DERIVATIVES AND HEDGING (Tables)

6 Months Ended

Apr. 24, 2016

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments (in thousands) as of April 24, 2016, and October 25, 2015, were as follows:

		Fair Value (1)
	Location on Consolidated Statements of Financial Position	April 24, 2016		October 25, 2015
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$	(3,370)	$	305

Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	319		248


Total Asset Derivatives		$	(3,051)	$	553

(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 L “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 second quarter ended April 24, 2016, and April 26, 2015, 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:	April 24, 2016		April 26, 2015			April 24, 2016		April 26, 2015		April 24, 2016		April 26, 2015
Commodity contracts	$	(1,620)	$	(5,033)	Cost of products sold	$	(577)	$	(2,705)	$	(29)	$	-

					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:						April 24, 2016		April 26, 2015		April 24, 2016		April 26, 2015
Commodity contracts					Cost of products sold	$	664	$	(3,769)	$	13	$	203

					Location on Consolidated Statements of Operations	Gain/(Loss) Recognized in Earnings
						Three Months Ended
Derivatives Not Designated as Hedges:						April 24, 2016		April 26, 2015
Commodity contracts					Cost of products sold	$	50	$	(264)

Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the six months ended April 24, 2016, and April 26, 2015, 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)
	Six Months Ended					Six Months Ended				Six Months Ended
Cash Flow Hedges:	April 24, 2016		April 26, 2015			April 24, 2016		April 26, 2015		April 24, 2016		April 26, 2015
Commodity contracts	$	(4,468)	$	(1,370)	Cost of products sold	$	(1,344)	$	(7,084)	$	(28)	$	-

					Location on Consolidated Statements of Operations	Gain/(Loss) Recognized in Earnings (Effective Portion) (3)				Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Six Months Ended				Six Months Ended
Fair Value Hedges:						April 24, 2016		April 26, 2015		April 24, 2016		April 26, 2015
Commodity contracts					Cost of products sold	$	1,906	$	(3,937)	$	(239)	$	93

					Location on Consolidated Statements of Operations	Gain/(Loss) Recognized in Earnings
						Six Months Ended
Derivatives Not Designated as Hedges:						April 24, 2016		April 26, 2015
Commodity contracts					Cost of products sold	$	(430)	$	(135)

(1)

Amounts represent gains or losses in AOCL before tax. See Note I “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)

There were no gains or losses excluded from the assessment of hedge effectiveness during the second quarter or first six months.

(3)

Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the second quarter or first six 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 second quarter or first six 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 second quarter or first six months.

Derivatives not designated as hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	April 24, 2016	October 25, 2015
Corn	3.9 million bushels	2.6 million bushels
Soybean meal	17,900 tons	11,500 tons

Cash Flow Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	April 24, 2016	October 25, 2015
Corn	26.4 million bushels	20.1 million bushels

Fair Value Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	April 24, 2016	October 25, 2015
Corn	1.0 million bushels	5.3 million bushels
Lean hogs	0.2 million cwt	0.4 million cwt