DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Jul. 29, 2018

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments (in thousands) as of July 29, 2018, and October 29, 2017, were as follows:



		Fair Value (1)
	Location on Consolidated Statements of Financial Position	July 29, 2018			October 29, 2017
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$	(9,414	)	$	326

Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	—			—

Total Asset Derivatives		$	(9,414	)	$	326

(1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its 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 derivative in the Consolidated Statements of Financial Position. See Note K “Fair Value Measurements” for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

Schedule of gains or losses (before tax) related to derivative instruments

Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the third quarter ended July 29, 2018, and July 30, 2017, were as follows:



	Gain/(Loss) Recognized in AOCL (Effective Portion) (1)					Location on Consolidated Statements of Operations	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (4)
	Three Months Ended						Three Months Ended					Three Months Ended
Cash Flow Hedges:	July 29, 2018			July 30, 2017			July 29, 2018			July 30, 2017		July 29, 2018			July 30, 2017
Commodity contracts	$	(12,620	)	$	1,490	Cost of products sold	$	(763	)	$	1,758	$	(241	)	$	(22	)



	Location on Consolidated Statements of Operations	Gain/(Loss) Recognized in Earnings (Effective Portion) (3)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
		Three Months Ended					Three Months Ended
Fair Value Hedges:		July 29, 2018		July 30, 2017			July 29, 2018		July 30, 2017
Commodity contracts	Cost of products sold	$	1,363	$	(730	)	$	29	$	51

Location on

Consolidated

Statements

of Operations

Gain/(Loss)

Recognized

in Earnings

Three Months Ended

Derivatives Not

Designated as Hedges:

July 29, 2018

July 30, 2017

Commodity contracts

Cost of products sold

(41

)

Derivative Gains and Losses: Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the nine months ended July 29, 2018, and July 30, 2017, were as follows:



	Gain/(Loss) Recognized in AOCL (Effective Portion) (1)					Location on Consolidated Statements of Operations	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (4)
	Nine Months Ended						Nine Months Ended					Nine Months Ended
Cash Flow Hedges:	July 29, 2018			July 30, 2017			July 29, 2018			July 30, 2017		July 29, 2018			July 30, 2017
Commodity contracts	$	(13,869	)	$	703	Cost of products sold	$	(195	)	$	4,980	$	(602	)	$	17



	Location on Consolidated Statements of Operations	Gain/(Loss) Recognized in Earnings (Effective Portion) (3)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
		Nine Months Ended					Nine Months Ended
Fair Value Hedges:		July 29, 2018		July 30, 2017			July 29, 2018			July 30, 2017
Commodity contracts	Cost of products sold	$	3,144	$	(1,321	)	$	(243	)	$	52

Location on

Consolidated

Statements

of Operations

Gain/(Loss)

Recognized

in Earnings

Nine Months Ended

Derivatives Not

Designated as Hedges:

July 29, 2018

July 30, 2017

Commodity contracts

Cost of products sold

(228

)

(1) Amounts represent gains or losses in AOCL before tax. See Note H “Accumulated Other Comprehensive Loss” for the after-tax impact of these gains or losses on net earnings.

(2) There were no gains or losses excluded from the assessment of hedge effectiveness during the third quarter or first nine months.

(3) Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the third quarter or the first nine months, which were offset by a corresponding gain 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.

(4) There were no gains or losses resulting from the discontinuance of cash flow hedges during the third quarter or first nine months.

(5) There were no gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge during the third quarter or first nine months.

Cash Flow Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

As of July 29, 2018, and October 29, 2017, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases:



	Volume
Commodity	July 29, 2018	October 29, 2017
Corn	17.9 million bushels	11.5 million bushels
Lean hogs	0.8 million cwt	0.3 million cwt

Fair Value Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

As of July 29, 2018, and October 29, 2017, the Company had the following outstanding commodity futures contracts designated as fair value hedges:



	Volume
Commodity	July 29, 2018	October 29, 2017
Corn	3.4 million bushels	4.1 million bushels
Lean hogs	0.1 million cwt	0.4 million cwt