QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: The Company is exposed to various forms of market risk as a part of its ongoing business practices.
−Removed: The Company utilizes derivative instruments to mitigate earnings fluctuations due to market volatility.
+Added: The Company is exposed to various forms of market risk as a part of its ongoing business practices including commodity price risk, interest rate risk, foreign currency exchange rate risk, investment risk, and credit risk, among others.
Commodity Price Risk:
−Removed: The Company is subject to commodity price risk primarily through grain, lean hog, natural gas, and diesel fuel markets.
+Added: The Company is subject to commodity price risk through grain, lean hog, natural gas, and diesel fuel markets.
To reduce these exposures and offset the fluctuations caused by changes in market conditions, the Company employs hedging programs.
These programs utilize futures, swaps, and options contracts and are accounted for as cash flow hedges.
−Removed: The fair value of the Company’s cash flow commodity contracts as of July 28, 2024 was $(22.9) million, compared to $(17.1) million as of October 29, 2023.
+Added: The fair value of the Company’s cash flow commodity contracts as of January 26, 2025 was $15.5 million compared to $(5.9) million as of October 27, 2024.
The Company measures its market risk exposure on its cash flow commodity contracts using a sensitivity analysis, which considers a hypothetical 10 percent change in the market prices.
−Removed: A 10 percent decrease in the market price would have negatively impacted the fair value of the Company’s cash flow commodity contracts as of July 28, 2024 by $25.6 million, which in turn would lower the Company’s future cost on purchased commodities by a similar amount.
+Added: A 10 percent decrease in the market price would have negatively impacted the fair value of the Company’s cash flow commodity contracts as of January 26, 2025 by $31.0 million, which in turn would lower the Company’s future cost on purchased commodities by a similar amount.
Interest Rate Risk :
The Company is subject to interest rate risk primarily from changes in fair value of long-term fixed rate debt.
−Removed: As of July 28, 2024, the Company’s long-term debt had a fair value of $2.4 billion compared to $2.7 billion as of October 29, 2023.
+Added: As of January 26, 2025, the Company’s long-term debt had a fair value of $2.4 billion compared to $2.5 billion as of October 27, 2024.
The Company measures its market risk exposure of long-term fixed rate debt using a sensitivity analysis, which considers a 10 percent change in interest rates.
−Removed: A 10 percent decrease in interest rates would have positively impacted the fair value of the Company’s long-term debt as of July 28, 2024 by $76.0 million.
+Added: A 10 percent decrease in interest rates would have positively impacted the fair value of the Company’s long-term debt as of January 26, 2025 by $73.0 million.
A 10 percent increase would have negatively impacted the long-term debt by $68.0 million.
Foreign Currency Exchange Rate Risk:
−Removed: The fair values of certain of the Company’s assets are subject to fluctuations in foreign currency exchange rates.
−Removed: The Company’s net asset position in foreign currencies as of July 28, 2024 and October 29, 2023 was $1.1 billion, with most of the exposure existing in Chinese yuan, Indonesian rupiah, and Brazilian real.
+Added: The fair values of certain Company assets are subject to fluctuations in foreign currency exchange rates.
+Added: The Company’s net asset position in foreign currencies was $1.2 billion as of January 26, 2025 and October 27, 2024, with most of the exposure existing in Chinese yuan, Indonesian rupiah, and Brazilian real.
The Company currently does not use market risk sensitive instruments to manage this risk.
1 unchanged sentence
The Company has corporate-owned life insurance policies classified as trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans.
−Removed: As of July 28, 2024, the balance of these securities totaled $207.0 million compared to $188.2 million as of October 29, 2023.
+Added: As of January 26, 2025, the balance of these securities totaled $212.4 million compared to $209.7 million as of October 27, 2024.
The rabbi trust is invested primarily in fixed income funds.
1 unchanged sentence
A 10 percent decline in the value of the investments not held in fixed income funds would have negatively impacted the Company’s pre-tax earnings by approximately $10.2 million, while a 10 percent increase in value would have a positive impact of the same amount.
+Added: Concentration of Credit Risk:
+Added: The Company is exposed to credit risk from its customers.
+Added: The Company regularly assesses the credit worthiness of its customers.
+Added: As of January 26, 2025 and October 27, 2024, one customer accounted for more than 10% of net accounts receivable.
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.