10-Q 1 hrl-20220501.htm 10-Q hrl-20220501
0000048465false10/302022Q2P2YP7Y1200000484652021-11-012022-05-010000048465us-gaap:CommonStockMember2022-05-29xbrli:shares0000048465us-gaap:NonvotingCommonStockMember2022-05-2900000484652022-01-312022-05-01iso4217:USD00000484652021-01-252021-04-2500000484652020-10-262021-04-25iso4217:USDxbrli:shares00000484652022-05-0100000484652021-10-310000048465us-gaap:NonvotingCommonStockMember2022-05-010000048465us-gaap:NonvotingCommonStockMember2021-10-310000048465us-gaap:CommonStockMember2021-10-310000048465us-gaap:CommonStockMember2022-05-010000048465us-gaap:CommonStockMember2021-01-240000048465us-gaap:TreasuryStockCommonMember2021-01-240000048465us-gaap:AdditionalPaidInCapitalMember2021-01-240000048465us-gaap:RetainedEarningsMember2021-01-240000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-240000048465us-gaap:NoncontrollingInterestMember2021-01-2400000484652021-01-240000048465us-gaap:RetainedEarningsMember2021-01-252021-04-250000048465us-gaap:NoncontrollingInterestMember2021-01-252021-04-250000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-252021-04-250000048465us-gaap:TreasuryStockCommonMember2021-01-252021-04-250000048465us-gaap:CommonStockMember2021-01-252021-04-250000048465us-gaap:AdditionalPaidInCapitalMember2021-01-252021-04-250000048465us-gaap:CommonStockMember2021-04-250000048465us-gaap:TreasuryStockCommonMember2021-04-250000048465us-gaap:AdditionalPaidInCapitalMember2021-04-250000048465us-gaap:RetainedEarningsMember2021-04-250000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-250000048465us-gaap:NoncontrollingInterestMember2021-04-2500000484652021-04-250000048465us-gaap:CommonStockMember2022-01-300000048465us-gaap:TreasuryStockCommonMember2022-01-300000048465us-gaap:AdditionalPaidInCapitalMember2022-01-300000048465us-gaap:RetainedEarningsMember2022-01-300000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-300000048465us-gaap:NoncontrollingInterestMember2022-01-3000000484652022-01-300000048465us-gaap:RetainedEarningsMember2022-01-312022-05-010000048465us-gaap:NoncontrollingInterestMember2022-01-312022-05-010000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-312022-05-010000048465us-gaap:CommonStockMember2022-01-312022-05-010000048465us-gaap:AdditionalPaidInCapitalMember2022-01-312022-05-010000048465us-gaap:CommonStockMember2022-05-010000048465us-gaap:TreasuryStockCommonMember2022-05-010000048465us-gaap:AdditionalPaidInCapitalMember2022-05-010000048465us-gaap:RetainedEarningsMember2022-05-010000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-05-010000048465us-gaap:NoncontrollingInterestMember2022-05-010000048465us-gaap:CommonStockMember2020-10-250000048465us-gaap:TreasuryStockCommonMember2020-10-250000048465us-gaap:AdditionalPaidInCapitalMember2020-10-250000048465us-gaap:RetainedEarningsMember2020-10-250000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-250000048465us-gaap:NoncontrollingInterestMember2020-10-2500000484652020-10-250000048465us-gaap:RetainedEarningsMember2020-10-262021-04-250000048465us-gaap:NoncontrollingInterestMember2020-10-262021-04-250000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-10-262021-04-250000048465us-gaap:TreasuryStockCommonMember2020-10-262021-04-250000048465us-gaap:CommonStockMember2020-10-262021-04-250000048465us-gaap:AdditionalPaidInCapitalMember2020-10-262021-04-250000048465us-gaap:CommonStockMember2021-10-310000048465us-gaap:TreasuryStockCommonMember2021-10-310000048465us-gaap:AdditionalPaidInCapitalMember2021-10-310000048465us-gaap:RetainedEarningsMember2021-10-310000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-310000048465us-gaap:NoncontrollingInterestMember2021-10-310000048465us-gaap:RetainedEarningsMember2021-11-012022-05-010000048465us-gaap:NoncontrollingInterestMember2021-11-012022-05-010000048465us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-11-012022-05-010000048465us-gaap:CommonStockMember2021-11-012022-05-010000048465us-gaap:AdditionalPaidInCapitalMember2021-11-012022-05-010000048465hrl:PlantersSnackNutsBusinessMember2021-06-072021-06-070000048465hrl:PlantersSnackNutsBusinessMember2022-01-312022-05-010000048465hrl:PlantersSnackNutsBusinessMember2021-11-012022-05-010000048465hrl:GroceryProductsMember2022-01-300000048465hrl:RefrigeratedFoodsMember2022-01-300000048465hrl:JennieOTurkeyStoreMember2022-01-300000048465us-gaap:AllOtherSegmentsMember2022-01-300000048465hrl:GroceryProductsMember2022-01-312022-05-010000048465hrl:RefrigeratedFoodsMember2022-01-312022-05-010000048465hrl:JennieOTurkeyStoreMember2022-01-312022-05-010000048465us-gaap:AllOtherSegmentsMember2022-01-312022-05-010000048465hrl:GroceryProductsMember2022-05-010000048465hrl:RefrigeratedFoodsMember2022-05-010000048465hrl:JennieOTurkeyStoreMember2022-05-010000048465us-gaap:AllOtherSegmentsMember2022-05-010000048465hrl:GroceryProductsMember2021-10-310000048465hrl:RefrigeratedFoodsMember2021-10-310000048465hrl:JennieOTurkeyStoreMember2021-10-310000048465us-gaap:AllOtherSegmentsMember2021-10-310000048465hrl:GroceryProductsMember2021-11-012022-05-010000048465hrl:RefrigeratedFoodsMember2021-11-012022-05-010000048465hrl:JennieOTurkeyStoreMember2021-11-012022-05-010000048465us-gaap:AllOtherSegmentsMember2021-11-012022-05-010000048465hrl:BrandsTrademarksAndTradeNamesMember2022-05-010000048465hrl:BrandsTrademarksAndTradeNamesMember2021-10-310000048465us-gaap:OtherIntangibleAssetsMember2022-05-010000048465us-gaap:OtherIntangibleAssetsMember2021-10-310000048465hrl:CurrencyTranslationMember2022-05-010000048465hrl:CurrencyTranslationMember2021-10-310000048465hrl:CustomerListsOrRelationshipsMember2022-05-010000048465hrl:CustomerListsOrRelationshipsMember2021-10-310000048465us-gaap:OtherIntangibleAssetsMember2022-05-010000048465us-gaap:OtherIntangibleAssetsMember2021-10-310000048465us-gaap:TrademarksAndTradeNamesMember2022-05-010000048465us-gaap:TrademarksAndTradeNamesMember2021-10-310000048465hrl:CurrencyTranslationMember2022-05-010000048465hrl:CurrencyTranslationMember2021-10-310000048465hrl:MegaMexFoodsLLCMember2022-05-01xbrli:pure0000048465hrl:MegaMexFoodsLLCMember2021-10-310000048465srt:MinimumMember2021-10-310000048465srt:MinimumMember2022-05-010000048465srt:MaximumMember2022-05-010000048465srt:MaximumMember2021-10-310000048465hrl:OtherJointVenturesMember2022-05-010000048465hrl:OtherJointVenturesMember2021-10-310000048465hrl:MegaMexFoodsLLCMember2022-01-312022-05-010000048465hrl:MegaMexFoodsLLCMember2021-01-252021-04-250000048465hrl:MegaMexFoodsLLCMember2021-11-012022-05-010000048465hrl:MegaMexFoodsLLCMember2020-10-262021-04-250000048465hrl:OtherJointVenturesMember2022-01-312022-05-010000048465hrl:OtherJointVenturesMember2021-01-252021-04-250000048465hrl:OtherJointVenturesMember2021-11-012022-05-010000048465hrl:OtherJointVenturesMember2020-10-262021-04-250000048465hrl:MegaMexFoodsLLCMember2009-10-260000048465hrl:CommodityContractCornMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-04-25hrl:derivative0000048465us-gaap:CashFlowHedgingMembersrt:MinimumMemberus-gaap:TreasuryLockMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-04-262021-07-250000048465us-gaap:CashFlowHedgingMemberus-gaap:TreasuryLockMembersrt:MaximumMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-04-262021-07-250000048465us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-300000048465us-gaap:CashFlowHedgingMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMember2021-11-012022-05-01utr:bu0000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMember2020-10-262021-10-310000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractHogsMember2021-11-012022-05-01utr:lb0000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractHogsMember2020-10-262021-10-310000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:OtherCurrentAssetsMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-10-310000048465us-gaap:CashFlowHedgingMemberhrl:InterestAndDividendPayableCurrentMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-05-010000048465us-gaap:CashFlowHedgingMemberhrl:InterestAndDividendPayableCurrentMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-10-310000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:AccountsPayableMember2022-05-010000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:AccountsPayableMember2021-10-310000048465hrl:LongTermDebtExcludingCurrentMaturitiesMemberus-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMember2022-05-010000048465hrl:LongTermDebtExcludingCurrentMaturitiesMemberus-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMember2021-10-310000048465us-gaap:CommodityContractMember2021-11-012022-05-010000048465us-gaap:InterestRateContractMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2022-01-312022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2021-01-252021-04-250000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2022-01-312022-05-010000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2021-01-252021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2020-10-262021-04-250000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CostOfSalesMember2020-10-262021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:CommodityContractMemberus-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:CommodityContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:CashFlowHedgingMemberus-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465us-gaap:DesignatedAsHedgingInstrumentMember2021-01-252021-04-250000048465us-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-11-012022-05-010000048465us-gaap:InterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-10-262021-04-250000048465us-gaap:CashFlowHedgingMemberhrl:CommodityContractCornMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-01-312022-05-010000048465hrl:CommodityContractHogsMember2021-11-012022-05-010000048465us-gaap:PensionPlansDefinedBenefitMember2022-01-312022-05-010000048465us-gaap:PensionPlansDefinedBenefitMember2021-01-252021-04-250000048465us-gaap:PensionPlansDefinedBenefitMember2021-11-012022-05-010000048465us-gaap:PensionPlansDefinedBenefitMember2020-10-262021-04-250000048465us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-312022-05-010000048465us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-252021-04-250000048465us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-11-012022-05-010000048465us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2020-10-262021-04-250000048465us-gaap:AccumulatedTranslationAdjustmentMember2022-01-300000048465us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-300000048465us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-300000048465us-gaap:AccumulatedTranslationAdjustmentMember2022-01-312022-05-010000048465us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-312022-05-010000048465us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-312022-05-010000048465us-gaap:AccumulatedTranslationAdjustmentMember2022-05-010000048465us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-05-010000048465us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-05-010000048465us-gaap:AccumulatedTranslationAdjustmentMember2021-10-310000048465us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-10-310000048465us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-10-310000048465us-gaap:AccumulatedTranslationAdjustmentMember2021-11-012022-05-010000048465us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-11-012022-05-010000048465us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-11-012022-05-010000048465us-gaap:FairValueMeasurementsRecurringMember2022-05-010000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-05-010000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-05-010000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-05-010000048465us-gaap:FairValueMeasurementsRecurringMember2021-10-310000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-10-310000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-10-310000048465us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-10-310000048465us-gaap:TrustForBenefitOfEmployeesMember2022-01-312022-05-010000048465us-gaap:TrustForBenefitOfEmployeesMember2021-11-012022-05-010000048465us-gaap:TrustForBenefitOfEmployeesMember2021-01-252021-04-250000048465us-gaap:TrustForBenefitOfEmployeesMember2020-10-262021-04-250000048465hrl:UnsecuredSeniorNotesDueJune2051Memberus-gaap:SeniorNotesMember2022-05-010000048465hrl:UnsecuredSeniorNotesDueJune2051Memberus-gaap:SeniorNotesMember2021-10-310000048465hrl:UnsecuredSeniorNotesDueJune2030Memberus-gaap:SeniorNotesMember2022-05-010000048465hrl:UnsecuredSeniorNotesDueJune2030Memberus-gaap:SeniorNotesMember2021-10-310000048465us-gaap:SeniorNotesMemberhrl:UnsecuredSeniorNotesDueJune2028Member2022-05-010000048465us-gaap:SeniorNotesMemberhrl:UnsecuredSeniorNotesDueJune2028Member2021-10-310000048465hrl:UnsecuredSeniorNotesDueJune2024Memberus-gaap:SeniorNotesMember2022-05-010000048465hrl:UnsecuredSeniorNotesDueJune2024Memberus-gaap:SeniorNotesMember2021-10-310000048465us-gaap:SeniorNotesMember2022-05-010000048465us-gaap:SeniorNotesMember2021-10-310000048465hrl:UnsecuredSeniorNotesDueJune2030Memberus-gaap:SeniorNotesMember2020-06-110000048465hrl:UnsecuredSeniorNotesDueJune2030Memberus-gaap:SeniorNotesMember2021-06-112021-06-110000048465us-gaap:SeniorNotesMemberhrl:UnsecuredSeniorNotesDueApril2021Member2021-04-012021-04-300000048465hrl:UnsecuredSeniorNotesDueJune2024Memberus-gaap:SeniorNotesMember2021-06-030000048465us-gaap:SeniorNotesMemberhrl:UnsecuredSeniorNotesDueJune2028Member2021-06-030000048465hrl:UnsecuredSeniorNotesDueJune2051Memberus-gaap:SeniorNotesMember2021-06-030000048465hrl:UnsecuredSeniorNotesDueJune2024Memberus-gaap:SeniorNotesMember2021-06-032021-06-030000048465us-gaap:SeniorNotesMemberhrl:UnsecuredSeniorNotesDueJune2028Member2021-06-032021-06-030000048465hrl:UnsecuredSeniorNotesDueJune2051Memberus-gaap:SeniorNotesMember2021-06-032021-06-030000048465us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-060000048465srt:MinimumMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465srt:MaximumMemberus-gaap:BaseRateMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465srt:MinimumMemberus-gaap:EurodollarMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465srt:MaximumMemberus-gaap:EurodollarMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-05-062021-05-060000048465us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-05-010000048465us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-10-31hrl:segment0000048465hrl:GroceryProductsMember2021-01-252021-04-250000048465hrl:GroceryProductsMember2020-10-262021-04-250000048465hrl:RefrigeratedFoodsMember2021-01-252021-04-250000048465hrl:RefrigeratedFoodsMember2020-10-262021-04-250000048465hrl:JennieOTurkeyStoreMember2021-01-252021-04-250000048465hrl:JennieOTurkeyStoreMember2020-10-262021-04-250000048465us-gaap:AllOtherSegmentsMember2021-01-252021-04-250000048465us-gaap:AllOtherSegmentsMember2020-10-262021-04-250000048465hrl:GroceryProductsMemberus-gaap:IntersegmentEliminationMember2022-01-312022-05-010000048465hrl:GroceryProductsMemberus-gaap:IntersegmentEliminationMember2021-01-252021-04-250000048465hrl:GroceryProductsMemberus-gaap:IntersegmentEliminationMember2021-11-012022-05-010000048465hrl:GroceryProductsMemberus-gaap:IntersegmentEliminationMember2020-10-262021-04-250000048465hrl:RefrigeratedFoodsMemberus-gaap:IntersegmentEliminationMember2022-01-312022-05-010000048465hrl:RefrigeratedFoodsMemberus-gaap:IntersegmentEliminationMember2021-01-252021-04-250000048465hrl:RefrigeratedFoodsMemberus-gaap:IntersegmentEliminationMember2021-11-012022-05-010000048465hrl:RefrigeratedFoodsMemberus-gaap:IntersegmentEliminationMember2020-10-262021-04-250000048465us-gaap:IntersegmentEliminationMemberhrl:JennieOTurkeyStoreMember2022-01-312022-05-010000048465us-gaap:IntersegmentEliminationMemberhrl:JennieOTurkeyStoreMember2021-01-252021-04-250000048465us-gaap:IntersegmentEliminationMemberhrl:JennieOTurkeyStoreMember2021-11-012022-05-010000048465us-gaap:IntersegmentEliminationMemberhrl:JennieOTurkeyStoreMember2020-10-262021-04-250000048465us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2022-01-312022-05-010000048465us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2021-01-252021-04-250000048465us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2021-11-012022-05-010000048465us-gaap:AllOtherSegmentsMemberus-gaap:IntersegmentEliminationMember2020-10-262021-04-250000048465us-gaap:IntersegmentEliminationMember2022-01-312022-05-010000048465us-gaap:IntersegmentEliminationMember2021-01-252021-04-250000048465us-gaap:IntersegmentEliminationMember2021-11-012022-05-010000048465us-gaap:IntersegmentEliminationMember2020-10-262021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:GroceryProductsMember2022-01-312022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:GroceryProductsMember2021-01-252021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:GroceryProductsMember2021-11-012022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:GroceryProductsMember2020-10-262021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:RefrigeratedFoodsMember2022-01-312022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:RefrigeratedFoodsMember2021-01-252021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:RefrigeratedFoodsMember2021-11-012022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:RefrigeratedFoodsMember2020-10-262021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:JennieOTurkeyStoreMember2022-01-312022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:JennieOTurkeyStoreMember2021-01-252021-04-250000048465us-gaap:OperatingSegmentsMemberhrl:JennieOTurkeyStoreMember2021-11-012022-05-010000048465us-gaap:OperatingSegmentsMemberhrl:JennieOTurkeyStoreMember2020-10-262021-04-250000048465us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2022-01-312022-05-010000048465us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2021-01-252021-04-250000048465us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2021-11-012022-05-010000048465us-gaap:AllOtherSegmentsMemberus-gaap:OperatingSegmentsMember2020-10-262021-04-250000048465us-gaap:OperatingSegmentsMember2022-01-312022-05-010000048465us-gaap:OperatingSegmentsMember2021-01-252021-04-250000048465us-gaap:OperatingSegmentsMember2021-11-012022-05-010000048465us-gaap:OperatingSegmentsMember2020-10-262021-04-250000048465hrl:U.S.RetailMember2022-01-312022-05-010000048465hrl:U.S.RetailMember2021-01-252021-04-250000048465hrl:U.S.RetailMember2021-11-012022-05-010000048465hrl:U.S.RetailMember2020-10-262021-04-250000048465hrl:U.S.FoodserviceMember2022-01-312022-05-010000048465hrl:U.S.FoodserviceMember2021-01-252021-04-250000048465hrl:U.S.FoodserviceMember2021-11-012022-05-010000048465hrl:U.S.FoodserviceMember2020-10-262021-04-250000048465hrl:InternationalMember2022-01-312022-05-010000048465hrl:InternationalMember2021-01-252021-04-250000048465hrl:InternationalMember2021-11-012022-05-010000048465hrl:InternationalMember2020-10-262021-04-250000048465hrl:PerishableMeatMember2022-01-312022-05-010000048465hrl:PerishableMeatMember2021-01-252021-04-250000048465hrl:PerishableMeatMember2021-11-012022-05-010000048465hrl:PerishableMeatMember2020-10-262021-04-250000048465hrl:ShelfStableMember2022-01-312022-05-010000048465hrl:ShelfStableMember2021-01-252021-04-250000048465hrl:ShelfStableMember2021-11-012022-05-010000048465hrl:ShelfStableMember2020-10-262021-04-250000048465hrl:PoultryMember2022-01-312022-05-010000048465hrl:PoultryMember2021-01-252021-04-250000048465hrl:PoultryMember2021-11-012022-05-010000048465hrl:PoultryMember2020-10-262021-04-250000048465hrl:OtherProductsMember2022-01-312022-05-010000048465hrl:OtherProductsMember2021-01-252021-04-250000048465hrl:OtherProductsMember2021-11-012022-05-010000048465hrl:OtherProductsMember2020-10-262021-04-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 1, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________________________ to ________________________________________
Commission File Number: 1-2402
HORMEL FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
41-0319970
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1 Hormel Place
Austin, MN  55912
(Address of Principal Executive Office, including zip code)

(507) 437-5611
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock
$0.01465 par value
HRL
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes                 No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).       Yes                 No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class
Outstanding at May 29, 2022
Common Stock$.01465par value546,055,595 
Common Stock Non-Voting$.01par value0 


TABLE OF CONTENTS


2

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
Unaudited
 Quarter EndedSix Months Ended
 May 1, 2022April 25, 2021May 1, 2022April 25, 2021
Net Sales$3,096,559 $2,606,621 $6,140,917 $5,067,768 
Cost of Products Sold2,543,088 2,130,314 5,048,697 4,141,291 
Gross Profit553,471 476,307 1,092,220 926,477 
Selling, General and Administrative
224,659 199,966 450,631 396,346 
Equity in Earnings of Affiliates
5,916 13,074 12,814 27,302 
Operating Income334,728 289,415 654,402 557,433 
Other Income and Expense:
Interest and Investment Income1,799 10,992 5,668 28,284 
Interest Expense14,658 7,788 29,298 16,015 
Earnings Before Income Taxes321,868 292,620 630,772 569,702 
Provision for Income Taxes
60,189 64,699 129,383 119,386 
Net Earnings261,679 227,921 501,389 450,316 
Less: Net Earnings (Loss) Attributable to Noncontrolling Interest
62 21 201 133 
Net Earnings Attributable to Hormel Foods Corporation
$261,617 $227,901 $501,188 $450,184 
Net Earnings Per Share
Basic$0.48 $0.42 $0.92 $0.83 
Diluted$0.48 $0.42 $0.91 $0.82 
Weighted-average Shares Outstanding
Basic544,702 540,195 543,691 540,054 
Diluted550,036 547,536 548,982 547,490 
 

See Notes to Consolidated Financial Statements


3

HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
In thousands
Unaudited
 Quarter EndedSix Months Ended
 May 1, 2022April 25, 2021May 1, 2022April 25, 2021
Net Earnings$261,679 $227,921 $501,389 $450,316 
Other Comprehensive Income (Loss), Net of Tax:
Foreign Currency Translation14,071 (7,025)14,996 10,863 
Pension and Other Benefits2,603 4,199 5,138 8,399 
Deferred Hedging27,701 38,029 36,105 50,628 
Total Other Comprehensive Income (Loss)
44,375 35,203 56,239 69,890 
Comprehensive Income306,054 263,124 557,628 520,206 
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest
77 (16)335 401 
Comprehensive Income Attributable to Hormel Foods Corporation
$305,977 $263,140 $557,293 $519,805 
 
See Notes to Consolidated Financial Statements


4

CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
In thousands, except share and per share amounts
Unaudited
May 1, 2022October 31, 2021
Assets  
Current Assets  
Cash and Cash Equivalents$861,719 $613,530 
Short-term Marketable Securities23,478 21,162 
Accounts Receivable (Net of Allowance for Doubtful Accounts of
   $3,500 at May 1, 2022, and $4,033 at October 31, 2021)
795,292 895,719 
Inventories1,597,001 1,369,198 
Taxes Receivable7,763 8,293 
Prepaid Expenses 31,478 24,971 
Other Current Assets56,826 14,943 
Total Current Assets3,373,557 2,947,816 
Goodwill
4,935,832 4,929,102 
Other Intangibles
1,814,501 1,822,273 
Pension Assets
303,803 289,096 
Investments In and Receivables from Affiliates275,849 299,019 
Other Assets
295,127 299,907 
Property, Plant and Equipment
Land75,053 72,133 
Buildings1,349,098 1,332,881 
Equipment2,486,841 2,415,063 
Construction in Progress316,840 316,455 
Less: Allowance for Depreciation(2,104,237)(2,027,414)
Net Property, Plant and Equipment2,123,595 2,109,117 
Total Assets$13,122,263 $12,696,329 
 
See Notes to Consolidated Financial Statements












5

HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
In thousands, except share and per share amounts
Unaudited
May 1, 2022October 31, 2021
Liabilities and Shareholders' Investment  
Current Liabilities  
Accounts Payable and Accrued Expenses$826,729 $844,502 
Accrued Marketing Expenses126,077 114,746 
Employee Related Expenses244,664 269,327 
Interest and Dividends Payable181,782 154,803 
Taxes Payable93,324 23,520 
Current Maturities of Long-term Debt8,084 8,756 
Total Current Liabilities1,480,659 1,415,654 
Long-term Debt Less Current Maturities3,294,101 3,315,147 
Pension and Post-retirement Benefits550,047 546,362 
Other Long-term Liabilities160,401 162,623 
Deferred Income Taxes291,841 278,183 
Shareholders' Investment
Preferred Stock, Par Value $0.01 a Share–
  
Authorized 160,000,000 Shares: Issued–None
Common Stock, Non-voting, Par Value $0.01 a Share–
  
Authorized 400,000,000 Shares: Issued–None
Common Stock, Par Value $0.01465 a Share–
8,000 7,946 
Authorized 1,600,000,000 Shares:
Shares Issued as of May 1, 2022: 546,052,763
Shares Issued as of October 31, 2021: 542,412,403
Additional Paid-in Capital451,836 360,336 
Accumulated Other Comprehensive Loss(221,164)(277,269)
Retained Earnings7,100,730 6,881,870 
Hormel Foods Corporation Shareholders' Investment7,339,402 6,972,883 
Noncontrolling Interest5,812 5,478 
Total Shareholders' Investment7,345,214 6,978,360 
Total Liabilities and Shareholders' Investment$13,122,263 $12,696,329 
 
See Notes to Consolidated Financial Statements

6

HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT
In thousands, except per share amounts
Unaudited
Quarter Ended April 25, 2021
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interest
Total
Shareholders’
Investment
SharesAmountSharesAmount
Balance at January 24, 2021
539,796 $7,908  $ $298,988 $6,604,506 $(360,869)$5,195 $6,555,727 
Net Earnings
227,901 21 227,921 
Other Comprehensive Income (Loss)
35,240 (37)35,203 
Purchases of Common Stock
(18)(816)(816)
Stock-based Compensation Expense
381 8,053 8,054 
Exercise of Stock Options/Restricted Shares
595 9 12,017 12,026 
Shares Retired
(18) 18 816 (10)(806) 
Declared Cash Dividends – $0.2450 per Share
(132,265)(132,265)
Balance at April 25, 2021540,411 $7,917  $ $319,048 $6,699,336 $(325,629)$5,178 $6,705,851 
Quarter Ended May 1, 2022
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interest
Total
Shareholders’
Investment
SharesAmountSharesAmount
Balance at January 30, 2022
543,012 $7,955  $ $377,708 $6,980,451 $(265,524)$5,736 $7,106,325 
Net Earnings
261,617 62 261,679 
Other Comprehensive Income (Loss)
44,360 15 44,375 
Stock-based Compensation Expense
37 1 10,039 10,040 
Exercise of Stock Options/Restricted Shares
3,004 44 64,089 64,133 
Declared Cash Dividends – $0.2600 per Share
(141,338)(141,338)
Balance at May 1, 2022546,053 $8,000  $ $451,836 $7,100,730 $(221,164)$5,812 $7,345,214 
 

7

Six Months Ended April 25, 2021
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interest
Total
Shareholders’
Investment
SharesAmountSharesAmount
Balance at October 25, 2020539,887 $7,909  $ $289,554 $6,523,335 $(395,250)$4,778 $6,430,326 
Net Earnings450,184 133 450,316 
Other Comprehensive Income (Loss)69,622 268 69,890 
Purchases of Common Stock(217)(9,653)(9,653)
Stock-based Compensation Expense381 15,834 15,834 
Exercise of Stock Options/Restricted Shares703 11 13,780 13,791 
Shares Retired(217)(3)217 9,653 (120)(9,530) 
Declared Cash Dividends – $0.4900 per Share
(264,653)(264,653)
Balance at April 25, 2021540,411 $7,917  $ $319,048 $6,699,336 $(325,629)$5,178 $6,705,851 
Six Months Ended May 1, 2022
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Non-
controlling
Interest
Total
Shareholders’
Investment
SharesAmountSharesAmount
Balance at October 31, 2021542,412 $7,946  $ $360,336 $6,881,870 $(277,269)$5,478 $6,978,360 
Net Earnings501,188 201 501,389 
Other Comprehensive Income (Loss)56,105 134 56,239 
Stock-based Compensation Expense371 16,367 16,368 
Exercise of Stock Options/Restricted Shares3,603 53 75,133 75,186 
Declared Cash Dividends – $0.5200 per Share
(282,328)(282,328)
Balance at May 1, 2022546,053 $8,000  $ $451,836 $7,100,730 $(221,164)$5,812 $7,345,214 

See Notes to Consolidated Financial Statements


8

HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
In thousands
Unaudited
Six Months Ended
May 1, 2022April 25, 2021
Operating Activities  
Net Earnings$501,389 $450,316 
Adjustments to Reconcile to Net Cash Provided by Operating Activities:
Depreciation and Amortization126,436 103,307 
Equity in Earnings of Affiliates(12,814)(27,302)
Distributions Received from Equity Method Investees30,539 22,500 
Provision for Deferred Income Taxes(521)2,007 
Loss (Gain) on Property/Equipment Sales and Plant Facilities2,192 1,508 
Non-cash Investment Activities14,005 (16,526)
Stock-based Compensation Expense16,368 15,834 
Changes in Operating Assets and Liabilities, Net of Acquisitions:
Decrease (Increase) in Accounts Receivable109,297 (19,823)
Decrease (Increase) in Inventories(226,422)(154,647)
Decrease (Increase) in Prepaid Expenses and Other Current Assets943 45,848 
Increase (Decrease) in Pension and Post-retirement Benefits(4,508)2,375 
Increase (Decrease) in Accounts Payable and Accrued Expenses(46,331)(103,438)
Increase (Decrease) in Net Income Taxes Payable66,538 39,301 
Net Cash Provided by (Used in) Operating Activities577,111 361,259 
Investing Activities
Net (Purchase) Sale of Securities(4,367)(722)
Purchases of Property and Equipment(128,213)(85,544)
Proceeds from Sales of Property and Equipment434 1,653 
Decrease (Increase) in Investments, Equity in Affiliates, and Other Assets6,265 (3,599)
Proceeds from Company-owned Life Insurance70 956 
Net Cash Provided by (Used in) Investing Activities(125,811)(87,256)
Financing Activities
Repayments of Long-term Debt and Finance Leases(5,024)(254,360)
Dividends Paid on Common Stock(274,063)(257,787)
Share Repurchase (9,653)
Proceeds from Exercise of Stock Options75,086 13,340 
Net Cash Provided by (Used in) Financing Activities(204,001)(508,459)
Effect of Exchange Rate Changes on Cash890 4,680 
Increase (Decrease) in Cash and Cash Equivalents248,189 (229,776)
Cash and Cash Equivalents at Beginning of Year613,530 1,714,309 
Cash and Cash Equivalents at End of Quarter$861,719 $1,484,533 

See Notes to Consolidated Financial Statements

9

HORMEL FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
 
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include certain information and footnotes required by generally accepted accounting principles (U.S. GAAP) for comprehensive financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year.

These statements should be reviewed in conjunction with the consolidated financial statements and associated notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The significant accounting policies used in preparing these consolidated financial statements are consistent with those described in Note A - Summary of Significant Accounting Policies to the consolidated financial statements in the Form 10-K with the exception of new requirements adopted in the first quarter of fiscal 2022. The Company has considered the impact of COVID-19 and determined there have been no material changes in the Company’s significant accounting policies, including estimates and assumptions, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 31, 2021.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal 2022 consists of 52 weeks. Fiscal 2021 consisted of 53 weeks with the additional week occurring in the fourth quarter.

Rounding: Certain amounts in the Consolidated Financial Statements and associated notes may not foot due to rounding. All percentages have been calculated using unrounded amounts.

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

Accounting Changes and Recent Accounting Pronouncements:
New Accounting Pronouncements Adopted in Current Fiscal Year 

In December 2019, the Financial Accounting Standards Board (FASB) issued ASU 2019-12, Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740). The updated guidance simplifies the accounting for income taxes by removing certain exceptions in Topic 740 and clarifying and amending existing guidance. The amendments are effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2022 and adoption did not have a material impact on its consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848). The guidance provides optional expedients and exceptions to account for contracts, hedging relationships, and other transactions that reference London Interbank Referenced Rate (LIBOR) or another reference rate expected to be discontinued. The optional guidance can be applied from March 12, 2020 through December 31, 2022. The Company currently holds an interest rate swap which uses LIBOR as the benchmark interest rate. When LIBOR ceases to be published in June 2023, the benchmark interest rate of the swap will change to Secured Overnight Financing Rate (SOFR) plus a spread adjustment. The Company does not expect adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

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


NOTE B - ACQUISITIONS AND DIVESTITURES
 
Acquisitions: On June 7, 2021, the Company acquired the Planters® snack nuts business from The Kraft Heinz Company. The acquisition includes the Planters®, NUT-rition®, and Corn Nuts® brands. The final purchase price, including working capital adjustments, was $3.4 billion. The transaction was funded with the Company’s cash on hand and from the issuance of long-term debt.


10

Planters® is an iconic snack brand and this acquisition significantly expands the Company's presence, and should broaden the scope for future acquisitions, in the growing snacking space. Operating results for this acquisition have been included in the Company's Consolidated Statements of Operations from the date of acquisition and are reflected in the Grocery Products, Refrigerated Foods, and International & Other segments. The acquisition contributed $239.0 million and $510.8 million of net sales during the second quarter and first six months of fiscal 2022, respectively. As the acquisition has been integrated within the Company's existing operations, post-acquisition net earnings are not discernible.

The acquisition was accounted for as a business combination using the acquisition method. The Company determined the acquisition date fair values of the assets acquired using independent appraisals. The Company completed purchase accounting allocations in the fourth quarter of fiscal 2021.


NOTE C - GOODWILL AND INTANGIBLE ASSETS
 
Goodwill: The changes in the carrying amounts of goodwill for the quarter and six months ended May 1, 2022 are:
in thousandsGrocery
Products
Refrigerated
Foods
Jennie-O
Turkey Store
International
& Other
Total
Balance at January 30, 2022
$2,398,354 $2,094,421 $176,628 $258,737 $4,928,139 
Foreign Currency Translation   7,692 7,692 
Balance at May 1, 2022
$2,398,354 $2,094,421 $176,628 $266,429 $4,935,832 
Balance at October 31, 2021
$2,398,354 $2,094,421 $176,628 $259,699 $4,929,102 
Foreign Currency Translation   6,730 6,730 
Balance at May 1, 2022
$2,398,354 $2,094,421 $176,628 $266,429 $4,935,832 
Intangible Assets: The carrying amounts for indefinite-lived intangible assets are:
in thousandsMay 1, 2022October 31, 2021
Brands/Tradenames/Trademarks$1,665,190 $1,665,190 
Other Intangibles184 184 
Foreign Currency Translation(5,276)(6,646)
Total$1,660,098 $1,658,728 

The gross carrying amount and accumulated amortization for definite-lived intangible assets are:
 May 1, 2022October 31, 2021
in thousands
Gross Carrying
Amount
Accumulated
Amortization
Gross Carrying
Amount
Accumulated
Amortization
Customer Lists/Relationships$168,239 $(63,318)$168,239 $(56,882)
Other Intangibles59,241 (9,481)60,241 (8,356)
Tradenames/Trademarks10,536 (6,773)10,536 (5,700)
Foreign Currency Translation (4,041) (4,534)
Total$238,016 $(83,613)$239,016 $(75,471)
 
Amortization expense was $4.8 million and $9.6 million for the quarter and six months ended May 1, 2022, respectively, compared to $4.0 million and $7.9 million for the quarter and six months ended April 25, 2021.




11

Estimated annual amortization expense for the five fiscal years after October 31, 2021, is as follows:
in thousandsAmortization Expense
2022$19,244 
202318,351 
202416,352 
202514,627 
202614,170 


NOTE D - 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 Condensed Statements of Financial Position as Investments In and Receivables From Affiliates.
 
Investments In and Receivables From Affiliates consist of:
in thousandsSegment% OwnedMay 1, 2022October 31, 2021
MegaMex Foods, LLCGrocery Products50%$185,417 $205,413 
Other Joint VenturesInternational & Other
Various (20-50%)
90,432 93,606 
Total$275,849 $299,019 

Equity in Earnings of Affiliates consists of:
  Quarter EndedSix Months Ended
in thousands
 
Segment
May 1, 2022April 25, 2021May 1, 2022April 25, 2021
MegaMex Foods, LLCGrocery Products$3,011 $9,663 $10,006 $22,096 
Other Joint VenturesInternational & Other2,905 3,411 2,807 5,206 
Total$5,916 $13,074 $12,814 $27,302 
 
For the quarter and six months ended May 1, 2022, $12.5 million and $30.5 million of dividends were received from affiliates, compared to $11.2 million and $22.5 million of dividends received for the quarter and six months ended April 25, 2021.

The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $10.6 million is remaining as of May 1, 2022. This difference is being amortized through Equity in Earnings of Affiliates.


NOTE E - INVENTORIES
 
Principal components of inventories are:
in thousandsMay 1, 2022October 31, 2021
Finished Products$875,674 $725,115 
Raw Materials and Work-in-Process432,806 395,403 
Operating Supplies197,796 163,416 
Maintenance Materials and Parts90,725 85,264 
Total$1,597,001 $1,369,198 



12

NOTE F - DERIVATIVES AND HEDGING
 
The Company uses hedging programs to manage price risk associated with commodity purchases and interest rates. These programs utilize futures, swaps, and options contracts to manage the Company’s exposure to market fluctuations. The Company has determined its designated hedging programs to be highly effective in offsetting the changes in fair value or cash flows generated by the items hedged. Effectiveness testing is performed on a quarterly basis to ascertain a high level of effectiveness for cash flow and fair value hedging programs.

Cash Flow Commodity Hedges:  The Company designates grain and lean hog futures, swaps, and options used to offset price fluctuations in the Company’s future direct grain and hog purchases as cash flow hedges. Effective gains or losses related to these cash flow hedges are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost of Products Sold, in the periods in which the hedged transactions affect earnings. The Company typically does not hedge its grain exposure beyond the next two upcoming fiscal years and its hog exposure beyond the next fiscal year.

Fair Value Commodity Hedges:  The Company designates the futures it uses to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers as fair value hedges. The intent of the program is to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery. Changes in the fair value of the futures contracts, along with the gain or loss on the hedged purchase commitment, are marked-to-market through earnings and recorded on the Consolidated Condensed Statements of Financial Position as a Current Asset and Current Liability, respectively. Effective gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the periods in which the hedged transactions affect earnings.

Cash Flow Interest Rate Hedges: In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with the anticipated debt transactions required to fund the acquisition of the Planters® snack nuts business. The total notional amount of the Company's locks was $1.25 billion. In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with a tenor of seven and thirty years and both locks were lifted (See Note J - Long-term Debt and Other Borrowing Arrangements). Mark-to-market gains and losses on these instruments were deferred as a component of AOCL. The resulting gain in AOCL is reclassified to Interest Expense in the periods in which the hedged transactions affect earnings.

Fair Value Interest Rate Hedge: In the first quarter of fiscal 2022, the Company entered into an interest rate swap to protect against changes in the fair value of a portion of previously issued senior unsecured notes attributable to the change in the benchmark interest rate. The hedge specifically designates the last $450 million of the notes due June 2024 (the “2024 Notes”). The swap compounds quarterly and settles semi-annually with gains and losses recognized in earnings through interest expense. The swap includes SOFR plus a spread adjustment as a fallback rate to be used when LIBOR ceases to be published in June 2023. Mark-to-market changes in the fair value of the interest rate swap and hedged debt are also recognized as interest expense.

Other Derivatives:  The Company holds certain futures contract positions as part of a merchandising program and to manage the Company’s exposure to fluctuations in commodity markets. The Company has not applied hedge accounting to these positions. Activity related to derivatives not designated as hedges is immaterial to the consolidated financial statements.

Volume: The Company's outstanding contracts related to its commodity hedging programs include:
 Volume
Commodity ContractsMay 1, 2022October 31, 2021
Corn37.7 million bushels33.1 million bushels
Lean Hogs162.0 million pounds120.0 million pounds

Fair Value of Derivatives:  The fair values of the Company’s derivative instruments designated as hedges are:
  Gross Fair Value
in thousandsLocation on Consolidated Condensed Statements of Financial PositionMay 1,
2022
October 31,
2021
Derivatives Designated as Hedges:
Commodity Contracts(1)
Other Current Assets$51,269 $21,798 
Interest Rate ContractsInterest and Dividends Payable(18,723) 
(1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the commodity derivative in the Consolidated Condensed Statements of Financial Position. The gross asset position as of May 1, 2022 is offset by the obligation to return net cash collateral of $39.4 million contained within the master netting

13

arrangement. The gross asset position as of October 31, 2021 is offset by the obligation to return net cash collateral of $10.8 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Condensed Statements of Financial Position.
 
Fair Value Hedge - Assets (Liabilities): The carrying amount of the Company's fair value hedged assets (liabilities) are:
Carrying Amount of Hedged
Assets/(Liabilities)
in thousandsLocation on Consolidated Condensed Statements of Financial PositionMay 1,
2022
October 31,
2021
Fair Value Hedges:
Commodity Contracts
Accounts Payable(1)
$20,428 $3,432 
Interest Rate Contracts
Long-term Debt - Less Current Maturities(2)
(431,277) 
(1)  Represents the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above.
(2) Represents the carrying amount of the hedged portion of the "2024 Notes". As of May 1, 2022, a cumulative basis adjustment of $18.7 million has been included in the carrying amount.

Accumulated Other Comprehensive Loss Impact: As of May 1, 2022, the Company included in AOCL hedging gains (before tax) of $80.1 million on commodity contracts and $14.0 million related to interest rate settled positions. The Company expects to recognize the majority of the gains on commodity contracts over the next twelve months. Gains on interest rate contracts offset the hedged interest payments over the tenor of the debt instruments.

The effect of AOCL for gains or losses (before tax) related to the Company's derivative instruments are:
 
Gain/(Loss)
Recognized
 in AOCL (1)
Gain/(Loss)
Reclassified from
AOCL into Earnings (1)
Location on
Consolidated
Statements
of Operations
 Quarter EndedQuarter Ended
in thousandsMay 1, 2022April 25, 2021May 1, 2022April 25, 2021
Cash Flow Hedges:
Commodity Contracts$50,331 $36,109 $11,269 $4,512 Cost of Products Sold
Excluded Component (2)
(2,271)   
Interest Rate Contracts
 18,539 247  Interest Expense
Gain/(Loss)
Recognized
 in AOCL (1)
Gain/(Loss)
Reclassified from
AOCL into Earnings (1)
Location on
Consolidated
Statements
of Operations
Six Months EndedSix Months Ended
in thousandsMay 1, 2022April 25, 2021May 1, 2022April 25, 2021