10-K – 2026-03-24 – smf-20251228.htm

to anti-American sentiment. Any of the above could materially affect our business, financial condition and results of operations.
We cannot predict future trade policy and regulations in the U.S. and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business. Continuation of or escalations in trade tension could have a significant adverse effect on world trade and macroeconomic markets at large. To the extent that trade tariffs and other restrictions imposed by the U.S. or other countries increase the price of, or limit the amount of, our products or raw materials used in our products imported into the U.S. or other countries, or create adverse tax consequences, the sales, cost or gross margin of our products may be adversely affected and the demand from our customers for products may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending.
Furthermore, our foreign operations are subject to the risks described above as well as additional risks and uncertainties including:
• fluctuations in currency values, which have affected, among other things, the costs of our investments in foreign operations;
• translation of foreign currencies into U.S. dollars;
• foreign currency exchange controls; and
• unstable political environments.
Negative consequences relating to these risks and uncertainties could jeopardize or limit our ability to export our products to one or more of those markets and could adversely affect our business, financial condition and results of operations.
We depend on availability of, and satisfactory relations with, our employees.
As of December 28, 2025, we had approximately 32,000 employees in the U.S. and approximately 2,500 in Mexico, with approximately 44% of our total workforce covered by collective bargaining agreements or are members of labor unions. Our operations depend on the availability, retention and relative costs of labor and maintaining satisfactory relations with employees and the labor unions. Further, employee shortages can and do occur, particularly in rural areas where some of our operations are located. Labor relations issues arise from time to time, including issues in connection with union efforts to represent employees at our plants and with the negotiation of new collective bargaining agreements. If we fail to maintain satisfactory relations with our employees or with the labor unions, we may experience labor strikes, work stoppages or other labor disputes. Negotiation of collective bargaining agreements also could result in higher ongoing labor costs.
Immigration reform continues to attract significant attention in the public arena and the U.S. Congress. If new immigration legislation is enacted, such laws may contain provisions that could increase our costs in recruiting, training and retaining employees, increase our costs of complying with federal law in reviewing employees’ immigration status and create employee shortages. Furthermore, increased enforcement efforts with respect to existing immigration laws by governmental authorities may disrupt a portion of our workforce or our operations. There can be no assurance that these activities or consequences will not adversely affect our business, financial condition or results of operations in the future.
We also rely on an adequate supply of skilled employees in the farming and corporate areas. Trained and experienced personnel in our industry are in high demand, and we have experienced high turnover and difficulty retaining employees with appropriate training and skills. We cannot predict whether we will be able to attract, motivate and maintain an adequate skilled workforce necessary to operate our existing and future facilities efficiently, or that labor expenses will not increase as a result of a shortage in the supply of skilled personnel, thereby adversely impacting our financial performance. While our industry generally operates with high employee
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turnover, any material increases in employee turnover rates or any widespread employee dissatisfaction could also have a material adverse effect on our business, financial condition and results of operations.
We are subject to various risks relating to worker employment and health and safety.
Given the nature of our operations, the type of work performed by our employees and the number of plants and employees that we have, we are subject to various risks relating to employment eligibility and worker safety. We cannot assure you that no accidents will occur. Workplace accidents have previously resulted in lawsuits, regulatory or administrative investigations and inquiries and fines and penalties, and we may become subject to additional such lawsuits, investigations and inquiries, and fines and penalties in the future, and our business, financial condition and results of operations may be adversely affected.
Allegations or findings that we, our suppliers, third-party staffing agencies or other business partners are not complying with applicable workplace and labor laws, including child labor laws, or regarding illegal employment of foreign workers, could negatively affect our overall reputation and brand image, which in turn could have a negative impact on our relationships with customers, consumers and our brand license partners, as well as subject us to increased regulatory and political scrutiny. In addition, the discovery by us or governmental authorities of undocumented workers could result in our having to attempt to replace those workers, which could be disruptive to our operations or may be difficult to do. Moreover, failure or perceived failure to comply with legal or regulatory requirements applicable to our business could expose us to litigation, governmental inquiries and substantial fines and penalties, as well as costs and distractions, that could adversely affect our business, results of operations, financial condition and cash flows.
Following a 2023 investigation of our plant in St. James, the Minnesota Department of Labor and Industry alleged that we had employed 11 underage employees during the two-year audit period. During the hiring process, we use the federal E-Verify system and trained human resources professionals to scrutinize identity documents for I-9 purposes carefully, but our process may be circumvented by underage individuals with fake documentation. Since this investigation, we have put in place new risk-based measures designed to recognize identity fraud, including visual inspection protocols, internal auditing and enhanced I-9 training. In November 2024, we entered into a consent order with the Minnesota Department of Labor and Industry relating to these allegations. Although we did not admit liability in connection with this consent order, we paid a $2 million administrative penalty. Under the consent order, we are required to conduct industry outreach related to underage labor compliance, contractually require underage labor compliance with our labor staffing agencies and sanitation contractors, and take other steps to enhance our compliance practices.
In addition, one of our sanitation contractors, Packers Sanitation Services Inc. (now called Fortrex, Inc.), was featured prominently in the news in 2022 and 2023 because of a federal investigation that found underage employees in its workforce. We have sought to address the risk of our contractors utilizing underage employees by increasing our efforts to monitor compliance by these third parties; however, we cannot provide any assurance that companies that provide services to us will comply with such laws and that our monitoring efforts will timely identify non-compliance, if any occurs. In addition, we cannot give any assurance that our reputation will not be adversely affected by non-compliance, governmental investigations or other inquiries in the future.
We depend upon the continued services of certain key members of our senior management team, without whom our business operations could be significantly disrupted.
Our success depends, in part, on the continued contributions of our executive leadership team and key members of our senior management. Our management team has significant industry experience, as well as in-depth knowledge of our company, and could be difficult to replace. Any loss or extended interruption in the service of one or more of our senior officers could adversely affect our business, financial condition and results of operations. In addition, we do not have key-man insurance on the life of any of our officers. The unexpected loss of the services of our key personnel could have a detrimental effect on us. Moreover, the market for qualified individuals may be highly competitive and we may not be able to attract and retain qualified personnel to replace or succeed members of our senior management, should the need arise. In addition, our compensation arrangements may not always be successful in attracting new employees or retaining our existing team members.
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The consolidation of customers and/or the loss of our customers could adversely impact our business.
Continued consolidation within the retail industry, including among supermarkets, warehouse clubs and food distributors, has resulted in an increasingly concentrated retail base and increased our exposure to loss of certain customers. These consolidations have produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories, opposing price increases, and demanding lower pricing, increased promotional programs and specifically tailored products. These customers also may use shelf space currently used for our products for their own private label products. Because of these trends, our volume growth could slow or we may need to lower prices or increase promotional spending for our products, any of which could adversely affect our financial results. Additionally, these large customers may demand more favorable terms that may expose us to greater risks, including uncapped indemnification and no limitation of liability provisions. Such terms may obligate us to pay significant amounts in connection with potential losses arising from claims and related legal proceedings, and any such claims could also affect our reputation and our relationship with customers.
Our ten largest customers represented approximately 42% of net sales of fiscal year 2025. We generally do not have long-term sales agreements or other contractual assurances as to future sales to our customers, including these major customers. Our business could be materially adversely affected and suffer significant decreases in sales and operating profit from the loss of one or more of our larger customers or if our larger customers’ plans, markets, and/or financial condition should change significantly. For example, if our customers cannot access sufficient funds or financing, then they may delay, decrease, or cancel purchases of our products, or delay or fail to pay us for previous purchases. The loss of a significant customer or a material reduction in sales to, or adverse change to trade terms with, a significant customer could materially and adversely affect our product sales, financial condition and results of operations.
Impairment in the carrying value of goodwill or intangible assets could negatively impact our consolidated results of operations and net worth.
As of December 28, 2025, we had $2,882 million of goodwill and intangible assets, which represented approximately 24% of total assets. Goodwill was allocated to our reporting units as follows: Packaged Meats, $1,503 million; Mexico, $79 million; Fresh Pork, $34 million; Hog Production, $4 million; and Bioscience, $4 million. Under accounting principles generally accepted in the U.S. (“GAAP”), goodwill and identified intangible assets with indefinite lives must be evaluated for impairment annually or more frequently if events indicate it is warranted.
Goodwill is the excess amount of purchase consideration over the fair value of net assets acquired in a business combination. In evaluating the potential for impairment of goodwill, we make assumptions regarding future operating performance, business trends, and market and economic conditions. Such analyses further require us to make judgmental assumptions about sales, operating margins, growth rates, and discount rates. There are inherent uncertainties related to these factors and to management’s judgment in applying these factors to the assessment of goodwill recoverability. Goodwill reviews are prepared using estimates of the fair value of reporting units based on market multiples of EBITDA and/or on the estimated present value of future cash flows. For indefinite life intangible assets, an impairment loss is recognized if the carrying amount of an indefinite life intangible asset exceeds the estimated fair value of that intangible asset. Identified intangible assets with definite lives are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.
Events and conditions that could result in impairment in the value of our goodwill and other intangible assets include changes in the industry in which we operate, particularly the impact of a downturn in the global economy or the economies of geographic regions or countries in which we operate, as well as competition, adverse changes in the regulatory environment, or other factors leading to reduction in expected long-term sales or profitability. We could be required to evaluate the recoverability of goodwill and indefinite life intangible assets prior to the annual assessment if we experience disruptions to the business, unexpected significant declines in operating results, divestiture of a significant component of our business or market capitalization declines.
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In addition, our equity investments in joint ventures, partnerships and other entities, both within and outside the U.S., are periodically involved in modifying and amending their credit facilities and loan agreements. The ability of these entities to refinance or amend their facilities on a successful and satisfactory basis, and to comply with the covenants in their financing facilities, affects our assessment of the carrying value of any individual investment. As of December 28, 2025, none of our equity investments represented more than 5% of our total consolidated assets. If we determine in the future that an investment is impaired, we would be required to record a non-cash impairment charge, which could substantially affect our reported earnings in the period of such charge. In addition, any such impairment charge would negatively impact our financial ratios and could limit our ability to obtain financing in the future. See “Note 9: Equity Method Investments” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a discussion of the accounting treatment of our equity investments.
The loss of any trademark or other intellectual property right could enable other companies to compete more effectively with us.
We utilize intellectual property in our business. Our registered and unregistered trademarks are valuable assets that reflect the goodwill of our brands and consumers’ favorable perception of our products. We have invested a significant amount of money in establishing, promoting and protecting our brands. We also rely on patented and unpatented proprietary methods, processes and techniques in our manufacturing operations and copyright protection in our sales and marketing materials to develop and maintain our competitive position. Our continued success depends, to a significant degree, upon our ability to protect and preserve our intellectual property rights. In certain jurisdictions, we receive access to third-party intellectual property. In particular, we have a license agreement with Nathan’s for the exclusive right to manufacture, distribute, market and sell “Nathan’s Famous” branded hot dogs and sausages in refrigerated consumer packages to be resold through retail channels within the U.S. until March 2032. We have entered into a merger agreement to acquire all of the outstanding shares of Nathan’s, but we cannot assure you that we will be able to satisfy the conditions necessary to complete that acquisition, including obtaining the approval of CFIUS. If we are unable to complete the acquisition of Nathan’s, we cannot assure you that we will be able to maintain or renew the license agreement with Nathan’s, We also license certain of our trademarks and other intellectual property for use by third parties. In an effort to preserve our trademark rights, we enter into license agreements with these third parties that govern the use of our trademarks and contain limitations on their use. We cannot assure you that our efforts to police the use of our trademarks by our licensees will be sufficient to ensure that our licensees abide by the terms of their licenses. In the event that our licensees fail to do so, our trademark rights could be diluted.
We rely primarily on confidentiality agreements and intellectual property law to protect our proprietary rights. Our confidentiality agreements with our employees and certain of our consultants, contract employees, suppliers, vendors and independent contractors, including some of our co-manufacturers who use our formulations to manufacture our products, generally require that all non-public information made known to them be kept strictly confidential. Further, some of our formulations have been developed by or with our suppliers and co-manufacturers. As a result, we may not hold exclusive rights to some formulations or be able to prevent others from using similar formulations.
We cannot be certain that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon, misappropriate or challenge any such rights. In addition, our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could prevent us in the future from using certain brands or from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brands and products. We may not be successful in enforcing our trademarks or challenging confusingly similar trademarks used by third parties. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether we are successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual property, or force us to enter into licenses with others. Any one of these occurrences may have an adverse effect on our business, financial condition and results of operations.
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Deterioration of economic conditions could negatively impact our business.
Our business and results of operations have in the past been and may continue in the future to be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability of and access to capital markets, volatility in financial markets, declining consumer spending rates, recessions, decreased energy availability and increased energy costs (including fuel surcharges), supply chain challenges, labor shortages, geopolitical conflicts (including the ongoing conflicts between Russia and Ukraine and Israel and Hamas), the negative impacts caused by pandemics, epidemics and public health crises and the effects of governmental initiatives to manage economic conditions.
Any such changes could adversely affect the demand for our products or the cost and availability of our needed raw materials, cooking ingredients and packaging materials, thereby negatively affecting our financial results. Disruptions and instability in credit and other financial markets and deterioration of national and global economic conditions, could, among other things:
• make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;
• cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any technical or other waivers under our credit agreements to the extent we may seek them in the future;
• impair the financial condition of some of our customers, suppliers or counterparties to our derivative instruments, which could result in challenges in collecting accounts receivable or non-performance by suppliers;
• lead customers and consumers to delay or reduce purchases of our products as a result of unfavorable economic conditions;
• negatively impact global demand for our products, which could result in a reduction of sales, operating profit and cash flows;
• decrease the value of our investments in equity and debt securities, including our company-owned life insurance and pension plan assets, which could result in higher pension cost and statutorily mandated funding requirements; and
• impair the financial viability of our insurers.
Furthermore, inflation has and may continue to increase our operational costs, including labor costs and feed ingredient costs, and continued increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty and heightening these risks. As a result, instability and weakness of the U.S. and global economies, and the negative effects on consumers’ spending, may materially negatively affect our business and results of operations. A prolonged period of reduced consumer spending could have an adverse effect on our business and our results of operations.
If tax laws change or we experience adverse outcomes resulting from examination of our tax returns or disagreements with taxing authorities, it could adversely affect our business, financial condition and results of operations.
We are subject to federal, state, and local tax laws and regulations in the U.S. The application and interpretation of these laws in different jurisdictions affect our operations in complex ways and are subject to change, and some changes may be retroactively applied. Our future effective tax rates and the value of our deferred tax assets and liabilities could be adversely affected by changes in tax laws. Furthermore, the European carve-out may result in incremental tax liability to us. The U.S. and U.S. states and localities are also actively considering changes to existing tax laws that, if enacted, could increase our tax obligations or require us to change the manner in which we operate our business. For more information on the European carve-out, see “Note 3: Discontinued Operations” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
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In addition, we are subject to the examination of our income and other tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of our provision for income taxes. Although we believe we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in the tax laws, or challenges from tax authorities under existing tax laws could adversely affect our business, financial condition and results of operations.
We face risks associated with the long-term trend toward increased activism against companies in the food products industry.
The treatment of animals and related standards of care in the food products industry have been subject to increasing focus by animal rights groups. We and many of our customers face pressure from animal rights groups to operate our respective businesses in a manner that treats animals in conformity with certain standards developed or approved by these groups. Some of our customers also require us to comply with specified animal rights standards and audits of our facilities. Animal rights groups have also engaged in legislative efforts to ban any form of gestation crates in various states. Conforming to requirements imposed on our business by animal rights groups has caused us and may in the future cause us to incur increased costs.
Animal rights groups have in the past:
• used pressure tactics in an effort to generate adverse publicity regarding our company;
• trespassed on and otherwise damaged our properties; and
• sought to disrupt our business operations or those of our suppliers and customers through protests.
These groups have, and may continue to, coordinate their actions with other groups, threaten strikes or boycotts or enlist the support of well-known persons or organizations in order to increase the pressure on us to achieve their stated aims. Future activist actions could include one or more of the following:
• property damage;
• disruptions to our business operations;
• contamination of our hogs and food supply;
• outbreak of disease;
• cyberattacks;
• legal challenges or lawsuits;
• negative publicity about our business or the food products industry in general;
• reduction in demand for our products; and
• other adverse effects on our ability to develop our properties and expand our operations.
These actions could have a material adverse effect on our reputation and, in turn, our business, results of operations, financial condition and prospects. We may need to incur significant costs associated with responding to these or other initiatives, and there is no guarantee that our responses will produce favorable outcomes.
Risks Relating to Government Regulations
We are subject to extensive governmental regulations, which require significant compliance expenditures.
We are subject to extensive federal, state and local regulations. Our food processing facilities and products are subject to frequent inspection by the USDA, the FDA and various state and local health and agricultural agencies. Applicable statutes and regulations governing food products include rules for labeling the content of specific types of foods, the nutritional value of that food and its serving size, as well as rules that protect against contamination of
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products by food-borne pathogens. Many jurisdictions also require that food producers adhere to good production practices (the definition of which may vary by jurisdiction) with respect to production processes. Recently, the food safety practices and procedures in the meat processing industry have been subject to more intense scrutiny and oversight by the USDA and state authorities and future outbreaks of diseases among cattle, poultry or pigs could lead to further governmental regulation. In addition, our production facilities and distribution centers are subject to various federal, state and local laws and regulations relating to workplace safety and workplace health. Our exported products are often inspected by foreign food safety authorities, and any violation discovered during these inspections may result in a partial or total return of a shipment, partial or total destruction of the shipment and costs due to delays in product deliveries to our customers.
Our Bioscience operations are also subject to regulations from various government authorities, including the FDA, USDA and EPA. Compliance with these and other agency requirements, which are subject to change, affect our operations and may impact our results at one or more of our facilities. Additionally, the loss of or failure to obtain necessary permits or registrations, or failure to comply with these regulations, at any of our facilities could result in (1) the suspension or restriction of our heparin operations, (2) administrative penalties and injunctive relief, (3) civil penalties such as fines, injunctions and product recalls and/or (4) negative publicity.
We seek to comply with applicable regulations through using internationally recognized management systems to manage our regulatory and compliance programs, employing data analytics to monitor food safety indicators and taking corrective action if necessary, and working with the USDA and the FDA on projects aimed at improving food safety and increasing consumer protection. Failure by us, our contract farms or our co-manufacturers to comply with applicable laws and regulations or maintain permits, licenses or registrations relating to our or our co-manufacturers’ operations could subject us to civil remedies or penalties, including fines, injunctions, recalls or seizures, warning letters, restrictions on the marketing or manufacturing of products, or refusals to permit the import or export of products, as well as potential criminal sanctions, which could result in increased operating costs resulting in a material effect on our operating results and business.
In addition, developments or changes in the regulatory environment may have a material impact on our business. For example, an executive order issued in July 2021 directed federal agencies to enforce antitrust laws more vigorously and an executive order issued in December 2025 directed the Justice Department and Federal Trade Commission to pursue antitrust investigations across the food supply sector. As a subsidiary of a public company based outside of the U.S., we may also face heightened scrutiny in respect of potential acquisition transactions. See the section titled “Item 1. Business—Quality Assurance and Food Safety—Regulation” for further information on the regulations to which we are subject.
Governmental authorities may take further action restricting our ability to produce and/or sell livestock or adopt new regulations impacting our production or processing operations, which could adversely affect our business.
A number of states have adopted legislation that prohibits or restricts the ability of meat packers, or in some cases corporations generally, from owning livestock or engaging in farming. In addition, the U.S. Congress has in the past considered, and may in the future consider, federal legislation that would restrict or prohibit meat packers from owning livestock or otherwise participating in certain livestock production activities. For example, legislation recently has been proposed in Congress that would impose additional restrictions on meat packer ownership of certain livestock or vertical integration within the meat industry. We cannot assure you that such or similar legislation affecting our operations will not be adopted at the federal or state levels in the future. Such legislation, if adopted and applicable to our current operations and not successfully challenged or settled, could have a material adverse impact on our operations and our financial statements.
In addition, the State of California enacted Proposition 12, which became enforceable on July 1, 2023. Proposition 12 prohibits the sale within the state of certain uncooked pork produced from breeding sows or their offspring unless the animals have been housed in confinement systems that meet certain minimum standards and other conditions are met. Similarly, Massachusetts Question 3 prohibits the sale of certain pork products within the State of Massachusetts, as well as the shipment of certain pork products through the state, unless the products came from animals that were also housed in confinement systems that meet certain minimum standards. Our sales into California and into or through Massachusetts accounted for approximately 6% of our consolidated sales for the year
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ended December 28, 2025, and approximately 19% of those sales into California and into or through Massachusetts were subject to either Proposition 12 in California or Question 3 in Massachusetts.
In fiscal year 2008, North Carolina enacted a permanent moratorium on the construction of new hog farms that use the lagoon and sprayfield system. The moratorium limits us from expanding our North Carolina hog production operations. This permanent moratorium replaced a 10-year moratorium on the construction of hog farms with more than 250 hogs or the expansion of existing large farms. This moratorium may over time lead to increased difficulties in our ability to contract with independent growers.
We may be impacted by legislation targeting foreign ownership of land, or foreign ownership or operation of facilities, located in the U.S.
An increasing number of states and the federal government are proposing or adopting legislation and/or regulations that prohibit or limit entities directly or indirectly controlled by individuals or entities based in the PRC, the Special Administrative Regions Hong Kong and Macau, and other jurisdictions deemed national security threats to the U.S., from acquiring or owning an interest in private agricultural land within the boundaries of the state, or pursuant to federal law. In some cases, the adopted or proposed legislation or regulation goes beyond private agricultural land to include any land, including land on which we currently maintain production plants or other facilities. For example, the State of Indiana has enacted legislation that will be effective on July 1, 2026 that prohibits companies owned or controlled directly or indirectly by individuals domiciled in the PRC or majority owned by such individuals, from purchasing or otherwise acquiring an interest in real property in Indiana other than pursuant to a lease with not more than a two-year duration. In addition, there have been preliminary legislative proposals in Congress that seek to regulate the operations of certain foreign-owned entities. More recently, additional legislative proposals have been introduced in Congress that would impose restrictions on foreign ownership of U.S. meat packing companies or other participants in the U.S. agricultural supply chain. We cannot assure you that federal or state legislation and/or regulation impacting our ownership of land, or ownership and operation of facilities, will not be proposed or enacted in the future. We currently own 87,000 acres of land in the U.S. (having sold over 40,000 acres in 2024 and 2,500 acres in 2025) on which many of our production, processing and distribution facilities are located. Such legislation or regulation, if adopted and applicable to our current operations, including such facilities, and not successfully challenged, could require us to divest land or operations that are critical to our business, which would have a material adverse impact on our operations and our financial statements going forward.
We are, and could become, subject to legal proceedings and regulatory investigations that may result in significant expenses, fines and reputational damage.
We are involved on an ongoing basis in litigation arising in the ordinary course of business or otherwise. For example, we have been named as one of 16 defendants in a series of purported class actions alleging antitrust violations in the pork industry. The plaintiffs in all of these cases also challenge the defendant pork producers’ use of benchmarking reports from defendant Agri Stats, Inc., alleging that the reports allowed the pork producers to share proprietary information and monitor each producer’s compliance with the supposed agreement to reduce supply. Payments in an aggregated amount of $194 million were made by us to settle all class claims against us by the direct purchasers, commercial and institutional indirect purchasers and consumer indirect purchasers. In addition to the class actions, we have been named as a defendant in similar claims and suits brought by a number of individual purchasers who opted out of their class and three states or commonwealths. We have entered into negotiations with many of these claimants and have settled certain of the pending non-class cases and related claims. Currently, 14 opt-out cases remain pending against us. In addition, in July 2025, the Company received a civil investigative demand from the Attorney General for the state of Washington seeking information related to this antitrust litigation.
We intend to vigorously defend against these claims, but we cannot assure you that we will be successful or that additional similar claims will not arise in the future. We established a reserve for these claims, however we cannot assure you that the reserve will not have to be increased, as applicable.
Trends in litigation may include class actions involving consumers, shareholders, employees or injured persons and claims related to commercial, labor, employment, antitrust, securities or environmental matters. Moreover, the
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process of litigating cases, even if we are successful, may be costly, and may approximate the cost of damages sought. These actions could also expose us to adverse publicity, which might adversely affect our brands, reputation and/or customer preference for our products and distract management from other tasks. Litigation trends and expenses and the outcome of litigation cannot be predicted with certainty and adverse litigation trends, expenses and outcomes could adversely affect our business, financial condition and results of operations. See “—Risks Relating to Government Regulations—Environmental regulation and related litigation and commitments could have a material adverse effect on us” for further information regarding ligation involving environmental matters.
Government antitrust and foreign investment policies and regulations may limit our strategic growth opportunities, including certain acquisitions and joint ventures.
The U.S. and many non-U.S. jurisdictions have laws designed to protect national security or to restrict foreign direct investment. In the U.S. , CFIUS has the authority to review transactions that afford foreign investors the ability to “control” a U.S. business, as well as certain non-controlling investments. If CFIUS identifies a national security risk arising from a particular transaction, it can impose mitigation measures and can also intervene to prohibit the transaction or order a divestment if the transaction has already closed. Many non-U.S. jurisdictions restrict foreign investment in assets important to national security by taking steps including, but not limited to, placing limitations, restrictions or conditions on foreign equity investment, implementing investment screening or approval mechanisms and restricting the employment of foreigners as key personnel. These U.S. and foreign laws could limit our ability to invest in certain businesses or joint ventures or impose burdensome notification requirements, operational restrictions or delays in pursuing and consummating transactions.
Certain of our acquisitions or investments may be subject to review and approval by CFIUS or any non-U.S. equivalents thereof based on our ownership structure and scope of operations. We also may seek approval from CFIUS even where not technically required, as we have done for our proposed acquisition of Nathan’s. This may have outsized impacts on transaction certainty, timing, feasibility and cost, and could prevent us from maintaining or pursuing acquisition or investment opportunities that we otherwise would have maintained or pursued. CFIUS or any non-U.S. equivalents thereof may seek to impose limitations, conditions or restrictions on or prohibit one or more of our acquisitions or investments, which may adversely affect our flexibility in structuring or financing certain acquisition transactions. In addition, CFIUS is actively pursuing transactions that were not notified to it voluntarily and may ask questions regarding, or impose restrictions, conditions or limitations on, transactions post-closing. Although CFIUS reviews (and in some cases mitigates) foreign investment originating from various countries, it has placed significant focus on reviews involving investors either directly or indirectly controlled by individuals or entities based in the PRC. As a result, acquisitions or investments undertaken by us could be subject to heightened CFIUS scrutiny compared to acquisitions or investments made by other foreign investors. These risks have increased and may continue to increase due to geopolitical, policy or regulatory developments, particularly with regard to U.S.-PRC relations. On February 21, 2025, President Trump issued a National Security Memorandum on America First Investment Policy directing CFIUS to impose greater scrutiny on acquisitions or investments by PRC-affiliated persons, including a call to “restrict PRC-affiliated persons from investing in U.S. technology, critical infrastructure, healthcare, agriculture, energy, raw materials or other strategic sectors.”
In addition, the U.S. Department of Justice Antitrust Division and the Federal Trade Commission, the two agencies responsible for enforcing federal antitrust and competition laws, issued new Merger Guidelines in December 2023, designed to invigorate enforcement of the antitrust and competition laws. These initiatives are expected to increase scrutiny of mergers and acquisitions subject to premerger review and those already consummated. As a result, the review process from U.S. antitrust agencies and other non-U.S. antitrust authorities for mergers and acquisitions undertaken by us is expected to become more challenging, more time consuming and more expensive. We may even be required to undergo investigations concerning previously closed transactions. If certain proposed acquisitions are delayed or rejected by antitrust enforcers, or if previously closed transactions are investigated, it could have an adverse impact on our business, as well as limit our opportunities for future strategic growth through acquisitions. In addition, competition rules from other U.S. federal agencies, including the USDA, as well as state competition laws could create additional hurdles.
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Furthermore, complying with these laws imposes potentially significant costs and complex additional burdens, and any failure by us to comply with them could expose us to significant penalties, sanctions, loss of future investment opportunities, additional regulatory scrutiny and reputational harm.
Environmental regulation and related litigation and commitments could have a material adverse effect on us.
Our past and present business operations and properties are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to protection of the environment, including:
• the treatment of hazardous materials and the discharge of such materials into the environment;
• the handling and disposition of manure and liquid and solid wastes; and
• air emissions.
We have incurred and expect to continue to incur significant costs complying with environmental laws and regulations. Failure to comply with, and liabilities under, these laws and regulations in the future may result in significant additional consequences to us, including administrative, civil and criminal penalties, cleanup and other environmental damages, negative publicity and increased compliance costs. Some requirements applicable to us, including the Clean Water Act and the Clean Air Act, may also be enforced by citizen groups or other third parties. Natural disasters, such as flooding and hurricanes, can cause the discharge of effluents or other waste into the environment, which have in the past and may in the future result in litigation and governmental enforcement actions against us or new or additional governmental regulations applicable to our operations. See “Item 1. Business—Quality Assurance and Food Safety—Regulation” for further discussion of regulatory compliance as it relates to environmental risk. We have incurred, and will continue to incur, significant capital and operating expenditures to comply with these laws and regulations.
We also face the risk of lawsuits even if we are operating in compliance with applicable regulations. For example, in recent years various nuisance suits were filed against us and our subsidiary Murphy-Brown LLC in North Carolina. Several of these lawsuits resulted in unfavorable outcomes to us. We resolved all then-existing filed cases in July 2019 pursuant to a settlement agreement, however we have since been involved in other pending and threatened nuisance suits and claims related to both farms and other facilities. We cannot assure you that additional or similar claims relating to our farming operations (whether sounding in nuisance or other torts or causes of action) will not arise in the future.
In addition, new environmental issues could arise that would cause currently unanticipated investigations, assessments or expenditures. U.S. federal, international, state and local authorities may, from time to time, adopt revisions to environmental rules and regulations with which we must comply. New or more stringent laws or regulations that impose additional requirements on our operations or on us could increase the cost of doing business for us. For example, in January 2024, the EPA published draft revised Effluent Limitations Guidelines (“ELGs”) for wastewater discharges of meat and poultry facilities. The draft proposal included a number of options for revised ELGs that the EPA was evaluating. While the EPA withdrew the proposed ELGs in August 2025, litigation challenging this action is ongoing.
Significant upgrades related to our direct and indirect wastewater discharge streams, including to treatment systems at our Sioux City and Denison, Iowa, Sioux Falls, South Dakota and Tar Heel, North Carolina facilities, would be required to meet the standards that were proposed, which we estimate would require material capital expenditures in the aggregate.
Additionally, increased public interest in farm animal welfare could result in additional government regulation and additional or unplanned capital expenditures. Further, the regulation or taxation of carbon or other greenhouse gas (“GHG”) emissions to address climate change concerns could result in increased compliance costs and capital expenditures and may also affect the prices of commodities, energy and other inputs to our business. It is not possible at this time to predict the complete structure or outcome of any future legislative or regulatory efforts to address GHG emissions and climate change or whether costs of compliance with such efforts will have a material adverse effect on our financial position or results of operations.
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Climate change, or legal, regulatory, voluntary or market measures to address climate change, may negatively affect our business, operations or reputation.
There is growing concern that carbon dioxide and other GHGs in the atmosphere have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. In the event that climate change has a negative effect on agricultural productivity, we may be subject to decreased availability or less favorable pricing for certain commodities that are necessary for our products, such as grains. We may also be subject to decreased availability or less favorable pricing for water as a result of climate change, which could impact our farming, manufacturing and distribution operations. In addition, natural disasters and extreme weather conditions may disrupt the productivity of our facilities or the operation of our supply chain.
The increasing concern over climate change also has resulted and may continue to result in more state, regional, federal, and/or global legal and regulatory requirements including changes to energy policies, increased mandatory climate-related disclosure, carbon pricing regulations or carbon taxes. For example, in March 2024 the SEC published its final rules to enhance and standardize climate-related disclosures, requiring covered entities, including us, to disclose certain climate-related metrics and GHG emissions data, information about climate-related targets and goals and climate-related risks and obtain attestation requirements. The rules were subsequently withdrawn by the new administration . At this time, we cannot predict the costs of implementation or any potential adverse impacts resulting from similar rules, should they be proposed and become effective. However, we may incur increased costs relating to the assessment and disclosure of climate-related risks and targets. We may also be subject to increased litigation risks related to disclosures made pursuant to any federal or state reporting requirements or voluntary climate-related reporting, which could materially and adversely affect our future results of operations and financial condition.
Collecting, measuring and analyzing information relating to our GHG emissions or impacts of climate change on our business is costly, time-consuming, and dependent on third-party cooperation and such information may ultimately be unreliable. Furthermore, methodologies for measuring, tracking and reporting on such matters are evolving, and may be ambiguous and subject to rapid change, which may require our processes, benchmarks, baselines and controls for such data to evolve as well. Organizational changes may result in data recalculations. Quantifying GHG emissions within the boundaries of a business is a relatively nascent exercise, and we, like other companies in our industry, have refined and updated our methodologies following prior publication of data. For example, there have been inconsistent practices across many U.S. pork/poultry and dairy producers in quantifying our GHG emissions where biogas eligible for carbon reduction credits is also produced on farms. We have revised baselines and previously reported GHG emissions for our U.S. operations, as well as our carbon reduction goals, as a result of guidance clarifying the accounting for biogas credits in this context. Our GHG footprint has also changed as a result of closure or sale of plants, acquisition of new plants and reduction of farm operations. Furthermore, like many peer companies, our data collection, analysis and reporting capabilities have developed from a starting point with very limited established guidance or methodology. We have engaged a third-party consultant to prepare a limited assurance of the GHG emissions attributable to our worldwide businesses, our energy use and our value chain to ensure their accuracy and to meet potential regulatory requirements.
Like many companies, our quantification of GHG emissions attributable to our business and our carbon reduction goals have been voluntary to date. The process of quantifying our GHG emissions and setting carbon reduction goals, as well as a perceived or actual lack of progress in these endeavors, can subject companies such as ours to criticism, investigations, regulatory enforcement, litigation and other risks. In addition, failure to achieve our GHG emissions reduction goals could harm our reputation, which could have a material adverse effect on our results of operations, financial condition and liquidity. We may also face increased pressure from customers, consumers, investors, activists and other stakeholders to modify our products or operations to exclude ingredients or activities that are considered to have a greater impact on climate change.
Our ability to achieve any of our climate-related strategies, expectations, goals and targets is also subject to factors and conditions that are outside of our control. Examples of such factors include, but are not limited to, evolving regulatory and other standards, processes and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, market trends that may alter business opportunities, the conduct of third-party manufacturers and suppliers, constraints or disruptions to our supply chain and changes in
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carbon markets or carbon taxes. We may be required to expend significant resources in the near or long-term future to achieve these strategies and expectations, which could significantly increase our operational costs and, despite such efforts, may be unable to achieve such strategies or meet customer or investor expectations.
Risks Relating to our Capital Structure
We may require additional financing to achieve our goals, and the failure to obtain this necessary capital when needed on acceptable terms, or at all, may force us to delay, limit, reduce or terminate our product manufacturing and development, and other operations.
We have funded our operations primarily through equity financing, long-term senior unsecured notes, committed revolving credit facilities, commercial paper and sales of our products. We have incurred and expect to continue to incur significant capital expenditures related to the expansion and automation of our processing capacity and maintenance of our facilities. We believe that we will continue to expend substantial resources for the foreseeable future as we consider additional markets to pursue and other growth opportunities. In addition, our operating performance and cash flow may not be sufficient to meet all our debt service requirements, return value to shareholders such as through payment of dividends or repurchase of shares of our common stock, and achieve our target Ratio of Net Debt to Adjusted EBITDA or our target minimum liquidity.
Our operating plan may change because of factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financing or other sources. We may also seek financing in connection with potential new product introductions or acquisitions or investments in businesses or technologies that we believe could offer growth opportunities. Such financing may result in dilution to shareholders, imposition of affirmative and negative covenants and debt repayment obligations, or other restrictions, any of which may adversely affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Our affiliation with WH Group has historically provided us with higher credit ratings. The terms of additional financing we incur in the future may not be as favorable as those previously obtained. Our ability to access additional capital may further be affected by adverse or uncertain economic conditions. Weakness and volatility in the capital markets and the economy in general could make it more difficult to access the capital markets and could increase our cost of borrowing.
Our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position.
As of December 28, 2025, we had, on a consolidated basis, $2,003 million of outstanding total debt and finance lease obligations and $2,298 million of undrawn capacity including $2,100 million under the Senior Revolving Credit Facility (as defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Senior Unsecured Revolving Credit Facility”) and $198 million under the Securitization Facility (as defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities—Accounts Receivable Securitization Facility”) (after giving effect to $27 million of issued but undrawn letters of credit).
Because the borrowing capacity under the Securitization Facility depends, in part, on accounts receivable levels, which fluctuate from time to time, such amounts may not reflect actual borrowing capacity. The Senior Revolving Credit Facility is a fixed commitment facility and is not dependent on a borrowing base. In addition, on or before the maturity date of the Senior Revolving Credit Facility, we have the right, but not the obligation, to request an increase in the amount of commitments under the Senior Revolving Credit Facility in an aggregate amount not to exceed $500 million under customary terms and conditions.
Our indebtedness may increase from time to time for various reasons, including fluctuations in operating results, working capital needs, capital expenditures, dividends and potential acquisitions or joint ventures. In addition, due to the volatile nature of the commodities markets, we may need to borrow significant amounts to cover any margin calls under our risk management and hedging programs. Over the past three years, the maximum amount of margin deposits held by our brokers and counterparties at any given time was $121 million.
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Our consolidated indebtedness level could significantly affect our business and the value of our common stock because:
• it may, together with the financial and other affirmative and negative covenants in the agreements governing our indebtedness, limit or impair our ability in the future to obtain financing, refinance any of our indebtedness, sell assets or raise equity or debt on commercially reasonable terms or at all, which could cause us to default on our obligations, materially impair our liquidity or otherwise adversely affect our business and the value of our common stock;
• a downgrade in our credit rating (including the loss of our investment grade credit ratings) could restrict or impede our ability to access capital markets at attractive rates and increase the cost of future borrowings;
• it may, through event of default provisions, limit our ability to enter into change of control transactions, which may impede our ability to enter into certain transactions;
• it may reduce our flexibility to respond to changing business and economic conditions or to take advantage of business opportunities that may arise;
• it may place us at a competitive disadvantage relative to some of our competitors that have less indebtedness than we do;
• a portion of our cash flow from operations must be dedicated to interest payments on our indebtedness and is not available for other purposes, which amount could increase if prevailing interest rates rise or if we incur additional indebtedness;
• substantially all of our accounts receivable in the U.S. secure the Securitization Facility, all of which could limit our ability to dispose of such assets or utilize the proceeds of such dispositions and, upon an event of default under any such secured indebtedness, the lender thereunder could foreclose upon our pledged assets; and
• it could make us more vulnerable to downturns in general economic or industry conditions or in our business.
Further, our debt agreements, under certain circumstances, either currently or in the future, may require us to maintain investment grade credit ratings and certain financial ratio covenants, and may limit additional borrowings, investments, the payment of dividends and other restricted payments, the acquisition or disposition of assets, mergers and consolidations, transactions with affiliates, the creation of liens, entrance into swap agreements, sale/leaseback transactions and the repayment of certain debt. We cannot assure you that any of these limitations will not hinder our ability to finance operations and capital needs and our ability to pursue business opportunities and activities that may be in our interest.
In addition, should market conditions deteriorate, or should our operating results otherwise be depressed in the future, we may have to request amendments or waivers to our covenants and restrictions under our debt agreements. There can be no assurance that we will be able to obtain such relief should it be needed in the future. A breach of any of these covenants or restrictions could result in a default that would permit our senior lenders, including lenders under the Senior Revolving Credit Facility and the Securitization Facility and the holders of our other debt financing facilities, as the case may be, to declare all amounts outstanding under the Senior Revolving Credit Facility, the Securitization Facility and our other debt financing facilities, as applicable, to be due and payable, together with accrued and unpaid interest, and the commitments of the relevant lenders to make further extensions of credit under the Senior Revolving Credit Facility and the Securitization Facility could be terminated. If we were unable to repay our secured indebtedness to our lenders, these lenders could proceed against the collateral securing that indebtedness, which could include substantially all of our accounts receivable assets in the U.S.
Our future ability to comply with financial covenants and other conditions, make scheduled payments of principal and interest, or refinance existing borrowings depends on our future business performance which is subject to economic, financial, competitive and other factors, including the other risks set forth in this section, and may be
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affected by events beyond our control. Any failure to comply with the covenants of our debt agreements could have a material adverse effect on our business, financial condition, results of operations and prospects.
Additionally, the repayment obligations under our outstanding debt may have the effect of discouraging, delaying or preventing a takeover of our company.
We may not be able to generate sufficient cash to service all of our indebtedness.
Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures and other strategic investments will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not generate sufficient cash flow from operations, and we cannot assure you that future borrowings will be available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs.
If we do not generate cash flow from operations sufficient to pay our debt service obligations, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. Our ability to refinance our debt will depend on the condition of the capital markets and our financial condition at that time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
In addition, we conduct our operations through our subsidiaries, certain of which are not, and in the future may not be, guarantors of our indebtedness. Accordingly, repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, intercompany transfer, debt repayment or otherwise. Due to the restrictive covenants under certain debt agreements, our subsidiaries may be restricted from distributing dividends to enable us to make payments in respect of our indebtedness. In addition, unless they are guarantors of our indebtedness, our subsidiaries do not have any obligation to pay amounts due on our indebtedness or to make funds available for that purpose.
If drawn upon, our current variable rate indebtedness would subject us to interest rate risk, which could cause our debt service obligations to increase.
Our Senior Revolving Credit Facility and Securitization Facility have variable interest rates. Market interest rates have fluctuated over the past several years and may increase in the future as a result of action by the U.S. Federal Reserve and other factors, and as a result, variable-rate debt may create higher debt service requirements, which would adversely affect our cash flow. If we draw upon our variable rate indebtedness and interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed would remain the same.
In particular, our borrowings under the Senior Revolving Credit Facility bear interest at the Secured Overnight Financing Rate (“SOFR”), or the Eurocurrency Rate (as defined in the Senior Revolving Credit Facility), 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 rating. To the extent we draw from our Senior Revolving Credit Facility, we may subject to interest rate risk which could cause our debt service obligations to increase. We may also enter into additional variable rate indebtedness in the future.
Despite current indebtedness levels and restrictive covenants, we may incur additional indebtedness. This could further exacerbate the risks associated with our financial leverage.
Despite current indebtedness levels and restrictive covenants, we may incur other indebtedness to finance our operations and other capital needs. Although the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of thresholds, qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. If additional debt is incurred, the related risks that we now face as a result of our leverage would intensify.
Risks Relating to our Relationship with WH Group
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We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of other companies that are subject to such requirements.
As of March 24, 2026, WH Group beneficially owned approximately 87% of our outstanding shares of common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including requirements that:
• a majority of our board consist of “independent directors” as defined under the rules of Nasdaq;
• our director nominees be selected, or recommended for our board’s selection, by a nominating and governance committee comprised solely of independent directors; and
• the compensation of our executive officers be determined, or recommended to our board for determination, by a compensation committee comprised solely of independent directors.
We currently utilize these exemptions. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq. These exemptions do not modify the independence requirements for our audit committee. There is no single shareholder or group of shareholders which owns 50% or more of the voting power of WH Group as of March 24, 2026. As a result, WH Group is not considered a controlled company within the meaning of the corporate governance standards of Nasdaq.
WH Group controls us, and their interests may conflict with ours or yours in the future.
For so long as WH Group owns, in the aggregate, a majority of our then outstanding shares of our common stock, WH Group has the right to designate, for inclusion in the slate of directors nominated by our board for election to our board, a majority of the directors on our board and control the composition of our board and the approval of actions requiring shareholder approval through its voting power. Even when WH Group ceases to own a majority of our then outstanding shares of common stock, for so long as WH Group continues to own, in the aggregate, at least 10% of our then outstanding shares of common stock, WH Group is entitled to designate, for inclusion in the slate of directors nominated by the board for election to our board, a number of the total number of directors entitled to serve on the board proportionate to the percentage of our outstanding common stock owned by WH Group, rounded up to the nearest whole number. In addition, our amended and restated articles of incorporation provide that at any time that WH Group owns at least a majority of our then outstanding shares of common stock, shareholders are permitted to take action by written consent. For the purpose of determining ownership of our common stock for these purposes, references to WH Group include WH Group, its successors by way of merger or transfer of all or substantially all of its assets, any entity that is 50% beneficially owned by WH Group, and any entity that acquires a majority of our then outstanding shares of common stock directly from any of the foregoing that is a shareholder of our company.
As a result, WH Group is generally able to control, whether directly or indirectly through its ability to remove and elect directors, and subject to applicable law, substantially all matters affecting us, including:
• any determination with respect to our business direction and policies, including the election and removal or directors and the appointment and removal of officers;
• any determinations with respect to mergers, amalgamations, business combinations or disposition of assets;
• our financing and dividend policy, and the payment of dividends on our common stock, if any;
• compensation and benefit programs and other human resources policy decisions;
• changes to any other agreements that may adversely affect us; and
• determinations with respect to our tax returns and other tax matters.
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In particular, for so long as WH Group continues to own a significant percentage of our common stock, WH Group will be able to cause or prevent a change of control of our company or a change in the composition of our board, and could preclude any unsolicited acquisition of our company. The concentration of ownership could deprive you of an opportunity to receive a premium for your common stock as part of a sale of our company and ultimately might affect the market price of our common stock.
If WH Group sells a controlling interest in our company to a third party in a private transaction, you may not realize any change of control premium on shares of our common stock and we may become subject to the control of a presently unknown third party.
WH Group owns a controlling equity interest in our company and therefore has the ability, should it choose to do so, to sell some or all of its shares of our common stock in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our company.
The ability of WH Group to privately sell its shares of our common stock, with no requirement for a concurrent offer to be made to acquire all of the shares of our common stock that will be publicly traded hereafter, could prevent you from realizing any change of control premium on your shares of our common stock that may otherwise accrue to WH Group on its private sale of our common stock. Additionally, if WH Group privately sells its controlling interest in our company, we may become subject to the control of a presently unknown third party. Such third party may have interests that conflict with those of other shareholders.
Certain of our directors may have actual or potential conflicts of interest because of their equity interest in WH Group. Also, certain of WH Group’s current executive officers also serve as directors of our company, which may create conflicts of interest, or the appearance of conflicts of interest.
Because of their positions with WH Group, certain of our directors own equity interests in WH Group. Continuing ownership of shares of WH Group’s common stock and equity awards could create, or appear to create, potential conflicts of interest if we and WH Group face decisions that could have implications for both WH Group and us. In addition, certain of WH Group’s current executive officers also serve as directors of our company, and this could create, or appear to create, potential conflicts of interest when we and WH Group encounter opportunities or face decisions that could have implications for both companies or in connection with the allocation of such directors’ time between WH Group and us. These potential conflicts could arise, for example, over matters such as the desirability of changes in our business and operations, funding and capital matters, regulatory matters and other agreements with WH Group relating to the commercial arrangements in the future, employee retention or recruiting or our dividend policy.
While our b oard believes that, given its size and structure, such actual or potential conflicts of interest can be managed adequately, including that the independent members of our b oard may meet in the absence of senior executive officers or non-independent directors in respect of the relevant matter, the actual or perceived conflicts of interest that may arise could cause reputational or other harm.
In addition, we have, and expect to continue to be, engaged in related party transactions with WH Group and its affiliates. In all related party transactions, there is a risk that a related party’s influence may be such that the transaction terms could be viewed as favorable to that related party, even if we strive to reach arms-length transaction terms. The appearance of conflicts of interest created by related party transactions could impair the confidence of our investors. Furthermore, WH Group has certain non-compete arrangements with Henan Shuanghui Investment & Development Co., Ltd. (“Shuanghui Development”) , which provide that there will be no competition between Shuanghui Development on the one hand, and WH Group and entities controlled by WH Group, on the other hand, regarding the operation of meat business in the PRC. Such undertaking by WH Group may restrict us from engaging in certain activities that would compete with Shuanghui Development and may limit our ability to pursue business opportunities in the manner that we desire, which could adversely affect our business, financial condition and results of operations.
WH Group indemnifies us for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure us against the full amount of such liabilities, or that WH Group’s ability to satisfy its indemnification obligation will not be impaired in the future.
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Pursuant to the shareholders agreement and certain other agreements with WH Group, WH Group has agreed to indemnify us, our affiliates and subsidiaries and each of our officers, directors, employees and agents for any losses arising out of or due to liabilities or alleged liabilities for the operation of WH Group’s business or any untrue statement or alleged untrue statement of a material fact contained in any document filed with the SEC, or any omission or alleged omission to state a material fact required to be stated in any document filed with the SEC and to the extent such statement or omission was made based on information provided by WH Group. However, third parties could also seek to hold us responsible for any of the liabilities that WH Group has agreed to retain, and there can be no assurance that the indemnity from WH Group will be sufficient to protect us against the full amount of such liabilities, or that WH Group will be able to fully satisfy its indemnification obligations. In addition, WH Group’s insurance will not necessarily be available to us for liabilities associated with occurrences of indemnified liabilities prior to the closing of our IPO, and in any event WH Group’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the closing of our IPO. Moreover, even if we ultimately succeed in recovering from WH Group or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our business, financial condition or results of operations.
Changes in relations between the U.S. and the PRC, or in U.S. regulations concerning the PRC, may adversely impact our business, financial condition, results of operations, our ability to raise capital or the market price of our common stock.
The U.S. government, including its agencies such as the SEC, and state and local governments have made statements and taken certain actions that have led to, and may in the future make statements or take actions that would lead to, changes in relations between the U.S. and the PRC, which statements and actions could impact companies, including us, with connections to the PRC. In particular, the U.S. may in the future impose policies on or increase scrutiny of companies having operations in the PRC, such as WH Group, or companies in the U.S.with significant PRC ownership. These could restrict or negatively impact our business or our ability to access the U.S. capital markets. More broadly, changes in political conditions in the PRC and changes in the state of U.S.-PRC relations, including any tensions relating to potential military conflict between the PRC and Taiwan, are difficult to predict and could lead to policies or regulations that adversely affect our business, financial condition or results of operations on account of our controlling shareholder’s ties to the PRC. Furthermore, continued or increased tension in U.S. PRC relations or any deterioration in political or trade relations between the U.S. and the PRC may lead to negative investor sentiment towards companies controlled by shareholders with significant ties to the PRC, which could make our common stock less attractive to U.S. investors and affect the market price of our common stock.
Our controlling shareholder is required by the stock exchange on which its shares are listed to disclose and obtain approval from its board of directors or shareholders for certain corporate actions that we undertake.
WH Group is listed on The Stock Exchange of Hong Kong Limited and is therefore subject to the applicable Hong Kong laws and regulations, including but not limited to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“HKEx Listing Rules”). Under the HKEx Listing Rules, WH Group is obligated to obtain approval from its board of directors and/or shareholders for certain transactions in which we, as a subsidiary of WH Group, engage, such as the purchase or sale of assets, mergers and acquisitions, lending, leasing of assets, donation or acceptance of assets, debt restructuring, license agreements, R&D joint ventures, and transactions with connected persons (as defined under the HKEx Listing Rules) of WH Group, the value of which exceeds certain financial thresholds established by the applicable listing rules and/or otherwise not exempted under the applicable listing rules. In addition, the HKEx Listing Rules require our controlling shareholder to obtain shareholders’ approval for certain corporate actions that we undertake, including but not limited to (i) any issuance of shares by us that results in a reduction of WH Group’s equity interest in us in excess of certain dilution thresholds and (ii) the implementation of a share option and/or award scheme involving the issuance of new shares by us.
There can be no assurance that WH Group will obtain the requisite approvals if we desire to enter into any of the transactions as required under the applicable listing rules, and a failure to do so would restrict our ability to engage in such transactions. Furthermore, regulators including The Stock Exchange of Hong Kong Limited and/or the Securities and Futures Commission of Hong Kong could impose additional restrictions or approval requirements that could impact our ability to undertake certain corporate actions. We cannot guarantee that our controlling shareholder
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will be able to successfully or timely obtain any of the approvals needed to permit us to undertake any of the corporate actions as required under the applicable listing rules, and the failure to do so may have a material adverse effect on our business, financial condition or results of operations.
Risks Relating to the Ownership of Our Common Stock
The obligations associated with being an independent, publicly traded company require significant resources and management attention.
As a public company, we incur significant legal, regulatory, finance, accounting, investor relations, insurance and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. We also have incurred and will incur costs associated with the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules implemented by the SEC and Nasdaq. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. These rules and regulations have increased our compliance costs and made some activities more time-consuming and costly. Our management must devote a substantial amount of time to related compliance requirements, diverting the attention of management away from revenue-producing activities. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action, and civil litigation.
Failure to comply with requirements to design, implement, and maintain effective internal controls could have a material adverse effect on our business and stock price.
As a public company, we have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment, and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and harm our results of operations.
We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404, or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.
In addition, the preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our combined financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, net sales and expenses that are not readily apparent from other sources. If our assumptions change or if actual circumstances differ from our assumptions, our results of operations could be adversely affected.
We cannot be certain that an active trading market for our common stock will be sustained.
We cannot assure you that an active trading market for our common stock will be sustained. If an active and liquid trading market is not sustained, you may have difficulty selling your shares of our common stock at an attractive price or at all. An inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to acquire other companies by using our shares of common stock as consideration .
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Our stock price may fluctuate significantly, and you could lose all or part of your investment as a result.
We cannot predict the prices at which shares of our common stock may trade. The market price of our common stock may be highly volatile and could be subject to wide fluctuations due to a number of factors such as those listed elsewhere in this section and the following:
• results of operations that vary from the expectations of securities analysts and investors;
• results of operations that vary from those of our competitors;
• changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;
• changes in market valuations of, or earnings and other announcements by, companies in our industries;
• declines in the market prices of stocks generally, particularly those of companies in our industry;
• additions or departures of key management personnel;
• strategic actions by us or our competitors;
• announcements by us or our competitors of significant contracts, price reductions, new services, acquisitions, dispositions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;
• changes in our market share;
• an increase in our indebtedness or the interest rates applicable to our indebtedness;
• changes in general economic or market conditions or trends in our industries or the economy as a whole;
• changes in business or regulatory conditions;
• future sales of our common stock or other securities;
• actions by WH Group or other institutional shareholders;
• investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives;
• changes in the way we are perceived in the marketplace, including due to negative publicity or campaigns on social media to boycott certain of our products, our business or our industries;
• the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;
• changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;
• announcements relating to litigation or governmental investigations;
• guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;
• the development and sustainability of an active trading market for our common stock;
• changes in accounting principles; and
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• other events or factors, including those resulting from informational technology system failures and disruptions, epidemics, pandemics, natural disasters, war, acts of terrorism, civil unrest, or responses to these events.
Further, the global equity markets in general have recently experienced extreme price and volume fluctuations, economic uncertainty and changes or anticipated changes in interest rates, inflation, liquidity concerns at financial institutions and trade tensions among the U.S. and other countries. These fluctuations have been and in the future may be unrelated to our operating performance. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.
In the past, following periods of market volatility, shareholders have instituted securities class action litigation against various issuers. If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation, which may adversely affect the market price of our common stock.
We expect to continue paying regular dividends to our shareholders, but our ability to do so is subject to the discretion of our board and may be limited by our financial condition, our credit facilities, the indentures governing the notes we previously issued and applicable law.
We have historically paid dividends to WH Group annually, along with special dividends in some years. For fiscal year 2026, we intend to pay annual cash dividends in an amount equal to $1.25 per share of common stock. However, the payment of dividends and other distributions is at the discretion of our board and our board may, in its discretion, increase, decrease or eliminate the payment of dividends. Our ability to pay dividends on our common stock depends on many factors, including financial condition, earnings, liquidity and capital requirements, regulatory constraints, level of indebtedness, contractual restrictions with respect to the payment of dividends, restrictions in our debt agreements and in any preferred stock, general business conditions and any other factors that our board may deem relevant in making such a determination. In particular, our ability to pay dividends on our common stock is limited by covenants in our credit facilities and the indentures governing the notes and may be further restricted by the terms of any future debt or preferred securities. Furthermore, Virginia law prohibits us from paying dividends or other distributions if, after giving effect to the dividend or other distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the dividend or other distribution, to satisfy the preferential rights of any then outstanding shares of our preferred stock. While we do not currently believe that these restrictions will impair our ability to continue to pay regular quarterly cash dividends, there can be no assurance that we will not need to reduce or eliminate the payment of dividends on our common stock in the future.
Any shareholder whose principal currency is not the U.S. dollar will be subject to exchange rate fluctuations.
Our common stock is traded in, and any cash dividends or other distributions to be declared in respect of them, if any, will be denominated in U.S. dollars. Shareholders whose principal currency is not the U.S. dollar are thus exposed to foreign currency exchange rate risk. Any depreciation of the U.S. dollar in relation to such foreign currency would reduce the value of our common stock held by such shareholders, whereas any appreciation of the U.S. dollar would increase their value in foreign currency terms. In addition, we have not offered to our shareholders, and we do not intend to offer to our shareholders, the option to elect to receive dividends, if any, in any other currency. Consequently, our shareholders may be required to arrange their own foreign currency exchange, either through a brokerage house or otherwise, which could incur additional commissions or expenses.
Future sales or issuances, or the perception of future sales or issuances, by us or our existing shareholders in the public market could cause the market price for our common stock to decline.
The sale or issuance of substantial amounts of shares of our common stock or other securities convertible or exchangeable into shares of our common stock in the public market, or the perception that such sales or issuances could occur, including sales by our existing shareholders, could harm the prevailing market price of shares of our
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common stock. These sales or issuances, or the possibility that these sales or issuances may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
As of March 24, 2026, WH Group beneficially owned approximately 87% of our outstanding shares of common stock. These shares are “restricted securities” as that term is defined in Rule 144 of the Securities Act (“Rule 144”) and we have granted WH Group certain registration rights with respect to its remaining shares of our common stock. WH Group is entitled to sell these shares in the public market only if the sale of such shares is registered with the SEC or if the sale of such shares qualifies for an exemption from registration under Rule 144 or any other applicable exemption under the Securities Act. We are unable to predict with certainty whether or when WH Group will sell shares of our common stock.
In addition, pursuant to the registration rights agreement entered into between us and WH Group, WH Group has the right, subject to certain conditions, to require us to register the sale of its shares of our common stock under the Securities Act. By exercising its registration rights and selling a large number of shares, WH Group could cause the prevailing market price of our common stock to decline.
In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or by offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity or shares of preferred stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may have a material adverse effect on the amount, timing or nature of our future offerings. Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their stockholdings in us.
As restrictions on resale end, or if the existing shareholders exercise their registration rights, or we register additional shares of our common stock or securities convertible into or exchangeable for shares of our common stock, or if the market anticipates any of the foregoing, the market price of our shares of common stock could drop significantly. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.
Our quarterly results of operations may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.
Our quarterly results of operations may fluctuate due to seasonal or other factors. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. In addition, if we increase our marketing or promotional activity in certain periods, the seasonality of our business may be amplified. Typically, our third and fourth quarters have higher revenue due to weather and holidays. Fluctuations or changes in these seasonal patterns may adversely affect our business, financial condition and results of operations. As a result, it may be difficult to accurately forecast our results of operations and, if our forecasts are not accurate, we may fail to meet the expectations of investors and securities analysts, which could cause the trading price of our common stock to fall substantially and potentially subject us to costly lawsuits, including securities class action suits.
If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.
The trading market for our common stock relies in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our stock or our industries, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, or if our operating results do not meet their expectations, the price of our stock could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
Anti-takeover provisions in our organizational documents and provisions in existing and future debt agreements could delay or prevent a change of control.
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Certain provisions of our amended and restated articles of incorporation and our amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a shareholder might consider to be in its best interest, including those attempts that might result in a premium over the market price for the shares held by our shareholders.
These provisions provide for, among other things:
• a classified board of directors, as a result of which our board will be divided into three classes, with each class serving for staggered three-year terms;
• the ability of our board to issue one or more classes or series of preferred stock and to determine the preferences, rights and limitations of those shares without shareholder approval;
• advance notice requirements for nominations of directors and proposals of other business by shareholders to be considered at our annual or special meetings;
• at any time after WH Group ceases to own directly or indirectly a majority of the combined voting power of our then-outstanding shares of common stock entitled to vote generally in director elections (“WHG Trigger Event”), our shareholders will not be able to act by less-than-unanimous written consent without a duly called annual or special meeting of our shareholders;
• at any time after the WHG Trigger Event, special meetings may only be called by the Chair of the board, the President or the board;
• from and after the WHG Trigger Event, our directors may only be removed for cause, by the affirmative vote of holders of a majority of the voting power of the shares of common stock outstanding and entitled to vote on the election of directors;
• restrictions on engaging in mergers, share exchanges, certain dispositions of corporate assets and other transactions with an interested shareholder (generally defined as any person, other than any member of WH Group or any entity that acquires a majority of our then outstanding shares of common stock directly from any member of WH Group that is a shareholder of our company, that acquires more than 10% of any class of our outstanding voting shares without the approval of a majority of our disinterested directors) unless the transaction is approved by a majority of our disinterested directors and holders of two-thirds of our voting shares (excluding shares owned by the interested shareholder); and
• that our amended and restated articles of incorporation and amended and restated bylaws may be amended by the affirmative vote of the holders of at least a majority of the total voting power of the outstanding shares of common stock entitled to vote.
These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our shareholders. These provisions also may have the effect of preventing changes in our board and may make it more difficult to accomplish transactions that shareholders may otherwise deem to be in their best interests. As a result, our shareholders may be limited in their ability to obtain a premium for their shares.
Our board is authorized to issue and designate shares of our preferred stock in additional classes and series without shareholder approval.
Our amended and restated articles of incorporation authorize our board, without the approval of our shareholders, to issue up to 100,000,000 shares of our preferred stock, subject to limitations prescribed by applicable law and the provisions of our amended and restated articles of incorporation, in one or more classes or series, to establish from time to time the number of shares to be included in each such class or series and to fix the preferences, rights and limitations of the shares of each such class or series. The preferences, rights and limitations of these classes or series of preferred stock may be senior to or on parity with our common stock, which may reduce the value of our common stock.
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Our amended and restated bylaws designate the U.S. District Court for the Eastern District of Virginia, Richmond Division (or if it does not have jurisdiction over certain action, the Circuit Court of Henrico County, Virginia) as the sole and exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
Pursuant to our amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the U.S. District Court for the Eastern District of Virginia, Richmond Division (or, if the U.S. District Court for the Eastern District of Virginia does not have jurisdiction over certain action, the Circuit Court of Henrico County) is the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of our company, (2) any action asserting a claim of breach of a duty owed by any of our directors, officers or shareholders to us or our shareholders, (3) any action asserting a claim arising pursuant to the Virginia Stock Corporation Act, our amended and restated articles of incorporation or our amended and restated bylaws or (4) any action asserting a claim governed by the internal affairs doctrine. Our amended and restated bylaws provide that the foregoing provision will not apply to claims arising under the Securities Act or the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. There is no guarantee that a court will enforce such provisions. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. For the avoidance of doubt, our shareholders cannot waive compliance with U.S. federal securities laws and the rules and regulations thereunder. The forum selection clause in our amended and restated bylaws may have the effect of discouraging lawsuits against us or our directors, officers or shareholders.
Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and consented to the forum provisions in our amended and restated bylaws, except our shareholders will not be deemed to have waived (and cannot waive) compliance with the federal securities laws and the rules and regulations thereunder. This exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our current or former directors, officers or shareholders. There is also a risk that this exclusive forum provision may result in increased costs for a shareholder to bring a claim. Alternatively, if a court were to find the exclusive forum provision contained in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

ITEM 1C. CYBERSECURITY DISCLOSURE
Risk Management and Strategy
We acknowledge the significance of cybersecurity in protecting our operations, data, and shareholders’ interests, and have made cybersecurity a fundamental component of our overall risk management framework. Our cybersecurity program is based on the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. This framework guides our efforts to protect critical assets, identify potential threats, respond to incidents, and strengthen resilience, while simultaneously allowing us to assess and enhance the maturity of our program. The cybersecurity program is an integral part of our Enterprise Risk Management (“ERM”) process and relies on internal and external expertise. We proactively evaluate and refine our security controls by utilizing best practices and threat intelligence to mitigate cyber risks. We also utilize third parties for some cybersecurity services, including managed security services, external penetration testing, and social engineering tests. Additionally, we maintain an incident response plan that aligns with industry standards to ensure timely detection, containment, and remediation of security incidents.

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Cybersecurity Program Components
Our cybersecurity program is focused on exposure management, business resilience and governance through people, process and technology. Key components include incident prevention, detection, containment and response capabilities, employee training programs, threat intelligence monitoring, and the implementation of advanced technologies. Our risk management processes include regular assessments of internal and third-party risks, which are aligned with our ERM strategy. We enforce cybersecurity policies, standards, and governance practices, ensuring they align with regulatory requirements and industry best practices. Additionally, we conduct periodic business impact analyses to strengthen resilience and inform risk-based decision-making.
The cybersecurity program incorporates multiple layers of security controls to safeguard our systems and data. Access controls are established based on the principle of least privilege, and all employees engage in cybersecurity awareness training to cultivate a security-conscious culture. We train our employees through periodic security training, phishing simulations and regular communications about timely security topics to enhance their understanding of cybersecurity threats and their ability to identify and escalate potential cybersecurity events. We maintain robust security configuration management and regularly update systems to minimize vulnerabilities.
Our cybersecurity team continuously monitors network activity using advanced threat detection and exposure management. Through advanced analytics, automated alerts, behavioral analytics, threat intelligence and artificial intelligence, security anomalies are identified in a timely manner. Routine vulnerability scanning and independent penetration testing further enhance our ability to detect weaknesses before they can be exploited.
Recovery strategies are in place and supervised by a crisis management plan to restore critical operations following a cybersecurity event. We maintain secure, redundant backups and regularly test them for integrity and availability. Our recovery strategies prioritize minimizing downtime and rapid service restoration. We strive to incorporate lessons learned from past incidents, strengthening our resilience against future threats.
Third-party risk management is a core component of our IT risk framework. We evaluate new vendors to identify potential risks and to establish required security and notification obligations. We also monitor risks associated with existing providers. Our assessments include a standardized questionnaire and evaluations of financial, reputational, information security, cybersecurity and business resiliency risks.
Impact of Cybersecurity Risks and Threats
While some of our third-party service providers have experienced cybersecurity incidents and we have experienced threats to our data and systems, as of the date of this report, our management is not aware of any cybersecurity threats or incidents that have materially affected our business strategy, results of operations, or financial condition. While we remain vigilant, there can be no guarantee that we will not be the subject of future threats or incidents. Additional information on cybersecurity risks we face can be found in “Item 1A. Risk Factors—Risks Relating to Our Business and Operations—We are increasingly dependent on IT, and our business and reputation could suffer if we are unable to protect our IT systems against, or effectively respond to, cyberattacks, other cyber-incidents or security breaches or if our IT systems are otherwise disrupted,” which should be read in conjunction with the foregoing information.
Governance
Board of Directors and Audit Committee
Our Board of Directors has delegated oversight of the Company’s ERM program, including cybersecurity, to the Audit Committee. The Audit Committee receives updates regarding our enterprise-wide cybersecurity programs on a quarterly basis from our Senior Vice President, Information Technology (“SVPIT”) or Chief Information Security Officer (“CISO”). These updates may address data management and security initiatives, significant existing and emerging cybersecurity risks, and any material cybersecurity incidents and their impact on us and our stakeholders.

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Management
Our management is responsible for identifying, assessing, and managing our exposure to cybersecurity risk. We have an internal team that is supported by cybersecurity technologies, third-party experts, and threat intelligence resources in support of cybersecurity risk reduction. Our SVPIT oversees the team responsible for leading the enterprise-wide IT strategy, policy, standards, architecture, and processes. This team includes our Cybersecurity Department and incorporates input from personnel from different functions, levels, and operating regions to support a high level of visibility and accountability throughout our company and to incorporate multiple vantage points on risks and potential mitigations. Our Cybersecurity Department is led by the CISO, who reports to the SVPIT and is responsible for overseeing the execution of cybersecurity strategy and maturing the Company’s cybersecurity posture. The Cybersecurity Department has extensive experience in cybersecurity, including graduate degrees in information security and Certified Information Security Systems Professional certifications. Our SVPIT has over 20 years of experience in the IT industry, and our CISO has over 30 years of experience in cybersecurity, providing a firm foundation from which IT and cybersecurity decisions and strategies can be made. We have established an Executive Cybersecurity Committee, comprised of interdisciplinary executive leadership, that meets quarterly and provides oversight for cyber protection, cybersecurity programs, exposure management, and risk tolerance. Cybersecurity considerations are incorporated into our disclosure controls and procedures, and our Disclosure Committee is notified of cybersecurity incidents that could require evaluation under SEC reporting standards, ensuring timely assessment of potential materiality.
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ITEM 2. PROPERTIES
The table below summarizes information about our owned and leased properties as of January 28, 2026:

Number of Facilities
Segment/Type of Facilities Owned Leased Total State (5)
Capacity
( in thousand )
Unit of
Measurement
Packaged Meats (1)

Production 29 1 30 Georgia (1), Iowa (5), Illinois (2), Indiana (1), Kansas (2), Kentucky (2), Massachusetts (1), Minnesota (1), Missouri (2), North Carolina (3), Nebraska (3), Ohio (2), Pennsylvania (1) , South Dakota (1), Tennessee (1), Virginia (1), Wisconsin (1) 12,500 Daily production lbs.
Fresh Pork (1)

Processing 8 — 8 Iowa (2), Illinois (1), Missouri (1), Nebraska (1), North Carolina (2), South Dakota (1) 108 Head of hogs daily
Other 5 1 6 Iowa (2), North Carolina (2), Utah (1), Virginia (1) 2,200 Daily production lbs.
Hog Production
Farms (3)
245 1,388 (2)

1,633 Colorado (25), Iowa (397), Illinois (15), Missouri (202), North Carolina (879), Oklahoma (11), South Carolina (30), South Dakota (8), Utah (25), Virginia (41) 11,500 Hogs annually
Feed facilities 26
23 49 Colorado (1), Iowa (2), Indiana (1), Kansas (1), Missouri (9), North Carolina (25), Ohio (2), South Carolina (5), Utah (1), Virginia (2) 654/33 Capacity in tons of feed storage / daily feed production
Distribution Network
Distribution Centers (4)
2 3 5 Indiana (1), Kansas (1), Maryland (1), Nebraska (1), North Carolina (1) 201 Pallet capacity
Direct-to-Store Delivery Facilities 6 7
13 Indiana (3), Kentucky (1), Michigan (2), Ohio (3), Pennsylvania (1), Texas (3) 152 Square feet
Other
Mexico
Fresh Pork Processing 1 — 1 Puebla, MX 5 Head of hogs daily
Hog Production 134 6 (2)
140 Puebla (86), Veracruz (54), MX 1,800 Hogs annually
Corporate — — 1 Puebla, MX 13 Square feet
Bioscience 1 — 1 Ohio 34 Square feet
U.S. Administrative
Headquarters 1 — 1 Virginia 148 Square feet

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Number of Facilities
Segment/Type of Facilities Owned Leased Total State (5)
Capacity
( in thousand )
Unit of
Measurement
Satellite offices 1 3 4 Illinois (1), Missouri (1), North Carolina (1), Virginia (1) 183 Square feet
Sales offices — 5 5 Idaho (1), Ohio (1), Michigan (1) California (1), Arkansas (1) 32 Square feet

________________
(1) Certain of our fresh pork facilities are co-located with packaged meats production facilities. They are counted separately under each segment heading. We operate a total of 38 facilities that process fresh pork and packaged meats in the U.S.
(2)     Consists of contract farms.
(3)     Does not include a limited number of inactive farms.
(4)     Distribution centers serve both our Packaged Meats and Fresh Pork segments. We also have access to over 45 cold storage locations via contractual arrangements with third parties. Our contracts are either pay-for-use or commit us to a specific annual amount irrespective of usage.
(5)     Numbers in parentheses represent total number of facilities for each jurisdiction.

The map below shows the expansive footprint of our facilities and properties:

________________
(1) Certain of our fresh pork facilities are co-located with packaged meats production facilities.
(2) Other includes our Smithfield Bioscience facility and our fresh pork facility in Mexico.
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ITEM 3. LEGAL PROCEEDINGS
The information called for by this item is incorporated herein by reference to “Note 19: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
On January 28, 2025, our common stock began trading on the Nasdaq Global Select Market under the symbol “SFD.” Prior to that, there was no public market for our common stock. Smithfield is a majority-owned subsidiary of Hong Kong-based WH Group. WH Group is listed on the Hong Kong Exchange.
Holders
As of March 4, 2026, there was one record holder of the Company’s common stock and approximately 23,346 holders whose shares were held in street name by brokerage firms and financial institutions.
Issuer Purchases of Equity Securities
None.
Dividends
In fiscal year 2025, we paid dividends of $1.00 per share. 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.
Securities Authorized for Issuance under Equity Compensation Plans
For information relating to securities authorized for issuance under equity compensation plans, see Part III, Item 12 of this Form 10-K.

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Shareholder Return Performance Graph
The following graph compares the cumulative total shareholder return on Smithfield’s common stock from our initial trading date through the end of fiscal year 2025 to the cumulative total returns on the Standard & Poor’s (“S&P”) 500 index and the S&P Composite 1500 Food Products index. The comparison assumes $100 was invested on January 28, 2025 in shares of our common stock and in each of the indices shown and assumes that all of the dividends were reinvested.

January 28, 2025 March 30, 2025 June 29, 2025 September 28, 2025 December 28, 2025
Smithfield Foods, Inc. $ 100  $ 102  $ 120  $ 122  $ 119 
S&P 500 100  92  102  110  116 
S&P Composite 1500 Food Products 100  106  101  100  96 

The information in this section shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934.

ITEM 6. RESERVED
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 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. Totals and percentages may be affected by rounding. Certain prior period amounts have been reclassified to conform to the current period presentation.

Overview
We are an American food company that employs approximately 32,000 people in the U.S. and 2,500 people in Mexico. We boast a portfolio of high-quality, iconic brands, such as Smithfield®, Eckrich® and Nathan’s Famous®, among many others. We are an indirect, majority-owned subsidiary of Hong Kong-based WH Group.
We conduct our operations through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production. We also conduct operations through two other operating segments, Mexico and Bioscience, which are aggregated and reported as “Other.”
Our fiscal year is the 52-week or 53-week period which ends on the Sunday nearest to December 31. Fiscal years 2025 and 2024 each consisted of 52 weeks.
For a more comprehensive overview of our company and operations, refer to “Item 1. 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
The strategic initiatives we are executing across our segments are complemented and enabled by our strong balance sheet and ongoing operational investments, positioning us for future growth. We have several strategic initiatives to grow our business, reduce costs and enhance our profitability and margins. For a comprehensive discussion of our growth strategies, refer to “Item 1. Business—Our Growth Strategies in this Annual Report on Form 10-K.
Sales Drivers
We are focused on driving profitable growth through our Packaged Meats segment. Within the Packaged Meats segment, the primary factors impacting sales of our brands are household penetration, consumption levels, price point and product offerings. As a result, we have pursued strategies that we believe best align our products with consumer trends and behavior. We have shifted our portfolio towards a higher mix of value-added and margin accretive products while leveraging the breadth of our offerings to further penetrate across dayparts. We look to increase brand awareness and encourage consumer adoption of our products through product and packaging innovation and effective and appealing marketing strategies while maintaining our promise to consumers to offer high-quality products for every budget. We have also expanded to new categories and grown distribution of under-indexed brands in under-penetrated locations. 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.
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The U.S. packaged meats market is supported by long-term secular tailwinds, including consumer demand for high-protein diets, high-quality nutrition, product versatility and convenience. We expect these tailwinds to continue to drive increases in overall meat consumption. Nevertheless, changes in market trends and consumer preferences could adversely affect our results of operations.
In our Fresh Pork segment, the primary drivers of external sales are the consistent level of global pork consumption, our ability to maximize the value of each hog and our ability to leverage our different end markets including retail, foodservice, industrial and export channels. Through ongoing product innovation, we seek to appeal to ever-changing consumer preferences, including demand for convenience and smaller portion sizes as well as expanded interests in new and varied flavors. 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.
Cost Factors
Our cost as a percentage of sales varies based on fluctuations of raw material prices, as well as manufacturing, distribution and marketing costs. Raw materials are the largest component of our total cost of goods sold, with feed ingredients and hogs accounting for the majority share. 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 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. In our logistics and distribution network, we have reduced transportation and warehousing costs by improving transportation carrier mix, maximizing utilization of our cold storage and trucking assets, improving supply and demand planning and optimizing inventory levels.
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.
Initial Public Offering
On January 29, 2025, we completed our IPO of 26,086,958 shares of common stock, representing 7% of the total outstanding shares, at a price of $20.00 per share. We issued 13,043,479 shares of common stock bringing the total number of outstanding shares to 393,112,711. 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 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
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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.
Tariffs
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.
Litigation
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.
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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.
Acquisitions
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.

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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
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
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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 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 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. 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.

Results of Operations
Consolidated Results of Continuing Operations

Fiscal Year
2025 2024 $ Change % Change
(in millions)
Sales $ 15,531  $ 14,142  $ 1,389  9.8  %
Cost of sales 13,442  12,244  1,197  9.8  %
Gross profit 2,089  1,897  192  10.1  %
Selling, general and administrative expenses 849  840  9  1.1  %
Operating gains (52) (60) 8  (12.9) %

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

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Operating Profit (Loss) by Segment

Fiscal Year
2025 2024 $ Change % Change
(in millions)
Packaged Meats
$ 1,094  $ 1,168  $ (74) (6.4) %
Fresh Pork
214  266  (52) (19.7) %
Hog Production
176  (144) 320  NM
Other
45  35  10  29.1  %
Corporate expenses (128) (153) 26  16.8  %
Unallocated (1)
(109) (55) (55) (99.2) %
Operating profit $ 1,292  $ 1,118  $ 175  15.6  %
________________
(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 the fiscal year of 2025 compared to the fiscal year of 2024.
Sales

Fiscal Year
2025 2024 $ Change % Change
(in millions)
Sales by segment:
Packaged Meats $ 8,757  $ 8,319  $ 438  5.3  %
Fresh Pork 8,344  7,873  471  6.0  %
Hog Production 3,393  3,002  391  13.0  %
Other 528  471  58  12.2  %
Total segment sales 21,023  19,665  1,358  6.9  %
Inter-segment sales eliminations:

Fresh Pork
(3,327) (2,990) (337) 11.3  %
Hog Production
(2,164) (2,533) 369  (14.6) %
Other
(1) (1) —  (3.6) %
Total inter-segment sales eliminations (5,492) (5,524) 32  (0.6) %
Consolidated sales $ 15,531  $ 14,142  $ 1,389  9.8  %

Packaged Meats. Segment sales increased by $438 million, or 5.3%, primarily as a result of a 5.6% increase in average sales price. The increase in average sales price was primarily due to higher raw material costs, which translated into higher sales prices of our packaged meats products. Volume remained relatively consistent year-over-year.
Fresh Pork. 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-
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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 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.
Other. 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, 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 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

Fiscal Year
2025 2024 $ Change % Change
(in millions)
Packaged Meats
$ 7,295  $ 6,759  $ 536  7.9  %
Fresh Pork
7,965  7,419  545  7.3  %
Hog Production
3,179  3,104  75  2.4  %
Other
458  412  47  11.4  %
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  %

Packaged Meats. 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.
Fresh Pork. 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.
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• A $35 million decrease in employee retention tax credits.
Hog Production. 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.
Other. 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. 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

Fiscal Year
2025 2024 $ Change % Change
(in millions)
Packaged Meats
$ 367  $ 394  $ (27) (6.8) %
Fresh Pork
166  188  (22) (11.7) %
Hog Production
38  42  (4) (8.7) %
Other
25  24  —  2.0  %
Corporate expenses
128  154  (26) (16.8) %
Unallocated 125  38  87  227.9  %
Selling, general and administrative expenses $ 849  $ 840  $ 9  1.1  %

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.

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Operating Gains
The following table provides details of operating gains.

Fiscal Year
2025 2024
(in millions)

Insurance recoveries (1)
$ (37) $ (9)
Gain on disposal of assets (2)
(7) (43)

Other operating gains (8) (8)
Operating gains $ (52) $ (60)

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

Fiscal Year
2025 2024
(in millions)

Gain on assets held in rabbi trusts (1)
$ (34) $ (16)
Net pension and postretirement benefits cost (2)
17  10 

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
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
Our sources of liquidity include cash and cash equivalents on hand together with availability under our committed revolving credit facilities. As of December 28, 2025, we had $3,837 million of available liquidity consisting of $1,539 million in cash and cash equivalents and $2,298 million of availability under our committed credit facilities. Availability under our committed credit facilities is reduced by the principal amount of any outstanding commercial
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paper. 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.
Credit Facilities

December 28, 2025
Facility Capacity Borrowing
Base
Adjustment Outstanding
Borrowings Commercial
Paper
Borrowings Outstanding
Letters of
Credit Amount
Available
(in millions)
Senior Revolving Credit Facility $ 2,100  $ —  $ —  $ —  $ —  $ 2,100 
Securitization Facility 225  —  —  —  (27) 198 

Total credit facilities $ 2,325  $ —  $ —  $ —  $ (27) $ 2,298 

Senior Unsecured Revolving Credit Facility
In February 2025, we refinanced our $2,100 million senior unsecured revolving credit facility (“Senior Revolving Credit Facility”), extending the maturity date from May 21, 2027 to February 12, 2030 with the option to extend the maturity date for up to two one-year periods, subject to obtaining the lenders’ consent and satisfaction of certain other conditions. 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 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, 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.
Accounts Receivable Securitization Facility
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. The SPV is included in our consolidated financial statements and therefore the accounts receivable owned by it are included in our consolidated balance sheets. However, the accounts receivable owned by the SPV are separate and distinct from our other assets and are not available to our other creditors should we become insolvent. As of December 28, 2025, the SPV held $654 million of accounts receivable. We must maintain certain ratios related to the collection of our receivables as a condition of the Securitization Facility agreement. As of December 28, 2025, we had $27 million in letters of credit issued under the Securitization Facility. None of the letters of credit were drawn upon.

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Monetization Facility
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

Fiscal Year
2025 2024
(in millions)
Cash flows from operating activities:
Net income $ 998  $ 970 
Less: Net income from discontinued operations —  (172)
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 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)
Change in inventories 118  138 
Change in prepaid expenses and other current assets (6) (88)
Change in accounts payable 65  (19)
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 

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 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
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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 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

Fiscal Year
2025 2024
(in millions)
Cash flows from investing activities:
Capital expenditures $ (341) $ (350)
Net expenditures from breeding stock transactions (14) (43)
Investments in partnerships and other assets (12) (13)
Proceeds from sale of property, plant and equipment and other assets 14  99 
Cash receipts on notes receivable 25  — 

Other 18  9 
Net cash flows used in investing activities of continuing operations $ (309) $ (298)

The following items explain the significant investing activities:
• Capital expenditures. 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 $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.
• 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.
• 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.

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Cash Flows From Financing Activities of Continuing Operations

Fiscal Year
2025 2024
(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 

Net repayments to revolving credit facilities —  (8)

Net proceeds from issuance of common stock 236  — 
Other 1  1 
Net cash flows used in financing activities of continuing operations $ (164) $ (321)

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
Our cash requirements for long-term contractual obligations and commitments as of December 28, 2025 are presented in the following table:

Due Date by Period
2026 2027 2028 2029 2030 2031 & thereafter Total
(in millions)
Debt principal payments (1)
$ —  $ 600  $ —  $ 400  $ 500  $ 500  $ 2,000 
Debt interest payments 74  51  49  33  25  9  242 
Guaranteed royalty payments (2)
15  16  16  16  17  17  97 
Lease obligations (3)
92  80  68  41  28  197  506 
Pension and other postretirement benefit obligations (4)
26  —  —  —  —  —  204 
Commitments to investees (5)
—  —  —  —  —  —  198 
Purchase commitments:
Hog procurement (6)
2,994  1,825  1,383  1,177  792  792  8,964 
Contract hog growers (7)
267  144  130  67  29  89  727 
Grain procurement (8)
99  —  —  —  —  —  99 
Other
72  18  16  16  16  198  335 
Other long-term liabilities (9)
—  —  —  —  —  —  174 
Total $ 3,640  $ 2,734  $ 1,662  $ 1,751  $ 1,408  $ 1,802  $ 13,546 

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(1) In the event of default on a payment, acceleration of principal payments could occur.
(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.
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(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 on Form 10-K.
(4) We historically provided the majority of our U.S. employees with pension benefits. Funding requirements for our pension plans are determined based on the funded status measured at the end of each year. The values of our pension obligation and related assets may fluctuate significantly, which may in turn lead to a larger underfunded status in our pension plans and a higher funding requirement. The funding requirement for our qualified pension plans in fiscal year 2026 is expected to be $5 million. We also expect to contribute $22 million to our non-qualified pension plans to cover expected benefit payments. We are unable to reliably estimate the amount and timing of the remaining payments beyond fiscal year 2026, therefore we have only the estimated funding for fiscal year 2026 and the total liability as of December 28, 2025 in the table above. 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 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. Should the board, of which we have 50% of the voting power, choose not to approve additional projects, the remaining contributions would not be required. Additionally, we have committed to contribute up to $25 million to the TPG Rise Climate investment fund through July 2027. As of December 28, 2025, we had contributed $21 million in capital toward this commitment. Lastly, we have capital support agreements with Murphy Family Farms and VisionAg whereby we are committed to advance up to $50 million and $15 million, respectively, to cover operating costs if certain conditions are met. No such advances have been made. We are unable to reliably estimate if or when any of these commitments will be drawn upon.
(6) Through the Fresh Pork segment, we have purchase agreements with certain independent suppliers. Some of these arrangements obligate us to purchase all of the hogs produced by these suppliers. Other arrangements obligate us to purchase a fixed amount of hogs. Due to the uncertainty of the number of hogs that we are obligated to purchase and the uncertainty of market prices at the time of hog purchases, we have estimated our obligations under these arrangements. Future payments were estimated using current live hog market prices, available futures contract prices and internal projections adjusted for historical quality premiums.
(7) Through the Hog Production segment, we use contract farmers and their facilities to raise hogs produced from our breeding stock. Under multi-year contracts, the farmers provide the initial facility investment, labor and front-line management in exchange for a performance-based service fee payable upon delivery. We are obligated to pay this service fee for all hogs delivered. We have estimated our obligation based on expected hogs delivered from these farmers.
(8) Includes fixed-price forward grain purchase contracts totaling $67 million. Also includes unpriced forward grain purchase contracts which, if valued using market prices as of December 28, 2025, would be $33 million. These forward grain contracts are accounted for as normal purchases. As a result, they are not recorded in the balance sheet.
(9) Other long-term liabilities consist of long-term casualty insurance reserves, deferred compensation and unrecognized tax benefits, among others. We are unable to estimate reliably the timing of settlement of these liabilities.
Other Anticipated or Potential Cash Requirements
Capital Expenditures
The Company remains in a strong financial position due to its robust cash flows, liquidity, and solid balance sheet. 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.
Dividends
Returning cash to shareholders in the form of dividends is also a top priority for the Company. 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
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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 (“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
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. As of December 28, 2025, the value of the NCI on our consolidated balance sheet was $264 million.
Contingent Losses
The consolidated financial statements reflect accruals for contingent losses associated with various claims. Legal expenses incurred in our and our subsidiaries’ defense of these claims and any payments made to plaintiffs through unfavorable verdicts or otherwise could negatively impact our cash flows and our liquidity position. For more information on contingencies, refer to “Note 19: Regulation and Contingencies” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K .
Risk Management Activities
We are exposed to market risks primarily from changes in commodity prices, and to a lesser degree, interest rates and foreign exchange rates. 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. When the value of our open derivative contracts decreases, we may be required to post margin deposits with our brokers and counterparties to cover a portion of the decrease. Conversely, when the value of our open derivative contracts increases, our brokers may be required to deliver margin deposits to us for a portion of the increase. 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. For example, in a period of rising grain prices, gains resulting from long grain derivative positions would generally be offset by higher cash prices paid to farmers and other suppliers in spot markets. 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.
Guarantees
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.
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Non-GAAP Measures
In arriving at our presentation of non-GAAP financial measures, we exclude items that have an impact on our income statement that, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not identified, potentially cause investors to extrapolate future performance from an improper base. While not all inclusive, examples of these items include:
• loss contingencies, due to the difficulty in predicting future events, their timing and size;
• transactions or events that are not part of our core business activities or are unusual in their nature (whether gains or losses); and
• the tax effects of the foregoing items.
Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield
The following table provides a reconciliation of net income from continuing operations attributable to Smithfield to adjusted net income from continuing operations attributable to Smithfield. 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. We believe these non-GAAP measures are useful for investors because they exclude the effects of items that are unusual in nature, infrequent in occurrence or otherwise stem from strategic decisions to restructure our operations. Although we believe these non-GAAP measures provide a better comparison of our year-over-year performance and are frequently used by investors and securities analysts in their evaluations of companies, they have limitations as analytical tools. 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.
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Fiscal Year Affected income statement
account

2025 2024
(in millions, except per share data)
Net income from continuing operations attributable to Smithfield $ 987  $ 783 
Litigation charges 73  —  SG&A
Reduction in workforce (1)
9  —  SG&A
Reduction in workforce (1)
2  —  Cost of sales
Office closures (2)
4  —  SG&A

Hog Production Reform (3)
5  31  Cost of sales

Hog Production Reform (4)
(4) (38) Operating gains
Plant closure 2  —  Cost of sales
Incremental costs from destruction of property —  4  Cost of sales

Employee retention tax credits (5)
(10) (86) Cost of sales

Employee retention tax credits (5)
—  (1) SG&A

Insurance recoveries (6)
(36) (4) Operating gains
Company-owned life insurance gain (7)
(17) —  Non-operating gains
Income tax effect of non-GAAP adjustments (8)
(11) 24  Income tax expense
Adjusted net income from continuing operations attributable to Smithfield $ 1,002  $ 714 

Net income from continuing operations attributable to Smithfield per diluted common share $ 2.51 $ 2.06
Adjusted net income from continuing operations attributable to Smithfield per diluted common share $ 2.55 $ 1.88

________________
(1) Consists of severance costs associated with workforce reduction initiatives. 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%.
EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations
The following table provides a reconciliation of net income from continuing operations to EBITDA from continuing operations and adjusted EBITDA from continuing operations. EBITDA from continuing operations, adjusted EBITDA from continuing operations and adjusted EBITDA margin from continuing operations are non-GAAP measures. We believe EBITDA from continuing operations is a useful measure to our stakeholders because it excludes the effects of financing and investing activities by eliminating interest and depreciation costs to provide a comparable year-over-year analysis. We believe adjusted EBITDA from continuing operations is a useful measure as it excludes the effect of discontinued operations, non-operating gains and losses, and other items that are unusual in nature, infrequent in occurrence or otherwise stem from strategic decisions to restructure our operations. We believe adjusted EBITDA margin from continuing operations is a useful measure as it evaluates overall operating performance, ability to pursue and service possible debt opportunities and possible future investment opportunities.
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We believe these non-GAAP measures provide a more comparable year-over-year analysis. Although these non-GAAP measures are frequently used by investors and securities analysts in their evaluations of companies, they have limitations as analytical tools. 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.

Fiscal Year Affected Income Statement Account
2025 2024
(in millions, except percentages)