What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-12-06 compared with 2022-12-06 · 343 added, 289 removed, 1177 unchanged (35% of the section changed)

26 unchanged sentences

In our opinion, Hormel Foods Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of October 29, 2023, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the accompanying consolidated statements of financial position of the Company as of October 30, 2022 and October 31, 2021, the related consolidated statements of operations, comprehensive income, changes in shareholders’ investment, and cash flows for each of the three years in the period ended October 30, 2022 and the related notes and financial statement schedule listed in the index at Item 15 and our report dated December 6, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of October 29, 2023 and October 30, 2022, the related consolidated statements of operations, comprehensive income, changes in shareholders’ investment and cash flows for each of the three years in the period ended October 29, 2023 and the related notes and schedule listed in the Index at Item 15 and our report dated December 6, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial position of Hormel Foods Corporation (the Company) as of October 30, 2022 and October 31, 2021, the related consolidated statements of operations, comprehensive income, changes in shareholders’ investment, and cash flows for each of the three years in the period ended October 30, 2022 and the related notes and the financial statement schedule listed in the index at Item 15 (collectively referred to as the consolidated financial statements).

We have audited the accompanying consolidated statements of financial position of Hormel Foods Corporation (the Company) as of October 29, 2023 and October 30, 2022, the related consolidated statements of operations, comprehensive income, changes in shareholders’ investment and cash flows for each of the three years in the period ended October 29, 2023 and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 29, 2023 and October 30, 2022, and the results of its operations and its cash flows for each of the three years in the period ended October 29, 2023, in conformity with U.S.

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Description of the Matter At October 29, 2023, the Company had $1.2 billion in plan assets related to the defined benefit pension plans.

Approximately 61% of the total pension assets are in private equity funds, real estate – domestic funds, global stocks – collective investment funds, hedge funds, fixed income – hedge funds, and fixed income – collective investment funds.

These types of investments are referred to as “alternative investments.” As documented in Note G of the financial statements, these alternative investments are valued at net asset value (NAV) or are valued using significant unobservable inputs.

Approximately 61% of the total pension assets are in private equity funds, real estate – domestic funds, global stocks – collective investment funds, global stocks – gold funds, hedge funds, fixed income – hedge funds, and fixed income – collective investment funds.

These types of investments are referred to as “alternative investments.” As documented in the notes of the financial statements, these alternative investments are valued at net asset value (NAV) or are valued using significant unobservable inputs.

Auditing the fair value of these alternative investments is challenging because of the higher estimation uncertainty of the inputs to the fair value calculations, including the underlying NAVs, discounted cash flow valuations, comparable market valuations, and adjustments for currency, credit liquidity and other risks.

21 unchanged sentences

Equity in Earnings of Affiliates 42,754 27,185 47,763

Goodwill and Intangible Impairment

Operating Income 1,072,046 1,312,607 1,122,599

4 unchanged sentences

Net Earnings 792,920 1,000,226 909,140

Net Earnings Attributable to Noncontrolling Interest 239 301 272

Net Earnings (Loss) Attributable to Noncontrolling Interest

( 653 ) 239 301

Net Earnings Attributable to Hormel Foods Corporation $ 793,572 $ 999,987 $ 908,839

5 unchanged sentences

Diluted 548,982 549,566 547,580

See Notes to Consolidated Financial Statements

See Notes to the Consolidated Financial Statements

Consolidated Statements of Comprehensive Income

6 unchanged sentences

Pension and Other Benefits 11,632 65,587 71,967

Deferred Hedging ( 5,267 ) 33,034 ( 284 )

Derivatives and Hedging

( 38,940 ) ( 5,267 ) 33,034

Equity Method Investments

Total Other Comprehensive Income (Loss) ( 16,874 ) 20,927 118,380

2 unchanged sentences

Comprehensive Income Attributable to Hormel Foods Corporation $ 776,881 $ 1,021,695 $ 1,026,820

See Notes to Consolidated Financial Statements

See Notes to the Consolidated Financial Statements

Consolidated Statements of Financial Position

13 unchanged sentences

Pension Assets 204,697 245,566

Investments In and Receivables from Affiliates 271,058 299,019

Investments in Affiliates

725,121 271,058

Other Assets 370,252 283,169

12 unchanged sentences

Employee-Related Expenses

263,330 279,072

Interest and Dividends Payable 172,178 163,963

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Total Liabilities and Shareholders’ Investment $ 13,448,772 $ 13,306,919

See Notes to Consolidated Financial Statements

See Notes to the Consolidated Financial Statements

Consolidated Statements of Changes in Shareholders’ Investment

7 unchanged sentences

(Loss) 117,981 399 118,380

Contribution from

Non-controlling Interest 77 77

Purchases of Common Stock ( 469 ) ( 19,958 ) ( 19,958 )

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(Loss) 21,708 ( 782 ) 20,927

Purchases of Common Stock ( 469 ) ( 19,958 ) ( 19,958 )

Stock-based Compensation

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Restricted Shares 3,787 55 79,871 79,927

Shares Retired ( 469 ) ( 7 ) 469 19,958 ( 287 ) ( 19,664 ) —

Declared Dividends —

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(Loss) ( 16,691 ) ( 183 ) ( 16,874 )

Purchases of Common Stock ( 310 ) ( 12,303 ) ( 12,303 )

Stock-based Compensation

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Restricted Shares 629 9 12,009 12,018

Shares Retired ( 310 ) ( 5 ) 310 12,303 ( 277 ) ( 12,021 ) —

Declared Dividends —

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546,599 $ 8,007 — $ — $ 506,179 $ 7,492,952 $ ( 272,252 ) $ 4,100 $ 7,738,985

See Notes to Consolidated Financial Statements

See Notes to the Consolidated Financial Statements

Consolidated Statements of Cash Flows

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Net Earnings $ 792,920 $ 1,000,226 $ 909,140

Adjustments to Reconcile to Net Cash Provided by (Used in) Operating Activities:

Adjustments to Reconcile to Net Cash Provided by

(Used in) Operating Activities:

Depreciation 227,331 213,026 183,772

3 unchanged sentences

Provision for Deferred Income Taxes 31,794 177,000 28,677

Loss (Gain) on Property/Equipment Sales and Plant Facilities 6,695 3,731 1,793

Non-cash Investment Activities ( 2,392 ) 19,298 ( 24,215 )

Stock-based Compensation Expense 24,077 24,943 24,744

Operating Lease Cost

29,072 20,633 16,699

Goodwill and Intangible Impairment

Other Non-cash, Net

20,034 12,931 6,129

Changes in Operating Assets and Liabilities, Net of Acquisitions:

1 unchanged sentence

Decrease (Increase) in Inventories 35,714 ( 351,663 ) ( 145,176 )

Decrease (Increase) in Prepaid Expenses and Other Current Assets ( 15,460 ) 34,555 5,860

Decrease (Increase) in Prepaid Expenses and Other Assets ( 68,666 ) ( 15,460 ) 34,555

Increase (Decrease) in Pension and Post-retirement Benefits 18,272 ( 29,392 ) ( 15,448 )

5 unchanged sentences

Acquisitions of Businesses and Intangibles — — ( 3,396,246 )

Purchases of Property and Equipment ( 278,918 ) ( 232,416 ) ( 367,501 )

Proceeds from Sales of Property and Equipment 1,224 2,216 1,916

Decrease (Increase) in Investments, Equity in Affiliates, and Other Assets 2,404 ( 343 ) ( 21,124 )

Purchases of Property, Plant, and Equipment

( 270,211 ) ( 278,918 ) ( 232,416 )

Proceeds from Sales of Property, Plant, and Equipment

5,322 1,224 2,216

Proceeds from (Purchases of) Affiliates and Other Investments

( 427,709 ) 2,404 ( 343 )

Proceeds from Company-owned Life Insurance 3,096 14,761 5,315

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Proceeds from Exercise of Stock Options 12,018 79,827 45,919

Proceeds from Noncontrolling Interest — — 77

Net Cash Provided by (Used in) Financing Activities ( 600,064 ) ( 486,684 ) 1,520,520

3 unchanged sentences

Cash and Cash Equivalents at End of Year $ 736,532 $ 982,107 $ 613,530

See Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

See Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Summary of Significant Accounting Policies

Principles of Consolidation:

The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits.

The Consolidated Financial Statements include the accounts of Hormel Foods Corporation (the Company) and all its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits.

Use of Estimates:

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Fiscal year 2024 will consist of 52 weeks.

Reportable Segments:

As of October 30, 2022, the Company had four operating and reportable segments:

Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International and Other.

At the beginning of fiscal 2023, the Company transitioned to a new strategic operating model, which aligns its businesses to be more agile, consumer and customer focused, and market driven.

Effective on October 31, 2022, the Company operates with the following three operating and reportable segments:

Retail, Foodservice, and International, which are consistent with how the Company's chief operating decision maker assesses performance and allocates resources.

This change had no impact on the consolidated results of operations, financial position, shareholders' investment, or cash flows.

Prior period segment results have been retrospectively recast to reflect the new reportable segments.

Cash and Cash Equivalents:

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Fair Value Measurements:

Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements.

Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures , the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the Consolidated Financial Statements.

Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price).

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The securities held by the trust are classified as trading securities.

Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings.

Therefore, unrealized gains and losses associated with these investments

are included in the Company’s earnings.

Securities held by the trust generated gains (losses) of $ 3.2 million, $( 16.8 ) million, and $ 21.2 million for fiscal years 2023, 2022, and 2021, respectively.

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If the rate implicit in the lease is not readily determinable, the Company used its periodic incremental borrowing rate, based on the information available at commencement date, to determine the present value of future lease payments.

Leases and right-of-use assets that existed prior to the adoption of ASU 2016-02, Leases (Topic 842) were valued using the incremental borrowing rate on October 28, 2019.

Leases and right-of-use assets that existed prior to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842) were valued using the incremental borrowing rate on October 28, 2019.

Impairment of Long-Lived Assets and Definite-Lived Intangible Assets:

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The fair value of each reporting unit is estimated using discounted cash flow valuations (Level 3), which incorporate assumptions regarding future growth rates, terminal values and discount rates.

The estimates and assumptions used consider historical performance and are consistent with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors.

The estimates and assumptions used consider historical performance and are consistent

with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors.

If the quantitative assessment results in the carrying value exceeding the fair value of any reporting unit, the results from the quantitative analysis will be relied upon to determine both the existence and amount of goodwill impairment.

An impairment loss will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.

As a result of organizational changes in the first quarter of fiscal 2023, the Company conducted an assessment of its operating segments and reporting units.

Based on this analysis, goodwill was reallocated using the relative fair value approach.

Prior to the goodwill reallocation, an impairment assessment was performed which indicated no impairment to the Company's reporting units.

Subsequent to the goodwill reallocation, the Company completed quantitative impairment testing on each new reporting unit.

The fair value of each reporting unit exceeded its carrying amount;

therefore, no impairment charges were recorded.

During the fourth quarter of fiscal 2023, the Company completed its annual goodwill impairment tests and performed qualitative assessments.

No impairment charges were recorded as a result of the qualitative assessments in fiscal years 2022 and 2020 and quantitative assessments in fiscal year 2021.

No impairment charges were recorded as a result of the annual assessments in fiscal years 2023, 2022, and 2021.

Indefinite-Lived Intangibles

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During the fourth quarter of fiscal 2023, the Company completed its annual indefinite-lived asset impairment tests by performing qualitative assessments.

No impairment charges were recorded as a result of the qualitative assessments in fiscal years 2022 and 2020 and quantitative assessments in fiscal year 2021.

As a result of the qualitative assessments, it was determined that more likely than not the Justin's ® trade name was impaired, and the Company performed a quantitative impairment test.

As a result of the quantitative impairment test, a $ 28.4 million intangible asset impairment charge was recorded for the Justin's ® trade name.

No other impairment charges were recorded as a result of the qualitative assessments in fiscal years 2023 and 2022 and quantitative assessments in fiscal year 2021.

Pension and Other Post-retirement Benefits:

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Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the date of the Consolidated Statements of Financial Position.

Amounts in the Consolidated Statements of Operations are translated at the average monthly exchange rate.

Amounts in the Consolidated Statements of Operations

are translated at the average monthly exchange rate.

Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of Accumulated Other Comprehensive Loss within Shareholders’ Investment.

3 unchanged sentences

The derivative instruments are recorded at fair value on the Consolidated Statements of Financial Position.

The cash flow impacts from the derivative instruments are primarily included in Operating Activities on the Consolidated Statements of Cash Flows.

The cash flow impacts from the derivative instruments are primarily included in Operating Activities in the Consolidated Statements of Cash Flows.

Additional information on hedging activities is presented in Note F - Derivatives and Hedging.

Equity Method Investments:

The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control.

The Company accounts for such investments under the equity method of accounting and its underlying share of each investee’s equity, along with any related receivables from affiliates, is reported in the Consolidated Statements of Financial Position as part of Investments In and Receivables from Affiliates.

The Company has a number of investments for which its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control.

The Company accounts for such investments under the equity method of accounting and its underlying share of each investee’s equity, along with any balances due to or from affiliates, is reported on the Consolidated Statements of Financial Position as part of Investments in Affiliates.

The Company records its interest in the net earnings of its equity method investments, along with adjustments for unrealized profits on intra-entity transactions and amortization of basis differences, within Equity in Earnings of Affiliates in the Consolidated Statements of Operations.

Financial results for certain entities are reported on a 30- to 90-day lag.

The Company regularly monitors and evaluates the fair value of its equity investments.

If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in Equity in Earnings of Affiliates in the Consolidated Statements of Operations.

The Company did no t record an impairment charge on any

of its equity investments in fiscal years 2022, 2021, or 2020.

See additional information pertaining to the Company’s equity method investments in Note D - Investments In and Receivables From Affiliates.

If events and circumstances, such as ongoing or projected decreases in earnings or significant business disruptions, indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in Equity in Earnings of Affiliates in the Consolidated Statements of Operations.

The Company recorded a $ 7.0 million impairment in fiscal 2023 related to a corporate venturing investment.

The Company did no t record an impairment charge on any of its equity investments in fiscal 2022 or 2021.

See additional information pertaining to the Company’s equity method investments in Note D - Investments in Affiliates.

The Company uses the cumulative earnings approach to determine the cash flow presentation of distributions from equity method investments.

Distributions received are reflected in operating activities in the Consolidated Statements of Cash Flows unless the cumulative distributions exceed the portion of the cumulative equity in earnings of the equity method investment.

Distributions in excess of the cumulative equity in earnings are deemed to be returns of the investment and classified as investing activities in the Consolidated Statements of Cash Flows.

Revenue Recognition:

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The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of anticipated performance and all information (historical, current, and forecasted) that is reasonably available.

The Company discloses revenue by reportable segment, sales channel, and class of similar product in Note P - Segment Reporting.

The Company discloses revenue by reportable segment and class of similar product in Note P - Segment Reporting.

Allowance for Doubtful Accounts:

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Shipping and Handling Costs:

The Company’s shipping and handling expenses are included in Cost of Products Sold on the Consolidated Statements of Operations.

The Company’s shipping and handling expenses are included in Cost of Products Sold in the Consolidated Statements of Operations.

Research and Development Expenses:

Research and development costs are expensed as incurred and are included in Selling, General, and Administrative expenses on the Consolidated Statements of Operations.

Research and development costs are expensed as incurred and are included in Selling, General, and Administrative expenses in the Consolidated Statements of Operations.

Research and development expenses incurred for fiscal years 2023, 2022, and 2021 were $ 33.7 million, $ 34.7 million, and $ 33.6 million, respectively.

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Supplemental Cash Flow Information:

Non-cash investment activities presented on the Consolidated Statements of Cash Flows primarily consist of unrealized gains or losses on the Company’s rabbi trust.

Non-cash investment activities presented in the Consolidated Statements of Cash Flows primarily consist of unrealized gains or losses on the Company’s rabbi trust.

The noted investments are included in Other Assets on the Consolidated Statements of Financial Position.

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Certain reclassifications of previously reported amounts have been made to conform to the current year presentation.

Amortization related to operating leases and debt issuance costs were reclassified from Amortization to separate line items within the operating activities section of the Consolidated Statements of Cash Flows.

These reclassifications had no impact on the Consolidated Statements of Operations, Consolidated Statements of Financial Position, or the Increase (Decrease) in Cash and Cash Equivalents in the Consolidated Statements of Cash Flows.

Accounting Changes and Recent Accounting Pronouncements:

New Accounting Pronouncements Recently Adopted

No new accounting standards were adopted during fiscal 2023.

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740).

1 unchanged sentence

The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted.

The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2022 and adoption did not have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses:

Measurement of Credit Losses on Financial Instruments (Topic 326).

The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.

The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates.

The updated guidance is to be applied on a modified retrospective approach and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021.

The adoption did not have a material impact on the Company's consolidated financial statements, thus no cumulative-effect adjustment to retained earnings was necessary.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820) .

The updated guidance requires entities to disclose the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

Amendments in this guidance also require disclosure of transfers into and out of Level 3 of the fair value hierarchy, purchases and issues of Level 3 assets and liabilities, and clarify that the measurement uncertainty disclosure is as of the reporting date.

The guidance removes requirements to disclose the amounts and reasons for transfers between Level 1 and Level 2, policy for timing between of transfers between levels, and the valuation processes for Level 3 fair value measurements.

The updated guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021.

Presentation and disclosure requirements were applied prospectively and retrospectively as required by the amendments.

The adoption did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans (Topic 715) .

The updated guidance requires additional disclosures of weighted-average interest crediting rates for cash balance plans and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation.

Amendments in the guidance also clarify the requirement to disclose the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets.

The same disclosure is needed for the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets.

The guidance removes certain previous disclosure requirements no longer considered cost beneficial.

The amendments are effective for fiscal years ending after December 15, 2020, with early adoption permitted.

The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2021.

Presentation and disclosure requirements were applied retrospectively to all periods presented.

The adoption did not have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) .

The updated guidance requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than twelve months.

Recognition, measurement, and presentation of expenses will depend on the classification as a finance or operating lease.

The update also requires expanded quantitative and qualitative disclosures.

Accounting guidance for lessors is largely unchanged.

The requirements of the new standard are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2020.

For transition purposes, the Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification, and initial direct costs.

The Company elected the comparative periods practical expedient, and as a result, the Company did not adjust its comparative period financial information or make the new required lease disclosures for periods before the effective date.

Upon adoption, the Company recognized right-of-use assets of $ 112.7 million and lease liabilities of $ 114.1 million in the Consolidated Statements of Financial Position as of October 28, 2019.

The new standard did not have a material impact on the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows.

adopted the provisions of this new accounting standard at the beginning of fiscal 2022 and adoption did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07 Segment Reporting - Improving Reportable Segment Disclosures (Topic 280).

The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses.

The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources.

The ASU also requires all annual disclosures currently required by Topic 280 to be included in interim periods.

The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted and requires retrospective application to all prior periods presented in the financial statements.

The Company is currently assessing the timing and impact of adopting the updated provisions.

Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company.

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Planters ® is an iconic snack brand and this acquisition significantly expands the Company's presence, and should broaden the scope for future acquisitions, in the growing snacking space.

Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Grocery Products, Refrigerated Foods, and International & Other segments.

The acquisition contributed $ 1.0 billion and $ 410.8 million of net sales during fiscal 2022 and fiscal 2021, respectively.

Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Retail, Foodservice, and International segments.

The acquisition contributed $ 952.5 million, $ 1.0 billion and $ 410.8 million of net sales during fiscal 2023, 2022 and 2021, respectively.

As the acquisition has been integrated within the Company's existing operations, post-acquisition net earnings are not discernible.

11 unchanged sentences

Other Intangibles:

Tradenames 712,000

Trade Names 712,000

Customer Relationships 51,000

5 unchanged sentences

Fiscal Year Ended

In thousands October 31, 2021 October 25, 2020

In thousands October 31, 2021

Pro Forma Net Sales $ 12,061,686

1 unchanged sentence

The pro forma results include charges for depreciation and amortization of acquired assets and interest expense on debt issued to finance the acquisition, as well as the related income taxes.

The pro forma results for the fiscal year ended October 25, 2020, also include nonrecurring adjustments relating to the recognition of transaction costs incurred and revaluation of inventory acquired, along with the related income tax effects, which in the aggregate reduce pro forma net earnings by $ 41.1 million.

The pro forma results for the fiscal year ended October 31, 2021, include an adjustment to add back the transaction costs incurred and revaluation of inventory acquired in those periods, along with the related income tax effects, since those costs are reflected in the preceding fiscal year on a pro forma basis.

On March 2, 2020, the Company acquired the assets comprising the Sadler's Smokehouse business (Sadler's) for a final purchase price of $ 270.8 million.

Sadler's is an authentic, pit-smoked meats business based in Henderson, Texas.

This acquisition has strengthened the Company's foodservice position and provided an opportunity to further extend the Sadler's product line into the retail channel.

The transaction was funded with cash on hand and accounted for as a business combination using the acquisition method.

The Company completed an allocation of the fair value of the assets acquired utilizing third-party valuation appraisals during fiscal 2020.

Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Refrigerated Foods segment.

Pro forma results are not material for inclusion.

The pro forma results also reflect an adjustment to add back the transaction costs incurred and revaluation of inventory acquired along with the related income tax effects.

See Note C - Goodwill and Intangible Assets for amounts assigned to goodwill and intangible assets.

Goodwill and Intangible Assets

Goodwill was reallocated as of October 31, 2022, due to organizational changes as described in Note A - Summary of Significant Accounting Policies.

The changes in the carrying amount of goodwill for the fiscal years ended October 29, 2023 and October 30, 2022, are:

2 unchanged sentences

Foods Jennie-O

Turkey Store International

& Other Total

Turkey Store Retail Foodservice International Total

Balance at October 31, 2021

$ 2,398,354 $ 2,094,421 $ 176,628 $ — $ — $ 259,699 $ 4,929,102

Goodwill Acquired 1,766,053 487,416 — 59,595 2,313,064

Foreign Currency Translation — — — — — ( 3,273 ) ( 3,273 )

1 unchanged sentence

$ 2,398,354 $ 2,094,421 $ 176,628 $ — $ — $ 256,427 $ 4,925,829

Goodwill Reallocation ( 2,398,354 ) ( 2,094,421 ) ( 176,628 ) 2,916,796 1,750,594 2,013 —

Foreign Currency Translation — — — — — 2,635 2,635

1 unchanged sentence

$ — $ — $ — $ 2,916,796 $ 1,750,594 $ 261,074 $ 4,928,464

The increase in goodwill during fiscal 2021 reflects the acquisition of the Planters ® snack nuts business.

See Note B - Acquisitions and Divestitures for additional information.

Intangible Assets:

2 unchanged sentences

In thousands 2023 2022

Brands/Tradenames/Trademarks $ 1,665,190 $ 1,665,190

Brands/Trade Names/Trademarks

$ 1,636,807 $ 1,665,190

Other Intangibles 184 184

7 unchanged sentences

Other Intangibles 59,241 ( 15,857 ) 59,241 ( 11,606 )

Tradenames/Trademarks 10,536 ( 7,828 ) 10,536 ( 5,700 )

Trade Names/Trademarks 6,540 ( 5,089 ) 10,536 ( 7,828 )

Foreign Currency Translation — ( 4,344 ) — ( 4,551 )

Total $ 234,020 $ ( 107,947 ) $ 238,016 $ ( 93,764 )

Amortization expense for the last three fiscal years was:

Amortization expense on intangible assets for the last three fiscal years was:

2023 $ 18,386

Estimated annual amortization expense for the five fiscal years after October 30, 2022, is as follows:

Estimated annual amortization expense on intangible assets for the five fiscal years after October 29, 2023, is as follows:

2024 $ 16,381

During the fourth quarter of fiscal years 2022, 2021, and 2020, the Company completed the required annual impairment tests of indefinite-lived intangible assets and goodwill.

No impairment was indicated.

During the fourth quarter of fiscal years 2023, 2022, and 2021, the Company completed required annual impairment tests of indefinite-lived intangible assets and goodwill.

In fiscal 2023, an impairment was indicated for the Justin's ® trade name, resulting in an impairment charge of $ 28.4 million.

The expense is reflected in the Retail segment and included in Goodwill and Intangible Impairment in the Consolidated Statements of Operations.

No other impairment was indicated.

Useful lives of intangible assets were also reviewed during this process with no material changes identified.

Investments In and Receivables From Affiliates

Investments In and Receivables from Affiliates consists of:

In thousands Segment Percent Owned October 30, 2022 October 31, 2021

MegaMex Foods, LLC Grocery Products 50 %

Investments in Affiliates

Equity in Earnings of Affiliates consists of:

In thousands % Owned

Fiscal Year Ended

October 29, 2023

October 30, 2022

October 31, 2021

MegaMex Foods, LLC (1)

50 % $ 40,501 $ 19,861 $ 38,178

Other Joint Ventures International & Other Various ( 20 – 50 %)

Other Equity Method Investments (2)

Various ( 20 - 50 %)

2,253 7,324 9,585

Total $ 271,058 $ 299,019

Equity in Earnings of Affiliates consists of:

In thousands Segment Fiscal Year Ended

Total Equity in Earnings of Affiliates

$ 42,754 $ 27,185 $ 47,763

(1) MegaMex, Foods, LLC, is reflected in the Retail Segment.

(2) Other Equity Method Investments are primarily reflected in the International Segment but also include corporate venturing investments.

Distributions received from equity method investees include:

In thousands Fiscal Year Ended

October 29, 2023 October 30, 2022 October 31, 2021

MegaMex Foods, LLC Grocery Products $ 19,861 $ 38,178 $ 31,919

Other Joint Ventures International & Other 7,324 9,585 3,653

Total $ 27,185 $ 47,763 $ 35,572

Dividends received from affiliates for the fiscal years ended October 30, 2022, October 31, 2021, and October 25, 2020, were $ 43.0 million, $ 45.0 million, and $ 37.5 million, respectively.

$ 38,160 $ 43,039 $ 44,999

On December 15, 2022, the Company purchased from various minority shareholders a 29 % common stock interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood), a food and beverage company in Indonesia.

On April 12, 2023, the Company purchased additional shares increasing the ownership interest to 30 %.

This investment expands the Company's presence in Southeast Asia and supports the global execution of the snacking and entertaining strategic priority.

The Company has the ability to exercise significant influence, but not control, over Garudafood;

therefore, the investment is accounted for under the equity method.

The Company obtained its Garudafood interest for a purchase price of $ 425.8 million, including associated transaction costs.

The transaction was funded using the Company's cash on hand.

Based on a third-party valuation, the Company's basis difference between the fair value of the investment and proportionate share of the carrying value of Garudafood's net assets is $ 324.8 million.

The basis difference related to inventory, property, plant and equipment, and certain intangible assets is being amortized through Equity in Earnings of Affiliates over the associated useful lives.

As of October 29, 2023, the remaining basis difference was $ 324.6 million.

Based on quoted market prices, the fair value of the common stock held in Garudafood was $ 291.2 million as of October 29, 2023.

In fiscal 2023, the Company recorded a $ 7.0 million impairment charge related to a corporate venturing investment to recognize a decline in fair value not believed to be temporary.

The impact is reflected in Equity in Earnings of Affiliates on the Consolidated Statements of Operations.

The Company determined that no other-than-temporary impairment existed for any other equity method investments as of October 29, 2023.

The Company recognized a basis difference of $ 21.3 million associated with the formation of MegaMex Foods, LLC, of which $ 9.3 million is remaining as of October 29, 2023.

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Cash Flow Commodity Hedges:

The Company designates grain and lean hog futures, swaps, and options used to offset price fluctuations in the Company’s future grain and hog purchases as cash flow hedges.

Effective gains or losses related to these cash flow hedges are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost

of Products Sold, in the periods in which the hedged transactions affect earnings.

The Company typically does not hedge its grain exposure beyond the next two upcoming fiscal years and its hog exposure beyond the next fiscal year.

The Company designates grain, lean hog, and natural gas futures, swaps, and options contracts used to offset price fluctuations in the Company’s future purchases of these commodities as cash flow hedges.

Effective gains or losses related to these cash flow hedges are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost of Products Sold, in the periods in which the hedged transactions affect earnings.

The Company typically does not hedge its grain or natural gas exposure beyond the next two upcoming fiscal years and its lean hog exposure beyond the next fiscal year.

Fair Value Commodity Hedges:

The Company designates the futures it uses to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers as fair value hedges.

The intent of the program is to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery.

Changes in the fair value of the futures contracts, along with the gain or loss on the hedged purchase commitment, are marked-to-market through earnings and recorded on the Consolidated Statements of Financial Position as a Current Asset and Current Liability, respectively.

The programs are intended to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery.

Changes in the fair value of the futures contracts and the gain or loss on the hedged purchase commitment are marked-to-market through earnings and recorded on the Consolidated Statements of Financial Position as a Current Asset and Current Liability, respectively.

Gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the periods in which the hedged transactions affect earnings.

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The Company terminated the swap in the fourth quarter of fiscal 2022.

The loss related to the swap was recorded as a fair value hedging adjustment to the hedged debt and will be amortized into earnings over the remaining life of the debt.

The loss related to the swap was recorded as a fair value hedging adjustment to the hedged debt and will be amortized through earnings over the remaining life of the debt.

Other Derivatives:

The Company holds certain futures contract positions as part of a merchandising program and to manage the Company’s exposure to fluctuations in commodity markets.

The Company holds certain futures and swap contracts to manage the Company’s exposure to fluctuations in grain and pork commodity markets.

The Company has not applied hedge accounting to these positions.

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The Company's outstanding contracts related to its commodity hedging programs include:

Commodity Contracts October 30, 2022 October 31, 2021

Corn 34.3 million bushels 33.1 million bushels

Lean Hogs 177.5 million pounds 120.0 million pounds

October 29, 2023 October 30, 2022

Corn 30.7 bushels 34.3 bushels

Lean Hogs 144.2 pounds 177.5 pounds

3.0 MMBtu — MMBtu

Fair Value of Derivatives:

The fair values of the Company’s derivative instruments designated as hedges are:

Location on Consolidated Gross Fair Value (1)

In thousands Statements of Financial Position October 30, 2022 October 31, 2021

Commodity Contracts Other Current Assets $ 13,504 $ 21,798

The gross fair values of the Company’s derivative instruments designated as hedges are:

In thousands Location on Consolidated

Statements of Financial Position

October 29, 2023 October 30, 2022

Commodity Contracts (1)

Other Current Assets $ ( 13,233 ) $ 13,504

(1) Amounts represent the gross fair value of commodity derivative assets and liabilities.

The Company nets the derivative assets and liabilities for each of its commodity 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 commodity derivative in the Consolidated Statements of Financial Position.

The gross asset position as of October 30, 2022, is offset by the obligation to return cash collateral of $ 1.3 million contained within the master netting arrangement.

The gross asset position as of October 31, 2021, is offset by the obligation to return cash collateral of $ 10.8 million.

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

The amount or timing of cash collateral balances may impact the classification of the commodity derivative on the Consolidated Statements of Financial Position.

The gross liability position as of October 29, 2023, is offset by the right to reclaim net cash collateral of $ 32.2 million contained within the master netting arrangement.

The gross asset position as of October 30, 2022, is offset by the obligation to return net cash collateral of $ 1.3 million.

See Note I - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Statements of Financial Position.

Fair Value Hedge - Assets (Liabilities):

The carrying amount of the Company’s fair value hedge assets (liabilities) are:

Location on Consolidated Carrying Amount of the Hedged

Assets/(Liabilities)

In thousands Statements of Financial Position October 30, 2022 October 31, 2021

The carrying amount of the Company’s fair value hedged assets (liabilities) are:

In thousands Location on Consolidated

Statements of Financial Position

October 29, 2023 October 30, 2022

Commodity Contracts

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$ ( 4,914 ) $ 5,725

Interest Rate Contracts

Current Maturities of Long-term Debt (2)

( 442,549 ) —

Interest Rate Contracts Long-term Debt Less Current Maturities (2)

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As of October 29, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $ 7.5 million from discontinued hedges.

In the third quarter of fiscal 2023, the 2024 Notes and the fair value hedging adjustment were reclassified from Long-term Debt less Current Maturities to Current Maturities of Long-term Debt on the Consolidated Statements of Financial Position.

Accumulated Other Comprehensive Loss Impact:

As of October 30, 2022, the Company included in AOCL hedging gains (before tax) of $ 26.0 million on commodity contracts and $ 13.5 million related to interest rate settled positions.

The Company expects to recognize the majority of the gains on commodity contracts over the next twelve months.

As of October 29, 2023, the Company included in AOCL hedging losses (before tax) of $ 24.5 million on commodity contracts and gains (before tax) of $ 12.5 million related to interest rate settled positions.

The Company expects to recognize the majority of the losses on commodity contracts over the next twelve months.

Gains on interest rate contracts offset the hedged interest payments over the tenor of the associated debt instruments.

The effect of AOCL for gains or losses (before tax) related to the Company's derivative instruments are:

The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are:

Recognized in AOCL (1)

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The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments are:

Consolidated Statement of Operations Impact

Fiscal Year Ended

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Gain (Loss) Reclassified from AOCL

1,225 55,350 31,787

Amortization of Excluded Component from Options

Gain (Loss) Due to Discontinuance of Cash Flow Hedges (1)

( 5,835 ) ( 4,369 ) ( 3,033 )

Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges (1)

— 2,242 ( 743 )

Fair Value Hedges - Commodity Contracts

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Cash Flow Hedges - Interest Rate Locks

Amortization of Gain on Interest Rate Locks 988 399 —

Gain (Loss) Reclassified from AOCL

Fair Value Hedge - Interest Rate Swap

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Total Gain (Loss) Recognized in Earnings $ ( 15,466 ) $ 35,094 $ 332

(1) In fiscal years ended 2022 and 2021, the Company discontinued hedge accounting related to corn usage deemed to no longer probable to occur resulting in the immediate recognition of gains of $ 2.2 million ( 1.0 million bushels) and losses of $ 0.7 million ( 2.8 million bushels), respectively.

(1) In fiscal years 2022 and 2021, the Company discontinued hedge accounting related to corn usage that was deemed no longer probable to occur resulting in the immediate recognition of gains of $ 2.2 million ( 1.0 million bushels) and losses of $ 0.7 million ( 2.8 million bushels), respectively.

(2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the year, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.

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(3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold.

(4) Represents the fair value hedging adjustment amortized into earnings.

(5) Total Loss on Interest Rate Contracts is recognized in earnings through Interest Expense.

(4) Represents the fair value hedging adjustment amortized through earnings.

(5) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.

Pension and Other Post-retirement Benefits

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In the fourth quarter of fiscal 2022, an amendment was enacted for the salaried pension plan which changed the design from a stable value benefit to a cash balance benefit effective January 1, 2023.

The cash balance design establishes hypothetical accounts for employees that are credited with an amount equal to a specified percentage of their pay plus interest.

The cash balance design establishes hypothetical accounts for employees that are credited with an amount equal to a specified percent of their pay plus interest.

Total costs associated with the Company’s defined contribution benefit plans in fiscal years 2023, 2022, and 2021 were $ 41.0 million, $ 47.9 million, and $ 46.7 million, respectively.

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Expected Return on Plan Assets ( 78,285 ) ( 108,248 ) ( 102,693 ) — — —

Amortization of Prior Service Cost ( 1,496 ) ( 1,496 ) ( 2,168 ) 8 ( 669 ) ( 2,651 )

Recognized Actuarial Loss 12,530 22,742 22,383 2,439 2,020 1,045

Amortization of Prior Service Cost (Credit)

( 1,843 ) ( 1,496 ) ( 1,496 ) 8 8 ( 669 )

Recognized Actuarial Loss (Gain)

13,303 12,530 22,742 ( 29 ) 2,439 2,020

Net Periodic Cost $ 37,413 $ ( 6,581 ) $ 6,080 $ 12,290 $ 10,600 $ 9,830

Non-service cost components of net pension and post-retirement benefit cost are presented within Interest and Investment Income on the Consolidated Statements of Operations.

Non-service cost components of net pension and post-retirement benefit cost are presented within Interest and Investment Income in the Consolidated Statements of Operations.

Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized over periods ranging from 8 to 21 years for pension benefits and 13 to 14 years for post-retirement benefits.

2 unchanged sentences

In thousands October 29, 2023 October 30, 2022 October 29, 2023 October 30, 2022

Unrecognized Prior Service Credit $ ( 2,399 ) $ ( 3,624 ) $ ( 146 ) $ ( 154 )

Unrecognized Actuarial (Losses) Gains ( 272,401 ) ( 305,433 ) 18,044 ( 35,616 )

Unrecognized Prior Service (Cost) Credit

$ ( 7,549 ) $ ( 2,399 ) $ ( 138 ) $ ( 146 )

Unrecognized Actuarial (Loss) Gain

( 270,468 ) ( 272,401 ) 35,483 18,044

The following is a reconciliation of the beginning and ending balances of the benefit obligation, fair value of plan assets, and funded status of the plans as of the measurement dates:

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Funded Status at End of Year $ 11,292 $ 40,187 $ ( 186,199 ) $ ( 211,986 )

Amounts recognized in the Consolidated Statements of Financial Position are as follows:

Amounts recognized on the Consolidated Statements of Financial Position are as follows:

Pension Benefits Post-retirement Benefits

2 unchanged sentences

Employee-Related Expenses

( 12,023 ) ( 11,571 ) ( 18,313 ) ( 19,962 )

Pension and Post-retirement Benefits ( 181,382 ) ( 193,808 ) ( 167,886 ) ( 192,024 )

Net Amount Recognized $ 11,292 $ 40,187 $ ( 186,199 ) $ ( 211,986 )

The accumulated benefit obligation for all pension plans was $ 1.2 billion and $ 1.7 billion as of October 30, 2022, and October 31, 2021, respectively.

The accumulated benefit obligation for all pension plans was $ 1.2 billion as of October 29, 2023 and October 30, 2022.

The following table provides information for pension plans with projected and accumulated benefit obligations in excess of plan assets:

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Interest Crediting Rate (For Cash Balance Plan)

(1) Cash balance plan enacted in the fourth quarter of fiscal 2022.

4.98 % 4.42 %

Weighted-average assumptions used to determine net periodic benefit costs are as follows:

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6.50 % 6.50 % 6.75 %

Interest Crediting Rate (For Cash Balance Plan) (1)

4.42 % — % — %

(1) Cash balance plan enacted in the fourth quarter of fiscal 2022.

The expected long-term rate of return on plan assets is based on fair value and developed in consultation with outside advisors.

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The investment strategy for the Master Trust attempts to minimize the long-term cost of pension benefits, reduce the volatility of pension expense, and achieve a healthy funded status for the plans.

The Company establishes target allocations in consultation with outside advisors through the use of asset-liability modeling in an effort to match the duration of the plan assets with the duration of the Company’s projected benefit liability.

The Company establishes target allocations in consultation

with outside advisors through the use of asset-liability modeling in an effort to match the duration of the plan assets with the duration of the Company’s projected benefit liability.

The actual and target weighted-average asset allocations for the Company’s pension plan assets as of the plan measurement date are as follows:

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Private Equity 6.7 0 – 15 7.1 0 – 10

2.4 0 – 5 — 0 – 0

Hedge Funds 2.1 0 – 10 2.1 0 – 10

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Corporate Issues – Foreign 36,133 — 36,133 —

Global Stocks - Mutual Funds (4)

Plan Assets in Fair Value Hierarchy $ 547,258 $ 124,144 $ 343,667 $ 79,448

2 unchanged sentences

Global Stocks – Collective Investment Funds (5)

Global Stocks – Gold (6)

Hedge Funds (7)

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Corporate Issues – Foreign 41,759 — 41,759 —

Global Stocks - Mutual Funds (4)

94,115 94,115 — —

Plan Assets in Fair Value Hierarchy $ 574,121 $ 109,643 $ 376,324 $ 88,154

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(1) Cash Equivalents:

These Level 2 investments consist primarily of highly liquid money market mutual funds traded in active markets in addition to highly liquid futures and T-bills with an observable daily settlement price.

These Level 1 and Level 2 investments consist primarily of cash and highly liquid money market mutual funds traded in active markets in addition to highly liquid futures and T-bills with an observable daily settlement price.

(2) Private Equity:

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government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources, and municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources.

(4) Global Stocks - Mutual Funds:

These Level 1 investments include open-ended mutual funds consisting of a mix of U.S.

common stocks and foreign common stocks, which are valued at closing price reported on the active market in which the fund is traded.

The investment strategy is to obtain long term capital appreciation by focusing on companies generating above average earnings growth and are leading growth businesses in the marketplace.

There are no restrictions on redemptions.

(4) Real Estate – Domestic:

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All funds are daily liquid with the exception of one that is available on the first business day of the month for subscriptions and withdrawals.

(6) Global Stocks – Gold:

This investment is a limited partnership consisting of physical gold, global mining industry common stocks, and to a limited extent, other precious metals.

The limited partnership is valued at the NAV of shares held by the Master Trust.

This fund allows for weekly subscriptions and monthly redemptions.

(7) Hedge Funds:

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Fair Value at End of Year $ 79,448 $ 88,154

(1) Included in Accumulated Other Comprehensive Loss in the Consolidated Statements of Financial Position.

(1) Included in Accumulated Other Comprehensive Loss on the Consolidated Statements of Financial Position.

During fiscal 2023, the value of the Level 3 investments ranged from $ 77.8 million to $ 88.2 million, with an average value of $ 81.2 million.

The Company has commitments totaling $ 131.5 million for the private equity investments within the pension plans.

The unfunded private equity commitment balance for each investment category is as follows:

The Company has commitments totaling $ 151.9 million for the investments within the pension plans.

The unfunded commitment balance for each investment category is as follows:

In thousands October 29, 2023 October 30, 2022

2 unchanged sentences

Unfunded Commitment Balance $ 28,231 $ 12,612

Funding for future private equity capital calls will come from existing pension plan assets and not from additional cash contributions by the Company.

Funding for future capital calls will come from existing pension plan assets and not from additional cash contributions by the Company.

Accumulated Other Comprehensive Loss

1 unchanged sentence

In thousands Foreign

Translation Pension & Other Benefits Derivatives & Hedging Accumulated

Translation Pension & Other Benefits Derivatives & Hedging Equity Method Investments

Comprehensive

5 unchanged sentences

Gross — 22,597 (1)

( 31,443 ) (2)

Tax Effect — ( 5,538 ) 7,652 — 2,114

Net of Tax Amount ( 11,164 ) 15,698 ( 284 ) 4,250

Change Net of Tax 12,980 71,967 33,034 — 117,981

Balance at October 31, 2021 $ ( 51,181 ) $ ( 261,211 ) $ 35,123 $ — $ ( 277,269 )

6 unchanged sentences

Tax Effect — ( 3,312 ) 14,073 — 10,761

Net of Tax Amount 12,980 71,967 33,034 117,981

Change Net of Tax ( 38,612 ) 65,587 ( 5,267 ) — 21,708

Balance at October 30, 2022 $ ( 89,793 ) $ ( 195,624 ) $ 29,856 $ — $ ( 255,561 )

5 unchanged sentences

( 2,213 ) (2)

( 8,235 ) (3)

Tax Effect — ( 2,806 ) 501 — ( 2,305 )

Net of Tax Amount ( 38,612 ) 65,587 ( 5,267 ) 21,708

Change Net of Tax 3,771 11,632 ( 38,940 ) 6,847 ( 16,691 )

Balance at October 29, 2023 $ ( 86,022 ) $ ( 183,993 ) $ ( 9,084 ) $ 6,847 $ ( 272,252 )

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See Note F - Derivatives and Hedging for additional information.

(3) Included in Equity in Earnings of Affiliates in the Consolidated Statements of Operations.

Fair Value Measurements

49 unchanged sentences

The Company also offers a fixed rate investment option to participants.

The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S.

applicable federal rates.

The rate earned on these investments is adjusted annually based on a specified percent of the U.S.

Internal Revenue Service (IRS) applicable federal rates.

These liabilities are classified as Level 2.

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Unrealized gains and losses associated with these investments are included in the Company's earnings.

Securities held by the trust generated gains (losses) of $( 16.8 ) million, $ 21.2 million, and $ 7.0 million for fiscal years 2022, 2021, and 2020, respectively.

(4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and hogs, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity

The Company’s futures contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange.

Securities held by the rabbi trust generated gains (losses) of $ 3.2 million, $( 16.8 ) million, and $ 21.2 million for fiscal years 2023, 2022, and 2021, respectively.

(4) The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn, natural gas, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers.

The Company’s futures and options contracts for corn are traded on the Chicago Board of Trade, while futures contracts for

lean hogs are traded on the Chicago Mercantile Exchange.

These are active markets with quoted prices available, and these contracts are classified as Level 1.

The Company’s corn futures option contracts are over-the-counter instruments classified as Level 2 whose value is calculated using the Black-Scholes pricing model, corn future prices quoted from the Chicago Board of Trade, and other adjustments to inputs that are observable in active markets.

The Company holds natural gas and pork swap contracts that are over-the-counter instruments classified as Level 2.

The value of the natural gas swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied USDA estimated pork cut-out value.

All derivatives are reviewed for potential credit risk and risk of nonperformance.

The net balance for each program is included in Other Current Assets or Accounts Payable, as appropriate, in the Consolidated Statements of Financial Position.

As of October 30, 2022, the Company has recognized the obligation to return net cash collateral of $ 1.3 million from various counterparties (including cash of $ 27.5 million less $ 26.2 million of realized gain).

The net balance for commodity derivatives is included in Other Current Assets or Accounts Payable, as appropriate, on the Consolidated Statements of Financial Position.

As of October 29, 2023, the Company has recognized the right to reclaim net cash collateral of $ 32.2 million from various counterparties (including cash of $ 42.6 million less $ 10.4 million of realized loss).

As of October 30, 2022, the Company had recognized obligation to return net cash collateral of $ 1.3 million from various counterparties (including cash of $ 27.5 million less $ 26.2 million of realized gain).

The Company’s financial assets and liabilities include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value.

The Company does not carry its long-term debt at fair value in its Consolidated Statements of Financial Position.

The Company does not carry its long-term debt at fair value on the Consolidated Statements of Financial Position.

The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $ 2.7 billion as of October 29, 2023 and $ 2.7 billion as of October 30, 2022.

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The Company measures certain nonfinancial assets and liabilities at fair value, which are recognized or disclosed on a nonrecurring basis (e.g., goodwill, intangible assets, and property, plant, and equipment).

During fiscal years 2022, 2021, and 2020, there were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

During fiscal year 2023, the Company recorded a $ 28.4 million impairment charge on the Justin's ® trade name and a $ 7.0 million impairment charge on a corporate venturing investment.

See additional discussion in Note C - Goodwill and Intangible Assets and Note D - Investments in Affiliates.

During fiscal years 2023, 2022, and 2021, there were no other material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

Commitments and Contingencies

To ensure a steady supply of hogs and turkeys and keep the cost of products stable, the Company has entered into contracts with producers for the purchase of hogs and turkeys at formula-based prices over periods up to 10 years.

Purchase Commitments:

The Company has also entered into grow-out contracts with independent farmers to raise turkeys for the Company for periods up to 25 years.

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In addition, the Company has contracted for the purchase of corn, soybean meal, feed ingredients, and other raw materials from independent suppliers for periods up to 2 years.

Under these contracts, the Company is committed to make purchases, assuming current price levels, as follows:

In thousands October 30, 2022

As of October 29, 2023, the Company is committed to make purchases under these contracts, assuming current price levels, for future fiscal years:

2024 $ 1,228,731

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Purchases under these contracts for fiscal years 2023, 2022, and 2021 were $ 1.4 billion, $ 1.2 billion, and $ 1.1 billion, respectively.

The Company has commitments of approximately $ 75 million related to infrastructure improvements supporting various manufacturing facilities as of October 30, 2022.

Other Commitments and Guarantees:

The Company has commitments of approximately $ 48.2 million related to infrastructure improvements supporting various manufacturing facilities and $ 62.0 million for a media advertising agreement as of October 29, 2023.

As of October 29, 2023, the Company has $ 48.6 million of standby letters of credit issued on its behalf.

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This amount includes revocable standby letters of credit totaling $ 2.7 million for obligations of an affiliated party that may arise under workers compensation claims.

Letters of credit are not reflected in the Company’s Consolidated Statements of Financial Position.

The Company is involved in litigation on an ongoing basis arising in the ordinary course of business.

In the opinion of management, the outcome of litigation currently pending will not materially affect the Company’s results of operations, financial condition, or liquidity.

The Company has operating leases for manufacturing facilities, office space, warehouses, transportation equipment, and miscellaneous real estate and equipment contracts.

Letters of credit are not reflected on the Consolidated Statements of Financial Position.

Legal Proceedings:

The Company is a party to various legal proceedings related to the ongoing operation of its business, including claims both by and against the Company.

At any time, such proceedings typically involve claims related to product liability, labeling, contracts, antitrust regulations, intellectual property, competition laws, employment practices, or other actions brought by employees, customers, consumers, competitors, or suppliers.

The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable.

However, future developments or settlements are uncertain and may require the Company to change such accruals as proceedings progress.

Resolution of any currently known matter, either individually or in the aggregate, is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity.

Pork Antitrust Litigation

Beginning in June 2018, a series of putative class action complaints were filed against the Company, as well as several other pork-processing companies and a benchmarking service called Agri Stats in the United States District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the Pork Antitrust Civil Litigation).

The plaintiffs allege, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products—including through the use of Agri Stats—in violation of federal antitrust laws.

The complaints on behalf of the putative classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws.

The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees.

Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future.

The Company has not recorded any liability for these matters as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations.

The Offices of the Attorney General in New Mexico and Alaska have filed complaints against the Company and certain of its pork subsidiaries, as well as several other pork processing companies and Agri Stats.

The complaints are based on allegations similar to those asserted in the Pork Antitrust Civil Litigation and allege violations of state antitrust, unfair trade practice, and unjust enrichment laws based on allegations of conspiracies to exchange information and manipulate the supply of pork.

Turkey Antitrust Litigation

Beginning in December 2019, a series of putative class action complaints were filed against the Company, as well as several other turkey-processing companies and a benchmarking service called Agri Stats, in the U.S.

District Court for the Northern District of Illinois styled In re Turkey Antitrust Litigation .

The plaintiffs allege, among other things, that from at least 2010 to 2017, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of turkey products—including through the use of Agri Stats—in violation of federal antitrust laws.

The plaintiffs seek treble damages, injunctive relief, pre-and post-judgment interest, costs, and attorneys’ fees.

Poultry Wages Antitrust Litigation

In December 2019, a putative class of non-supervisory production and maintenance employees at poultry-processing plants in the continental United States filed an amended consolidated class action complaint against the Company and various other poultry processing companies in the United States District Court for the District of Maryland styled Jien, et al.

Perdue Farms, Inc., et al .

The plaintiffs allege that since 2009, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at poultry-processing plants, feed mills, and hatcheries in violation of federal antitrust laws.

The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief.

In July 2022, the Court partially granted the Company’s motion to dismiss, and dismissed plaintiffs’ per se wage-fixing claim as to the Company.

The Company has not recorded any liability for this matter as it does not believe a loss is probable, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations.

Red Meat Wages Antitrust Litigation

In November 2022, a putative class of non-supervisory production and maintenance employees at “red meat” processing plants in the continental United States filed a class action complaint against the Company and various other beef- and pork-processing companies in the United States District Court for the District of Colorado styled Brown, et al.

JBS USA Food Co., et al .

The plaintiffs allege that since 2014, the defendants directly and through a wage survey and benchmarking service exchanged information regarding compensation in an effort to depress and fix wages and benefits for employees at

beef- and pork-processing plants in violation of federal antitrust laws.

The plaintiffs seek, among other things, treble monetary damages, punitive damages, restitution, and pre-and post-judgment interest, as well as declaratory and injunctive relief.

The Company has operating leases for manufacturing facilities, office space, warehouses, transportation equipment, as well as miscellaneous real estate and equipment contracts.

Finance leases primarily include turkey growing facilities and an aircraft.

The Company's lessor portfolio consists primarily of immaterial operating leases of farmland to third parties.

Lease information included in the Consolidated Statements of Financial Position are:

Lease information included on the Consolidated Statements of Financial Position are:

In thousands Location on Consolidated Statements of

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Variability of these costs is determined based on usage or output and may vary for other reasons such as changes in material prices.

The weighted-average remaining lease term and discount rate for lease liabilities included in the Consolidated Statements of Financial Position are:

The weighted-average remaining lease term and discount rate for lease liabilities included on the Consolidated Statements of Financial Position are:

October 29, 2023 October 30, 2022

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Finance Leases 3.37 % 3.44 %

Supplemental cash flow and other information related to leases for the fiscal year-end are:

Supplemental cash flow and other information related to leases for the fiscal year ended are:

In thousands October 29, 2023 October 30, 2022 October 31, 2021

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Financing Cash Flows from Finance Leases 8,407 8,491 8,598

Right-of-Use Assets obtained in exchange for new finance lease liabilities

Right-of-Use Assets obtained in exchange for new operating lease liabilities 84,087 19,646 31,962

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(1) Over the life of the lease contracts, finance lease payments include $ 8.1 million related to purchase options which are reasonably certain of being exercised.

(2) Lease payments exclude $ 31.2 million of legally binding minimum lease payments for leases signed but not yet commenced.

Long-term Debt and Other Borrowing Arrangements

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Interest Rate Swap Liabilities (1)

( 7,451 ) ( 19,950 )

Finance Lease Liabilities (2)

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Senior Unsecured Notes:

On June 3, 2021, the Company issued $ 950.0 million aggregate principal amount of its 0.650 % notes due 2024 (the "2024 Notes"), $ 750.0 million aggregate principal amount of its 1.700 % notes due 2028 (the "2028 Notes"), and $ 600.0 million aggregate principal amount of its 3.050 % notes due 2051 (the "2051 Notes").

On June 3, 2021, the Company issued $ 950.0 million aggregate principal amount of its 0.650 % notes due 2024 (2024 Notes), $ 750.0 million aggregate principal amount of its 1.700 % notes due 2028 (2028 Notes), and $ 600.0 million aggregate principal amount of its 3.050 % notes due 2051 (2051 Notes).

The 2024 Notes may be redeemed in whole or in part one year after their issuance without penalty for early partial payments or full redemption.

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See Note F - Derivatives and Hedging for additional information.

If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101 % of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $ 1.0 billion, due June 11, 2030.

If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price

equal to 101 % of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

During the third quarter of fiscal 2023, the 2024 Notes were reclassified to Current Maturities of Long-term Debt on the Consolidated Statement of Financial Position.

On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $ 1.0 billion due 2030.

The notes bear interest at a fixed rate of 1.800 % per annum, with interest paid semi-annually in arrears on June 11 and December 11 of each year, commencing December 11, 2020.

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On May 6, 2021, the Company entered into an unsecured revolving credit agreement with Wells Fargo Bank, National Association as administrative agent, swingline lender and issuing lender, U.S.

Bank National

Association, JPMorgan Chase Bank, N.A.

Bank National Association, JPMorgan Chase Bank, N.A.

and BofA Securities, Inc.

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The revolving credit agreement provides for an unsecured revolving credit facility with an aggregate principal commitment amount at any time outstanding of up to $ 750.0 million with an uncommitted increase option of an additional $ 375.0 million upon the satisfaction of certain conditions.

The unsecured revolving line of credit bears interest, at the Company’s election, at either a Base Rate plus margin of 0.0 % to 0.150 % or the Eurocurrency Rate plus margin of 0.575 % to 1.150 % and a variable fee of 0.050 % to 0.100 % is paid for the availability of this credit line.

On April 17, 2023, the Company entered into a first amendment (Amendment) to the Company’s $ 750.0 million revolving credit agreement.

The Amendment provides for, among other things (i) the replacement of London Interbank Offered Rate (LIBOR) with Term Secured Overnight Financing Rate (SOFR) and Daily Simple Singapore Overnight Rate Average (SORA) for the Eurocurrency Rate for U.S.

Dollars and Singapore Dollars, including applicable credit spread adjustments and relevant SOFR benchmark provisions, (ii) permitting two one-year extension options to be exercised at any anniversary, (iii) removing the change in debt ratings notice requirement, (iv) shortening the notice period requirements for Base Rate Loans to allow for same day notice, and (v) increasing the number of permitted interest periods from 8 to 15 .

The unsecured revolving line of credit bears interest, at the Company’s election, at either a Base Rate plus margin of 0.0 % to 0.150 % or the Adjusted Term SOFR, Adjusted Daily Simple Risk-Free Rate (RFR) or Eurocurrency Rate plus margin of 0.575 % to 1.150 % and a variable fee of 0.050 % to 0.100 % is paid for the availability of this credit line.

Extensions of credit under the facility may be made in the form of revolving loans, swingline loans and letters of credit.

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The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position.

As of October 30, 2022, the Company was in compliance with all of these covenants.

As of October 29, 2023, the Company was in compliance with all covenants.

Interest Payments:

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Stock-based compensation expense for fiscal years 2023, 2022, and 2021, was $ 24.1 million, $ 24.9 million, and $ 24.7 million, respectively.

The Company recognizes stock-based compensation expense ratably over the vesting period or the individual's retirement eligibility date.

The Company recognizes stock-based compensation expense ratably over the shorter of the vesting period or the individual's retirement eligibility date.

As of October 29, 2023, there was $ 16.2 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans.

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(in thousands) Weighted-average

Exercise Price Weighted-Average

Exercise Price

Weighted-average

Remaining Contractual

Term (Years) Aggregate

Intrinsic Value

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Stock Options Exercisable at October 29, 2023 13,611 $ 36.00 3.5 $ 18,845

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised during each of the past three fiscal years, are:

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised are:

Fiscal Year Ended

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(in thousands) Weighted-

Fair Value Weighted-Average

Weighted-average

Remaining Contractual

Term (Years) Aggregate

Intrinsic Value

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723 $ 45.59 1.3 $ 22,692

The weighted-average grant date fair value of restricted stock units granted and the total fair value of restricted stock units granted during each of the past three fiscal years, are:

The weighted-average grant date fair value of restricted stock units granted, the total fair value of restricted stock units granted, and the fair value of restricted stock units that have vested are:

Fiscal Year Ended

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A reconciliation of the restricted shares as of October 29, 2023, is:

In thousands, except per share amounts Shares Weighted-

(in thousands) Weighted-

Restricted Shares Outstanding at October 30, 2022 37 $ 47.11

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Restricted Shares Outstanding at October 29, 2023 44 $ 44.14

The weighted-average grant date fair value of restricted shares granted, the total fair value of restricted shares granted, and the fair value of shares that have vested during each of the past three fiscal years are:

The weighted-average grant date fair value of restricted shares granted, the total fair value of restricted shares granted, and the fair value of shares that have vested are:

Fiscal Year Ended

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Marketing and Promotional Accruals 16,972 29,045

46,856 10,368

Other, net 75,562 51,966

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Stock-based Compensation ( 0.1 ) ( 1.5 ) ( 1.6 )

Foreign-derived Intangible Income Deduction

( 1.3 ) ( 0.4 ) ( 0.4 )

All Other, net ( 0.3 ) 0.2 ( 0.5 )

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Balance as of October 29, 2023

The amount of unrecognized tax benefits, including interest and penalties, is recorded in Other Long-term Liabilities.

Unrecognized tax benefits, including interest and penalties, are recorded in Other Long-term Liabilities.

If recognized as of October 29, 2023 and October 30, 2022, $ 17.0 million, and $ 17.2 million, respectively, would impact the Company’s effective tax rate.

The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with immaterial losses included in expense for fiscal 2022, 2021 and 2020.

The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial losses included during fiscal 2023, 2022 and 2021.

The amount of accrued interest and penalties at October 29, 2023 and October 30, 2022, associated with unrecognized tax benefits was $ 2.4 million and $ 2.3 million, respectively.

The Company is regularly audited by federal and state taxing authorities.

Internal Revenue Service (I.R.S.) concluded their examinations of fiscal 2019 in the second quarter of fiscal 2021.

has placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal 2020.

In this phase, the I.R.S.

will not accept any disclosures, conduct any reviews, or provide any assurances.

The IRS concluded its examination of fiscal 2021 in the second quarter of fiscal 2023.

Previously, the IRS placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal 2020.

In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances.

The Company has elected to participate in CAP for fiscal years through 2023.

The objective of CAP is to contemporaneously work with the I.R.S.

to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return.

The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return.

The Company may elect to continue participating in CAP for future tax years;

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The Inflation Reduction Act of 2022 was signed into law on August 16, 2022.

The 15% corporate alternative minimum tax will not apply to the Company until fiscal year 2024.

The 15% corporate minimum tax will apply to the Company in fiscal year 2024.

Earnings Per Share Data

The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share.

Diluted earnings per share was calculated using the treasury stock method.

The following table sets forth the shares used as the denominator for those computations.

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The Company develops, processes, and distributes a wide array of food products in a variety of markets.

The Company reports its results in the following four segments:

Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other, which are consistent with how the Company's Chief Operating Decision Maker (CODM) assesses performance and allocates resources.

Grocery Products:

The Grocery Products segment primarily consists of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers.

This segment also includes the results from the Company’s MegaMex Foods, LLC (MegaMex) joint venture.

Refrigerated Foods:

The Refrigerated Foods segment includes the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, deli, convenience store, and commercial customers.

Jennie-O Turkey Store:

The Jennie-O Turkey Store segment primarily consists of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and commercial customers.

International & Other:

The International & Other segment includes Hormel Foods International, which manufactures, markets, and sells Company products internationally.

This segment also includes the results from the Company’s international royalty arrangements and other joint ventures.

Intersegment sales are eliminated in the Consolidated Statements of Operations.

As described in Note A - Summary of Significant Accounting Policies, the Company transitioned to a new operating model in the first quarter of fiscal 2023 and now reports its results in the following three segments:

Retail, Foodservice, and International, which are consistent with how the Company's chief operating decision maker (CODM) assesses performance and allocates resources.

Prior period segment results have been retrospectively recast to reflect the new reportable segments.

The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market.

This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture.

The Foodservice segment consists primarily of the processing, marketing, and sale of food and nutritional products for foodservice, convenience store, and commercial customers.

The International segment processes, markets, and sells Company products internationally.

This segment also includes the results from the Company’s international joint ventures, equity method investments, and royalty arrangements.

The Company's CODM reviews assets at a consolidated level and does not use assets by segment to evaluate performance or allocate resources.

Therefore, the Company does not disclose assets by segment.

Intersegment sales are eliminated in

consolidation and are not reviewed when evaluating segment performance.

The Company does not allocate deferred compensation, investment income, interest expense, or interest income to its segments when measuring performance.

The Company also retains various other income and expenses at the corporate level.

In fiscal 2021, one-time acquisition-related costs and accounting adjustments associated with the purchase of the Planters ® snack nuts business were also retained at the corporate level.

Equity in Earnings of Affiliates is included in segment profit;

however, earnings attributable to the Company’s noncontrolling interests are excluded.

however, earnings attributable to the Company’s corporate venturing investments and noncontrolling interests are excluded.

These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes.

Financial measures for each of the Company’s reportable segments and reconciliation to consolidated Earnings Before Income Taxes are set forth below.

The Company's CODM reviews assets at a consolidated level and does not use assets by segment to evaluate performance or allocate resources.

Therefore, the Company does not disclose assets by segment.

The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets.

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October 29, 2023 October 30, 2022 October 31, 2021

Sales to Unaffiliated Customers

Grocery Products $ 3,533,138 $ 2,809,445 $ 2,385,291

Refrigerated Foods 6,691,230 6,333,410 5,271,061

Jennie-O Turkey Store 1,507,421 1,495,151 1,333,459

International & Other 727,017 748,183 618,650

Total $ 12,458,806 $ 11,386,189 $ 9,608,462

Intersegment Sales

Grocery Products $ — $ — $ 13

Refrigerated Foods 25,751 28,019 21,067

Jennie-O Turkey Store 253,573 134,563 108,276

International & Other — — —

Total 279,325 162,582 129,356

Intersegment Elimination

Retail $ 7,749,039 $ 7,987,598 $ 7,418,079

Foodservice 3,639,492 3,691,408 3,130,174

International 721,479 779,799 837,936

Total Net Sales

$ 12,110,010 $ 12,458,806 $ 11,386,189

Total $ — $ — $ —

Grocery Products $ 3,533,138 $ 2,809,445 $ 2,385,304

Refrigerated Foods 6,716,981 6,361,429 5,292,128

Jennie-O Turkey Store 1,760,994 1,629,714 1,441,735

International & Other 727,017 748,183 618,650

Intersegment Elimination ( 279,325 ) ( 162,582 ) ( 129,356 )

Total $ 12,458,806 $ 11,386,189 $ 9,608,462

Segment Profit

Grocery Products $ 367,642 $ 382,197 $ 358,008

Refrigerated Foods 685,394 664,558 609,406

Jennie-O Turkey Store 218,860 76,006 105,585

International & Other 105,264 115,943 93,782

Retail $ 577,690 $ 721,832 $ 690,127

Foodservice 595,682 547,686 431,992

International 55,234 107,642 116,585

Total Segment Profit $ 1,228,606 $ 1,377,161 $ 1,238,704

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Depreciation and Amortization

Grocery Products $ 50,948 $ 34,645 $ 32,148

Refrigerated Foods 131,041 116,206 97,317

Jennie-O Turkey Store 47,190 47,669 46,322

International & Other 12,972 15,244 16,226

Corporate 20,602 14,643 13,767

Total $ 262,753 $ 228,406 $ 205,781

Revenue has been disaggregated into the categories below to show how sales channels affect the nature, amount, timing, and uncertainty of revenue and cash flows.

Total revenue contributed by sales channel for the last three fiscal years are:

Fiscal Year Ended

In thousands October 30, 2022 October 31, 2021 October 25, 2020

Retail $ 7,780,284 $ 7,283,842 $ 6,411,739

Foodservice 3,879,568 3,239,424 2,489,644

$ 145,690 $ 135,824 $ 124,627

74,370 69,577 53,954

International

Total $ 12,458,806 $ 11,386,189 $ 9,608,462

In fiscal 2022, the Company updated its presentation of revenue disaggregation by sales channel, combining U.S.

Deli and U.S.

Retail as market conditions have evolved providing many similarities between the channels.

The prior year presentation has been updated to conform to the current period presentation.

15,627 16,072 16,482

Corporate 17,623 14,413 14,246

Total Depreciation and Amortization

$ 253,311 $ 235,885 $ 209,309

The Company’s products primarily consist of meat and other food products.

Total revenue contributed by classes of similar products for the last three fiscal years are:

Total revenue contributed by classes of similar products are:

Fiscal Year Ended

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Shelf-stable 3,598,215 3,721,320 2,948,338

Poultry 2,121,819 2,100,356 1,886,367

Miscellaneous 380,400 353,475 300,806

Total $ 12,458,806 $ 11,386,189 $ 9,608,462

Perishable includes fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, and guacamole (excluding Jennie-O Turkey Store products).

Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, and other items that do not require refrigeration.

The Poultry category is composed primarily of Jennie-O Turkey Store products.

The Miscellaneous category primarily consists of nutritional food products and supplements, dessert and drink mixes, and industrial gelatin products.

Total Net Sales

$ 12,110,010 $ 12,458,806 $ 11,386,189

Perishable includes fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, guacamole, and other items that require refrigeration.

Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, nutritional food supplements, and other items that do not require refrigeration.

Revenues from external customers are classified as domestic or foreign based on the location where title passes.

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Total net sales attributed to the U.S.

and all foreign countries in total for the last three fiscal years are:

and all foreign countries in total are:

Fiscal Year Ended

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Foreign 594,915 681,923 733,101

Total $ 12,458,806 $ 11,386,189 $ 9,608,462

Total Net Sales

$ 12,110,010 $ 12,458,806 $ 11,386,189

In fiscal 2023, sales to Walmart Inc.

(Walmart) represented $ 2.0 billion or 15.5 % of the Company’s consolidated gross sales less returns and allowances compared to $ 2.1 billion or 15.6 % in fiscal 2022.

Walmart is a customer for all four segments of the Company.

Walmart is a customer for the Company's Retail and International segments.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data