Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 25, 2015 | Nov. 27, 2015 | Apr. 26, 2015 | |
Entity Registrant Name | HORMEL FOODS CORP /DE/ | ||
Entity Central Index Key | 48,465 | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 25, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-25 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 7,354,755,988 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | |||
Entity Common Stock, Shares Outstanding | 264,228,740 | ||
Common stock, non-voting | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Thousands | Oct. 25, 2015 | Oct. 26, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 347,239 | $ 334,174 |
Accounts receivable (net of allowance for doubtful accounts of $4,086 at October 25, 2015, and $4,050 at October 26, 2014) | 605,689 | 609,526 |
Inventories | 993,265 | 1,054,552 |
Income taxes receivable | 6,132 | 25,678 |
Deferred income taxes | 86,902 | 86,853 |
Prepaid expenses | 14,383 | 15,250 |
Other current assets | 9,422 | 6,738 |
TOTAL CURRENT ASSETS | 2,063,032 | 2,132,771 |
GOODWILL | 1,699,484 | 1,226,406 |
OTHER INTANGIBLES | 827,219 | 554,890 |
PENSION ASSETS | 132,861 | 130,284 |
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES | 258,998 | 264,451 |
OTHER ASSETS | 146,498 | 145,050 |
PROPERTY, PLANT AND EQUIPMENT | ||
Land | 71,192 | 61,809 |
Buildings | 815,643 | 803,722 |
Equipment | 1,679,100 | 1,597,044 |
Construction in progress | 79,964 | 119,657 |
Property, Plant and Equipment, Gross | 2,645,899 | 2,582,232 |
Less allowance for depreciation | (1,634,160) | (1,580,465) |
Property, Plant and Equipment, Net | 1,011,739 | 1,001,767 |
TOTAL ASSETS | 6,139,831 | 5,455,619 |
CURRENT LIABILITIES | ||
Accounts payable | 495,317 | 484,042 |
Short-term debt | 185,000 | |
Accrued expenses | 71,777 | 76,836 |
Accrued workers compensation | 37,009 | 35,406 |
Accrued marketing expenses | 119,153 | 89,561 |
Employee related expenses | 232,309 | 209,874 |
Taxes payable | 6,764 | 5,507 |
Interest and dividends payable | 66,696 | 53,466 |
TOTAL CURRENT LIABILITIES | 1,214,025 | 954,692 |
LONG-TERM DEBT--less current maturities | 250,000 | 250,000 |
PENSION AND POST-RETIREMENT BENEFITS | 509,261 | 502,693 |
OTHER LONG-TERM LIABILITIES | 101,056 | 112,176 |
DEFERRED INCOME TAXES | $ 64,096 | $ 24,002 |
SHAREHOLDERS' INVESTMENT | ||
Preferred stock, par value $.01 a share - authorized 160,000,000 shares; issued - none | ||
Accumulated other comprehensive loss | $ (225,668) | $ (207,700) |
Retained earnings | 4,216,125 | 3,805,654 |
HORMEL FOODS CORPORATION SHAREHOLDERS' INVESTMENT | 3,998,198 | 3,605,678 |
NONCONTROLLING INTEREST | 3,195 | 6,378 |
TOTAL SHAREHOLDERS' INVESTMENT | 4,001,393 | 3,612,056 |
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT | $ 6,139,831 | $ 5,455,619 |
Common stock, non-voting | ||
SHAREHOLDERS' INVESTMENT | ||
Common stock | ||
Common Stock | ||
SHAREHOLDERS' INVESTMENT | ||
Common stock | $ 7,741 | $ 7,724 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands | Oct. 25, 2015 | Oct. 26, 2014 |
Accounts receivable, allowance for doubtful accounts (in dollars) | $ 4,086 | $ 4,050 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 160,000,000 | 160,000,000 |
Preferred stock, issued shares | 0 | 0 |
Common stock, non-voting | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 400,000,000 | 400,000,000 |
Common stock, issued shares | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0293 | $ 0.0293 |
Common stock, authorized shares | 800,000,000 | 800,000,000 |
Common stock, issued shares | 264,205,814 | 263,613,201 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Consolidated Statements of Operations | |||
Net sales | $ 9,263,863 | $ 9,316,256 | $ 8,751,654 |
Cost of products sold | 7,455,282 | 7,751,273 | 7,338,838 |
GROSS PROFIT | 1,808,581 | 1,564,983 | 1,412,816 |
Selling, general and administrative | 743,611 | 650,948 | 627,340 |
Goodwill impairment charge | 21,537 | ||
Equity in earnings of affiliates | 23,887 | 17,585 | 20,513 |
OPERATING INCOME | 1,067,320 | 931,620 | 805,989 |
Other income and expense: | |||
Interest and investment income (loss) | 2,934 | 3,236 | 4,971 |
Interest expense | (13,111) | (12,704) | (12,453) |
EARNINGS BEFORE INCOME TAXES | 1,057,143 | 922,152 | 798,507 |
Provision for income taxes | 369,879 | 316,126 | 268,431 |
NET EARNINGS | 687,264 | 606,026 | 530,076 |
Less: Net earnings attributable to noncontrolling interest | 1,176 | 3,349 | 3,865 |
NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION | $ 686,088 | $ 602,677 | $ 526,211 |
NET EARNINGS PER SHARE: | |||
BASIC (in dollars per share) | $ 2.60 | $ 2.28 | $ 1.99 |
DILUTED (in dollars per share) | $ 2.54 | $ 2.23 | $ 1.95 |
WEIGHTED-AVERAGE SHARES OUTSTANDING: | |||
BASIC (in shares) | 264,072 | 263,812 | 264,317 |
DILUTED (in shares) | 270,501 | 270,216 | 270,224 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Net earnings | $ 687,264 | $ 606,026 | $ 530,076 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation | (7,135) | (1,921) | (2,820) |
Pension and other benefits | (21,280) | (52,985) | 192,464 |
Deferred hedging | 9,823 | (3,590) | (15,085) |
Total Other Comprehensive Income (Loss) | (18,592) | (58,496) | 174,559 |
Comprehensive income | 668,672 | 547,530 | 704,635 |
Less: Comprehensive income attributable to noncontrolling interest | 947 | 3,339 | 4,069 |
Comprehensive Income Attributable to Hormel Foods Corporation | $ 667,725 | $ 544,191 | $ 700,566 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Investment - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Oct. 25, 2015 | Jan. 25, 2015 | Oct. 26, 2014 | Jan. 26, 2014 | Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Increase (Decrease) in Shareholders' Investment | |||||||
Balance | $ 3,612,056 | $ 3,316,579 | $ 3,612,056 | $ 3,316,579 | $ 2,824,925 | ||
Net earnings | $ 187,443 | 172,430 | $ 171,848 | 154,458 | 687,264 | 606,026 | 530,076 |
Other comprehensive income (loss) | (18,592) | (58,496) | 174,559 | ||||
Purchases of common stock | (24,928) | (58,937) | (70,819) | ||||
Stock-based compensation expense | 15,717 | 14,393 | 17,596 | ||||
Exercise of stock options/nonvested shares | 9,555 | 6,103 | 24,024 | ||||
Purchase of additional ownership from noncontrolling interest | (14,035) | ||||||
Distribution to noncontrolling interest | (1,581) | (2,500) | (4,000) | ||||
Declared cash dividends - $1.00, $0.80 and $0.68 per share for the years ended October 25, 2015, October 26, 2014 and October 27, 2013, respectively | (264,063) | (211,112) | (179,782) | ||||
Balance | 4,001,393 | 3,612,056 | 4,001,393 | 3,612,056 | 3,316,579 | ||
Common Stock | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Balance | $ 7,724 | $ 7,725 | $ 7,724 | $ 7,725 | $ 7,707 | ||
Balance (in shares) | 263,613 | 263,658 | 263,613 | 263,658 | 263,044 | ||
Stock-based compensation expense | $ 1 | $ 1 | |||||
Exercise of stock options/nonvested shares | $ 28 | $ 35 | $ 69 | ||||
Exercise of stock options/nonvested shares, shares | 993 | 1,212 | 2,359 | ||||
Shares retired | $ (12) | $ (37) | $ (51) | ||||
Shares retired, shares | (400) | (1,257) | (1,745) | ||||
Balance | $ 7,741 | $ 7,724 | $ 7,741 | $ 7,724 | $ 7,725 | ||
Balance (in shares) | 264,206 | 263,613 | 264,206 | 263,613 | 263,658 | ||
Treasury Stock | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Purchases of common stock | $ (24,928) | $ (58,937) | $ (70,819) | ||||
Purchases of common stock, shares | (400) | (1,257) | (1,745) | ||||
Shares retired | $ 24,928 | $ 58,937 | $ 70,819 | ||||
Shares retired, shares | 400 | 1,257 | 1,745 | ||||
Additional Paid-in Capital | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Stock-based compensation expense | $ 15,716 | $ 14,392 | $ 17,596 | ||||
Exercise of stock options/nonvested shares | 9,527 | 6,068 | 23,955 | ||||
Shares retired | (13,362) | (20,460) | (41,551) | ||||
Purchase of additional ownership from noncontrolling interest | (11,881) | ||||||
Retained Earnings | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Balance | $ 3,805,654 | $ 3,452,529 | 3,805,654 | 3,452,529 | 3,135,317 | ||
Net earnings | 686,088 | 602,677 | 526,211 | ||||
Shares retired | (11,554) | (38,440) | (29,217) | ||||
Declared cash dividends - $1.00, $0.80 and $0.68 per share for the years ended October 25, 2015, October 26, 2014 and October 27, 2013, respectively | (264,063) | (211,112) | (179,782) | ||||
Balance | $ 4,216,125 | $ 3,805,654 | 4,216,125 | 3,805,654 | 3,452,529 | ||
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Balance | (207,700) | (149,214) | (207,700) | (149,214) | (323,569) | ||
Other comprehensive income (loss) | (18,363) | (58,486) | 174,355 | ||||
Purchase of additional ownership from noncontrolling interest | 395 | ||||||
Balance | (225,668) | (207,700) | (225,668) | (207,700) | (149,214) | ||
Non-controlling Interest | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Balance | $ 6,378 | $ 5,539 | 6,378 | 5,539 | 5,470 | ||
Net earnings | 1,176 | 3,349 | 3,865 | ||||
Other comprehensive income (loss) | (229) | (10) | 204 | ||||
Purchase of additional ownership from noncontrolling interest | (2,549) | ||||||
Distribution to noncontrolling interest | (1,581) | (2,500) | (4,000) | ||||
Balance | $ 3,195 | $ 6,378 | $ 3,195 | $ 6,378 | $ 5,539 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Shareholders' Investment (Parenthetical) - $ / shares | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Consolidated Statements of Changes in Shareholders' Investment | |||
Declared cash dividends (in dollars per share) | $ 1 | $ 0.80 | $ 0.68 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
OPERATING ACTIVITIES | |||
Net earnings | $ 687,264 | $ 606,026 | $ 530,076 |
Adjustments to reconcile to net cash provided by operating activities: | |||
Depreciation | 125,292 | 120,692 | 115,371 |
Amortization of intangibles | 8,142 | 9,352 | 9,479 |
Goodwill impairment charge | 21,537 | ||
Equity in earnings of affiliates, net of dividends | 13,438 | 5,246 | 13,507 |
Provision for deferred income taxes | 19,979 | 9,800 | 1,067 |
Gain on property/equipment sales and plant facilities | (5,240) | (1,667) | (2,127) |
Non-cash investment activities | (847) | (1,387) | (2,705) |
Stock-based compensation expense | 15,717 | 14,393 | 17,596 |
Excess tax benefit from stock-based compensation | (22,950) | (24,700) | (23,406) |
Other | 963 | ||
Changes in operating assets and liabilities, net of acquisitions: | |||
Decrease (increase) in accounts receivable | 22,451 | (20,486) | (44,459) |
Decrease (increase) in inventories | 82,437 | (21,645) | 31,699 |
Decrease (increase) in prepaid expenses and other current assets | 62,635 | 11,592 | (9,792) |
(Decrease) increase in pension and post-retirement benefits | (28,999) | (32,644) | 11,283 |
Increase (decrease) in accounts payable and accrued expenses | (7,429) | 72,307 | (10,747) |
Other | (1,435) | ||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 991,992 | 746,879 | 637,805 |
INVESTING ACTIVITIES | |||
Net sale of trading securities | 77,558 | ||
Acquisitions of businesses/intangibles | (770,587) | (466,204) | (665,415) |
Purchases of property/equipment | (144,063) | (159,138) | (106,762) |
Proceeds from sales of property/equipment | 18,501 | 10,285 | 10,164 |
(Increase) decrease in investments, equity in | (4,798) | (1,718) | (6,619) |
NET CASH USED IN INVESTING ACTIVITIES | (900,947) | (616,775) | (691,074) |
FINANCING ACTIVITIES | |||
Proceeds from short-term debt | 350,000 | 115,000 | 25,000 |
Principal payments on short-term debt | (165,000) | (115,000) | (25,000) |
Dividends paid on common stock | (250,834) | (203,156) | (174,320) |
Share repurchase | (24,928) | (58,937) | (70,819) |
Proceeds from exercise of stock options | 10,468 | 10,523 | 30,212 |
Excess tax benefit from stock-based compensation | 22,950 | 24,700 | 23,406 |
Distribution to noncontrolling interest | (1,581) | (2,500) | (4,000) |
Payments to noncontrolling interest | (11,702) | ||
NET CASH USED IN FINANCING ACTIVITIES | (70,627) | (229,370) | (195,521) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (7,353) | (574) | 416 |
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 13,065 | (99,840) | (248,374) |
Cash and cash equivalents at beginning of year | 334,174 | 434,014 | 682,388 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 347,239 | $ 334,174 | $ 434,014 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 25, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE A Summary of Significant Accounting Policies Principles of Consolidation: The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits. Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal years 2015, 2014, and 2013 consisted of 52 weeks. Fiscal year 2016 will consist of 53 weeks. Subsequent Event: On November 25, 2015, subsequent to the end of the fiscal year, the Company announced that its Board of Directors authorized a two-for-one split of the Company’s common stock. Stockholder approval of the stock split is required during the Company’s Annual Meeting to be held on January 26, 2016. Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. The Company’s cash equivalents as of October 25, 2015, and October 26, 2014, consisted primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. Fair Value Measurements: Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 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 Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows: Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. See additional discussion regarding the Company’s fair value measurements in Notes G, H, and M. Investments: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans, which is included in other assets on the Consolidated Statements of Financial Position. The securities held by the trust are classified as trading securities and consist mainly of fixed return investments. Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings. Securities held by the trust generated gains of $2.4 million, $2.9 million, and $4.6 million for fiscal years 2015, 2014, and 2013, respectively. Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally under the average cost method. Adjustments to the Company’s lower of cost or market inventory reserve are reflected in cost of products sold in the Consolidated Statements of Operations. 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, machinery and equipment 5 to 10 years. Internal-use software development and implementation costs are expensed until the Company has determined that the software will result in probable future economic benefits, and management has committed to funding the project. Thereafter, all material development and implementation costs, and purchased software costs, are capitalized and amortized using the straight-line method over the remaining estimated useful lives. Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise. In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test. In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results. If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. 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. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference. During fiscal years 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal year 2015. See additional discussion regarding the Company’s assets held for sale in Note E. In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test. In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that may impact their intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset. If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment. Based on the qualitative assessment conducted in fiscal year 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal years 2015, 2014, or 2013. Impairment of Long-lived Assets and Definite-Lived Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews long-lived assets and definite-lived intangible assets for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets and any related goodwill, the carrying value is reduced to the estimated fair value. No material write-downs were recorded in fiscal years 2015, 2014, or 2013. Assets Held For Sale: The Company classifies assets as held for sale when management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value or the fair market value, less costs to sell. See additional discussion regarding the Company’s assets held for sale in Note E. Employee Benefit Plans: The Company has elected to use the corridor approach to recognize expenses related to its defined benefit pension and post-retirement benefit plans. Under the corridor approach, actuarial gains or losses resulting from experience different from that assumed and from changes in assumptions are deferred and amortized over future periods. For the defined benefit pension plans, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year. For the post-retirement plan, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the accumulated pension benefit obligation at the beginning of the year. For plans with active employees, net gains or losses in excess of the corridor are amortized over the average remaining service period of participating employees expected to receive benefits under those plans. For plans with only retiree participants, net gains or losses in excess of the corridor are amortized over the average remaining life of the retirees receiving benefits under those plans. Contingent Liabilities: The Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. Such proceedings typically involve claims related to product liability, contract disputes, wage and hour laws, employment practices, or other actions brought by employees, 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. Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range that 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. Foreign Currency Translation: Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the statement of financial position date, and amounts in the statement 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 in 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. dollars. Derivatives and Hedging Activity: The Company uses commodity and currency positions to manage its exposure to price fluctuations in those markets. The contracts are recorded at fair value on the Consolidated Statements of Financial Position within other current assets or accounts payable. Additional information on hedging activities is presented in Note H. Equity Method Investments: The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control. The Company accounts for such investments under the equity method of accounting, and its underlying share of each investee’s equity is reported in the Consolidated Statements of Financial Position as part of investments in and receivables from affiliates. The Company regularly monitors and evaluates the fair value of our equity investments. If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in equity in earnings of affiliates in the Consolidated Statements of Operations. The Company’s equity investments do not have a readily determinable fair value as none of them are publicly traded. The fair values of the Company’s private equity investments are determined by discounting the estimated future cash flows of each entity. These cash flow estimates include assumptions on growth rates and future currency exchange rates (Level 3). Excluding charges related to the exit from international joint venture businesses in fiscal year 2015, there were no other charges on any of the Company’s equity investments in fiscal years 2015, 2014, or 2013. See additional discussion regarding the Company’s equity method investments in Note I. Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured. The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contract accruals are based on a review of the unpaid outstanding contracts on which performance has taken place. Estimates used to determine the revenue reduction include the level of customer performance and the historical spend rate versus contracted rates. Allowance for Doubtful Accounts: The Company estimates the allowance for doubtful accounts based on a combination of factors, including the age of its accounts receivable balances, customer history, collection experience, and current market factors. Additionally, a specific reserve may be established if the Company becomes aware of a customer’s inability to meet its financial obligations. Advertising Expenses: Advertising costs are expensed when incurred. Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research. Advertising costs for fiscal years 2015, 2014, and 2013 were $145.3 million, $114.4 million, and $89.9 million, respectively. Shipping and Handling Costs: The Company’s shipping and handling expenses are included in cost of products sold. Research and Development Expenses: Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses incurred for fiscal years 2015, 2014, and 2013 were $32.0 million, $29.9 million, and $29.9 million, respectively. Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur. In accordance with ASC 740, Income Taxes, the Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Employee Stock Options: 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 requisite service period. Stock-based compensation expense for grants made to retirement-eligible employees is recognized on the date of grant. Share Repurchases: During fiscal year 2013, 1.2 million shares were purchased as part of a 2010 program at an average price of $39.67, fully depleting that program. On January 29, 2013, the Company’s Board of Directors authorized the repurchase 10.0 million shares of its common stock with no expiration date. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation under this authorization at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. During fiscal year 2014, 1.3 million shares were purchased at an average price of $46.87 and 0.6 million shares were purchased during fiscal year 2013 at an average price of $42.54. Supplemental Cash Flow Information: Non-cash investment activities presented on the Consolidated Statements of Cash Flows generally consist of unrealized gains or losses on the Company’s rabbi trust. The noted investments are included in other assets or short-term marketable securities on the Consolidated Statements of Financial Position. Changes in the value of these investments are included in the Company’s net earnings and are presented in the Consolidated Statements of Operations as either interest and investment income or interest expense, as appropriate. On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership of that business. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture. The difference between the fair value of the consideration given and the reduction in the noncontrolling interest was recognized as an $11.9 million reduction in additional paid-in capital attributable to the Company. The Company will continue to manufacture at the Shanghai facility by leasing the land use rights and buildings from the previous minority partner. Accounting Changes and Recent Accounting Pronouncements: In January 2014, the FASB updated the guidance within ASC 323, Investments-Equity Method and Joint Ventures. The update provides guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to make an accounting policy election to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The updated guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2016, and adoption is not expected to have a material impact on the consolidated financial statements. In April 2014, the Financial Accounting Standards Board (FASB) updated the guidance within ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard update only requires disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The updated guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company early adopted the new provisions of this accounting standard in the fourth quarter of fiscal year 2015, and determined it did not have any transactions qualifying as a discontinued operation under the new guidance. In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. generally accepted accounting principles and international financial reporting standards and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. On July 8, 2015, the FASB approved a one-year deferral of the effective date. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. Accordingly, the Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2019, and adoption is not expected to have a material impact on the consolidated financial statements. In April 2015, the FASB updated the guidance within ASC 835, Interest . The update provides guidance on simplifying the presentation of debt issuance cost. The amendments require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements. In April 2015, the FASB updated the guidance within ASC 715, Compensation – Retirement Benefits . The update provides guidance on simplifying the measurement date for defined benefit plan assets and obligations. The amendments allow employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year ends. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and adoption is not expected to have a material impact on its consolidated financial statements. In May 2015, the FASB updated the guidance within ASC 820, Fair Value Measurements and Disclosures . The update provides guidance on the disclosures for investments in certain entities that calculate net asset value (NAV) per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share (or its equivalent) as a practical expedient. The updated guidance is to be applied retrospectively and is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Oct. 25, 2015 | |
Acquisitions | |
Acquisitions | NOTE B Acquisitions On July 13, 2015, the Company acquired Applegate Farms, LLC (Applegate) of Bridgewater, New Jersey for a preliminary purchase price of $774.1 million in cash. The purchase price is preliminary pending final purchase accounting adjustments, and was funded by the Company with cash on hand and by utilizing short-term financing. Applegate ® is the No. 1 brand in natural and organic value-added prepared meats and this acquisition will allow the Company to expand the breadth of its protein offerings to provide consumers more choice in that fast growing category. The acquisition was accounted for as a business combination using the acquisition method. The Company is in the process of obtaining an independent appraisal. Therefore, a preliminary allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below. (in thousands) Accounts receivable $ Inventory Prepaid and other assets Property, plant and equipment Intangible assets Goodwill Current liabilities Deferred taxes Purchase price $ Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the potential to expand presence in the natural and organic channels and the supply chain for natural and organic products. A portion of the goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Refrigerated Foods reporting segment. The Company recognized approximately $9.0 million of transaction costs in fiscal year 2015 related to the acquisition and the charges were reported in selling, general and administrative expense in the Company’s Consolidated Statements of Operations. Operating results for this acquisition have been included in the Company’s Consolidated Statements of Operations from the date of acquisition and are reflected in the Refrigerated Foods reporting segment. The acquisition contributed $92.8 million of net sales since the date of acquisition. On August 11, 2014, the Company acquired CytoSport Holdings, Inc. (CytoSport) of Benicia, California for a final purchase price of $420.9 million in cash. The purchase price was funded by the Company with cash on hand and by utilizing funds from its revolving line of credit. The agreement provides for a potential additional payment of up to $20.0 million subject to meeting specific financial performance criteria over the two years subsequent to the year of acquisition. The Company recognized a $10.3 million liability related to this potential payment through purchase accounting. In fiscal year 2015, the Company had a positive $8.9 million adjustment related to this accrual due to a current evaluation of net sales and earnings targets associated with the acquisition. CytoSport is the maker of Muscle Milk ® products and is a leading provider of premium protein products in the sports nutrition category. CytoSport’s brands align with the Company’s focus on protein while further diversifying the Company’s portfolio. The acquisition was accounted for as a business combination using the acquisition method. The Company has estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. The final allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below. (in thousands) Accounts receivable $ Inventory Prepaid and other assets Property, plant and equipment Intangible assets Goodwill Current liabilities Long-term liabilities Deferred taxes Purchase price $ The liabilities shown above include $15.0 million representing potential payments owed under a supplier agreement, which are contingent on future production levels through fiscal year 2018. Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, manufacturing synergies, and the potential to expand presence in alternate channels. The goodwill balance is not expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Specialty Foods and International & Other reporting segments. 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 Specialty Foods and International & Other reporting segments. The acquisition contributed an incremental $249.7 million of net sales for fiscal year 2015, and incremental $73.5 million of net sales for fiscal year 2014. The Company recognized approximately $4.8 million of transaction costs in fiscal year 2014 related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations. On November 26, 2013, the Company acquired the China based SKIPPY ® peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. for a final purchase price of $41.9 million in cash. This acquisition included the Weifang, China manufacturing facility and all sales in Mainland China. The purchase price was funded by the Company with cash on hand. SKIPPY ® is a well-established brand that allows the Company to expand its presence in the center of the store with a non-meat protein product and reinforces the Company’s balanced product portfolio. The acquisition also provides the opportunity to strengthen the Company’s global presence and complements the international sales strategy for the SPAM ® family of products. On January 31, 2013, the Company had previously acquired the United States based SKIPPY ® peanut butter business from Unilever United States Inc. for a final purchase price of $665.4 million in cash. This acquisition included the Little Rock, Arkansas manufacturing facility and all sales worldwide, except sales in Mainland China. The purchase price was funded by the Company with cash on hand generated from operations and liquidating marketable securities. The acquisition was accounted for as a business combination using the acquisition method. The Company estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. Therefore, an allocation of the final purchase price to the acquired assets, liabilities, and goodwill is presented in the table below. (in thousands) Inventory $ Property, plant and equipment Intangible assets Goodwill Current liabilities Purchase price $ Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, cost synergies, and the potential to integrate and expand existing product lines. The goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Grocery Products and International & Other reporting segments. The Company recognized approximately $7.7 million of transaction costs in fiscal year 2013 (excluding transitional service expenses) related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations. Operating results for both of these SKIPPY ® acquisitions have been included in the Company’s Consolidated Statements of Operations from the date of acquisition and are primarily reflected in the Grocery Products and International & Other reporting segments. The China based business contributed an incremental $28.9 million of net sales for fiscal year 2014. The United States based business contributed an incremental $86.5 million of net sales for the first quarter of fiscal year 2014, and an incremental $272.8 million of net sales for fiscal year 2013. Pro forma results of operations are not presented, as no acquisitions in fiscal years 2015, 2014, or 2013 were considered material, individually or in the aggregate, to the consolidated Company. |
Inventories
Inventories | 12 Months Ended |
Oct. 25, 2015 | |
Inventories | |
Inventories | NOTE C Inventories Principal components of inventories are: October 25, October 26, (in thousands) 2015 2014 Finished products $ 553,298 $ 604,946 Raw materials and work-in-process Materials and supplies Total $ 993,265 $ 1,054,552 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Oct. 25, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | NOTE D Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the fiscal years ended October 25, 2015, and October 26, 2014, are presented in the table below. Additions during fiscal year ended October 25, 2015 are entirely due to the acquisition of Applegate on July 13, 2015. The goodwill amounts are preliminary pending final purchase adjustments. The impairment charge is related to the Company’s assets held for sale. See additional discussion regarding the Company’s assets held for sale in Note E. Purchase adjustments during the year relate to the CytoSport acquisition. The additions during the prior fiscal year ended October 26, 2014, were due to the acquisitions of CytoSport on August 11, 2014, and the China based SKIPPY ® peanut butter business on November 26, 2013. Grocery Refrigerated Specialty International (in thousands) Products Foods JOTS Foods & Other Total Balance as of October 27, 2013 $ $ 96,643 $ $ $ 104,645 $ 934,472 Goodwill acquired – – – Balance as of October 26, 2014 $ $ 96,643 $ $ $ 132,750 $ 1,226,406 Goodwill acquired – – – – Purchase Adjustments – – – – Impairment charge – – – – Product line Disposal – – Balance as of October 25, 2015 $ $ $ $ $ $ The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below. In fiscal year 2015, customer relationships of $25.1 million and non-compete agreements of $1.2 million were acquired during the third quarter related to Applegate. In fiscal year 2014, customer relationships of $21.6 million were acquired during the fourth quarter related to CytoSport and $2.6 million were acquired during the first quarter related to the China based SKIPPY ® peanut butter business. Through the final purchase accounting valuation of CytoSport in fiscal year 2015, the value of the customer relationships was raised to $23.3 million. October 25, 2015 October 26, 2014 Gross Weighted- Gross Weighted- Carrying Accumulated Avg Life Carrying Accumulated Avg Life (in thousands) Amount Amortization (in Years) Amount Amortization (in Years) Customer lists/relationships $ $ $ 67,540 $ Formulas and recipes Proprietary software and technology Other intangibles Total $ $ $ $ Amortization expense for the last three fiscal years was as follows: (in millions) 2015 $ 2014 2013 Estimated annual amortization expense for the five fiscal years after October 25, 2015, is as follows: (in millions) 2016 $ 2017 2018 2019 2020 The carrying amounts for indefinite-lived intangible assets are in the following table. The increase in fiscal year 2015 represents the fair value of the tradenames acquired with Applegate. October 25, October 26, (in thousands) 2015 2014 Brand/tradename/trademarks $ $ Other intangibles Total $ $ During the fourth quarter of fiscal years 2015 and 2014, the Company completed the required annual impairment tests of indefinite-lived intangible assets and goodwill. The goodwill impairment charge referred to above was recorded in fiscal year 2015 and no impairment was indicated in fiscal year 2014. Useful lives of intangible assets were also reviewed during this process, with no changes identified. |
Assets Held For Sale
Assets Held For Sale | 12 Months Ended |
Oct. 25, 2015 | |
Assets Held For Sale | |
Assets Held For Sale | NOTE E Assets Held For Sale In fiscal year 2015, the Company began actively marketing a portion of Diamond Crystal Brands (DCB). Through this process, the Company identified the specific assets and liabilities to be sold and allocated goodwill based on the relative fair values of the assets held for sale and the assets that will be retained by the Company. The Company determined the carrying value of the DCB assets held for sale more likely than not exceeded its fair value, requiring a two step test for impairment. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. An impairment charge of $21.5 million was recorded for the assets held for sale. This impairment is recorded on the Company’s Consolidated Statements of Operations on the line item “Goodwill impairment charge.” DCB is reported within the Company’s Specialty Foods segment. The portion of the business held for sale is not material to the Company’s annual net sales, net earnings, or earnings per share. Amounts classified as assets and liabilities held for sale at October 25, 2015 are presented on the Company’s Consolidated Statement of Financial Position within their respective accounts, and include the following: Assets held for sale (in thousands) Current assets $ 26,057 Goodwill Intangibles Property, plant and equipment Total assets held for sale $ Liabilities held for sale (in thousands) Total current liabilities held for sale $ 3,191 |
Long-term Debt and Other Borrow
Long-term Debt and Other Borrowing Arrangements | 12 Months Ended |
Oct. 25, 2015 | |
Long-term Debt and Other Borrowing Arrangements | |
Long-term Debt and Other Borrowing Arrangements | NOTE F Long-term Debt and Other Borrowing Arrangements Long-term debt consists of: October 25, October 26, (in thousands) 2015 2014 Senior unsecured notes, with interest at 4.125%, interest due semi-annually through April 2021 maturity date $ $ Less current maturities – – Total $ $ The Company has a $400.0 million unsecured revolving line of credit which matures in June 2020 and bears interest at a variable rate based on LIBOR. A fixed fee is paid for the availability of this credit line. As of October 25, 2015, and October 26, 2014, the Company had no outstanding draws from this line of credit. The Company also has a $300.0 million term loan facility that expires December 2016 that bears interest at a variable rate based on LIBOR. As of October 25, 2015, the Company had $185.0 million outstanding on the loan facility and no outstanding draws as of October 26, 2014. The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position. At the end of the current fiscal year, the Company was in compliance with all of these covenants. Total interest paid in the last three fiscal years is as follows: (in millions) 2015 $ 2014 2013 |
Pension and Other Post-retireme
Pension and Other Post-retirement Benefits | 12 Months Ended |
Oct. 25, 2015 | |
Pension and Other Post-retirement Benefits | |
Pension and Other Post-retirement Benefits | NOTE G Pension and Other Post-retirement Benefits The Company has several defined benefit plans and defined contribution plans covering most employees. Total costs associated with the Company’s defined contribution benefit plans in 2015, 2014, and 2013 were $31.7 million, $30.1 million, and $29.9 million, respectively. 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. The Company’s funding policy is to make annual contributions of not less than the minimum required by applicable regulations. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 9-23 years. Certain groups of employees are eligible for post-retirement health or welfare benefits. 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. Eligible employees hired after January 1, 1990, may receive post-retirement medical coverage but must pay the full cost of the coverage. On October 17, 2012, the plan was amended, effective April 1, 2013, to terminate coverage for certain nonunion retirees who retired on or after August 1, 2002, and who are or will be Medicare eligible. If the cost of the nonunion retiree coverage is currently subsidized by the Company for the affected retirees, credits will be established in a health reimbursement account to help reimburse the retiree for the cost of purchasing coverage in the individual market. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 6-18 years. In 2011, an amendment was enacted for a defined benefit plan which included a change in the pension formula effective January 1, 2017. The amended formula remains a defined benefit formula, but will base the accrued benefit credit on age and service and define the benefit as a lump sum. Effective October 31, 2016, the 401(k) match for these participants will be increased. Net periodic cost of defined benefit plans included the following: Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2013 2015 2014 2013 Service cost $ $ $ $ 1,795 $ 1,963 $ 2,494 Interest cost Expected return on plan assets – – – Amortization of prior service cost Recognized actuarial loss (gain) Curtailment charge – – – – – Net periodic cost $ 6,123 $ 2,989 $ $ $ $ The following amounts have not been recognized in net periodic pension cost and are included in accumulated other comprehensive loss: (in thousands) Pension Benefits Post-retirement Benefits 2015 2014 2015 2014 Unrecognized prior service credit $ 32,490 $ 37,368 $ 2,844 $ 4,180 Unrecognized actuarial losses The following amounts are expected to be recognized in net periodic benefit expense in fiscal year 2016: Post- Pension retirement (in thousands) Benefits Benefits Amortized prior service credit $ (4,878) $ (1,337) Recognized actuarial losses The following is a reconciliation of the beginning and ending balances of the benefit obligation, the fair value of plan assets, and the funded status of the plans as of the October 25, 2015, and the October 26, 2014, measurement dates: Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Change in benefit obligation: Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Actuarial (gain) loss Employee contributions – – Medicare Part D subsidy – – Benefits paid Benefit obligation at end of year $ $ $ $ Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Change in plan assets: Fair value of plan assets at beginning of year $ $ $ – $ – Actual return on plan assets – – Employee contributions – – Employer contributions Benefits paid Fair value of plan assets at end of year $ $ $ – $ – Funded status at end of year $ $ (67,004) $ $ Amounts recognized in the Consolidated Statements of Financial Position as of October 25, 2015, and October 26, 2014, are as follows: Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Pension assets $ $ 130,284 $ – $ – Employee related expenses Pension and post-retirement benefits Net amount recognized $ $ (67,004) $ $ The following table provides information for pension plans with accumulated benefit obligations in excess of plan assets: (in thousands) 2015 2014 Projected benefit obligation $ $ Accumulated benefit obligation Fair value of plan assets – – Weighted-average assumptions used to determine benefit obligations are as follows: 2015 2014 Discount rate Rate of future compensation increase (for plans that base benefits on final compensation level) Weighted-average assumptions used to determine net periodic benefit costs are as follows: 2015 2014 2013 Discount rate Rate of future compensation increase (for plans that base benefits on final compensation level) Expected long-term return on plan assets The expected long-term rate of return on plan assets is based on fair value and is developed in consultation with outside advisors. A range is determined based on the composition of the asset portfolio, historical long-term rates of return, and estimates of future performance. For measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered health care benefits for pre-Medicare and post-Medicare retirees’ coverage is assumed for 2016. The pre-Medicare and post-Medicare rate is assumed to decrease to 5.0% for 2021, and remain at that level thereafter. The assumed discount rate, expected long-term rate of return on plan assets, rate of future compensation increase, and health care cost trend rate have a significant impact on the amounts reported for the benefit plans. A one-percentage-point change in these rates would have the following effects: 1-Percentage-Point Expense Benefit Obligation (in thousands) Increase Decrease Increase Decrease Pension Benefits: Discount rate $ $ $ $ Expected long-term rate of return on plan assets – – Rate of future compensation increase Post-retirement Benefits: Discount rate $ (64) $ 5,035 $ (33,462) $ 40,619 Health care cost trend rate The actual and target weighted-average asset allocations for the Company’s pension plan assets as of the plan measurement date are as follows: 2015 2014 Asset Category Actual Target Range Actual Target Range Large Capitalization Equity 15-35% 15-35% Small Capitalization Equity 5-15% 5-15% International Equity 15-25% 15-25% Private Equity 0-15% 0-15% Total Equity Securities 50-75% 55-75% Fixed Income 25-45% 25-45% Real Estate – 0-10% – – Cash and Cash Equivalents – – Target allocations are established in consultation with outside advisors through the use of asset-liability modeling to attempt to match the duration of the plan assets with the duration of the Company’s projected benefit liability. The asset allocation strategy 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. During 2014, the 1.7 million shares of Company common stock held in plan assets were sold. Dividends paid during 2014 on shares held by the plan were $0.7 million. Based on the October 25, 2015 measurement date, the Company anticipates making contributions of $24.1 million to fund the pension plans during fiscal year 2016. The Company also expects to make contributions of $27.2 million during 2016 that represent benefit payments for unfunded plans. Benefits expected to be paid over the next ten fiscal years are as follows: Post- Pension retirement (in thousands) Benefits Benefits 2016 $ 53,515 $ 22,113 2017 2018 2019 2020 2021 – 2025 Post-retirement benefits are net of expected federal subsidy receipts related to prescription drug benefits granted under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which are estimated to be $2.4 million per year through 2025. The fair values of the defined benefit pension plan investments as of October 25, 2015, and October 26, 2014, by asset category and fair value hierarchy level, are as follows: Fair Value Measurements at October 25, 2015 Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Total Identical Assets Inputs Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Investments at Fair Value: Cash Equivalents (1) $ 16,551 $ 16,551 $ – $ – Large Capitalization Equity (2) Domestic $ 300,735 $ $ $ – Foreign – – World – – Total Large Capitalization Equity $ 457,578 $ $ $ – Small Capitalization Equity (3) Domestic $ 55,513 $ 55,513 $ – $ – Foreign – – Total Small Capitalization Equity $ 63,759 $ 63,759 $ – $ – International Equity (4) Mutual fund $ 101,062 $ – $ $ – Collective trust – – Total International Equity $ 164,923 $ – $ $ – Private Equity (5) Domestic $ 54,748 $ – $ – $ International – – Total Private Equity $ 71,775 $ – $ – $ Total Equity $ 758,035 $ $ $ Fixed Income (6) US government issues $ 130,456 $ $ 25,996 $ – Municipal issues – – Corporate issues – domestic – – Corporate issues – foreign – – Total Fixed Income $ 405,191 $ $ $ – Total Investments at Fair Value $ $ $ $ Fair Value Measurements at October 26, 2014 Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Total Identical Assets Inputs Inputs (in thousands) Fair Value (Level 1) (Level 2 (Level 3) Investments at Fair Value: Cash Equivalents (1) $ 14,342 $ 14,342 $ – $ – Large Capitalization Equity (2) Domestic $ 351,195 $ $ $ – Foreign – – Total Large Capitalization Equity $ 385,321 $ $ $ – Small Capitalization Equity (3) Domestic $ 62,521 $ 62,521 $ – $ – Foreign – – Total Small Capitalization Equity $ 70,552 $ 70,552 $ – $ – International Equity (4) Mutual fund $ 69,393 $ – $ 69,393 $ – Collective trust – – Total International Equity $ 242,401 $ – $ $ – Private Equity (5) Domestic $ 43,340 $ – $ – $ International – – Total Private Equity $ 58,723 $ – $ – $ Total Equity $ 756,997 $ $ $ Fixed Income (6) US government issues $ 126,894 $ 96,199 $ 30,695 $ – Municipal issues – – Corporate issues – domestic – – Corporate issues – foreign – – Total Fixed Income $ 397,426 $ 96,199 $ $ – Total Investments at Fair Value $ $ $ $ The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy: (1) Cash Equivalents: These Level 1 investments consist primarily of money market mutual funds that are highly liquid and traded in active markets. (2) Large Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investment includes mutual funds consisting of a mix of U.S. and foreign common stocks that are valued at the publicly available net asset value (NAV) of shares held by the pension plans at year end. (3) Small Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. (4) International Equity: These Level 2 investments include a mix of collective investment funds and mutual funds. The mutual funds are valued at the publicly available NAV of shares held by the pension plans at year end. The value of the collective investment funds is based on the fair value of the underlying investments and the NAV can be calculated for these funds. (5) Private Equity: These Level 3 investments consist of various collective investment funds, which are managed by a third party, that invest in a well-diversified portfolio of equity investments from top performing, high quality firms that focus on U.S. and foreign small to mid-markets, venture capitalists, and entrepreneurs with a concentration in areas of innovation. Investment strategies include buyouts, growth capital, buildups, and distressed, as well as early stages of company development mainly in the U.S. The fair value of the units for these investments is based on the fair value of the underlying investments, and the NAV can be calculated for these funds. (6) Fixed Income: The Level 1 investments include U.S. Treasury bonds and notes, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investments consist principally of U.S. government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources; municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources; and mutual funds invested in long-duration corporate bonds that are valued at the publicly available NAV of shares held by the pension plans at year-end. A reconciliation of the beginning and ending balance of the investments measured at fair value using significant unobservable inputs (Level 3) is as follows: (in thousands) 2015 2014 Beginning Balance $ $ Purchases, issuances, and settlements (net) Unrealized gains Realized gains Interest and dividend income Ending Balance $ $ The Company has commitments totaling $85.0 million for the private equity investments within the pension plans. The unfunded private equity commitment balance for each investment category as of October 25, 2015, and October 26, 2014 is as follows: (in thousands) 2015 2014 Domestic equity $ 9,264 $ International equity Unfunded commitment balance $ $ Funding for future private equity capital calls will come from existing pension plan asset investments and not from additional cash contributions into the Company’s pension plans. |
Derivatives and Hedging
Derivatives and Hedging | 12 Months Ended |
Oct. 25, 2015 | |
Derivatives and Hedging | |
Derivatives and Hedging | NOTE H Derivatives and Hedging The Company uses hedging programs to manage price risk associated with commodity purchases. These programs utilize futures contracts, options, and swaps to manage the Company’s exposure to price fluctuations in the commodities markets. The Company has determined that its programs which are designated as hedges are highly effective in offsetting the changes in fair value or cash flows generated by the items hedged. Cash Flow Hedges: The Company currently utilizes corn futures to offset price fluctuations in the Company’s future direct grain purchases, and has historically entered into various swaps to hedge the purchases of grain at certain plant locations. The financial instruments are designated and accounted for as cash flow hedges, and the Company measures the effectiveness of the hedges at least quarterly. 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 period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. The Company typically does not hedge its grain exposure beyond the next two upcoming fiscal years. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases: Volume Commodity October 25, 2015 October 26, 2014 Corn 20.1 million bushels 18.3 million bushels As of October 25, 2015, the Company has included in AOCL hedging gains of $1.0 million (before tax) relating to its positions, compared to losses of $14.8 million (before tax) as of October 26, 2014. The Company expects to recognize the majority of these gains over the next 12 months. Fair Value Hedges: The Company utilizes futures to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers. The intent of the program is to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery. The futures contracts are designated and accounted for as fair value hedges, and the Company measures the effectiveness of the hedges at least quarterly. Changes in the fair value of the futures contracts, along with the gain or loss on the hedged purchase commitment, are marked-to-market through earnings and are recorded on the Consolidated Statement of Financial Position as a current asset and liability, respectively. Effective gains or losses related to these fair value hedges are recognized through cost of products sold in the period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts designated as fair value hedges: Volume Commodity October 25, 2015 October 26, 2014 Corn 5.3 million bushels 8.0 million bushels Lean hogs 0.4 million cwt 0.7 million cwt Other Derivatives: The Company holds certain futures and options contract positions as part of a merchandising program and to manage the Company’s exposure to fluctuations in commodity markets. The Company has not applied hedge accounting to these positions. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding futures and options contracts related to these programs: Volume Commodity October 25, 2015 October 26, 2014 Corn 2.6 million bushels 2.9 million bushels Soybean meal 11,500 tons – Fair Values: The fair values of the Company’s derivative instruments as of October 25, 2015, and October 26, 2014, were as follows: Fair Value (1) Location on Consolidated October 25, October 26, (in thousands) Statements of Financial Position 2015 2014 Asset Derivatives: Derivatives Designated as Hedges: Commodity contracts Other current assets $ $ Derivatives Not Designated as Hedges: Commodity contracts Other current assets Total Asset Derivatives $ $ (1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statement of Financial Position. See Note M for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position. Derivative Gains and Losses: Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the fiscal year ended October 25, 2015, and October 26, 2014, were as follows: Gain/(Loss) Recognized Gain/(Loss) Reclassified Gain/(Loss) Recognized in AOCL from AOCL into Earnings in Earnings (Effective Portion) (1) (Effective Portion) (1) (Ineffective Portion) (2) (4) Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended October 25, October 26, Location on Consolidated October 25, October 26, October 25, October 26, Cash Flow Hedges: 2015 2014 Statements of Operations 2015 2014 2015 2014 Commodity contracts $ $ Cost of products sold $ $ $ $ Gain/(Loss) Gain/(Loss) Recognized in Earnings Recognized in Earnings (Effective Portion) (3) (Ineffective Portion) (2) (5) Fiscal Year Ended Fiscal Year Ended Location on Consolidated October 25, October 26, October 25, October 26, Fair Value Hedges: Statements of Operations 2015 2014 2015 2014 Commodity contracts Cost of products sold $ $ $ $ Gain/(Loss) Recognized in Earnings Fiscal Year Ended Derivatives Not Location on Consolidated October 25, October 26, Designated as Hedges: Statements of Operations 2015 2014 Commodity contracts Cost of products sold $ $ (1) Amounts represent gains or losses in AOCL before tax. See Note J for the after tax impact of these gains or losses on net earnings. (2) There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2015 includes the mark-to-market impact on certain corn futures contracts which resulted from a temporary suspension of hedge accounting due to market volatility. (3) Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the fiscal year, which were offset by a corresponding gain on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. (4) There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year. (5) There were no gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge during the fiscal year. |
Investments In and Receivables
Investments In and Receivables from Affiliates | 12 Months Ended |
Oct. 25, 2015 | |
Investments In and Receivables from Affiliates | |
Investments In and Receivables from Affiliates | NOTE I Investments In and Receivables from Affiliates The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company owns a minority interest, and for which there are no other indicators of control, are accounted for under the equity or cost method. These investments, along with any related receivables from affiliates, are included in the Consolidated Statements of Financial Position as investments in and receivables from affiliates. Investments in and receivables from affiliates consists of the following: October 25, October 26, (in thousands) Segment % Owned 2015 2014 MegaMex Foods, LLC Grocery Products 50% $ $ Foreign Joint Ventures International & Other Various (26 – 50%) Total $ $ Equity in earnings of affiliates consists of the following: (in thousands) Segment 2015 2014 2013 MegaMex Foods, LLC Grocery Products $ $ $ Foreign Joint Ventures International & Other ) Total $ $ $ Equity in earnings in fiscal year 2015 included charges related to the exit from international joint venture businesses. Dividends received from affiliates for the fiscal years ended October 25, 2015, October 26, 2014, and October 27, 2013, were $37.3 million, $22.8 million, and $34.0 million, respectively. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $16.2 million is remaining as of October 25, 2015. This difference is being amortized through equity in earnings of affiliates. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Oct. 25, 2015 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | NOTE J Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss are as follows: Accumulated Foreign Deferred Other Currency Pension & Gain (Loss) Comprehensive (in thousands) Translation Other Benefits – Hedging Loss Balance at October 28, 2012 $ $ ) $ $ ) Unrecognized gains (losses): Gross ) ) Tax effect – ) ) Reclassification into net earnings: Gross – (1) ) (2) Tax effect – ) ) Net of tax amount ) ) Balance at October 27, 2013 $ $ ) $ ) $ ) Unrecognized gains (losses): Gross ) ) ) ) Tax effect – Reclassification into net earnings: Gross – (1) (2) Tax effect – ) ) ) Net of tax amount ) ) ) ) Balance at October 26, 2014 $ $ ) $ ) $ ) Unrecognized gains (losses): Gross ) ) ) Tax effect – ) Reclassification into net earnings: Gross – (1) (2) Tax effect – ) ) ) Net of tax amount ) ) ) Purchase of additional ownership of noncontrolling interest ) – – ) Balance at October 25, 2015 $ $ ) $ $ ) (1) Included in computation of net periodic cost (see Note G for additional details). (2) Included in cost of products sold in the Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 25, 2015 | |
Income Taxes | |
Income Taxes | NOTE K Income Taxes The components of the provision for income taxes are as follows: (in thousands) 2015 2014 2013 Current: U.S. Federal $ $ $ State Foreign Total current Deferred: U.S. Federal State ) Foreign Total deferred Total provision for income taxes $ $ $ Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company believes that, based upon its lengthy and consistent history of profitable operations, it is more likely than not the net deferred tax assets of $22.8 million will be realized on future tax returns, primarily from the generation of future taxable income. Significant components of the deferred income tax liabilities and assets are as follows: October 25, October 26, (in thousands) 2015 2014 Deferred tax liabilities: Goodwill and intangible assets $ ) $ ) Tax over book depreciation and basis differences ) ) Other, net ) ) Deferred tax assets: Pension and post-retirement benefits Employee compensation related liabilities Marketing and promotional accruals Other accruals not currently deductible – Other, net Net deferred tax assets $ 22,806 $ Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows: 2015 2014 2013 U.S. statutory rate % % % State taxes on income, net of federal tax benefit Domestic production activities deduction ) ) ) All other, net ) ) ) Effective tax rate % % % No provision has been made for U.S. federal income taxes on certain undistributed earnings of foreign subsidiaries and joint ventures that the Company intends to permanently invest or that may be remitted substantially tax-free. The total of undistributed earnings that would be subject to federal income tax if remitted under existing law is approximately $109.3 million as of October 25, 2015. Determination of the unrecognized deferred tax liability related to these earnings is not practicable because of the complexities with its hypothetical calculation. Upon distribution of these earnings, we will be subject to U.S. taxes and withholding taxes payable to various foreign governments. A credit for foreign taxes already paid would be available to reduce the U.S. tax liability. Total income taxes paid during fiscal years 2015, 2014, and 2013 were $296.5 million, $285.8 million, and $226.2 million, respectively. The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2014 and 2015. (in thousands) Balance as of October 27, 2013 $ Tax positions related to the current period: Increases Decreases ) Tax positions related to prior periods: Increases Decreases ) Settlements ) Decreases related to a lapse of applicable statute of limitations ) Balance as of October 26, 2014 $ Tax positions related to the current period: Increases Decreases – Tax positions related to prior periods: Increases Decreases ) Settlements ) Decreases related to a lapse of applicable statute of limitations ) Balance as of October 25, 2015 $ The amount of unrecognized tax benefits, including interest and penalties, at October 25, 2015, recorded in other long-term liabilities was $24.6 million, of which $16.0 million would impact the Company’s effective tax rate if recognized. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with losses of $1.0 million included in expense for fiscal year 2015. The amount of accrued interest and penalties at October 25, 2015, associated with unrecognized tax benefits was $3.2 million. The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) is currently examining fiscal years 2013, 2014, and 2015. During the first quarter of fiscal year 2015, the Company entered into a voluntary program to work with the I.R.S. called Compliance Assurance Process (CAP). The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2015 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2010. 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. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Oct. 25, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | NOTE L Stock-Based Compensation The Company issues stock options and nonvested shares as part of its stock incentive plans for employees and non-employee directors. The Company’s policy is to grant options with the exercise price equal to the market price of the common stock on the date of grant. Options typically vest over four years and expire ten years after the date of the grant. The Company recognizes stock-based compensation expense ratably over the shorter of the requisite service period or vesting period. The fair value of stock-based compensation granted to retirement-eligible individuals is expensed at the time of grant. A reconciliation of the number of options outstanding and exercisable (in thousands) as of October 25, 2015, and changes during the fiscal year then ended, is as follows: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding at October 26, 2014 $ Granted Exercised Forfeited Outstanding at October 25, 2015 $ 5.0 yrs $ Exercisable at October 25, 2015 $ 4.1 yrs $ The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during each of the past three fiscal years is as follows: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Weighted-average grant date fair value $ 9.84 $ 9.70 $ 5.50 Intrinsic value of exercised options $ $ $ The fair value of each option award is calculated on the date of grant using the Black-Scholes valuation model utilizing the following weighted-average assumptions: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Risk-free interest rate Dividend yield Stock price volatility Expected option life 8 years 8 years 8 years As part of the annual valuation process, the Company reassesses the appropriateness of the inputs used in the valuation models. The Company establishes the risk-free interest rate using stripped U.S. Treasury yields as of the grant date where the remaining term is approximately the expected life of the option. The dividend yield is set based on the dividend rate approved by the Company’s Board of Directors and the stock price on the grant date. The expected volatility assumption is set based primarily on historical volatility. As a reasonableness test, implied volatility from exchange traded options is also examined to validate the volatility range obtained from the historical analysis. The expected life assumption is set based on an analysis of past exercise behavior by option holders. In performing the valuations for option grants, the Company has not stratified option holders as exercise behavior has historically been consistent across all employee and non-employee director groups. The Company’s nonvested shares granted on or before September 26, 2010, vest after five years or upon retirement. Nonvested shares granted between September 27, 2010, and July 27, 2014, vest after one year. Nonvested shares granted on or after July 28, 2014 vest on the earlier of the day before the Company’s next annual meeting date or one year. A reconciliation of the nonvested shares (in thousands) as of October 25, 2015 and changes during the fiscal year then ended, is as follows: Weighted- Average Grant Date Shares Fair Value Nonvested at October 26, 2014 $ Granted Vested Forfeited – – Nonvested at October 25, 2015 $ The weighted-average grant date fair value of nonvested shares granted, the total fair value (in thousands) of nonvested shares granted, and the fair value (in thousands) of shares that have vested during each of the past three fiscal years is as follows: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Weighted-average grant date fair value $ $ $ Fair value of nonvested shares granted $ $ $ Fair value of shares vested $ $ $ Stock-based compensation expense, along with the related income tax benefit, for each of the past three fiscal years is presented in the table below: Fiscal Year Ended October 25, October 26, October 27, (in thousands) 2015 2014 2013 Stock-based compensation expense recognized $ $ $ Income tax benefit recognized After-tax stock-based compensation expense $ 9,750 $ 8,924 $ At October 25, 2015, there was $9.3 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans. This compensation is expected to be recognized over a weighted-average period of approximately 2.6 years. During fiscal years 2015, 2014, and 2013, cash received from stock option exercises was $10.5 million, $10.5 million, and $30.2 million, respectively. The total tax benefit to be realized for tax deductions from these option exercises was $25.6 million, $28.4 million, and $29.4 million, respectively. Shares issued for option exercises and nonvested shares may be either authorized but unissued shares, or shares of treasury stock acquired in the open market or otherwise. The number of shares available for future grants was 25.1 million at October 25, 2015, 26.6 million at October 26, 2014, and 27.9 million at October 27, 2013. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 25, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE M Fair Value Measurements Pursuant to the provisions of ASC 820, the Company’s financial assets and liabilities carried at fair value on a recurring basis in the consolidated financial statements as of October 25, 2015, and October 26, 2014, and their level within the fair value hierarchy, are presented in the table below. Fair Value Measurements at October 25, 2015 Quoted Prices in Fair Value at Active Markets Significant Other Significant October 25, for Identical Observable Unobservable (in thousands) 2015 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Assets at Fair Value: Cash and cash equivalents (1) $ $ $ – $ – Other trading securities (2) – Commodity derivatives (3) – – Total Assets at Fair Value $ $ $ $ – Liabilities at Fair Value: Deferred compensation (2) $ $ $ $ – Total Liabilities at Fair Value $ $ $ $ – Fair Value Measurements at October 26, 2014 Quoted Prices in Fair Value at Active Markets Significant Other Significant October 26, for Identical Observable Unobservable (in thousands) 2014 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Assets at Fair Value: Cash and cash equivalents (1) $ $ $ – $ – Other trading securities (2) – Commodity derivatives (3) – – Total Assets at Fair Value $ $ $ $ – Liabilities at Fair Value: Deferred compensation (2) $ $ $ $ – Total Liabilities at Fair Value $ $ $ $ – 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 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. As these investments have a maturity date of three months or less, the carrying value approximates fair value. (2) The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested 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 that supports the fund, 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. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2. (3) The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal 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 therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions). The Company’s financial assets and liabilities also include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Statements of Financial Position. Based on borrowing rates available to the Company for long-term financing with similar terms and average maturities, the fair value of long-term debt, utilizing discounted cash flows (Level 2), was $268.4 million as of October 25, 2015, and $273.8 million as of October 26, 2014. In accordance with the provisions of ASC 820, the Company also measures certain nonfinancial assets and liabilities at fair value that are recognized or disclosed on a nonrecurring basis (e.g. goodwill, intangible assets, and property, plant and equipment). During the fourth quarter of fiscal year 2015, a $21.5 million goodwill impairment charge was recorded for the portion of DCB held for sale. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. See additional discussion regarding the Company’s assets held for sale in Note E. During fiscal years 2015, 2014, and 2013, there were no other material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 25, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE N Commitments and Contingencies In order to ensure a steady supply of hogs and turkeys, and to keep the cost of products stable, the Company has entered into contracts with producers for the purchase of hogs and turkeys at formula-based prices over periods up to 10 years. The Company has also entered into grow-out contracts with independent farmers to raise turkeys for the Company for periods up to 25 years. Under these arrangements, the Company owns the livestock, feed, and other supplies while the independent farmers provide facilities and labor. The Company has also contracted for the purchase of corn, soybean meal, and other feed ingredients from independent suppliers for periods up to three years. Under these contracts, the Company is committed at October 25, 2015, to make purchases, assuming current price levels, as follows: (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ Purchases under these contracts for fiscal years 2015, 2014, and 2013 were $1.6 billion, $2.2 billion, and $2.0 billion, respectively. The Company has noncancelable operating lease commitments on facilities and equipment at October 25, 2015, as follows: (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ The Company expensed $22.4 million, $21.1 million, and $21.6 million for rent in fiscal years 2015, 2014, and 2013, respectively. The Company has commitments to expend approximately $254.3 million to complete construction in progress at various locations as of October 25, 2015. The Company also has purchase obligations that are not reflected in the consolidated statements of financial position, representing open purchase orders and contracts related to the procurement of raw materials, supplies, and various services. As of October 25, 2015, commitments related to those purchase orders, and all known contracts exceeding $1.0 million, are shown below. The Company primarily purchases goods and services on an as-needed basis and therefore, amounts in the table represent only a portion of expected future cash expenditures. (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ The Company is involved on an ongoing basis in litigation arising in the ordinary course of business. In the opinion of management, the outcome of litigation currently pending will not materially affect the Company’s results of operations, financial condition, or liquidity. |
Earnings Per Share Data
Earnings Per Share Data | 12 Months Ended |
Oct. 25, 2015 | |
Earnings Per Share Data | |
Earnings Per Share Data | NOTE O Earnings Per Share Data The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share for all years presented. A reconciliation of the shares used in the computation is as follows: (in thousands) 2015 2014 2013 Basic weighted-average shares outstanding Dilutive potential common shares Diluted weighted-average shares outstanding For fiscal years 2015, 2014, and 2013, a total of 0.5 million, 0.4 million, and 0.4 million weighted-average outstanding stock options, respectively, were not included in the computation of dilutive potential common shares since their inclusion would have had an antidilutive effect on earnings per share. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Oct. 25, 2015 | |
Segment Reporting | |
Segment Reporting | NOTE P 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 five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex joint venture. The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers. This segment includes the results of Applegate and Affiliated Foods (Farmer John, Burke, and Dan’s Prize). The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and fresh product customers. The Specialty Foods segment consists of the packaging and sale of private label shelf stable products, nutritional products, sugar, and condiments to industrial, retail, and foodservice customers including the results of Diamond Crystal Brands (DCB), CytoSport/Century Foods International, and Hormel Specialty Products (HSP). As of the end of fiscal year 2015, a portion of DCB is held for sale. The segment operating results for fiscal year 2015 include the related goodwill impairment charge of $21.5 million. See additional discussion regarding the Company’s assets held for sale in Note E. The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures. Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the following table as net interest and investment expense (income), general corporate expense, and noncontrolling interest when reconciling to earnings before income taxes. Sales and operating profits for each of the Company’s reportable segments and reconciliation to 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 operating profit and other financial information shown below. (in thousands) 2015 2014 2013 Net Sales (to unaffiliated customers) Grocery Products $ 1,617,680 $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Total $ 9,263,863 $ $ Intersegment Sales Grocery Products $ – $ – $ – Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other – – – Total Intersegment elimination Total $ – $ – $ – Segment Net Sales Grocery Products $ 1,617,680 $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Intersegment elimination Total $ 9,263,863 $ $ Segment Operating Profit Grocery Products $ 228,582 $ 195,064 $ 213,646 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Total segment operating profit $ 1,101,343 $ 961,705 $ 828,818 Net interest and investment expense (income) General corporate expense Noncontrolling interest Earnings Before Income Taxes $ 1,057,143 $ 922,152 $ 798,507 (in thousands) 2015 2014 2013 Assets Grocery Products $ $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ $ $ Additions to Property, Plant and Equipment Grocery Products $ 18,104 $ 31,741 $ 10,100 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ 144,063 $ 159,138 $ 106,762 Depreciation and Amortization Grocery Products $ 26,972 $ 25,883 $ 22,912 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ 133,434 $ 130,044 $ 124,850 The Company’s products primarily consist of meat and other food products. The Perishable category includes fresh meats, frozen items, refrigerated meal solutions, sausages, hams, wieners, guacamole, and bacon (excluding JOTS products). The Poultry category is composed primarily of JOTS products. Shelf-stable includes canned luncheon meats, shelf-stable microwaveable meals, stews, chilies, hash, meat spreads, flour and corn tortillas, salsas, tortilla chips, peanut butter, and other items that do not require refrigeration. The Miscellaneous category primarily consists of nutritional food products and supplements, sugar and sugar substitutes, dessert and drink mixes, and industrial gelatin products. The percentages of total revenues contributed by classes of similar products for the last three fiscal years are as follows: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Perishable Poultry Shelf-stable Miscellaneous Revenues from external customers are classified as domestic or foreign based on the destination where title passes. No individual foreign country is material to the consolidated results. Additionally, the Company’s long-lived assets located in foreign countries are not significant. Total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years are as follows: Fiscal Year Ended October 25, October 26, October 27, (in thousands) 2015 2014 2013 United States $ $ $ Foreign $ $ $ In fiscal 2015, sales to Wal-Mart Stores, Inc. (Wal-Mart) represented $1.43 billion or 13.9 percent of the Company’s consolidated revenues (measured as gross sales less returns and allowances). In fiscal 2014, sales to Wal-Mart represented $1.43 billion or 14.1 percent of the Company’s consolidated revenues. Wal-Mart is a customer for all five segments of the Company. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Oct. 25, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Quarterly Results of Operations (Unaudited) | NOTE Q Quarterly Results of Operations (Unaudited) The following tabulations reflect the unaudited quarterly results of operations for the years ended October 25, 2015, and October 26, 2014. Net Earnings Attributable to Basic Diluted Gross Net Hormel Foods Earnings Earnings (in thousands, except per share data) Net Sales Profit Earnings Corporation (1) Per Share Per Share 2015 Fir st quarter $ $ $ $ $ $ Second quarter Third quarter Fourth quarter 2014 First quarter $ $ $ $ $ $ Second quarter Third quarter Fourth quarter (1) Excludes net earnings attributable to the Company’s noncontrolling interests. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Oct. 25, 2015 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES HORMEL FOODS CORPORATION (In Thousands) Additions/(Benefits) Balance at Charged to Charged to Balance at Beginning Costs and Other Accounts- Deductions- End of Classification of Period Expenses Describe Describe Period Valuation reserve deduction from assets account: Fiscal year ended October 25, 2015 Allowance for doubtful accounts $ 52 (2) receivable $ 4,050 $ (25) $ 36 (1) (77) (3) $ 4,086 Fiscal year ended October 26, 2014 Allowance for doubtful accounts $ 4,152 (2) receivable $ 4,000 $ 4,076 $ 50 (4) (76) (3) $ 4,050 Fiscal year ended October 27, 2013 Allowance for doubtful accounts $ 497 (2) receivable $ 4,000 $ 476 $ 0 (21) (3) $ 4,000 Note (1) – Increase in the reserve due to the inclusion of Applegate Farms accounts receivable. Note (2) – Uncollectible accounts written off. Note (3) – Recoveries on accounts previously written off. Note (4) – Increase in the reserve due to the inclusion of CytoSport accounts receivable. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 25, 2015 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation: The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Fiscal Year | Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal years 2015, 2014, and 2013 consisted of 52 weeks. Fiscal year 2016 will consist of 53 weeks. |
Subsequent Event | Subsequent Event: On November 25, 2015, subsequent to the end of the fiscal year, the Company announced that its Board of Directors authorized a two-for-one split of the Company’s common stock. Stockholder approval of the stock split is required during the Company’s Annual Meeting to be held on January 26, 2016. |
Cash and Cash Equivalents | Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. The Company’s cash equivalents as of October 25, 2015, and October 26, 2014, consisted primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. |
Fair Value Measurements | Fair Value Measurements: Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 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 Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows: Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets. Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances. See additional discussion regarding the Company’s fair value measurements in Notes G, H, and M. |
Investments | Investments: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans, which is included in other assets on the Consolidated Statements of Financial Position. The securities held by the trust are classified as trading securities and consist mainly of fixed return investments. Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings. Securities held by the trust generated gains of $2.4 million, $2.9 million, and $4.6 million for fiscal years 2015, 2014, and 2013, respectively. |
Inventories | Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally under the average cost method. Adjustments to the Company’s lower of cost or market inventory reserve are reflected in cost of products sold in the Consolidated Statements of Operations. |
Property, Plant and Equipment | 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, machinery and equipment 5 to 10 years. Internal-use software development and implementation costs are expensed until the Company has determined that the software will result in probable future economic benefits, and management has committed to funding the project. Thereafter, all material development and implementation costs, and purchased software costs, are capitalized and amortized using the straight-line method over the remaining estimated useful lives. |
Goodwill and Other Indefinite-Lived Intangibles | Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise. In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test. In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results. If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. 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. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference. During fiscal years 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal year 2015. See additional discussion regarding the Company’s assets held for sale in Note E. In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test. In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that may impact their intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset. If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment. Based on the qualitative assessment conducted in fiscal year 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal years 2015, 2014, or 2013. |
Impairment of Long-lived and Definite-Lived Intangible Assets | Impairment of Long-lived Assets and Definite-Lived Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews long-lived assets and definite-lived intangible assets for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets and any related goodwill, the carrying value is reduced to the estimated fair value. No material write-downs were recorded in fiscal years 2015, 2014, or 2013. |
Assets Held For Sale | Assets Held For Sale: The Company classifies assets as held for sale when management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value or the fair market value, less costs to sell. See additional discussion regarding the Company’s assets held for sale in Note E. |
Employee Benefit Plans | Employee Benefit Plans: The Company has elected to use the corridor approach to recognize expenses related to its defined benefit pension and post-retirement benefit plans. Under the corridor approach, actuarial gains or losses resulting from experience different from that assumed and from changes in assumptions are deferred and amortized over future periods. For the defined benefit pension plans, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year. For the post-retirement plan, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the accumulated pension benefit obligation at the beginning of the year. For plans with active employees, net gains or losses in excess of the corridor are amortized over the average remaining service period of participating employees expected to receive benefits under those plans. For plans with only retiree participants, net gains or losses in excess of the corridor are amortized over the average remaining life of the retirees receiving benefits under those plans. |
Contingent Liabilities | Contingent Liabilities: The Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. Such proceedings typically involve claims related to product liability, contract disputes, wage and hour laws, employment practices, or other actions brought by employees, 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. Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range that 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. |
Foreign Currency Translation | Foreign Currency Translation: Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the statement of financial position date, and amounts in the statement 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 in 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. dollars. |
Derivatives and Hedging Activity | Derivatives and Hedging Activity: The Company uses commodity and currency positions to manage its exposure to price fluctuations in those markets. The contracts are recorded at fair value on the Consolidated Statements of Financial Position within other current assets or accounts payable. Additional information on hedging activities is presented in Note H. |
Equity Method Investments | Equity Method Investments: The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control. The Company accounts for such investments under the equity method of accounting, and its underlying share of each investee’s equity is reported in the Consolidated Statements of Financial Position as part of investments in and receivables from affiliates. The Company regularly monitors and evaluates the fair value of our equity investments. If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in equity in earnings of affiliates in the Consolidated Statements of Operations. The Company’s equity investments do not have a readily determinable fair value as none of them are publicly traded. The fair values of the Company’s private equity investments are determined by discounting the estimated future cash flows of each entity. These cash flow estimates include assumptions on growth rates and future currency exchange rates (Level 3). Excluding charges related to the exit from international joint venture businesses in fiscal year 2015, there were no other charges on any of the Company’s equity investments in fiscal years 2015, 2014, or 2013. See additional discussion regarding the Company’s equity method investments in Note I. |
Revenue Recognition | Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured. The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contract accruals are based on a review of the unpaid outstanding contracts on which performance has taken place. Estimates used to determine the revenue reduction include the level of customer performance and the historical spend rate versus contracted rates. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts: The Company estimates the allowance for doubtful accounts based on a combination of factors, including the age of its accounts receivable balances, customer history, collection experience, and current market factors. Additionally, a specific reserve may be established if the Company becomes aware of a customer’s inability to meet its financial obligations. |
Advertising Expenses | Advertising Expenses: Advertising costs are expensed when incurred. Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research. Advertising costs for fiscal years 2015, 2014, and 2013 were $145.3 million, $114.4 million, and $89.9 million, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs: The Company’s shipping and handling expenses are included in cost of products sold. |
Research and Development Expenses | Research and Development Expenses: Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses incurred for fiscal years 2015, 2014, and 2013 were $32.0 million, $29.9 million, and $29.9 million, respectively. Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur. In accordance with ASC 740, Income Taxes, the Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. |
Income Taxes | Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur. |
Employee Stock Options | Employee Stock Options: 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 requisite service period. Stock-based compensation expense for grants made to retirement-eligible employees is recognized on the date of grant. |
Share Repurchases | Share Repurchases: During fiscal year 2013, 1.2 million shares were purchased as part of a 2010 program at an average price of $39.67, fully depleting that program. On January 29, 2013, the Company’s Board of Directors authorized the repurchase 10.0 million shares of its common stock with no expiration date. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation under this authorization at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. During fiscal year 2014, 1.3 million shares were purchased at an average price of $46.87 and 0.6 million shares were purchased during fiscal year 2013 at an average price of $42.54. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information: Non-cash investment activities presented on the Consolidated Statements of Cash Flows generally consist of unrealized gains or losses on the Company’s rabbi trust. The noted investments are included in other assets or short-term marketable securities on the Consolidated Statements of Financial Position. Changes in the value of these investments are included in the Company’s net earnings and are presented in the Consolidated Statements of Operations as either interest and investment income or interest expense, as appropriate. On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership of that business. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture. The difference between the fair value of the consideration given and the reduction in the noncontrolling interest was recognized as an $11.9 million reduction in additional paid-in capital attributable to the Company. The Company will continue to manufacture at the Shanghai facility by leasing the land use rights and buildings from the previous minority partner. |
Accounting Changes and Recent Accounting Pronouncements | Accounting Changes and Recent Accounting Pronouncements: In January 2014, the FASB updated the guidance within ASC 323, Investments-Equity Method and Joint Ventures. The update provides guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to make an accounting policy election to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The updated guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2016, and adoption is not expected to have a material impact on the consolidated financial statements. In April 2014, the Financial Accounting Standards Board (FASB) updated the guidance within ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard update only requires disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The updated guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company early adopted the new provisions of this accounting standard in the fourth quarter of fiscal year 2015, and determined it did not have any transactions qualifying as a discontinued operation under the new guidance. In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. generally accepted accounting principles and international financial reporting standards and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. On July 8, 2015, the FASB approved a one-year deferral of the effective date. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. Accordingly, the Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2019, and adoption is not expected to have a material impact on the consolidated financial statements. In April 2015, the FASB updated the guidance within ASC 835, Interest . The update provides guidance on simplifying the presentation of debt issuance cost. The amendments require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements. In April 2015, the FASB updated the guidance within ASC 715, Compensation – Retirement Benefits . The update provides guidance on simplifying the measurement date for defined benefit plan assets and obligations. The amendments allow employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year ends. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and adoption is not expected to have a material impact on its consolidated financial statements. In May 2015, the FASB updated the guidance within ASC 820, Fair Value Measurements and Disclosures . The update provides guidance on the disclosures for investments in certain entities that calculate net asset value (NAV) per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share (or its equivalent) as a practical expedient. The updated guidance is to be applied retrospectively and is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Applegate | |
Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill | (in thousands) Accounts receivable $ Inventory Prepaid and other assets Property, plant and equipment Intangible assets Goodwill Current liabilities Deferred taxes Purchase price $ |
CytoSport Holdings | |
Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill | (in thousands) Accounts receivable $ Inventory Prepaid and other assets Property, plant and equipment Intangible assets Goodwill Current liabilities Long-term liabilities Deferred taxes Purchase price $ |
SKIPPY | |
Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill | (in thousands) Inventory $ Property, plant and equipment Intangible assets Goodwill Current liabilities Purchase price $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Inventories | |
Principal components of inventories | October 25, October 26, (in thousands) 2015 2014 Finished products $ 553,298 $ 604,946 Raw materials and work-in-process Materials and supplies Total $ 993,265 $ 1,054,552 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Goodwill and Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Grocery Refrigerated Specialty International (in thousands) Products Foods JOTS Foods & Other Total Balance as of October 27, 2013 $ $ 96,643 $ $ $ 104,645 $ 934,472 Goodwill acquired – – – Balance as of October 26, 2014 $ $ 96,643 $ $ $ 132,750 $ 1,226,406 Goodwill acquired – – – – Purchase Adjustments – – – – Impairment charge – – – – Product line Disposal – – Balance as of October 25, 2015 $ $ $ $ $ $ |
Schedule of gross carrying amount and accumulated amortization for definite-lived intangible assets | October 25, 2015 October 26, 2014 Gross Weighted- Gross Weighted- Carrying Accumulated Avg Life Carrying Accumulated Avg Life (in thousands) Amount Amortization (in Years) Amount Amortization (in Years) Customer lists/relationships $ $ $ 67,540 $ Formulas and recipes Proprietary software and technology Other intangibles Total $ $ $ $ |
Schedule of amortization expense | (in millions) 2015 $ 2014 2013 |
Schedule of estimated annual amortization expense | Estimated annual amortization expense for the five fiscal years after October 25, 2015, is as follows: (in millions) 2016 $ 2017 2018 2019 2020 |
Schedule of carrying amounts for indefinite-lived intangible assets | October 25, October 26, (in thousands) 2015 2014 Brand/tradename/trademarks $ $ Other intangibles Total $ $ |
Assets Held For Sale (Tables)
Assets Held For Sale (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Assets Held For Sale | |
Schedule of assets and liabilities held for sale | Amounts classified as assets and liabilities held for sale at October 25, 2015 are presented on the Company’s Consolidated Statement of Financial Position within their respective accounts, and include the following: Assets held for sale (in thousands) Current assets $ 26,057 Goodwill Intangibles Property, plant and equipment Total assets held for sale $ Liabilities held for sale (in thousands) Total current liabilities held for sale $ 3,191 |
Long-term Debt and Other Borr32
Long-term Debt and Other Borrowing Arrangements (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Long-term Debt and Other Borrowing Arrangements | |
Schedule of long-term debt | October 25, October 26, (in thousands) 2015 2014 Senior unsecured notes, with interest at 4.125%, interest due semi-annually through April 2021 maturity date $ $ Less current maturities – – Total $ $ |
Schedule of interest paid | (in millions) 2015 $ 2014 2013 |
Pension and Other Post-retire33
Pension and Other Post-retirement Benefits (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Pension and Other Post-retirement Benefits | |
Schedule of net periodic cost of defined benefit plans | Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2013 2015 2014 2013 Service cost $ $ $ $ 1,795 $ 1,963 $ 2,494 Interest cost Expected return on plan assets – – – Amortization of prior service cost Recognized actuarial loss (gain) Curtailment charge – – – – – Net periodic cost $ 6,123 $ 2,989 $ $ $ $ |
Schedule of amounts that have not been recognized in net periodic pension cost and are included in accumulated other comprehensive loss | (in thousands) Pension Benefits Post-retirement Benefits 2015 2014 2015 2014 Unrecognized prior service credit $ 32,490 $ 37,368 $ 2,844 $ 4,180 Unrecognized actuarial losses |
Schedule of amounts that are expected to be recognized in net periodic benefit expense in fiscal year 2016 | The following amounts are expected to be recognized in net periodic benefit expense in fiscal year 2016: Post- Pension retirement (in thousands) Benefits Benefits Amortized prior service credit $ (4,878) $ (1,337) Recognized actuarial losses |
Schedule of reconciliation of the beginning and ending balances of the benefit obligation, the fair value of plan assets, and the funded status of the plans | Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Change in benefit obligation: Benefit obligation at beginning of year $ $ $ $ Service cost Interest cost Actuarial (gain) loss Employee contributions – – Medicare Part D subsidy – – Benefits paid Benefit obligation at end of year $ $ $ $ Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Change in plan assets: Fair value of plan assets at beginning of year $ $ $ – $ – Actual return on plan assets – – Employee contributions – – Employer contributions Benefits paid Fair value of plan assets at end of year $ $ $ – $ – Funded status at end of year $ $ (67,004) $ $ |
Schedule of amounts recognized in the Consolidated Statements of Financial Position | Pension Benefits Post-retirement Benefits (in thousands) 2015 2014 2015 2014 Pension assets $ $ 130,284 $ – $ – Employee related expenses Pension and post-retirement benefits Net amount recognized $ $ (67,004) $ $ |
Schedule of information for pension plans with accumulated benefit obligations in excess of plan assets | (in thousands) 2015 2014 Projected benefit obligation $ $ Accumulated benefit obligation Fair value of plan assets – – |
Schedule of weighted-average assumptions used to determine benefit obligations and net periodic benefit costs | Weighted-average assumptions used to determine benefit obligations are as follows: 2015 2014 Discount rate Rate of future compensation increase (for plans that base benefits on final compensation level) Weighted-average assumptions used to determine net periodic benefit costs are as follows: 2015 2014 2013 Discount rate Rate of future compensation increase (for plans that base benefits on final compensation level) Expected long-term return on plan assets |
Schedule of effects of one-percentage-point change in assumed discount rate, expected long-term rate of return on plan assets, rate of future compensation increase, and health care cost trend rate | 1-Percentage-Point Expense Benefit Obligation (in thousands) Increase Decrease Increase Decrease Pension Benefits: Discount rate $ $ $ $ Expected long-term rate of return on plan assets – – Rate of future compensation increase Post-retirement Benefits: Discount rate $ (64) $ 5,035 $ (33,462) $ 40,619 Health care cost trend rate |
Schedule of actual and target weighted-average asset allocations for pension plan assets | 2015 2014 Asset Category Actual Target Range Actual Target Range Large Capitalization Equity 15-35% 15-35% Small Capitalization Equity 5-15% 5-15% International Equity 15-25% 15-25% Private Equity 0-15% 0-15% Total Equity Securities 50-75% 55-75% Fixed Income 25-45% 25-45% Real Estate – 0-10% – – Cash and Cash Equivalents – – |
Schedule of benefits expected to be paid over the next ten fiscal years | Post- Pension retirement (in thousands) Benefits Benefits 2016 $ 53,515 $ 22,113 2017 2018 2019 2020 2021 – 2025 |
Schedule of fair values of the defined benefit pension plan investments | Fair Value Measurements at October 25, 2015 Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Total Identical Assets Inputs Inputs (in thousands) Fair Value (Level 1) (Level 2) (Level 3) Investments at Fair Value: Cash Equivalents (1) $ 16,551 $ 16,551 $ – $ – Large Capitalization Equity (2) Domestic $ 300,735 $ $ $ – Foreign – – World – – Total Large Capitalization Equity $ 457,578 $ $ $ – Small Capitalization Equity (3) Domestic $ 55,513 $ 55,513 $ – $ – Foreign – – Total Small Capitalization Equity $ 63,759 $ 63,759 $ – $ – International Equity (4) Mutual fund $ 101,062 $ – $ $ – Collective trust – – Total International Equity $ 164,923 $ – $ $ – Private Equity (5) Domestic $ 54,748 $ – $ – $ International – – Total Private Equity $ 71,775 $ – $ – $ Total Equity $ 758,035 $ $ $ Fixed Income (6) US government issues $ 130,456 $ $ 25,996 $ – Municipal issues – – Corporate issues – domestic – – Corporate issues – foreign – – Total Fixed Income $ 405,191 $ $ $ – Total Investments at Fair Value $ $ $ $ Fair Value Measurements at October 26, 2014 Quoted Prices in Active Significant Other Significant Markets for Observable Unobservable Total Identical Assets Inputs Inputs (in thousands) Fair Value (Level 1) (Level 2 (Level 3) Investments at Fair Value: Cash Equivalents (1) $ 14,342 $ 14,342 $ – $ – Large Capitalization Equity (2) Domestic $ 351,195 $ $ $ – Foreign – – Total Large Capitalization Equity $ 385,321 $ $ $ – Small Capitalization Equity (3) Domestic $ 62,521 $ 62,521 $ – $ – Foreign – – Total Small Capitalization Equity $ 70,552 $ 70,552 $ – $ – International Equity (4) Mutual fund $ 69,393 $ – $ 69,393 $ – Collective trust – – Total International Equity $ 242,401 $ – $ $ – Private Equity (5) Domestic $ 43,340 $ – $ – $ International – – Total Private Equity $ 58,723 $ – $ – $ Total Equity $ 756,997 $ $ $ Fixed Income (6) US government issues $ 126,894 $ 96,199 $ 30,695 $ – Municipal issues – – Corporate issues – domestic – – Corporate issues – foreign – – Total Fixed Income $ 397,426 $ 96,199 $ $ – Total Investments at Fair Value $ $ $ $ The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy: (1) Cash Equivalents: These Level 1 investments consist primarily of money market mutual funds that are highly liquid and traded in active markets. (2) Large Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investment includes mutual funds consisting of a mix of U.S. and foreign common stocks that are valued at the publicly available net asset value (NAV) of shares held by the pension plans at year end. (3) Small Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. (4) International Equity: These Level 2 investments include a mix of collective investment funds and mutual funds. The mutual funds are valued at the publicly available NAV of shares held by the pension plans at year end. The value of the collective investment funds is based on the fair value of the underlying investments and the NAV can be calculated for these funds. (5) Private Equity: These Level 3 investments consist of various collective investment funds, which are managed by a third party, that invest in a well-diversified portfolio of equity investments from top performing, high quality firms that focus on U.S. and foreign small to mid-markets, venture capitalists, and entrepreneurs with a concentration in areas of innovation. Investment strategies include buyouts, growth capital, buildups, and distressed, as well as early stages of company development mainly in the U.S. The fair value of the units for these investments is based on the fair value of the underlying investments, and the NAV can be calculated for these funds. (6) Fixed Income: The Level 1 investments include U.S. Treasury bonds and notes, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investments consist principally of U.S. government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources; municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources; and mutual funds invested in long-duration corporate bonds that are valued at the publicly available NAV of shares held by the pension plans at year-end. |
Schedule of reconciliation of the beginning and ending balance of the investments measured at fair value using significant unobservable inputs (Level 3) | (in thousands) 2015 2014 Beginning Balance $ $ Purchases, issuances, and settlements (net) Unrealized gains Realized gains Interest and dividend income Ending Balance $ $ |
Schedule of unfunded private equity commitment balance for each investment category | (in thousands) 2015 2014 Domestic equity $ 9,264 $ International equity Unfunded commitment balance $ $ |
Derivatives and Hedging (Tables
Derivatives and Hedging (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Derivatives and hedging | |
Schedule of fair values of derivative instruments | Fair Value (1) Location on Consolidated October 25, October 26, (in thousands) Statements of Financial Position 2015 2014 Asset Derivatives: Derivatives Designated as Hedges: Commodity contracts Other current assets $ $ Derivatives Not Designated as Hedges: Commodity contracts Other current assets Total Asset Derivatives $ $ (1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statement of Financial Position. See Note M for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position. |
Schedule of gains or losses (before tax) related to derivative instruments | Gain/(Loss) Recognized Gain/(Loss) Reclassified Gain/(Loss) Recognized in AOCL from AOCL into Earnings in Earnings (Effective Portion) (1) (Effective Portion) (1) (Ineffective Portion) (2) (4) Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended October 25, October 26, Location on Consolidated October 25, October 26, October 25, October 26, Cash Flow Hedges: 2015 2014 Statements of Operations 2015 2014 2015 2014 Commodity contracts $ $ Cost of products sold $ $ $ $ Gain/(Loss) Gain/(Loss) Recognized in Earnings Recognized in Earnings (Effective Portion) (3) (Ineffective Portion) (2) (5) Fiscal Year Ended Fiscal Year Ended Location on Consolidated October 25, October 26, October 25, October 26, Fair Value Hedges: Statements of Operations 2015 2014 2015 2014 Commodity contracts Cost of products sold $ $ $ $ Gain/(Loss) Recognized in Earnings Fiscal Year Ended Derivatives Not Location on Consolidated October 25, October 26, Designated as Hedges: Statements of Operations 2015 2014 Commodity contracts Cost of products sold $ $ (1) Amounts represent gains or losses in AOCL before tax. See Note J for the after tax impact of these gains or losses on net earnings. (2) There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2015 includes the mark-to-market impact on certain corn futures contracts which resulted from a temporary suspension of hedge accounting due to market volatility. (3) Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the fiscal year, which were offset by a corresponding gain on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis. (4) There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year. (5) There were no gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge during the fiscal year. |
Derivatives not designated as hedges | |
Derivatives and hedging | |
Schedule of outstanding commodity futures contracts | Volume Commodity October 25, 2015 October 26, 2014 Corn 2.6 million bushels 2.9 million bushels Soybean meal 11,500 tons – |
Cash Flow Hedges | |
Derivatives and hedging | |
Schedule of outstanding commodity futures contracts | Volume Commodity October 25, 2015 October 26, 2014 Corn 20.1 million bushels 18.3 million bushels |
Fair Value Hedges | |
Derivatives and hedging | |
Schedule of outstanding commodity futures contracts | Volume Commodity October 25, 2015 October 26, 2014 Corn 5.3 million bushels 8.0 million bushels Lean hogs 0.4 million cwt 0.7 million cwt |
Investments In and Receivable35
Investments In and Receivables from Affiliates (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Investments In and Receivables from Affiliates | |
Schedule of investments in and receivables from affiliates | October 25, October 26, (in thousands) Segment % Owned 2015 2014 MegaMex Foods, LLC Grocery Products 50% $ $ Foreign Joint Ventures International & Other Various (26 – 50%) Total $ $ |
Schedule of equity in earnings of affiliates | (in thousands) Segment 2015 2014 2013 MegaMex Foods, LLC Grocery Products $ $ $ Foreign Joint Ventures International & Other ) Total $ $ $ |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Accumulated Other Comprehensive Loss | |
Schedule of components of accumulated other comprehensive loss | Accumulated Foreign Deferred Other Currency Pension & Gain (Loss) Comprehensive (in thousands) Translation Other Benefits – Hedging Loss Balance at October 28, 2012 $ $ ) $ $ ) Unrecognized gains (losses): Gross ) ) Tax effect – ) ) Reclassification into net earnings: Gross – (1) ) (2) Tax effect – ) ) Net of tax amount ) ) Balance at October 27, 2013 $ $ ) $ ) $ ) Unrecognized gains (losses): Gross ) ) ) ) Tax effect – Reclassification into net earnings: Gross – (1) (2) Tax effect – ) ) ) Net of tax amount ) ) ) ) Balance at October 26, 2014 $ $ ) $ ) $ ) Unrecognized gains (losses): Gross ) ) ) Tax effect – ) Reclassification into net earnings: Gross – (1) (2) Tax effect – ) ) ) Net of tax amount ) ) ) Purchase of additional ownership of noncontrolling interest ) – – ) Balance at October 25, 2015 $ $ ) $ $ ) (1) Included in computation of net periodic cost (see Note G for additional details). (2) Included in cost of products sold in the Consolidated Statements of Operations. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Income Taxes | |
Schedule of components of provision for income taxes | (in thousands) 2015 2014 2013 Current: U.S. Federal $ $ $ State Foreign Total current Deferred: U.S. Federal State ) Foreign Total deferred Total provision for income taxes $ $ $ |
Schedule of significant components of the deferred income tax liabilities and assets | October 25, October 26, (in thousands) 2015 2014 Deferred tax liabilities: Goodwill and intangible assets $ ) $ ) Tax over book depreciation and basis differences ) ) Other, net ) ) Deferred tax assets: Pension and post-retirement benefits Employee compensation related liabilities Marketing and promotional accruals Other accruals not currently deductible – Other, net Net deferred tax assets $ 22,806 $ |
Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate | 2015 2014 2013 U.S. statutory rate % % % State taxes on income, net of federal tax benefit Domestic production activities deduction ) ) ) All other, net ) ) ) Effective tax rate % % % |
Schedule of changes in the unrecognized tax benefits, excluding interest and penalties | (in thousands) Balance as of October 27, 2013 $ Tax positions related to the current period: Increases Decreases ) Tax positions related to prior periods: Increases Decreases ) Settlements ) Decreases related to a lapse of applicable statute of limitations ) Balance as of October 26, 2014 $ Tax positions related to the current period: Increases Decreases – Tax positions related to prior periods: Increases Decreases ) Settlements ) Decreases related to a lapse of applicable statute of limitations ) Balance as of October 25, 2015 $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Stock-Based Compensation | |
Schedule of reconciliation of the number of options outstanding and exercisable | Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Term Value Outstanding at October 26, 2014 $ Granted Exercised Forfeited Outstanding at October 25, 2015 $ 5.0 yrs $ Exercisable at October 25, 2015 $ 4.1 yrs $ |
Schedule of weighted-average grant date fair value of stock options granted, and the total intrinsic value of options exercised | The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during each of the past three fiscal years is as follows: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Weighted-average grant date fair value $ 9.84 $ 9.70 $ 5.50 Intrinsic value of exercised options $ $ $ |
Schedule of weighted-average assumptions used to calculate fair value of each option award | Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Risk-free interest rate Dividend yield Stock price volatility Expected option life 8 years 8 years 8 years |
Schedule of reconciliation of the nonvested shares | A reconciliation of the nonvested shares (in thousands) as of October 25, 2015 and changes during the fiscal year then ended, is as follows: Weighted- Average Grant Date Shares Fair Value Nonvested at October 26, 2014 $ Granted Vested Forfeited – – Nonvested at October 25, 2015 $ |
Schedule of weighted-average grant date fair value of nonvested shares granted, the total fair value of nonvested shares granted, and the fair value of nonvested shares vested | The weighted-average grant date fair value of nonvested shares granted, the total fair value (in thousands) of nonvested shares granted, and the fair value (in thousands) of shares that have vested during each of the past three fiscal years is as follows: Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Weighted-average grant date fair value $ $ $ Fair value of nonvested shares granted $ $ $ Fair value of shares vested $ $ $ |
Schedule of stock-based compensation expense, along with the related income tax benefit | Fiscal Year Ended October 25, October 26, October 27, (in thousands) 2015 2014 2013 Stock-based compensation expense recognized $ $ $ Income tax benefit recognized After-tax stock-based compensation expense $ 9,750 $ 8,924 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Fair Value Measurements | |
Schedule of financial assets and liabilities carried at fair value on a recurring basis | Fair Value Measurements at October 25, 2015 Quoted Prices in Fair Value at Active Markets Significant Other Significant October 25, for Identical Observable Unobservable (in thousands) 2015 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Assets at Fair Value: Cash and cash equivalents (1) $ $ $ – $ – Other trading securities (2) – Commodity derivatives (3) – – Total Assets at Fair Value $ $ $ $ – Liabilities at Fair Value: Deferred compensation (2) $ $ $ $ – Total Liabilities at Fair Value $ $ $ $ – Fair Value Measurements at October 26, 2014 Quoted Prices in Fair Value at Active Markets Significant Other Significant October 26, for Identical Observable Unobservable (in thousands) 2014 Assets (Level 1) Inputs (Level 2) Inputs (Level 3) Assets at Fair Value: Cash and cash equivalents (1) $ $ $ – $ – Other trading securities (2) – Commodity derivatives (3) – – Total Assets at Fair Value $ $ $ $ – Liabilities at Fair Value: Deferred compensation (2) $ $ $ $ – Total Liabilities at Fair Value $ $ $ $ – 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 consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. As these investments have a maturity date of three months or less, the carrying value approximates fair value. (2) The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested 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 that supports the fund, 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. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2. (3) The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal 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 therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Commitments and Contingencies | |
Schedule of purchase commitments | Under these contracts, the Company is committed at October 25, 2015, to make purchases, assuming current price levels, as follows: (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ |
Schedule of noncancelable operating lease commitments | The Company has noncancelable operating lease commitments on facilities and equipment at October 25, 2015, as follows: (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ |
Schedule of purchase obligations that are not reflected in the consolidated statements of financial position | As of October 25, 2015, commitments related to those purchase orders, and all known contracts exceeding $1.0 million, are shown below. (in thousands) 2016 $ 2017 2018 2019 2020 Later Years Total $ |
Earnings Per Share Data (Tables
Earnings Per Share Data (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Earnings Per Share Data | |
Schedule of denominator for the computation of basic and diluted earnings per share | (in thousands) 2015 2014 2013 Basic weighted-average shares outstanding Dilutive potential common shares Diluted weighted-average shares outstanding |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Segment Reporting | |
Schedule of operating profit and other financial information | (in thousands) 2015 2014 2013 Net Sales (to unaffiliated customers) Grocery Products $ 1,617,680 $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Total $ 9,263,863 $ $ Intersegment Sales Grocery Products $ – $ – $ – Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other – – – Total Intersegment elimination Total $ – $ – $ – Segment Net Sales Grocery Products $ 1,617,680 $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Intersegment elimination Total $ 9,263,863 $ $ Segment Operating Profit Grocery Products $ 228,582 $ 195,064 $ 213,646 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Total segment operating profit $ 1,101,343 $ 961,705 $ 828,818 Net interest and investment expense (income) General corporate expense Noncontrolling interest Earnings Before Income Taxes $ 1,057,143 $ 922,152 $ 798,507 (in thousands) 2015 2014 2013 Assets Grocery Products $ $ $ Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ $ $ Additions to Property, Plant and Equipment Grocery Products $ 18,104 $ 31,741 $ 10,100 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ 144,063 $ 159,138 $ 106,762 Depreciation and Amortization Grocery Products $ 26,972 $ 25,883 $ 22,912 Refrigerated Foods Jennie-O Turkey Store Specialty Foods International & Other Corporate Total $ 133,434 $ 130,044 $ 124,850 |
Schedule of percentages of total revenues contributed by classes of similar products | Fiscal Year Ended October 25, October 26, October 27, 2015 2014 2013 Perishable Poultry Shelf-stable Miscellaneous |
Schedule of total revenues attributable to U.S. and all foreign countries | Fiscal Year Ended October 25, October 26, October 27, (in thousands) 2015 2014 2013 United States $ $ $ Foreign $ $ $ |
Quarterly Results of Operatio43
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Oct. 25, 2015 | |
Quarterly Results of Operations (Unaudited) | |
Schedule of unaudited quarterly results of operations | Net Earnings Attributable to Basic Diluted Gross Net Hormel Foods Earnings Earnings (in thousands, except per share data) Net Sales Profit Earnings Corporation (1) Per Share Per Share 2015 First quarter $ $ $ $ $ $ Second quarter Third quarter Fourth quarter 2014 First quarter $ $ $ $ $ $ Second quarter Third quarter Fourth quarter (1) Excludes net earnings attributable to the Company’s noncontrolling interests. |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details) $ in Millions | Dec. 16, 2015 | Nov. 25, 2015 | Oct. 25, 2015USD ($) | Oct. 26, 2014USD ($) | Oct. 27, 2013USD ($) |
Fiscal year term | 364 days | 364 days | 364 days | ||
Rabbi trust | |||||
Investments | |||||
Gains related to securities held | $ 2.4 | $ 2.9 | $ 4.6 | ||
2,016 | |||||
Fiscal year term | 371 days | ||||
Common Stock | |||||
Subsequent Event | |||||
Authorized stock split ratio | 2 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | Jan. 29, 2013 | |
Goodwill and Other Intangibles | ||||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | |
Indefinite-lived intangible assets impairment charges | 0 | 0 | 0 | |
Advertising Expenses | ||||
Advertising costs | 145,300 | 114,400 | 89,900 | |
Research and Development Expenses | ||||
Research and development expense | $ 32,000 | $ 29,900 | $ 29,900 | |
Minimum | ||||
Equity Method Investments | ||||
Ownership percentage | 20.00% | |||
Maximum | ||||
Equity Method Investments | ||||
Ownership percentage | 50.00% | |||
2010 Program | Common Stock | ||||
Shares Repurchases | ||||
Stock repurchased (in shares) | 1.2 | |||
Average price of shares repurchased (in dollars per share) | $ 39.67 | |||
2013 Program | Common Stock | ||||
Shares Repurchases | ||||
Stock repurchased (in shares) | 0.4 | 1.3 | 0.6 | |
Average price of shares repurchased (in dollars per share) | $ 62.32 | $ 46.87 | $ 42.54 | |
Number of shares authorized to be repurchased (in shares) | 10 | |||
Buildings | Minimum | ||||
Estimated useful life | 20 years | |||
Buildings | Maximum | ||||
Estimated useful life | 40 years | |||
Machinery and equipment | Minimum | ||||
Estimated useful life | 5 years | |||
Machinery and equipment | Maximum | ||||
Estimated useful life | 10 years |
Summary of Significant Accoun46
Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands | Mar. 16, 2015 | Oct. 25, 2015 |
Supplemental Cash Flow Information | ||
Cash amount of ownership interest purchased | $ 11,702 | |
Reduction in additional paid-in capital | $ 14,035 | |
Shanghai Shangshi Meat Products Co. Ltd. | ||
Supplemental Cash Flow Information | ||
Percent of ownership interest purchased | 19.29% | |
Ownership percentage | 100.00% | |
Cash amount of ownership interest purchased | $ 11,700 | |
Reduction in additional paid-in capital | $ 11,900 |
Acquisitions (Detail)
Acquisitions (Detail) - USD ($) $ in Thousands | May. 26, 2015 | Aug. 11, 2014 | Nov. 26, 2013 | Jan. 31, 2013 | Oct. 25, 2015 | Oct. 25, 2015 | Jul. 26, 2015 | Apr. 26, 2015 | Jan. 25, 2015 | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | Jul. 13, 2015 |
Acquisitions | |||||||||||||||||
Purchase price | $ 770,587 | $ 466,204 | $ 665,415 | ||||||||||||||
Allocation of the purchase price to the acquired assets, liabilities, and goodwill | |||||||||||||||||
Goodwill | $ 1,699,484 | $ 1,699,484 | $ 1,226,406 | 1,699,484 | 1,226,406 | 934,472 | |||||||||||
Net sales | 2,400,858 | $ 2,188,587 | $ 2,279,345 | $ 2,395,073 | $ 2,543,771 | $ 2,284,947 | $ 2,244,866 | $ 2,242,672 | 9,263,863 | 9,316,256 | 8,751,654 | ||||||
Applegate | |||||||||||||||||
Acquisitions | |||||||||||||||||
Purchase price | $ 774,100 | ||||||||||||||||
Allocation of the purchase price to the acquired assets, liabilities, and goodwill | |||||||||||||||||
Accounts receivable | $ 25,574 | ||||||||||||||||
Inventory | 22,089 | ||||||||||||||||
Prepaid and other assets | 2,916 | ||||||||||||||||
Property, plant and equipment | 3,463 | ||||||||||||||||
Intangible assets | 275,900 | ||||||||||||||||
Goodwill | 488,476 | ||||||||||||||||
Current liabilities | (23,420) | ||||||||||||||||
Deferred taxes | (20,935) | ||||||||||||||||
Purchase price | $ 774,063 | ||||||||||||||||
Transaction costs | 9,000 | 9,000 | 9,000 | ||||||||||||||
Net sales | 92,800 | ||||||||||||||||
CytoSport Holdings | |||||||||||||||||
Acquisitions | |||||||||||||||||
Purchase price | $ 420,900 | ||||||||||||||||
Potential additional payment | $ 20,000 | ||||||||||||||||
Term for additional payment | 2 years | ||||||||||||||||
Recognized amount related to potential additional payment | $ 10,300 | $ 10,300 | 10,300 | ||||||||||||||
Allocation of the purchase price to the acquired assets, liabilities, and goodwill | |||||||||||||||||
Accounts receivable | $ 30,580 | ||||||||||||||||
Inventory | 62,246 | ||||||||||||||||
Prepaid and other assets | 3,133 | ||||||||||||||||
Property, plant and equipment | 8,119 | ||||||||||||||||
Intangible assets | 188,500 | ||||||||||||||||
Goodwill | 270,925 | ||||||||||||||||
Current liabilities | (52,811) | ||||||||||||||||
Long-term liabilities | (30,140) | ||||||||||||||||
Deferred taxes | (59,700) | ||||||||||||||||
Purchase price | 420,852 | ||||||||||||||||
Potential payments owed under a supplier agreement | $ 15,000 | ||||||||||||||||
Adjustment to potential payment | 8,900 | ||||||||||||||||
Net sales | $ 249,700 | 73,500 | |||||||||||||||
Transaction costs (excluding transitional service expenses) related to the acquisition | 4,800 | ||||||||||||||||
SKIPPY | China | |||||||||||||||||
Acquisitions | |||||||||||||||||
Purchase price | $ 41,900 | ||||||||||||||||
Allocation of the purchase price to the acquired assets, liabilities, and goodwill | |||||||||||||||||
Net sales | $ 28,900 | ||||||||||||||||
SKIPPY | Worldwide, except sales in mainland China | |||||||||||||||||
Acquisitions | |||||||||||||||||
Purchase price | $ 665,400 | ||||||||||||||||
Allocation of the purchase price to the acquired assets, liabilities, and goodwill | |||||||||||||||||
Inventory | 49,156 | ||||||||||||||||
Property, plant and equipment | 48,461 | ||||||||||||||||
Intangible assets | 264,500 | ||||||||||||||||
Goodwill | 303,597 | ||||||||||||||||
Current liabilities | (299) | ||||||||||||||||
Purchase price | $ 665,415 | ||||||||||||||||
Net sales | $ 86,500 | 272,800 | |||||||||||||||
Transaction costs (excluding transitional service expenses) related to the acquisition | $ 7,700 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Oct. 25, 2015 | Oct. 26, 2014 |
Inventories | ||
Finished products | $ 553,298 | $ 604,946 |
Raw materials and work-in-process | 239,174 | 274,105 |
Materials and supplies | 200,793 | 175,501 |
Total | $ 993,265 | $ 1,054,552 |
Goodwill and Intangible Asset49
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 25, 2015 | Oct. 26, 2014 | |
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | $ 1,226,406 | $ 934,472 |
Goodwill acquired | 488,476 | 291,934 |
Purchase Adjustments | 7,096 | |
Impairment charge | (21,537) | |
Product line Disposal | (957) | |
Balance at the end of the period | 1,699,484 | 1,226,406 |
Grocery Products | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | 322,942 | 322,942 |
Product line Disposal | (521) | |
Balance at the end of the period | 322,421 | 322,942 |
Refrigerated Foods | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | 96,643 | 96,643 |
Goodwill acquired | 488,476 | |
Product line Disposal | (435) | |
Balance at the end of the period | 584,684 | 96,643 |
Jennie-O Turkey Store | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | 203,214 | 203,214 |
Balance at the end of the period | 203,214 | 203,214 |
Specialty Foods | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | 470,857 | 207,028 |
Goodwill acquired | 263,829 | |
Purchase Adjustments | 7,096 | |
Impairment charge | (21,537) | |
Balance at the end of the period | 456,416 | 470,857 |
International & Other | ||
Changes in the carrying amount of goodwill | ||
Balance at the beginning of the period | 132,750 | 104,645 |
Goodwill acquired | 28,105 | |
Product line Disposal | (1) | |
Balance at the end of the period | $ 132,749 | $ 132,750 |
Goodwill and Intangible Asset50
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | $ 100,060 | $ 104,960 | |
Accumulated Amortization | $ (28,900) | $ (53,336) | |
Weighted-Avg Life | 11 years 3 months 18 days | 10 years 4 months 24 days | |
Amortization expense | $ 8,142 | $ 9,352 | $ 9,479 |
Estimated Amortization Expense | |||
2,016 | 8,200 | ||
2,017 | 7,600 | ||
2,018 | 7,000 | ||
2,019 | 7,000 | ||
2,020 | 6,800 | ||
Customer lists/relationships | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 83,190 | 67,540 | |
Accumulated Amortization | $ (13,939) | $ (19,336) | |
Weighted-Avg Life | 12 years 1 month 6 days | 11 years | |
Customer lists/relationships | Applegate | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Definite-lived intangible assets acquired | 25,100 | ||
Customer lists/relationships | CytoSport Holdings | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Definite-lived intangible assets acquired | 23,300 | $ 21,600 | |
Customer lists/relationships | SKIPPY | China | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Definite-lived intangible assets acquired | 2,600 | ||
Noncompete agreements | Applegate | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Definite-lived intangible assets acquired | $ 1,200 | ||
Formulas and recipes | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | 7,490 | $ 17,854 | |
Accumulated Amortization | $ (6,865) | $ (15,955) | |
Weighted-Avg Life | 7 years 2 months 12 days | 8 years 9 months 18 days | |
Proprietary software and technology | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | $ 7,010 | $ 14,820 | |
Accumulated Amortization | $ (6,901) | $ (13,542) | |
Weighted-Avg Life | 8 years 1 month 6 days | 10 years 2 months 12 days | |
Other intangibles | |||
Gross carrying amount and accumulated amortization for definite-lived intangible assets | |||
Gross Carrying Amount | $ 2,370 | $ 4,746 | |
Accumulated Amortization | $ (1,195) | $ (4,503) | |
Weighted-Avg Life | 7 years 6 months | 7 years 4 months 24 days |
Goodwill and Intangible Asset51
Goodwill and Intangible Assets (Details 3) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Carrying amounts for indefinite-lived intangible assets | |||
Carrying amounts for indefinite-lived intangible assets | $ 756,059 | $ 503,266 | |
Goodwill impairment charges | 0 | 0 | $ 0 |
Brands/tradename/trademarks | |||
Carrying amounts for indefinite-lived intangible assets | |||
Carrying amounts for indefinite-lived intangible assets | 748,075 | 495,282 | |
Other intangibles | |||
Carrying amounts for indefinite-lived intangible assets | |||
Carrying amounts for indefinite-lived intangible assets | $ 7,984 | $ 7,984 |
Assets Held For Sale (Details)
Assets Held For Sale (Details) - Portion of DCB - Assets Held For Sale. $ in Thousands | 12 Months Ended |
Oct. 25, 2015USD ($) | |
Assets Held For Sale | |
Impairment charge | $ 21,500 |
Assets held for sale | |
Current assets | 26,057 |
Goodwill | 51,811 |
Intangibles | 5,389 |
Property, plant and equipment | 31,678 |
Total assets held for sale | 114,935 |
Liabilities held for sale | |
Total current liabilities held for sale | $ 3,191 |
Long-term Debt and Other Borr53
Long-term Debt and Other Borrowing Arrangements (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Long-term Debt and Other Borrowing Arrangements | |||
Total | $ 250,000 | $ 250,000 | |
Outstanding amount | 185,000 | ||
Interest paid | 13,100 | 12,700 | $ 12,500 |
4.125% Senior unsecured notes, due April 2021 | |||
Long-term Debt and Other Borrowing Arrangements | |||
Long-term debt | $ 250,000 | $ 250,000 | |
Interest rate (as a percent) | 4.125% | 4.125% | |
Revolving line of credit | |||
Long-term Debt and Other Borrowing Arrangements | |||
Maximum borrowing capacity | $ 400,000 | ||
Outstanding draws | 0 | $ 0 | |
Term loan facility | |||
Long-term Debt and Other Borrowing Arrangements | |||
Maximum borrowing capacity | 300,000 | ||
Outstanding amount | $ 185,000 | $ 0 |
Pension and Other Post-retire54
Pension and Other Post-retirement Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Pension and other post-retirement benefits | |||
Costs associated with the defined contribution benefit plans | $ 31,700 | $ 30,100 | $ 29,900 |
Amounts recognized in the Consolidated Statements of Financial Position | |||
Pension assets | 132,861 | 130,284 | |
Pension and post-retirement benefits | (509,261) | (502,693) | |
Pension Benefits | |||
Net periodic cost of defined benefit plans | |||
Service cost | 28,795 | 25,935 | 30,979 |
Interest cost | 52,522 | 53,030 | 47,688 |
Expected return on plan assets | (88,792) | (83,702) | (73,144) |
Amortization of prior service cost | (4,878) | (4,971) | (5,079) |
Recognized actuarial loss (gain) | 18,476 | 12,697 | 34,019 |
Curtailment charge | 6 | ||
Net periodic cost | 6,123 | 2,989 | 34,469 |
Amounts recognized in accumulated other comprehensive loss | |||
Unrecognized prior service credit | 32,490 | 37,368 | |
Unrecognized actuarial gains (losses) | (360,949) | (343,398) | |
Amount of prior service credit (cost) included in accumulated other comprehensive loss expected to be recognized during next year | (4,878) | ||
Amount of actuarial loss included in accumulated other comprehensive loss expected to be recognized during next year | 18,693 | ||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 1,235,769 | 1,098,060 | |
Service cost | 28,795 | 25,935 | 30,979 |
Interest cost | 52,522 | 53,030 | 47,688 |
Actuarial loss (gain) | (16,872) | 108,047 | |
Benefits paid | (52,005) | (49,303) | |
Benefit obligation at end of year | 1,248,209 | 1,235,769 | 1,098,060 |
Changes in fair value | |||
Fair value of plan assets at beginning of year | 1,168,765 | 1,087,315 | |
Actual return on plan assets | 35,870 | 101,025 | |
Employer contributions | 27,147 | 29,728 | |
Benefits paid | (52,005) | (49,303) | |
Fair value of plan assets at end of year | 1,179,777 | 1,168,765 | 1,087,315 |
Funded status at end of year | (68,432) | (67,004) | |
Amounts recognized in the Consolidated Statements of Financial Position | |||
Pension assets | 132,861 | 130,284 | |
Employee related expenses | (4,931) | (4,532) | |
Pension and post-retirement benefits | (196,362) | (192,756) | |
Net amount recognized | (68,432) | (67,004) | |
Accumulated benefit obligation in excess of plan assets | |||
Projected benefit obligation | 201,293 | 197,288 | |
Accumulated benefit obligation | $ 193,913 | 186,085 | |
Pension Benefits | Minimum | |||
Accumulated benefit obligation in excess of plan assets | |||
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments | 9 years | ||
Pension Benefits | Maximum | |||
Accumulated benefit obligation in excess of plan assets | |||
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments | 23 years | ||
Post-retirement Benefits | |||
Net periodic cost of defined benefit plans | |||
Service cost | $ 1,795 | 1,963 | 2,494 |
Interest cost | 13,479 | 15,279 | 14,910 |
Amortization of prior service cost | (1,337) | (1,337) | (1,332) |
Recognized actuarial loss (gain) | (2) | (2) | 7,719 |
Net periodic cost | 13,935 | 15,903 | 23,791 |
Amounts recognized in accumulated other comprehensive loss | |||
Unrecognized prior service credit | 2,844 | 4,180 | |
Unrecognized actuarial gains (losses) | (40,590) | (30,250) | |
Amount of prior service credit (cost) included in accumulated other comprehensive loss expected to be recognized during next year | (1,337) | ||
Amount of actuarial loss included in accumulated other comprehensive loss expected to be recognized during next year | 1,303 | ||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 330,841 | 334,447 | |
Service cost | 1,795 | 1,963 | 2,494 |
Interest cost | 13,479 | 15,279 | 14,910 |
Actuarial loss (gain) | 10,339 | 927 | |
Employee contributions | 2,798 | 2,715 | |
Medicare Part D subsidy | 1,313 | 1,941 | |
Benefits paid | (26,021) | (26,431) | |
Benefit obligation at end of year | 334,544 | 330,841 | $ 334,447 |
Changes in fair value | |||
Employee contributions | 2,798 | 2,715 | |
Employer contributions | 23,223 | 23,716 | |
Benefits paid | (26,021) | (26,431) | |
Funded status at end of year | (334,544) | (330,841) | |
Amounts recognized in the Consolidated Statements of Financial Position | |||
Employee related expenses | (21,645) | (20,904) | |
Pension and post-retirement benefits | (312,899) | (309,937) | |
Net amount recognized | $ (334,544) | $ (330,841) | |
Post-retirement Benefits | Minimum | |||
Accumulated benefit obligation in excess of plan assets | |||
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments | 6 years | ||
Post-retirement Benefits | Maximum | |||
Accumulated benefit obligation in excess of plan assets | |||
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments | 18 years |
Pension and Other Post-retire55
Pension and Other Post-retirement Benefits (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Pension Benefits | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 4.50% | 4.31% | |
Rate of future compensation increase (as a percent) | 3.92% | 3.94% | |
Weighted-average assumptions used to determine net periodic benefit costs | |||
Discount rate (as a percent) | 4.31% | 4.89% | 4.05% |
Rate of future compensation increase (as a percent) | 3.94% | 3.91% | 3.97% |
Expected long-term return on plan assets (as a percent) | 7.70% | 7.80% | 7.90% |
Effect of one-percentage-point change | |||
Effect of one-percentage-point increase in discount rate on expense | $ (12,892) | ||
Effect of one-percentage-point decrease in discount rate on expense | 16,810 | ||
Effect of one-percentage-point increase in discount rate on benefit obligation | (157,394) | ||
Effect of one-percentage-point decrease in discount rate on benefit obligation | 197,869 | ||
Effect of one-percentage-point increase in expected long-term rate of return on plan assets | (11,629) | ||
Effect of one-percentage-point decrease in expected long-term rate of return on plan assets | 11,629 | ||
Effect of one-percentage-point increase in rate of future compensation increase on expense | 461 | ||
Effect of one-percentage-point decrease in rate of future compensation increase on expense | (442) | ||
Effect of one-percentage-point increase in rate of future compensation increase on benefit obligation | 2,504 | ||
Effect of one-percentage-point decrease in rate of future compensation increase on benefit obligation | $ (2,417) | ||
Post-retirement Benefits | |||
Weighted-average assumptions used to determine net periodic benefit costs | |||
Increase in per capita cost of covered health care benefits assumed for next fiscal year (as a percent) | 8.00% | ||
Expected ultimate pre-Medicare and post-Medicare rate (as a percent) | 5.00% | ||
Year that reaches the ultimate trend rate | 2,021 | ||
Effect of one-percentage-point change | |||
Effect of one-percentage-point increase in discount rate on expense | $ (64) | ||
Effect of one-percentage-point decrease in discount rate on expense | 5,035 | ||
Effect of one-percentage-point increase in discount rate on benefit obligation | (33,462) | ||
Effect of one-percentage-point decrease in discount rate on benefit obligation | 40,619 | ||
Effect of one-percentage-point increase in health care cost trend rate on expense | 1,749 | ||
Effect of one-percentage-point decrease in health care cost trend rate on expense | (1,451) | ||
Effect of one-percentage-point increase in health care cost trend rate on benefit obligation | 38,194 | ||
Effect of one-percentage-point decrease in health care cost trend rate on benefit obligation | $ (31,112) |
Pension and Other Post-retire56
Pension and Other Post-retirement Benefits (Details 3) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | |
Oct. 25, 2015 | Oct. 26, 2014 | |
Pension Benefits | ||
Pension and other post-retirement benefits | ||
Number of shares of common stock of the Company included in plan assets sold during the year | 1.7 | |
Dividends paid on employer shares held by the plan | $ 700 | |
Employers contribution in next fiscal year | $ 24,100 | |
Expected contribution representing benefit payments for unfunded plans during next fiscal year | 27,200 | |
Expected future benefit payments | ||
2,016 | 53,515 | |
2,017 | 55,661 | |
2,018 | 58,010 | |
2,019 | 60,934 | |
2,020 | 63,916 | |
2021 - 2025 | $ 361,518 | |
Pension Benefits | Large Capitalization Equity | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 38.80% | 33.00% |
Pension Benefits | Large Capitalization Equity | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 15.00% | 15.00% |
Pension Benefits | Large Capitalization Equity | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 35.00% | 35.00% |
Pension Benefits | Small Capitalization Equity | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 5.40% | 6.00% |
Pension Benefits | Small Capitalization Equity | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 5.00% | 5.00% |
Pension Benefits | Small Capitalization Equity | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 15.00% | 15.00% |
Pension Benefits | International Equity | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 14.00% | 20.80% |
Pension Benefits | International Equity | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 15.00% | 15.00% |
Pension Benefits | International Equity | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 25.00% | 25.00% |
Pension Benefits | Private Equity | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 6.10% | 5.00% |
Pension Benefits | Private Equity | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 0.00% | 0.00% |
Pension Benefits | Private Equity | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 15.00% | 15.00% |
Pension Benefits | Equity Securities | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 64.30% | 64.80% |
Pension Benefits | Equity Securities | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 50.00% | 55.00% |
Pension Benefits | Equity Securities | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 75.00% | 75.00% |
Pension Benefits | Fixed Income | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 34.30% | 34.00% |
Pension Benefits | Fixed Income | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 25.00% | 25.00% |
Pension Benefits | Fixed Income | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 45.00% | 45.00% |
Pension Benefits | Real Estate | Minimum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 0.00% | |
Pension Benefits | Real Estate | Maximum | ||
Pension and other post-retirement benefits | ||
Target range of weighted-average asset allocations (as a percent) | 10.00% | |
Pension Benefits | Cash and Cash Equivalents | ||
Pension and other post-retirement benefits | ||
Actual weighted-average asset allocations (as a percent) | 1.40% | 1.20% |
Post-retirement Benefits | ||
Expected future benefit payments | ||
2,016 | $ 22,113 | |
2,017 | 22,441 | |
2,018 | 22,612 | |
2,019 | 22,711 | |
2,020 | 22,621 | |
2021 - 2025 | 108,832 | |
Expected federal subsidy receipts related to prescription drug benefits per year through 2024 | $ 2,400 |
Pension and Other Post-retire57
Pension and Other Post-retirement Benefits (Details 4) - Pension Benefits - USD ($) $ in Thousands | Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 |
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | $ 1,179,777 | $ 1,168,765 | $ 1,087,315 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 396,613 | 412,196 | |
Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 711,389 | 697,846 | |
Significant Other Unobservable Inputs (Level 3) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 71,775 | 58,723 | $ 45,783 |
Cash and Cash Equivalents | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 16,551 | 14,342 | |
Cash and Cash Equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 16,551 | 14,342 | |
Large Capitalization Equity | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 457,578 | 385,321 | |
Large Capitalization Equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 211,843 | 231,103 | |
Large Capitalization Equity | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 245,735 | 154,218 | |
Large Capitalization Equity - Domestic | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 300,735 | 351,195 | |
Large Capitalization Equity - Domestic | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 175,206 | 196,977 | |
Large Capitalization Equity - Domestic | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 125,529 | 154,218 | |
Large Capitalization Equity - Foreign | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 36,637 | 34,126 | |
Large Capitalization Equity - Foreign | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 36,637 | 34,126 | |
Large Capitalization Equity - World | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 120,206 | ||
Large Capitalization Equity - World | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 120,206 | ||
Small Capitalization Equity | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 63,759 | 70,552 | |
Small Capitalization Equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 63,759 | 70,552 | |
Small Capitalization Equity - Domestic | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 55,513 | 62,521 | |
Small Capitalization Equity - Domestic | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 55,513 | 62,521 | |
Small Capitalization Equity - Foreign | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 8,246 | 8,031 | |
Small Capitalization Equity - Foreign | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 8,246 | 8,031 | |
International Equity | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 164,923 | 242,401 | |
International Equity | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 164,923 | 242,401 | |
Mutual fund | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 101,062 | 69,393 | |
Mutual fund | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 101,062 | 69,393 | |
Collective trust | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 63,861 | 173,008 | |
Collective trust | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 63,861 | 173,008 | |
Private Equity | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 71,775 | 58,723 | |
Private Equity | Significant Other Unobservable Inputs (Level 3) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 71,775 | 58,723 | |
Private Equity - Domestic | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 54,748 | 43,340 | |
Private Equity - Domestic | Significant Other Unobservable Inputs (Level 3) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 54,748 | 43,340 | |
Private Equity - International | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 17,027 | 15,383 | |
Private Equity - International | Significant Other Unobservable Inputs (Level 3) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 17,027 | 15,383 | |
Equity Securities | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 758,035 | 756,997 | |
Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 275,602 | 301,655 | |
Equity Securities | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 410,658 | 396,619 | |
Equity Securities | Significant Other Unobservable Inputs (Level 3) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 71,775 | 58,723 | |
Fixed Income | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 405,191 | 397,426 | |
Fixed Income | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 104,460 | 96,199 | |
Fixed Income | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 300,731 | 301,227 | |
US government issues | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 130,456 | 126,894 | |
US government issues | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 104,460 | 96,199 | |
US government issues | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 25,996 | 30,695 | |
Municipal issues | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 20,211 | 20,232 | |
Municipal issues | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 20,211 | 20,232 | |
Corporate issues domestic | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 210,035 | 212,299 | |
Corporate issues domestic | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 210,035 | 212,299 | |
Corporate issues foreign | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | 44,489 | 38,001 | |
Corporate issues foreign | Significant Other Observable Inputs (Level 2) | |||
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level | |||
Total Investments at Fair Value | $ 44,489 | $ 38,001 |
Pension and Other Post-retire58
Pension and Other Post-retirement Benefits (Details 5) - Pension Benefits - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 25, 2015 | Oct. 26, 2014 | |
Changes in fair value | ||
Fair value of plan assets at beginning of year | $ 1,168,765 | $ 1,087,315 |
Fair value of plan assets at end of year | 1,179,777 | 1,168,765 |
Significant Other Unobservable Inputs (Level 3) | ||
Changes in fair value | ||
Fair value of plan assets at beginning of year | 58,723 | 45,783 |
Purchases, issuances and settlements (net) | (3,574) | 3,050 |
Unrealized gains | 7,741 | 4,260 |
Realized gains | 7,623 | 4,479 |
Interest and dividend income | 1,262 | 1,151 |
Fair value of plan assets at end of year | $ 71,775 | $ 58,723 |
Pension and Other Post-retire59
Pension and Other Post-retirement Benefits (Details 6) - Pension Benefits - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 25, 2015 | Oct. 26, 2014 | |
Investment commitment | ||
Unfunded commitments for investments | $ 18,778 | $ 30,299 |
Private Equity | ||
Investment commitment | ||
Commitment for investments | 85,000 | 85,000 |
Private Equity - Domestic | ||
Investment commitment | ||
Unfunded commitments for investments | 9,264 | 17,659 |
Private Equity - International | ||
Investment commitment | ||
Unfunded commitments for investments | $ 9,514 | $ 12,640 |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) item in Millions, bu in Millions, $ in Millions | 12 Months Ended | |
Oct. 25, 2015USD ($)itemTbu | Oct. 26, 2014USD ($)itembu | |
Derivatives and hedging | ||
Maximum number of upcoming fiscal years to hedge grain or natural gas exposure | 2 years | |
Accumulated change, pretax, in accumulated gains and (losses) from derivative instruments designated and qualifying as the effective portion of cash flow hedges | $ | $ 1 | $ (14.8) |
The Company expects to recognize the majority of hedging losses over this period | 12 months | |
Corn | Derivatives not designated as hedges | ||
Derivatives and hedging | ||
Futures contracts, volume (in million bushels) | 2.6 | 2.9 |
Corn | Cash Flow Hedges | ||
Derivatives and hedging | ||
Futures contracts, volume (in million bushels) | 20.1 | 18.3 |
Corn | Fair Value Hedges | ||
Derivatives and hedging | ||
Futures contracts, volume (in million bushels) | 5.3 | 8 |
Lean hogs | Fair Value Hedges | ||
Derivatives and hedging | ||
Futures contracts, volume ( in centum weight) | item | 0.4 | 0.7 |
Soybean meal | Derivatives not designated as hedges | ||
Derivatives and hedging | ||
Futures contracts, volume (in tons) | T | 11,500 |
Derivatives and Hedging (Deta61
Derivatives and Hedging (Details 2) - USD ($) $ in Thousands | Oct. 25, 2015 | Oct. 26, 2014 |
Derivatives fair value | ||
Asset Derivatives, Other current assets | $ 553 | $ (8,062) |
Derivatives designated as hedges | Commodity contracts | Other current assets | ||
Derivatives fair value | ||
Asset Derivatives, Other current assets | 305 | (7,124) |
Derivatives not designated as hedges | Commodity contracts | Other current assets | ||
Derivatives fair value | ||
Asset Derivatives, Other current assets | $ 248 | $ (938) |
Derivatives and Hedging (Deta62
Derivatives and Hedging (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Oct. 25, 2015 | Oct. 26, 2014 | |
Derivative instruments gains or losses (before tax) | ||
Gains or losses excluded from the assessment of cash flow hedge effectiveness | $ 0 | $ 0 |
Gains or losses excluded from the assessment of fair value hedge effectiveness | 0 | 0 |
Gains or losses resulting from the discontinuance of cash flow hedges | 0 | 0 |
Gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge | 0 | 0 |
Derivatives not designated as hedges | Commodity contracts | Cost of products sold | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in Earnings | (269) | (2,083) |
Cash Flow Hedges | Commodity contracts | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in AOCL (Effective Portion) | 3,409 | (16,701) |
Cash Flow Hedges | Commodity contracts | Cost of products sold | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) | (12,369) | (10,925) |
Gain/(Loss) Recognized in Earnings (Ineffective Portion) | (6,127) | 193 |
Fair Value Hedges | Derivatives designated as hedges | Commodity contracts | Cost of products sold | ||
Derivative instruments gains or losses (before tax) | ||
Gain/(Loss) Recognized in Earnings (Effective Portion) | (4,297) | (21,608) |
Gain/(Loss) Recognized in Earnings (Ineffective Portion) | $ 2,547 | $ 322 |
Investments In and Receivable63
Investments In and Receivables from Affiliates (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | Oct. 26, 2009 | |
Investments In and Receivables from Affiliates | ||||
Investments in and receivables from affiliates | $ 258,998 | $ 264,451 | ||
Equity in earnings of affiliates | 23,887 | 17,585 | $ 20,513 | |
Dividends received from affiliates | $ 37,300 | 22,800 | 34,000 | |
Minimum | ||||
Investments In and Receivables from Affiliates | ||||
Ownership percentage | 20.00% | |||
Maximum | ||||
Investments In and Receivables from Affiliates | ||||
Ownership percentage | 50.00% | |||
MegaMex Foods, LLC | ||||
Investments In and Receivables from Affiliates | ||||
Ownership percentage | 50.00% | |||
Investments in and receivables from affiliates | $ 200,110 | 208,221 | ||
Equity in earnings of affiliates | 26,849 | 14,415 | 17,261 | |
Excess of investment over the underlying equity in net assets of the joint venture | 16,200 | $ 21,300 | ||
Foreign Joint Ventures | ||||
Investments In and Receivables from Affiliates | ||||
Investments in and receivables from affiliates | 58,888 | 56,230 | ||
Equity in earnings of affiliates | $ (2,962) | $ 3,170 | $ 3,252 | |
Foreign Joint Ventures | Minimum | ||||
Investments In and Receivables from Affiliates | ||||
Ownership percentage | 26.00% | |||
Foreign Joint Ventures | Maximum | ||||
Investments In and Receivables from Affiliates | ||||
Ownership percentage | 50.00% |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Accumulated Other Comprehensive Loss | |||
Balance at beginning of period | $ 3,605,678 | ||
Reclassification into net earnings: | |||
Balance at end of period | 3,998,198 | $ 3,605,678 | |
Accumulated Other Comprehensive Income (Loss) | |||
Accumulated Other Comprehensive Loss | |||
Balance at beginning of period | (207,700) | (149,214) | $ (323,569) |
Unrecognized gains (losses): | |||
Gross | (49,096) | (110,296) | 252,055 |
Tax effect | 16,207 | 41,042 | (95,948) |
Reclassification into net earnings: | |||
Gross | 24,628 | 17,312 | 29,456 |
Tax effect | (9,312) | (6,544) | (11,208) |
Net tax amount | (17,573) | (58,486) | 174,355 |
Purchase of additional ownership | (395) | ||
Balance at end of period | (225,668) | (207,700) | (149,214) |
Foreign Currency Translation | |||
Accumulated Other Comprehensive Loss | |||
Balance at beginning of period | 7,480 | 9,391 | 12,415 |
Unrecognized gains (losses): | |||
Gross | (6,116) | (1,911) | (3,024) |
Reclassification into net earnings: | |||
Net tax amount | (6,116) | (1,911) | (3,024) |
Purchase of additional ownership | (395) | ||
Balance at end of period | 969 | 7,480 | 9,391 |
Pension & Other Benefits | |||
Accumulated Other Comprehensive Loss | |||
Balance at beginning of period | (205,986) | (153,001) | (345,465) |
Unrecognized gains (losses): | |||
Gross | (46,389) | (91,684) | 273,408 |
Tax effect | 17,492 | 34,737 | (102,846) |
Reclassification into net earnings: | |||
Gross | 12,259 | 6,387 | 35,327 |
Tax effect | (4,642) | (2,425) | (13,425) |
Net tax amount | (21,280) | (52,985) | 192,464 |
Balance at end of period | (227,266) | (205,986) | (153,001) |
Deferred Gain (Loss) - Hedging | |||
Accumulated Other Comprehensive Loss | |||
Balance at beginning of period | (9,194) | (5,604) | 9,481 |
Unrecognized gains (losses): | |||
Gross | 3,409 | (16,701) | (18,329) |
Tax effect | (1,285) | 6,305 | 6,898 |
Reclassification into net earnings: | |||
Gross | 12,369 | 10,925 | (5,871) |
Tax effect | (4,670) | (4,119) | 2,217 |
Net tax amount | 9,823 | (3,590) | (15,085) |
Balance at end of period | $ 629 | $ (9,194) | $ (5,604) |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Current: | |||
U.S. Federal | $ 299,557 | $ 264,533 | $ 231,359 |
State | 39,817 | 34,034 | 30,671 |
Foreign | 10,526 | 7,759 | 5,334 |
Total current | 349,900 | 306,326 | 267,364 |
Deferred: | |||
U.S. Federal | 18,451 | 8,756 | 1,080 |
State | 1,070 | 873 | (194) |
Foreign | 458 | 171 | 181 |
Total deferred | 19,979 | 9,800 | 1,067 |
Total provision for income taxes | 369,879 | 316,126 | $ 268,431 |
Deferred tax liabilities: | |||
Goodwill and intangible assets | (213,312) | (168,167) | |
Tax over book depreciation and basis differences | (94,496) | (85,623) | |
Other, net | (18,788) | (30,252) | |
Deferred tax assets: | |||
Pension and post-retirement benefits | 154,306 | 152,392 | |
Employee compensation related liabilities | 109,061 | 101,706 | |
Marketing and promotional accruals | 37,603 | 28,703 | |
Other accruals not currently deductible | 13,010 | ||
Other, net | 48,432 | 51,082 | |
Net deferred tax assets | $ 22,806 | $ 62,851 | |
Reconciliation of the statutory federal income tax rate to the effective tax rate | |||
U.S. statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State taxes on income, net of federal tax benefit (as a percent) | 2.70% | 2.80% | 2.70% |
Domestic production activities deduction (as a percent) | (2.60%) | (2.70%) | (2.40%) |
All other, net (as a percent) | (0.10%) | (0.80%) | (1.70%) |
Effective tax rate (as a percent) | 35.00% | 34.30% | 33.60% |
Undistributed earnings of foreign subsidiaries and joint ventures | $ 109,300 | ||
Income taxes paid | 296,500 | $ 285,800 | $ 226,200 |
Changes in unrecognized tax benefits | |||
Balance at the beginning of the period | 22,608 | 20,085 | |
Tax positions related to the current period | |||
Increases | 2,920 | 4,693 | |
Decreases | (670) | ||
Tax positions related to prior periods: | |||
Increases | 1,629 | 4,455 | |
Decreases | (796) | (3,245) | |
Settlements | (2,839) | (573) | |
Decreases related to a lapse of applicable statute of limitations | (2,185) | (2,137) | |
Balance at the end of the period | 21,337 | $ 22,608 | $ 20,085 |
Unrecognized tax benefits including interest and penalties | 24,600 | ||
Portion of unrecognized tax benefit including interest and penalties, that if recognized, would impact effective tax rate | 16,000 | ||
Interest and penalties expense related to uncertain tax positions recognized in income tax expense | 1,000 | ||
Accrued interest and penalties, associated with unrecognized tax benefits | $ 3,200 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 12 Months Ended |
Oct. 25, 2015 | |
Stock options | |
Stock-based compensation | |
Vesting period | 4 years |
Stock option expiration period | 10 years |
Nonvested shares | Shares granted on or before September 26, 2010 | |
Stock-based compensation | |
Vesting period | 5 years |
Nonvested shares | Shares granted between September 27, 2010, and July 27, 2014 | |
Stock-based compensation | |
Vesting period | 1 year |
Nonvested shares | Minimum | Shares granted on or after July 29, 2014 | |
Stock-based compensation | |
Vesting period | 1 year |
Stock-Based Compensation (Det67
Stock-Based Compensation (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Stock-based compensation expense, along with the related income tax benefit | |||
Stock based compensation expense recognized | $ 15,717 | $ 14,393 | $ 17,596 |
Income tax benefit recognized | (5,967) | (5,469) | (6,655) |
After-tax stock-based compensation expense | $ 9,750 | $ 8,924 | $ 10,941 |
Period for recognition of unrecognized stock-based compensation expense | 2 years 7 months 6 days | ||
Stock-based compensation expense unrecognized | $ 9,300 | ||
Number of shares available for future grants | 25,100 | 26,600 | 27,900 |
Stock options | |||
Stock-based compensation | |||
Cash received from stock options exercised | $ 10,500 | $ 10,500 | $ 30,200 |
Tax benefit realized from stock options, aggregate | $ 25,600 | $ 28,400 | $ 29,400 |
Reconciliation of Stock Options | |||
Outstanding, at the beginning of the period (in shares) | 17,402 | ||
Granted (in shares) | 1,514 | ||
Exercised (in shares) | 1,716 | ||
Forfeited (in shares) | 1 | ||
Outstanding, at the end of the period (in shares) | 17,199 | 17,402 | |
Exercisable at the end of the period (in shares) | 12,899 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 24.61 | ||
Granted (in dollars per share) | 52.55 | ||
Exercised (in dollars per share) | 18.61 | ||
Forfeited (in dollars per share) | 18.71 | ||
Outstanding at the end of the period (in dollars per share) | 27.67 | $ 24.61 | |
Exercisable at end of period (in dollars per share) | $ 22.83 | ||
Weighted-Average Remaining Contractual Term | |||
Outstanding at the end of the period | 5 years | ||
Exercisable at end of period | 4 years 1 month 6 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period | $ 699,294 | ||
Exercisable at end of period | $ 586,844 | ||
Weighted-average grant date fair value of stock options granted, and the total intrinsic value of options exercised | |||
Weighted-average grant date fair value of options granted (in dollars per share) | $ 9.84 | $ 9.70 | $ 5.50 |
Intrinsic value of exercised options | $ 67,516 | $ 74,972 | $ 77,610 |
Weighted-average assumptions used to calculate fair value of each ordinary option award | |||
Risk-free interest rate (as a percent) | 2.10% | 2.50% | 1.40% |
Dividend yield (as a percent) | 1.90% | 1.80% | 2.10% |
Stock price volatility (as a percent) | 19.00% | 20.00% | 20.00% |
Expected option life | 8 years | 8 years | 8 years |
Nonvested shares | |||
Reconciliation of the nonvested shares | |||
Nonvested shares at the beginning of the period | 70 | ||
Nonvested shares granted in period | 37 | ||
Nonvested shares vested in period | 70 | ||
Nonvested shares at the end of the period | 37 | 70 | |
Weighted Average Grant Date Fair Value | |||
Nonvested shares at the beginning of the period (in dollars per share) | $ 33.58 | ||
Nonvested shares granted in period (in dollars per share) | 51.74 | $ 44.12 | $ 35.42 |
Nonvested shares vested in period (in dollars per share) | 33.58 | ||
Nonvested shares at the end of the period (in dollars per share) | $ 51.74 | $ 33.58 | |
Weighted-average grant date fair value, the total fair value of nonvested shares granted, and the fair value of shares that have vested | |||
Fair value of nonvested shares granted | $ 1,920 | $ 1,760 | $ 1,600 |
Fair value of shares vested | $ 2,347 | $ 2,085 | $ 1,824 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Oct. 25, 2015 | Oct. 25, 2015 | Oct. 26, 2014 | ||||
Methods and assumptions used to estimate the fair value of the financial assets and liabilities | ||||||
Guarantee period at issue for rate of return on fixed income funds | 1 year | |||||
Recognized right to reclaim net cash collateral | $ 2,300 | $ 2,300 | $ 11,500 | |||
Cash collateral posted | 13,700 | 13,700 | 55,600 | |||
Realized losses on closed positions | 11,400 | 11,400 | 44,100 | |||
Fair value, long-term debt | ||||||
Fair value of long-term debt (including current maturities) | 268,400 | 268,400 | 273,800 | |||
Asset Impairment Charges [Abstract] | ||||||
Goodwill impairment charge | 21,537 | |||||
Recurring basis | Fair Value | ||||||
Assets at Fair Value: | ||||||
Cash and cash equivalents | 347,239 | [1] | 347,239 | [1] | 334,174 | |
Other trading securities | 119,668 | [2] | 119,668 | [2] | 117,249 | [1] |
Commodity derivatives | 6,485 | 6,485 | 3,461 | [2] | ||
Total Assets at Fair Value | 473,392 | 473,392 | 454,884 | |||
Liabilities at Fair Value: | ||||||
Deferred compensation | 57,869 | 57,869 | 54,809 | [1] | ||
Total Liabilities at Fair Value | 57,869 | 57,869 | 54,809 | |||
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||||
Assets at Fair Value: | ||||||
Cash and cash equivalents | 347,239 | [1] | 347,239 | [1] | 334,174 | |
Other trading securities | 39,329 | [2] | 39,329 | [2] | 39,120 | [1] |
Commodity derivatives | 6,485 | 6,485 | 3,461 | [2] | ||
Total Assets at Fair Value | 393,053 | 393,053 | 376,755 | |||
Liabilities at Fair Value: | ||||||
Deferred compensation | 25,272 | 25,272 | 23,642 | [1] | ||
Total Liabilities at Fair Value | 25,272 | 25,272 | 23,642 | |||
Recurring basis | Significant Other Observable Inputs (Level 2) | ||||||
Assets at Fair Value: | ||||||
Other trading securities | 80,339 | [2] | 80,339 | [2] | 78,129 | [1] |
Total Assets at Fair Value | 80,339 | 80,339 | 78,129 | |||
Liabilities at Fair Value: | ||||||
Deferred compensation | 32,597 | 32,597 | 31,167 | [1] | ||
Total Liabilities at Fair Value | 32,597 | $ 32,597 | $ 31,167 | |||
Assets Held For Sale. | Portion of DCB | Significant Other Observable Inputs (Level 2) | ||||||
Asset Impairment Charges [Abstract] | ||||||
Goodwill impairment charge | $ 21,500 | |||||
[1] | The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested 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 that supports the fund, 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. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2. | |||||
[2] | The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal 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 therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions). |
Commitments and Contingencies69
Commitments and Contingencies (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Purchase commitments | |||
2,016 | $ 1,427,178 | ||
2,017 | 959,812 | ||
2,018 | 688,677 | ||
2,019 | 449,439 | ||
2,020 | 326,233 | ||
Later Years | 293,510 | ||
Total | 4,144,849 | ||
Purchases under contracts | 1,600,000 | $ 2,200,000 | $ 2,000,000 |
Noncancelable operating lease commitments | |||
2,016 | 11,250 | ||
2,017 | 6,041 | ||
2,018 | 4,586 | ||
2,019 | 3,545 | ||
2,020 | 3,034 | ||
Later years | 6,738 | ||
Total | 35,194 | ||
Expenses under noncancelable operating lease commitments | 22,400 | $ 21,100 | $ 21,600 |
Approximate amount of commitments to complete construction in progress at various locations | 254,300 | ||
Standby letters of credit | 44,100 | ||
Revocable standby letter of credit | 4,000 | ||
Portion of expected future cash expenditures | |||
Purchase commitments | |||
Contract value threshold | 1,000 | ||
2,016 | 518,158 | ||
2,017 | 28,212 | ||
2,018 | 27,102 | ||
2,019 | 2,794 | ||
2,020 | 1,931 | ||
Later Years | 8,866 | ||
Total | $ 587,063 | ||
Hogs and turkeys | Maximum | |||
Purchase commitments | |||
Purchase commitments, time period | 10 years | ||
Grow-out contracts | Maximum | |||
Purchase commitments | |||
Purchase commitments, time period | 25 years | ||
Corn, soybean meal and other feed | Maximum | |||
Purchase commitments | |||
Purchase commitments, time period | 3 years |
Earnings Per Share Data (Detail
Earnings Per Share Data (Details) - shares shares in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Earnings Per Share Data | |||
Basic weighted-average shares outstanding | 264,072 | 263,812 | 264,317 |
Dilutive potential common shares | 6,429 | 6,404 | 5,907 |
Diluted weighted-average shares outstanding | 270,501 | 270,216 | 270,224 |
Weighted average stock options not included in the computation of dilutive potential common shares | 500 | 400 | 400 |
Segment Reporting (Detail)
Segment Reporting (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 25, 2015USD ($) | Jul. 26, 2015USD ($) | Apr. 26, 2015USD ($) | Jan. 25, 2015USD ($) | Oct. 26, 2014USD ($) | Jul. 27, 2014USD ($) | Apr. 27, 2014USD ($) | Jan. 26, 2014USD ($) | Oct. 25, 2015USD ($)segment | Oct. 26, 2014USD ($) | Oct. 27, 2013USD ($) | |
Operating profit and other financial information | |||||||||||
Goodwill impairment charge | $ 21,537 | ||||||||||
Number of reportable business segments | segment | 5 | ||||||||||
Sales | $ 2,400,858 | $ 2,188,587 | $ 2,279,345 | $ 2,395,073 | $ 2,543,771 | $ 2,284,947 | $ 2,244,866 | $ 2,242,672 | $ 9,263,863 | $ 9,316,256 | $ 8,751,654 |
Segment Operating Profit | 1,067,320 | 931,620 | 805,989 | ||||||||
Net interest and investment expense | 10,177 | 9,468 | 7,482 | ||||||||
General corporate expense | 35,199 | 33,434 | 26,694 | ||||||||
Noncontrolling interest | 1,176 | 3,349 | 3,865 | ||||||||
EARNINGS BEFORE INCOME TAXES | 1,057,143 | 922,152 | 798,507 | ||||||||
Assets | 6,139,831 | 5,455,619 | 6,139,831 | 5,455,619 | 4,915,880 | ||||||
Additions to Property, Plant and Equipment | 144,063 | 159,138 | 106,762 | ||||||||
Depreciation and Amortization | 133,434 | 130,044 | 124,850 | ||||||||
Intersegment sales | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 141,317 | 167,422 | 140,887 | ||||||||
Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 9,263,863 | 9,316,256 | 8,751,654 | ||||||||
Segment Operating Profit | 1,101,343 | 961,705 | 828,818 | ||||||||
Intersegment elimination | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | (141,317) | (167,422) | (140,887) | ||||||||
Corporate | |||||||||||
Operating profit and other financial information | |||||||||||
Assets | 705,107 | 712,928 | 705,107 | 712,928 | 810,077 | ||||||
Additions to Property, Plant and Equipment | 15,750 | 32,291 | 8,697 | ||||||||
Depreciation and Amortization | 10,428 | 6,821 | 6,000 | ||||||||
Grocery Products | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 1,617,680 | 1,558,265 | 1,517,557 | ||||||||
Assets | 1,214,988 | 1,249,631 | 1,214,988 | 1,249,631 | 1,237,405 | ||||||
Additions to Property, Plant and Equipment | 18,104 | 31,741 | 10,100 | ||||||||
Depreciation and Amortization | 26,972 | 25,883 | 22,912 | ||||||||
Grocery Products | Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 1,617,680 | 1,558,265 | 1,517,557 | ||||||||
Segment Operating Profit | 228,582 | 195,064 | 213,646 | ||||||||
Refrigerated Foods | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 4,372,347 | 4,644,179 | 4,251,515 | ||||||||
Assets | 1,973,424 | 1,215,694 | 1,973,424 | 1,215,694 | 1,218,418 | ||||||
Additions to Property, Plant and Equipment | 54,074 | 61,183 | 58,523 | ||||||||
Depreciation and Amortization | 53,325 | 57,709 | 57,879 | ||||||||
Refrigerated Foods | Intersegment sales | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 13,058 | 23,163 | 17,359 | ||||||||
Refrigerated Foods | Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 4,385,405 | 4,667,342 | 4,268,874 | ||||||||
Segment Operating Profit | 424,968 | 338,020 | 232,692 | ||||||||
Jennie-O Turkey Store | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 1,635,776 | 1,672,452 | 1,601,868 | ||||||||
Assets | 811,693 | 857,697 | 811,693 | 857,697 | 819,343 | ||||||
Additions to Property, Plant and Equipment | 32,250 | 25,761 | 22,863 | ||||||||
Depreciation and Amortization | 28,262 | 27,091 | 26,921 | ||||||||
Jennie-O Turkey Store | Intersegment sales | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 128,195 | 144,137 | 123,420 | ||||||||
Jennie-O Turkey Store | Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 1,763,971 | 1,816,589 | 1,725,288 | ||||||||
Segment Operating Profit | 276,217 | 272,362 | 222,117 | ||||||||
Specialty Foods | |||||||||||
Operating profit and other financial information | |||||||||||
Goodwill impairment charge | 21,537 | ||||||||||
Sales | 1,103,359 | 907,120 | 932,533 | ||||||||
Assets | 988,455 | 1,013,420 | 988,455 | 1,013,420 | 469,599 | ||||||
Additions to Property, Plant and Equipment | 5,309 | 3,266 | 3,606 | ||||||||
Depreciation and Amortization | 11,075 | 8,999 | 9,232 | ||||||||
Specialty Foods | Intersegment sales | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 64 | 122 | 108 | ||||||||
Specialty Foods | Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 1,103,423 | 907,242 | 932,641 | ||||||||
Segment Operating Profit | 93,258 | 71,514 | 88,873 | ||||||||
International & Other | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 534,701 | 534,240 | 448,181 | ||||||||
Assets | $ 446,164 | $ 406,249 | 446,164 | 406,249 | 361,038 | ||||||
Additions to Property, Plant and Equipment | 18,576 | 4,896 | 2,973 | ||||||||
Depreciation and Amortization | 3,372 | 3,541 | 1,906 | ||||||||
International & Other | Operating segment | |||||||||||
Operating profit and other financial information | |||||||||||
Sales | 534,701 | 534,240 | 448,181 | ||||||||
Segment Operating Profit | 78,318 | $ 84,745 | $ 71,490 | ||||||||
Assets Held For Sale. | Portion of DCB | Specialty Foods | |||||||||||
Operating profit and other financial information | |||||||||||
Goodwill impairment charge | $ 21,500 |
Segment Reporting (Details 2)
Segment Reporting (Details 2) - Revenues | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Percentage of revenue by classes of products | |||
Percentage of total revenues | 100.00% | 100.00% | 100.00% |
Perishable | |||
Percentage of revenue by classes of products | |||
Percentage of total revenues | 53.00% | 54.50% | 53.30% |
Poultry | |||
Percentage of revenue by classes of products | |||
Percentage of total revenues | 18.60% | 18.40% | 18.80% |
Shelf-stable | |||
Percentage of revenue by classes of products | |||
Percentage of total revenues | 18.40% | 19.00% | 19.00% |
Miscellaneous | |||
Percentage of revenue by classes of products | |||
Percentage of total revenues | 10.00% | 8.10% | 8.90% |
Segment Reporting (Details 3)
Segment Reporting (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 25, 2015 | Jul. 26, 2015 | Apr. 26, 2015 | Jan. 25, 2015 | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Revenues attributable to U.S. and Foreign countries | |||||||||||
Revenue, Net | $ 2,400,858 | $ 2,188,587 | $ 2,279,345 | $ 2,395,073 | $ 2,543,771 | $ 2,284,947 | $ 2,244,866 | $ 2,242,672 | $ 9,263,863 | $ 9,316,256 | $ 8,751,654 |
United States | |||||||||||
Revenues attributable to U.S. and Foreign countries | |||||||||||
Revenue, Net | 8,721,722 | 8,708,042 | 8,193,730 | ||||||||
Foreign | |||||||||||
Revenues attributable to U.S. and Foreign countries | |||||||||||
Revenue, Net | $ 542,141 | $ 608,214 | $ 557,924 |
Segment Reporting (Details 4)
Segment Reporting (Details 4) - Revenues - USD ($) $ in Millions | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Revenues from major customer | |||
Concentration risk (as a percent) | 100.00% | 100.00% | 100.00% |
Customer concentration | Wal-Mart Stores | |||
Revenues from major customer | |||
Gross sales, less returns and allowances | $ 1,430 | $ 1,430 | |
Concentration risk (as a percent) | 13.90% | 14.10% |
Quarterly Results of Operatio75
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 25, 2015 | Jul. 26, 2015 | Apr. 26, 2015 | Jan. 25, 2015 | Oct. 26, 2014 | Jul. 27, 2014 | Apr. 27, 2014 | Jan. 26, 2014 | Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Quarterly Results of Operations (Unaudited) | |||||||||||
Net sales | $ 2,400,858 | $ 2,188,587 | $ 2,279,345 | $ 2,395,073 | $ 2,543,771 | $ 2,284,947 | $ 2,244,866 | $ 2,242,672 | $ 9,263,863 | $ 9,316,256 | $ 8,751,654 |
Gross Profit | 495,030 | 409,390 | 459,556 | 444,605 | 423,584 | 363,999 | 378,758 | 398,642 | 1,808,581 | 1,564,983 | 1,412,816 |
Net earnings | 187,443 | 146,956 | 180,435 | 172,430 | 171,848 | 139,014 | 140,706 | 154,458 | 687,264 | 606,026 | 530,076 |
Net Earnings Attributable to Hormel Foods Corporation | $ 187,231 | $ 146,938 | $ 180,201 | $ 171,718 | $ 171,264 | $ 137,975 | $ 140,090 | $ 153,348 | $ 686,088 | $ 602,677 | $ 526,211 |
Basic Earnings Per Share (in dollars per share) | $ 0.71 | $ 0.56 | $ 0.68 | $ 0.65 | $ 0.65 | $ 0.52 | $ 0.53 | $ 0.58 | $ 2.60 | $ 2.28 | $ 1.99 |
Diluted Earnings Per Share (in dollars per share) | $ 0.69 | $ 0.54 | $ 0.67 | $ 0.64 | $ 0.63 | $ 0.51 | $ 0.52 | $ 0.57 | $ 2.54 | $ 2.23 | $ 1.95 |
SCHEDULE II - VALUATION AND Q76
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 25, 2015 | Oct. 26, 2014 | Oct. 27, 2013 | |
Change in valuation and qualifying accounts and reserves | |||
Balance at Beginning of Period | $ 4,050 | $ 4,000 | $ 4,000 |
Additions/(Benefits) Charged to Costs and Expenses | (25) | 4,076 | 476 |
Additions/(Benefits) Charged to Other Accounts Describe | 36 | 50 | 0 |
Deductions-Describe, Uncollectible accounts written off | 52 | 4,152 | 497 |
Deductions-Describe, Recoveries on accounts previously written off | (77) | (76) | (21) |
Balance at End of Period | $ 4,086 | $ 4,050 | $ 4,000 |