severance costs associated with workforce reduction initiatives.

Total severance costs round up to $12 million.

(2) Consists of severance costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(3) Consists of contract termination costs, loss on asset disposals, employee termination benefits and other exit costs associated with our Hog Production Reform initiative.

Excludes accelerated depreciation charges as such amounts are included in the depreciation and amortization line in this table.

(4) Fiscal year 2025 includes a $3 million gain on the sale of certain of our hog farms in Missouri.

Fiscal year 2024 includes a $32 million gain on the sale of hog farms in Utah and a $6 million gain on the sale of assets to Murphy Family Farms.

(5) Excludes accelerated depreciation charges as such amounts are included in the depreciation and amortization line in this table.

(6) Represents the recognition of employee retention tax credits received under the CARES Act.

(7) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

(8) Consists of a gain recognized in the third quarter of 2025 for a one-time benefit on company-owned life insurance policies.

Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations

15 unchanged sentences

Net debt $ 464 $ 1,059

Net income (loss) from continuing operations

$ 798 $ (133)

Net income from continuing operations $ 998 $ 798

Adjusted EBITDA from continuing operations $ 1,677 $ 1,379

Ratio of total debt and finance lease obligations to net income (loss) from continuing operations

Ratio of net debt to adjusted EBITDA from continuing operations

Ratio of total debt and finance lease obligations to net income from continuing operations 2.0x 2.5x

Ratio of net debt to adjusted EBITDA from continuing operations 0.3x 0.8x

Adjusted Operating Profit and Adjusted Operating Profit Margin

8 unchanged sentences

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)

West Coast Exit and Hog Production Reform — — — — — (7) (7)

(5) (5) — — — — (10)

Insurance recoveries (7)

Incremental costs from destruction of property — — — — — 4 4

— — — — — (36) (36)

Adjusted operating profit (loss) $ 1,089 $ 209 $ 176 $ 45 $ (128) $ (55) $ 1,336

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)

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)

3 unchanged sentences

$ 1,168 $ 266 $ (144) $ 35 $ (153) $ (55) $ 1,118

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 — — — — — 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

4 unchanged sentences

(2) Represents general corporate expenses for management and administration of the business.

(3) Includes certain costs of sales, SG&A and operating gains that we do not allocate to our segments.

(3) We do not allocate certain items to our operating segments such as litigation charges, exit and disposal costs, insurance recoveries, gains and losses on the sale of property, plant and equipment and other assets, accelerated depreciation, and employee termination benefits, among others.

(4) Consists of severance costs associated with workforce reduction initiatives.

(5) Consists of severance costs associated with the planned closure of our satellite offices in Lisle, Illinois and Kansas City, Missouri.

(6) Represents the recognition of employee retention tax credits received under the CARES Act.

(7) Consists of gains recognized in connection with settlements of insurance claims associated with past litigation and property damage.

(8) Consists of a $32 million gain on the sale of our Utah hog farms and a $6 million gain on the sale of breeding stock to Murphy Family Farms, partially offset by contract termination costs, loss on asset disposals, employee termination benefits, accelerated depreciation charges and other exit costs associated with our Hog Production Reform initiative.

Critical Accounting Estimates

5 unchanged sentences

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.

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

23 unchanged sentences

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.

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.

In the evaluation of goodwill for impairment, we may perform a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

11 unchanged sentences

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.

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.

6 unchanged sentences

• Fresh Pork:

• Hog Production:$4 million;

• Hog Production:

• Bioscience:

9 unchanged sentences

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.

We record liabilities for uncertain tax positions based on our analysis of whether, and the extent to which, additional taxes will be due.

We record liabilities for unrecognized tax benefits based on our analysis of whether, and the extent to which, additional taxes will be due.

We record these liabilities using a two-step process in which (1) we evaluate whether we believe it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the tax authority.

The difference between the tax benefit claimed or expected to be claimed on a tax return and the amount recognized for financial reporting purposes is recorded as a liability.

The determination of our provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws.

2 unchanged sentences

In addition, changes in projected future earnings could affect the recorded valuation allowances in the future.

Our analysis of uncertain tax positions requires considerable judgment about the likelihood and amount of benefit that would be sustained upon examination by tax authorities.

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.

2 unchanged sentences

A favorable tax settlement would be recognized as a reduction in our effective tax rate in the period of resolution.

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.

See “Note 13:

Income Taxes” to the consolidated financial statements included in Part II, Item 8 of this Annual Report.

Income Taxes” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Pension Accounting

13 unchanged sentences

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.

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.

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.

1 unchanged sentence

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.

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

11 unchanged sentences

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.

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.

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.

Summary of Significant Accounting Policies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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 7. Management’s Discussion and Analysis