Excluded component

[Table of Contents](#ic0f1e00f8fa04a87b8ba424679040b3d_7)  
Fair Value Hedge - Assets (Liabilities):  The carrying amount of the Company’s fair value hedge assets (liabilities) are: 

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| Location on Consolidated Statements of Financial Position |  | Carrying Amount(1) of the Hedged Assets/(Liabilities) |
| (in thousands)  |  | October 31, 2021 |  | October 25, 2020 |
| Accounts Payable |  | $ | 3,432  |  |  | $ | 4,269  |  |

(1) Amounts represent the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above.  
Accumulated Other Comprehensive Loss Impact:  As of October 31, 2021, the Company included in AOCL hedging gains (before tax) of $32.0 million on commodity contracts and $14.5 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:

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|   |  | Gain/(Loss)Recognized in AOCL(1) |  | Location onConsolidatedStatementsof Operations |  | Gain/(Loss)Reclassified fromAOCL into Earnings(1) |
| (in thousands)  |  | Fiscal Year Ended |  |  | Fiscal Year Ended |
| Cash Flow Hedges: |  | October 31, 2021 |  | October 25, 2020 |  |  | October 31, 2021 |  | October 25, 2020 |
| Commodity Contracts |  | $ | 59,143  |  |  | $ | (38,213) |  |  | Cost of Products Sold |  | $ | 31,044  |  |  | $ | (37,834) |  |
| Excluded Component(2) |  | 1,078  |  |  | —  |  |  |  |  | —  |  |  | —  |  |
| Interest Rate Contracts |  | 14,864  |  |  | —  |  |  | Interest Expense |  | 399  |  |  | —  |  |

(1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings.(2) Represents the time value of corn options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.  
Consolidated Statements of Operations Impact:  The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments for the fiscal years ended are:

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|  | Consolidated Statement of Operations Impact |
| (in thousands) | October 31, 2021 |  | October 25, 2020 |  | October 27, 2019 |
| Net Earnings Attributable to Hormel Foods Corporation | $ | 908,839  |  |  | $ | 908,082  |  |  | $ | 978,806  |  |
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| Cash Flow Hedges - Commodity Contracts |  |  |  |  |  |
|    Gain (Loss) Reclassified from AOCL | $ | 31,787  |  |  | $ | (37,834) |  |  | $ | (1,701) |  |
|    Amortization of Excluded Component from Options | (3,033) |  |  | —  |  |  | (2,489) |  |
|    Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges(1) | (743) |  |  | —  |  |  | —  |  |
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| Fair Value Hedges - Commodity Contracts |  |  |  |  |  |
|    Gain (Loss) on Commodity Futures(2) | (28,078) |  |  | 13,192  |  |  | 5,197  |  |
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| Total Gain (Loss) on Commodity Contracts(3) | $ | (67) |  |  | $ | (24,642) |  |  | $ | 1,007  |  |
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| Cash Flow Hedges - Interest Rate Locks |  |  |  |  |  |
| Amortization of Gain on Interest Rate Locks | $ | 399  |  |  | $ | —  |  |  | $ | —  |  |
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| Total Gain on Interest Rate Locks(4) | $ | 399  |  |  | $ | —  |  |  | $ | —  |  |
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| Total Gain (Loss) Recognized in Earnings | $ | 332  |  |  | $ | (24,642) |  |  | $ | 1,007  |  |

  
(1) During the fourth quarter of fiscal 2021, the Company discontinued hedge accounting on 2.8 million bushels of corn usage that was deemed no longer probable to occur. A loss of $0.7 million related to the discontinued hedges was reclassified directly into earnings.(2) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the year, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.(3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold.(4) Total Gain on Interest Rate Locks is recognized in earnings through Interest Expense.  
  
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