SEC Form 10-K Filing Report

Company: HORMEL FOODS CORP /DE/
CIK: 48465
SIC Code: 2011
Filing Date: 2015-12-16 00:00:00
Market Capitalization: 21119036.311309814

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ITEM 1. BUSINESS
Item 1. BUSINESS
(a) General Development of Business
Hormel Foods Corporation, a Delaware corporation (the Company), was founded by George A. Hormel in 1891 in Austin, Minnesota, as Geo. A. Hormel & Company. The Company started as a processor of meat and food products and continues in this line of business. The Company’s name was changed to Hormel Foods Corporation on January 31, 1995. The Company is primarily engaged in the production of a variety of meat and food products and the marketing of those products throughout the United States and internationally. Although pork and turkey remain the major raw materials for its products, the Company has emphasized for several years the manufacturing and distribution of branded, value-added consumer items rather than the commodity fresh meat business. The Company has continually expanded its product portfolio through organic growth, new product development, and acquisitions.
Internationally, the Company markets its products through Hormel Foods International Corporation (HFIC), a wholly owned subsidiary. HFIC has a presence in the international marketplace through joint ventures and placement of personnel in strategic foreign locations such as Australia, Canada, China, Japan, and the Philippines. HFIC has a global presence with a minority position in a food company in the Philippines (The Purefoods-Hormel Company, Inc., 40% holding).
The Company has not been involved in any bankruptcy, receivership, or similar proceedings during its history. Substantially all the assets of the Company have been acquired in the ordinary course of business.
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 adjustments, and was funded by the Company with cash on hand and by utilizing short-term financing.
The Company had no other significant change in the type of products produced or services rendered, or in the markets or methods of distribution since the beginning of the 2015 fiscal year.
(b) Segments
The Company’s business is reported in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store (JOTS), Specialty Foods, and International & Other. Net sales to unaffiliated customers, operating profit, total assets, and the presentation of certain other financial information by segment, are reported in Note P of the Notes to Consolidated Financial Statements and in the Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Annual Stockholder’s Report for the fiscal year ended October 25, 2015, incorporated herein by reference.
(c) Description of Business
Products and Distribution
The Company’s products primarily consist of meat and other food products. The meat products are sold fresh, frozen, cured, smoked, cooked, and canned. The percentages of total revenues contributed by classes of similar products for the last three fiscal years are as follows:
Reporting of revenues from external customers is based on similarity of products, as the same or similar products are sold across multiple distribution channels such as retail, foodservice, or international. Revenues reported are based on financial information used to produce the Company’s general-purpose financial statements.
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.
Domestically, the Company sells its products in all 50 states. The Company’s products are sold through its sales personnel, operating in assigned territories or as dedicated teams serving major customers, coordinated from sales offices located in most of the larger U.S. cities. The Company also utilizes independent brokers and distributors. As of October 25, 2015, the Company had approximately 850 sales personnel engaged in selling its products. Distribution of products to customers is primarily by common carrier.
Through HFIC, the Company markets its products in various locations throughout the world. Some of the larger markets include Australia, Canada, China, England, Japan, Mexico, Micronesia, the Philippines, Singapore, and South Korea. The distribution of export sales to customers is by common carrier, while the China operations own and operate their own delivery system. The Company, through HFIC, has licensed companies to manufacture various Company products internationally on a royalty basis, with the primary licensees being Tulip International of Denmark and CJ CheilJedang Corporation of South Korea.
Raw Materials
The Company has, for the past several years, been concentrating on branded products for consumers with year-round demand to minimize the seasonal variation experienced with commodity-type products. Pork continues to be the primary raw material for Company products. Although the live pork industry has evolved to large, vertically integrated, year-round operations, and supply contracts have become prevalent in the industry, there is still a seasonal variation in the supply of fresh pork materials. The Company’s expanding line of branded products has reduced, but not eliminated, the sensitivity of Company results to raw material supply and price fluctuations.
The majority of the hogs harvested by the Company are purchased under supply contracts from producers located principally in California, Colorado, Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota, Texas, Utah, and Wisconsin. The cost of hogs and the utilization of the Company’s facilities are affected by both the level and the methods of pork production in the United States. The movement toward larger operations, which operate under supply agreements with processors, has resulted in fewer hogs being available on the spot cash market. The Company, like others in the industry, uses supply contracts to manage the effects of this trend and to ensure a stable supply of raw materials. The Company’s contracts are based on market-based formulas and/or the cost of production, to better balance input costs with customer pricing, and all contract costs are fully reflected in the Company’s reported financial statements. In fiscal 2015, the Company purchased 94 percent of its hogs under supply contracts. The Company also procures a portion of its hogs through farms that it either owns or operates in Arizona, California, Colorado, and Wyoming.
In fiscal 2015, JOTS raised turkeys representing approximately 77 percent of the volume needed to meet its raw material requirements for whole bird and branded turkey products. Turkeys not sourced within the Company are contracted with independent turkey growers. JOTS’ turkey-raising farms are located throughout Minnesota and Wisconsin.
Production costs in raising hogs and turkeys are subject primarily to fluctuations in feed grain prices and, to a lesser extent, fuel costs. To manage this risk, the Company hedges a portion of its anticipated purchases of grain using futures contracts.
Additionally, the cost and supply of avocados, peanuts, whey, and natural and organic protein are impacted by the changing market forces of supply and demand which can impact the cost of the Company’s products. The Company uses long-term supply contracts and forward buying in an attempt to manage these risks.
Manufacturing
The Company has three plants that harvest hogs for processing. Quality Pork Processors, Inc. of Dallas, Texas, operates the harvesting facility at Austin, Minnesota, under a custom harvesting arrangement. The Company currently has seven turkey harvest and processing operations, and 35 facilities that produce and distribute other manufactured items. Albert Lea Select Foods, Inc. operates the processing facility at Albert Lea, Minnesota, under a custom manufacturing agreement. Company products are also custom manufactured by several other companies. The following are the Company’s larger custom manufacturers: Abbyland Foods, Inc., Abbotsford, Wisconsin; Agropur Division Natrel USA, Maplewood, Minnesota; Algood Food Company, Louisville, Kentucky; Cloverleaf Cold Storage, Sioux City, Iowa; Deitz & Watson, Inc., Philadelphia, Pennsylvania; HP Hood LLC, Lynnfield, Massachusetts; OSI Industries LLC, Chicago, Illinois; Park 100 Foods, Inc., Tipton, Indiana; Reichel Foods, Inc., Rochester, Minnesota; Reser’s Fine Foods, Topeka, Kansas; and Steuben Foods, Jamaica, New York. Exel, Inc., based in Westerville, Ohio, operates distribution centers for the Company in Dayton, Ohio, and Osceola, Iowa.
Patents and Trademarks
There are numerous patents and trademarks that are important to the Company’s business. The Company holds 46 U.S.-issued and 17 foreign patents. Most of the trademarks are registered. Some of the more significant owned or licensed trademarks used by the Company or its affiliates are:
HORMEL, ALWAYS TENDER, APPLEGATE, AUSTIN BLUES, BACON 1, BLACK LABEL, BREAD READY, BÚFALO, CAFÉ H, CALIFORNIA NATURAL, CHI-CHI’S, COMPLEATS, CURE 81, CUREMASTER, CYTOSPORT, DAN’S PRIZE, DI LUSSO, DINTY MOORE, DODGER DOG, DON MIGUEL, DOÑA MARIA, DUBUQUE, EMBASA, ESSENCE C, FARMER JOHN, FAST ‘N EASY, FIRE BRAISED, HERB-OX, HERDEZ, HIBACHI GRILL, HOMELAND, HORMEL GATHERINGS, HOUSE OF TSANG, JENNIE-O, KID’S KITCHEN, LA VICTORIA, LAYOUT, LITTLE SIZZLERS, LLOYD’S, MANNY’S, MARY KITCHEN, MONSTER MILK, MUSCLE MILK, NATURAL CHOICE, NATURASELECT, NOT-SO-SLOPPY-JOE, OLD SMOKEHOUSE, PILLOW PACK, POCO PAC, PREMORO, PREP CHEF, RANGE BRAND, REV, ROSA GRANDE, SAAG’S, SANDWICH MAKERS, SAUCY BLUES, SKIPPY, SPAM, SPECIAL RECIPE, STAGG, TEZZATA, THICK & EASY, VALLEY FRESH, WHOLLY GUACAMOLE, and WRANGLERS.
The Company’s patents expire after a term that is typically 20 years from the date of filing, with earlier expiration possible based on the Company’s decision to pay required maintenance fees. As long as the Company intends to continue using its trademarks, they are renewed indefinitely.
Customers and Backlog Orders
During fiscal year 2015, sales to Wal-Mart Stores, Inc. (Wal-Mart) represented approximately 13.9 percent of the Company’s revenues (measured as gross sales less returns and allowances), compared to 14.1 percent in fiscal 2014. Wal-Mart is a customer for all five segments of the Company. The five largest customers in each segment make up approximately the following percentage of segment sales: 45 percent of Grocery Products, 36 percent of Refrigerated Foods, 41 percent of JOTS, 35 percent of Specialty Foods, and 23 percent of International & Other. The loss of one or more of the top customers in any of these segments could have a material adverse effect on the results of such segment. Backlog orders are not significant due to the perishable nature of a large portion of the products. Orders are accepted and shipped on a current basis.
Competition
The production and sale of meat and food products in the United States and internationally are highly competitive. The Company competes with manufacturers of pork and turkey products, as well as national and regional producers of other meat and protein sources, such as beef, chicken, fish, peanut butter, and whey. The Company believes that its largest domestic competitors for its Refrigerated Foods segment in 2015 were Tyson Foods, Inc. and Smithfield Foods, Inc.; for its Grocery Products segment, ConAgra Foods, Inc., General Mills, Inc., Campbell Soup Co., and J. M. Smucker Co.; and for JOTS, Cargill, Inc. and Butterball, LLC.
All segments compete on the basis of price, product quality and attributes, brand identification, breadth of product line, and customer service. Through aggressive marketing and strong quality assurance programs, the Company’s strategy is to provide higher quality products that possess strong brand recognition, which would then support higher value perceptions from customers.
Research and Development
Research and development continues to be a vital part of the Company’s strategy to extend existing brands and expand into new branded items. The expenditures for research and development for fiscal 2015, 2014, and 2013, were approximately $32.0 million, $29.9 million, and $29.9 million, respectively. There are approximately 150 employees engaged in full time research and development, 80 in the area of improving existing products and 70 in developing new products.
Employees
As of October 25, 2015, the Company had approximately 20,700 active domestic and foreign employees.
(d) Geographic Areas
Financial information about geographic areas, including total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years of the Company, is reported in Note P of the Notes to Consolidated Financial Statements of the Annual Stockholder’s Report for the fiscal year ended October 25, 2015, incorporated herein by reference.
(e) Available Information
The Company makes available, free of charge on its Web site at www.hormelfoods.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are accessible under the caption, “Investors - SEC Filings” on the Company’s Web site and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.
The documents noted above are also available in print, free of charge, to any stockholder who requests them.
(f) Executive Officers of the Registrant
CURRENT OFFICE AND PREVIOUS
NAME
AGE
FIVE YEARS EXPERIENCE
DATES
Jeffrey M. Ettinger
Chairman of the Board and Chief Executive Officer
10/26/15 to Present
Chairman of the Board, President and Chief Executive Officer
11/21/06 to 10/25/15
James P. Snee
President and Chief Operating Officer
10/26/15 to Present
Group Vice President/President Hormel Foods International Corporation
10/29/12 to 10/25/15
Vice President/Senior Vice President Hormel Foods International Corporation
10/31/11 to 10/28/12
Vice President (Affiliated Business Units - Refrigerated Foods)
10/27/08 to 10/30/11
Jody H. Feragen
Executive Vice President and Chief Financial Officer
11/01/10 to Present
Senior Vice President and Chief Financial Officer
01/01/07 to 10/31/10
Steven G. Binder
Executive Vice President/President Hormel Business Units
10/31/11 to Present
Executive Vice President (Refrigerated Foods)
11/01/10 to 10/30/11
Group Vice President (Refrigerated Foods)
07/30/07 to 10/31/10
Jeffrey R. Baker
Group Vice President (Foodservice)
10/26/15 to Present
Vice President (Foodservice Marketing)
10/29/12 to 10/25/15
Director (Foodservice Marketing)
06/18/12 to 10/28/12
Director (Fresh Meats Marketing and Precept Foods, LLC)
10/26/09 to 06/17/12
Deanna T. Brady
Group Vice President/President Consumer Products Sales
10/26/15 to Present
Group Vice President (Foodservice)
10/28/13 to 10/25/15
Vice President Sales (Foodservice Sales)
07/30/07 to 10/27/13
Thomas R. Day
Group Vice President (Refrigerated Foods)
10/28/13 to Present
Group Vice President (Foodservice)
11/01/10 to 10/27/13
Senior Vice President (Foodservice)
07/30/07 to 10/31/10
Donald H. Kremin
Group Vice President (Specialty Foods Group)
10/31/11 to Present
Vice President/Senior Vice President Consumer Product Sales (Wal-Mart)
10/29/07 to 10/30/11
Glenn R. Leitch
Group Vice President/President Jennie-O Turkey Store, Inc.
10/31/11 to Present
General Manager (Jennie-O Turkey Store, Inc.)
05/30/11 to 10/30/11
Senior Vice President - Commodity (Supply Chain Division - Jennie-O Turkey Store, Inc.)
04/30/01 to 05/29/11
(f) Executive Officers of the Registrant - Continued
CURRENT OFFICE AND PREVIOUS
NAME
AGE
FIVE YEARS EXPERIENCE
DATES
James M. Splinter
Group Vice President (Grocery Products)
11/01/10 to Present
Vice President (Marketing-Consumer Products-Refrigerated Foods)
06/02/03 to 10/31/10
Larry L. Vorpahl
Group Vice President/President Hormel Foods International Corporation
10/26/15 to Present
Group Vice President/President Consumer Products Sales
10/31/05 to 10/25/15
Bryan D. Farnsworth
Senior Vice President (Supply Chain)
03/03/14 to Present
Vice President Quality Management
08/01/05 to 03/02/14
Lawrence C. Lyons
Senior Vice President (Human Resources)
03/30/15 to Present
Vice President (Human Resources)
03/03/14 to 03/29/15
Director (Human Resources)
01/09/06 to 03/02/14
Lori J. Marco
Senior Vice President (External Affairs) and General Counsel
03/30/15 to Present
Vice President (External Affairs) and General Counsel
01/24/11 to 03/29/15
Senior Attorney
01/01/07 to 01/23/11
Kevin L. Myers, Ph.D.
Senior Vice President (Research and Development)
03/30/15 to Present
Vice President (Research and Development)
10/28/13 to 03/29/15
Director Product and Process Development (Research and Development)
04/30/12 to 10/27/13
Group Manager Product Development (Research and Development)
03/06/06 to 04/29/12
Roland G. Gentzler
Vice President (Finance) and Treasurer
01/01/07 to Present
Brian D. Johnson
Vice President and Corporate Secretary
11/22/10 to Present
Corporate Secretary and Senior Attorney
10/29/07 to 11/21/10
James N. Sheehan
Vice President and Controller
05/01/00 to Present
No family relationship exists among the executive officers.
Executive officers are elected annually by the Board of Directors at the first meeting following the Annual Meeting of Stockholders. Vacancies may be filled and additional officers elected at any time.

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ITEM 1A. RISK FACTORS
Item 1A. RISK FACTORS
Information on the Company’s risk factors included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 28 through 31 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
Item 2. PROPERTIES
Location
Principal Segment (1)
Approximate Area (Square Feet,
Unless Noted)
Owned or
Leased
Lease
Expiration Date
Harvest and Processing Plants
Austin, Minnesota
Refrigerated Foods
Grocery Products
Specialty Foods
International & Other
1,398,000
Owned
Barron, Wisconsin
JOTS
425,000
Owned
Faribault, Minnesota
JOTS
173,000
Owned
Fremont, Nebraska
Refrigerated Foods
Grocery Products
Specialty Foods
International & Other
700,000
Owned
Melrose, Minnesota
JOTS
133,000
Owned
Vernon, California
Refrigerated Foods
724,000
Owned
Refrigerated Foods
108,000
Leased
March 2019
Willmar, Minnesota
JOTS
339,000
Owned
Processing Plants
Albert Lea, Minnesota
Refrigerated Foods
80,000
Owned
Algona, Iowa
Refrigerated Foods
154,000
Owned
Alma, Kansas
Refrigerated Foods
66,000
Owned
Aurora, Illinois
Specialty Foods
Grocery Products
147,000
Owned
Beijing, China
International & Other
95,000
80% Owned
Beloit, Wisconsin
Grocery Products
Specialty Foods
346,000
Owned
Grocery Products
Specialty Foods
5,000
Leased
Monthly
Bremen, Georgia
Specialty Foods
156,000
Owned
Browerville, Minnesota
Refrigerated Foods
101,000
Owned
Dubuque, Iowa
Grocery Products
343,000
Owned
Duluth, Georgia
Specialty Foods
85,000
Owned
Knoxville, Iowa
Refrigerated Foods
131,000
Owned
Lathrop, California
Refrigerated Foods
87,000
Owned
Little Rock, Arkansas
Grocery Products
167,000
Owned
Long Prairie, Minnesota
Refrigerated Foods
86,000
Owned
Mendota Heights, Minnesota
Refrigerated Foods
77,000
Owned
Mitchellville, Iowa
Specialty Foods
87,000
Owned
Montevideo, Minnesota
JOTS
89,000
Owned
Nevada, Iowa
Refrigerated Foods
226,000
Owned
New Berlin, Wisconsin
Grocery Products
50,000
Leased
February 2016
Osceola, Iowa
Refrigerated Foods
373,000
Owned
Pelican Rapids, Minnesota
JOTS
374,000
Owned
Quakertown, Pennsylvania
Specialty Foods
12,000
Owned
Rochelle, Illinois
Refrigerated Foods
Grocery Products
Specialty Foods
398,000
Owned
San Leandro, California
Refrigerated Foods
42,000
Leased
November 2021
Savannah, Georgia
Specialty Foods
300,000
Owned
Shanghai, China
International & Other
33,000
Leased
February 2018
Sparta, Wisconsin
Specialty Foods
385,000
Owned
Item 2. PROPERTIES - Continued
Location
Principal Segment (1)
Approximate Area (Square Feet,
Unless Noted)
Owned or
Leased
Lease
Expiration Date
Processing Plants (continued)
Tucker, Georgia
Grocery Products
Refrigerated Foods
Specialty Foods
283,000
Owned
Visalia, California
Specialty Foods
107,000
Owned
Weifang, China
International & Other
117,000
Owned
Wichita, Kansas
Refrigerated Foods
89,000
Owned
Warehouse/Distribution Centers
Austin, Minnesota
Refrigerated Foods
Grocery Products
82,000
Owned
Bondurant, Iowa
Specialty Foods
98,000
Owned
Dayton, Ohio
Refrigerated Foods
Grocery Products
Specialty Foods
140,000
Owned
Eldridge, Iowa
Grocery Products
Specialty Foods
424,000
Leased
July 2019
New Berlin, Wisconsin
Grocery Products
20,000
Leased
February 2016
Osceola, Iowa
Refrigerated Foods
233,000
Owned
Shanghai, China
International & Other
26,000
Leased
June 2016
Sparta, Wisconsin
Specialty Foods
50,000
Leased
June 2016
Vernon, California
Refrigerated Foods
115,000
Owned
Willmar, Minnesota
JOTS
120,000
Owned
5,000
Leased
September 2018
Hog Production Facilities
Albin, Wyoming
Refrigerated Foods
458,000
Owned
Corcoran, California
Refrigerated Foods
816,000
Owned
Holbrook, Arizona
Refrigerated Foods
13,000
Owned
Las Animas, Colorado
Refrigerated Foods
801,000
Owned
Pine Bluffs, Wyoming
Refrigerated Foods
64,000
Owned
Snowflake, Arizona
Refrigerated Foods
1,529,000
Owned
Hatcheries
Barron, Wisconsin
JOTS
29,000
Owned
Detroit Lakes, Minnesota
JOTS
27,000
Owned
Henning, Minnesota
JOTS
22,000
Owned
Feed Mills
Albin, Wyoming
Refrigerated Foods
6,000
Owned
Atwater, Minnesota
JOTS
19,000
Owned
Barron, Wisconsin
JOTS
26,000
Owned
Corcoran, California
Refrigerated Foods
5,000
Owned
Dawson, Minnesota
JOTS
37,000
Owned
Faribault, Minnesota
JOTS
25,000
Owned
Henning, Minnesota
JOTS
5,000
Owned
Northfield, Minnesota
JOTS
17,000
Owned
Perham, Minnesota
JOTS
26,000
Owned
Snowflake, Arizona
Refrigerated Foods
28,000
Owned
Swanville, Minnesota
JOTS
29,000
Owned
Item 2. PROPERTIES - Continued
Location
Principal Segment (1)
Approximate Area (Square Feet,
Unless Noted)
Owned or
Leased
Lease
Expiration Date
Turkey Farms
Minnesota and Wisconsin
JOTS
13,900
(2)
Owned
Research and Development
Austin, Minnesota
All Segments
83,000
Owned
Shanghai, China
International & Other
4,000
Leased
September 2016
Willmar, Minnesota
JOTS
10,000
Owned
Administrative Offices
Austin, Minnesota
All Segments
299,000
Owned
Beijing, China
International & Other
4,000
Leased
May 2016
Benicia, California
Specialty Foods
14,000
Leased
November 2015
Bridgewater, New Jersey
Refrigerated Foods
29,000
Leased
January 2024
Gainesville, Georgia
Refrigerated Foods
5,000
Leased
October 2019
Las Animas, Colorado
Refrigerated Foods
4,000
Leased
Monthly
Moorabbin, Australia
International & Other
3,000
Leased
September 2016
Savannah, Georgia
Specialty Foods
14,000
Owned
Shanghai, China
International & Other
14,000
Leased
September 2017
Taylor, Arizona
Refrigerated
5,000
Leased
December 2019
Vernon, California
Refrigerated Foods
24,000
Leased
March 2019
Walnut Creek, California
Specialty Foods
22,000
Leased
April 2023
Willmar, Minnesota
JOTS
56,000
Owned
(1) Many of the Company’s properties are not exclusive to any one segment, and a few of the properties are utilized in all five segments. For locations that support multiple segments, but with a substantial percentage of activity attributable to certain segments, only the principal segments have been listed.
(2) Acres
The Company believes its operating facilities are well maintained and suitable for current production volumes, and expansion plans are either completed or in process to accommodate all volumes anticipated in the foreseeable future.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings related to the on-going operation of its business, including claims both by and against the Company. At any time, 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. Resolution of any currently known matters, either individually or in the aggregate, is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity.

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ITEM 4. RESERVED
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
The high and low sales price of the Company’s common stock and the dividends per share declared for each quarter of fiscal 2015 and fiscal 2014 are shown below:
High
Low
Dividend
First Quarter
$55.40
$50.06
$0.25
Second Quarter
58.98
50.13
0.25
Third Quarter
59.36
54.15
0.25
Fourth Quarter
68.97
56.89
0.25
High
Low
Dividend
First Quarter
$46.75
$41.93
$0.20
Second Quarter
49.47
42.81
0.20
Third Quarter
49.87
46.02
0.20
Fourth Quarter
53.12
44.91
0.20
Additional information about dividends, principal market of trade, and number of stockholders on pages 64 and 65 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, is incorporated herein by reference. The Company’s common stock has been listed on the New York Stock Exchange since January 16, 1990.
Issuer purchases of equity securities in the fourth quarter of fiscal year 2015 are shown below:
Period
Total
Number of
Shares
Purchased
Average
Price Paid
Per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs1
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans or
Programs1
July 27, 2015 - August 30, 2015
-
$ -
-
8,187,700
August 31, 2015 - September 27, 20152
400,000
62.32
400,000
7,787,700
September 28, 2015 - October 25, 2015
-
-
-
7,787,700
Total
400,000
$62.32
400,000
1 On January 31, 2013, the Company announced that its Board of Directors had authorized the repurchase of 10,000,000 shares of its common stock with no expiration date. The repurchase program was authorized at a meeting of the Company’s Board of Directors on January 29, 2013.
2 The 400,000 shares were purchased from The Hormel Foundation at $62.32, representing the average closing price for the three days of September 15, September 16, and September 17, 2015. Settlement took place on September 18, 2015.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. SELECTED FINANCIAL DATA
Selected Financial Data for the five fiscal years ended October 25, 2015, on page 13 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 14 through 32 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information on the Company’s exposure to market risk included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 31 through 32 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Financial Statements, including unaudited quarterly data, on pages 36 through 63 and the Report of Independent Registered Public Accounting Firm on page 35 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, are incorporated herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this report (the Evaluation Date), the Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Internal Control over Financial Reporting
(a) The report entitled “Management’s Report on Internal Control Over Financial Reporting” on page 33 of the Annual Stockholder’s Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.
(b) The report entitled “Report of Independent Registered Public Accounting Firm” on page 34 of the Annual Stockholder’s Report for the fiscal year ended October 25, 2015, is incorporated herein by reference.
(c) During the fourth quarter of fiscal year 2015, there has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. OTHER INFORMATION
None.
PART III

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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information under “Item 1 - Election of Directors” on pages 2 through 7, information under “Board Independence” on pages 8 and 9, and information under “Board of Director and Committee Meetings” on pages 9 and 10 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.
Information concerning Executive Officers is set forth in Part I, Item 1(f) of this Annual Report on Form 10-K, pursuant to Instruction 3 to Paragraph (b) of Item 401 of Regulation S-K.
Information under “Section 16(a) Beneficial Ownership Reporting Compliance,” on pages 33 and 34 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.
The Company has adopted a Code of Ethical Business Conduct in compliance with applicable rules of the Securities and Exchange Commission that applies to its principal executive officer, its principal financial officer, and its principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethical Business Conduct is available on the Company’s Web site at www.hormelfoods.com, free of charge, under the caption, “Investors - Corporate Governance.” The Company intends to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this Code of Ethical Business Conduct by posting such information on the Company’s Web site at the address and location specified above.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION
Information commencing with “Executive Compensation” on page 16 through “Potential Payments Upon Termination at Fiscal 2015 Year End” on pages 31 through 33, and information under “Compensation of Directors” on pages 11 through 12 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information regarding the Company’s equity compensation plans as of October 25, 2015, is shown below:
Plan Category
Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
Weighted-
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights
Number of Securities Remaining
Available for Future Issuance
under Equity Compensation
Plans (Excluding Securities
Reflected in Column (a))
(a)
(b)
(c)
Equity compensation plans approved by security holders
17,198,531
$ 27.67
25,067,926
Equity compensation plans not approved by security holders
-
-
-
Total
17,198,531
$ 27.67
25,067,926
Information under “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management” on pages 15 and 16 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information under “Related Party Transactions” on page 33 and “Board Independence” on pages 8 and 9 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.

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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information under “Independent Registered Public Accounting Firm Fees” and “Audit Committee Preapproval Policies and Procedures” on pages 14 and 15 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 26, 2016, is incorporated herein by reference.
PART IV

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ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The response to Item 15 is submitted as a separate section of this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HORMEL FOODS CORPORATION
By:
/s/ JEFFREY M. ETTINGER
December 16, 2015
JEFFREY M. ETTINGER, Chairman of the
Date
Board, Chief Executive Officer, and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Date
Title
/s/ JEFFREY M. ETTINGER
12/16/15
Chairman of the Board, Chief Executive
JEFFREY M. ETTINGER
Officer, and Director
(Principal Executive Officer)
/s/ JAMES P. SNEE
12/16/15
President and Chief Operating Officer
JAMES P. SNEE
and Director
/s/ JODY H. FERAGEN
12/16/15
Executive Vice President, Chief Financial
JODY H. FERAGEN
Officer, and Director
(Principal Financial Officer)
/s/ JAMES N. SHEEHAN
12/16/15
Vice President and Controller
JAMES N. SHEEHAN
(Principal Accounting Officer)
/s/ GARY C. BHOJWANI*
12/16/15
Director
GARY C. BHOJWANI
/s/ TERRELL K. CREWS*
12/16/15
Director
TERRELL K. CREWS
/s/ GLENN S. FORBES*
12/16/15
Director
GLENN S. FORBES
/s/ STEPHEN M. LACY*
12/16/15
Director
STEPHEN M. LACY
/s/ JOHN L. MORRISON*
12/16/15
Director
JOHN L. MORRISON
/s/ ELSA A. MURANO*
12/16/15
Director
ELSA A. MURANO
/s/ ROBERT C. NAKASONE*
12/16/15
Director
ROBERT C. NAKASONE
/s/ SUSAN K. NESTEGARD*
12/16/15
Director
SUSAN K. NESTEGARD
/s/ DAKOTA A. PIPPINS*
12/16/15
Director
DAKOTA A. PIPPINS
/s/ CHRISTOPHER J. POLICINSKI*
12/16/15
Director
CHRISTOPHER J. POLICINSKI
/s/ SALLY J. SMITH*
12/16/15
Director
SALLY J. SMITH
/s/ STEVEN A. WHITE*
12/16/15
Director
STEVEN A. WHITE
*By: /s/ JAMES N. SHEEHAN
12/16/15
JAMES N. SHEEHAN,
as Attorney-In-Fact
ANNUAL REPORT ON FORM 10-K
ITEM 15
LIST OF FINANCIAL STATEMENTS
FINANCIAL STATEMENT SCHEDULE
LIST OF EXHIBITS
FISCAL YEAR ENDED OCTOBER 25, 2015
HORMEL FOODS CORPORATION
Austin, Minnesota
Item 15.
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
HORMEL FOODS CORPORATION
FINANCIAL STATEMENTS
The following consolidated financial statements of Hormel Foods Corporation included in the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, are incorporated herein by reference in Item 8 of Part II of this report:
Consolidated Statements of Financial Position--October 25, 2015, and October 26, 2014.
Consolidated Statements of Operations--Fiscal Years Ended October 25, 2015, October 26, 2014, and October 27, 2013.
Consolidated Statements of Comprehensive Income--Fiscal Years Ended October 25, 2015, October 26, 2014, and October 27, 2013.
Consolidated Statements of Changes in Shareholders’ Investment--Fiscal Years Ended October 25, 2015, October 26, 2014, and October 27, 2013.
Consolidated Statements of Cash Flows--Fiscal Years Ended October 25, 2015, October 26, 2014, and October 27, 2013.
Notes to Consolidated Financial Statements--October 25, 2015.
Report of Independent Registered Public Accounting Firm
FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statement schedule of Hormel Foods Corporation required pursuant to Item 15(c) is submitted herewith:
Schedule II - Valuation and Qualifying Accounts and Reserves...F-3
FINANCIAL STATEMENTS AND SCHEDULES OMITTED
All other financial statements and schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
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.
LIST OF EXHIBITS
HORMEL FOODS CORPORATION
NUMBER
DESCRIPTION OF DOCUMENT
2.1(1)
Purchase Agreement by and among Hormel Foods Corporation, Applegate Farms, LLC, the management sellers listed on Exhibit A, Weiser, Inc., Stephen M. McDonnell, SPC Partners IV, L.P., K&E Investment Partners, L.P. and Applegate Investment Corporation, dated May 26, 2015. (Incorporated by reference to Exhibit 2.1 to Hormel’s Quarterly Report on Form 10-Q for the quarter ended April 26, 2015, File No. 001-02402.) Exhibits identified in the agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be furnished to the Commission upon request.
3.1(1)
Restated Certificate of Incorporation as amended to date. (Incorporated by reference to Exhibit 3.1 to Hormel’s Quarterly Report on Form 10-Q for the quarter ended January 30, 2011, File No. 001-02402.)
3.2(1)
Bylaws as amended to date. (Incorporated by reference to Exhibit 3.2 to Hormel’s Quarterly Report on Form 10-Q for the quarter ended January 24, 2010, File No. 001-02402.)
4.1(1)
Indenture dated as of April 1, 2011, between the Company and U.S. Bank National Association. (Incorporated by reference to Exhibit 4.3 to Hormel’s Registration Statement on Form S-3 filed on April 4, 2011, File No. 333-173284.)
4.2(1)
Form of 4.125% Notes due 2021. (Incorporated by reference to Exhibit 4.1 to Hormel’s Current Report on Form 8-K dated April 11, 2011, File No. 001-02402.)
4.3
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of holders of certain long-term debt are not filed. Hormel agrees to furnish copies thereof to the Securities and Exchange Commission upon request.
10.1(1)(3)
Hormel Foods Corporation Operators’ Shares Incentive Compensation Plan. (Incorporated by reference to Appendix A to Hormel’s definitive Proxy Statement filed on December 19, 2012, File No. 001-02402.)
10.2(1)(3)
Hormel Foods Corporation Supplemental Executive Retirement Plan (2007 Restatement). (Incorporated by reference to Exhibit 10.2 to Hormel’s Current Report on Form 8-K dated November 21, 2011, File No. 001-02402.)
10.3(1)(3)
First Amendment of Hormel Foods Corporation Supplemental Executive Retirement Plan (2007 Restatement). (Incorporated by reference to Exhibit 10.3 to Hormel’s Current Report on Form 8-K dated November 21, 2011, File No. 001-02402.)
10.4(1)(3)
Second Amendment of Hormel Foods Corporation Supplemental Executive Retirement Plan (2007 Restatement). (Incorporated by reference to Exhibit 10.4 to Hormel’s Current Report on Form 8-K dated November 21, 2011, File No. 001-02402.)
10.5(1)(3)
Third Amendment of Hormel Foods Corporation Supplemental Executive Retirement Plan (2007 Restatement). (Incorporated by reference to Exhibit 10.5 to Hormel’s Current Report on Form 8-K dated November 21, 2011, File No. 001-02402.)
10.6(1)(3)
Hormel Foods Corporation 2000 Stock Incentive Plan (Amended 1-31-2006). (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated January 31, 2006, File No. 001-02402.)
10.7(1)(3)
Hormel Foods Corporation Executive Deferred Income Plan II (November 21, 2011 Restatement). (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated November 21, 2011, File No. 001-02402.)
10.8(1)(3)
Form of Indemnification Agreement for Directors and Officers. (Incorporated by reference to Exhibit 10.1 to Hormel’s Quarterly Report on Form 10-Q for the quarter ended April 29, 2012, File No. 001-02402.)
10.9(1)(3)
Hormel Foods Corporation Nonemployee Director Deferred Stock Plan (Plan Adopted October 4, 1999; Amended and Restated Effective January 1, 2008). (Incorporated by reference to Exhibit 10.6 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 26, 2008, File No. 001-02402.)
LIST OF EXHIBITS (CONTINUED)
HORMEL FOODS CORPORATION
NUMBER
DESCRIPTION OF DOCUMENT
10.10(1)(3)
Hormel Foods Corporation 2009 Nonemployee Director Deferred Stock Plan (Plan Adopted November 24, 2008). (Incorporated by reference to Exhibit 10.2 to Hormel’s Quarterly Report on Form 10-Q for the quarter ended January 25, 2009, File No. 001-02402.)
10.11(1)(3)
Hormel Foods Corporation 2009 Long-Term Incentive Plan. (Incorporated by reference to Appendix A to Hormel’s definitive Proxy Statement filed on December 18, 2013, File No. 001-02402.)
10.12(1)(3)
Hormel Survivor Income Plan for Executives (1993 Restatement). (Incorporated by reference to Exhibit 10.11 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 29, 2006, File No. 001-02402.)
10.13(1)
Underwriting Agreement, dated as of April 4, 2011, by and between the Company and J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner, & Smith Incorporated as representatives of the several underwriters named in Schedule 1 thereto. (Incorporated by reference to Exhibit 1.1 to Hormel’s Current Report on Form 8-K dated April 11, 2011, File No. 001-02402.)
11.1(2)
Statement re: computation of per share earnings. (Included in Exhibit 13.1 filed with this Annual Report on Form 10-K for the fiscal year ended October 25, 2015.)
13.1(2)
Pages 13 through 66 of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015.
21.1(2)
Subsidiaries of the Registrant.
23.1(2)
Consent of Independent Registered Public Accounting Firm.
24.1(2)
Power of Attorney.
31.1(2)
Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(2)
Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(2)
Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1(1)
U.S. $300,000,000 Revolving Credit Agreement, dated as of May 25, 2010, between the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders identified on the signature pages thereof. (Incorporated by reference to Exhibit 99 to Hormel’s Current Report on Form 8-K dated May 25, 2010, File No. 001-02402.)
99.2(1)
First Amendment to U.S. $300,000,000 Revolving Credit Agreement, dated as of May 25, 2010, between the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders identified on the signature pages thereof. (Incorporated by reference to Exhibit 99 to Hormel’s Current Report on Form 8-K dated November 22, 2011, File No. 001-02402.)
99.3(1)
U.S. $700,000,000 Amended and Restated Credit Agreement, dated as of June 24, 2015, between the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the lenders identified on the signature pages thereof. (Incorporated by reference to Exhibit 99 to Hormel’s Current Report on Form 8-K dated June 24, 2015, File No. 001-02402.)
101.INS(2)
XBRL Instance Document
101.SCH(2)
XBRL Taxonomy Extension Schema Document
101.CAL(2)
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF(2)
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB(2)
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE(2)
XBRL Taxonomy Extension Presentation Linkbase Document
(1)
Document has previously been filed with the Securities and Exchange Commission and is incorporated herein by reference.
(2)
These exhibits transmitted via EDGAR.
(3)
Management contract or compensatory plan or arrangement.

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Stock Performance Metrics:
Return: 0.023458456620574
1-Day Return: $1_day_return
3-Day Return: $3_day_return
5-Day Return: $5_day_return
10-Day Return: $10_day_return
20-Day Return: $20_day_return
40-Day Return: $40_day_return
60-Day Return: $60_day_return
80-Day Return: $80_day_return
100-Day Return: $100_day_return
150-Day Return: $150_day_return
252-Day Return: $252_day_return