DERIVATIVES AND HEDGING (Tables)

3 Months Ended

Jan. 26, 2014

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments (in thousands) as of January 26, 2014, and October 27, 2013, were as follows:

		Fair Value (1)
	Location on Consolidated Statements of Financial Position	January 26, 2014	October 27, 2013
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$ (25,145)	$ (25,802)

Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	(2,277)	(3,783)

Total Asset Derivatives		$ (27,422)	$ (29,585)

(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 J “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 first quarter ended January 26, 2014, and January 27, 2013, were as follows:

Gain/(Loss)
Recognized in
AOCL
(Effective Portion) (1)(2)

Location on
Consolidated

Gain/(Loss)
Reclassified from
AOCL into Earnings
(Effective Portion) (1)(2)

Gain/(Loss)
Recognized in Earnings
(Ineffective
Portion) (3)(5)

Three Months Ended

Cash Flow Hedges:

January 26,
2014

January 27,
2013

Statements
of Operations

January 26,
2014

January 27,
2013

January 26,
2014

January 27,
2013

Commodity contracts

(4,004)

(4,091)

Cost of products sold

(3,249)

6,830

(294)

166

Location on
Consolidated

Gain/(Loss)
Recognized in Earnings
(Effective Portion) (4)

Gain/(Loss)
Recognized in Earnings
(Ineffective
Portion) (3)(6)

Three Months Ended

Fair Value Hedges:

Statements
of Operations

January 26,
2014

January 27,
2013

January 26,
2014

January 27,
2013

Commodity contracts

Cost of products sold

1,254

(1,086)

(38)

(30)

Gain/(Loss)
Recognized
in Earnings (2)

Location on
Consolidated
Statements
of Operations

Three Months Ended

Derivatives Not
Designated as Hedges:

January 26,
2014

January 27,
2013

Commodity contracts

Cost of products sold

(517)

(1,084)

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

(2) During fiscal year 2013, the Company dedesignated and ceased hedge accounting for its corn futures contracts held for its hog operations. At the date of dedesignation of these hedges, losses of $2.0 million (before tax) were deferred in AOCL, with $0.7 million (before tax) remaining as of January 26, 2014. These losses will remain in AOCL until the hedged transactions occur or it is probable the hedged transactions will not occur. Gains or losses related to these contracts after the date of dedesignation have been recognized in earnings as incurred.

(3) There were no gains or losses excluded from the assessment of hedge effectiveness during the quarter.

(4) 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.

(5) There were no gains or losses resulting from the discontinuance of cash flow hedges during the quarter.

(6) 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 quarter.

Derivatives not designated as hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 26, 2014	October 27, 2013
Corn	2.1 million bushels	1.7 million bushels

Cash Flow Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 26, 2014	October 27, 2013
Corn	15.9 million bushels	14.7 million bushels

Fair Value Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 26, 2014	October 27, 2013
Corn	5.4 million bushels	5.8 million bushels
Lean hogs	1.1 million cwt	1.4 million cwt