XML 22 R28.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
DERIVATIVES AND HEDGING (Tables)
 3 Months Ended
Jan. 26, 2020
Derivative [Line Items]  
Schedule of fair values of derivative instruments The fair values of the Company’s derivative instruments as of January 26, 2020, and October 27, 2019, were as follows:
 
 
 
 
Fair Value (1)
(in thousands)
 
Location on Consolidated Statements
of Financial Position
 
January 26,
2020
 
October 27,
2019
Derivatives Designated as Hedges:
 
 
 
 
 
 
Commodity Contracts
 
Other Current Assets
 
$
(921
)
 
$
6,405

(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 fair value hedge assets (liabilities) The carrying amount of the Company's fair value hedge assets (liabilities) as of January 26, 2020, and October 27, 2019, were as follows:
Location on Consolidated Statements
    of Financial Position
 
Carrying Amount of the Hedged
Assets/(Liabilities)
(in thousands)
 
January 26,
2020
 
October 27, 2019
Accounts Payable
 
$
(2,347
)
 
$
(2,805
)
Schedule of gains or losses (before tax) related to derivative instruments
The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax) related to the Company's derivative instruments for the three months ended January 26, 2020, and January 27, 2019, were as follows:
 
 
Gain/(Loss)
Recognized
 in AOCL (1)
 
Location on
Consolidated
Statements
of Operations
 
Gain/(Loss)
Reclassified from
AOCL into Earnings (1)
 
 
Three Months Ended
 
 
Three Months Ended
(in thousands)
 
January 26, 2020
 
January 27, 2019
 
 
January 26, 2020
 
January 27, 2019
Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
Commodity Contracts
 
$
(8,626
)
 
$
(843
)
 
Cost of Products Sold
 
$
(1,875
)
 
$
(1,243
)
Excluded Component (2)
 
—

 
(687
)
 
 
 
 
 
 

(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 amount of lean hog 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 for the three months ended January 26, 2020, and January 27, 2019, were as follows:
 
 
Cost of Products Sold
 
 
Three Months Ended
(in thousands)
 
January 26, 2020
 
January 27, 2019
Consolidated Statements of Operations
 
$
1,916,014

 
$
1,872,021

 
 
 
 
 
Cash Flow Hedges - Commodity Contracts
 
 
 
 
   Gain (Loss) Reclassified from AOCL
 
(1,875
)
 
(1,243
)
 Amortization of Excluded Component from Options
 
—

 
(1,358
)
 
 
 
 
 
Fair Value Hedges - Commodity Contracts
 
 
 
 
   Gain (Loss) on Commodity Futures (1)
 
3,186

 
932

Total Gain (Loss) Recognized in Earnings
 
$
1,311

 
$
(1,669
)

(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  
Derivative [Line Items]  
Schedule of outstanding commodity futures contracts As of January 26, 2020, and October 27, 2019, the Company had the following outstanding commodity futures and options contracts related to its hedging programs:
 
 
Volume
Commodity Contracts
 
January 26, 2020
 
October 27, 2019
Corn
 
25.3 million bushels
 
30.4 million bushels
Lean Hogs
 
182.0 million pounds
 
187.3 million pounds