SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [Fee Required]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the transition period from __________________ to ____________________.
Commission File No. 0-2258
A. Full title of the plan and the address of the plan, if different
from that of the issuer below:
SMITHFIELD FOODS, INC. 401(k) Plan
B. Name of the issuer of the securities held pursuant to the plan and
the address of the principal executive office:
SMITHFIELD FOODS, INC.
900 DOMINION TOWER
999 WATERSIDE DRIVE
NORFOLK, VA 23510
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Table of Contents
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Page(s)
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Report of Independent Public Accountants 1
Financial Statements
Statements of Net Assets Available for Benefits as of December 31, 1995 and 1994 2
Statement of Changes in Net Assets Available for Benefits, With Fund Information, for
the Year Ended December 31, 1995 3
Notes to Financial Statements and Supplemental Schedules as of December 31, 1995 and
1994 4 - 7
Supplemental Schedules to Financial Statements
Schedule I: Item 27a - Schedule of Assets Held for Investment Purposes as of December
31, 1995 8
Schedule II: Item 27d - Schedule of Reportable Transactions for the Year Ended
December 31, 1995 9
Consent of Independent Public Accountants 10
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Report of Independent Public Accountants
To the Plan Administrator of the
Smithfield Foods, Inc. 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the Smithfield Foods, Inc. 401(k) Plan as of December 31, 1995 and 1994, and
the related statement of changes in net assets available for benefits, with fund
information, for the year ended December 31, 1995. These financial statements
and the schedules referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted accounting
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Smithfield
Foods, Inc. 401(k) Plan as of December 31, 1995 and 1994, and the changes in its
net assets available for benefits, with fund information, for the year ended
December 31, 1995, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the changes in net assets available
for benefits of each fund. The supplemental schedules and fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated, in all material
respects, in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Richmond, Virginia,
September 27, 1996
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Smithfield Foods, Inc. 401(k) Plan
Statements of Net Assets Available for Benefits
As of December 31, 1995 and 1994
1995 1994
----------- -----------
Investments, at fair value:
Money market fund $ 413,084 $ 248,172
Smithfield Foods, Inc. common stock 1,613,554 1,172,311
Mutual funds 1,247,141 624,113
----------- -----------
Total investments 3,273,779 2,044,596
Cash - 16,427
Employee contributions receivable 35,878 -
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Net assets available for benefits $3,309,657 $2,061,023
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The accompanying notes are an integral part of this statement.
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Smithfield Foods, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits,
With Fund Information,
For the Year Ended December 31, 1995
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Participant-Directed
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Money Company Fixed
Market Stock Equity Bond Income
Fund Fund Fund Fund Fund Cash Total
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Additions to net assets
attributed to:
Net appreciation in fair
value of investments - $ 105,670 $135,196 $ 14,829 $ 11,304 $ - $ 266,999
Employee contributions 150,176 493,339 280,007 85,014 30,616 19,451 1,058,603
Interest and dividends 19,122 - 44,799 12,396 8,817 - 85,134
Total additions 169,298 599,009 460,002 112,239 50,737 19,451 1,410,736
Deductions from net assets
attributed to:
Distributions paid to
participants 35,608 65,310 40,601 17,361 3,222 - 162,102
-------- ---------- -------- ---------- -------- ------- ----------
Net increase 133,690 533,699 419,401 94,878 47,515 19,451 1,248,634
Net assets available for
benefits, beginning of year 248,172 1,172,311 393,866 230,247 - 16,427 2,061,023
Transfers (net) 31,222 (92,456) 77,158 (325,125) 309,201 - -
-------- ---------- -------- ---------- -------- ------- ----------
Net assets available for
benefits, end of year $413,084 $1,613,554 $890,425 $ - $356,716 $35,878 $3,309,657
======== ========== ======== ========== ======== ======= ==========
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The accompanying notes are an integral part of this statement.
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Smithfield Foods, Inc. 401(k) Plan
Notes to Financial Statements and Supplemental Schedules
As of December 31, 1995 and 1994
1. Description of the Plan:
The following description of the Smithfield Foods, Inc. 401(k) Plan (the "Plan")
provides general information only. Participants should refer to the Plan
document for a more complete description of the Plan's provisions.
General
The Plan was adopted effective October 1, 1992, and is a defined contribution
plan established by Smithfield Foods, Inc. (the "Company") under the provisions
of Section 401(a) of the Internal Revenue Code ("IRC"), which includes a
qualified cash or deferred arrangement as described in Section 401(k) of the
IRC. The Adopting Employers of this plan are Smithfield Foods, Inc.; The
Smithfield Packing Company, Incorporated; Smithfield Packing Transportation Co.,
Inc.; Smithfield Packing - Landover, Inc.; Gwaltney of Smithfield, Ltd.;
Gwaltney Transportation Co., Inc.; Hancock's Old Fashioned Country Ham, Inc.;
Patrick Cudahy Incorporated; Esskay, Inc.; Brown's of Carolina, Inc.; and
Valleydale Foods, Inc. (collectively, the "Adopting Employers"). The Plan is for
the benefit of eligible employees of the Company and the other Adopting
Employers. The Plan is designed to enable its participants to accumulate and
invest savings on a tax-deferred basis. The Plan provides retirement,
termination, death, and disability benefits. On the effective date, all
full-time employees of the Adopting Employers became participants in the Plan.
Other full-time employees of Adopting Employers automatically become
participants on the entry date following the completion of 90 days of employment
and reaching age 21. Part-time employees of the Adopting Employers become
participants on the entry date following their first employment year in which
they have worked 1,000 hours and reached age 21. High ranking officers are
limited in their participation. Collectively bargained employees are ineligible
to participate.
Plan Administration
The appointed trustee for the Plan is NationsBank of Georgia, N.A. (the
"Trustee"). The Plan is administered by the Company.
Contributions
Plan participants make contributions to the Plan by means of a salary
redirection agreement. Salary may be redirected by an amount not less than 1
percent nor more than 20 percent of base salary. Contributions made are not
included in income reported to the Internal Revenue Service ("IRS") for
individual income tax purposes. The participants will pay taxes on the
contributions as they receive distributions from the Plan.
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Benefits
Upon termination of service due to death, disability, or retirement, a
participant may elect to receive an amount equal to the value of the
participant's vested interest in his or her account. The form of payment is a
single sum cash payment.
Vesting
Participants are always 100 percent vested in their contributions, including
investment gains and losses on those contributions.
Participant Accounts
Individual accounts are maintained for each of the Plan's participants to
reflect the participant's contributions, as well as the participant's share of
the Plan's income and any related administrative expenses. Allocations are based
on the proportion that each participant's account balance has to the total of
all participant's account balances.
Investment Options
Participants may direct their contributions and any related earnings into five
investment options in 1 percent increments. Participants may change their
investment elections at any time. A description of each investment option
available for the year ended December 31, 1995, is provided below:
Money Market Fund: A diversified fund investing in cash equivalent
securities with maturities less than 398 days.
Company Stock Fund: A fund investing in common stock of Smithfield
Foods, Inc.
Equity Fund: A diversified mutual fund that seeks long-term capital
growth with income as a secondary consideration. Normally, 65 percent of
the fund is invested in common stock.
Bond Fund: A diversified mutual fund that seeks a high level of current
income with a relatively stable principal. The portfolio invests
primarily in investment grade and related securities.
Fixed Income Fund: A fixed income collective fund that seeks to maximize
total investment return through the active management of fixed income
securities.
The stated objectives of these funds are not necessarily indicators of actual
performance.
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2. Summary of Significant Accounting Policies:
Basis of Accounting
The accompanying financial statements have been prepared using the accrual basis
of accounting. The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan's management to use
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from these estimates.
Administrative Expenses
Certain administrative expenses of the Plan are paid by the Adopting Employers
listed in Note 1.
Investment Valuation
Investments in securities traded on a national securities exchange are valued at
the last reported sales price on the last business day of the year. Securities
traded in the over-the-counter market and listed securities for which no sale
was reported on the last business day of the year are valued at the last
reported bid price. Investments in money market and mutual funds are stated at
fair value based on quoted market prices.
Net Appreciation in Fair Value of Investments
Net realized and unrealized gains and losses are recorded in the accompanying
statement of changes in net assets available for benefits, with fund
information, as net appreciation in fair value of investments.
3. Investments:
At December 31, 1995, the fair market values of the following investments
represented over 5 percent of net assets available for benefits:
Smithfield Foods, Inc. common stock $ 1,613,554
Nations Value Fund Trust A Shares 890,425
Nations Prime Fund Trust A Shares 413,084
Nations Strategic Fixed Income Fund 356,716
At December 31, 1994, the fair market values of the following investments
represented over 5 percent of net assets available for benefits:
Smithfield Foods, Inc. common stock $1,172,311
Nations Value Fund Trust A Shares 393,866
Nations Prime Fund Trust A Shares 248,172
Nations Managed Bond Fund 230,247
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4. Tax Status:
The IRS issued a determination letter dated December 5, 1995, stating that the
Plan, subject to the following amendments, was in accordance with applicable IRC
requirements. On January 1, 1996, the Company amended the Plan to meet certain
IRS requirements relating to maximum compensation limits. On January 14, 1996,
the Plan was amended to permit certain vice presidents of the Company to
participate in the Plan and to permit employee rollovers. The plan
administration believes that the Plan continues to operate in accordance with
applicable law and is therefore exempt from Federal income taxes under
Provisions of Section 501(a).
5. Plan Termination:
The Adopting Employers anticipate that the Plan will continue without
interruption, but reserve the right to discontinue the Plan subject to Plan
provisions and the applicable provisions of the Employee Retirement Income
Security Act of 1974. In the event that such discontinuance results in
termination of the Plan, the Plan will continue until each participant's account
is distributed.
6. Party-in-Interest Transactions:
The Plan invests in several funds managed by the Plan's Trustee.
The Plan provides an investment option for the participants whereby they can
invest in a fund that solely purchases Smithfield Foods, Inc. common stock. As
described in Note 1, Smithfield Foods, Inc. is an Adopting Employer, as well as
the ultimate parent company for the other Adopting Employers listed.
7. Subsequent Event:
Effective July 29, 1996, Esskay, Inc. became a wholly owned subsidiary of
Gwaltney of Smithfield, Ltd. This merger is not expected to have any
significant effect on the Plan.
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Schedule I
Smithfield Foods, Inc. 401(k) Plan
Item 27a - Schedule of Assets Held for Investment Purposes
As of December 31, 1995
Description of Investments Fair
Cost Value
Money market fund-
Nations Prime Fund Trust A Shares* $ 413,084 $ 413,084
Mutual funds-
Nations Value Fund Trust A Shares* 788,900 890,425
Nations Strategic Fixed Income Fund* 345,593 356,716
Smithfield Foods, Inc., common stock* 1,143,381 1,613,554
* Represents a party-in-interest for the year ended December 31, 1995.
The accompanying notes are an integral part of this schedule.
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Schedule II
Smithfield Foods, Inc. 401(k) Plan
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1995
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Cost of Current Net
Number of Purchase Selling Assets Value of Gain
Identity of Party Involved Purchases Sales Price Price Sold Assets (Loss)
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Individual transactions:
Nations Strategic Fixed Income Fund* 1 - $316,192 $ - $ - $ - $ -
Nations Managed Bond Fund* - 1 - 316,192 316,192 302,558 -
Aggregate transactions:
Smithfield Foods, Inc., common stock* 74 104 585,163 249,590 209,024 293,095 40,566
Nations Value Fund Trust A Shares* 82 67 441,663 80,300 75,045 67,809 5,255
Nations Prime Fund Trust A Shares* 78 75 257,674 92,763 92,763 92,763 -
Nations Managed Bond Fund* 48 54 101,079 346,155 346,628 331,326 (473)
Nations Strategic Fixed Income Fund* 18 22 356,726 11,314 11,132 11,116 182
* Represents a party-in-interest for the year ended December 31, 1995.
The accompanying notes are an integral part of this schedule.
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Consent of Independent Public Accountants
As independent public accountants, we hereby consent to use of our report dated
September 27, 1996, included in this Form 11-K, and incorporated by reference
into the Smithfield Foods, Inc. Corporation's previously filed Registration
Statement File No. 33-53024. It should be noted that we have not audited any
financial statements of Smithfield Foods, Inc. subsequent to April 28, 1996 or
performed any audit procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Richmond, Virginia,
October 15, 1996
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrator of the Plan has caused this Annual Report to be
signed on its behalf by the undersigned thereunto duly authorized.
SMITHFIELD FOODS, INC. 401(K) PLAN
Smithfield Foods, Inc.
(As Plan Administrator)
October 17, 1996 By: /s/ Aaron D. Trub
(Date) --------------------------
Vice President,
Secretary and Treasurer
By: /s/ C. Larry Pope
--------------------------
Vice President and
Controller
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