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FAIR VALUE MEASUREMENTS | 3 Months Ended
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Jan. 30, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation. Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. The Company’s financial assets and liabilities carried at fair value on a recurring basis as of January 30, 2022, and October 31, 2021, and their level within the fair value hierarchy are presented in the table below.
| Fair Value Measurements at January 30, 2022
in thousands | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets at Fair Value |  |  |  |  |  |  |
Cash and Cash Equivalents (1) | $ | 824,434 |  |  | $ | 822,314 |  |  | $ | 2,120 |  |  | $ | — |
Short-term Marketable Securities (2) | 22,194 |  |  | 10,443 |  |  | 11,751 |  |  | — |
Other Trading Securities (3) | 197,644 |  |  | — |  |  | 197,644 |  |  | — |
Commodity Derivatives (4) | 13,218 |  |  | 7,043 |  |  | 6,175 |  |  | — |
Total Assets at Fair Value | $ | 1,057,490 |  |  | $ | 839,800 |  |  | $ | 217,690 |  |  | $ | — |
Liabilities at Fair Value |  |  |  |  |  |  |
Deferred Compensation (3) | $ | 67,434 |  |  | $ | — |  |  | $ | 67,434 |  |  | $ | — |
Interest Rate Derivatives (5) | 4,949 |  |  | — |  |  | 4,949 |  |  | — |
Total Liabilities at Fair Value | $ | 72,383 |  |  | $ | — |  |  | $ | 72,383 |  |  | $ | — |
| Fair Value Measurements at October 31, 2021
in thousands | Total Fair Value |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Assets at Fair Value |  |  |  |  |  |  |
Cash and Cash Equivalents (1) | $ | 613,530 |  |  | $ | 611,111 |  |  | $ | 2,419 |  |  | $ | — |
Short-term Marketable Securities (2) | 21,162 |  |  | 8,790 |  |  | 12,372 |  |  | — |
Other Trading Securities (3) | 203,020 |  |  | — |  |  | 203,020 |  |  | — |
Commodity Derivatives (4) | 13,522 |  |  | 8,104 |  |  | 5,418 |  |  | — |
Total Assets at Fair Value | $ | 851,234 |  |  | $ | 628,005 |  |  | $ | 223,229 |  |  | $ | — |
Liabilities at Fair Value |  |  |  |  |  |  |
Deferred Compensation (3) | $ | 70,466 |  |  | $ | — |  |  | $ | 70,466 |  |  | $ | — |
Total Liabilities at Fair Value | $ | 70,466 |  |  | $ | — |  |  | $ | 70,466 |  |  | $ | — |
The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above: (1) The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less. Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost. (2) The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds rated AAA held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2. (3) The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. Under the Company's deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options which include equity securities, money market accounts, bond funds or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. applicable federal rates. These liabilities are classified as Level 2. The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans. These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account. These policies are classified as Level 2. The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Condensed Statements of Financial Position. Securities held by the rabbi trust are classified as trading securities. Unrealized gains and losses associated with these investments are included in the Company's earnings. During the quarter ended January 30, 2022, securities held by the rabbi trust generated losses of $5.4 million, compared to a gain of $11.8 million for the quarter ended January 24, 2021. (4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company’s corn futures option contracts are OTC instruments classified as Level 2 whose value is calculated using the Black-Scholes pricing model, corn future prices quoted from the Chicago Board of Trade, and other adjustments to inputs that are observable in active markets. All derivatives are reviewed for potential credit risk and risk of nonperformance. The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Condensed Statements of Financial Position. As of January 30, 2022, the Company has recognized the obligation to return net cash collateral of $16.8 million from various counterparties (including cash of $18.7 million less $1.9 million of realized gain). As of October 31, 2021, the Company had recognized the obligation to return net cash collateral of $10.8 million from various counterparties (including cash of $45.6 million less $34.8 million of realized gain). (5) The Company holds an interest rate hedging position to minimize the risk related to future interest rate changes. The fair value of the outstanding interest rate hedge agreement is based on an observable benchmark interest rate (LIBOR) and therefore classified as Level 2. The Company’s financial assets and liabilities include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Condensed Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $3.2 billion as of January 30, 2022, and $3.3 billion as of October 31, 2021. See Note J - Long Term Debt and Other Borrowing Arrangements for additional information. The Company measures certain nonfinancial assets and liabilities at fair value, which are recognized or disclosed on a nonrecurring basis (e.g. goodwill, intangible assets, and property, plant and equipment). During the quarter ended January 30, 2022, and January 24, 2021, there were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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