XML 49 R34.htm IDEA: XBRL DOCUMENT
v3.23.3

Derivatives and Hedging (Tables) | 12 Months Ended
--- | ---
Oct. 29, 2023
Derivatives and hedging |
Schedule of gross fair values of derivative instruments | The gross fair values of the Company’s derivative instruments designated as hedges are:
In thousands | Location on Consolidated Statements of Financial Position |  | October 29, 2023 |  | October 30, 2022
Commodity Contracts(1) | Other Current Assets |  | $ | (13,233) |  |  | $ | 13,504 |
(1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the commodity derivative on the Consolidated Statements of Financial Position. The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $32.2 million contained within the master netting arrangement. The gross asset position as of October 30, 2022, is offset by the obligation to return net cash collateral of $1.3 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Statements of Financial Position.
Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company’s fair value hedged assets (liabilities) are:
In thousands | Location on Consolidated Statements of Financial Position |  | October 29, 2023 |  | October 30, 2022
Commodity Contracts | Accounts Payable(1) |  | $ | (4,914) |  |  | $ | 5,725 |
Interest Rate Contracts | Current Maturities of Long-term Debt(2) |  | (442,549) |  |  | — |
Interest Rate Contracts | Long-term Debt Less Current Maturities(2) |  | — |  |  | (430,050) |
(1) Represents the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above. (2) Represents the carrying amount of the hedged portion of the 2024 Notes. As of October 29, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $7.5 million from discontinued hedges. In the third quarter of fiscal 2023, the 2024 Notes and the fair value hedging adjustment were reclassified from Long-term Debt less Current Maturities to Current Maturities of Long-term Debt on the Consolidated Statements of Financial Position.
Schedule of gains or losses (before tax) related to derivative instruments | The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are:
|  | Gain/(Loss) Recognized in AOCL(1) |  | Location on Consolidated Statements of Operations |  | Gain/(Loss) Reclassified from AOCL into Earnings(1)
In thousands |  | Fiscal Year Ended |  |  | Fiscal Year Ended
Cash Flow Hedges: |  | October 29, 2023 |  | October 30, 2022 |  |  | October 29, 2023 |  | October 30, 2022
Commodity Contracts |  | $ | (50,353) |  |  | $ | 56,371 |  |  | Cost of Products Sold |  | $ | 1,225 |  |  | $ | 57,592 |
Excluded Component(2) |  | 1,127 |  |  | (4,748) |  |  |  |  | — |  |  | — |
Interest Rate Contracts |  | — |  |  | — |  |  | Interest Expense |  | 988 |  |  | 988 |
(1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value of corn options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL. Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments are:
| Fiscal Year Ended
In thousands | October 29, 2023 |  | October 30, 2022 |  | October 31, 2021
Net Earnings Attributable to Hormel Foods Corporation | $ | 793,572 |  |  | $ | 999,987 |  |  | $ | 908,839 |
Cash Flow Hedges - Commodity Contracts |  |  |  |  |
Gain (Loss) Reclassified from AOCL | 1,225 |  |  | 55,350 |  |  | 31,787 |
Amortization of Excluded Component from Options | (5,835) |  |  | (4,369) |  |  | (3,033) |
Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges(1) | — |  |  | 2,242 |  |  | (743) |
Fair Value Hedges - Commodity Contracts |  |  |  |  |
Gain (Loss) on Commodity Futures(2) | 656 |  |  | (18,122) |  |  | (28,078) |
Total Gain (Loss) on Commodity Contracts(3) | $ | (3,955) |  |  | $ | 35,101 |  |  | $ | (67) |
Cash Flow Hedges - Interest Rate Locks |  |  |  |  |
Gain (Loss) Reclassified from AOCL | 988 |  |  | 988 |  |  | 399 |
Fair Value Hedge - Interest Rate Swap |  |  |  |  |
Gain (Loss) on Interest Rate Swap | — |  |  | 928 |  |  | — |
Amortization of Loss Due to Discontinuance of Fair Value Hedge(4) | (12,499) |  |  | (1,923) |  |  | — |
Total Gain (Loss) on Interest Rate Contracts(5) | $ | (11,511) |  |  | $ | (7) |  |  | $ | 399 |
Total Gain (Loss) Recognized in Earnings | $ | (15,466) |  |  | $ | 35,094 |  |  | $ | 332 |
(1) In fiscal years 2022 and 2021, the Company discontinued hedge accounting related to corn usage that was deemed no longer probable to occur resulting in the immediate recognition of gains of $2.2 million (1.0 million bushels) and losses of $0.7 million (2.8 million bushels), respectively. (2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the year, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. (3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (4) Represents the fair value hedging adjustment amortized through earnings. (5) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.
Cash Flow Hedges |
Derivatives and hedging |
Schedule of outstanding commodity futures contracts | The Company's outstanding contracts related to its commodity hedging programs include:
In millions | October 29, 2023 | October 30, 2022
Corn | 30.7 bushels | 34.3 bushels
Lean Hogs | 144.2 pounds | 177.5 pounds
Natural Gas | 3.0 MMBtu | — MMBtu

X
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 + Details
Name: | us-gaap_DerivativeLineItems
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4E -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-4E Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-4C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-4A + Details
Name: | us-gaap_ScheduleOfDerivativeInstrumentsGainLossInStatementOfFinancialPerformanceTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-4B + Details
Name: | us-gaap_ScheduleOfDerivativeInstrumentsInStatementOfFinancialPositionFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of derivative liabilities at fair value. + References No definition available. + Details
Name: | us-gaap_ScheduleOfDerivativeLiabilitiesAtFairValueTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the notional amounts of outstanding derivative positions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-1A + Details
Name: | us-gaap_ScheduleOfNotionalAmountsOfOutstandingDerivativePositionsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_DerivativeInstrumentsGainLossByHedgingRelationshipAxis=us-gaap_CashFlowHedgingMember
Namespace Prefix: |
Data Type: | na
Balance Type: |
Period Type: |