Derivatives and Hedging (Tables)

12 Months Ended

Oct. 27, 2019

Derivatives and hedging

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments (in thousands) as of October 27, 2019, and October 28, 2018, were as follows: 

		Fair Value(1)
Derivatives Designated as Hedges	Location on Consolidated Statements of Financial Position	October 27, 2019		October 28, 2018
Commodity Contracts	Other Current Assets	$	6,405	$	(30	)

(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 M - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

Schedule of fair value hedge assets (liabilities)

The carrying amount of the Company’s fair value hedge assets (liabilities) (in thousands) as of October 27, 2019, and October 28, 2018, were as follows: 

Location on Consolidated Statements of Financial Position	Carrying Amount of the Hedged Assets/(Liabilities)
	October 27, 2019			October 28, 2018
Accounts Payable	$	(2,805	)	$	(594	)

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

The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax, in thousands) related to the Company's derivative instruments for the fiscal years ended October 27, 2019, and October 28, 2018, was as follows:

	Gain/(Loss) Recognized in AOCL(1)					Location on Consolidated Statements of Operations	Gain/(Loss) Reclassified from AOCL into Earnings(1)						Gain/(Loss) Recognized in Earnings (Ineffective Portion)
	Fiscal Year Ended						Fiscal Year Ended						Fiscal Year Ended
Cash Flow Hedges	October 27, 2019		October 28, 2018				October 27, 2019			October 28, 2018			October 27, 2019		October 28, 2018
Commodity Contracts	$	2,813	$	(8,634	)	Cost of Products Sold	$	(1,701	)	$	(5,480	)	$	—	$	(177	)

(1) See Note J - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings.

Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax, in thousands) related to the Company's derivative instruments for the fiscal years ended, were as follows:

	Cost of Products Sold
	October 27, 2019			October 28, 2018			October 29, 2017
Consolidated Statements of Operations	$	7,612,669		$	7,566,227		$	7,170,883
Cash Flow Hedges - Commodity Contracts
Gain (Loss) Reclassified from AOCL	$	(1,701	)	$	(5,480	)	$	5,994
Amortization of Excluded Component from Options	(2,489		)	—			—
Gain (Loss) due to Ineffectiveness	—			(177		)	156
Fair Value Hedges - Commodity Contracts
Gain (Loss) on Commodity Futures(1)	5,197			3,572			(327		)
Gain (Loss) due to Ineffectiveness	—			(171		)	267
Total Gain (Loss) Recognized in Earnings	$	1,007		$	(2,256	)	$	6,090

(1) Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the quarter, 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.

Cash Flow Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

As of October 27, 2019, and October 28, 2018, the Company had the following outstanding commodity futures and options contracts related to its hedging programs: 

	Volume
Commodity Contracts	October 27, 2019	October 28, 2018
Corn	30.4 million bushels	23.0 million bushels
Lean Hogs	187.3 million pounds	56.9 million pounds