What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-12-05 compared with 2023-12-06 · 345 added, 290 removed, 1230 unchanged (34% of the section changed)

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Management of Hormel Foods Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Exchange Act Rule 13a–15(f).

The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting standards.

Under the supervision, and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

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In our opinion, Hormel Foods Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of October 27, 2024, 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 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.

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 27, 2024 and October 29, 2023, 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 27, 2024, and the related notes and financial statement schedule listed in the Index at Item 15 and our report dated December 5, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Valuation of Alternative Investments — Pension Assets

Valuation of Pension Plan Assets

Description of the Matter At October 27, 2024, the Company had $1.3 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, 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.

Additionally, certain information regarding the fair value of these alternative investments is based on unaudited information available to management at the time of valuation.

Valuation of Alternative Investments — Pension Assets

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls addressing the risk of material misstatement relating to valuation of alternative investments.

This included testing management's review controls over the valuation of alternative investments, for example, a review of fund performance in comparison to the selected benchmark and meetings with the investment advisor on a quarterly basis to review market performance and fund returns in comparison with relevant indices and the investment policy.

We also tested management’s independent price testing of underlying investments performed for certain investments on a quarterly basis.

Our audit procedures included, among others, inquiring of management and the investment advisor regarding changes to the investment portfolio and investment strategies.

We confirmed the fair value of the investments and ownership interest directly with the fund managers.

We inspected the trust statement for observable transactions near year end to compare to the estimated fair value.

We also obtained the latest audited financial statements for certain investments, performed a rollforward of the investment balance to compute an estimated market return on investment, and compared the market return to relevant benchmarks.

This includes $87.3 million of private equity and real estate funds and $724.5 million of investments recorded at net asset value (NAV).

Auditing the fair value of these 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.

Additionally, certain information regarding the fair value of these investments is based on unaudited information available to management at the time of valuation.

This included testing management's review controls over the valuation of these investments, for example, a review of fund performance in comparison to the selected benchmark returns and independent price testing of the underlying investments of certain funds.

We also tested management’s review of the valuation of private equity, hedge funds and real estate funds, which included performing a look back comparison of fair values from audited financial statements to unaudited financial statements and rolling forward the balance using cash flows and predicting the ending market value using benchmark returns.

Our audit procedures included, among others, inquiring of management and the investment advisor regarding changes to the investment portfolio, investment strategies, and valuation policies.

We confirmed the completeness of the investments and ownership interest directly with the fund managers.

We performed a hindsight analysis comparing the fair value of the investments using the most recently available financial statements of the fund to management’s recorded value as of the date of the audited financial statements of the fund.

We rolled forward the fair value of certain investments from the date of the audited financial statements of the funds to the measurement date by predicting income from the date of the audited financial statements to the measurement date using a relevant benchmark return and evaluating activity (e.g.

purchases, sales) to calculate the fair value of the funds recorded by management as of the measurement date.

Additionally, we inspected the trust statement for observable transactions near year end to compare to the estimated fair value.

/s/ Ernst & Young LLP

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Equity Method Investments

( 14,050 ) 6,847 —

Total Other Comprehensive Income (Loss) 9,310 ( 16,874 ) 20,927

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542,412 $ 7,946 — $ — $ 360,336 $ 6,881,870 $ ( 277,269 ) $ 5,478 $ 6,978,360

Net Earnings 908,839 301 909,140

Net Earnings (Loss)

999,987 239 1,000,226

Other Comprehensive Income

(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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546,237 $ 8,002 — $ — $ 469,468 $ 7,313,374 $ ( 255,561 ) $ 4,936 $ 7,540,219

Net Earnings 999,987 239 1,000,226

Net Earnings (Loss)

793,572 ( 653 ) 792,920

Other Comprehensive Income

(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

Net Earnings 793,572 ( 653 ) 792,920

Net Earnings (Loss)

805,038 ( 407 ) 804,631

Other Comprehensive Income

(Loss) 8,921 389 9,310

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

Contribution from

Noncontrolling Interest

Stock-based Compensation

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Restricted Shares 1,951 28 40,685 40,713

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

Declared Dividends —

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Net Earnings $ 804,631 $ 792,920 $ 1,000,226

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 233,827 227,331 213,026

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16,292 20,034 12,931

Changes in Operating Assets and Liabilities, Net of Acquisitions:

Changes in Operating Assets and Liabilities, Net of Divestitures:

Decrease (Increase) in Accounts Receivable 1,899 48,998 28,365

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Investing Activities

Net (Purchase) Sale of Securities ( 42 ) 2,493 ( 4,364 )

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

Net Sale (Purchase) of Securities

( 6,088 ) ( 42 ) 2,493

Proceeds from Sale of Business 25,006 — —

Purchases of Property, Plant, and Equipment

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Proceeds from Long-term Debt 497,765 1,980 —

Payment of Debt Issuance Costs

( 1,105 ) — —

Repayments of Long-term Debt and Finance Leases ( 959,017 ) ( 8,827 ) ( 8,673 )

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Proceeds from Exercise of Stock Options 40,713 12,018 79,827

Proceeds from Noncontrolling Interest 6,508 — —

Net Cash Provided by (Used in) Financing Activities ( 1,030,096 ) ( 600,064 ) ( 486,684 )

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Cash and Cash Equivalents at End of Year $ 741,881 $ 736,532 $ 982,107

Supplemental Non-cash Financing and Investing Activities:

Purchases of Property, Plant, and Equipment included in Accounts Payable

$ 21,996 $ 21,175 $ 19,104

See Notes to the Consolidated Financial Statements

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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.

Financial information from certain foreign subsidiaries is reported on a one-month lag.

Use of Estimates:

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Fiscal years 2024, 2023, and 2022 consisted of 52 weeks.

Fiscal year 2021 consisted of 53 weeks.

Fiscal year 2025 will consist of 52 weeks.

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The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans.

Under the plans, participants can defer certain types of compensation and elect to receive a return on the deferred amounts based on the changes in fair value of various investment options, primarily a variety of mutual funds.

The Company has corporate-owned life insurance policies on certain participants in the deferred compensation plans.

The cash surrender value of the policies is included in Other Assets on the Consolidated Statements of Financial Position.

The rabbi trust is reflected in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Statements of Financial Position.

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.

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.

Therefore, unrealized gains and losses associated with these investments are included in Interest and Investment Income on the Consolidated Statements of Operations.

The Company also has corporate-owned life insurance policies on

certain participants in the deferred compensation plans.

The cash surrender value of these policies is included in Other Assets on the Consolidated Statements of Financial Position.

Inventories are stated at the lower of cost or net realizable value.

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Property, Plant, and Equipment:

Property, Plant, and Equipment are stated at cost.

The Company uses the straight-line method in computing depreciation.

The annual provisions for depreciation have been computed principally using the following ranges of asset lives:

buildings 20 to 40 years, and equipment 3 to 14 years.

Property, Plant, and Equipment are stated at cost and the Company recognizes depreciation using the straight-line method over the estimated useful life of the assets.

Costs associated with software developed or obtained for internal use, including third-party development fees incurred during the application development stage, are capitalized and amortized on a straight-line basis.

Depreciation has been computed principally using asset lives of 20 to 40 years for buildings and 3 to 14 years for software and equipment.

The Company determines if an arrangement contains a lease at inception.

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Goodwill and Other Indefinite-Lived Intangibles:

Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition.

Indefinite-lived intangible assets are originally recorded at their estimated fair values at the date of acquisition.

Goodwill is the residual after allocating the purchase price to net assets acquired.

Acquired goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related benefits.

Goodwill and indefinite-lived intangible assets are tested annually for impairment during the fourth quarter following the annual planning process or more frequently if impairment indicators arise.

Goodwill and indefinite-lived intangible assets are tested annually for impairment during the fourth quarter or more frequently if impairment indicators arise.

See additional discussion regarding the Company’s goodwill and intangible assets in Note C - Goodwill and Intangible Assets.

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First, the fair value of each reporting unit is compared to its corresponding carrying value, including goodwill.

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 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.

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.

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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.

During the fourth quarter of fiscal 2024, the Company completed its annual goodwill impairment tests by performing qualitative assessments.

No impairment charges were recorded as a result of the annual assessments in fiscal years 2024, 2023, and 2022.

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Even if not required, the Company may elect to perform the quantitative test in order to gain further assurance in the qualitative assessment.

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

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.

During the fourth quarter of fiscal 2024, 2023, and 2022, the Company completed its annual indefinite-lived asset impairment tests by performing qualitative assessments.

In fiscal 2023, the qualitative assessment determined the Justin ’ s ® trade name was more likely than not 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.

No other impairment charges were recorded as a result of the assessments in fiscal years 2024, 2023, and 2022.

Pension and Other Post-retirement Benefits:

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The Company may be subject to investigations, legal proceedings, or claims related to the ongoing operation of its business, including claims both by and against the Company.

Such proceedings typically involve claims related to product liability, contract disputes, antitrust regulations, wage and hour laws, employment practices, or other actions brought by employees, consumers, competitors or suppliers.

The Company establishes accruals for its potential exposure for claims when losses become probable and reasonably estimable.

Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range which constitutes the Company’s best estimate.

The Company also discloses the nature of and range of loss for claims against the Company when losses are reasonably possible and material.

Where the Company is able to reasonably estimate a range of probable losses, but no amount within the range is more likely than another, the Company records the amount at the low end of the range.

The Company also discloses the nature of claims against the Company when losses are reasonably possible and material;

in this situation, the Company also discloses an estimate of the possible loss, range of loss, or that an estimate cannot be made.

Foreign Currency Translation:

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.

When calculating foreign currency translation, the Company deemed its foreign investments to be permanent in nature and has not provided for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S.

When calculating foreign currency translation, the Company has deemed its foreign investments to be permanent in nature and has not provided for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S.

Derivatives and Hedging Activity:

The Company uses derivative instruments to manage its exposure to commodity prices and interest rates.

Hedge accounting is used for cash flow and fair value hedging programs that qualify in accordance with ASC 815, Derivatives and Hedging .

The Company has determined its designated hedging programs to be highly effective in offsetting the changes in fair value or cash flows generated by the items hedged.

Effectiveness testing is performed on a quarterly basis to ascertain a high level of effectiveness for cash flow and fair value hedging programs.

If the requirements of hedge accounting are no longer met, hedge accounting is discontinued immediately and any future changes to fair value are recorded directly through earnings.

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

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 on the Consolidated Statements of Financial Position.

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

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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, 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.

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

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 records 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 method investments in fiscal 2024 or 2022.

In fiscal 2023, the Company recorded a $ 7.0 million impairment related to a corporate venturing investment.

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

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The Company’s revenue is recognized at the point in time when performance obligations have been satisfied and control of the product has transferred to the customer.

This is typically once the shipped product is received or picked up by the customer.

This is typically once the ordered product is received or picked up by the customer.

Revenue is recognized at the net consideration the Company expects to receive in exchange for the goods.

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A majority of the Company’s revenue is short-term in nature with shipments within one year from order date.

The Company's payment terms generally range between 7 to 45 days and vary by sales channel and other factors.

The Company’s payment terms generally range between seven to 60 days and vary by sales channel and other factors.

The Company accounts for shipping and handling costs as contract fulfillment costs and excludes taxes imposed on and collected from customers in revenue producing transactions from the transaction price.

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The Company promotes products through advertising, consumer incentives, and trade promotions.

These programs include discounts, slotting fees, coupons, rebates, and in-store display incentives.

Customer trade promotion and consumer incentive activities are recorded as a reduction to the sale price based on amounts estimated as variable consideration.

The Company estimates variable consideration at the expected value method to determine the total consideration which the Company expects to be entitled.

Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.

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.

These promotional programs include, but are not limited to, discounts, slotting fees, coupons, rebates, and in-store display incentives.

Customer trade promotion and consumer incentive activities are recorded as a reduction to revenue and a corresponding accrued liability based on amounts estimated as variable consideration.

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

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Advertising Expenses:

Advertising costs are included in Selling, General, and Administrative and expensed when incurred.

Advertising costs are included in Selling, General, and Administrative expenses in the Consolidated Statements of Operations and expensed when incurred.

Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research.

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Research and Development Expenses:

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

Research and development expenses incurred for fiscal years 2024, 2023, and 2022 were $ 36.1 million, $ 33.7 million, and $ 34.7 million, respectively.

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The Company records stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation .

For options subject to graded vesting, the Company recognizes stock-based compensation expense ratably over the shorter of 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 grantee’s retirement eligibility date.

These costs are primarily included in Selling, General, and Administrative expenses in the Consolidated Statements of Operations.

The Company estimates forfeitures at the time of grant based on historical experience and revises in subsequent periods if actual forfeitures differ.

Share Repurchases:

The Company may purchase shares of its common stock through open market and privately negotiated transactions at prices deemed appropriate by management.

The Company may purchase shares of its common stock through open market and privately negotiated transactions pursuant to share repurchase authorizations approved by the Company's Board of Directors and at prices deemed appropriate by management.

The timing and amount of repurchase transactions under the repurchase authorization depend on market conditions as well as corporate and regulatory considerations.

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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.

Changes in the value of these investments are presented in the Consolidated Statements of Operations as Interest and Investment Income.

Changes in the value of these investments are presented in Interest and Investment Income in the Consolidated Statements of Operations.

Reclassifications:

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.

The reclassifications had no impact on the Consolidated Statements of Operations, Consolidated Statements of Comprehensive Income, Consolidated Statements of Financial Position, Consolidated Statements of Shareholders' Investment, or Consolidated Statements of Cash Flows.

Accounting Changes and Recent Accounting Pronouncements:

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No new accounting standards were adopted during fiscal 2024.

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).

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

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.

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.

New Accounting Pronouncements Not Yet Adopted

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

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

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

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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.

The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and requires retrospective application to all prior periods presented in the financial statements.

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

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The update is intended to enhance transparency and decision usefulness of income tax disclosures.

This ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction.

The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

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

In March 2024, the SEC adopted a final rule under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors , to enhance and standardize climate-related disclosures.

The rule will require companies to disclose material Scope 1 and Scope 2 greenhouse gas emissions;

climate-related risks, governance, and oversight;

and the financial effects of severe weather events and other natural conditions.

These disclosures are required to be phased in starting with annual reporting periods beginning in 2025;

however, this rule has been stayed pending the outcome of legal challenges.

The Company is assessing the impact of adoption on our Consolidated Financial Statements and related disclosures in the event that the stay is lifted.

In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The new guidance is intended to provide investors more detailed disclosures around specific types of expenses.

The new disclosures require certain details for expenses presented on the face of the Consolidated Statements of Operations as well as selling expenses to be presented in the notes to the financial statements.

The update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The disclosure updates are required to be applied prospectively with the option for retrospective application.

The Company is currently assessing the impact and timing 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.

Acquisitions and Divestitures

Acquisitions:

On June 7, 2021, the Company acquired the Planters ® snack nuts business from The Kraft Heinz Company.

The acquisition includes the Planters ® , NUT-rition ® , and Corn Nuts ® brands.

The final purchase price, including working capital adjustments, was $ 3.4 billion.

The transaction was funded with the Company’s cash on hand and from the issuance of long-term debt.

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 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.

Acquisition-related costs were $ 30.3 million for the fiscal year ended October 31, 2021, which are reflected in the Consolidated Statements of Operations as Selling, General, and Administrative.

Additional one-time adjustments related to the revaluation of acquired inventory of $ 12.9 million were recognized in the Consolidated Statements of Operations as Cost of Products Sold for the fiscal year ended October 31, 2021.

The combined impact of these one-time acquisition costs and accounting adjustments was $ 43.2 million for the fiscal year ended October 31, 2021.

The acquisition was accounted for as a business combination using the acquisition method.

The Company determined the acquisition date fair values of the assets acquired using independent appraisals.

The Company completed purchase accounting allocations in the fourth quarter of fiscal 2021.

Allocations of the purchase price to acquired assets, including goodwill and intangibles assets, are presented in the table below.

In thousands Purchase Price Allocation

Inventory $ 149,224

Property, Plant, and Equipment 170,958

Goodwill 2,313,064

Other Intangibles:

Trade Names 712,000

Customer Relationships 51,000

Purchase Price $ 3,396,246

Goodwill is calculated as the excess of the purchase price over the fair values of the identifiable net assets acquired and is deductible for tax purposes.

The goodwill recorded as part of the acquisition primarily reflects the value of the potential to expand the Company's presence in the growing snacking space and serve as a platform for innovation.

The following unaudited pro forma financial information presents the combined results of operations as if the acquisition of the Planters ® snack nuts business had occurred on October 27, 2019.

These unaudited pro forma results do not necessarily reflect the actual results of operations that would have been achieved had the acquisition occurred on that date, nor are they necessarily indicative of future results of operations.

Fiscal Year Ended

In thousands October 31, 2021

Pro Forma Net Sales $ 12,061,686

Pro Forma Net Earnings Attributable to Hormel Foods Corporation 985,881

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 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.

Divestitures:

On October 18, 2024, the Company completed the sale of its equity interests in Hormel Health Labs, LLC (Hormel Health Labs) and related assets to Lyons Health Labs Holdco, LLC.

The preliminary purchase price was $ 25.0 million, pending final working capital adjustments.

The divestiture resulted in a pre-tax gain of $ 3.9 million, which was recognized in Selling, General and Administrative on the Consolidated Statements of Operations.

Results of operations for Hormel Health Labs were reflected within the Foodservice segment through the date of divestiture.

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:

The change in the carrying amount of goodwill for the fiscal years ended October 27, 2024 and October 29, 2023, is:

In thousands Grocery

4 unchanged sentences

$ 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

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

Goodwill Sold

— — — — ( 2,239 ) — ( 2,239 )

Foreign Currency Translation — — — — — ( 2,738 ) ( 2,738 )

1 unchanged sentence

$ — $ — $ — $ 2,916,796 $ 1,748,355 $ 258,336 $ 4,923,487

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

The goodwill sold during fiscal 2024 was due to the divestiture of Hormel Health Labs.

Intangible Assets:

The carrying amounts for indefinite-lived intangible assets are:

October 29, October 30,

In thousands 2023 2022

In thousands October 27, 2024 October 29, 2023

Brands/Trade Names/Trademarks

2 unchanged sentences

Foreign Currency Translation ( 6,655 ) ( 5,893 )

Total $ 1,631,098 $ 1,658,775

Total Indefinite-lived Intangible Assets

$ 1,623,112 $ 1,631,098

The decrease in fiscal 2024 was primarily due to the trademarks associated with the divestiture of Hormel Health Labs.

The gross carrying amount and accumulated amortization for definite-lived intangible assets are:

October 27, 2024 October 29, 2023

Carrying Accumulated Carrying Accumulated

In thousands Amount Amortization Amount Amortization

Customer Lists/Relationships $ 168,239 $ ( 82,658 ) $ 168,239 $ ( 69,779 )

In thousands Gross

Amount Accumulated

Customer Relationships

$ 168,239 $ ( 93,536 ) $ 168,239 $ ( 82,658 )

Other Intangibles 59,241 ( 20,107 ) 59,241 ( 15,857 )

1 unchanged sentence

Foreign Currency Translation — ( 4,458 ) — ( 4,344 )

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

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

Total Definite-lived Intangible Assets

$ 233,690 $ ( 124,097 ) $ 234,020 $ ( 107,947 )

Amortization expense on intangible assets for the last three fiscal years is as follows:

In thousands Amortization Expense

2024 $ 16,366

Estimated annual amortization expense on intangible assets for the five fiscal years after October 27, 2024, is as follows:

In thousands Amortization

2025 $ 14,624

1 unchanged sentence

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.

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

No other impairment was indicated.

4 unchanged sentences

Fiscal Year Ended

October 29, 2023

October 30, 2022

October 31, 2021

October 27, 2024 October 29, 2023 October 30, 2022

MegaMex Foods, LLC (1)

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(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:

Distributions received from equity method investees consists of:

In thousands Fiscal Year Ended

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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.

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

This investment expanded the Company’s presence in Southeast Asia to support the global execution of the entertaining and snacking strategy.

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.

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

The transactions were 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.

As of October 27, 2024, the remaining basis difference was $ 328.1 million, which includes the impact of foreign currency translation.

Based on quoted market prices, the fair value of the common stock held in Garudafood was $ 295.6 million as of October 25, 2024.

2 unchanged sentences

The Company determined that no other-than-temporary impairment existed for any other equity method investments as of October 27, 2024.

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.

The Company recognized a basis difference of $ 21.3 million associated with the formation of MegaMex Foods, LLC, of which $ 8.5 million was remaining as of October 27, 2024.

This difference is being amortized through Equity in Earnings of Affiliates.

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Maintenance Materials and Parts 119,837 109,151

Total $ 1,680,406 $ 1,716,059

Total Inventories

$ 1,576,300 $ 1,680,406

Derivatives and Hedging

The Company uses hedging programs to manage risk associated with commodity purchases and interest rates.

The Company uses hedging programs to manage risk associated with various commodity purchases and interest rates.

These programs utilize futures, swaps, and options contracts to manage the Company’s exposure to market fluctuations.

The Company has determined its designated hedging programs to be highly effective in offsetting the changes in fair value or cash flows generated by the items hedged.

Effectiveness testing is performed on a quarterly basis to ascertain a high level of effectiveness for cash flow and fair value hedging programs.

If the requirements of hedge accounting are no longer met, hedge accounting is discontinued immediately and any future changes to fair value are recorded directly through earnings.

Cash Flow Commodity Hedges:

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.

The Company uses futures, swaps, and options contracts to offset price fluctuations in the Company’s future purchases of grain, lean hogs, natural gas, and diesel fuel.

These contracts are designated as cash flow hedges;

therefore, the related gains or losses 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, natural gas, or diesel fuel exposure beyond two fiscal years and its lean hog exposure beyond one 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 Company designates the futures it uses to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s lean hog and grain suppliers as fair value hedges.

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

2 unchanged sentences

Cash Flow Interest Rate Hedges:

In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with the anticipated debt transactions required to fund the acquisition of the Planters ® snack nuts business.

In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with anticipated debt transactions.

The total notional amount of the Company’s locks was $ 1.25 billion.

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In the first quarter of fiscal 2022, the Company entered into an interest rate swap to protect against changes in the fair value of a portion of previously issued senior unsecured notes attributable to the change in the benchmark interest rate.

The hedge specifically designated the last $ 450 million of the notes due June 2024 (the 2024 Notes).

The hedge specifically designated the last $ 450 million of the $ 950 million aggregate principal amount of its 0.650 % notes due June 2024 (the 2024 Notes).

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 through 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 amortized through earnings over the remaining life of the debt.

In the third quarter of fiscal 2024, the fair value hedging adjustment was completely amortized to correspond with the payment of the 2024 Notes upon maturity.

Other Derivatives:

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.

Activity related to derivatives not designated as hedges is immaterial to the consolidated financial statements.

The Company holds certain futures and swap contracts to manage the Company’s exposure to fluctuations in grain and pork commodity markets for which it has not applied hedge accounting.

Activity related to derivatives not designated for hedge accounting was immaterial to the consolidated financial statements during fiscal years 2024, 2023, and 2022.

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

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

In millions October 27, 2024 October 29, 2023

Corn 29.2 bushels

Lean Hogs 175.6 pounds

Fair Value of Derivatives:

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

In thousands Location on Consolidated

Statements of Financial Position

October 27, 2024 October 29, 2023

Commodity Contracts (1)

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

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

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.

In thousands Assets Liabilities Assets Liabilities

Gross Fair Value of Commodity Contracts

$ 9,851 $ ( 12,638 ) $ 13,747 $ ( 26,980 )

Counterparty and Collateral Netting Offset (1)

( 1,785 ) 12,638 5,226 26,980

Amounts Recognized on Consolidated Statements of Financial Position (2)

$ 8,066 $ — $ 18,972 $ —

(1) Per the terms of the Company's master netting arrangements, the gross fair value of the Company's commodity contracts were offset by the right to reclaim net cash collateral of $ 10.9 million and $ 32.2 million as of October 27, 2024 and October 29, 2023, respectively.

(2) The Company's commodity contracts are located in Prepaid Expenses and Other Current Assets on the Consolidated Statements of Financial Position.

Fair Value Hedge - Assets (Liabilities):

1 unchanged sentence

In thousands Location on Consolidated

Statements of Financial Position

October 29, 2023 October 30, 2022

Statements of Financial Position October 27, 2024 October 29, 2023

Commodity Contracts

4 unchanged sentences

— ( 442,549 )

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

— ( 430,050 )

(1) Represents the carrying amount of fair value hedged assets and liabilities, which are offset by other assets included in master netting arrangements described above.

1 unchanged sentence

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.

The 2024 Notes were paid on June 3, 2024.

Accumulated Other Comprehensive Loss Impact:

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.

As of October 27, 2024, the Company included in AOCL pre-tax hedging losses of $ 8.8 million on commodity contracts and gains of $ 11.5 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 on AOCL for gains or losses (before tax) related to the Company's derivative instruments are:

Recognized in AOCL (1)

of Operations Gain/(Loss)

Reclassified from

AOCL into Earnings (1)

In thousands Fiscal Year Ended Fiscal Year Ended

Cash Flow Hedges:

October 29, 2023 October 30, 2022 October 29, 2023 October 30, 2022

Commodity Contracts $ ( 50,353 ) $ 56,371 Cost of Products Sold $ 1,225 $ 57,592

The pre-tax gains or (losses) recognized in AOCL related to the Company’s derivative instruments are:

In thousands Fiscal Year Ended

October 27, 2024 October 29, 2023

Commodity Contracts $ ( 12,898 ) $ ( 50,353 )

Excluded Component (1)

1,127 ( 4,748 ) — —

(1) Represents the time value of commodity options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.

The pre-tax gains (losses) reclassified from AOCL into earnings related to the Company’s derivative instruments are:

In thousands Location on

Consolidated Statements of Operations Fiscal Year Ended

October 27, 2024 October 29, 2023

Commodity Contracts

Cost of Products Sold $ ( 26,445 ) $ 1,225

Interest Rate Contracts Interest Expense 988 988

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

(2) Represents the time value of corn options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.

Consolidated Statements of Operations Impact:

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

The effect on the Consolidated Statements of Operations for pre-tax gains (losses) related to the Company’s derivative instruments are:

Fiscal Year Ended

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

— 2,242 ( 743 )

Fair Value Hedges - Commodity Contracts

3 unchanged sentences

$ ( 22,957 ) $ ( 3,955 ) $ 35,101

Cash Flow Hedges - Interest Rate Locks

Cash Flow Hedges - Interest Rate Contracts

Gain (Loss) Reclassified from AOCL

Fair Value Hedge - Interest Rate Swap

Fair Value Hedge - Interest Rate Contracts

Gain (Loss) on Interest Rate Swap — — 928

4 unchanged sentences

Total Gain (Loss) Recognized in Earnings $ ( 29,420 ) $ ( 15,466 ) $ 35,094

(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.

(1) In fiscal year 2022, 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).

(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.

5 unchanged sentences

The Company has several defined benefit plans and defined contribution plans covering most employees.

Benefits for defined benefit pension plans covering hourly employees are provided based on stated amounts for each year of service, while plan benefits covering salaried employees are based on final average compensation, age and years of service.

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.

Benefits for defined benefit pension plans covering certain bargaining unit employees are provided based on stated amounts for each year of service.

Plan benefits covering certain non-bargaining unit hourly and salaried employees are based on final average compensation, age, and years of service for benefits accrued prior to January 1, 2017.

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

This amendment also called for benefits to be calculated retroactively to January 1, 2017.

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.

2 unchanged sentences

Benefits for retired employees vary for each group depending on respective retirement dates and applicable plan coverage in effect.

Contribution requirements for retired employees are governed by the Retiree Health Care Payment Program and may change each year as the cost to provide coverage is determined.

Contribution requirements for retired employees are governed by the Company's Retiree Health Care Payment Program and may change each year as the cost to provide coverage is determined.

Net periodic cost of defined benefit plans included the following for fiscal years ending:

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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.

Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized over periods ranging from 8 to 12 years for pension benefits and 13 years for post-retirement benefits.

The following amounts have not been recognized in net periodic pension cost and are included in Accumulated Other Comprehensive Loss:

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Benefit Obligation at End of Year $ 1,339,726 $ 1,174,380 $ 191,578 $ 186,199

(1) Actuarial gains in fiscal 2022 were primarily due to the change in the discount rate assumptions utilized in measuring plan obligations.

(1) Actuarial losses in fiscal 2024 were primarily due to the change in the discount rate assumptions utilized in measuring plan obligations.

Pension Benefits Post-retirement Benefits

16 unchanged sentences

Net Amount Recognized $ ( 11,966 ) $ 11,292 $ ( 191,578 ) $ ( 186,199 )

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

The accumulated benefit obligation for all pension plans was $ 1.3 billion as of October 27, 2024 and $ 1.2 billion as of October 29, 2023.

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

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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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International 45,080 — — 45,080

Fixed Income (3)

Real Estate Funds

Domestic 6,249 — — 6,249

Government Issues 175,715 152,721 22,994 —

2 unchanged sentences

Corporate Issues – Foreign 41,088 — 41,088 —

Global Stocks – Mutual Funds

Domestic 8,451 8,451 — —

Plan Assets in Fair Value Hierarchy $ 603,219 $ 161,172 $ 354,760 $ 87,287

3 unchanged sentences

Global Stocks – Gold

Hedge Funds (7)

Fixed Income – Hedge Funds

14 unchanged sentences

International 48,065 — — 48,065

Fixed Income (3)

Government Issues 171,949 123,683 48,266 —

6 unchanged sentences

Global Stocks – Collective Investment Funds

Hedge Funds (7)

Global Stocks – Gold

Fixed Income – Hedge Funds

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The fair value of these funds is based on the fair value of the underlying investments.

Real Estate Funds :

These Level 3 investments include ownership in closed-ended real estate funds targeting value added real estate opportunities.

These funds manage diversified portfolios of commercial properties with broad sector exposure.

Investment strategies aim to acquire, hold, or dispose of investments with the goal of achieving current and/or capital appreciation.

These funds have a predetermined life and are illiquid investments.

Fixed Income:

3 unchanged sentences

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.

Global Stocks – Mutual Funds :

These investments include holdings of mutual funds that are SEC-registered open-end investment companies that pool money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments.

Shares of these companies are liquid and traded daily on public market exchanges.

Real Estate – Domestic:

13 unchanged sentences

This fund allows for weekly subscriptions and monthly redemptions.

(7) Hedge Funds:

These investments are designed to provide diversification to an overall institutional portfolio and, in particular, provide protection against equity market downturns.

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( 2,144 ) ( 8,525 )

Realized Gains 6,455 ( 604 )

Realized Gains (Losses)

Interest and Dividend Income 8,385 2,290

Fair Value at End of Year $ 87,287 $ 79,448

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

During fiscal 2024, the value of the Level 3 investments ranged from $ 78.5 million to $ 87.3 million, with an average value of $ 82.9 million.

27 unchanged sentences

( 2,213 ) (2)

( 8,235 ) (3)

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

7 unchanged sentences

( 4,831 ) (3)

( 8,235 ) (3)

Tax Effect — ( 2,744 ) ( 6,190 ) — ( 8,933 )

7 unchanged sentences

Fair Value Measurements

The Company’s financial assets and liabilities carried at fair value on a recurring basis as of October 29, 2023 and October 30, 2022, and their level within the fair value hierarchy are presented in the table below.

The Company’s financial assets and liabilities carried at fair value on a recurring basis and their level within the fair value hierarchy are presented in the tables below.

See additional discussion of fair value measurements in Note A - Summary of Significant Accounting Policies.

Fair Value Measurements at October 27, 2024

13 unchanged sentences

$ 62,101 $ — $ 62,101 $ —

Commodity Derivatives

12,638 11,127 1,510 —

Total Liabilities at Fair Value $ 74,738 $ 11,127 $ 63,611 $ —

Fair Value Measurements at October 29, 2023

Value Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Value Quoted Prices in

Active Markets for Identical Assets

Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)

Assets at Fair Value

11 unchanged sentences

$ 55,222 $ — $ 55,222 $ —

Commodity Derivatives

27,071 26,732 339 —

Total Liabilities at Fair Value $ 82,293 $ 26,732 $ 55,561 $ —

The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above:

Cash and Cash Equivalents:

The Company’s cash equivalents considered Level 1 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts, and have a maturity date of three months or less.

Cash equivalents considered Level 2 are funds holding agency bonds or securities recognized at amortized cost.

Short-term Marketable Securities:

The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary.

4 unchanged sentences

Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2.

Deferred Compensation and Other Trading Securities:

The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans.

The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and have been invested primarily in fixed income funds managed by a third party.

The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio supporting the fund as adjusted for expenses and other charges.

The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate.

As the value is based on adjusted market rates and the fixed rate is only reset on an annual basis, these funds are classified as Level 2.

These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account.

These policies are classified as Level 2.

The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and are invested in fixed income investments.

The declared rate on these investments is set based on a formula using the yield of the general account investment portfolio supporting the fund, as adjusted for expenses and other charges.

The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a

guaranteed minimum rate.

Investments held by the rabbi trust generated gains (losses) of $ 21.6 million, $ 3.2 million, and $( 16.8 ) million for fiscal years 2024, 2023, and 2022, respectively.

Under the Company’s deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options, which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market.

3 unchanged sentences

These liabilities are classified as Level 2.

The Company maintains funding in the rabbi trust generally mirroring the selections within the deferred compensation plans.

These funds are managed by a third-party insurance policy, the values of which represent their cash surrender value based on the fair value of the underlying investments in the account.

These policies are classified as Level 2.

The rabbi trust is included in Other Assets and deferred compensation liabilities in Other Long-term Liabilities on the Consolidated Statements of Financial Position.

Securities held by the rabbi trust are classified as trading securities.

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

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.

The Company maintains funding in the rabbi trust generally mirroring the investment selections within the deferred compensation plans.

Commodity Derivatives:

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, diesel fuel, lean 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 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.

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

The value of the natural gas and diesel fuel 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 U.S.

Department of Agriculture estimated pork cut-out value.

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

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

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

As of October 27, 2024, the Company has recognized the right to reclaim net cash collateral of $ 10.9 million from various counterparties (including cash of $ 26.5 million less $ 15.6 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).

As of October 29, 2023, the Company had 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).

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

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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.

District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the Pork Antitrust Litigation).

Class Plaintiffs consist of Direct Purchaser Plaintiffs, Commercial and Institutional Indirect Purchaser Plaintiffs, and Consumer Indirect Purchaser Plaintiffs.

The Class 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.

Since the original filing, certain plaintiffs, including the Offices of the Attorney General in New Mexico and Alaska, have opted out of class treatment and are proceeding with individual direct actions making similar claims (Non-Class Direct-Action Plaintiffs), and others may do so in the future.

Although the Company strongly denies liability, continues to deny the allegations asserted by the Class Plaintiffs, and believes it has valid defenses, to avoid the uncertainty, risk, expense, and distraction of continued litigation involving the Class Plaintiffs, the Company executed settlement agreements providing for payments by the Company to the Direct Purchaser Plaintiffs of $ 4.9 million, the Commercial and Institutional Indirect Purchaser Plaintiffs of $ 2.4 million, and the Consumer Indirect Purchaser Plaintiffs of $ 4.5 million.

The settlement amounts were recorded in Selling, General, and Administrative in the Consolidated Statements of Operations in the second quarter of fiscal 2024 and were paid during the second half of fiscal 2024.

The Company continues to defend against the claims of the Non-Class Direct-Action Plaintiffs.

The Company has not recorded any liability for the non-class matters as it does not believe a loss is probable.

The Company cannot reasonably estimate any reasonably possible loss.

The Company believes that it has valid and meritorious defenses against the allegations.

Turkey Antitrust Litigation

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The Company has not recorded any liability for these matters as it does not believe a loss is probable.

The Company cannot reasonably estimate any reasonably possible loss.

The Company believes that it has valid and meritorious defenses against the allegations.

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.

In December 2019, a putative class of non-supervisory production and maintenance employees at poultry-processing plants in the continental U.S.

filed an amended consolidated class action complaint against Jennie-O Turkey Store, Inc.

and various other poultry processing companies in the U.S.

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.

(the Poultry Wages Antitrust Litigation).

In the operative amended complaint filed in February 2022, the plaintiffs allege that, since 2000, the defendants directly and through wage surveys and a 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 complaint sought, 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.

Although the Company strongly denies liability, continues to deny the allegations asserted by the plaintiffs, and believes it has valid defenses, to avoid the uncertainty, risk, expense, and distraction of continued litigation, the Company executed a settlement agreement with the plaintiffs on August 20, 2024, to settle this matter for the payment of $ 3.5 million.

The settlement remains subject to Court approval.

The Company recorded the agreed-upon settlement amount in Selling, General, and Administrative in the Consolidated Statements of Operations and in Accrued Expenses on the Consolidated Statements of Financial Position for the third quarter of fiscal 2024.

The agreed-upon settlement amount will be paid following preliminary Court approval.

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.

In November 2022, a putative class of non-supervisory production and maintenance employees at “red meat” processing plants in the continental U.S.

filed a class action complaint against the Company and various other beef- and pork-processing companies in the U.S.

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 Red Meat Wages Antitrust Litigation).

In the operative amended complaint filed in January 2024, the plaintiffs allege that, since 2000, the defendants directly and through wage surveys and a 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 complaint sought, among other things, treble monetary damages, punitive damages, restitution, and pre- and post-judgment interest, as well as declaratory and injunctive relief.

The settlement remains subject to Court approval.

The agreed-upon settlement amount will be paid following preliminary Court approval.

Tax Proceedings:

Two current Company subsidiaries organized in Brazil, Clean Field Comércio de Produtos de Alimentícios LTDA and Omamori Indústria de Alimentos LTDA, the results of which are reported in the International segment, as well as one former subsidiary, Talis Distribuidora de Alimentos LTDA, received tax deficiency notices from the State of São Paulo Tax Authority Office alleging underpayment of ICMS and ICMS-ST taxes, which are similar to value added taxes, for multiple tax years.

The subsidiaries have filed objections to appeal these tax deficiency notices, and the proceedings are in various stages of the administrative review process.

Any adverse outcomes at the administrative level are expected to be eligible for further appeal through judicial processes.

The Company has not recognized a loss relating to any of these assessments.

The Company cannot at this time reasonably estimate any reasonably possible loss.

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

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Total Right-of-Use Assets $ 178,183 $ 169,919

Lease Liabilities

Operating Accrued Expenses $ 32,068 $ 26,238

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390,032 511,906 463,439

Net Lease Cost $ 555,070 $ 498,813 $ 576,751

Total Lease Cost

$ 440,836 $ 555,070 $ 498,813

(1) Includes short-term lease costs, which are immaterial.

(2) ASC 842 - Leases requires disclosure of payments related to agreements with an embedded lease that are not otherwise reflected on the balance sheet.

(2) ASC 842 - Leases requires disclosure of payments related to agreements with an embedded lease that are not otherwise reflected on the Consolidated Statements of Financial Position.

The Company’s variable lease costs primarily include inventory-related expenses, such as materials, labor, and overhead from manufacturing and service agreements that contain embedded leases.

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(1) Over the life of the lease contracts, finance lease payments include $ 7.2 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.

(2) Lease payments exclude $ 36.0 million of legally binding minimum lease payments for leases signed but not yet commenced as of October 27, 2024.

Long-term Debt and Other Borrowing Arrangements

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Senior Unsecured Notes with Interest at 4.800 %

Interest Due Semi-annually through March 2027 Maturity Date

Senior Unsecured Notes with Interest at 0.650 %

Interest Due Semi-annually through June 2024 Maturity Date

950,000 950,000

Unamortized Discount on Senior Notes ( 6,687 ) ( 7,016 )

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Interest Rate Swap Liabilities (1)

( 7,451 ) ( 19,950 )

Finance Lease Liabilities (2)

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Other Financing Arrangements 3,530 3,908

Total $ 3,309,247 $ 3,299,345

Total Debt 2,858,756 3,309,247

Current Maturities of Long-term Debt 7,813 950,529

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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 (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.

The 2028 Notes and 2051 Notes may be redeemed in whole or in part at any time at the applicable redemption price.

Interest will accrue per annum at the stated rates with interest on the notes being paid semi-annually in arrears on June 3 and December 3 of each year, commencing December 3, 2021.

On March 8, 2024, the Company issued senior notes in an aggregate principal amount of $ 500.0 million due March 2027.

The notes bear interest at a fixed rate of 4.800 % per annum.

Interest accrues on the notes from March 8, 2024, and is payable semi-annually in arrears on March 30 and September 30 of each year, commencing September 30, 2024.

The notes may be redeemed in whole or in part at any time at the applicable redemption prices.

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

The notes may be redeemed in whole or in part at any time at the applicable redemption price.

Interest accrues per annum at the stated rates and is paid semi-annually in arrears on June 3 and December 3 of each year, commencing December 3, 2021.

Interest rate risk was hedged utilizing interest rate locks on the 2028 Notes and 2051 Notes.

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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.

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.

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.

The Company repaid the $ 950.0 million 2024 Notes upon maturity on June 3, 2024.

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

The notes may be redeemed in whole or in part at any time at the applicable redemption price set forth in the prospectus supplement.

The notes may be redeemed in whole or in part at any time at the applicable redemption prices.

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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.

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.

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

The Amendment provided 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.

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.

The lending commitments under the agreement are scheduled to expire on May 6, 2026, at which time the Company will be required to pay in full all obligations then outstanding.

As of October 29, 2023 and October 30, 2022, the Company had no outstanding draws from this facility.

As of October 27, 2024, and October 29, 2023, the Company had no outstanding borrowings from this facility.

Debt Covenants:

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Total interest paid in the last three fiscal years is as follows:

In millions Interest Payments

Stock-Based Compensation

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Stock-based compensation expense for fiscal years 2024, 2023, and 2022, was $ 23.2 million, $ 24.1 million, and $ 24.9 million, respectively.

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 27, 2024, there was $ 15.4 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans.

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Fiscal Year Ended

October 29, October 30, October 31,

In thousands, except per share amounts 2023 2022 2021

In thousands, except per share amounts October 27, 2024 October 29, 2023 October 30, 2022

Weighted-average Grant Date Fair Value $ 5.95 $ 10.06 $ 7.09

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October 27, 2024 October 29, 2023 October 30, 2022

2023 2022 2021

Risk-free Interest Rate 4.1 % 3.5 % 1.6 %

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Fiscal Year Ended

October 29, October 30, October 31,

In thousands, except per share amounts 2023 2022 2021

In thousands, except per share amounts October 27, 2024 October 29, 2023 October 30, 2022

Weighted-average Grant Date Fair Value $ 31.39 $ 45.96 $ 44.14

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Vested ( 35 ) 45.34

Forfeited ( 9 ) 34.44

Restricted Shares Outstanding at October 27, 2024 53 $ 31.51

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Fiscal Year Ended

October 29, October 30, October 31,

In thousands, except per share amounts 2023 2022 2021

In thousands, except per share amounts October 27, 2024 October 29, 2023 October 30, 2022

Weighted-average Grant Date Fair Value $ 30.89 $ 44.14 $ 47.11

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Marketing and Promotional Accruals 9,833 16,972

46,856 10,368

Other, net 84,733 75,562

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Total income taxes paid during fiscal years 2024, 2023, and 2022 were $ 186.4 million, $ 205.0 million, and $ 93.1 million, respectively.

The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2023 and 2022.

Fiscal year 2024 included amounts paid for the purchase of federal transferable energy credits.

The changes in unrecognized tax benefits, excluding interest and penalties, for fiscal years 2024 and 2023 are as follows:

Balance as of October 30, 2022

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Balance as of October 27, 2024

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 Provision for Income Taxes, with immaterial losses included during fiscal 2023, 2022 and 2021.

Unrecognized tax benefits, including interest and penalties, are recorded in Other Long-term Liabilities on the Consolidated Statements of Financial Position.

If recognized as of October 27, 2024, these benefits would impact the Company’s effective tax rate by $ 15.9 million compared to $ 17.0 million as of October 29, 2023.

The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial expenses included during fiscal 2024, 2023, and 2022.

The amount of accrued interest and penalties at October 27, 2024 and October 29, 2023, associated with unrecognized tax benefits was $ 2.3 million and $ 2.4 million, respectively.

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

Tax Examinations:

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

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.

The IRS placed the Company in the Bridge phase of the Compliance Assurance Process (CAP) for fiscal years 2020 and 2023.

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

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The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2015.

While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

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

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

While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, as of October 27, 2024, it was not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

The Company is subject to various examinations by foreign tax authorities.

With limited exceptions, the Company is no longer subject to foreign tax examinations for fiscal years prior to 2018 for material jurisdictions.

Tax Legislation:

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

The IRA made several changes to the U.S.

tax code, including a 15% corporate minimum tax which applied to the Company beginning in fiscal year 2024 and did not have a material impact on the provision for income taxes or financial statements.

The Organization for Economic Co-operation and Development created a Pillar Two Framework, which generally provides for a minimum effective tax rate of 15%.

The Company is evaluating the potential impact on future fiscal periods, pending legislative adoption by individual countries.

Earnings Per Share Data

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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.

The shares used as the denominator for those computations are as follows:

Fiscal Year Ended

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Basic Weighted-average Shares Outstanding

548,129 546,421 544,918

Dilutive Potential Common Shares 703 2,562 4,648

Diluted Weighted-average Shares Outstanding

548,832 548,982 549,566

Antidilutive Potential Common Shares 17,878 6,834 1,915

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

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:

The Company 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.

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

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 Foodservice segment consists primarily of the processing, marketing, and sale of food products for foodservice, convenience store, and commercial customers located in the United States.

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.

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

Financial measures for each of the Company’s reportable segments are set forth below.

Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance.

The Company does not allocate deferred compensation, non-recurring expenses associated with the Transform and Modernize initiative, 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.

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

Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown 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.

In thousands Fiscal Year Ended

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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.

The Company has a global presence selling its products in all 50 U.S.

states as well as several major international markets.

No individual foreign country is material to the consolidated results.

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$ 11,920,797 $ 12,110,010 $ 12,458,806

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.

Sales to Walmart Inc.

and its subsidiaries (Walmart) represented 15.6 % or $ 2.0 billion, 15.5 % or $ 2.0 billion, and 15.6 % or $ 2.1 billion of the Company’s consolidated gross sales less returns and allowances in fiscal 2024, 2023, and 2022, respectively.

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

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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