Hormel Foods 2013 Annual Report Download - page 57

Download and view the complete annual report

Please find page 57 of the 2013 Hormel Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 66

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66

55
Derivative Gains and Losses: Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the
fiscal year ended October 27, 2013, and October 28, 2012, were as follows:
Gain/(Loss) Recognized Gain/(Loss) Reclassified Gain/(Loss)
in AOCL from AOCL into Earnings Recognized in Earnings
(Effective Portion)(1) (2) (Effective Portion)(1) (2) (Ineffective Portion)(3) (5)
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
October 27, October 28, Location on Consolidated October 27, October 28, October 27, October 28,
Cash Flow Hedges: 2013 2012 Statements of Operations 2013 2012 2013 2012
Commodity contracts $ (18,329) $ 10,261 Cost of products sold $ 5,871 $ 22,319 $ (5,272) $ –
Gain/(Loss) Gain/(Loss)
Recognized in Earnings Recognized in Earnings
(Effective Portion)(4) (Ineffective Portion)(3) (6)
Fiscal Year Ended Fiscal Year Ended
Location on Consolidated October 27, October 28, October 27, October 28,
Fair Value Hedges: Statements of Operations 2013 2012 2013 2012
Commodity contracts Cost of products sold $ 6,067 $ (10,670) $ 3,560 $ 19
Gain/(Loss)
Recognized in Earnings(2)
Fiscal Year Ended
Derivatives Not Location on Consolidated October 27, October 28,
Designated as Hedges: Statements of Operations 2013 2012
Commodity contracts Cost of products sold $ (2,227) $ 46
Foreign exchange contracts Interest and investment
income (loss) $ 244 $ –
(1) Amounts represent gains or losses in AOCL before tax. See Note B for the after tax impact of these gains or losses on net earnings.
(2) During fiscal year 2013, the Company dedesignated and ceased hedge accounting for its corn futures contracts held for its hog operations. At the
date of dedesignation of these hedges, losses of $2.0 million (before tax) were deferred in AOCL, with $1.1 million (before tax) remaining as of
October 27, 2013. These losses will remain in AOCL until the hedged transactions occur or it is probable the hedged transactions will not occur.
Gains or losses related to these contracts after the date of dedesignation have been recognized in earnings as incurred.
(3) There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2013 includes the mark-to-
market impact on certain Jennie-O Turkey Store corn futures contracts which resulted from a temporary suspension of hedge accounting due to
market volatility.
(4) 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 com-
modity 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.
(5) There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year.
(6) 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.