WH Group Limited — Annual Report 2016

Mar 29, 2016

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WH Group Limited 萬洲國際有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 288)

FORM 10-K ANNUAL REPORT FOR THE YEAR ENDED JANUARY 3, 2016 OF SMITHFIELD FOODS, INC.

RESULTS OF SMITHFIELD AND FORM 10-K ANNUAL REPORT

As at the date of this announcement, Smithfield Foods, Inc. (“ Smithfield ”) is a corporation incorporated in the Commonwealth of Virginia, the United States and an indirect wholly owned subsidiary of WH Group Limited (the “ Company ”).

As disclosed in the Company’s prospectus dated July 24, 2014, Smithfield voluntarily files with the United States Securities and Exchange Commission (the “ SEC ”) the periodic reports prescribed by the SEC under Section 13(a) of the United States Securities Exchange Act of 1934 (the “ U.S. Exchange Act ”). As an indirect wholly owned subsidiary of the Company, Smithfield is no longer subject to the periodic reporting obligations under the U.S. Exchange Act. However, the indentures governing certain of Smithfield’s senior debts contain covenants that require Smithfield to file such reports as if it were subject to those reporting requirements. Accordingly, Smithfield currently files with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. These reports contain financial and other information regarding Smithfield and its subsidiaries. The periodic reports filed by Smithfield with the SEC are available to the public at the respective internet websites maintained by the SEC and Smithfield.

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Smithfield is expected to file, at or about the same time of this Announcement, its annual report with the SEC under Form 10-K for the year ended January 3, 2016 (the “ Smithfield Annual Report ”). Such audited consolidated condensed financial results have been prepared in accordance with accounting principles generally accepted in the United States (“ US GAAP ”). However, it is important to note that the Company prepares its consolidated financial results in accordance with International Financial Reporting Standards (“ IFRS ”). Accordingly, Smithfield’s results reported herein differ from Smithfield’s results contained in the Company’s consolidated financial statements, which include certain adjustments in order to conform to IFRS. These adjustments include the re-measurement of biological assets from cost to fair value through earnings, the reclassification of numerous balance sheet items primarily reflected in biological assets and deferred taxes, and classification changes within the financial results, primarily for distribution expenses, which have a significant impact on gross margin. Readers are cautioned to consider these differences when reviewing Smithfield’s US GAAP consolidated condensed financial results reported herein.

SUMMARY OF RESULTS OF SMITHFIELD FOR THE YEAR ENDED JANUARY 3, 2016

For the year ended January 3, 2016, Smithfield sold 18.7 million hogs, an increase of 8% from the comparable period in 2014. Hogs processed amounted to 35.1 million heads, an increase of 9% from the comparable period of 2014. Packaged meat sales volume increased 5% to 1.6 million metric tons compared to the comparable period for 2014. Sales for the year ended decreased 3.9% from the comparable period of 2014 to US$14,438.4 million. Net income decreased 18.7% from the comparable period of 2014 to US$452.3 million.

The audited consolidated condensed statements of income for the twelve months ended January 3, 2016 and the consolidated condensed balance sheets as of January 3, 2016 of Smithfield contained in the Smithfield Annual Report are reproduced below:

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SMITHFIELD FOODS, INC. CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(in US$ millions)

(audited)

Sales Cost of sales Gross profit Selling, general and administrative expenses (Income) loss from equity method investments Operating profit Interest expense Non-operating (gain) loss Income before income taxes Income tax expense Net income	Twelve Months Ended January 3, 2016 December 28, 2014 14,438.4 15,031.3 12,683.0 13,255.7 1,755.4 1,775.6 973.3 902.2 (11.7) (58.2) 793.8 931.6 133.8 159.4 12.1 (0.9) 647.9 773.1 195.6 217.0 452.3 556.1

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SMITHFIELD FOODS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS

(in US$ millions, except share data)

(audited)

ASSETS Current assets: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property, plant and equipment, net Goodwill Intangible assets, net Investments Other assets Total assets LIABILITIES AND SHAREHOLDER’S EQUITY Current liabilities: Current portion of long-term debt and capital lease obligations Accrued expenses and other current liabilities Accounts payable Total current liabilities Long-term debt and capital lease obligations Deferred income taxes, net Net long-term pension liability Other liabilities Redeemable non-controlling interests	January 3, 2016 704.9 760.0 2,099.7 176.4 3,741.0 2,867.3 1,619.5 1,365.7 142.5 158.0 9,894.0 30.3 828.3 686.1 1,544.7 2,257.9 668.2 431.5 116.8 53.9	December 28, 2014 433.5 864.0 2,206.8 244.3 3,748.6 2,753.4 1,626.2 1,380.9 498.0 124.4 10,131.5 48.1 745.0 675.1 1,468.2 2,678.5 697.5 574.9 122.2 49.8

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January 3, December 28, 2016 2014

Commitments and contingencies Equity: Shareholder’s equity: Common stock, no par value, 1,000 authorized shares; 1,000 issued and outstanding Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total shareholder’s equity Non-controlling interests Total equity Total liabilities and shareholder’s equity	– 4,185.1 1,013.1 (377.7) 4,820.5 0.5 4,821.0 9,894.0	– 4,167.3 590.8 (218.6) 4,539.5 0.9 4,540.4 10,131.50

If you wish to review the Smithfield Annual Report, please visit http://www.smithfieldfoods.com/investor-relations or http://www.sec.gov. To view a copy of the related earnings release made by Smithfield, please visit http://www.smithfieldfoods.com/investor-relations/sec-filings.

By order of the board of directors of WH Group Limited Chau Ho Company Secretary

Hong Kong, March 29, 2016

As at the date of this announcement, the executive directors of the Company are Mr. WAN Long, Mr. GUO Lijun, Mr. ZHANG Taixi, Mr. SULLIVAN Kenneth Marc and Mr. YOU Mu; the non-executive director of the Company is Mr. JIAO Shuge; and the independent nonexecutive directors of the Company are Mr. HUANG Ming, Mr. LEE Conway Kong Wai and Mr. LAU, Jin Tin Don.

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