-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BNP5z7EoLVo1W79DsWgb8EeQFWV76xtNTDNGzZycp1+Zkz1Uqtpq2pDMcb+rVZ9u gJi3l47NkDE7mtAdGyeuPg== 0001104659-08-026514.txt : 20080424 0001104659-08-026514.hdr.sgml : 20080424 20080424155958 ACCESSION NUMBER: 0001104659-08-026514 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071027 FILED AS OF DATE: 20080424 DATE AS OF CHANGE: 20080424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HORMEL FOODS CORP /DE/ CENTRAL INDEX KEY: 0000048465 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 410319970 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02402 FILM NUMBER: 08774446 BUSINESS ADDRESS: STREET 1: 1 HORMEL PL CITY: AUSTIN STATE: MN ZIP: 55912-3680 BUSINESS PHONE: 5074375737 MAIL ADDRESS: STREET 1: 1 HORMEL PLACE CITY: AUSTIN STATE: MN ZIP: 55912-3680 FORMER COMPANY: FORMER CONFORMED NAME: HORMEL GEO A & CO DATE OF NAME CHANGE: 19920703 11-K 1 a08-12210_111k.htm 11-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 11-K

 

x

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES

 

EXCHANGE ACT OF 1934

 

 

For the fiscal year ended October 27, 2007

 

OR

 

o

TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES

 

EXCHANGE ACT OF 1934

 

 

 

For the transition period from                      to                     

 

Commission file number   1-2402

 

A.           Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

Hormel Foods Corporation Joint Earnings Profit Sharing Trust

 

B.             Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

Hormel Foods Corporation

1 Hormel Place

Austin, MN   55912

 

507-437-5611

 

 



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Audited Financial Statements and Schedule

 

Years Ended October 27, 2007, and October 28, 2006

 

Contents

 

Report of Independent Registered Public Accounting Firm

 

 

 

Audited Financial Statements

 

 

 

Statements of Net Assets Available for Benefits

 

Statements of Changes in Net Assets Available for Benefits

 

Notes to Financial Statements

 

 

 

Schedule

 

 

 

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

 

 

2



 

Report of Independent Registered Public Accounting Firm

 

The Employee Benefits Committee

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

We have audited the accompanying statements of net assets available for benefits of the Hormel Foods Corporation Joint Earnings Profit Sharing Trust (the Plan) as of October 27, 2007, and October 28, 2006, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at October 27, 2007, and October 28, 2006, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of October 27, 2007, is presented for the purpose of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

 

 

/s/ Ernst & Young LLP

Minneapolis, Minnesota

April 21, 2008

 

3



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Statements of Net Assets Available for Benefits

 

 

 

October 27,
2007

 

October 28,
2006

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

8,424

 

Investments, at fair value

 

262,464,800

 

247,523,692

 

Contributions receivable from Hormel Foods Corporation

 

10,577,075

 

9,983,455

 

Contributions receivable from participants

 

7

 

176

 

Net assets available for benefits

 

$

273,041,882

 

$

257,515,747

 

 

See accompanying notes.

 

4



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Statements of Changes in Net Assets Available for Benefits

 

 

 

Year Ended

 

 

 

October 27,
2007

 

October 28,
2006

 

Additions:

 

 

 

 

 

Contributions from Hormel Foods Corporation

 

$

10,573,094

 

$

9,996,710

 

Contributions from participants

 

70,900

 

97,757

 

Interest and dividend income

 

4,240,042

 

3,678,862

 

 

 

14,884,036

 

13,773,329

 

 

 

 

 

 

 

Deductions:

 

 

 

 

 

Distributions

 

16,284,703

 

23,333,214

 

Administrative expenses

 

93,485

 

115,642

 

 

 

16,378,188

 

23,448,856

 

 

 

 

 

 

 

Net realized and unrealized appreciation in fair value of investments

 

17,020,287

 

26,085,643

 

Net additions

 

15,526,135

 

16,410,116

 

Net assets available for benefits at beginning of year

 

257,515,747

 

241,105,631

 

Net assets available for benefits at end of year

 

$

273,041,882

 

$

257,515,747

 

 

See accompanying notes.

 

5



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Notes to Financial Statements

 

October 27, 2007

 

1. Significant Accounting Policies

 

The accounting records of the Hormel Foods Corporation Joint Earnings Profit Sharing Trust (the Plan) are maintained on the accrual basis.

 

Marketable securities are stated at fair value (the last reported sales price on the last business day of the year). The nonpooled separate account consists of common stock of Hormel Foods Corporation (the Company or the Sponsor) and a portion of uninvested cash. For separate accounts, fair value represents the net asset value of the fund shares, which is calculated based on the valuation of the funds’ underlying investments at fair value at the end of the year. The investment in the insurance company general account is reported at contract value which approximates fair value. The Plan’s insurance company general account contract is fully benefit-responsive. Benefit responsiveness is defined as the extent to which a contract’s terms and the Plan permit or require participant-initiated withdrawals at contract value.

 

All costs and expenses incurred in connection with the operation of the Plan with regard to the purchase and sale of investments and certain professional fees are paid by the Plan.

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans, investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. The Plan invests in investment contracts through Massachusetts Mutual Life Insurance Company (MassMutual). The statement of net assets available for benefits presents the fair value of the investment in the General Investment Account which equals the contract value relating to these investment contracts. The statement of changes in net assets available for benefits is prepared on a contract value basis.

 

6



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Notes to Financial Statements (continued)

 

2. Description of the Plan

 

The following description of the Plan provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan’s provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

 

The Plan is a defined contribution plan covering employees of the Company and certain eligible subsidiaries. The amount contributed by the Company each year is discretionary, as authorized by the Board of Directors. The amount available to all participants is allocated in proportion of individual recognized compensation for the plan year to the recognized compensation for the plan year for all such eligible participants. The Plan contains a diversified selection of funds intended to satisfy Section 404(c) of ERISA. Certain restrictions exist, as defined in the plan document, for investing of funds in other contribution accounts.

 

Plan participants may elect to make after-tax contributions to the Thrift account in amounts not to exceed statutory limits.

 

Each participant’s account is credited with the participant’s and the Company’s contributions and plan earnings and is charged with an allocation of administrative expenses. Allocations are based on account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s account.

 

Employee contributions are always 100% vested in the participants’ plan account. Employer contributions are 100% vested in the participants’ plan accounts for those employees hired prior to October 29, 2006. Employer contributions for employees hired after October 28, 2006, vest over a graduated six-year term.

 

Most benefits are paid upon termination of service in a lump-sum amount equal to the vested value of a participant’s account, unless an eligible participant elects to defer the payment. Complete details of payment provisions are described in a Summary Plan Description, available from the Sponsor.

 

The Company has the right under the plan agreement to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, the assets of the Plan shall be distributed to the participants.

 

7



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Notes to Financial Statements (continued)

 

3. Investment Contracts

 

The crediting interest rate on the General Investment Account was 4.65% and 4.25% as of October 27, 2007, and October 28, 2006, respectively. The Plan has entered into a benefit-responsive investment contract with MassMutual which is a general account evergreen group annuity contract. MassMutual maintains the contributions in a general account. Specific securities within the general account are not attributed to the investment contract with the Plan. The Plan owns a series of guarantees that are embedded in the insurance contract. The contractual guarantees are backed up by the full faith and credit of MassMutual, the contract issuer. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. MassMutual is contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The crediting interest rate is based on a formula agreed upon with the issuer. Such interest rates are reviewed on a semiannual basis for resetting.

 

Certain events limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (i) amendments to the plan documents (including complete or partial plan termination or merger with another plan), (ii) changes to the Plan’s prohibition on competing investment options or deletion of equity wash provisions, (iii) bankruptcy of the plan sponsor or other plan sponsor event (e.g., divestures or spin-offs of a subsidiary), which cause a significant withdrawal from the Plan, or (iv) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The plan administrator does not believe that the occurrence of any such event, which would limit the Plan’s ability to transact at contract value with participants, is probable.

 

The Guaranteed Income Account contract does not allow the insurance company to terminate the agreement prior to a breech of the contract terms by the investor or on the contract anniversary date with 90 days prior notice.

 

8



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Notes to Financial Statements (continued)

 

3. Investment Contracts (continued)

 

During the years ended October 27, 2007, and October 28, 2006, the Plan’s investments (including investments bought and sold, as well as held during the year) appreciated in fair value by $17,020,287 and $26,085,643, respectively, as follows:

 

 

 

2007

 

2006

 

Net appreciation in fair value during the year:

 

 

 

 

 

Nonpooled separate account (containing company stock)

 

$

2,106,998

 

$

13,727,842

 

Separate trust accounts

 

5,416,134

 

3,592,591

 

Pooled separate accounts

 

8,186,533

 

7,869,910

 

Common and preferred stock

 

(7,210

)

64,141

 

Mutual funds

 

1,292,178

 

827,642

 

Federal bond

 

32

 

(485

)

Other

 

25,622

 

4,002

 

 

 

$

17,020,287

 

$

26,085,643

 

 

The Plan, at the discretion of the participants, is authorized to invest up to 100% of the fair value of its net assets available for benefits in the common stock of the Company. Such investment totaled approximately 37% of total investments at October 27, 2007, and 42% of total investments at October 28, 2006.

 

The fair value of individual investments that represent 5% or more of the Plan’s net assets is as follows:

 

 

 

October 27,
2007

 

October 28,
2006

 

Nonpooled separate account:

 

 

 

 

 

Hormel Foods Corporation common stock

 

$

94,554,549

 

$

101,315,668

 

IBT Money Market Fund

 

1,342,189

 

1,415,285

 

Total nonpooled separate account

 

95,896,738

 

102,730,953

 

 

 

 

 

 

 

Insurance company general account:

 

 

 

 

 

Massachusetts Mutual Life Insurance Company:

 

 

 

 

 

General Investment Account

 

52,748,304

 

52,471,356

 

 

9



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

Notes to Financial Statements (continued)

 

3. Investment Contracts (continued)

 

 

 

October 27,
2007

 

October 28,
2006

 

Pooled separate account:

 

 

 

 

 

Massachusetts Mutual Life Insurance Company:

 

 

 

 

 

Aggressive Growth Fund

 

19,990,763

 

17,906,780

 

 

 

 

 

 

 

Separate trust account:

 

 

 

 

 

Investors Bank & Trust Company:

 

 

 

 

 

American Funds Euro Pacific Fund

 

17,334,469

 

12,372,689

 

 

4. Income Tax Status

 

The Plan has received a determination letter from the Internal Revenue Service (IRS) dated March 13, 2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code), and therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan was amended subsequent to the IRS determination letter. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan is qualified and the related trust is tax-exempt.

 

5. Risks and Uncertainties

 

The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities could occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits.

 

10



 

Hormel Foods Corporation

Joint Earnings Profit Sharing Trust

 

EIN: 41-0319970  Plan: 030

 

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

 

October 27, 2007

 

Identity of Issuer, Borrower, Lessor, or Similar Party

 

Description of Investment, Including Maturity Date,
Rate of Interest, Par,
or Maturity Value

 

Current
Value

 

 

 

 

 

 

 

Nonpooled separate account:

 

 

 

 

 

Investors Bank & Trust Company:*

 

 

 

 

 

Hormel Stock Fund

 

4,141,437 units

 

$

95,896,738

 

 

 

 

 

 

 

Insurance company general account:

 

 

 

 

 

Massachusetts Mutual Life Insurance Company:*

 

 

 

 

 

General Investment Account

 

3,297,164 units

 

52,748,304

 

 

 

 

 

 

 

Pooled separate accounts:

 

 

 

 

 

Massachusetts Mutual Life Insurance Company:*

 

 

 

 

 

Aggressive Growth Fund

 

1,141,019 units

 

19,990,763

 

Moderate Growth Fund

 

700,427 units

 

12,203,578

 

Select Small Cap Value Equity Fund (SSgA)

 

53,759 units

 

5,704,093

 

Select Fundamental Value (Wellington)

 

54,496 units

 

8,911,026

 

Conservative Growth Fund

 

602,410 units

 

10,195,876

 

Select Large Cap Value Fund (Davis)

 

25,209 units

 

5,410,746

 

Select Indexed Equity Fund (Northern Trust)

 

8,020 units

 

3,325,673

 

Select Aggressive Growth Fund (Sands)

 

38,980 units

 

2,999,521

 

Premier Core Bond (Babson Capital)

 

999 units

 

1,520,112

 

Conservative Journey

 

7,670 units

 

1,181,632

 

Total pooled separate accounts

 

 

 

71,443,020

 

 

 

 

 

 

 

Separate trust accounts:

 

 

 

 

 

Investors Bank & Trust Company:*

 

 

 

 

 

American Funds Euro Pacific Fund

 

624,245 units

 

17,334,469

 

Manager’s Special Equity Fund

 

359,906 units

 

5,451,951

 

American Funds Growth R4 Fund

 

395,355 units

 

7,082,555

 

Black Rock High Yield Bond

 

191,619 units

 

2,336,041

 

Total separate trust accounts

 

 

 

32,205,016

 

 

 

 

 

 

 

Self-directed brokerage assets

 

 

 

10,171,722

 

Total assets held for investment purposes

 

 

 

$

262,464,800

 

 


*Indicates a party in interest to the Plan.

 

11



 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized.

 

 

 

HORMEL FOODS CORPORATION
JOINT EARNINGS PROFIT SHARING TRUST

 

 

 

 

 Date:

April 22, 2008

By:

 /s/ JODY H. FERAGEN

 

 

 

JODY H. FERAGEN

 

 

Senior Vice President

 

 

and Chief Financial Officer

 

12



 

EXHIBIT INDEX

 

Exhibit
Number
 
Description

23

 

Consent of Independent Registered Public Accounting Firm

 

13


EX-23 2 a08-12210_1ex23.htm EX-23

Exhibit 23

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-102806) pertaining to the Hormel Foods Corporation Joint Earnings Profit Sharing Trust of our report dated April 21, 2008, with respect to the financial statements and schedule of Hormel Foods Corporation’s Joint Earnings Profit Sharing Trust included in this Annual Report (Form 11-K) for the year ended October 27, 2007.

 

 

/s/ Ernst & Young LLP

 

Minneapolis, Minnesota

April 21, 2008

 


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