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Discontinued Operations | 12 Months Ended
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Dec. 29, 2024
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | DISCONTINUED OPERATIONS On August 26, 2024, we completed a carve-out and distribution of our European operations to WH Group. The European carve-out represents a strategic shift in our geographical footprint. Accordingly, the results of operations, assets and liabilities, and cash flows of the European operations have been condensed into separate line items and presented in the consolidated statements of income, the consolidated balance sheets and the consolidated statements of cash flows as discontinued operations and this treatment has been applied retrospectively to all periods presented. The following table presents the major components of net income from discontinued operations included in the consolidated statements of income.
| Fiscal Year
| 2024 |  | 2023 |  | 2022
| (in millions)
Sales | $ | 2,362 |  |  | $ | 3,337 |  |  | $ | 2,872 |
Cost of sales | 2,037 |  |  | 2,980 |  |  | 2,623 |
Gross profit | 325 |  |  | 357 |  |  | 250 |
Selling, general and administrative expenses | 151 |  |  | 164 |  |  | 144 |
Operating gains | (15) |  |  | (7) |  |  | (2) |
Operating profit | 188 |  |  | 199 |  |  | 108 |
Interest expense | 4 |  |  | 11 |  |  | 9 |
Non-operating losses | — |  |  | 3 |  |  | 2 |
Income from discontinued operations before income taxes | 184 |  |  | 185 |  |  | 97 |
Income tax on discontinued operations (1) | 13 |  |  | 30 |  |  | 27 |
Net income from discontinued operations | $ | 172 |  |  | $ | 155 |  |  | $ | 70 |
________________ (1)Income tax on discontinued operations for 2024 includes a $22 million income tax benefit recognized as a result of the carve-out of our European operations. The following tables present the carrying amounts of the major classes of assets and liabilities of the discontinued operations included in the consolidated balance sheets. Assets
| December 29, 2024 |  | December 31, 2023
Current assets: |  |  |
Cash and cash equivalents | $ | — |  |  | $ | 61 |
Accounts receivable, net | — |  |  | 412 |
Inventories, net | — |  |  | 460 |
Prepaid expenses and other current assets | — |  |  | 25 |
Total current assets | — |  |  | 958 |
Property, plant and equipment, net | — |  |  | 911 |
Goodwill | — |  |  | 253 |
Intangible assets, net | — |  |  | 114 |
Other assets | — |  |  | 69 |
Total long-term assets | $ | — |  |  | $ | 1,347 |
Liabilities
| December 29, 2024 |  | December 31, 2023
Current liabilities: |  |  |
Accounts payable | $ | — |  |  | $ | 182 |
Current portion of long-term debt and finance lease obligations | — |  |  | 68 |
Accrued expenses and other current liabilities | — |  |  | 156 |
Total current liabilities | — |  |  | 406 |
Deferred income taxes, net | — |  |  | 30 |
Long-term debt and finance lease obligations | — |  |  | 8 |
Other liabilities | — |  |  | 48 |
Total long-term liabilities | $ | — |  |  | $ | 86 |
Acquisitions within our Discontinued Operations Prior to the carve-out and distribution of our European operations, we completed several acquisitions, which are included in discontinued operations. Goodies On February 28, 2023, our former European operations purchased Goodies Meat Production S.R.L. (“Goodies”), a Romanian producer of private label packaged meats products, for consideration valued at €29 million ($31 million). The amount paid was €24 million ($26 million) including post-closing adjustments. The consideration includes contingent payments of €5 million, payable upon the achievement of certain earnings targets over a two-year period. Goodies operates a production facility in Ceptura de Jos, Romania and employs 320 people. Their portfolio of products includes salami, ham, bacon, bologna and other meat specialties. DeVeris On May 31, 2023, our former European operations acquired an 80% interest in DeVeris Polska Sp. z o.o. (“DeVeris”), a Polish processor of poultry by-products, for 48 million zł ($11 million). DeVeris operates a production facility in Turek, Poland. The acquisition of DeVeris expanded the vertically integrated business in Poland by enabling further processing of both pork and poultry by-products. Argal On March 28, 2024, our former European operations purchased a 50.1% stake in Argal Alimentacíon, S.A. (“Argal”), a Spanish producer of packaged meats products with approximately 1,480 employees, for €91 million ($98 million), subject to post-closing adjustments. The amount paid at closing was €82 million ($88 million) with the remaining balance due upon finalization of the purchase price. In August 2024, an additional €8 million ($9 million) was paid, which resulted in a final purchase price of €90 million ($97 million). Continuing Involvement In connection with the carve-out of our European operations (“Morliny Foods”), we entered into a transition services agreement that governs certain services Smithfield will provide to Morliny Foods for up to a year subsequent to the carve-out. These services include information technology support, including access and license fees, tax advisory services and financial reporting services, none of which are material to Smithfield. In addition, Smithfield will continue to purchase certain products from Morliny Foods for distribution in the U.S. market. Purchases of these products from Morliny Foods were $45 million, $33 million and $62 million in fiscal years 2024, 2023 and 2022, respectively.

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