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Item 1. Financial Statements

2025-02-27 compared with 2024-09-04 · 237 added, 320 removed, 492 unchanged (53% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter Ended Nine Months Ended

Quarter Ended

In thousands, except per share amounts

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

January 26, 2025 January 28, 2024

Net Sales $ 2,988,813 $ 2,996,911

3 unchanged sentences

Equity in Earnings of Affiliates 16,111 16,091

7,977 9,784 39,250 42,213

Operating Income 228,330 284,438

3 unchanged sentences

Provision for Income Taxes 47,543 66,818

48,984 45,055 170,733 170,230

Net Earnings 170,530 218,729

Net Earnings (Loss) Attributable to Noncontrolling Interest ( 45 ) ( 134 )

34 ( 108 ) ( 170 ) ( 200 )

Net Earnings Attributable to Hormel Foods Corporation $ 170,575 $ 218,863

$ 176,701 $ 162,679 $ 584,842 $ 597,637

Net Earnings Per Share

7 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Net Earnings $ 170,530 $ 218,729

3 unchanged sentences

Derivatives and Hedging

( 18,601 ) 2,518 ( 1,397 ) ( 31,058 )

Equity Method Investments 473 2,884

3 unchanged sentences

Comprehensive Income (Loss) Attributable to Noncontrolling Interest

( 357 ) ( 510 ) ( 502 ) ( 338 )

Comprehensive Income Attributable to Hormel Foods Corporation

4 unchanged sentences

In thousands, except share and per share amounts

July 28, 2024 October 29, 2023

January 26, 2025 October 27, 2024

Cash and Cash Equivalents $ 840,398 $ 741,881

1 unchanged sentence

Accounts Receivable (Net of Allowance for Doubtful Accounts of

$ 3,678 at July 28, 2024, and $ 3,557 at October 29, 2023)

$ 3,703 at January 26, 2025, and $ 3,712 at October 27, 2024)

767,804 817,908

Inventories 1,516,716 1,576,300

Taxes Receivable 50,747 50,380

Prepaid Expenses and Other Current Assets 64,386 35,265

58,814 46,256

Total Current Assets 3,266,068 3,246,476

4,923,731 4,928,464

Other Intangibles

1,743,615 1,757,171

Goodwill 4,916,874 4,923,487

Intangible Assets 1,727,655 1,732,705

Pension Assets 201,350 205,964

190,947 204,697

Investments in Affiliates 710,433 719,481

409,125 370,252

Other Assets 406,315 411,889

Property, Plant, and Equipment

8 unchanged sentences

Accounts Payable $ 709,190 $ 735,604

$ 675,167 $ 771,397

Accrued Expenses 63,833 66,380

1 unchanged sentence

Employee-related Expenses 230,037 283,490

248,954 263,330

Interest and Dividends Payable 173,889 175,941

14 unchanged sentences

Common Stock, Par Value $ 0.01465 a Share — Authorized 1,600,000,000 Shares;

Shares Issued as of July 28, 2024:

Shares Issued as of January 26, 2025:

Shares Issued as of October 27, 2024:

3 unchanged sentences

Hormel Foods Corporation Shareholders’ Investment 8,028,342 7,993,420

7,867,119 7,734,885

Noncontrolling Interest 10,101 10,590

Total Shareholders’ Investment 8,038,442 8,004,011

7,877,225 7,738,985

Total Liabilities and Shareholders’ Investment $ 13,403,483 $ 13,434,729

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT

Quarter Ended July 30, 2023

Hormel Foods Corporation Shareholders

Comprehensive

Income (Loss) Non-

Shareholders’

In thousands, except per share amounts

Shares Amount Shares Amount

Balance at April 30, 2023 546,255 $ 8,002 — $ — $ 488,100 $ 7,435,292 $ ( 244,887 ) $ 5,108 $ 7,691,615

Net Earnings (Loss)

162,679 ( 108 ) 162,571

Other Comprehensive Income (Loss)

3,277 ( 402 ) 2,875

Stock-based Compensation Expense

Exercise of Stock Options/Restricted Shares

212 3 5,931 5,933

Declared Dividends – $ 0.2750 per Share

239 ( 150,404 ) ( 150,165 )

Balance at July 30, 2023 546,467 $ 8,005 — $ — $ 499,304 $ 7,447,567 $ ( 241,610 ) $ 4,598 $ 7,717,863

Quarter Ended July 28, 2024

Quarter Ended January 28, 2024

Hormel Foods Corporation Shareholders

Stock Treasury

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Non-

Interest Total

Shareholders’

1 unchanged sentence

Shares Amount Shares Amount

Balance at April 28, 2024 548,030 $ 8,028 — $ — $ 549,130 $ 7,591,157 $ ( 262,325 ) $ 10,462 $ 7,896,452

Balance at October 29, 2023 546,599 $ 8,007 — $ — $ 506,179 $ 7,492,952 $ ( 272,252 ) $ 4,100 $ 7,738,985

Net Earnings (Loss)

2 unchanged sentences

21,469 209 21,678

Contribution from Noncontrolling Interest 280 280

Stock-based Compensation Expense

3 unchanged sentences

209 ( 154,658 ) ( 154,449 )

Balance at July 28, 2024 548,329 $ 8,033 — $ — $ 560,849 $ 7,612,610 $ ( 314,373 ) $ 10,106 $ 7,877,225

See Notes to the Consolidated Financial Statements

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT

Nine Months Ended July 30, 2023

Balance at January 28, 2024 547,596 $ 8,021 — $ — $ 529,715 $ 7,557,157 $ ( 250,783 ) $ 4,455 $ 7,848,566

Quarter Ended January 26, 2025

Hormel Foods Corporation Shareholders

13 unchanged sentences

Other Comprehensive Income (Loss)

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

Stock-based Compensation Expense 44 — 20,946 20,946

Exercise of Stock Options/Restricted Shares 496 7 8,482 8,489

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

Declared Dividends – $ 0.8250 per Share

( 7,932 ) ( 445 ) ( 8,377 )

Balance at July 30, 2023 546,467 $ 8,005 — $ — $ 499,304 $ 7,447,567 $ ( 241,610 ) $ 4,598 $ 7,717,863

Nine Months Ended July 28, 2024

Hormel Foods Corporation Shareholders

Stock Treasury

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Non-

Interest Total

Shareholders’

In thousands, except per share amounts

Shares Amount Shares Amount

Balance at October 29, 2023 546,599 $ 8,007 — $ — $ 506,179 $ 7,492,952 $ ( 272,252 ) $ 4,100 $ 7,738,985

Net Earnings (Loss)

584,842 ( 170 ) 584,671

Other Comprehensive Income (Loss) ( 42,121 ) ( 332 ) ( 42,453 )

Contribution from Noncontrolling Interest 6,508 6,508

Stock-based Compensation Expense

Exercise of Stock Options/Restricted Shares

1,180 17 25,980 25,997

Declared Dividends – $ 0.2900 per Share

275 ( 159,448 ) ( 159,173 )

Balance at July 28, 2024 548,329 $ 8,033 — $ — $ 560,849 $ 7,612,610 $ ( 314,373 ) $ 10,106 $ 7,877,225

Balance at January 26, 2025 549,785 $ 8,054 — $ — $ 602,887 $ 7,688,663 $ ( 271,263 ) $ 10,101 $ 8,038,442

See Notes to the Consolidated Financial Statements

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

Nine Months Ended

July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Operating Activities

7 unchanged sentences

Stock-based Compensation Expense 5,454 4,444

Loss (Gain) on Sale of Business 10,800 —

Operating Lease Cost 9,580 8,675

27,869 16,497

Other Non-cash, Net 1,140 5,814

18,510 12,295

Changes in Operating Assets and Liabilities:

8 unchanged sentences

Net Sale (Purchase) of Securities ( 1,387 ) ( 964 )

( 6,106 ) ( 49 )

Proceeds from Sale of Business 13,643 —

Purchases of Property, Plant, and Equipment ( 72,167 ) ( 47,210 )

4 unchanged sentences

Financing Activities

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

Payment of Debt Issuance Costs

Repayments of Long-term Debt and Finance Leases ( 2,202 ) ( 2,249 )

Dividends Paid on Common Stock ( 154,980 ) ( 150,294 )

Share Repurchase — ( 12,303 )

Proceeds from Exercise of Stock Options 14,120 18,898

25 unchanged sentences

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 Condensed 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 Condensed Statements of Cash Flows.

Accounting Changes and Recent Accounting Pronouncements:

3 unchanged sentences

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

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

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

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

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

The update is effective for the Company's fiscal year ending October 26, 2025, and interim periods for the fiscal year ending October 25, 2026.

Early adoption is 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 Company is currently assessing the impact of adopting the updated provisions.

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

2 unchanged sentences

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 timing and impact of adopting the updated provisions.

The update is effective for the Company's fiscal year ending October 25, 2026.

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

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 guidance is effective for the Company's annual period ending October 29, 2028, and interim periods for the fiscal year ending October 28, 2029.

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

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

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

NOTE B - GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the nine months ended July 28, 2024, is:

Retail Foodservice International Total

NOTE B - ACQUISITIONS AND DIVESTITURES

Divestitures:

On October 18, 2024, the Company sold its equity interests in Hormel Health Labs, LLC (Hormel Health Labs) and related assets to Lyons Health Labs Holdco, LLC for $ 24.5 million.

The divestiture resulted in a pre-tax gain of $ 3.9 million, net of transaction costs, which was recognized in Selling, General, and Administrative.

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

On November 18, 2024, the Company sold its equity interests in a non-core sow operation, Mountain Prairie, LLC, and related assets to Chaparral Ranches, LLC for $ 13.6 million.

The divestiture resulted in a pre-tax loss of $ 11.3 million, including transaction costs, which was recognized in Selling, General, and Administrative.

Results of operations were primarily reflected within the Retail segment through the date of divestiture.

NOTE C - GOODWILL AND INTANGIBLE ASSETS

The change in the carrying amount of goodwill for the three months ended January 26, 2025, is:

In thousands Retail Foodservice International Total

Balance at October 27, 2024

1 unchanged sentence

Foreign Currency Translation — — ( 6,612 ) ( 6,612 )

Balance at July 28, 2024

Balance at January 26, 2025

$ 2,916,796 $ 1,748,355 $ 251,724 $ 4,916,874

Intangible Assets:

The carrying amounts for indefinite-lived intangible assets are:

July 28, 2024 October 29, 2023

Brands/Trade Names/Trademarks

$ 1,636,807 $ 1,636,807

Other Intangibles 184 184

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

Total Indefinite-lived Intangible Assets

$ 1,630,099 $ 1,631,098

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

July 28, 2024 October 29, 2023

Gross Carrying

The intangible assets by type are:

January 26, 2025 October 27, 2024

In thousands Gross

Amount Accumulated

Amortization Gross Carrying

Amortization Net

Amount Accumulated

Customer Lists/Relationships $ 168,239 $ ( 90,951 ) $ 168,239 $ ( 82,658 )

Other Intangibles 59,241 ( 19,045 ) 59,241 ( 15,857 )

Amortization Net

Definite-lived Intangible Assets

Customer Relationships $ 143,139 $ ( 70,991 ) $ 72,148 $ 168,239 $ ( 93,536 ) $ 74,703

Other Definite-lived Intangibles 59,241 ( 21,170 ) 38,071 59,241 ( 20,107 ) 39,134

Trade Names/Trademarks 6,210 ( 6,210 ) — 6,210 ( 5,996 ) 214

6,210 ( 5,687 ) 6,540 ( 5,089 )

Foreign Currency Translation — ( 4,588 ) ( 4,588 ) — ( 4,458 ) ( 4,458 )

Total Definite-lived Intangible Assets $ 208,590 $ ( 102,959 ) $ 105,631 $ 233,690 $ ( 124,097 ) $ 109,593

$ 233,690 $ ( 120,174 ) $ 234,020 $ ( 107,947 )

Indefinite-lived Intangible Assets

Brands/Trade Names/Trademarks $ 1,629,582 $ 1,629,582

Other Indefinite-lived Intangibles 184 184

Foreign Currency Translation ( 7,743 ) ( 6,655 )

Total Indefinite-lived Intangible Assets 1,622,024 1,623,112

Total Intangible Assets $ 1,727,655 $ 1,732,705

Amortization expense on intangible assets is as follows:

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

In thousands January 26, 2025 January 28, 2024

Amortization Expense $ 3,830 $ 4,463

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

NOTE C - INVESTMENTS IN AFFILIATES

NOTE D - INVESTMENTS IN AFFILIATES

Equity in Earnings of Affiliates consists of:

Quarter Ended Nine Months Ended

% Owned July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

% Owned January 26, 2025 January 28, 2024

MegaMex Foods, LLC (1)

2 unchanged sentences

Various ( 25 - 45 %)

4,912 1,685 19,806 7,501

Total Equity in Earnings of Affiliates

3 unchanged sentences

Distributions received from equity method investees consists of:

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Dividends $ 19,894 $ 15,731

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 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.

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 July 28, 2024, the remaining basis difference was $ 304.1 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 $ 258.4 million as of July 26, 2024.

The Company recognized a basis difference of $ 21.3 million associated with the formation of MegaMex Foods, LLC, of which $ 8.7 million was remaining as of July 28, 2024.

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

NOTE D - INVENTORIES

The Company recognized basis differences of $ 324.8 million upon the purchase of a minority interest in PT Garudafood Putra Putri Jaya Tbk (Garudafood) and $ 21.3 million associated with the formation of MegaMex Foods, LLC.

As of January 26, 2025, basis differences of $ 307.8 million, which includes the impact of foreign currency translation, and $ 8.2 million were remaining for Garudafood and MegaMex Foods, LLC, respectively.

The basis differences associated with definite-lived assets are being amortized through Equity in Earnings of Affiliates over the associated useful lives.

Based on quoted market prices, the fair value of the common stock held in Garudafood was $ 273.1 million as of January 24, 2025.

NOTE E - INVENTORIES

Principal components of inventories are:

July 28, 2024 October 29, 2023

January 26, 2025 October 27, 2024

Finished Products $ 842,802 $ 881,295

4 unchanged sentences

$ 1,516,716 $ 1,576,300

NOTE E - DERIVATIVES AND HEDGING

NOTE F - DERIVATIVES AND HEDGING

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:

1 unchanged sentence

These contracts are designated as cash flow hedges;

therefore, 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, natural gas, or diesel fuel exposure beyond the next two upcoming fiscal years and its lean hog exposure beyond the next fiscal year.

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.

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:

1 unchanged sentence

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

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

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

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

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.

In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with a tenor of seven and thirty years and both locks were lifted (See Note J - Long-Term Debt and Other Borrowing Arrangements).

In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with a tenor of seven and thirty years and both locks were lifted (See Note K - Long-term Debt and Other Borrowing Arrangements).

Mark-to-market gains and losses on these instruments were deferred as a component of AOCL.

2 unchanged sentences

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 was 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 was immaterial to the consolidated financial statements during the quarter and nine months ended July 28, 2024, and July 30, 2023.

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 the quarters ended January 26, 2025, and January 28, 2024.

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

July 28, 2024 October 29, 2023

January 26, 2025 October 27, 2024

Corn 33.5 bushels

3 unchanged sentences

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

Location on Consolidated Statements of Financial Position

July 28, 2024 October 29, 2023

Commodity Contracts (1)

Other Current Assets $ ( 18,987 ) $ ( 13,233 )

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

The Company nets the derivative assets and liabilities for each of its commodity hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract.

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

The gross liability position as of July 28, 2024 was offset by the right to reclaim net cash collateral of $ 29.3 million contained within the master netting arrangement.

The gross liability position as of October 29, 2023 was offset by the right to reclaim net cash collateral of $ 32.2 million.

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

January 26, 2025 October 27, 2024

Gross Fair Value of Commodity Contracts

$ 16,678 $ ( 3,507 ) $ 9,851 $ ( 12,638 )

Counterparty and Collateral Netting Offset (1)

( 4,154 ) 3,507 ( 1,785 ) 12,638

Amounts Recognized on Consolidated Statements of Financial Position (2)

$ 12,524 $ — $ 8,066 $ —

(1) Per the terms of the Company's master netting arrangements, the gross fair value of the Company's commodity contracts was offset by the obligation to return net cash collateral of $ 0.6 million (including cash of $ 0.4 million and $ 0.3 million of realized loss) as of January 26, 2025 and the right to reclaim net cash collateral of $ 10.9 million (including cash of $ 26.5 million and $ 15.6 million of realized loss) as of October 27, 2024.

(2) The Company's commodity contracts are reflected in Prepaid Expenses and Other Current Assets.

Fair Value Hedge - Assets (Liabilities):

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

Location on Consolidated Statements of Financial Position

July 28, 2024 October 29, 2023

Location on Consolidated Statements

of Financial Position

January 26, 2025 October 27, 2024

Commodity Contracts

1 unchanged sentence

$ 2,217 $ ( 2,902 )

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

— ( 442,549 )

(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.

(2) Represents the carrying amount of the hedged portion of the 2024 Notes.

The 2024 Notes were paid on June 3, 2024, and there was no cumulative fair value hedging adjustment from discontinued hedges.

Accumulated Other Comprehensive Loss Impact:

As of July 28, 2024, the Company included in AOCL hedging losses (before tax) of $ 25.5 million on commodity contracts and gains (before tax) of $ 11.7 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.

As of January 26, 2025, the Company included in AOCL pre-tax hedging gains of $ 12.4 million on commodity contracts and gains of $ 11.3 million related to interest rate settled positions.

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

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:

Reclassified from

AOCL into Earnings (1)

of Operations

Quarter Ended Quarter Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Cash Flow Hedges

Commodity Contracts $ ( 26,172 ) $ ( 2,600 ) $ ( 1,541 ) $ ( 5,758 ) Cost of Products Sold

Excluded Component (2)

Interest Rate Contracts

— — 247 247 Interest Expense

Reclassified from

AOCL into Earnings (1)

of Operations

Nine Months Ended Nine Months Ended

in thousands July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Cash Flow Hedges

Commodity Contracts $ ( 24,487 ) $ ( 34,151 ) $ ( 21,297 ) $ 5,833 Cost of Products Sold

Excluded Component (2)

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

Quarter Ended

In thousands January 26, 2025 January 28, 2024

Commodity Contracts

$ 19,134 $ ( 5,613 )

Interest Rate Contracts

— — 741 741 Interest Expense

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

Excluded Component (1)

(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:

Location on Consolidated

Statements of Operations

Quarter Ended

In thousands January 26, 2025 January 28, 2024

Commodity Contracts

Cost of Products Sold

$ ( 2,141 ) $ ( 11,601 )

Interest Rate Contracts Interest Expense

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

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:

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

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

Quarter Ended

January 26, 2025 January 28, 2024

Net Earnings Attributable to Hormel Foods Corporation $ 170,575 $ 218,863

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Gain (Loss) on Commodity Futures (1)

1,139 1,019 5,766 ( 440 )

Total Gain (Loss) on Commodity Contracts (2)

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Amortization of Loss Due to Discontinuance of Fair Value Hedge (3)

( 1,202 ) ( 3,125 ) ( 7,451 ) ( 9,374 )

Total Gain (Loss) on Interest Rate Contracts (4)

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Total Gain (Loss) Recognized in Earnings $ ( 398 ) $ ( 12,040 )

(1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter and nine months ended July 28, 2024, and July 30, 2023, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.

(1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarters ended January 26, 2025, and January 28, 2024, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.

Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.

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

NOTE F - PENSION AND OTHER POST-RETIREMENT BENEFITS

Net periodic cost for pension and other post-retirement benefit plans consists of:

NOTE G - PENSION AND OTHER POST-RETIREMENT BENEFITS

Net periodic cost of defined benefit plans consists of:

Pension Benefits

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Service Cost $ 11,973 $ 9,053

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Expected Return on Plan Assets ( 21,737 ) ( 19,377 )

Amortization of Prior Service Cost ( 221 ) ( 461 ) ( 664 ) ( 1,383 )

Recognized Actuarial (Gain) Loss 3,317 3,325 9,951 9,976

Amortization of Prior Service Cost (Credit)

Recognized Actuarial Loss (Gain)

Net Periodic Cost

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Post-retirement Benefits

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Service Cost $ 42 $ 41

Interest Cost 2,480 2,896

Amortization of Prior Service Cost 2 2 6 6

Recognized Actuarial (Gain) Loss ( 317 ) ( 7 ) ( 952 ) ( 21 )

Amortization of Prior Service Cost (Credit)

Recognized Actuarial Loss (Gain)

( 40 ) ( 317 )

Net Periodic Cost

$ 2,484 $ 2,622

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.

NOTE G - ACCUMULATED OTHER COMPREHENSIVE LOSS

Non-service cost components of net pension and post-retirement benefit cost are presented within Interest and Investment Income.

NOTE H - ACCUMULATED OTHER COMPREHENSIVE LOSS

Components of Accumulated Other Comprehensive Loss are as follows:

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Comprehensive

Balance at April 28, 2024 $ ( 93,937 ) $ ( 179,795 ) $ 8,121 $ 3,286 $ ( 262,325 )

Unrecognized Gains (Losses) — —

Gross ( 28,685 ) ( 90 ) ( 25,873 ) ( 5,079 ) ( 59,726 )

Tax Effect — — 6,286 — 6,286

Reclassification into Net Earnings — — — —

Gross — 2,781 (1)

( 1,691 ) (3)

Tax Effect — ( 683 ) ( 308 ) — ( 991 )

Change Net of Tax ( 28,685 ) 2,008 ( 18,601 ) ( 6,770 ) ( 52,048 )

Balance at July 28, 2024

$ ( 122,621 ) $ ( 177,788 ) $ ( 10,481 ) $ ( 3,484 ) $ ( 314,373 )

Balance at October 27, 2024

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Gross — 3,295 (1)

( 5,217 ) (3)

Tax Effect — ( 810 ) ( 446 ) — ( 1,256 )

Change Net of Tax ( 26,634 ) 2,366 15,862 473 ( 7,932 )

Balance at July 28, 2024

Balance at January 26, 2025

$ ( 97,427 ) $ ( 184,959 ) $ 17,853 $ ( 6,730 ) $ ( 271,263 )

(1) Included in computation of net periodic cost.

See Note F - Pension and Other Post-Retirement Benefits for additional information.

(2) Included in Cost of Products Sold and Interest Expense in the Consolidated Statements of Operations.

See Note E - Derivatives and Hedging for additional information.

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

NOTE H - FAIR VALUE MEASUREMENTS

Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of the three levels below based on the inputs used in the valuation.

See Note G - Pension and Other Post-Retirement Benefits for additional information.

(2) Included in Cost of Products Sold and Interest Expense.

See Note F - Derivatives and Hedging for additional information.

(3) Included in Equity in Earnings of Affiliates.

NOTE I - FAIR VALUE MEASUREMENTS

Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation.

The three levels are defined as follows:

Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

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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.

Fair Value Measurements at July 28, 2024

Fair Value Measurements at January 26, 2025

Value Quoted Prices

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Assets at Fair Value

Cash and Cash Equivalents (1)

$ 537,476 $ 537,008 $ 468 $ —

Short-term Marketable Securities

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$ 62,813 $ — $ 62,813 $ —

Commodity Derivatives

3,544 3,348 197 —

Total Liabilities at Fair Value $ 66,358 $ 3,348 $ 63,010 $ —

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Assets at Fair Value

Cash and Cash Equivalents (1)

$ 736,532 $ 735,387 $ 1,145 $ —

Short-term Marketable Securities

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$ 62,101 $ — $ 62,101 $ —

Commodity Derivatives 12,638 11,127 1,510 —

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

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

(1) 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.

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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 of $ 2.7 million and $ 11.5 million for the quarters ended January 26, 2025 and January 28, 2024, 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.

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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.

During the quarter and nine months ended July 28, 2024, securities held by the rabbi trust generated gains of $ 4.9 million, and $ 18.8 million, respectively, compared to gains of $ 5.1 million and $ 12.1 million for the quarter and nine months ended July 30, 2023, 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, diesel fuel, hogs, and pork, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers.

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.

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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 USDA estimated pork cut-out value.

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.

As of July 28, 2024, the Company had recognized the right to reclaim net cash collateral of $ 29.3 million from various counterparties (including cash of $ 37.7 million less $ 8.4 million of realized loss).

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.

The net balance for commodity derivatives is included in Prepaid Expenses and Other Current Assets or Accounts Payable, as appropriate.

The Company’s financial assets and liabilities include cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value due to their short-term maturities.

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

The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $ 2.4 billion as of July 28, 2024, and $ 2.7 billion as of October 29, 2023.

See Note J - Long-Term Debt and Other Borrowing Arrangements for additional information.

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

There were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the quarter and nine months ended July 28, 2024, and July 30, 2023.

NOTE I - COMMITMENTS AND CONTINGENCIES

Except as described below, there were no material changes outside the ordinary course of business during the quarter and nine months ended July 28, 2024, to the contractual obligations and other commitments last disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 29, 2023.

The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $ 2.4 billion as of January 26, 2025, and $ 2.5 billion as of October 27, 2024.

See Note K - Long-term Debt and Other Borrowing Arrangements for additional information.

The Company measures certain nonfinancial assets and liabilities including goodwill, intangible assets, and property, plant, and equipment at fair value on a nonrecurring basis.

There were no material fair value remeasurements of nonfinancial assets or liabilities during the quarters ended January 26, 2025, and January 28, 2024.

NOTE J - COMMITMENTS AND CONTINGENCIES

There were no material changes outside the ordinary course of business during the quarter ended January 26, 2025, to the purchase commitments and other commitments and guarantees last disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 27, 2024.

Legal Proceedings:

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

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

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

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

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

proceedings progress.

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

Pork Antitrust Litigation

Beginning in June 2018, a series of putative class action complaints were filed against the Company, as well as several other pork-processing companies and a benchmarking service called Agri Stats, in the U.S.

Beginning in June 2018, a series of 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 U.S.

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

Since the original filing, certain Non-Class Direct-Action 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, 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.

Payments totaling $ 7.3 million were made in the third quarter of fiscal 2024, and $ 4.5 million is reflected within Accrued Expenses on the Consolidated Statements of Financial Position for the third quarter of fiscal 2024.

The $ 4.5 million settlement amount was paid in August 2024, subsequent to the end of the third quarter.

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, and it cannot reasonably estimate any reasonably possible loss as the Company believes that it has valid and meritorious defenses against the allegations.

Since the original filing, certain plaintiffs 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, and believes it has valid defenses, to avoid the uncertainty, risk, expense, and distraction of continued litigation, the Company executed settlement agreements providing for payments by the Company to the Class Plaintiffs and one Non-Class Direct-Action Plaintiff.

For the Class Plaintiffs, the total settlement amount of $ 11.8 million was recorded as Accrued Expenses on the Consolidated Statements of Financial Position in the second quarter of fiscal 2024 and was paid during the second half of fiscal 2024.

For the Non-Class Direct-Action Plaintiff, the settlement amount of $ 0.2 million was recorded as Accrued Expenses on the Consolidated Statements of Financial Position in the first quarter of fiscal 2025 and is expected to be paid in fiscal 2025.

All settlement amounts were recorded in Selling, General, and Administrative in the Consolidated Statements of Operations.

The Company continues to defend against the claims.

Except as noted above, 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.

Turkey Antitrust Litigation

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

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

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

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

The 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 complaints on behalf of the 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 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

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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.

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

The Company expects to pay the agreed-upon settlement in the second quarter of fiscal 2025.

Red Meat Wages Antitrust Litigation

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(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.

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.

NOTE J - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS

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, agreeing to pay $ 13.5 million and provide certain data and information.

The settlement has been approved by the Court and was paid in February 2025, subsequent to the end of the first quarter.

Tax Proceedings:

Two current Company subsidiaries organized in Brazil, Clean Field Comércio de Produtos de Alimentícios LTDA and Omamori Indústria de Alimentos LTDA, along with a former subsidiary, Talis Distribuidora de Alimentos LTDA, which are reported in the International segment, 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 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 recorded any liability relating to these assessments and cannot reasonably estimate any reasonably possible loss at this time.

NOTE K - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS

Long-term Debt consists of:

July 28, 2024 October 29, 2023

January 26, 2025 October 27, 2024

Senior Unsecured Notes with Interest at 3.050 %

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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

500,000 500,000

Unamortized Discount on Senior Notes ( 6,477 ) ( 6,687 )

Unamortized Debt Issuance Costs ( 14,914 ) ( 15,628 )

Interest Rate Swap Liabilities (1)

Finance Lease Liabilities 25,475 27,541

Other Financing Arrangements 3,309 3,530

Total 2,859,853 3,309,247

2,857,393 2,858,756

Current Maturities of Long-term Debt 7,187 7,813

Long-term Debt Less Current Maturities $ 2,850,206 $ 2,850,944

(1) See Note E - Derivatives and Hedging for additional information.

Senior Unsecured Notes:

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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).

On June 3, 2021, the Company issued $ 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.

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The Company lifted the hedges in conjunction with the issuance of these notes.

See Note E - Derivatives and Hedging for additional information.

See Note F - Derivatives and Hedging for additional information.

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.

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as syndication agents and the lenders party thereto.

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

The 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 unsecured revolving credit agreement.

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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 July 28, 2024, and October 29, 2023, the Company had no outstanding draws from this facility.

As of January 26, 2025, and October 27, 2024, the Company had no outstanding borrowings from this facility.

Debt Covenants:

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

As of July 28, 2024, the Company was in compliance with all covenants.

NOTE K - INCOME TAXES

As of January 26, 2025, the Company was in compliance with all covenants.

NOTE L - INCOME TAXES

The Company’s tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter.

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The deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the related temporary differences are anticipated to reverse.

The Company’s effective tax rate for the quarter and nine months ended July 28, 2024, was 21.7 % and 22.6 %, respectively, compared to 21.7 % and 22.2 %, respectively, for the corresponding periods a year ago.

The Company benefited from the purchase of federal transferable energy credits in the third quarter of fiscal 2024.

The Company benefited from the impact of higher federal deductions in the third quarter of fiscal 2023.

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

If recognized as of July 28, 2024, these benefits would impact the Company’s effective tax rate by $ 17.2 million compared to $ 19.6 million as of July 30, 2023.

The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial losses included during the quarter ended July 28, 2024, and July 30, 2023.

The amount of accrued interest and penalties associated with unrecognized tax benefits was $ 2.7 million at July 28, 2024, and $ 3.2 million at July 30, 2023.

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

The Company’s effective tax rate for the quarter ended January 26, 2025, was 21.8 % compared to 23.4 % for the corresponding period a year ago.

The Company benefited primarily from the purchase of federal transferable energy tax credits in the first quarter of fiscal 2025.

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

If recognized as of January 26, 2025, these benefits would impact the Company’s effective tax rate by $ 16.7 million compared to $ 17.7 million as of January 28, 2024.

The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial expenses included during the quarters ended January 26, 2025, and January 28, 2024.

The amount of accrued interest and penalties associated with unrecognized tax benefits was $ 2.6 million at January 26, 2025, and $ 2.7 million at January 28, 2024.

Tax Examinations:

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

The IRS concluded its examination of fiscal 2022 in the second quarter of fiscal 2024.

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

The Company has elected to participate in CAP for fiscal years through 2025.

The Company has elected to participate in CAP through fiscal year 2026.

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

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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, as of July 28, 2024, it was not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

NOTE L - EARNINGS PER SHARE DATA

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 January 26, 2025, 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.

See Note J - Commitments and Contingencies for additional information.

Tax Legislation:

The Organization for Economic Cooperation and Development published a framework for Pillar Two of the Global Anti-Base Erosion Rules which was designed to coordinate participating jurisdictions in updating the international tax system to ensure that large multinational companies pay a minimum tax of 15%.

Many countries have enacted, or begun the process of enacting, laws based on the Pillar Two framework.

The Company considered the applicable tax laws in relevant jurisdictions and concluded the impact of Pillar Two was not material to the tax provision for the quarter ended January 26, 2025.

The Company will continue to evaluate the impact of such legislative changes but does not expect the new tax laws to have a material effect on the Company’s consolidated financial statements in future reporting periods.

NOTE M - EARNINGS PER SHARE DATA

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

1 unchanged sentence

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

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Basic Weighted-average Shares Outstanding

4 unchanged sentences

Antidilutive Potential Common Shares 19,778 17,892

NOTE M - SEGMENT REPORTING

NOTE N - SEGMENT REPORTING

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

The Company reports its results in the following three segments:

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

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

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

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.

2 unchanged sentences

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 does not allocate deferred compensation, non-recurring expenses associated with the Transform and Modernize initiative, gains or losses on the sale of businesses, investment income, interest expense, or interest income to its segments when measuring performance.

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

4 unchanged sentences

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

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Retail $ 1,890,133 $ 1,911,272

12 unchanged sentences

Total revenue contributed by classes of similar products are:

Quarter Ended Nine Months Ended

July 28, 2024 July 30, 2023 July 28, 2024 July 30, 2023

Quarter Ended

January 26, 2025 January 28, 2024

Perishable $ 2,151,822 $ 2,106,571

2 unchanged sentences

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

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

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

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-Q

Item 1. Financial Statements