Core Viewpoint - Smithfield Foods, Inc. is launching a secondary public offering of 16,000,000 shares of common stock, with no proceeds going to the company itself [1] Group 1: Offering Details - The offering will be conducted by SFDS UK Holdings Limited, the principal shareholder of Smithfield Foods [1] - The underwriters will have a 30-day option to purchase up to 2,400,000 additional shares at the public offering price [1] - Smithfield Foods will not sell any shares in this offering and will not receive any proceeds from the sale [1] Group 2: Underwriters - Morgan Stanley, BofA Securities, and Barclays are acting as joint lead book-running managers for the proposed offering [2] Group 3: Regulatory Information - A registration statement, including a prospectus, has been filed with the SEC but is not yet effective, meaning securities cannot be sold until it becomes effective [4] - The offering will be made only by means of a prospectus, which will be available for free on the SEC website and from the underwriters [3]

Core Points - Smithfield Foods has partnered with Feed the Children to host Resource Rallies aimed at addressing food insecurity among local families and children returning to school [1][2] - The initiative includes a $100,000 donation and the provision of thousands of pounds of protein, such as ham and bacon, to support families in need [3][7] - The first Resource Rally took place in Cudahy, Wisconsin, with additional events planned in Milan, Missouri, and Clinton, North Carolina, each expected to assist approximately 400 families [2][6] Company Initiatives - Smithfield's hunger relief program, Helping Hungry Homes, has provided hundreds of millions of servings of protein across all 50 U.S. states since 2008, with over 25 million servings valued at nearly $28 million donated in 2024 alone [7] - The company is on track to donate an additional 200 million servings of protein by the end of 2025, highlighting its commitment to combating food insecurity [7] Community Impact - Each participating family at the Resource Rallies receives a 25-pound box of food and a 15-pound box of personal care items, along with school supplies for children [4][6] - The collaboration between Smithfield Foods and Feed the Children marks its second year, addressing the serious issue of childhood hunger, particularly during the back-to-school season [6][10]

Core Viewpoint - Smithfield Foods has made a $500,000 philanthropic investment to support the new Riverside Smithfield Hospital, addressing the critical need for full-service inpatient care in Isle of Wight County [3][4][5]. Company Contributions - The investment from Smithfield Foods reflects its commitment to the health and well-being of its employees and the local community, recognizing the importance of timely, high-quality medical care [3][4]. - This contribution is part of a broader initiative to enhance healthcare access and outcomes in the region, ensuring that community members do not have to travel far for necessary medical services [5]. Community Impact - The establishment of Riverside Smithfield Hospital aims to provide advanced and compassionate care closer to home, which is expected to improve health outcomes and reduce barriers such as transportation [4][5]. - The investment is seen as a statement of belief in the local community, promoting a healthier and more resilient future for Isle of Wight County and surrounding areas [5]. About Riverside Health - Riverside Health is an integrated health network serving Eastern Virginia since 1915, providing over 2 million services annually across various medical specialties [7]. - The health system operates multiple facilities, including four acute-care hospitals and is in the process of constructing the new Riverside Smithfield Hospital, set to open in early 2026 [7]. About Smithfield Foods - Smithfield Foods, Inc. is a leading American food company specializing in packaged meats and fresh pork products, with a strong commitment to quality and sustainability [8].

Core Insights - Smithfield Foods, Inc. reported in-line earnings for Q2 with earnings of 55 cents per share, meeting analyst consensus estimates [1] - The company achieved quarterly sales of $3.786 billion, surpassing the analyst consensus estimate of $3.630 billion [1] - For fiscal year 2025, Smithfield updated its financial outlook, showing increased optimism in certain areas while maintaining stability in others [1][2] Sales Growth Expectations - The company expects total sales to grow by a low-to-mid-single-digit percentage compared to fiscal year 2024, excluding sales impacts from Hog Production segment transactions [2] Business Performance - The strong Q2 results reflect the agility and resilience of the business in a dynamic macroeconomic environment, with the Packaged Meats segment meeting consumer demand for quality protein [3] - The Fresh Pork segment is effectively managing a dynamic tariff environment, while the Hog Production segment continues to enhance profitability [3] Stock Performance - Following the earnings announcement, Smithfield Foods shares increased by 2.7%, trading at $25.17 [4] - Analysts adjusted their price targets for Smithfield Foods post-earnings, indicating positive sentiment towards the stock [4] Analyst Ratings and Price Targets - UBS analyst Manav Gupta maintained a Buy rating and raised the price target from $25 to $28.5 [6] - Barclays analyst Benjamin Theurer maintained an Overweight rating and increased the price target from $28 to $30 [6] - Morgan Stanley analyst Dara Mohsenian also maintained an Overweight rating, raising the price target from $29 to $30 [6]

Financial Data and Key Metrics Changes - The company reported a record second quarter adjusted operating profit of $298 million, up 20% from $248 million in 2024, with an adjusted operating profit margin of 7.9%, improved from 7.3% in 2024 [5][30] - Consolidated sales for the second quarter were $3.8 billion, representing an 11% increase or $374 million compared to the prior year [30] - Adjusted net income from continuing operations was a record $217 million compared to $192 million in 2024, with adjusted EPS at $0.55 per share compared to $0.51 per share in 2024 [30] Business Segment Data and Key Metrics Changes - The packaged meat segment delivered an adjusted operating profit of $296 million with a margin of 14.2%, despite higher raw material costs, and sales increased by 6.9% year over year [7][31] - The fresh pork segment reported an adjusted operating profit of $30 million, up from $17 million in 2024, with a margin of 1.4% [8][32] - The hog production segment achieved an adjusted operating profit of $22 million, compared to a loss of $10 million in 2024, driven by improved market conditions [9][33] Market Data and Key Metrics Changes - The company noted a 4.5% increase in sales volume for packaged meats, with a 2.3% increase in average selling price driven by higher market prices for pork [31] - Fresh pork segment sales increased by 5% year over year, primarily due to a 3.3% increase in average selling price and a 1.7% increase in volume [33] - Hog production segment sales increased by 8.4% year over year, despite a 24% reduction in the number of hogs produced [34] Company Strategy and Development Direction - The company has five strategic growth priorities: increasing profits in packaged meats, growing fresh pork profits, achieving a best-in-class cost structure in hog production, optimizing operations, and evaluating M&A opportunities [11][12] - The focus is on enhancing product mix, volume growth, and innovation in the packaged meat segment, which represents 55% of consolidated sales [12][14] - The company aims to maximize product value across channels in the fresh pork segment and optimize operations in hog production to improve profitability [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic consumer spending and geopolitical environment, raising the full-year outlook for adjusted operating profit [10][11] - The company anticipates total sales growth in the low to mid-single-digit percent range compared to fiscal 2024, with adjusted operating profit expectations for packaged meats and fresh pork remaining stable [37] - Management highlighted the importance of delivering value and convenience to consumers, particularly in the packaged meats segment, amidst cautious consumer spending [12][18] Other Important Information - The company has a strong balance sheet with a net debt to adjusted EBITDA ratio of 0.7 times and liquidity of $3.2 billion [35] - Capital expenditures for the first half were $158 million, with over 50% allocated to projects driving top and bottom line growth [36] - The company plans to pay a quarterly dividend of $0.25 per share, expecting to maintain a total annual dividend of $1 per share [36] Q&A Session Summary Question: Insights on consumer shift within brands and private label trends - Management noted that while there is an increase in private label share growth, the company's private label business provides a competitive advantage due to high-quality offerings [46][47] Question: Visibility on hog prices and profitability between hog production and fresh pork - Management indicated confidence in hog production profitability, supported by favorable market conditions and operational improvements [49][50] Question: Confidence in packaged meats profitability amidst rising raw material costs - Management emphasized efficiency improvements and a diversified product portfolio as key factors in maintaining profitability despite rising costs [56][58] Question: Dynamics around hog production hedging and mark to market impacts - Management clarified that mark to market adjustments impacted second quarter results but overall business performance remains strong, supporting the raised outlook [64][66] Question: Expectations for volume performance in packaged meats in the second half - Management expressed confidence in volume growth driven by product innovation and strong foodservice sales, with expectations for continued momentum [75][76]

Financial Data and Key Metrics Changes - The company reported a record second quarter adjusted operating profit of $298 million, up 20% from $248 million in 2024, with an adjusted operating profit margin of 7.9%, improved from 7.3% in 2024 [5][28] - Consolidated sales for the second quarter were $3.8 billion, representing an 11% increase or $374 million compared to the prior year [28] - Adjusted net income from continuing operations was a record $217 million compared to $192 million in 2024, with adjusted EPS at $0.55 per share compared to $0.51 per share in 2024 [28] Business Segment Data and Key Metrics Changes - The packaged meat segment delivered an adjusted operating profit of $296 million with a margin of 14.2%, despite higher raw material costs, and sales increased by 6.9% to $2.1 billion [29] - The fresh pork segment reported an adjusted operating profit of $30 million, up from $17 million in 2024, with a margin of 1.4% [30] - The hog production segment achieved an adjusted operating profit of $22 million, compared to a loss of $10 million in 2024, with sales increasing by 8.4% to $840 million [31][32] Market Data and Key Metrics Changes - The company noted a 4.5% increase in sales volume for packaged meats, driven by a favorable product mix and a later Easter holiday [29] - Fresh pork segment sales increased by 5% year over year, primarily due to a 3.3% increase in average selling price and a 1.7% increase in volume [31] - The hog production segment's sales increase was attributed to higher external grain and feed sales and the sale of commercial hog inventories [32] Company Strategy and Development Direction - The company has five strategic growth priorities: increasing profits in packaged meats, growing fresh pork profitability, achieving a best-in-class cost structure in hog production, optimizing operations, and evaluating synergistic M&A opportunities [11] - The focus remains on enhancing product mix, volume growth, and innovation in the packaged meat segment, which represents 55% of consolidated sales [12][14] - The company aims to maximize product value across channels in the fresh pork segment and optimize operations to deliver efficiencies [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a dynamic consumer spending and geopolitical environment, raising the full-year outlook for adjusted operating profit primarily due to improved hog production segment performance [10][11] - The company anticipates total sales growth in the low to mid-single-digit percent range compared to fiscal 2024, with adjusted operating profit expectations for packaged meats and fresh pork remaining stable [36][37] - Management highlighted the importance of delivering value and convenience to consumers, particularly in the packaged meats segment, amidst cautious consumer spending [12][13] Other Important Information - The company has a strong balance sheet with a net debt to adjusted EBITDA ratio of 0.7 times and liquidity of $3.2 billion [34] - Capital expenditures for the first half were $158 million, with over 50% allocated to projects driving growth [35] - The company paid quarterly dividends of $0.25 per share and expects to maintain a $1 per share annual dividend [35] Q&A Session Summary Question: Insights on consumer shifts within packaged meats and private label trends - Management noted that while there is an increase in private label share growth, their private label business provides a competitive advantage due to high-quality offerings [46][47] Question: Visibility on hog prices and their impact on profitability - Management indicated confidence in hog prices supported by market dynamics and improvements in hog production operations [49][50] Question: Confidence in packaged meats profitability amidst rising raw material costs - Management emphasized efficiency improvements and a strong product portfolio that allows them to mitigate raw material cost impacts [56][58] Question: Dynamics around hog production hedging and mark-to-market impacts - Management clarified that mark-to-market adjustments impacted second quarter results but overall business performance remains strong, leading to an increased full-year outlook [63] Question: Expectations for volume performance in packaged meats - Management expressed confidence in volume growth driven by product innovation and strong foodservice sales [72][73] Question: Competitive environment for packaged meats and promotional activity - Management highlighted a focus on quality over quantity in promotional strategies, leading to improved profit margins [80][81]

Financial Performance - Smithfield achieved a record second quarter adjusted operating profit of $298 million, a 20% year-over-year increase [25, 81] - The adjusted operating profit margin was 7.9%, up 60 basis points year-over-year [25, 81] - Adjusted net income reached $217 million, up 12.8% compared to the previous year [81] - Adjusted earnings per share (EPS) increased by 7.8% to $0.55 [81] Segment Performance - The Packaged Meats segment delivered $296 million in adjusted operating profit with a 14.2% adjusted operating margin [25] - The Fresh Pork segment saw a 74.4% increase in adjusted operating profit [97] - Hog Production segment sales increased by 8.4% [102] Strategic Initiatives - The company is focused on increasing profits in the Packaged Meats segment through enhanced product mix and volume growth [28] - Smithfield is optimizing operations to offset inflation by delivering operating efficiencies in manufacturing, supply chain, distribution, procurement, and SG&A [28] - The company is evaluating synergistic M&A opportunities across North America [27] Capital Allocation - Smithfield is returning value to shareholders through quarterly dividends of $0.25 per share and an anticipated annual dividend of $1.00 per share [25] - The company's capital allocation strategy includes driving growth through product innovation and marketing, reinvesting in the business to improve automation and operating efficiencies, and opportunistic M&A [107] Financial Position - The ratio of net debt to adjusted EBITDA is 0.7x [131]

Market Overview - US stock index futures are all down before the market opens, with Dow futures down 0.05%, S&P 500 futures down 0.07%, and Nasdaq futures down 0.06% [1] - The German DAX index is down 0.49%, while the UK FTSE 100 is up 0.07%, and the French CAC40 is up 0.10% [2][3] - WTI crude oil is down 0.69% at $63.52 per barrel, and Brent crude oil is down 0.51% at $66.29 per barrel [3][4] Economic Data and Inflation - The US July Consumer Price Index (CPI) is set to be released, with expectations of a year-on-year increase of 2.8%, up from 2.7% in June [4][5] - Core CPI, excluding food and energy, is expected to rise to 3.0% year-on-year, indicating persistent inflation pressures [4][5] Corporate Earnings and Stock Buybacks - US companies are projected to repurchase over $1.1 trillion in stock this year, with $983.6 billion already announced [6] - Major companies leading the buyback trend include Apple, Alphabet, JPMorgan Chase, Bank of America, and Morgan Stanley [6] Federal Reserve and Interest Rates - There is speculation that the Federal Reserve may cut interest rates twice by 25 basis points this year, with some investors betting on a 50 basis point cut in September [5] - The selection process for the next Federal Reserve Chair is intensifying, with candidates including Michelle Bowman, Philip Jefferson, and Lori Logan [7] Trade Policies and Tariffs - Goldman Sachs warns that 70% of the costs from tariffs imposed by President Trump are being passed on to US consumers, with the burden expected to increase [7] - The US and China have agreed to pause the implementation of 24% tariffs for 90 days, while retaining 10% tariffs on certain goods [8] Company-Specific News - Sea Ltd reported Q2 revenue of $5.26 billion, a 38.2% year-on-year increase, driven by strong performance in e-commerce and digital financial services [9] - Circle's Q2 revenue increased by 53% to $658 million, with a net loss of $482 million primarily due to IPO-related expenses [10] - Smithfield Foods reported a Q2 sales increase of 11% to $3.79 billion, driven by strong demand for packaged meat products [11] - Tencent Music's Q2 revenue grew by 17.9% to 8.44 billion yuan, with online music service revenue increasing by 26.4% [12] - Pony.ai's Q2 revenue surged by 75.9% to 215 million USD, with a significant increase in Robotaxi passenger fare income [13] - Yalla Technology's Q2 revenue was $84.6 million, slightly below expectations, with a 7% decline in paid user numbers [14] Regulatory and Legal Developments - Elon Musk has criticized Apple for allegedly favoring OpenAI in the App Store, indicating potential legal action [15] - President Trump is considering allowing Nvidia and AMD to export downgraded AI chips to China, with a 15% revenue share for the US government [16]

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) [Registrant Information](index=1&type=section&id=Registrant%20Information) Details Smithfield Foods, Inc.'s identification, incorporation, address, stock exchange listing, and filer status for its Q2 2025 Form 10-Q - Smithfield Foods, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 29, 2025[1](index=1&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | Exact name of registrant | SMITHFIELD FOODS, INC. | | State of incorporation | Virginia | | Address of principal executive offices | 200 Commerce Street, Smithfield, Virginia 23430 | | Registrant's telephone number | (757) 365-3000 | | Commission file number | 001-15321 | | Trading Symbol | SFD | | Exchange Registered | The Nasdaq Global Select Market | | Filer Status | Non-accelerated filer | | Common Stock Outstanding (as of Aug 11, 2025) | 393,112,711 shares | [Table of Contents](index=2&type=section&id=TABLE%20OF%20CONTENTS) The Table of Contents outlines the structure of the Form 10-Q, dividing it into Part I (Financial Information) and Part II (Other Information), with specific items and their corresponding page numbers - The report is structured into two main parts: Part I for Financial Information and Part II for Other Information, detailing specific items and their page references[4](index=4&type=chunk)[5](index=5&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) Presents Smithfield's unaudited condensed consolidated financial statements and detailed notes on accounting policies, segment performance, and financial instruments [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Provides a comparative overview of Smithfield's sales, gross profit, operating profit, and net income for the three and six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Income (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Sales | $3,786 | $3,412 | $374 | 11.0% | | Cost of sales | $3,288 | $2,885 | $403 | 14.0% | | Gross profit | $499 | $527 | $(28) | (5.3%) | | Operating profit | $260 | $334 | $(74) | (22.2%) | | Net income attributable to Smithfield | $188 | $301 | $(113) | (37.5%) | | Basic and diluted EPS (Continuing operations) | $0.48 | $0.67 | $(0.19) | (28.4%) | | Basic and diluted EPS (Total) | $0.48 | $0.79 | $(0.31) | (39.2%) | Condensed Consolidated Statements of Income (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,558 | $6,856 | $702 | 10.2% | | Cost of sales | $6,549 | $5,967 | $582 | 9.8% | | Gross profit | $1,008 | $889 | $119 | 13.4% | | Operating profit | $582 | $498 | $84 | 16.9% | | Net income attributable to Smithfield | $412 | $457 | $(45) | (9.8%) | | Basic and diluted EPS (Continuing operations) | $1.05 | $0.97 | $0.08 | 8.2% | | Basic and diluted EPS (Total) | $1.05 | $1.20 | $(0.15) | (12.5%) | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Details Smithfield's net income and other comprehensive income components, including foreign currency translation and hedge accounting, for the three and six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net income | $188 | $306 | $(118) | (38.6%) | | Foreign currency translation | $47 | $(81) | $128 | NM | | Pension accounting | $4 | $3 | $1 | 33.3% | | Hedge accounting | $(58) | $62 | $(120) | NM | | Total other comprehensive income (loss) | $(8) | $(16) | $8 | (50.0%) | | Comprehensive income attributable to Smithfield | $165 | $306 | $(141) | (46.1%) | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Net income | $415 | $460 | $(45) | (9.8%) | | Foreign currency translation | $45 | $(87) | $132 | NM | | Pension accounting | $7 | $7 | $0 | 0.0% | | Hedge accounting | $(17) | $19 | $(36) | NM | | Total other comprehensive income (loss) | $35 | $(61) | $96 | NM | | Comprehensive income attributable to Smithfield | $432 | $412 | $20 | 4.9% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents Smithfield's financial position, including assets, liabilities, and equity, as of June 29, 2025, and December 29, 2024 Condensed Consolidated Balance Sheets (as of) | Asset/Liability/Equity | June 29, 2025 (in millions) | December 29, 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Cash and cash equivalents | $928 | $943 | $(15) | | Accounts receivable, net | $773 | $558 | $215 | | Inventories, net | $2,288 | $2,412 | $(124) | | Total current assets | $4,292 | $4,202 | $90 | | Total assets | $11,186 | $11,054 | $132 | | **LIABILITIES** | | | | | Accounts payable | $444 | $777 | $(333) | | Total current liabilities | $1,339 | $1,706 | $(367) | | Long-term debt and finance lease obligations | $2,001 | $1,999 | $2 | | Total liabilities and equity | $11,186 | $11,054 | $132 | | **EQUITY** | | | | | Total shareholders' equity | $6,301 | $5,834 | $467 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines Smithfield's cash flows from operating, investing, and financing activities for the six months ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Cash Flows (Six Months Ended) | Cash Flow Activity | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash flows from (used in) operating activities of continuing operations | $108 | $(9) | $117 | | Net cash flows used in investing activities of continuing operations | $(171) | $(215) | $44 | | Net cash flows from (used in) financing activities of continuing operations | $38 | $(202) | $240 | | Net change in cash, cash equivalents and restricted cash | $(15) | $(467) | $452 | | Cash, cash equivalents and restricted cash at end of period | $928 | $215 | $713 | [Condensed Consolidated Statements of Shareholder's Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholder's%20Equity) Details changes in Smithfield's shareholders' equity, including net income, dividends, and other comprehensive income, for the three and six months ended June 29, 2025 Changes in Shareholders' Equity (Three Months Ended June 29, 2025) | Item | Additional Paid-in Capital (in millions) | Retained Earnings (in millions) | Accumulated Other Comprehensive Loss (in millions) | Total Shareholders' Equity (in millions) | | :--- | :--- | :--- | :--- | :--- | | Balance, March 30, 2025 | $3,325 | $3,308 | $(408) | $6,225 | | Dividend | — | $(99) | — | $(99) | | Net income attributable to Smithfield | — | $188 | — | $188 | | Other comprehensive loss, net of tax | — | — | $(23) | $(23) | | Balance, June 29, 2025 | $3,335 | $3,398 | $(432) | $6,301 | Changes in Shareholders' Equity (Six Months Ended June 29, 2025) | Item | Additional Paid-in Capital (in millions) | Retained Earnings (in millions) | Accumulated Other Comprehensive Loss (in millions) | Total Shareholders' Equity (in millions) | | :--- | :--- | :--- | :--- | :--- | | Balance, December 29, 2024 | $3,102 | $3,184 | $(452) | $5,834 | | Net proceeds from issuance of common stock | $236 | — | — | $236 | | Net income attributable to Smithfield | — | $412 | — | $412 | | Other comprehensive income, net of tax | — | — | $20 | $20 | | Balance, June 29, 2025 | $3,335 | $3,398 | $(432) | $6,301 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for significant accounting policies, segment information, and other financial statement items [NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201%3A%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines Smithfield's core business, fiscal year, consolidation principles, seasonality, and recently issued accounting pronouncements - Smithfield Foods, Inc. produces fresh pork and packaged meats, operating in a cyclical industry affected by commodity price fluctuations, and is a majority-owned subsidiary of Hong Kong-based WH Group Limited[18](index=18&type=chunk) - The company's fiscal year ends on the Sunday nearest to December 31, with the second quarter of 2025 and 2024 each consisting of 13 weeks, and the six-month periods consisting of 26 weeks[21](index=21&type=chunk) - Sales and profitability are generally higher in the fourth quarter due to holiday demand, while cash use is highest in the first quarter due to working capital needs[24](index=24&type=chunk) - New accounting pronouncements (ASU 2023-09, ASU 2024-03, ASU 2025-03) are effective for fiscal years 2025 and 2027, primarily impacting disclosures and presentation, but not financial position, results of operations, or cash flows[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [NOTE 2: REPORTABLE SEGMENTS](index=11&type=section&id=NOTE%202%3A%20REPORTABLE%20SEGMENTS) Details Smithfield's three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, and their sales performance - Smithfield's operations are structured into three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, with 'Other' including Mexico and Bioscience operations[30](index=30&type=chunk) Sales by Reportable Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $2,079 | $1,945 | $134 | 6.9% | | Fresh Pork | $2,080 | $1,981 | $99 | 5.0% | | Hog Production | $840 | $776 | $65 | 8.4% | | Other | $120 | $119 | $1 | 1.2% | | Consolidated Sales | $3,786 | $3,412 | $374 | 11.0% | Sales by Reportable Segment (Six Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | Change (YoY) | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $4,103 | $3,944 | $159 | 4.0% | | Fresh Pork | $4,114 | $3,920 | $194 | 5.0% | | Hog Production | $1,772 | $1,482 | $291 | 19.6% | | Other | $224 | $233 | $(8) | (3.6%) | | Consolidated Sales | $7,558 | $6,856 | $701 | 10.2% | - Hog Production segment sales increased significantly due to a **$116 million increase in grain and feed sales** and **$103 million in other sales** to Murphy Family Farms and VisionAg in Q2 2025, despite a **24% decrease in market hogs sold**[192](index=192&type=chunk)[198](index=198&type=chunk) [NOTE 3: DISCONTINUED OPERATIONS](index=15&type=section&id=NOTE%203%3A%20DISCONTINUED%20OPERATIONS) Explains the carve-out of Smithfield's European operations to WH Group and their presentation as discontinued operations - Smithfield completed the carve-out and distribution of its European operations to WH Group on August 26, 2024, which is now reported as discontinued operations[41](index=41&type=chunk) Net Income from Discontinued Operations (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Sales | $— | $926 | | Gross profit | $— | $143 | | Operating profit | $— | $90 | | Net income from discontinued operations | $— | $47 | Net Income from Discontinued Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Sales | $— | $1,735 | | Gross profit | $— | $240 | | Operating profit | $— | $146 | | Net income from discontinued operations | $— | $89 | [NOTE 4: ACQUISITION AND DISPOSITIONS](index=16&type=section&id=NOTE%204%3A%20ACQUISITION%20AND%20DISPOSITIONS) Describes Smithfield's acquisition of a dry sausage facility and the closure of two other facilities to optimize production - Acquired a dry sausage production facility in Nashville, Tennessee, for **$38 million** on July 30, 2024, to grow the value-added packaged meats business[47](index=47&type=chunk) - Closed the Elizabeth, New Jersey dry sausage production facility on June 30, 2025, and the Altoona, Iowa ham boning facility on August 30, 2024, to consolidate production and improve manufacturing efficiencies, with associated charges being immaterial[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) [NOTE 5: OPERATING GAINS AND NON-OPERATING (GAINS) LOSSES](index=17&type=section&id=NOTE%205%3A%20OPERATING%20GAINS%20AND%20NON-OPERATING%20%28GAINS%29%20LOSSES) Details the components of operating gains and non-operating gains/losses, primarily from insurance recoveries and retirement plan assets Operating Gains (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Insurance recoveries | $(29) | $(1) | | Other operating gains | $(1) | $(1) | | Total Operating gains | $(30) | $(2) | Non-operating (Gains) Losses (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Gain on nonqualified retirement plan assets | $(8) | $(3) | | Net pension and postretirement benefits cost | $4 | $2 | | Total Non-operating (gains) losses | $(4) | $(2) | - Operating gains in Q2 2025 included a **$29 million gain** from a litigation insurance settlement and a **$6 million gain** from a 2021 fire insurance settlement in Q1 2025[52](index=52&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) [NOTE 6: RESTRUCTURING](index=17&type=section&id=NOTE%206%3A%20RESTRUCTURING) Outlines the Hog Production Reform initiatives, including partnerships, workforce reductions, and office closures, and associated charges - Hog Production Reform involved ceasing certain farm operations, terminating agreements with underperforming contract farmers, and reducing the size of the hog production business[53](index=53&type=chunk) - Became a member of Murphy Family Farms LLC (**25% minority interest**) and VisionAg Hog Production, LLC (**9% minority interest**), which now supply approximately **3.2 million** and **600,000 hogs annually**, respectively[54](index=54&type=chunk)[55](index=55&type=chunk) Hog Production Reform Charges (Six Months Ended) | Type of Cost | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Accelerated depreciation | $1 | $— | | Contract termination costs | $— | $8 | | Employee termination benefits | $— | $2 | | Total | $1 | $10 | - Implemented a workforce reduction in Q1 2025, recognizing **$9 million in employee termination benefits** (**$6 million in SG&A**, **$2 million in cost of sales**)[58](index=58&type=chunk) - Announced closure of Lisle, Illinois and Kansas City, Missouri satellite offices in Q2 2025, accruing **$4 million in employee termination benefits** in SG&A[59](index=59&type=chunk) [NOTE 7: EMPLOYEE RETENTION TAX CREDITS](index=18&type=section&id=NOTE%207%3A%20EMPLOYEE%20RETENTION%20TAX%20CREDITS) Reports the recognition of employee retention tax credits under the CARES Act and their classification in cost of sales Employee Retention Tax Credits Recognized | Period | Amount (in millions) | | :--- | :--- | | Three Months Ended June 29, 2025 | $10 | | Three Months Ended June 30, 2024 | $87 | | Six Months Ended June 29, 2025 | $10 | | Six Months Ended June 30, 2024 | $87 | - The majority of these credits were classified in cost of sales, with **$1 million in Q2 2024** classified in SG&A[61](index=61&type=chunk) [NOTE 8: ACCOUNTS RECEIVABLE](index=18&type=section&id=NOTE%208%3A%20ACCOUNTS%20RECEIVABLE) Provides details on the composition and changes in Smithfield's net accounts receivable Accounts Receivable, Net | Metric | June 29, 2025 (in millions) | December 29, 2024 (in millions) | | :--- | :--- | :--- | | Accounts receivable, net | $773 | $558 | | Receivables from contracts with customers | $718 | $494 | - The allowance for credit losses was not material for the periods presented[63](index=63&type=chunk) [NOTE 9: INVENTORIES](index=19&type=section&id=NOTE%209%3A%20INVENTORIES) Details the composition and changes in Smithfield's net inventories, including fresh meats, livestock, and grains Inventories, Net (in millions) | Category | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Fresh and packaged meats | $1,221 | $1,006 | | Livestock | $710 | $949 | | Grains | $100 | $208 | | Maintenance parts | $119 | $115 | | Manufacturing supplies | $116 | $115 | | Other | $22 | $19 | | **Inventories, net** | **$2,288** | **$2,412** | [NOTE 10: DERIVATIVE FINANCIAL INSTRUMENTS](index=19&type=section&id=NOTE%2010%3A%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Explains Smithfield's use of derivative instruments to manage commodity, interest rate, and foreign currency risks, and their fair values - Smithfield hedges commodity prices (live hogs, corn, soybean meal, wheat, fuel, energy), interest rates, and foreign exchange rates to mitigate price risk[65](index=65&type=chunk) Fair Values of Open Derivative Financial Instruments (in millions) | Category | June 29, 2025 (Assets) | December 29, 2024 (Assets) | June 29, 2025 (Liabilities) | December 29, 2024 (Liabilities) | | :--- | :--- | :--- | :--- | :--- | | Commodity contracts (hedge accounting) | $12 | $13 | $74 | $37 | | Commodity contracts (mark-to-market) | $1 | $2 | $16 | $7 | | **Total fair value of derivative instruments** | **$13** | **$15** | **$91** | **$44** | Derivative Impact on Condensed Consolidated Statements of Income (Three Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Total derivative loss recognized in sales | $(25) | $(5) | | Total derivative gain (loss) recognized in cost of sales | $4 | $(5) | | Total derivative loss | $(23) | $(9) | Derivative Impact on Condensed Consolidated Statements of Income (Six Months Ended) | Item | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Total derivative loss recognized in sales | $(27) | $(17) | | Total derivative gain (loss) recognized in cost of sales | $8 | $(10) | | Total derivative loss | $(22) | $(25) | [NOTE 11: EQUITY METHOD INVESTMENTS](index=23&type=section&id=NOTE%2011%3A%20EQUITY%20METHOD%20INVESTMENTS) Describes Smithfield's minority interests in Murphy Family Farms and VisionAg, and the sale process for Monarch Bio Energy - Smithfield acquired a **25% minority interest** in Murphy Family Farms and a **9% minority interest** in VisionAg, both accounted for using the equity method[79](index=79&type=chunk)[80](index=80&type=chunk) - A sale notice was delivered for Monarch Bio Energy, LLC, requiring the joint venture to pursue a sale by January 17, 2026, after which TPG may require Monarch to purchase its ownership interests[82](index=82&type=chunk) [NOTE 12: DEBT](index=24&type=section&id=NOTE%2012%3A%20DEBT) Details Smithfield's refinanced Senior Revolving Credit Facility, Accounts Receivable Securitization Facility, and the termination of its Monetization Facility - Refinanced the **$2,100 million Senior Revolving Credit Facility** in February 2025, extending maturity to February 12, 2030, with no subsidiary guarantors[83](index=83&type=chunk) - Maintains a **$225 million Accounts Receivable Securitization Facility**, maturing in November 2027, with **$28 million in letters of credit** issued as of June 29, 2025[85](index=85&type=chunk) - Terminated the **$250 million Accounts Receivable Monetization Facility** on July 22, 2025, as it was no longer cost-effective or necessary given the company's liquidity position[89](index=89&type=chunk) Charges from Monetization Facility (in millions) | Period | Charges | | :--- | :--- | | Three Months Ended June 29, 2025 | $3 | | Three Months Ended June 30, 2024 | $4 | | Six Months Ended June 29, 2025 | $6 | | Six Months Ended June 30, 2024 | $7 | [NOTE 13: LEASES](index=25&type=section&id=NOTE%2013%3A%20LEASES) Reports the amendment of hog farmer contracts, extending lease terms and increasing lease obligations - Amended terms of approximately **700 contracts** with independent hog farmers in Q2 2025, extending the noncancellable term to three years[90](index=90&type=chunk) - The incremental lease obligation associated with these agreements was **$58 million** as of June 29, 2025, with **$13 million** recorded as current and the remainder as long-term[90](index=90&type=chunk) [NOTE 14: GUARANTEES](index=25&type=section&id=NOTE%2014%3A%20GUARANTEES) Notes Smithfield's release from its guaranty of Monarch Bio Energy, LLC's debt following refinancing - Smithfield was released from its guaranty of Monarch Bio Energy, LLC's debt in June 2025 after Monarch refinanced its debt facility[91](index=91&type=chunk) [NOTE 15: INCOME TAXES](index=25&type=section&id=NOTE%2015%3A%20INCOME%20TAXES) Discusses Smithfield's effective tax rate for continuing operations and the impact of new tax legislation Effective Tax Rate Attributable to Continuing Operations | Period | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Second Quarter | 24.6% | 18.2% | | First Six Months | 24.0% | 20.5% | - The increase in the effective tax rate was driven by increased profitability, a settlement with state tax authorities, and the disallowance of certain officers' compensation[92](index=92&type=chunk) - The 'One Big Beautiful Bill' (Tax Relief for American Families and Workers Act of 2025) was signed into law on July 4, 2025, permanently reinstating **100% bonus depreciation**, immediate expensing of R&D, and restoring EBITDA-based limitation for interest deduction; Smithfield is evaluating its impact for Q3 2025[93](index=93&type=chunk)[94](index=94&type=chunk) [NOTE 16: PENSION AND OTHER RETIREMENT PLANS](index=26&type=section&id=NOTE%2016%3A%20PENSION%20AND%20OTHER%20RETIREMENT%20PLANS) Details the net periodic pension cost and its components for Smithfield's retirement plans Net Periodic Pension Cost (in millions) | Component | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $25 | $25 | $50 | $49 | | Amortization | $5 | $5 | $11 | $9 | | Service cost | $3 | $3 | $6 | $6 | | Expected return on plan assets | $(26) | $(28) | $(53) | $(55) | | **Net periodic pension cost** | **$7** | **$5** | **$14** | **$10** | [NOTE 17: REDEEMABLE NONCONTROLLING INTERESTS](index=26&type=section&id=NOTE%2017%3A%20REDEEMABLE%20NONCONTROLLING%20INTERESTS) Explains the classification and changes in redeemable noncontrolling interests, primarily related to Altosano - Redeemable noncontrolling interests are classified outside of equity on the condensed consolidated balance sheets and are adjusted to redemption value at the end of each period[97](index=97&type=chunk) Changes in Redeemable Noncontrolling Interests (in millions) | Item | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Beginning balance | $225 | $246 | | Attribution of net income | $4 | $2 | | Attribution of comprehensive income (loss) | $15 | $(16) | | Adjustment to redemption value | $1 | $34 | | **Ending balance** | **$245** | **$265** | [NOTE 18: EQUITY](index=26&type=section&id=NOTE%2018%3A%20EQUITY) Details Smithfield's stock split, IPO, equity-based incentive awards, and changes in accumulated other comprehensive loss - A **380,069.232-for-one stock split** was approved and effected on January 17, 2025, retroactively adjusting all share and per share amounts[99](index=99&type=chunk)[101](index=101&type=chunk) - Completed an IPO on January 29, 2025, issuing **13,043,479 shares of common stock at $20.00 per share**, generating net proceeds of **$236 million**[102](index=102&type=chunk) - Granted stock options (**9,822,467 shares**) and RSUs (**1,527,000 units**) in connection with the IPO, recognizing **$2 million** and **$4 million** in compensation expense for the three and six months ended June 29, 2025, respectively[103](index=103&type=chunk) Accumulated Other Comprehensive Loss (in millions) | Component | June 29, 2025 | December 30, 2024 | | :--- | :--- | :--- | | Foreign Currency Translation | $21 | $(8) | | Pension Accounting | $(410) | $(418) | | Hedge Accounting | $(43) | $(26) | | **Total Accumulated Other Comprehensive Loss** | **$(432)** | **$(452)** | [NOTE 19: EARNINGS PER SHARE](index=31&type=section&id=NOTE%2019%3A%20EARNINGS%20PER%20SHARE) Explains the calculation of basic and diluted EPS, including the impact of the IPO and stock options Weighted-Average Shares Outstanding | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Basic weighted-average shares outstanding | 393,112,711 | 380,069,232 | 390,962,687 | 380,069,232 | | Diluted weighted-average shares outstanding | 393,751,294 | 380,069,232 | 391,410,859 | 380,069,232 | - Approximately **7.7 million** and **6.5 million stock options** were excluded from diluted EPS computation for the three and six months ended June 29, 2025, respectively, as their effect would have been anti-dilutive[116](index=116&type=chunk) [NOTE 20: FAIR VALUE MEASUREMENTS](index=32&type=section&id=NOTE%2020%3A%20FAIR%20VALUE%20MEASUREMENTS) Describes Smithfield's fair value measurements for financial instruments and the valuation of noncontrolling interests using a three-level hierarchy - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[115](index=115&type=chunk)[117](index=117&type=chunk) Assets and Liabilities Measured at Fair Value on a Recurring Basis (June 29, 2025, in millions) | Category | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Commodity derivative contracts | $5 | $8 | $— | $13 | | Mutual funds | $67 | $— | $— | $77 | | Insurance contracts | $— | $110 | $— | $110 | | **Total Assets** | **$72** | **$118** | **$—** | **$200** | | **Liabilities:** | | | | | | Commodity derivative contracts | $64 | $26 | $— | $90 | | **Total Liabilities** | **$64** | **$26** | **$—** | **$91** | Significant Unobservable Level 3 Inputs for Altosano Valuation | Unobservable Inputs | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Weighted-average cost of capital | 10 % | 9 % | | Growth rate | 3 % | 3 % | | EBITDA multiple | 9.25x | 10x | | Control premium | 25 % | 25 % | Fair Value and Carrying Value of Debt (in millions) | Item | June 29, 2025 (Fair Value) | June 29, 2025 (Carrying Value) | December 29, 2024 (Fair Value) | December 29, 2024 (Carrying Value) | | :--- | :--- | :--- | :--- | :--- | | Debt | $1,882 | $1,984 | $1,821 | $1,983 | [NOTE 21: REGULATION AND CONTINGENCIES](index=35&type=section&id=NOTE%2021%3A%20REGULATION%20AND%20CONTINGENCIES) Details Smithfield's contingent liabilities from litigation, including antitrust lawsuits, and insurance recoveries - Contingent liabilities related to litigation matters totaled **$194 million** as of June 29, 2025, an increase from **$141 million** at December 29, 2024[133](index=133&type=chunk) - Recorded **$80 million in charges** for litigation matters in SG&A for the three and six months ended June 29, 2025[133](index=133&type=chunk) - Settled all class claims in the antitrust price-fixing litigation with aggregate payments of **$194 million**, with 22 non-class cases currently pending that the company intends to vigorously defend against[134](index=134&type=chunk)[135](index=135&type=chunk) - The Maxwell Foods litigation, involving breach of contract claims, was dismissed with prejudice on June 30, 2025, ending the litigation[144](index=144&type=chunk) - Received **$29 million in insurance proceeds** in Q2 2025 for recovery of losses from past litigation and **$6 million in Q1 2025** for a 2021 fire, recognized as operating gains[146](index=146&type=chunk)[147](index=147&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=38&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Smithfield's financial performance, condition, and operational results for Q2 and H1 2025, covering key factors, segment performance, liquidity, and non-GAAP measures [Overview](index=38&type=section&id=Overview) Describes Smithfield Foods, Inc. as an American food company with operations in Packaged Meats, Fresh Pork, and Hog Production, and a majority-owned subsidiary of WH Group - Smithfield Foods, Inc. is an American food company with approximately **32,000 employees in the U.S.** and **2,500 in Mexico**[149](index=149&type=chunk) - The company operates through three reportable segments: Packaged Meats, Fresh Pork, and Hog Production, with additional operations in Mexico and Bioscience aggregated as 'Other'[150](index=150&type=chunk) - The Packaged Meats segment sources approximately **80% of its raw materials** from the Fresh Pork segment, while the Fresh Pork segment sourced approximately **40% of its raw materials** from Hog Production in H1 2025 (down from 50% in H1 2024)[150](index=150&type=chunk)[151](index=151&type=chunk) [Growth Strategies](index=39&type=section&id=Growth%20Strategies) Outlines Smithfield's strategies for profitable growth in Packaged Meats, enhancing Fresh Pork profitability, innovation, operational efficiency, and M&A - Key growth strategies include driving growth in the Packaged Meats segment, enhancing Fresh Pork profitability, investing in innovation, optimizing operational and supply chain efficiencies, and executing synergistic M&A[154](index=154&type=chunk)[158](index=158&type=chunk) [Key Factors and Recent Developments Affecting Our Results of Operations and Financial Condition](index=39&type=section&id=Key%20Factors%20and%20Recent%20Developments%20Affecting%20Our%20Results%20of%20Operations%20and%20Financial%20Condition) Details the primary drivers influencing Smithfield's financial performance, including sales strategies, raw material costs, tariffs, litigation, tax legislation, and corporate actions [Sales Drivers](index=39&type=section&id=Sales%20Drivers) Explains how Smithfield drives sales in Packaged Meats through market penetration and innovation, and in Fresh Pork through global consumption and diverse channels - Packaged Meats sales are driven by increasing household penetration, consumption, price point, and product offerings, with a shift towards value-added and margin-accretive products[155](index=155&type=chunk) - Fresh Pork external sales are driven by consistent global pork consumption, maximizing hog value, and leveraging retail, foodservice, industrial, and export channels[157](index=157&type=chunk) [Cost Factors](index=39&type=section&id=Cost%20Factors) Discusses raw material costs as the largest component of COGS, hedging strategies, and the optimization of hog production - Raw materials (feed ingredients, hogs, pork) are the largest component of cost of goods sold, with prices fluctuating based on market dynamics[158](index=158&type=chunk)[159](index=159&type=chunk) - The company uses hedging transactions to mitigate commodity price risks[159](index=159&type=chunk) - Smithfield is optimizing hog production, reducing internal production from **17.6 million head in 2019** to an expected **11.5 million head in 2025**, representing approximately **40% of Fresh Pork's processed hogs**[160](index=160&type=chunk) [Tariffs](index=40&type=section&id=Tariffs) Addresses the impact of tariffs on Smithfield's export sales to China and the associated trade uncertainties - Export sales to China accounted for approximately **2% of total sales** in the first six months of 2025[163](index=163&type=chunk) - Products exported to China face tariffs ranging from **25% to 57%**, with most products subject to **57% rates**[163](index=163&type=chunk) - Uncertainty exists regarding future tariff rates and trade relations between the U.S. and China[164](index=164&type=chunk) [Litigation](index=40&type=section&id=Litigation) Covers Smithfield's contingent liabilities from litigation, including antitrust matters, and recent charges and insurance recoveries - Contingent liabilities related to litigation matters totaled **$194 million** as of June 29, 2025[167](index=167&type=chunk) - Recorded **$80 million in litigation charges** in SG&A for the three and six months ended June 29, 2025[167](index=167&type=chunk) - Received **$29 million in insurance proceeds** in Q2 2025 for recovery of losses incurred in connection with past litigation, recognized as an operating gain[169](index=169&type=chunk) [One Big Beautiful Bill](index=41&type=section&id=One%20Big%20Beautiful%20Bill) Describes the newly enacted tax legislation, "One Big Beautiful Bill," and its potential impact on Smithfield's financial reporting - The 'One Big Beautiful Bill' was signed into law on July 4, 2025, permanently reinstating **100% bonus depreciation**, immediate expensing of R&D, and restoring EBITDA-based interest deduction limitations[171](index=171&type=chunk)[175](index=175&type=chunk) - Smithfield is evaluating the impact of this legislation and will account for its effects in the third quarter of fiscal year 2025[171](index=171&type=chunk) [Employee Retention Tax Credits](index=41&type=section&id=Employee%20Retention%20Tax%20Credits) Reports the recognition of employee retention tax credits and their classification in cost of sales Employee Retention Tax Credits Recognized (in millions) | Period | Amount | | :--- | :--- | | Second Quarter 2025 | $10 | | Second Quarter 2024 | $87 | - Substantially all credits were classified in cost of sales[172](index=172&type=chunk) [Elizabeth, New Jersey Facility Closure](index=41&type=section&id=Elizabeth%2C%20New%20Jersey%20Facility%20Closure) Details the closure of Smithfield's Elizabeth, New Jersey dry sausage production facility to consolidate operations - Closed the Elizabeth, New Jersey dry sausage production facility on June 30, 2025, to consolidate production across its network[173](index=173&type=chunk) - Costs associated with the closure, primarily equipment disposal, were not material[173](index=173&type=chunk) [Office Closures](index=41&type=section&id=Office%20Closures) Announces Smithfield's plans to close satellite offices in Lisle, Illinois, and Kansas City, Missouri, and consolidate operations - Announced plans in Q2 2025 to close satellite offices in Lisle, Illinois, and Kansas City, Missouri, moving operations to Smithfield, Virginia[174](index=174&type=chunk) - Accrued **$4 million in employee termination benefit costs** in SG&A for personnel not expected to relocate[174](index=174&type=chunk) [Workforce Reduction](index=41&type=section&id=Workforce%20Reduction) Describes Smithfield's Q1 2025 workforce reduction initiative to streamline operations and reduce expenses - Implemented a workforce reduction initiative in Q1 2025 to streamline operations and reduce operating expenses[175](index=175&type=chunk) - Recognized **$9 million in employee termination benefit costs**, with **$6 million in SG&A** and **$2 million in cost of sales**[176](index=176&type=chunk) [Initial Public Offering](index=42&type=section&id=Initial%20Public%20Offering) Details Smithfield's January 2025 IPO, including shares issued, net proceeds, and equity-based incentive awards - Completed an IPO on January 29, 2025, issuing **13,043,479 shares of common stock at $20.00 per share**, resulting in **393,112,711 total outstanding shares**[177](index=177&type=chunk) - Received net proceeds of **$236 million** from the IPO[177](index=177&type=chunk) - Granted **9,822,467 stock options** and **1,527,000 RSUs**, recognizing **$2 million** and **$4 million** in compensation expense for the three and six months ended June 29, 2025, respectively[177](index=177&type=chunk) [Altoona, Iowa Facility Closure](index=42&type=section&id=Altoona%2C%20Iowa%20Facility%20Closure) Reports the closure of Smithfield's Altoona, Iowa ham boning facility to consolidate production and improve efficiencies - Closed the Altoona, Iowa ham boning facility on August 30, 2024, to consolidate production volume into other locations[178](index=178&type=chunk) - Costs associated with the closure, primarily related to operating lease assets and equipment disposal, were not material[178](index=178&type=chunk) [European Carve-Out](index=42&type=section&id=European%20Carve-Out) Explains the completion of Smithfield's European operations carve-out to WH Group and their reporting as discontinued operations - Completed the carve-out and transfer of European operations to WH Group on August 26, 2024, with no gain or loss recognized[179](index=179&type=chunk) - Historical results of European operations are reported as discontinued operations in the condensed consolidated financial statements[179](index=179&type=chunk) [Dry Sausage Facility Acquisition](index=42&type=section&id=Dry%20Sausage%20Facility%20Acquisition) Details Smithfield's acquisition of a dry sausage production facility in Nashville, Tennessee, to expand its value-added packaged meats business - Acquired a dry sausage production facility in Nashville, Tennessee, for **$38 million** on July 30, 2024[180](index=180&type=chunk) - The acquisition is part of a strategy to grow the value-added packaged meats business and meet demand for dry sausage products[180](index=180&type=chunk) [Hog Production Reform](index=42&type=section&id=Hog%20Production%20Reform) Outlines Smithfield's Hog Production Reform initiatives, including partnerships and associated charges, to optimize operations - Hog Production Reform began in 2023 to optimize operations and improve cost structure, involving cessation of farm operations and termination of underperforming contract farmer agreements[181](index=181&type=chunk) - Became a member of Murphy Family Farms LLC (**25% minority interest**) and VisionAg Hog Production, LLC (**9% minority interest**), which now supply approximately **3.2 million** and **600,000 hogs annually**, respectively[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) - Recognized **$10 million in charges** associated with Hog Production Reform in cost of sales for the six months ended June 30, 2024[185](index=185&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Analyzes Smithfield's consolidated and segment-specific sales, operating profit, and net income for Q2 and H1 2025 [Consolidated Results of Continuing Operations](index=43&type=section&id=Consolidated%20Results%20of%20Continuing%20Operations) Presents Smithfield's consolidated sales, gross profit, operating profit, and net income from continuing operations for Q2 and H1 2025 Consolidated Results of Continuing Operations (Three Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales | $3,786 | $3,412 | $374 | 11.0% | | Cost of sales | $3,288 | $2,885 | $403 | 14.0% | | Gross profit | $499 | $527 | $(28) | (5.4%) | | Operating profit | $260 | $334 | $(74) | (22.2%) | | Net income from continuing operations attributable to Smithfield | $188 | $256 | $(68) | (26.4%) | Consolidated Results of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,558 | $6,856 | $701 | 10.2% | | Cost of sales | $6,549 | $5,967 | $582 | 9.8% | | Gross profit | $1,008 | $889 | $119 | 13.4% | | Operating profit | $582 | $498 | $84 | 16.8% | | Net income from continuing operations attributable to Smithfield | $412 | $370 | $42 | 11.3% | [Operating Profit by Segment](index=44&type=section&id=Operating%20Profit%20by%20Segment) Provides a breakdown of operating profit (loss) for Smithfield's Packaged Meats, Fresh Pork, Hog Production, and Other segments Operating Profit (Loss) by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $301 | $330 | $(29) | (8.7%) | | Fresh Pork | $35 | $58 | $(23) | (39.3%) | | Hog Production | $22 | $(2) | $24 | NM | | Other | $7 | $7 | $1 | 8.5% | | Corporate expenses | $(26) | $(32) | $6 | 17.9% | | Unallocated | $(80) | $(27) | $(53) | (200.1%) | | **Operating profit** | **$260** | **$334** | **$(74)** | **(22.2%)** | Operating Profit (Loss) by Segment (Six Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $567 | $616 | $(49) | (7.9%) | | Fresh Pork | $117 | $168 | $(51) | (30.4%) | | Hog Production | $23 | $(176) | $199 | NM | | Other | $22 | $(2) | $23 | NM | | Corporate expenses | $(55) | $(64) | $9 | 13.6% | | Unallocated | $(92) | $(44) | $(47) | (106.4%) | | **Operating profit** | **$582** | **$498** | **$84** | **16.8%** | [Sales Analysis](index=44&type=section&id=Sales%20Analysis) Analyzes sales performance across Smithfield's segments, highlighting drivers such as volume, pricing, and new partnerships Sales by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $2,079 | $1,945 | $134 | 6.9% | | Fresh Pork | $2,080 | $1,981 | $99 | 5.0% | | Hog Production | $840 | $776 | $65 | 8.4% | | Other | $120 | $119 | $1 | 1.2% | | Consolidated sales | $3,786 | $3,412 | $374 | 11.0% | - Packaged Meats sales increased by **6.9% in Q2 2025** due to a **4.5% increase in sales volume** (higher holiday ham sales) and a **2.3% increase in average sales price**[190](index=190&type=chunk) - Hog Production sales increased by **8.4% in Q2 2025**, driven by a **$116 million increase in grain and feed sales** and **$103 million in other sales** to Murphy Family Farms and VisionAg, offsetting a **24% decrease in market hogs sold**[192](index=192&type=chunk)[198](index=198&type=chunk) - Hog Production sales increased by **19.6% in H1 2025**, driven by **$271 million in sales** to Murphy Family Farms and VisionAg, a **$189 million increase in grain and feed sales**, and an **8.2% increase in average market hog sales price**, offsetting a **22% decrease in market hogs sold**[196](index=196&type=chunk)[199](index=199&type=chunk) [Cost of Sales Analysis](index=46&type=section&id=Cost%20of%20Sales%20Analysis) Examines the factors influencing Smithfield's cost of sales, including raw material prices, sales volume, and employee retention tax credits Cost of Sales by Segment (Three Months Ended) | Segment | June 29, 2025 (in millions) | June 30, 2024 (in millions) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $1,690 | $1,518 | $173 | 11.4% | | Fresh Pork | $2,005 | $1,878 | $127 | 6.8% | | Hog Production | $808 | $766 | $42 | 5.5% | | Other | $107 | $107 | $— | 0.0% | | Consolidated cost of sales | $3,288 | $2,885 | $403 | 14.0% | - Packaged Meats cost of sales increased by **$173 million in Q2 2025** due to a **$146 million increase in raw material costs** and a **$32 million decrease in employee retention tax credits**[201](index=201&type=chunk)[202](index=202&type=chunk) - Hog Production cost of sales increased by **$42 million in Q2 2025**, driven by **$115 million in grain and feed sales costs** and **$108 million in other goods/services sales costs** to Murphy Family Farms and VisionAg, partially offset by a **$103 million decrease in raw material costs** from reduced hog production[201](index=201&type=chunk)[202](index=202&type=chunk) - Hog Production cost of sales increased by **$93 million in H1 2025**, driven by **$260 million in sales costs** to Murphy Family Farms and VisionAg and a **$187 million increase in grain and feed sales costs**, partially offset by a **$227 million decrease in raw material costs** from reduced hog production[204](index=204&type=chunk) [Selling, General and Administrative Expenses Analysis](index=47&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses%20Analysis) Selling, general and administrative (SG&A) expenses increased by $74 million (38.1%) in Q2 2025 and $72 million (18.3%) in H1 2025, primarily due to an $80 million increase in litigation charges and $10 million in employee termination benefits from workforce reduction and office closures Selling, General and Administrative Expenses (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $268 | $194 | $74 | 38.1% | | Six Months Ended | $465 | $393 | $72 | 18.3% | - The increase was primarily driven by an **$80 million increase in the accrual for litigation charges** and **$10 million in employee termination benefits** for workforce reduction and office closures[207](index=207&type=chunk)[209](index=209&type=chunk) [Operating Gains Analysis](index=48&type=section&id=Operating%20Gains%20Analysis) Operating gains significantly increased to $(30) million in Q2 2025 and $(39) million in H1 2025, primarily due to insurance recoveries related to past litigation and a 2021 fire Operating Gains (in millions) | Item | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | Gain on disposal of assets | $— | $— | $(2) | $(1) | | Other operating gains | $(1) | $(1) | $(2) | $(1) | | **Operating gains** | **$(30)** | **$(2)** | **$(39)** | **$(3)** | - Operating gains included a **$29 million gain** from a litigation insurance settlement in Q2 2025 and a **$6 million gain** from a 2021 fire insurance settlement in Q1 2025[210](index=210&type=chunk) [Interest Expense, Net Analysis](index=48&type=section&id=Interest%20Expense%2C%20Net%20Analysis) Net interest expense decreased by $9 million (45.0%) in Q2 2025 and $13 million (37.1%) in H1 2025, primarily due to higher levels of cash and cash equivalents earning interest Interest Expense, Net (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $11 | $19 | $(9) | (45.0%) | | Six Months Ended | $22 | $35 | $(13) | (37.1%) | - The decrease was driven by higher levels of cash and cash equivalents earning interest[211](index=211&type=chunk) [Non-operating (Gains) Losses Analysis](index=48&type=section&id=Non-operating%20%28Gains%29%20Losses%20Analysis) Non-operating (gains) losses shifted to a loss of $4 million in Q2 2025 and a gain of $2 million in H1 2025, primarily influenced by gains on nonqualified retirement plan assets and net pension and postretirement benefits costs Non-operating (Gains) Losses (in millions) | Item | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gain on nonqualified retirement plan assets | $(8) | $(3) | $(6) | $(9) | | Net pension and postretirement benefits cost | $4 | $2 | $8 | $3 | | **Non-operating (gains) losses** | **$(4)** | **$(2)** | **$2** | **$(6)** | [Income Tax Expense Analysis](index=48&type=section&id=Income%20Tax%20Expense%20Analysis) Income tax expense increased by $5 million (8.4%) in Q2 2025 and $38 million (39.1%) in H1 2025, primarily due to higher earnings. The effective tax rate for continuing operations increased to 24.6% in Q2 2025 and 24.0% in H1 2025, driven by increased profitability, a state tax settlement, and disallowance of certain officers' compensation Income Tax Expense (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $62 | $58 | $5 | 8.4% | | Six Months Ended | $134 | $96 | $38 | 39.1% | Effective Tax Rate Attributable to Continuing Operations | Period | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Second Quarter | 24.6% | 18.2% | | First Six Months | 24.0% | 20.5% | [Loss from Equity Method Investments Analysis](index=48&type=section&id=Loss%20from%20Equity%20Method%20Investments%20Analysis) Loss from equity method investments increased by $3 million in Q2 2025 and $7 million in H1 2025, primarily due to losses incurred by Murphy Family Farms Loss from Equity Method Investments (in millions) | Period | June 29, 2025 | June 30, 2024 | $ Change | | :--- | :--- | :--- | :--- | | Three Months Ended | $3 | $— | $3 | | Six Months Ended | $8 | $1 | $7 | - The increase in loss was primarily due to losses incurred by Murphy Family Farms[214](index=214&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses Smithfield's liquidity position, credit facilities, cash flow activities, and anticipated cash requirements [Overview of Liquidity](index=49&type=section&id=Overview%20of%20Liquidity) Provides an overview of Smithfield's strong liquidity position, including cash and committed credit facilities - As of June 29, 2025, Smithfield had **$3,225 million of available liquidity**, comprising **$928 million in cash and cash equivalents** and **$2,297 million from committed credit facilities**[216](index=216&type=chunk)[217](index=217&type=chunk) - The company believes its current liquidity is strong and sufficient to meet working capital needs and financial obligations for at least the next twelve months[216](index=216&type=chunk) [Credit Facilities](index=49&type=section&id=Credit%20Facilities) Details Smithfield's refinanced Senior Revolving Credit Facility and Accounts Receivable Securitization Facility, and covenant compliance - Refinanced the **$2,100 million Senior Revolving Credit Facility** in February 2025, extending maturity to February 12, 2030[218](index=218&type=chunk) - The Senior Revolving Credit Facility includes financial maintenance covenants for a maximum total consolidated leverage ratio of **0.50 to 1.00** and a minimum interest coverage ratio of **3.50 to 1.00**[218](index=218&type=chunk) - Maintains a **$225 million Accounts Receivable Securitization Facility**, maturing in November 2027, with **$28 million in letters of credit** issued as of June 29, 2025[220](index=220&type=chunk)[221](index=221&type=chunk) [Monetization Facility](index=50&type=section&id=Monetization%20Facility) Explains the termination of Smithfield's Accounts Receivable Monetization Facility due to sufficient liquidity and cost-effectiveness - Terminated the uncommitted **$250 million Accounts Receivable Monetization Facility** on July 22, 2025[224](index=224&type=chunk) - The termination was due to Smithfield's strong liquidity position and internal capital resources, making the facility no longer cost-effective or necessary[224](index=224&type=chunk) Charges from Monetization Facility (in millions) | Period | Charges | | :--- | :--- | | Three Months Ended June 29, 2025 | $3 | | Three Months Ended June 30, 2024 | $4 | | Six Months Ended June 29, 2025 | $6 | | Six Months Ended June 30, 2024 | $7 | [Cash Flows From Operating Activities of Continuing Operations](index=51&type=section&id=Cash%20Flows%20From%20Operating%20Activities%20of%20Continuing%20Operations) Net cash flows from operating activities of continuing operations significantly increased to $108 million for the six months ended June 29, 2025, from a use of $9 million in the prior year. This improvement was driven by changes in working capital, deferred taxes, and hedging activity, as well as higher earnings Net Cash Flows from Operating Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Net income from continuing operations | $415 | $372 | | Net cash flows from (used in) operating activities of continuing operations | $108 | $(9) | - The increase was primarily driven by changes in working capital (accounts receivable increase due to sales to Murphy Family Farms and VisionAg, inventory decrease due to Hog Production Reform, accounts payable decrease due to seasonal payments, and accrued expenses decrease due to variable compensation payout and litigation accruals)[225](index=225&type=chunk) [Cash Flows From Investing Activities of Continuing Operations](index=52&type=section&id=Cash%20Flows%20From%20Investing%20Activities%20of%20Continuing%20Operations) Net cash flows used in investing activities of continuing operations decreased to $171 million for the six months ended June 29, 2025, from $215 million in the prior year. This was mainly due to lower capital expenditures and reduced net expenditures from breeding stock transactions Net Cash Flows Used in Investing Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Capital expenditures | $(158) | $(173) | | Net expenditures from breeding stock transactions | $(13) | $(42) | | **Net cash flows used in investing activities of continuing operations** | **$(171)** | **$(215)** | - Capital expenditures primarily consisted of plant automation and improvement projects[226](index=226&type=chunk) [Cash Flows From Financing Activities of Continuing Operations](index=52&type=section&id=Cash%20Flows%20From%20Financing%20Activities%20of%20Continuing%20Operations) Net cash flows from financing activities of continuing operations significantly improved to $38 million for the six months ended June 29, 2025, compared to a use of $202 million in the prior year. This was primarily driven by net proceeds from the issuance of common stock (IPO) and lower principal payments on debt, partially offset by dividend payments Net Cash Flows From Financing Activities of Continuing Operations (Six Months Ended) | Metric | June 29, 2025 (in millions) | June 30, 2024 (in millions) | | :--- | :--- | :--- | | Net proceeds from issuance of common stock | $236 | $— | | Principal payments on long-term debt and finance lease obligations | $(1) | $(19) | | Payment of dividends | $(197) | $(182) | | **Net cash flows from (used in) financing activities of continuing operations** | **$38** | **$(202)** | [Other Anticipated or Potential Cash Requirements](index=52&type=section&id=Other%20Anticipated%20or%20Potential%20Cash%20Requirements) Outlines Smithfield's anticipated capital expenditures, dividend payments, and potential cash requirements related to investments and litigation - Anticipates capital expenditures in the range of **$400 million to $500 million for 2025**, including profit improvement projects like packaged meats capacity expansion and automation[228](index=228&type=chunk) - Announced a quarterly dividend of **$0.25 per share** for August 28, 2025, with an anticipated annual dividend rate of **$1.00 per share** for fiscal 2025[229](index=229&type=chunk) - TPG may require Monarch Bio Energy, LLC to purchase TPG's ownership interests if a sale of the joint venture is not consummated by January 17, 2026[230](index=230&type=chunk)[231](index=231&type=chunk) - Noncontrolling interest holders in Altosano have a put option to obligate Smithfield to redeem a portion or all of their interest, valued at **$245 million** as of June 29, 2025[232](index=232&type=chunk) [Risk Management Activities](index=53&type=section&id=Risk%20Management%20Activities) Describes Smithfield's exposure to market risks from commodity prices, interest rates, and foreign exchange rates, and its use of derivatives - Exposed to market risks primarily from changes in commodity prices, and to a lesser degree, interest rates and foreign exchange rates[234](index=234&type=chunk) - Utilizes derivative instruments to hedge exposure to changing prices and rates[234](index=234&type=chunk) - Changes in derivative portfolio value can impact liquidity through margin deposit requirements, with a maximum of **$121 million** held by brokers/counterparties over the past two fiscal years[235](index=235&type=chunk) [Guarantees](index=53&type=section&id=Guarantees) Notes Smithfield's release from its joint and several guaranty of Monarch Bio Energy, LLC's debt - Smithfield was released from its joint and several guaranty of Monarch Bio Energy, LLC's debt in June 2025 after Monarch refinanced its debt[237](index=237&type=chunk) [Non-GAAP Measures](index=53&type=section&id=Non-GAAP%20Measures) Explains Smithfield's use of non-GAAP financial measures to provide a clearer understanding of underlying performance and debt sustainability [Adjusted Net Income from Continuing Operations Attributable to Smithfield and Adjusted Net Income from Continuing Operations per Common Share Attributable to Smithfield](index=54&type=section&id=Adjusted%20Net%20Income%20from%20Continuing%20Operations%20Attributable%20to%20Smithfield%20and%20Adjusted%20Net%20Income%20from%20Continuing%20Operations%20per%20Common%20Share%20Attributable%20to%20Smithfield) Defines adjusted net income and EPS as non-GAAP measures that exclude unusual or infrequent items for better year-over-year comparison - Non-GAAP measures are used to exclude items that are unusual in nature, infrequent in occurrence, or stem from strategic restructuring decisions[240](index=240&type=chunk) Adjusted Net Income from Continuing Operations Attributable to Smithfield (in millions, except per share data) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income from continuing operations attributable to Smithfield | $188 | $256 | $412 | $370 | | Litigation charges | $73 | $— | $73 | $— | | Reduction in workforce (SG&A) | $— | $— | $6 | $— | | Reduction in workforce (Cost of sales) | $— | $— | $2 | $— | | Office closures | $4 | $— | $4 | $— | | Hog Production Reform (Cost of sales) | $— | $— | $2 | $10 | | Employee retention tax credits (Cost of sales) | $(10) | $(86) | $(10) | $(86) | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | Adjusted net income from continuing operations attributable to Smithfield | $217 | $192 | $443 | $315 | | Adjusted net income from continuing operations attributable to Smithfield per diluted common share | $0.55 | $0.51 | $1.13 | $0.83 | [EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations and Adjusted EBITDA Margin from Continuing Operations](index=56&type=section&id=EBITDA%20from%20Continuing%20Operations%2C%20Adjusted%20EBITDA%20from%20Continuing%20Operations%20and%20Adjusted%20EBITDA%20Margin%20from%20Continuing%20Operations) Explains EBITDA and Adjusted EBITDA as non-GAAP measures for assessing operating performance, debt capacity, and efficiency - EBITDA from continuing operations excludes financing and investing activities to provide a comparable year-over-year analysis[242](index=242&type=chunk) - Adjusted EBITDA from continuing operations further excludes discontinued operations, non-operating gains/losses, and other unusual or infrequent items[242](index=242&type=chunk) Adjusted EBITDA from Continuing Operations (in millions, except percentages) | Metric | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income from continuing operations | $188 | $259 | $415 | $372 | | Interest expense, net | $11 | $19 | $22 | $35 | | Income tax expense | $62 | $58 | $134 | $96 | | Depreciation and amortization | $82 | $83 | $165 | $165 | | **EBITDA from continuing operations** | **$344** | **$419** | **$736** | **$668** | | Litigation charges | $73 | $— | $73 | $— | | Employee retention tax credits | $(10) | $(86) | $(10) | $(86) | | Insurance recoveries | $(29) | $(1) | $(35) | $(1) | | **Adjusted EBITDA from continuing operations** | **$381** | **$333** | **$777** | **$594** | | Adjusted EBITDA margin from continuing operations | 10.1 % | 9.7 % | 10.3 % | 8.7 % | [Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations](index=57&type=section&id=Net%20Debt%20and%20Ratio%20of%20Net%20Debt%20to%20Adjusted%20EBITDA%20from%20Continuing%20Operations) Defines net debt and its ratio to adjusted EBITDA as non-GAAP measures for understanding financial position and debt sustainability - Net debt is a non-GAAP measure that helps investors understand the financial position and is used to calculate leverage ratios[246](index=246&type=chunk) - The ratio of net debt to adjusted EBITDA from continuing operations monitors debt sustainability and ability to take on additional debt[246](index=246&type=chunk) Net Debt and Ratio of Net Debt to Adjusted EBITDA from Continuing Operations (in millions, except ratios) | Metric | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | Total debt and finance lease obligations | $2,003 | $2,002 | | Cash and cash equivalents | $(928) | $(943) | | **Net debt** | **$1,075** | **$1,059** | | Adjusted EBITDA from continuing operations (LTM) | $1,562 | $1,379 | | **Ratio of net debt to adjusted EBITDA from continuing operations** | **0.7x** | **0.8x** | [Adjusted Operating Profit and Adjusted Operating Profit Margin](index=57&type=section&id=Adjusted%20Operating%20Profit%20and%20Adjusted%20Operating%20Profit%20Margin) Explains adjusted operating profit and margin as non-GAAP measures to provide a clearer view of underlying operating results by excluding unusual items - Adjusted operating profit and margin provide a better understanding of underlying operating results by excluding unusual or infrequent items and strategic restructuring impacts[248](index=248&type=chunk) Adjusted Operating Profit (Loss) by Segment (Three Months Ended June 29, 2025, in millions, except percentages) | Segment | Operating profit (loss) | Litigation charges | Office closures | Employee retention tax credits | Insurance recoveries | Adjusted operating profit (loss) | Adjusted operating profit (loss) margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $301 | $— | $— | $(5) | $— | $296 | 14.2 % | | Fresh Pork | $35 | $— | $— | $(5) | $— | $30 | 1.4 % | | Hog Production | $22 | $— | $— | $— | $— | $22 | 2.6 % | | Other | $7 | $— | $— | $— | $— | $7 | 6.1 % | | Corporate | $(26) | $— | $— | $— | $— | $(26) | NM | | Unallocated | $(80) | $73 | $4 | $— | $(29) | $(31) | NM | | **Consolidated** | **$260** | **$73** | **$4** | **$(10)** | **$(29)** | **$298** | **7.9 %** | Adjusted Operating Profit (Loss) by Segment (Six Months Ended June 29, 2025, in millions, except percentages) | Segment | Operating profit (loss) | Litigation charges | Workforce reduction | Office closures | Plant closure | Hog Production Reform | Employee retention tax credits | Insurance recoveries | Adjusted operating profit (loss) | Adjusted operating profit (loss) margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Packaged Meats | $567 | $— | $— | $— | $— | $— | $(5) | $— | $562 | 13.7 % | | Fresh Pork | $117 | $— | $— | $— | $— | $— | $(5) | $— | $112 | 2.7 % | | Hog Production | $23 | $— | $— | $— | $— | $— | $— | $— | $23 | 1.3 %

Smithfield Foods' Strategy Execution and Agile Business Model Drive Strong Second Quarter Results SMITHFIELD, Va., August 12, 2025 -- Smithfield Foods, Inc. (Nasdaq: SFD), an American food company and an industry leader in value-added packaged meats and fresh pork, today reported results for its fiscal 2025 second quarter ended June 29, 2025. Second Quarter Fiscal 2025 Financial Highlights First Six Months Fiscal 2025 Financial Highlights CEO Perspective • Net sales of $7.6 billion, up 10.2% from the first ...