Highlights   --  Loss from continuing operations was $107.7 million ($.75 per diluted       share) versus a loss of $29.1 million ($.22 per diluted share) in the       prior year   --  Loss from continuing operations, after adjusting for significant       items, was $80.0 million ($.56 per diluted share)   --  Quarterly results include pre-tax impairment charges totaling $34.1       million on Hog Production farm assets and pre-tax debt extinguishment       charges totaling $7.4 million   --  Hog Production losses continued as oversupply and recessionary       conditions in the United States depressed domestic hog prices   --  Packaged meats achieved record first quarter profits   --  Pork segment restructuring activities are on-time and on-budget;       benefits have begun to take hold   --  Liquidity levels remain in excess of $1 billion   --  New $1 billion U.S. credit facility and $625 million bond issue       further strengthens the balance sheet    --  Reduced company U.S. sow herd by an additional 3%, bringing the total       reduction to 13% over the last six quarters   

Following are the company's sales and operating profit (loss) by segment (in millions):

                                               Three Months Ended                                       ------------------------------------                                       August 2,                   July 27,                                         2009                        2008                                       --------                    --------   Sales:                                          (unaudited)    Pork      Fresh Pork                       $1,033.4                    $1,341.2      Packaged Meats                    1,218.4                     1,238.0                                       --------                    --------        Total Pork                      2,251.8                     2,579.2     International                         298.3                       405.3    Hog Production                        552.2                       725.8    Other                                  71.2                        44.2                                       --------                    --------                                        3,173.5                     3,754.5    Intersegment                         (458.2)                     (612.7)                                       --------                    --------        Consolidated sales             $2,715.3                    $3,141.8                                       ========                    ========    Operating profit (loss):    Pork      Fresh Pork                          $(6.8)                      $27.7      Packaged Meats                      107.8                        34.0                                       --------                    --------        Total Pork                        101.0                        61.7     International                           7.3                         5.9    Hog Production                       (162.1)                      (38.8)    Other                                  (4.6)                       (6.7)    Corporate                             (16.4)                      (19.6)                                       --------                    --------        Consolidated operating profit         (loss)                          $(74.8)                       $2.5                                       ========                    ========   

The company reported sales of $2.7 billion versus $3.1 billion in the same period last year and attributed the decline principally to lower volumes, currency fluctuations in its international operations and lower fresh pork selling prices.

The current quarterly results were affected by a number of significant items, including non-cash impairment charges on farm assets and losses on the extinguishment of the old U.S. credit facility. The table below presents the three months ended August 2, 2009, after adjusting the reported loss from continuing operations, before and after tax, and the loss per diluted share adjusted for the impact of significant items.

                                                           Per    (in millions)                      Before     After    Diluted    -------------                      Taxes      Taxes    Share                                      -------    ------    -----    Reported GAAP measure             $(142.7)  $(107.7)   $(.75)     Add back of significant items:      Hog Production impairments         34.1      23.2      .16      Loss on debt extinguishment         7.4       4.5      .03                                      -------    ------    -----    Adjusted Non-GAAP measure         $(101.2)   $(80.0)   $(.56)                                      =======    ======    =====    Commentary  

"This first quarter loss reflects the continuing adverse business environment in the hog production segment of the company's operations. While raising costs have continued to decline and the pork processing segment continues to deliver strong profits, they were not sufficient to offset the negative impact of low hog prices on the hog production business. The sharply lower hog prices reflect the impact of the A(H1N1) outbreak at the end of the prior quarter and softer export demand," said C. Larry Pope, president and chief executive officer.

"We continue to execute the Pork Group restructuring plan on or ahead of schedule. Five of the six plants that were targeted for closure have been closed and the remaining plant will be closed in the third quarter. Smithfield is already benefitting from the Pork Group restructuring plan and we are on track to achieve annual cost savings of approximately $55 million, after applicable restructuring expenses, in fiscal 2010 and $125 million by fiscal 2011," he continued.