10-K

ANNUAL REPORT ON FORM 10-K

HORMEL FOODS CORPORATION

OCTOBER 25, 2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 25, 2015

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, Minnesota	55912-3680
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (507) 437-5611

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.0293 par value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes X   No    

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes      No X

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, and (2) has been subject to such filing requirements for the past 90 days.  Yes X   No    

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T during the preceding 12 months.  Yes X   No    

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  (  )

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  X	Accelerated filer
Non-accelerated filer           (Do not check if a smaller reporting company)	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes      No X

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of April 26, 2015, was $7,354,755,988, based on the closing price of $54.85 on the last business day of the registrant’s most recently completed second fiscal quarter.

As of November 27, 2015, the number of shares outstanding of each of the registrant’s classes of common stock was as follows:

Common Stock, $0.0293 Par Value – 264,228,740 shares

Common Stock Non-Voting, $0.01 Par Value – 0 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Stockholders’ Report for the fiscal year ended October 25, 2015, are incorporated by reference into Part I, Items 1 and 1A and Part II, Items 5-8 and 9A, and included as Exhibit 13.1 filed herewith.

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held January 26, 2016, are incorporated by reference into Part III, Items 10-14.

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HORMEL FOODS CORPORATION

TABLE OF CONTENTS

PART I
	Item 1.	BUSINESS	3
	Item 1A.	RISK FACTORS	7
	Item 1B.	UNRESOLVED STAFF COMMENTS	7
	Item 2.	PROPERTIES	8
	Item 3.	LEGAL PROCEEDINGS	10
	Item 4.	MINE SAFETY DISCLOSURES	10
PART II
	Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	11
	Item 6.	SELECTED FINANCIAL DATA	11
	Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
	Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
	Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	12
	Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	12
	Item 9A.	CONTROLS AND PROCEDURES	12
	Item 9B.	OTHER INFORMATION	12
PART III
	Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	13
	Item 11.	EXECUTIVE COMPENSATION	13
	Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	13
	Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	14
	Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	14
PART IV
	Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	14
SIGNATURES			15

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PART I

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:

	Fiscal Year Ended
	October 25, 2015			October 26, 2014			October 27, 2013
Perishable		53.0	%		54.5	%		53.3	%
Poultry		18.6			18.4			18.8
Shelf-stable		18.4			19.0			19.0
Miscellaneous		10.0			8.1			8.9
		100.0	%		100.0	%		100.0	%

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

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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.

4

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.

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(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	57	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	48	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	59	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	58	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	51	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	50	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	57	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	55	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	55	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

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(f) Executive Officers of the Registrant - Continued

		CURRENT OFFICE AND PREVIOUS
NAME	AGE	FIVE YEARS EXPERIENCE	DATES
James M. Splinter	53	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	52	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	58	Senior Vice President (Supply Chain)	03/03/14 to Present
		Vice President Quality Management	08/01/05 to 03/02/14
Lawrence C. Lyons	60	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	48	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.	50	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	61	Vice President (Finance) and Treasurer	01/01/07 to Present
Brian D. Johnson	55	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	60	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.

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.

Item 1B.  UNRESOLVED STAFF COMMENTS

None.

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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

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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

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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.

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.

Item 4.  MINE SAFETY DISCLOSURES

Not applicable.

10

PART II

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:

2015	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
2014	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.

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.

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.

11

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.

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.

Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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.

Item 9B.  OTHER INFORMATION

None.

12

PART III

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.

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.

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.

13

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.

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

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The response to Item 15 is submitted as a separate section of this report.

14

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

15

*By: /s/ JAMES N. SHEEHAN	12/16/15
JAMES N. SHEEHAN,
as Attorney-In-Fact

16

F-1

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

17

F-2

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.

18

F-3

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.

19

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.)

20

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

21

(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.

22

EX-13.1

Exhibit 13.1

SELECTED PAGES OF THE 2015 ANNUAL STOCKHOLDERS’ REPORT

Selected Financial Data

(in thousands, except per share amounts)	2015		2014		2013		2012		2011
Operations
Net Sales	$9,263,863		$9,316,256		$8,751,654		$8,230,670		$7,895,089
Net Earnings	687,264		606,026		530,076		504,961		479,196
Net Earnings Attributable to Hormel Foods Corporation	686,088		602,677		526,211		500,050		474,195
% of net sales	7.41	%	6.47	%	6.01	%	6.08	%	6.01	%
EBIT(1)	1,066,144		928,271		802,124		759,763		737,283
% of net sales	11.51	%	9.96	%	9.17	%	9.23	%	9.34	%
EBITDA(2)	1,199,578		1,058,315		926,974		879,257		861,448
% of net sales	12.95	%	11.36	%	10.59	%	10.68	%	10.91	%
Return on Invested Capital(3)	15.62	%	15.79	%	14.92	%	16.43	%	16.85	%
Financial Position
Total Assets	6,139,831		5,455,619		4,915,880		4,563,966		4,244,391
Long-term Debt less Current Maturities	250,000		250,000		250,000		250,000		250,000
Hormel Foods Corporation Shareholders’ Investment	3,998,198		3,605,678		3,311,040		2,819,455		2,656,582
Selected Cash Flow Data
Depreciation and Amortization	133,434		130,044		124,850		119,494		124,165
Capital Expenditures	144,063		159,138		106,762		132,303		96,911
Acquisitions of Businesses	770,587		466,204		665,415		168		7,207
Share Repurchase	24,928		58,937		70,819		61,366		152,930
Dividends Paid	250,834		203,156		174,320		152,204		129,975
Common Stock
Weighted-Average Shares Outstanding — Basic	264,072		263,812		264,317		263,466		266,394
Weighted-Average Shares Outstanding — Diluted	270,501		270,216		270,224		268,891		271,915
Earnings per Share — Basic	$         2.60		$         2.28		$         1.99		$         1.90		$         1.78
Earnings per Share — Diluted	2.54		2.23		1.95		1.86		1.74
Dividends per Share	1.00		0.80		0.68		0.60		0.51
Hormel Foods Corporation Shareholders’ Investment per Share	15.13		13.68		12.56		10.72		10.06

The Company provides EBIT, EBITDA, and Return on Invested Capital because these measures are useful to investors as indicators of operating strength and performance relative to prior years, and are typically used to benchmark our Company’s performance against other companies in our industry. Management uses EBIT as a component of certain executive incentive plans, but does not utilize EBITDA for any material purpose. These measures are calculated as follows:

(in thousands)	2015		2014		2013		2012		2011
(1) EBIT:
Net Earnings Attributable to Hormel Foods Corporation	$   686,088		$   602,677		$   526,211		$   500,050		$   474,195
Plus: Income Tax Expense	369,879		316,126		268,431		253,374		239,640
Plus: Interest Expense	13,111		12,704		12,453		12,859		22,662
Less: Interest and Investment Income (Loss)	2,934		3,236		4,971		6,520		(786	)
EBIT	$1,066,144		$   928,271		$   802,124		$   759,763		$   737,283
(2) EBITDA:
EBIT per (1) above	$1,066,144		$   928,271		$   802,124		$   759,763		$   737,283
Plus: Depreciation and Amortization	133,434		130,044		124,850		119,494		124,165
EBITDA	$1,199,578		$1,058,315		$   926,974		$   879,257		$   861,448
(3) Return on Invested Capital:
EBIT per (1) above	$1,066,144		$   928,271		$   802,124		$   759,763		$   737,283
X (1 — Effective Tax Rate*)	64.97	%	65.59	%	66.22	%	66.37	%	66.43	%
After-tax EBIT	692,674		608,887		531,166		504,257		489,771
Divided by:
Total Debt	435,000		250,000		250,000		250,000		250,000
Hormel Foods Corporation Shareholders’ Investment	3,998,198		3,605,678		3,311,040		2,819,455		2,656,582
Total Debt and Shareholders’ Investment	4,433,198		3,855,678		3,561,040		3,069,455		2,906,582
Return on Invested Capital	15.62	%	15.79	%	14.92	%	16.43	%	16.85	%

* Excluding earnings attributable to noncontrolling interests.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Fiscal 2015: Hormel Foods achieved record earnings for fiscal 2015. Sales for the year were $9.3 billion, a 1 percent decrease from last year as the effects of avian influenza tempered sales for the Jennie-O Turkey Store segment and price deflation in the pork markets impacted our Refrigerated Foods and International & Other segments. Net earnings attributable to the Company for fiscal 2015 increased 13.8 percent to $686.1 million, from $602.7 million in fiscal 2014. Diluted earnings per share for fiscal 2015 increased 13.9 percent to $2.54 compared to $2.23 per share last year. Non-GAAP adjusted net earnings for the year were $714.4 million, an increase of 18.5 percent over 2014, with all five segments contributing to the growth. Non-GAAP adjusted earnings per diluted share were $2.64, an 18.4 percent improvement compared to last year. (See explanation of non-GAAP financial measures in the Consolidated Results section).

Improved performance for the Grocery Products, Refrigerated Foods, and Specialty Foods segments drove financial results for the year. The Grocery Products segment benefited from lower input costs, especially in the second half of the year, with strong sales growth for the SPAM® family of products, Dinty Moore® items, Hormel® hash, and Wholly Guacamole® products in MegaMex Foods. Financial performance for the Refrigerated Foods segment improved over last year, also benefiting from lower input costs for the value-added products in Foodservice and Meat Products. Continued strong value-added sales, and the addition of Applegate Farms, LLC (Applegate) were additional catalysts for growth in the segment. Specialty Foods segment net sales and profit were higher, driven by the contributions of Muscle Milk® sports nutrition products and synergies captured within the CytoSport and Century Foods supply chain. The Jennie-O Turkey Store segment, propelled by an excellent start through the first half of the year, delivered segment profit ahead of last year. Significant turkey supply shortages, the result of highly pathogenic avian influenza (HPAI), impacted sales, volume, and plant operational efficiencies in the second half of the year. Strong demand for fresh lean ground turkey products was a leading contributor to the year’s improved performance. The International & Other segment saw nice growth in China and export sales of SKIPPY® peanut butter, offsetting softer exports of fresh pork and the SPAM® family of products which were impacted by shipping delays caused by port issues and further hindered by a stronger dollar. General corporate expense was higher due to an increase in employee-related expenses and higher professional and legal fees. Our financial performance continued to generate substantial operating cash flows. We completed the acquisition of Applegate, spending a total of $774.1 million. We announced a 16 percent increase to our dividend after a 25 percent increase last year. The annual dividend for 2016 will be $1.16 per share and marks the 50th consecutive year of dividend increases.

Fiscal 2016 Outlook: We are pleased with our momentum heading into fiscal 2016 and expect renewed revenue growth as the year proceeds. Lower input costs are expected to provide a benefit for Grocery Products and Refrigerated Foods value-added margins, offsetting modestly lower pork operating margins compared to fiscal 2015. Strong demand for Applegate® natural and organic products will be an additional growth catalyst for the Refrigerated Foods segment. We expect the Jennie-O Turkey Store segment to return to growth in the second half of fiscal 2016, benefiting from strong demand for branded Jennie-O® products and low grain costs if there are no significant recurrences of HPAI. Specialty Foods should deliver increases through the growth of its Muscle Milk® protein nutrition products, and we expect the International & Other segment to achieve year-over-year improved results through the expansion of our business in China along with increased sales of the SPAM® and SKIPPY® families of products.

Critical Accounting Policies

This discussion and analysis of financial condition and results of operations is based upon the consolidated financial statements of Hormel Foods Corporation (the Company), which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company evaluates, on an ongoing basis, its estimates for reasonableness as changes occur in its business environment. The Company bases its estimates on experience, the use of independent third-party specialists, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Critical accounting policies are defined as those that are reflective of significant judgments, estimates, and uncertainties, and potentially result in materially different results under different assumptions and conditions. The Company believes the following are its critical accounting policies:

Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured.

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The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contractual accruals are based on agreements with customers for defined performance. The liability relating to these agreements is based on a review of the outstanding contracts on which performance has taken place but for which the promotional payments relating to such contracts remain unpaid as of the end of the fiscal year. The level of customer performance and the historical spend rate versus contracted rates are significant estimates used to determine these liabilities.

Inventory Valuation: The Company values its pork inventories at the lower of cost or USDA market prices (primal values). When the carcasses are disassembled and transferred from primal processing to various manufacturing departments, the primal values, as adjusted by the Company for product specifications and further processing, become the basis for calculating inventory values. Turkey raw materials are represented by the deboned meat quantities. The Company values these raw materials using a concept referred to as the “meat cost pool.” The meat cost pool is determined by combining the cost to grow turkeys with processing costs, less any net sales revenue from by-products created from the processing and not used in producing Company products. The Company has developed a series of ratios using historical data and current market conditions (which themselves involve estimates and judgment determinations by the Company) to allocate the meat cost pool to each meat component. Substantially all inventoriable expenses, meat, packaging, and supplies are valued by the average cost method.

Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise.

In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test.

In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that may impact their business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results.

If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. First, the fair value of each reporting unit is compared to its corresponding carrying value, including goodwill. The fair value of each reporting unit is estimated using discounted cash flow valuations (Level 3), which incorporate assumptions regarding future growth rates, terminal values, and discount rates. The estimates and assumptions used consider historical performance and are consistent with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference.

During fiscal 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal 2015.

In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test.

In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset.

If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections

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and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment.

Based on the qualitative assessment conducted in fiscal 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal 2015, 2014, or 2013.

Employee Benefit Plans: The Company incurs expenses relating to employee benefits, such as noncontributory defined benefit pension plans and post-retirement health care benefits. In accounting for these employment costs, management must make a variety of assumptions and estimates including mortality rates, discount rates, overall Company compensation increases, expected return on plan assets, and health care cost trend rates. The Company considers historical data as well as current facts and circumstances when determining these estimates. The Company uses third-party specialists to assist management in the determination of these estimates and the calculation of certain employee benefit expenses.

Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

The Company computes its provision for income taxes based on the statutory tax rates and tax planning opportunities available to it in the various jurisdictions in which it operates. Significant judgment is required in evaluating the Company’s tax positions and determining its annual tax provision. While the Company considers all of its tax positions fully supportable, the Company is occasionally challenged by various tax authorities regarding the amount of taxes due. The Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. A change in judgment related to the expected ultimate resolution of uncertain tax positions will be recognized in earnings in the quarter of such change.

Contingent Liabilities: At any time, the Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. 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. The Company routinely assesses the likelihood of any adverse outcomes related to these matters on a case by case basis, as well as the potential ranges of losses and fees. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. Where the Company is able to

reasonably estimate a range of potential losses, the Company records the amount within that range that constitutes the Company’s best estimate. The Company also discloses the nature of and range of loss for claims against the Company when losses are reasonably possible and material. These accruals and disclosures are determined based on the facts and circumstances related to the individual cases and require estimates and judgments regarding the interpretation of facts and laws, as well as the effectiveness of strategies or other factors beyond our control.

Results of Operations

OVERVIEW

The Company is a processor of branded and unbranded food products for retail, foodservice, and fresh product customers. The Company operates in the following five reportable segments:

Segment	Business Conducted
Grocery Products	This segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex Foods, LLC (MegaMex) joint venture.
Refrigerated Foods	This segment consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers. This segment includes the results of Applegate Farms, LLC (Applegate) and Affiliated Foods (Farmer John, Burke, and Dan’s Prize).
Jennie-O Turkey Store	This segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and fresh product customers.
Specialty Foods	This segment consists of the packaging and sale of private label shelf stable products, nutritional products, sugar, and condiments to industrial, retail, and foodservice customers including the results of Diamond Crystal Brands (DCB), CytoSport/Century Foods International, and Hormel Specialty Products (HSP). As of the end of fiscal 2015, a portion of DCB is held for sale.
International & Other	This segment includes Hormel Foods International, which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures.

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The Company’s fiscal year consisted of 52 weeks in 2015, 2014, and 2013. Fiscal year 2016 will consist of 53 weeks.

FISCAL YEARS 2015 AND 2014:

Consolidated Results

Net Earnings: Net earnings attributable to the Company for the fourth quarter of fiscal 2015 were $187.2 million, an increase of 9.3 percent compared to earnings of $171.3 million for the same quarter last year. Diluted earnings per share were $0.69 compared to $0.63 for the same quarter last year. Net earnings attributable to the Company for fiscal 2015 increased 13.8 percent to $686.1 million, from $602.7 million in fiscal 2014. Diluted earnings per share for fiscal 2015 increased 13.9 percent to $2.54 compared to $2.23 per share last year.

Non-GAAPadjusted(1)netearningsattributabletotheCompany(2)forthefourthquarteroffiscal2015were$199.9million,anincreaseof16.7percentcomparedtoearningsof$171.3millioninthesameperiodoffiscal2014.Non-GAAP

adjusted(1) diluted earnings per share(2) were $0.74 compared to $0.63 for the same quarter last year. Non-GAAP adjusted(1) net earnings attributable to the Company(2) for fiscal 2015 increased 18.5 percent to $714.4 million from $602.7 million in the same period of fiscal 2014. Non-GAAP adjusted(1) diluted earnings per share(2) for the same period increased 18.4 percent to $2.64 compared to $2.23 last year.

(1)The non-GAAP financial measurements are presented to provide investors additional information to facilitate the comparison of past and present operations. The non-GAAP financial measurements are used for internal purposes to evaluate the results of operations and to measure a component of certain employee incentive plans in fiscal 2015. Non-GAAP measurements are not intended to be a substitute for U.S. GAAP measurements in analyzing financial performance. These non-GAAP measurements are not in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies.

(2)Adjusted net earnings and diluted net earnings per share exclude charges relating to the closure of the Stockton, California, manufacturing facility and the exit from international joint venture businesses in the first quarter, and charges relating to the goodwill impairment charge associated with Diamond Crystal Brands and an adjustment to the contingent consideration accrual for CytoSport in the fourth quarter of fiscal 2015. The tables below show the calculations to reconcile from the non-GAAP adjusted measures to the GAAP measures.

					Fourth Quarter
					2015		Diamond		CytoSport
					Non- GAAP		Crystal		Contingent
					Adjusted		Brands		Consideration	2015 GAAP
(In thousands, except per share amounts)					Earnings		Impairment		Adjustment	Earnings
Grocery Products					$   78,772					$   78,772
Refrigerated Foods					111,287					111,287
Jennie-O Turkey Store					73,227					73,227
Specialty Foods					35,015		$ (21,537	)	$ 8,870	22,348
International & Other					23,300					23,300
Total segment operating profit					$ 321,601		$ (21,537	)	$ 8,870	$ 308,934
General corporate expense					(16,649	)				(16,649	)
Net interest & investment expense					(3,341	)				(3,341	)
Earnings before income taxes					$ 301,611		$ (21,537	)	$ 8,870	$ 288,944
Income taxes					(101,713	)				(101,713	)
Net earnings attributable to Hormel Foods Corporation					$ 199,898		$ (21,537	)	$ 8,870	$ 187,231
Diluted net earnings per share					$       0.74		$     (0.08	)	$   0.03	$       0.69
	Fiscal Year 2015
	2015						Diamond		CytoSport
	Non- GAAP		Stockton		International		Crystal		Contingent
	Adjusted		Plant		Business		Brands		Consideration	2015 GAAP
(In thousands, except per share amounts)	Earnings		Closure		Exit		Impairment		Adjustment	Earnings
Grocery Products	$    239,108		$ (10,526	)						$    228,582
Refrigerated Foods	424,968									424,968
Jennie-O Turkey Store	276,217									276,217
Specialty Foods	105,925						$ (21,537	)	$ 8,870	93,258
International & Other	87,864				$ (9,546	)				78,318
Total segment operating profit	$ 1,134,082		$ (10,526	)	$ (9,546	)	$ (21,537	)	$ 8,870	$ 1,101,343
General corporate expense	(35,199	)								(35,199	)
Net interest & investment expense	(10,177	)								(10,177	)
Earnings before income taxes	$ 1,088,706		$ (10,526	)	$ (9,546	)	$ (21,537	)	$ 8,870	$ 1,055,967
Income taxes	(374,334	)	3,685		770					(369,879	)
Net earnings attributable to Hormel Foods Corporation	$    714,372		$   (6,841	)	$ (8,776	)	$ (21,537	)	$ 8,870	$    686,088
Diluted net earnings per share*	$          2.64		$     (0.03	)	$   (0.03	)	$     (0.08	)	$   0.03	$          2.54

*Earnings per share does not sum across due to rounding.

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Net Sales: Net sales for the fourth quarter of fiscal 2015 decreased to $2.40 billion from $2.54 billion in the same quarter of fiscal 2014, a decrease of 5.6 percent. Net sales for fiscal 2015 decreased 0.6 percent to $9.26 billion compared to $9.32 billion in the prior year. Lower sales for the quarter and year were primarily due to turkey supply shortages in the Company’s Jennie-O Turkey Store (JOTS) segment and price deflation in the pork markets, impacting sales within the Refrigerated Foods and International & Other segments along with the dissolution of the Precept Foods joint venture at the end of fiscal 2014. Tonnage for the fourth quarter decreased 2.1 percent to 1.31 billion lbs. compared to 1.34 billion lbs. for the same period last year. Tonnage for the fiscal year increased 2.2 percent to 5.11 billion lbs. from 5.00 billion lbs. in the prior year.

Net sales and tonnage for the fiscal 2015 fourth quarter and year were positively impacted by the following incremental sales of material product lines including Applegate, CytoSport, and additional MegaMex Foods products not included in the prior year:

(in thousands)	Fourth Quarter		Year
Segment	Net Sales	Tonnage (lbs.)	Net Sales	Tonnage (lbs.)
Specialty Foods	$13,209	5,463	$237,829	102,915
Grocery Products	26,478	16,415	95,942	64,404
Refrigerated Foods	80,352	12,670	92,796	14,646

Despite a strong start to fiscal 2015, the effects of highly pathogenic avian influenza (HPAI) on the turkey supply chain significantly impacted JOTS as the number of birds through the Company’s facilities was reduced in the second half of the year. Value-added sales across the Company’s segments were strong, but price reductions taken on certain items in the Company’s Refrigerated Foods and International & Other segments due to the declining pork markets tempered top-line results.

The Company is moving into fiscal 2016 with positive sales trends for key product lines including Wholly Guacamole® dips, SKIPPY® peanut butter, and Hormel® Fire Braised™ meats. In fiscal 2016, the Company will benefit from a full year of Applegate sales. The addition of Applegate represents a significant opportunity for the Company to expand its presence in the natural and organic channels. To further support growth, the Company will continue to build brand awareness with increased advertising support for key products such as Hormel® REV® wraps, Hormel® Natural Choice® meats, SKIPPY® peanut butter, Wholly Guacamole® dips, and the SPAM® family of products.

Cost of Products Sold: Cost of products sold for the fourth quarter of fiscal 2015 decreased 10.1 percent to $1.91 billion compared to $2.12 billion in the fourth quarter last year, and decreased 3.8 percent to $7.46 billion in fiscal 2015 compared to $7.75 billion in fiscal 2014. Lower pork input costs for the Refrigerated Foods, Grocery Products, and International & Other segments led to the decrease for the quarter and fiscal year, partially offset by additional product costs from the acquisition of Applegate for the fourth quarter and CytoSport for the fiscal year. Results for the year also reflect charges totaling $10.5 million related to the closure of the Stockton, California manufacturing facility.

Gross Profit: Gross profit was $495.0 million and $1.81 billion for the 2015 fourth quarter and fiscal year, respectively, compared to $423.6 million and $1.56 billion last year. As a percentage of net sales, gross profit increased to 20.6 percent for the fourth quarter compared to 16.7 percent in fiscal 2014, and increased to 19.5 percent for the year compared to 16.8 percent in fiscal 2014.

Higher margins from the Grocery Products, Refrigerated Foods, and International & Other segments in the fourth quarter offset lower margins in the JOTS and Specialty Foods segments. Favorable raw material and plant operating costs along with improved equity in earnings contributed to the growth for Grocery Products. The Refrigerated Foods segment posted solid margin gains in the fourth quarter led by strong performance from Affiliated Foods. Positive results in China along with favorable costs on products such as SPAM® luncheon meat and SKIPPY® peanut butter in the International & Other segment aided margins. JOTS finished below last year as shortfalls due to flocks lost to HPAI lowered plant processing and sales volumes. For the year, synergies captured within the CytoSport and Century Foods operations contributed to the improved margins in fiscal 2015. Additionally, the Company’s value-added businesses within the Refrigerated Foods segment benefited from the lower input costs referenced above.

Positive volume trends and favorable pork and beef trim markets should continue to support margins for Grocery Products. Plant costs should also be favorable versus last year due to operational efficiencies gained as a result of the closure of the Stockton, California manufacturing plant in fiscal 2015. Refrigerated Foods entered fiscal 2016 with favorable pork operating margins. The value-added businesses should benefit from lower raw material costs. The addition of Applegate and its portfolio of natural and organic products will be an additional growth catalyst for this segment. The International & Other segment is entering 2016 with good momentum due to strong SPAM® and SKIPPY® sales and continued positive results from China. Specialty Foods expects to deliver increases through growth of Muscle Milk® protein nutrition products. Going into fiscal 2016, JOTS will be impacted by the lingering effects from the 2015 HPAI impact, but is expected to return to growth in the second half of the year.

Selling, General and Administrative: Selling, general and administrative expenses for the fourth quarter and year were $189.0 million and $743.6 million, respectively, compared to $165.9 million and $650.9 million last year. Selling, general and administrative expenses as a percentage of net sales for the fourth quarter increased to 7.9 percent compared to the prior year at 6.5 percent. For the fiscal year, these expenses

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increased to 8.0 percent of net sales from 7.0 percent in fiscal 2014. The Company incurred $40.4 million higher employee-related and $31.0 million higher advertising expenses in fiscal 2015 in addition to the added expenses related to the acquisition of Applegate during the fourth quarter and CytoSport for the fiscal year. Building upon double-digit growth in advertising in fiscal 2015, the Company plans a similar increase in advertising spend in fiscal 2016, with investments in key brands such as Hormel® REV® wraps, Hormel® Natural Choice® meats, Hormel® pepperoni, SKIPPY® peanut butter, the SPAM® family of products, Wholly Guacamole® dips, and Jennie-O® products later in the year, assuming bird supply normalizes as planned. As a percentage of net sales, the Company expects selling, general and administrative expenses to be approximately 8.0 percent in fiscal 2016.

Research and development expenses were $8.5 million and $32.0 million for the fiscal 2015 fourth quarter and year, respectively, compared to $7.5 million and $29.9 million in fiscal 2014.

Goodwill Impairment Charge: A goodwill impairment charge of $21.5 million was recorded in the fourth quarter of fiscal 2015 as the Company decided to sell a portion of DCB and classify it as held for sale.

Equity in Earnings of Affiliates: Equity in earnings of affiliates was $8.0 million and $23.9 million for the fiscal 2015 fourth quarter and year, respectively, compared to $5.7 million and $17.6 million last year. The increase for both the fourth quarter and fiscal 2015 is largely the result of improved earnings

from the Company’s 50 percent owned MegaMex joint venture, reflecting the impact of incentive expenses on the Fresherized Foods acquisition recognized in the prior year.

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 receivables from other affiliates, are included in the Consolidated Statements of Financial Position as investments in and receivables from affiliates. The composition of this line item at October 25, 2015, was as follows:

(in thousands)
Country	Investments/Receivables
United States	$200,110
Foreign	58,888
Total	$258,998

Income Taxes: The Company’s effective tax rate for the fiscal 2015 fourth quarter and year was 35.2 percent and 35.0 percent, respectively, compared to 34.1 percent and 34.3 percent, respectively, for the fourth quarter and year in fiscal 2014. The higher rate for the fourth quarter of fiscal 2015 is due to the impact of the goodwill impairment charge. Fiscal 2015 was also impacted by the unfavorable impact of the exit from international joint venture businesses. The Company expects the effective tax rate in fiscal 2016 to be approximately 34.0 percent.

Segment Results

Net sales and operating profits for each of the Company’s reportable segments are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below. (Additional segment financial information can be found in Note P “Segment Reporting.”)

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net Sales
Grocery Products	$   422,570	$   405,166	4.3	$1,617,680	$1,558,265	3.8
Refrigerated Foods	1,149,496	1,211,890	(5.1)	4,372,347	4,644,179	(5.9)
Jennie-O Turkey Store	420,312	509,980	(17.6)	1,635,776	1,672,452	(2.2)
Specialty Foods	269,887	277,559	(2.8)	1,103,359	907,120	21.6
International & Other	138,593	139,176	(0.4)	534,701	534,240	0.1
Total Net Sales	$2,400,858	$2,543,771	(5.6)	$9,263,863	$9,316,256	(0.6)
Segment Operating Profit
Grocery Products	$     78,772	$     50,051	57.4	$   228,582	$   195,064	17.2
Refrigerated Foods	111,287	87,296	27.5	424,968	338,020	25.7
Jennie-O Turkey Store	73,227	95,253	(23.1)	276,217	272,362	1.4
Specialty Foods	22,348	13,747	62.6	93,258	71,514	30.4
International & Other	23,300	22,629	3.0	78,318	84,745	(7.6)
Total Segment Operating Profit	308,934	268,976	14.9	1,101,343	961,705	14.5
Net interest and investment expense (income)	3,341	2,626	27.2	10,177	9,468	7.5
General corporate expense	16,649	6,192	168.9	35,199	33,434	5.3
Noncontrolling interest	212	584	(63.7)	1,176	3,349	(64.9)
Earnings Before Income Taxes	$   289,156	$   260,742	10.9	$1,057,143	$   922,152	14.6

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Grocery Products: Results for the Grocery Products segment compared to the prior year are as follows:

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net sales	$422,570	$405,166	4.3	$1,617,680	$1,558,265	3.8
Tonnage (lbs.)	230,170	218,912	5.1	890,735	850,844	4.7
Segment profit	$  78,772	$  50,051	57.4	$   228,582	$   195,064	17.2

Additional MegaMex Foods products not included in the prior year contributed an incremental $26.4 million of net sales and 16.4 million lbs. for the fourth quarter, and $95.9 million of net sales and 64.4 million lbs. for the year in fiscal 2015. Strong sales of SKIPPY® peanut butter, Dinty Moore® stew, and Hormel® chili also contributed to the improved net sales results for the fourth quarter, offsetting sales declines of Hormel® Compleats® microwave meals.

Lower pork and beef input costs and improved manufacturing productivity drove segment profit results in the fourth quarter, as well as improved equity in earnings results. Segment profit results for the year in fiscal 2015 were impacted by charges totaling $10.5 million related to the closure of the Stockton, California manufacturing facility.

Looking ahead to fiscal 2016, the Company anticipates the Grocery Products segment to benefit from continued lower pork and beef input costs, especially as compared to the first half of fiscal 2015, along with positive sales trends for key product lines including Wholly Guacamole® dips, SKIPPY® peanut butter, and the SPAM® family of products.

Refrigerated Foods: Results for the Refrigerated Foods segment compared to the prior year are as follows:

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net sales	$1,149,496	$ 1,211,890	(5.1)	$4,372,347	$ 4,644,179	(5.9)
Tonnage (lbs.)	601,857	587,862	2.4	2,368,804	2,351,898	0.7
Segment profit	$111,287	$   87,296	27.5	$  424,968	$   338,020	25.7

The comparative results for the fourth quarter and fiscal year reflect the addition of Applegate acquired on July 13, 2015, contributing an incremental $80.4 million of net sales and 12.6 million lbs. for the fourth quarter and $92.8 million of net sales and 14.6 million lbs. for fiscal 2015.

Many of the Company’s value-added products enjoyed strong sales growth during the fourth quarter. On the retail side, sales gains were led by sales of Hormel® refrigerated entrees, Hormel® pepperoni, and Hormel Gatherings® party trays. Within foodservice, sales of Hormel® Fire Braised™ meats and Hormel® pizza toppings experienced gains for the quarter. Despite robust value-added sales, overall sales declined for the fourth quarter and fiscal year due to price reductions taken on certain items in light of lower pork markets compared to the record high pork markets in the prior year and the dissolution of the Precept Foods joint venture at the end of fiscal 2014. Tonnage was higher in fiscal 2015, as the impact of the Porcine Epidemic Diarrhea Virus (PEDv) in the industry reduced volumes processed through the Company’s harvest facilities in fiscal 2014.

Segment profit results for the fourth quarter were driven by strong results from Affiliated Foods, higher pork operating margins, and the addition of Applegate on July 13, 2015. Fiscal 2015 benefitted from lower input costs. For the full year, $9.0 million of transaction costs offset the results from Applegate.

Going into fiscal 2016, the Company is positioned to start the year with strong earnings momentum. The Company expects lower input costs to provide a benefit for the Company’s value-added businesses, offsetting modestly lower pork operating margins later in the year. While the Refrigerated Foods segment benefited from favorable market conditions in fiscal 2015, significant progress has been made in the Company’s efforts to improve product mix and drive sustainable margin improvements. The Company will also benefit from a full year of Applegate sales in fiscal 2016.

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Jennie-O Turkey Store: Results for the Jennie-O Turkey Store (JOTS) segment compared to the prior year are as follows:

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net sales	$420,312	$ 509,980	(17.6)	$1,635,776	$ 1,672,452	(2.2)
Tonnage (lbs.)	221,528	280,810	(21.1)	849,418	892,965	(4.9)
Segment profit	$ 73,227	$  95,253	(23.1)	$  276,217	$   272,362	1.4

Both top and bottom-line results for the fourth quarter and fiscal 2015 were impacted by HPAI, as flocks lost earlier in the year created large volume shortfalls in operations and sales. Although JOTS was able to purchase some turkey meat to partially offset flock losses, turkey breast prices remained at a record high due to overall industry shortages. The strong value-added product sales enjoyed during the first half of the year along with second half price increases and controlled spending allowed JOTS to finish above last year in segment profit with lower volume and sales.

All of the farms previously impacted by HPAI have now been repopulated and the Company has not experienced any new outbreaks. JOTS continues to work closely with its customers to manage through turkey breast meat shortages. Operations management has made many adjustments and positioned JOTS to lessen any future impact to operations in the event the virus returns.

The Company expects JOTS to return to growth in the second half of fiscal 2016 if there are no significant recurrences of HPAI, benefiting from strong demand for branded Jennie-O® products and increased promotional support. Volumes will remain constrained in the early part of fiscal 2016 as the flock rebuilding process continues after the significant bird losses in the spring of fiscal 2015.

Specialty Foods: Results for the Specialty Foods segment compared to the prior year are as follows:

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net sales	$269,887	$ 277,559	(2.8)	$1,103,359	$ 907,120	21.6
Tonnage (lbs.)	177,784	175,285	1.4	702,110	612,415	14.6
Segment profit	$ 22,348	$  13,747	62.6	$    93,258	$  71,514	30.4

The comparative results for the fourth quarter and fiscal year reflect the addition of CytoSport acquired on August 11, 2014, which contributed an incremental $13.2 million of net sales and 5.5 million lbs. to top-line results for the fourth quarter and $237.8 million of net sales and 102.9 million lbs. for fiscal 2015. Full year sales benefited from the addition of Muscle Milk® protein nutrition products, but were unable to offset lower contract packaging sales in the fourth quarter.

Fourth quarter segment profit results reflect synergies captured within the CytoSport and Century Foods supply chain and a beneficial comparison to prior year CytoSport acquisition-related costs of $9.3 million. The Company has made the decision to explore the sale of a portion of DCB and has classified it as held for sale. The fair value of the net assets to be sold was determined utilizing a market participant bid along with internal valuations of the business. The Company recorded a goodwill impairment charge of $21.5 million for the assets held for sale, which was partially offset by an $8.9 million reduction to a contingent consideration liability related to the CytoSport acquisition.

The Company expects the Specialty Foods segment to deliver sales and profit increases through the growth of Muscle Milk® protein nutrition products in fiscal 2016.

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International & Other: Results for the International & Other segment compared to the prior year are as follows:

	Fourth Quarter Ended			Year Ended
	October 25,	October 26,		October 25,	October 26,
(in thousands)	2015	2014	% Change	2015	2014	% Change
Net sales	$138,593	$ 139,176	(0.4)	$534,701	$ 534,240	0.1
Tonnage (lbs.)	76,953	73,585	4.6	298,421	292,790	1.9
Segment profit	$  23,300	$   22,629	3.0	$  78,318	$   84,745	(7.6)

Strong export sales of the SPAM® family of products and continued growth in China were offset by softer pork export sales in the fourth quarter. For fiscal 2015, robust performance from China and sales growth for SKIPPY® peanut butter products drove top-line results.

Fourth quarter segment profit results were driven by growth in our core product lines and strong results in China, as noted above, along with improved royalties. Profitability on pork exports remained significantly below the prior year. For the fiscal year, International & Other segment profits were negatively impacted by pork markets, port challenges experienced in the first half of the year, and charges of $9.5 million related to the exit from international joint venture businesses.

On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership at the end of the second quarter.

Entering 2016, the Company expects the International & Other segment to achieve year-over-year improved results through increased sales of the SPAM® family of products and SKIPPY® peanut butter products, along with continued expansion in China. The Company’s new plant in Jiaxing, China is expected to be operational in the fall of 2016. Continued soft pork exports are expected in the near term, which will create challenging comparisons through at least the first half of fiscal year 2016.

Unallocated Income and Expenses: The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the segment table for the purpose of reconciling segment results to earnings before income taxes.

Net interest and investment expense for the fourth quarter and fiscal year was a net expense of $3.3 million and $10.2 million, respectively, compared to a net expense of $2.6 million and $9.5 million for the comparable periods of fiscal 2014. The increased expense for the fourth quarter and fiscal year is primarily due to higher interest expense associated with Applegate-related debt. Interest expense for the fourth quarter was $3.8 million compared to $3.4 million in the fourth quarter of fiscal 2014, as the Company utilized short-term

financing along with its revolving line of credit to fund the Applegate acquisition in the third quarter. Full year interest expense was $13.1 million for fiscal 2015, increasing slightly from $12.7 million in fiscal 2014. The Company expects interest expense to be approximately $14.0 million for fiscal 2016.

General corporate expense for the fourth quarter and year was $16.6 million and $35.2 million, respectively, compared to $6.2 million and $33.4 million for the comparable periods of the prior year. The higher expense for the fourth quarter reflects higher employee-related expenses and increased professional and legal fees. General corporate expense for the fiscal year was higher compared to last year, primarily the result of the fourth quarter expenses mentioned above.

Net earnings attributable to the Company’s noncontrolling interests were $0.2 million and $1.2 million for the 2015 fourth quarter and fiscal year, respectively, compared to $0.6 million and $3.3 million for the comparable periods of fiscal 2014.

FISCAL YEARS 2014 AND 2013:

Consolidated Results

Net Earnings: Net earnings attributable to the Company for the fourth quarter of fiscal 2014 were $171.3 million, an increase of 8.8 percent compared to earnings of $157.3 million for the same quarter of fiscal 2013. Diluted earnings per share were $0.63 compared to $0.58 for the same quarter of fiscal 2013. Net earnings attributable to the Company for fiscal 2014 increased 14.5 percent to $602.7 million, from $526.2 million in fiscal 2013. Diluted earnings per share for fiscal 2014 increased 14.4 percent to $2.23 compared to $1.95 per share in fiscal 2013.

Net Sales: Net sales for the fourth quarter of fiscal 2014 increased to $2.54 billion from $2.32 billion in the same quarter of fiscal 2013, an increase of 9.5 percent. Net sales for fiscal 2014 increased 6.5 percent to $9.32 billion compared to $8.75 billion in fiscal 2013. The Company’s Specialty Foods, International & Other, Jennie-O Turkey Store, and Refrigerated Foods reporting segments delivered sales growth in the fourth quarter compared to fiscal 2013. For the full year in fiscal 2014, growth was enjoyed by the International & Other, Refrigerated Foods, Jennie-O Turkey Store, and Grocery Products segments compared to fiscal 2013. Tonnage for the fourth quarter of fiscal 2014 increased 2.8 percent to 1.34 billion lbs. compared to 1.30 billion lbs. for the same period of fiscal 2013. Tonnage for fiscal 2014 increased 0.7 percent to 5.00 billion lbs. from 4.97 billion lbs. in fiscal 2013.

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Net sales for fiscal 2014 were enhanced by the addition of CytoSport acquired on August 11, 2014, and the China based SKIPPY®peanut butter business acquired on November 26, 2013. On a combined basis, these acquisitions contributed an incremental $84.3 million of net sales and 39.6 million lbs. for the fourth quarter, and $102.5 million of net sales and 50.3 million lbs. for fiscal year 2014. Additionally, top-line comparative results for the year were impacted by the addition of the U.S. based SKIPPY®peanut butter business acquired on January 31, 2013. These sales contributed an incremental $86.5 million of net sales and 57.1 million lbs. to the top-line results for fiscal year 2014. Increased value-added sales within the Refrigerated Foods and Jennie-O Turkey Store segments also contributed to the top-line results for both the fourth quarter and fiscal year. Robust sales from China and pork export sales by the Company’s international business also provided notable growth throughout fiscal 2014. Tonnage increased for fiscal year 2014, as the Company successfully managed reduced volume through its harvest facilities in the third quarter, reflecting tight raw material supplies due to Porcine Epidemic Diarrhea Virus (PEDv) in the industry.

Cost of Products Sold: Cost of products sold for the fourth quarter of fiscal 2014 increased 9.4 percent to $2.12 billion compared to $1.94 billion in the fourth quarter of fiscal 2013, and increased 5.6 percent to $7.75 billion in fiscal 2014 compared to $7.34 billion in fiscal 2013. The higher cost for both the fourth quarter and fiscal year resulted from higher meat input costs due to the impact of PEDv on the Refrigerated Foods, Grocery Products, and International & Other segments. Results for the fourth quarter of fiscal 2014 also reflect a $4.5 million fair value inventory adjustment related to the CytoSport acquisition included in the Specialty Foods segment.

Gross Profit: Gross profit was $423.6 million and $1.56 billion for the 2014 fourth quarter and fiscal year, respectively, compared to $385.5 million and $1.41 billion in fiscal 2013. As a percentage of net sales, gross profit increased to 16.7 percent for the fourth quarter compared to 16.6 percent in fiscal 2013, and increased to 16.8 percent for the year compared to 16.1 percent in fiscal 2013. Strong performances from the Refrigerated Foods, Jennie-O Turkey Store, and International & Other segments offset lower margins in the Grocery Products and Specialty Foods segments for both the fourth quarter and fiscal year. Beneficial turkey commodity prices for the Jennie-O Turkey Store segment and strong pork operating margins for the Refrigerated Foods segment drove overall profit gains. In addition, continued growth of retail and foodservice value-added products benefited margins. Strong margins from the Company’s China operations and higher pork export sales and royalty income boosted margins for the International & Other segment. High meat input costs and related pricing actions negatively impacted margins and drove lower results in the Grocery Products segment. The Specialty Foods segment delivered lower margins in the fourth quarter of fiscal 2014 due to a fair value inventory adjustment of $4.5 million relating to the CytoSport acquisition. The fourth

quarter 2013 expiration of the agreement allowing DCB to sell certain sugar substitutes into foodservice trade channels also impacted fiscal year comparisons. Additionally, shipping and handling expenses rose in all five of the Company’s segments for fiscal 2014.

Selling, General and Administrative: Selling, general and administrative expenses for the fourth quarter and fiscal year 2014 were $165.9 million and $650.9 million, respectively, compared to $147.4 million and $627.3 million in fiscal 2013. Selling, general and administrative expenses as a percentage of net sales for the fourth quarter of fiscal year 2014 increased to 6.5 percent compared to the prior year at 6.3 percent. For the 2014 fiscal year, these expenses decreased to 7.0 percent of net sales from 7.2 percent in fiscal 2013. The higher expense for the fourth quarter includes $4.8 million of transaction costs incurred related to the acquisition of CytoSport, reflected in the Specialty Foods segment. For fiscal year 2014, the Company incurred increased advertising and employee-related expenses, offset by transaction and transition costs related to the U.S. based SKIPPY®acquisition in the prior year.

Research and development expenses were $7.5 million and $29.9 million for the fiscal 2014 fourth quarter and year, respectively, compared to $7.2 million and $29.9 million in fiscal 2013.

Equity in Earnings of Affiliates: Equity in earnings of affiliates was $5.7 million and $17.6 million for the fiscal 2014 fourth quarter and year, respectively, compared to $2.1 million and $20.5 million in fiscal year 2013. The increase for the fourth quarter is a result of improved results from the Company’s 50 percent owned MegaMex joint venture, reflecting the impact of a larger incentive expense on the Fresherized Foods acquisition recognized in the prior year. In addition, overall improved results for the Company’s international joint ventures were noted for the fourth quarter of fiscal 2014, while the full year generated an overall decline for those operations as well as the MegaMex joint venture compared to the prior year.

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 receivables from other affiliates, are included in the Consolidated Statements of Financial Position as investments in and receivables from affiliates. The composition of this line item at October 26, 2014, was as follows:

(in thousands)
Country	Investments/Receivables
United States	$208,221
Foreign	56,230
Total	$264,451

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Income Taxes: The Company’s effective tax rate for the fiscal 2014 fourth quarter and year was 34.1 percent and 34.3 percent, respectively, compared to 33.9 percent and 33.6 percent, respectively, for the fourth quarter and year in fiscal 2013. The higher rate for fiscal 2014 is due to the impact of net favorable adjustments and settlements with various state jurisdictions in fiscal 2013.

Segment Results

Net sales and operating profits for each of the Company’s reportable segments are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below. (Additional segment financial information can be found in Note P “Segment Reporting.”)

	Fourth Quarter Ended			Year Ended
(in thousands)	October 26, 2014	October 27, 2013	% Change	October 26, 2014	October 27, 2013	% Change
Net Sales
Grocery Products	$  405,166	$  419,615	(3.4)	$1,558,265	$1,517,557	2.7
Refrigerated Foods	1,211,890	1,108,157	9.4	4,644,179	4,251,515	9.2
Jennie-O Turkey Store	509,980	459,670	10.9	1,672,452	1,601,868	4.4
Specialty Foods	277,559	212,485	30.6	907,120	932,533	(2.7)
International & Other	139,176	123,275	12.9	534,240	448,181	19.2
Total Net Sales	$2,543,771	$2,323,202	9.5	$9,316,256	$8,751,654	6.5
Segment Operating Profit
Grocery Products	$    50,051	$  63,476	(21.1)	$  195,064	$  213,646	(8.7)
Refrigerated Foods	87,296	79,453	9.9	338,020	232,692	45.3
Jennie-O Turkey Store	95,253	65,550	45.3	272,362	222,117	22.6
Specialty Foods	13,747	15,975	(13.9)	71,514	88,873	(19.5)
International & Other	22,629	22,069	2.5	84,745	71,490	18.5
Total Segment Operating Profit	268,976	246,523	9.1	961,705	828,818	16.0
Net interest and investment expense (income)	2,626	595	341.3	9,468	7,482	26.5
General corporate expense	6,192	7,466	(17.1)	33,434	26,694	25.2
Noncontrolling interest	584	1,145	(49.0)	3,349	3,865	(13.4)
Earnings Before Income Taxes	$ 260,742	$  239,607	8.8	$  922,152	$  798,507	15.5

Grocery Products: Grocery Products net sales decreased 3.4 percent for the fiscal 2014 fourth quarter and increased 2.7 percent for the year compared to fiscal 2013. Tonnage decreased 4.8 percent for the quarter and increased 3.3 percent for the year compared to fiscal 2013 results. The comparative results for fiscal 2014 reflect the addition of the SKIPPY® peanut butter business beginning in the second quarter of fiscal 2013. SKIPPY® products contributed an incremental $73.3 million of net sales and 49.1 million lbs. to the results for fiscal 2014.

Net sales for Grocery Products in the fourth quarter of fiscal 2014 were negatively impacted by lower tonnage in the canned meat portfolio due to pricing actions taken earlier in the year to partially offset higher commodity cost inputs. Softer sales of Hormel® chili and the Hormel® Compleats® line of microwave meals led to the fourth quarter decline. For fiscal 2014, sales gains for Hormel® bacon toppings and the Herdez® line of salsas and sauces within MegaMex offset lower sales of the Hormel® Compleats® line of microwave meals and the SPAM® family of products.

Segment profit for Grocery Products decreased 21.1 percent for the fourth quarter and 8.7 percent for fiscal 2014 compared to fiscal 2013. Profit results for the fourth quarter

were hampered by high meat input costs and reduced volumes following related pricing actions. Partially offsetting the decrease were higher equity in earnings results from MegaMex in the fourth quarter, as fiscal 2013 included higher incentive expense on the Fresherized Foods acquisition. For fiscal 2014, improved margins of Hormel® bacon toppings and the Herdez® line of salsas and sauces within MegaMex were unable to offset the margin declines in products such as the SPAM® family of products, Hormel® chili, Hormel® Compleats® microwave meals, and Dinty Moore® stew.

Refrigerated Foods: Net sales for the Refrigerated Foods segment increased 9.4 percent for the fiscal 2014 fourth quarter and increased 9.2 percent for the year compared to fiscal 2013. Tonnage increased 0.6 percent for the fourth quarter and decreased 0.1 percent for fiscal 2014 compared to fiscal 2013 results. Tonnage remained relatively even with fiscal 2013, as the Company successfully managed the reduced volumes processed through its harvest facilities in the third quarter due to PEDv in the industry and its effect on raw material supplies.

Several value-added product lines within Refrigerated Foods grew during fiscal 2014. Top-line results were driven by double-digit sales growth within foodservice in both the

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fourth quarter and fiscal 2014. Several value-added products within foodservice delivered growth, led by sales of innovative Hormel® Fire Braised™ meats and Hormel® Bacon 1™ fully cooked bacon, along with continued robust sales of Hormel®fully cooked sausages. On the retail side, improved sales performance of Hormel® Black Label®bacon and Hormel® REV®wraps, along with the reformulation and packaging updates of Hormel®side dishes introduced just under a year ago, led to restored sales growth for the fiscal year. Additionally, Hormel® Black Label®bacon and Hormel Gatherings®party trays delivered sales gains in the fiscal 2014 fourth quarter.

Segment profit for Refrigerated Foods increased 9.9 percent in the fourth quarter and 45.3 percent for fiscal 2014, compared to fiscal 2013. Unusually high pork operating margins were a significant driver of the higher results for both the fourth quarter and fiscal 2014. Strong growth for retail and foodservice value-added products also boosted margins in fiscal 2014.

Jennie-O Turkey Store: Jennie-O Turkey Store (JOTS) net sales for the fiscal 2014 fourth quarter and year 2014 increased 10.9 percent and 4.4 percent, respectively, compared to fiscal 2013. Tonnage increased 6.6 percent for the fiscal 2014 fourth quarter and 0.1 percent for the year, compared to fiscal 2013 results. JOTS value-added products continued to deliver sales gains throughout the fourth quarter and fiscal year 2014. Retail sales of Jennie-O® lean ground turkey chubs and tray pack items experienced the greatest benefit from the Make The Switch®advertising campaign that started early in fiscal 2014 featuring ground turkey tacos. High commodity turkey prices also aided top-line growth. Total harvest volume increased during the fourth quarter and fiscal 2014 compared to fiscal 2013.

Segment profit for JOTS increased 45.3 percent for the fourth quarter and 22.6 percent for fiscal 2014, compared to fiscal 2013. Increased value-added volume, improved product mix, strategic price management, and record commodity pricing drove the improved segment profit performance compared to fiscal 2013. The positive comparison to fiscal 2013 reflects lower overall grain costs and higher commodity turkey meat prices. Value-added growth benefited from increased advertising expenses in fiscal 2014 with a renewed focus on the Make The Switch®advertising campaign. These profit gains offset lower live production performance and higher fuel expenses from the extended harsh winter experienced earlier in fiscal 2014.

Specialty Foods: Specialty Foods net sales increased 30.6 percent for the fiscal 2014 fourth quarter and decreased 2.7 percent for the year compared to fiscal 2013. Tonnage increased 14.5 percent for the quarter and decreased 4.9 percent for fiscal year 2014, compared to fiscal 2013 results. The comparative results reflect the addition of the newly acquired CytoSport beginning in the fourth quarter of fiscal 2014, contributing $73.5 million of net sales and 32.5 million lbs. to top-line results. Along with the addition of CytoSport sales, stronger canned meat sales for HSP led to the improved top-line performance for the fiscal 2014 fourth quarter. Sales declines for the full year were largely driven by the fourth

quarter 2013 expiration of the agreement allowing DCB to sell certain sugar substitutes into foodservice trade channels, in addition to lower nutritional sales at Century Foods International (CFI). These declines were partially offset by improved sales of nutritional products for DCB and stronger canned meat sales for HSP.

Specialty Foods segment profit decreased 13.9 percent for the fourth quarter and 19.5 percent for fiscal 2014 compared to fiscal 2013. Declines in the fourth quarter of fiscal 2014 were largely driven by $9.3 million of transaction costs and fair value adjustments related to the CytoSport acquisition. For fiscal 2014, the shortfall was primarily driven by the expiration of the sugar substitute agreement noted above. High protein raw material costs also negatively impacted results in the fourth quarter of fiscal 2014 for HSP.

International & Other: International & Other net sales increased 12.9 percent for the fiscal 2014 fourth quarter and 19.2 percent for the year compared to fiscal 2013. Continued strong sales for the Company’s China operations and pork exports, along with the addition of the China based SKIPPY®peanut butter sales were the primary drivers of the top-line results for the fourth quarter of fiscal 2014. SKIPPY®products, including the U.S. based business acquired at the beginning of the second quarter of fiscal 2013, contributed an incremental $40.8 million of net sales and 25.0 million lbs. for the fiscal year comparison.

International & Other segment profit increased 2.5 percent and 18.5 percent for the fiscal 2014 fourth quarter and year, respectively, compared to fiscal 2013. Additional margins from China based SKIPPY®peanut butter sales and higher royalty income offset lower sales and margins on exports of the SPAM®family of products, as higher meat input costs pressured margins during the fourth quarter. Segment profit gains for fiscal 2014 were largely driven by robust margins for the Company’s China operations along with export sales of fresh pork items and improved royalty income.

Unallocated Income and Expenses: The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the segment table for the purpose of reconciling segment results to earnings before income taxes.

Net interest and investment expense (income) for the fourth quarter and fiscal 2014 was a net expense of $2.6 million and $9.5 million, respectively, compared to a net expense of $0.6 million and $7.5 million for the comparable periods of fiscal 2013. The increased expense for the fourth quarter and fiscal year 2014 is primarily due to lower returns on the Company’s rabbi trust. Interest expense was $12.7 million for fiscal 2014, increasing slightly from $12.5 million in fiscal 2013, as the Company utilized its revolving line of credit to fund the CytoSport acquisition in the fourth quarter.

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General corporate expense for the fourth quarter and fiscal 2014 was $6.2 million and $33.4 million, respectively, compared to $7.5 million and $26.7 million for the comparable periods of fiscal 2013. The lower expense for the fourth quarter reflects lower salary and pension related expenses compared to fiscal 2013. General corporate expense for fiscal 2014 was higher compared to fiscal 2013, primarily the result of a bad debt incurred in the third quarter.

Net earnings attributable to the Company’s noncontrolling interests were $0.6 million and $3.3 million for the fourth quarter and fiscal 2014, respectively, compared to $1.1 million and $3.9 million for the comparable periods of fiscal 2013. Precept Foods generated lower results for both the fourth quarter and full year of fiscal 2014 compared to fiscal 2013. This joint venture was dissolved at the end of fiscal year 2014. For fiscal 2014, these declines were partially offset by improved results from the Company’s China operations.

RELATED PARTY TRANSACTIONS

During the fourth quarter of fiscal 2015, the company purchased 400,000 shares of common stock from The Hormel Foundation at $62.32 per share, 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.

The Company was not party to any other material related party transactions during fiscal years 2015, 2014, or 2013.

Liquidity and Capital Resources

Cash and cash equivalents were $347.2 million at the end of fiscal 2015 compared to $334.2 million at the end of fiscal 2014 and $434.0 million at the end of fiscal 2013.

During fiscal 2015, cash provided by operating activities was $992.0 million compared to $746.9 million in fiscal 2014 and $637.8 million in fiscal 2013. Continued higher earnings and net positive working capital changes largely generated the increase in fiscal 2015.

Cash used in investing activities increased to $900.9 million in fiscal 2015 from $616.8 million in fiscal 2014 and $691.1 million in fiscal 2013. Fiscal 2015 included $774.1 used to purchase Applegate Farms, LLC in the third quarter. The fourth quarter of fiscal 2014 included $424.3 million used to purchase CytoSport Holdings, Inc. and fiscal 2014 included $41.9 million used to purchase the China based SKIPPY®peanut butter business in Weifang, China from Unilever United States Inc. Fiscal 2013 included $665.4 million used to acquire the U.S. based SKIPPY® peanut butter business. In anticipation of that purchase, the Company liquidated its marketable securities portfolio at the end of the first quarter of fiscal 2013, which generated $77.6 million in cash. Capital expenditures in fiscal 2015 decreased to $144.1 million, from $159.1 million in 2014 and increased from $106.8 million in 2013. The primary reason for lower capital expenditures in fiscal 2015 compared

to fiscal 2014 was the Company’s decision to delay the addition of capacity at JOTS in the face of the lower turkey supply in fiscal 2015 due to the impacts of HPAI. Capital expenditures for fiscal 2016 are estimated to be approximately $250.0 million as several projects in process during fiscal 2015 will be completed, including construction of the Company’s new plant in Jiaxing, China.

Cash used in financing activities was $70.6 million in fiscal 2015 compared to $229.4 million in fiscal 2014 and $195.5 million in fiscal 2013. In the third quarter of fiscal 2015, in connection with the purchase of Applegate, the Company borrowed $300.0 million under a term loan facility and $50.0 million under a revolving credit facility, of which $165.0 million was paid down in the fourth quarter. On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership at the end of the second quarter. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture.

The Company used $24.9 million for common stock repurchases during fiscal 2015, compared to $58.9 million in fiscal 2014 and $70.8 million in fiscal 2013. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. On January 29, 2013, the Company’s Board of Directors had authorized the repurchase of 10.0 million shares of its common stock with no expiration date. As of the end of fiscal 2015, there were 7.8 million shares remaining for repurchase under that authorization.

Cash dividends paid to the Company’s shareholders continues to be an ongoing financing activity for the Company, with $250.8 million in dividends paid in fiscal 2015, compared to $203.2 million in the fiscal 2014 and $174.3 million in fiscal 2013. The dividend rate was $1.00 per share in 2015, which reflected a 25.0 percent increase over the fiscal 2014 rate of $0.80 per share. The Company has paid dividends for 349 consecutive quarters and expects to continue doing so in the future. The annual dividend rate for fiscal 2016 was increased 16.0 percent to $1.16 per share, representing the 50th consecutive annual dividend increase.

Cash flows from operating activities continue to provide the Company with its principal source of liquidity. The Company does not anticipate a significant risk to cash flows from this source in the foreseeable future because the Company operates in a relatively stable industry and has strong brands across many product lines.

The Company takes pride in its legacy of increasing the dividend returned to shareholders year-after-year. The Company remains focused on growing the business through supporting innovation to drive organic growth, along with strategic acquisitions. Reinvesting in the business is a top priority, with employee safety and food safety taking top priority. Capital spending to enhance and expand current operations will also be a significant cash outflow in fiscal 2016.

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Contractual Obligations and Commercial Commitments

The following table outlines the Company’s future contractual financial obligations as of October 25, 2015 (for additional information regarding these obligations, see Note F “Long-term Debt and Other Borrowing Arrangements” and Note N “Commitments and Contingencies”):

	Payments Due by Periods
		Less Than			More Than
Contractual Obligations (in thousands)	Total	1 Year	1-3 Years	3-5 Years	5 Years
Purchase obligations:
Hog and turkey commitments(1)	$3,998,937	$1,339,771	$1,633,961	$763,452	$261,753
Grain commitments(1)	79,900	79,387	434	79	–
Turkey grow-out contracts(2)	66,012	8,019	14,095	12,141	31,757
Other(3)	587,063	518,158	55,314	4,725	8,866
Current and Long-term debt	435,000	185,000	–	–	250,000
Interest payments on long-term debt	58,097	11,691	20,625	20,625	5,156
Capital expenditures(4)	254,252	216,750	24,102	13,400	–
Leases	35,194	11,250	10,627	6,579	6,738
Other long-term liabilities(5) (6)	64,446	5,056	8,540	7,089	43,761
Total Contractual Cash Obligations	$5,578,901	$2,375,082	$1,767,698	$828,090	$608,031

(1) In the normal course of business, the Company commits to purchase fixed quantities of livestock and grain from producers to ensure a steady supply of production inputs. Certain of these contracts are based on market prices at the time of delivery, for which the Company has estimated the purchase commitment using current market prices as of October 25, 2015. The Company also utilizes various hedging programs to manage the price risk associated with these commitments. As of October 25, 2015, these hedging programs result in a net decrease of $6.5 million in future cash payments associated with the purchase commitments, which is not reflected in the table above.

(2)The Company also utilizes grow-out contracts with independent farmers to raise turkeys for the Company. Under these contracts, the turkeys, feed, and other supplies are owned by the Company. The farmers provide the required labor and facilities, and receive a fee per pound when the turkeys are delivered. Some of the facilities are sub-leased by the Company to the independent farmers. As of October 25, 2015, the Company had approximately 90 active contracts ranging from two to twenty-five years in duration. The grow-out activity is assumed to continue through the term of these active contracts, and amounts in the table represent the Company’s obligation based on turkeys expected to be delivered from these farmers.

(3)Amounts presented for other purchase obligations represent all known open purchase orders and all known contracts exceeding $1.0 million, related to the procurement of raw materials, supplies, and various services. The Company primarily purchases goods and services on an as-needed basis. Therefore, the amounts in the table represent only a portion of expected future cash expenditures.

(4)Amounts presented for capital expenditures represent only the Company’s current commitments to complete construction in progress at various locations. The Company estimates total capital expenditures for fiscal year 2016 to be approximately $250.0 million.

(5)Other long-term liabilities represent payments under the Company’s deferred compensation plans. Excluded from the table above are payments under the Company’s defined benefit pension and other post-retirement benefit plans. (See estimated benefit payments for the next ten fiscal years in Note G “Pension and Other Post-retirement Benefits.”)

(6)As discussed in Note K “Income Taxes,” the total liability for unrecognized tax benefits, including interest and penalties, at October 25, 2015, was $24.6 million, which is not included in the table above as the ultimate amount or timing of settlement of the Company’s reserves for income taxes cannot be reasonably estimated.

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In addition to the commitments set forth in the above table, at October 25, 2015, the Company had $44.1 million in standby letters of credit issued on behalf of the Company. The standby letters of credit are primarily related to the Company’s self-insured workers compensation programs.

The Company believes its financial resources, including a revolving credit facility for $400.0 million and anticipated funds from operations, will be adequate to meet all current commitments.

Off-Balance Sheet Arrangements

As of October 25, 2015, the Company had $44.1 million of standby letters of credit issued on its behalf. The standby letters of credit are primarily related to the Company’s self-insured workers compensation programs. However, that amount also includes revocable standby letters of credit totaling $4.0 million for obligations of an affiliated party that may arise under workers compensation claims. Letters of credit are not reflected in the Company’s Consolidated Statements of Financial Position.

Forward-Looking Statements

This report contains “forward-looking” information within the meaning of the federal securities laws. The “forward-looking” information may include statements concerning the Company’s outlook for the future as well as other statements of beliefs, future plans, strategies, or anticipated events and similar expressions concerning matters that are not historical facts.

The Private Securities Litigation Reform Act of 1995 (the Reform Act) provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. The Company is filing this cautionary statement in connection with the Reform Act. When used in the Company’s Annual Report to Stockholders, other filings by the Company with the U.S. Securities and Exchange Commission, the Company’s press releases, and oral statements made by the Company’s representatives, the words or phrases “should result,” “believe,” “intend,” “plan,” “are expected to,” “targeted,” “will continue,” “will approximate,” “is anticipated,” “estimate,” “project,” or similar expressions are intended to identify forward-looking statements within the meaning of the Reform Act. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those anticipated or projected.

In connection with the “safe harbor” provisions of the Reform Act, the Company is identifying risk factors that could affect financial performance and cause the Company’s actual results to differ materially from opinions or statements expressed with respect to future periods. The following discussion of risk factors contains certain cautionary statements regarding the Company’s business, which should be considered by investors and others. Such risk factors should be considered in conjunction with any discussions of operations or results by the Company or its representatives, including any forward-looking discussion, as well as comments contained in press releases, presentations to securities analysts or investors, or other communications by the Company.

In making these statements, the Company is not undertaking, and specifically declines to undertake, any obligation to address or update each or any factor in future filings or communications regarding the Company’s business or results, and is not undertaking to address how any of these factors may have caused changes to discussions or information contained in previous filings or communications. Though the Company has attempted to list comprehensively these important cautionary risk factors, the Company wishes to caution investors and others that other factors may in the future prove to be important in affecting the Company’s business or results of operations.

The Company cautions readers not to place undue reliance on forward-looking statements, which represent current views as of the date made. Forward-looking statements are inherently at risk to any changes in the national and worldwide economic environment, which could include, among other things, economic conditions, political developments, currency exchange rates, interest and inflation rates, accounting standards, taxes, and laws and regulations affecting the Company and its markets.

Risk Factors

The Company’s operations are subject to the general risks of the food industry. The food products manufacturing industry is subject to the risks posed by:

·food spoilage;

·food contamination caused by disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella, and pathogenic E coli.;

·food allergens;

·nutritional and health-related concerns;

·federal, state, and local food processing controls;

·consumer product liability claims;

·product tampering; and

·the possible unavailability and/or expense of liability insurance.

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The pathogens which may cause food contamination are found generally in livestock and in the environment and thus may be present in our products as a result of food processing. These pathogens also can be introduced to our products as a result of improper handling by customers or consumers. We do not have control over handling procedures once our products have been shipped for distribution. If one or more of these risks were to materialize, the Company’s brand and business reputation could be negatively impacted. In addition, revenues could decrease, costs of doing business could increase, and the Company’s operating results could be adversely affected.

Deterioration of economic conditions could harm the Company’s business. The Company’s business may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability of capital markets, energy availability and costs (including fuel surcharges), and the effects of governmental initiatives to manage economic conditions. Decreases in consumer spending rates and shifts in consumer product preferences could also negatively impact the Company.

Volatility in financial markets and the deterioration of national and global economic conditions could impact the Company’s operations as follows:

·The financial stability of our customers and suppliers may be compromised, which could result in additional bad debts for the Company or non-performance by suppliers; and

·The value of our investments in debt and equity securities may decline, including most significantly the Company’s trading securities held as part of a rabbi trust to fund supplemental executive retirement plans and deferred income plans, and the Company’s assets held in pension plans.

The Company also utilizes hedging programs to manage its exposure to various commodity market risks, which qualify for hedge accounting for financial reporting purposes. Volatile fluctuations in market conditions could cause these instruments to become ineffective, which could require any gains or losses associated with these instruments to be reported in the Company’s earnings each period. These instruments may also limit the Company’s ability to benefit from market gains if commodity prices become more favorable than those that have been secured under the Company’s hedging programs.

Additionally, if a high pathogenic disease outbreak developed in the United States, it may negatively impact the national economy, demand for Company products, and/or the Company’s workforce availability, and the Company’s financial results could suffer. The Company has developed contingency plans to address infectious disease scenarios and the potential impact on its operations, and will continue to update these plans as necessary. There can be no assurance given, however, that these plans will be effective in eliminating the negative effects of any such diseases on the Company’s operating results.

Fluctuations in commodity prices of pork, poultry, feed grains, avocados, peanuts, energy, and whey could harm the Company’s earnings. The Company’s results of operations and financial condition are largely dependent upon the cost and supply of pork, poultry, feed grains, avocados, peanuts, and whey as well as energy costs and the selling prices for many of our products, which are determined by constantly changing market forces of supply and demand.

The live hog industry has evolved to very large, vertically integrated operations operating under long-term supply agreements. This has resulted in fewer hogs being available on the cash spot market. Additionally, overall hog production in the U.S. has declined. The decrease in the supply of hogs could diminish the utilization of harvest and production facilities and increase the cost of the raw materials they produce. Consequently, the Company uses long-term supply contracts based on market-based formulas or the cost of production to ensure a stable supply of raw materials while minimizing extreme fluctuations in costs over the long term. This may result, in the short term, in costs for live hogs that are higher than the cash spot market depending on the relationship of the cash spot market to contract prices. Market-based pricing on certain product lines, and lead time required to implement pricing adjustments, may prevent all or part of these cost increases from being recovered, and these higher costs could adversely affect our short-term financial results.

Jennie-O Turkey Store raises turkeys and also contracts with turkey growers to meet its raw material requirements for whole birds and processed turkey products. Additionally, the Company owns various hog raising facilities that supplement its supply of raw materials. Results in these operations are affected by the cost and supply of feed grains, which fluctuate due to climate conditions, production forecasts, and supply and demand conditions at local, regional, national, and worldwide levels. The Company attempts to manage some of its short-term exposure to fluctuations in feed prices by forward buying, using futures contracts, and pursuing pricing advances. However, these strategies may not be adequate to overcome sustained increases in market prices due to alternate uses for feed grains or other changes in these market conditions.

The supply of natural and organic protein may impact the Company’s ability to ensure a continuing supply of these products.

International trade barriers and other restrictions could result in less foreign demand and increased domestic supply of proteins which could lower prices.

Outbreaks of disease among livestock and poultry flocks could harm the Company’s revenues and operating margins. The Company is subject to risks associated with the outbreak of disease in pork and beef livestock, and poultry flocks, including Bovine Spongiform Encephalopathy (BSE), pneu-mo-virus, Porcine Circovirus 2 (PCV2), Porcine Reproduction

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& Respiratory Syndrome (PRRS), Foot-and-Mouth Disease (FMD), Porcine Epidemic Diarrhea Virus (PEDv), and Highly Pathogenic Avian Influenza (HPAI). The outbreak of disease could adversely affect the Company’s supply of raw materials, increase the cost of production, reduce utilization of the Company’s harvest facilities, and reduce operating margins. Additionally, the outbreak of disease may hinder the Company’s ability to market and sell products both domestically and internationally. Most recently, HPAI has impacted the Company’s Jennie-O Turkey Store operations and several of the Company’s independent turkey suppliers. The impact of HPAI in the industry will reduce volume through the Company’s turkey facilities through the first part of fiscal 2016. The Company has developed business continuity plans for various disease scenarios and will continue to update these plans as necessary. There can be no assurance given, however, that these plans will be effective in eliminating the negative effects of any such diseases on the Company’s operating results.

Market demand for the Company’s products may fluctuate.

The Company faces competition from producers of alternative meats and protein sources, including pork, beef, turkey, chicken, fish, peanut butter, and whey. The bases on which the Company competes include:

·price;

·product quality and attributes;

·brand identification;

·breadth of product line; and

·customer service.

Demand for the Company’s products is also affected by competitors’ promotional spending, the effectiveness of the Company’s advertising and marketing programs, and consumer perceptions. Trends within the food industry change often, and failure to identify and react to changes in these trends could lead to, among other things, reduced demand and price reductions for the Company’s brands and products. The Company may be unable to compete successfully on any or all of these bases in the future.

The Company’s operations are subject to the general risks associated with acquisitions. The Company has made several acquisitions in recent years, most recently the acquisitions of Applegate Farms, LLC and CytoSport Holdings, Inc., and regularly reviews opportunities for strategic growth through acquisitions. Potential risks associated with acquisitions include the inability to integrate new operations successfully, the diversion of management’s attention from other business concerns, the potential loss of key employees and customers of the acquired companies, the possible assumption of unknown liabilities, potential disputes with the sellers, potential impairment charges if purchase assumptions are not achieved or market conditions decline, and the inherent risks in entering markets or lines of business in which the Company

has limited or no prior experience. Any or all of these risks could impact the Company’s financial results and business reputation. In addition, acquisitions outside the United States may present unique challenges and increase the Company’s exposure to the risks associated with foreign operations.

The Company’s operations are subject to the general risks of litigation. The Company is involved on an ongoing basis in litigation arising in the ordinary course of business. Trends in litigation may include class actions involving employees, consumers, competitors, suppliers, shareholders, or injured persons, and claims relating to product liability, contract disputes, intellectual property, advertising, labeling, wage and hour laws, employment practices, or environmental matters. Litigation trends and the outcome of litigation cannot be predicted with certainty and adverse litigation trends and outcomes could adversely affect the Company’s financial results.

The Company is subject to the loss of a material contract.

The Company is a party to several supply, distribution, contract packaging, and other material contracts. The loss of a material contract could adversely affect the Company’s financial results.

Government regulation, present and future, exposes the Company to potential sanctions and compliance costs that could adversely affect the Company’s business. The Company’s operations are subject to extensive regulation by the U.S. Department of Homeland Security, the U.S. Department of Agriculture, the U.S. Food and Drug Administration, federal and state taxing authorities, and other state and local authorities that oversee workforce immigration laws, tax regulations, animal welfare, food safety standards, and the processing, packaging, storage, distribution, advertising, and labeling of the Company’s products. The Company’s manufacturing facilities and products are subject to continuous inspection by federal, state, and local authorities. Claims or enforcement proceedings could be brought against the Company in the future. The availability of government inspectors due to a government furlough could also cause disruption to the Company’s manufacturing facilities. Additionally, the Company is subject to new or modified laws, regulations, and accounting standards. The Company’s failure or inability to comply with such requirements could subject the Company to civil remedies, including fines, injunctions, recalls, or seizures, as well as potential criminal sanctions.

The Company is subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations. The Company’s past and present business operations and ownership and operation of real property are subject to stringent federal, state, and local environmental laws and regulations pertaining to the discharge of materials into the environment and the handling and disposition of wastes (including solid and hazardous

30

wastes) or otherwise relating to protection of the environment. Compliance with these laws and regulations, and the ability to comply with any modifications to these laws and regulations, is material to the Company’s business. New matters or sites may be identified in the future that will require additional investigation, assessment, or expenditures. In addition, some of the Company’s facilities have been in operation for many years and, over time, the Company and other prior operators of these facilities may have generated and disposed of wastes that now may be considered hazardous. Future discovery of contamination of property underlying or in the vicinity of the Company’s present or former properties or manufacturing facilities and/or waste disposal sites could require the Company to incur additional expenses. The occurrence of any of these events, the implementation of new laws and regulations, or stricter interpretation of existing laws or regulations could adversely affect the Company’s financial results.

The Company’s foreign operations pose additional risks to the Company’s business. The Company operates its business and markets its products internationally. The Company’s foreign operations are subject to the risks described above, as well as risks related to fluctuations in currency values, foreign currency exchange controls, compliance with foreign laws, compliance with applicable U.S. laws, including the Foreign Corrupt Practices Act, and other economic or political uncertainties. International sales are subject to risks related to general economic conditions, imposition of tariffs, quotas, trade barriers and other restrictions, enforcement of remedies in foreign jurisdictions and compliance with applicable foreign laws, and other economic and political uncertainties. All of these risks could result in increased costs or decreased revenues, which could adversely affect the Company’s financial results.

Deterioration of labor relations or increases in labor costs could harm the Company’s business. As of October 25, 2015, the Company had approximately 20,700 employees worldwide, of which approximately 5,500 were represented by labor unions, principally the United Food and Commercial Workers’ Union. A significant increase in labor costs or a deterioration of labor relations at any of the Company’s facilities or contracted hog processing facilities that results in work slowdowns or stoppages could harm the Company’s financial results. Union contracts at the Company’s facilities in Knoxville, Iowa and Vernon, California will expire during fiscal 2016, covering a combined total of approximately 1,200 employees. Negotiations at these facilities have not yet been initiated.

Quantitative and Qualitative Disclosure About Market Risks

Hog Markets: The Company’s earnings are affected by fluctuations in the live hog market. To minimize the impact on earnings, and to ensure a steady supply of quality hogs, the Company has entered into contracts with producers for the purchase of hogs at formula-based prices over periods of up to 10 years. Purchased hogs under contract accounted for 94 percent of the total hogs purchased by the Company in both fiscal 2015 and 2014. The majority of these contracts use market-based formulas based on hog futures, hog primal values, or industry reported hog markets. Other contracts use a formula based on the cost of production, which can fluctuate independently from hog markets. Under normal, long-term market conditions, changes in the cash hog market are offset by proportional changes in primal values. Therefore, a hypothetical 10 percent change in the cash hog market would have had an immaterial effect on the Company’s results of operations.

Certain procurement contracts allow for future hog deliveries (firm commitments) to be forward priced. The Company generally hedges these firm commitments by using hog futures contracts. These futures contracts are designated and accounted for as fair value hedges. The change in the market value of such futures contracts is highly effective at offsetting changes in price movements of the hedged item, and the Company evaluates the effectiveness of the contracts at least quarterly. Changes in the fair value of the futures contracts, along with the gain or loss on the firm commitment, are marked-to-market through earnings and are recorded on the Consolidated Statements of Financial Position as a current asset and liability, respectively. The fair value of the Company’s open futures contracts as of October 25, 2015, was $1.2 million compared to $0.6 million as of October 26, 2014.

The Company measures its market risk exposure on its hog futures contracts using a sensitivity analysis, which considers a hypothetical 10 percent change in market prices. A 10 percent increase in market prices would have negatively impacted the fair value of the Company’s October 25, 2015 open contracts by $3.0 million, which in turn would lower the Company’s future cost of purchased hogs by a similar amount.

Turkey and Hog Production Costs: The Company raises or contracts for live turkeys and hogs to meet some of its raw material supply requirements. Production costs in raising turkeys and hogs are subject primarily to fluctuations in feed prices and, to a lesser extent, fuel costs. Under normal, long-term market conditions, changes in the cost to produce turkeys and hogs are offset by proportional changes in their respective markets.

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To reduce the Company’s exposure to changes in grain prices, the Company utilizes a hedge program to offset the fluctuation in the Company’s future direct grain purchases. This program currently utilizes corn futures for JOTS, and these contracts are accounted for under cash flow hedge accounting. The open contracts are reported at their fair value with an unrealized loss of ($2.9) million, before tax, on the Consolidated Statements of Financial Position as of October 25, 2015, compared to an unrealized loss of $(11.3) million, before tax, as of October 26, 2014.

The Company measures its market risk exposure on its grain futures contracts using a sensitivity analysis, which considers a hypothetical 10 percent change in the market prices for grain. A 10 percent decrease in the market price for grain would have negatively impacted the fair value of the Company’s October 25, 2015, open grain contracts by $8.0 million, which in turn would lower the Company’s future cost on purchased grain by a similar amount.

Long-Term Debt: A principal market risk affecting the Company is the exposure to changes in interest rates on the Company’s fixed-rate, long-term debt. Market risk for fixed-rate, long-term debt is estimated as the potential increase in fair value, resulting from a hypothetical 10 percent decrease in interest rates, and amounts to approximately $3.6 million. The fair value of the Company’s long-term debt was estimated using discounted future cash flows based on the Company’s incremental borrowing rates for similar types of borrowing arrangements.

Investments: The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. As of October 25, 2015, the balance of these securities totaled $119.7 million. A majority of these securities represent fixed income funds. The Company is subject to market risk due to fluctuations in the value of the remaining investments, as unrealized gains and losses associated with these securities are included in the Company’s net earnings on a mark-to-market basis. A 10 percent decline in the value of the investments not held in fixed income funds would have a direct negative impact to the Company’s pretax earnings of approximately $3.9 million, while a 10 percent increase in value would have a positive impact of the same amount.

International: The fair values of certain Company assets are subject to fluctuations in foreign currencies. The Company’s net asset position in foreign currencies as of October 25, 2015, was $277.5 million, compared to $214.8 million as of October 26, 2014, with most of the exposure existing in Chinese yuan and Philippine pesos. Changes in currency exchange rates impact the fair values of Company assets either currently through the Consolidated Statements of Operations as currency gains/losses, or by affecting other comprehensive loss.

The Company measures its foreign currency exchange risk by using a 10 percent sensitivity analysis on the Company’s primary foreign net asset position, the Chinese yuan, as of October 25, 2015. A 10 percent strengthening in the value of the yuan relative to the U.S. dollar would result in other comprehensive income of approximately $19.6 million pretax. A 10 percent weakening in the value of the yuan relative to the U.S. dollar would result in other comprehensive loss of approximately $16.0 million pretax.

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Report of Management

Management’s Responsibility for Financial Statements

The accompanying financial statements were prepared by the management of Hormel Foods Corporation which is responsible for their integrity and objectivity. These statements have been prepared in accordance with U.S. generally accepted accounting principles appropriate in the circumstances and, as such, include amounts that are based on our best estimates and judgments.

Hormel Foods Corporation has developed a system of internal controls designed to assure that the records reflect the transactions of the Company and that the established policies and procedures are adhered to. This system is augmented by well-communicated written policies and procedures, a strong program of internal audit, and well-qualified personnel.

These financial statements have been audited by Ernst & Young LLP, an independent registered public accounting firm, and their report is included herein. The audit was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and includes a review of the Company’s accounting and financial controls and tests of transactions.

The Audit Committee of the Board of Directors, composed solely of outside directors, meets periodically with the independent auditors, management, and the internal auditors to assure that each is carrying out its responsibilities. Both Ernst & Young LLP and our internal auditors have full and free access to the Audit Committee, with or without the presence of management, to discuss the results of their audit work and their opinions on the adequacy of internal controls and the quality of financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Management of Hormel Foods Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting standards. Under the supervision, and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Based on our evaluation under the framework in Internal Control – Integrated Framework, we concluded that our internal control over financial reporting was effective as of October 25, 2015. Our internal control over financial reporting as of October 25, 2015, has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Jeffrey M. Ettinger	Jody H. Feragen
Chairman of the Board,	Executive Vice President,
Chief Executive Officer,	Chief Financial Officer,
and Director	and Director

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders Hormel Foods Corporation

We have audited Hormel Foods Corporation’s internal control over financial reporting as of October 25, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). Hormel Foods Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management entitled Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Hormel Foods Corporation maintained, in all material respects, effective internal control over financial reporting as of October 25, 2015, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of Hormel Foods Corporation at October 25, 2015 and October 26, 2014 and the related statements of operations, comprehensive income, changes in shareholders’ investment and cash flows for each of the three years in the period ended October 25, 2015 and our report dated December 16, 2015 expressed an unqualified opinion thereon.

Minneapolis, Minnesota
December 16, 2015

34

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders Hormel Foods Corporation

We have audited the accompanying consolidated statements of financial position of Hormel Foods Corporation as of October 25, 2015 and October 26, 2014 and the related consolidated statements of operations, comprehensive income, changes in shareholders’ investment, and cash flows for each of the three years in the period ended October 25, 2015. These financial statements are the responsibility of the Company’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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as 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 consolidated financial position of Hormel Foods Corporation at October 25, 2015 and October 26, 2014 and the consolidated results of its operations and its cash flows for each of the three years in the period ended October 25, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Hormel Foods Corporation’s internal control over financial reporting as of October 25, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated December 16, 2015 expressed an unqualified opinion thereon.

Minneapolis, Minnesota
December 16, 2015

35

Consolidated Statements of Financial Position

	October 25,		October 26,
(in thousands, except share and per share amounts)	2015		2014
Assets
Current Assets
Cash and cash equivalents	$     347,239		$     334,174
Accounts receivable (net of allowance for doubtful accounts of $4,086 at October 25, 2015, and $4,050 at October 26, 2014)	605,689		609,526
Inventories	993,265		1,054,552
Income taxes receivable	6,132		25,678
Deferred income taxes	86,902		86,853
Prepaid expenses	14,383		15,250
Other current assets	9,422		6,738
Total Current Assets	2,063,032		2,132,771
Deferred Income Taxes	–		–
Goodwill	1,699,484		1,226,406
Other Intangibles	827,219		554,890
Pension Assets	132,861		130,284
Investments in and Receivables from Affiliates	258,998		264,451
Other Assets	146,498		145,050
Property, Plant and Equipment
Land	71,192		61,809
Buildings	815,643		803,722
Equipment	1,679,100		1,597,044
Construction in progress	79,964		119,657
	2,645,899		2,582,232
Less allowance for depreciation	(1,634,160	)	(1,580,465	)
	1,011,739		1,001,767
Total Assets	$  6,139,831		$  5,455,619
Liabilities and Shareholders’ Investment
Current Liabilities
Accounts payable	$     495,317		$     484,042
Short-term debt	185,000		–
Accrued expenses	71,777		76,836
Accrued workers compensation	37,009		35,406
Accrued marketing expenses	119,153		89,561
Employee related expenses	232,309		209,874
Taxes payable	6,764		5,507
Interest and dividends payable	66,696		53,466
Total Current Liabilities	1,214,025		954,692
Long-Term Debt — less current maturities	250,000		250,000
Pension and Post-Retirement Benefits	509,261		502,693
Other Long-Term Liabilities	101,056		112,176
Deferred Income Taxes	64,096		24,002
Shareholders’ Investment
Preferred stock, par value $0.01 a share — authorized 160,000,000 shares; issued — none
Common stock, nonvoting, par value $0.01 a share — authorized 400,000,000 shares; issued — none
Common stock, par value $0.0293 a share — authorized 800,000,000 shares; issued 264,205,814 shares October 25, 2015 issued 263,613,201 shares October 26, 2014	7,741		7,724
Additional paid-in capital	–		–
Accumulated other comprehensive loss	(225,668	)	(207,700	)
Retained earnings	4,216,125		3,805,654
Hormel Foods Corporation Shareholders’ Investment	3,998,198		3,605,678
Noncontrolling Interest	3,195		6,378
Total Shareholders’ Investment	4,001,393		3,612,056
Total Liabilities and Shareholders’ Investment	$  6,139,831		$  5,455,619

See Notes to Consolidated Financial Statements.

36

Consolidated Statements of Operations

	Fiscal Year Ended
	October 25,		October 26,		October 27,
(in thousands, except per share amounts)	2015		2014		2013
Net sales	$9,263,863		$9,316,256		$8,751,654
Cost of products sold	7,455,282		7,751,273		7,338,838
Gross Profit	1,808,581		1,564,983		1,412,816
Selling, general and administrative	743,611		650,948		627,340
Goodwill impairment charge	21,537		–		–
Equity in earnings of affiliates	23,887		17,585		20,513
Operating Income	1,067,320		931,620		805,989
Other income and expense:
Interest and investment income (loss)	2,934		3,236		4,971
Interest expense	(13,111	)	(12,704	)	(12,453	)
Earnings Before Income Taxes	1,057,143		922,152		798,507
Provision for income taxes	369,879		316,126		268,431
Net Earnings	687,264		606,026		530,076
Less: Net earnings attributable to noncontrolling interest	1,176		3,349		3,865
Net Earnings Attributable to Hormel Foods Corporation	$   686,088		$   602,677		$   526,211
Net Earnings Per Share:
Basic	$         2.60		$         2.28		$         1.99
Diluted	$         2.54		$         2.23		$         1.95
Weighted-Average Shares Outstanding:
Basic	264,072		263,812		264,317
Diluted	270,501		270,216		270,224

See Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

	Fiscal Year Ended
	October 25,		October 26,		October 27,
(in thousands)	2015		2014		2013
Net earnings	$ 687,264		$ 606,026		$ 530,076
Other comprehensive income (loss), net of tax:
Foreign currency translation	(7,135	)	(1,921	)	(2,820	)
Pension and other benefits	(21,280	)	(52,985	)	192,464
Deferred hedging	9,823		(3,590	)	(15,085	)
Total Other Comprehensive Income (Loss)	(18,592	)	(58,496	)	174,559
Comprehensive income	668,672		547,530		704,635
Less: Comprehensive income attributable to noncontrolling interest	947		3,339		4,069
Comprehensive Income Attributable to Hormel Foods Corporation	$ 667,725		$ 544,191		$ 700,566

See Notes to Consolidated Financial Statements.

37

Consolidated Statements of Changes in Shareholders’ Investment

	Hormel Foods Corporation Shareholders
																Accumulated
											Additional					Other		Non-		Total
(in thousands,	Common Stock					Treasury Stock					Paid-In			Retained		Comprehensive		controlling		Shareholders’
except per share amounts)	Shares		Amount			Shares		Amount			Capital			Earnings		Income (Loss)		Interest		Investment
Balance at October 28, 2012	263,044		$	7,707		–		$	–		$	–		$ 3,135,317		$ (323,569	)	$ 5,470		$ 2,824,925
Net earnings														526,211				3,865		530,076
Other comprehensive (loss) income																174,355		204		174,559
Purchases of common stock						(1,745	)	(70,819		)										(70,819	)
Stock-based compensation expense											17,596									17,596
Exercise of stock options/nonvested shares	2,359		69								23,955									24,024
Shares retired	(1,745	)	(51		)	1,745		70,819			(41,551		)	(29,217	)					–
Distribution to noncontrolling interest																		(4,000	)	(4,000	)
Declared cash dividends — $0.68 per share														(179,782	)					(179,782	)
Balance at October 27, 2013	263,658		$7,725			–		$	–		$	–		$ 3,452,529		$ (149,214	)	$ 5,539		$ 3,316,579
Net earnings														602,677				3,349		606,026
Other comprehensive (loss) income																(58,486	)	(10	)	(58,496	)
Purchases of common stock						(1,257	)	(58,937		)										(58,937	)
Stock-based compensation expense			1								14,392									14,393
Exercise of stock options/nonvested shares	1,212		35								6,068									6,103
Shares retired	(1,257	)	(37		)	1,257		58,937			(20,460		)	(38,440	)					–
Distribution to noncontrolling interest																		(2,500	)	(2,500	)
Declared cash dividends — $0.80 per share														(211,112	)					(211,112	)
Balance at October 26, 2014	263,613		$7,724			–		$	–		$	–		$ 3,805,654		$ (207,700	)	$ 6,378		$ 3,612,056
Net earnings														686,088				1,176		687,264
Other comprehensive (loss) income																(18,363	)	(229	)	(18,592	)
Purchases of common stock						(400	)	(24,928		)										(24,928	)
Stock-based compensation expense			1								15,716									15,717
Exercise of stock options/nonvested shares	993		28								9,527									9,555
Purchase of additional ownership from noncontrolling interest											(11,881		)			395		(2,549	)	(14,035	)
Shares retired	(400	)	(12		)	400		24,928			(13,362		)	(11,554	)					–
Distribution to noncontrolling interest																		(1,581	)	(1,581	)
Declared cash dividends — $1.00 per share														(264,063	)					264,063	)
Balance at October 25, 2015	264,206		$7,741			–		$	–		$	–		$4,216,125		$(225,668	)	$ 3,195		$4,001,393

See Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

	Fiscal Year Ended
(in thousands)		October 25,2015		October 26, 2014		October 27, 2013
Operating Activities
Net earnings		$  687,264		$  606,026		$  530,076
Adjustments to reconcile to net cash provided by operating activities:
Depreciation		125,292		120,692		115,371
Amortization of intangibles		8,142		9,352		9,479
Goodwill impairment charge		21,537		–		–
Equity in earnings of affiliates, net of dividends		13,438		5,246		13,507
Provision for deferred income taxes		19,979		9,800		1,067
Gain on property/equipment sales and plant facilities		(5,240	)	(1,667	)	(2,127	)
Non-cash investment activities		(847	)	(1,387	)	(2,705	)
Stock-based compensation expense		15,717		14,393		17,596
Excess tax benefit from stock-based compensation		(22,950	)	(24,700	)	(23,406	)
Other		–		–		963
Changes in operating assets and liabilities, net of acquisitions:
Decrease (increase) in accounts receivable		22,451		(20,486	)	(44,459	)
Decrease (increase) in inventories		82,437		(21,645	)	31,699
Decrease (increase) in prepaid expenses and other current assets		62,635		11,592		(9,792	)
(Decrease) increase in pension and post-retirement benefits		(28,999	)	(32,644	)	11,283
(Decrease) increase in accounts payable and accrued expenses		(7,429	)	72,307		(10,747	)
Other		(1,435	)	–		–
Net Cash Provided by Operating Activities		991,992		746,879		637,805
Investing Activities
Net sale of trading securities		–		–		77,558
Acquisitions of businesses/intangibles		(770,587	)	(466,204	)	(665,415	)
Purchases of property/equipment		(144,063	)	(159,138	)	(106,762	)
Proceeds from sales of property/equipment		18,501		10,285		10,164
(Increase) decrease in investments, equity in affiliates, and other assets		(4,798	)	(1,718	)	(6,619	)
Net Cash Used in Investing Activities		(900,947	)	(616,775	)	(691,074	)
Financing Activities
Proceeds from short-term debt		350,000		115,000		25,000
Principal payments on short-term debt		(165,000	)	(115,000	)	(25,000	)
Dividends paid on common stock		(250,834	)	(203,156	)	(174,320	)
Share repurchase		(24,928	)	(58,937	)	(70,819	)
Proceeds from exercise of stock options		10,468		10,523		30,212
Excess tax benefit from stock-based compensation		22,950		24,700		23,406
Distribution to noncontrolling interest		(1,581	)	(2,500	)	(4,000	)
Payments to noncontrolling interest		(11,702	)	–		–
Net Cash Used in Financing Activities		(70,627	)	(229,370	)	(195,521	)
Effect of Exchange Rate Changes on Cash		(7,353	)	(574	)	416
Increase (Decrease) in Cash and Cash Equivalents		13,065		(99,840	)	(248,374	)
Cash and cash equivalents at beginning of year		334,174		434,014		682,388
Cash and Cash Equivalents at End of Year		$  347,239		$  334,174		$  434,014

See Notes to Consolidated Financial Statements.

39

Notes to Consolidated Financial Statements October 25, 2015

NOTE A

Summary of Significant Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits.

Use of Estimates: 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.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal years 2015, 2014, and 2013 consisted of 52 weeks. Fiscal year 2016 will consist of 53 weeks.

Subsequent Event: On November 25, 2015, subsequent to the end of the fiscal year, the Company announced that its Board of Directors authorized a two-for-one split of the Company’s common stock. Stockholder approval of the stock split is required during the Company’s Annual Meeting to be held on January 26, 2016.

Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. The Company’s cash equivalents as of October 25, 2015, and October 26, 2014, consisted primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts.

Fair Value Measurements: Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows:

Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.

Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

See additional discussion regarding the Company’s fair value measurements in Notes G, H, and M.

Investments: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans, which is included in other assets on the Consolidated Statements of Financial Position. The securities held by the trust are classified as trading securities and consist mainly of fixed return investments. Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings. Securities held by the trust generated gains of $2.4 million, $2.9 million, and $4.6 million for fiscal years 2015, 2014, and 2013, respectively.

Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally under the average cost method. Adjustments to the Company’s lower of cost or market inventory reserve are reflected in cost of products sold in the Consolidated Statements of Operations.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. The Company uses the straight-line method in computing depreciation. The annual provisions for depreciation have been computed principally using the following ranges of asset lives: buildings 20 to 40 years, machinery and equipment 5 to 10 years.

Internal-use software development and implementation costs are expensed until the Company has determined that the software will result in probable future economic benefits, and management has committed to funding the project. Thereafter, all material development and implementation costs, and purchased software costs, are capitalized and amortized using the straight-line method over the remaining estimated useful lives.

Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise.

In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying

40

amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test.

In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results.

If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. First, the fair value of each reporting unit is compared to its corresponding carrying value, including goodwill. The fair value of each reporting unit is estimated using discounted cash flow valuations (Level 3), which incorporate assumptions regarding future growth rates, terminal values, and discount rates. The estimates and assumptions used consider historical performance and are consistent with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference.

During fiscal years 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal year 2015. See additional discussion regarding the Company’s assets held for sale in Note E.

In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test.

In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that

may impact their intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset.

If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment.

Based on the qualitative assessment conducted in fiscal year 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal years 2015, 2014, or 2013.

Impairment of Long-lived Assets and Definite-Lived Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews long-lived assets and definite-lived intangible assets for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets and any related goodwill, the carrying value is reduced to the estimated fair value. No material write-downs were recorded in fiscal years 2015, 2014, or 2013.

Assets Held For Sale: The Company classifies assets as held for sale when management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value or the fair market value, less costs to sell. See additional discussion regarding the Company’s assets held for sale in Note E.

Employee Benefit Plans: The Company has elected to use the corridor approach to recognize expenses related to its defined benefit pension and post-retirement benefit plans. Under the corridor approach, actuarial gains or losses resulting from experience different from that assumed and from changes in assumptions are deferred and amortized over future periods. For the defined benefit pension plans, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year. For the post-retirement plan, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the accumulated pension benefit obligation at the beginning of the year. For plans with active employees, net gains or losses in excess of the corridor are amortized over the average remaining service period of participating employees expected to

41

receive benefits under those plans. For plans with only retiree participants, net gains or losses in excess of the corridor are amortized over the average remaining life of the retirees receiving benefits under those plans.

Contingent Liabilities: The Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. 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. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range that constitutes the Company’s best estimate. The Company also discloses the nature of and range of loss for claims against the Company when losses are reasonably possible and material.

Foreign Currency Translation: Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the statement of financial position date, and amounts in the statement of operations are translated at the average monthly exchange rate. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of accumulated other comprehensive loss in shareholders’ investment.

When calculating foreign currency translation, the Company deemed its foreign investments to be permanent in nature and has not provided for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars.

Derivatives and Hedging Activity: The Company uses commodity and currency positions to manage its exposure to price fluctuations in those markets. The contracts are recorded at fair value on the Consolidated Statements of Financial Position within other current assets or accounts payable. Additional information on hedging activities is presented in Note H.

Equity Method Investments: The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control. The Company accounts for such investments under the equity method of accounting, and its underlying share of each investee’s equity is reported in the Consolidated Statements of Financial Position as part of investments in and receivables from affiliates.

The Company regularly monitors and evaluates the fair value of our equity investments. If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in equity in earnings of affiliates in the Consolidated Statements of Operations. The Company’s equity investments do not have a readily determinable fair value as none of them are publicly

traded. The fair values of the Company’s private equity investments are determined by discounting the estimated future cash flows of each entity. These cash flow estimates include assumptions on growth rates and future currency exchange rates (Level 3). Excluding charges related to the exit from international joint venture businesses in fiscal year 2015, there were no other charges on any of the Company’s equity investments in fiscal years 2015, 2014, or 2013.

See additional discussion regarding the Company’s equity method investments in Note I.

Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured.

The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contract accruals are based on a review of the unpaid outstanding contracts on which performance has taken place. Estimates used to determine the revenue reduction include the level of customer performance and the historical spend rate versus contracted rates.

Allowance for Doubtful Accounts: The Company estimates the allowance for doubtful accounts based on a combination of factors, including the age of its accounts receivable balances, customer history, collection experience, and current market factors. Additionally, a specific reserve may be established if the Company becomes aware of a customer’s inability to meet its financial obligations.

Advertising Expenses: Advertising costs are expensed when incurred. Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research. Advertising costs for fiscal years 2015, 2014, and 2013 were $145.3 million, $114.4 million, and $89.9 million, respectively.

Shipping and Handling Costs: The Company’s shipping and handling expenses are included in cost of products sold.

Research and Development Expenses: Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses incurred for fiscal years 2015, 2014, and 2013 were $32.0 million, $29.9 million, and $29.9 million, respectively.

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Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

In accordance with ASC 740, Income Taxes, the Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Employee Stock Options: The Company records stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation. For options subject to graded vesting, the Company recognizes stock-based compensation expense ratably over the shorter of the vesting period or requisite service period. Stock-based compensation expense for grants made to retirement-eligible employees is recognized on the date of grant.

Share Repurchases: During fiscal year 2013, 1.2 million shares were purchased as part of a 2010 program at an average price of $39.67, fully depleting that program.

On January 29, 2013, the Company’s Board of Directors authorized the repurchase 10.0 million shares of its common stock with no expiration date. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation under this authorization at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. During fiscal year 2014, 1.3 million shares were purchased at an average price of $46.87 and 0.6 million shares were purchased during fiscal year 2013 at an average price of $42.54.

Supplemental Cash Flow Information: Non-cash investment activities presented on the Consolidated Statements of Cash Flows generally consist of unrealized gains or losses on the Company’s rabbi trust. The noted investments are included in other assets or short-term marketable securities on the Consolidated Statements of Financial Position. Changes in the value of these investments are included in the Company’s net earnings and are presented in the Consolidated Statements of Operations as either interest and investment income or interest expense, as appropriate.

On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership of that business. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture. The difference between the fair value of the consideration given and the reduction in the noncontrolling interest was recognized as an $11.9 million reduction in additional paid-in capital attributable to the

Company. The Company will continue to manufacture at the Shanghai facility by leasing the land use rights and buildings from the previous minority partner.

Accounting Changes and Recent Accounting Pronouncements: In January 2014, the FASB updated the guidance within ASC 323, Investments-Equity Method and Joint Ventures. The update provides guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to make an accounting policy election to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The updated guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2016, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2014, the Financial Accounting Standards Board (FASB) updated the guidance within ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard update only requires disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The updated guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company early adopted the new provisions of this accounting standard in the fourth quarter of fiscal year 2015, and determined it did not have any transactions qualifying as a discontinued operation under the new guidance.

In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. generally accepted accounting principles and international financial reporting standards and supersedes ASC 605, Revenue Recognition. The new standard requires

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companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. On July 8, 2015, the FASB approved a one-year deferral of the effective date. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. Accordingly, the Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2019, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 835, Interest. The update provides guidance on simplifying the presentation of debt issuance cost. The amendments require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 715, Compensation – Retirement Benefits. The update provides guidance on simplifying the measurement date for defined benefit plan assets and obligations. The amendments allow employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year ends. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and adoption is not expected to have a material impact on its consolidated financial statements.

In May 2015, the FASB updated the guidance within ASC 820, Fair Value Measurements and Disclosures. The update provides guidance on the disclosures for investments in certain entities that calculate net asset value (NAV) per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share (or its equivalent) as a practical expedient. The updated guidance is to be applied retrospectively and is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

NOTE B

Acquisitions

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 purchase accounting adjustments, and was funded by the Company with cash on hand and by utilizing short-term financing.

Applegate® is the No. 1 brand in natural and organic value-added prepared meats and this acquisition will allow the Company to expand the breadth of its protein offerings to provide consumers more choice in that fast growing category.

The acquisition was accounted for as a business combination using the acquisition method. The Company is in the process of obtaining an independent appraisal. Therefore, a preliminary allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Accounts receivable	$  25,574
Inventory	22,089
Prepaid and other assets	2,916
Property, plant and equipment	3,463
Intangible assets	275,900
Goodwill	488,476
Current liabilities	(23,420)
Deferred taxes	(20,935)
Purchase price	$774,063

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the potential to expand presence in the natural and organic channels and the supply chain for natural and organic products. A portion of the goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Refrigerated Foods reporting segment.

The Company recognized approximately $9.0 million of transaction costs in fiscal year 2015 related to the acquisition and the charges were reported in selling, general and administrative expense in the Company’s Consolidated Statements of Operations.

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 Refrigerated Foods reporting segment. The acquisition contributed $92.8 million of net sales since the date of acquisition.

On August 11, 2014, the Company acquired CytoSport Holdings, Inc. (CytoSport) of Benicia, California for a final purchase price of $420.9 million in cash. The purchase price was funded by the Company with cash on hand and by utilizing

44

funds from its revolving line of credit. The agreement provides for a potential additional payment of up to $20.0 million subject to meeting specific financial performance criteria over the two years subsequent to the year of acquisition. The Company recognized a $10.3 million liability related to this potential payment through purchase accounting. In fiscal year 2015, the Company had a positive $8.9 million adjustment related to this accrual due to a current evaluation of net sales and earnings targets associated with the acquisition.

CytoSport is the maker of Muscle Milk® products and is a leading provider of premium protein products in the sports nutrition category. CytoSport’s brands align with the Company’s focus on protein while further diversifying the Company’s portfolio.

The acquisition was accounted for as a business combination using the acquisition method. The Company has estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. The final allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Accounts receivable	$  30,580
Inventory	62,246
Prepaid and other assets	3,133
Property, plant and equipment	8,119
Intangible assets	188,500
Goodwill	270,925
Current liabilities	(52,811)
Long-term liabilities	(30,140)
Deferred taxes	(59,700)
Purchase price	$420,852

The liabilities shown above include $15.0 million representing potential payments owed under a supplier agreement, which are contingent on future production levels through fiscal year 2018.

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, manufacturing synergies, and the potential to expand presence in alternate channels. The goodwill balance is not expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Specialty Foods and International & Other reporting segments.

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 Specialty Foods and International & Other reporting segments. The acquisition contributed an incremental $249.7 million of net sales for fiscal year 2015, and incremental $73.5 million of net sales for fiscal year 2014.

The Company recognized approximately $4.8 million of transaction costs in fiscal year 2014 related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

On November 26, 2013, the Company acquired the China based SKIPPY® peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. for a final purchase price of $41.9 million in cash. This acquisition included the Weifang, China manufacturing facility and all sales in Mainland China. The purchase price was funded by the Company with cash on hand.

SKIPPY® is a well-established brand that allows the Company to expand its presence in the center of the store with a non-meat protein product and reinforces the Company’s balanced product portfolio. The acquisition also provides the opportunity to strengthen the Company’s global presence and complements the international sales strategy for the SPAM® family of products.

On January 31, 2013, the Company had previously acquired the United States based SKIPPY® peanut butter business from Unilever United States Inc. for a final purchase price of $665.4 million in cash. This acquisition included the Little Rock, Arkansas manufacturing facility and all sales worldwide, except sales in Mainland China. The purchase price was funded by the Company with cash on hand generated from operations and liquidating marketable securities.

The acquisition was accounted for as a business combination using the acquisition method. The Company estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. Therefore, an allocation of the final purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Inventory	$ 49,156
Property, plant and equipment	48,461
Intangible assets	264,500
Goodwill	303,597
Current liabilities	(299)
Purchase price	$ 665,415

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, cost synergies, and the potential to integrate and expand existing product lines. The goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Grocery Products and International & Other reporting segments.

The Company recognized approximately $7.7 million of transaction costs in fiscal year 2013 (excluding transitional service expenses) related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

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Operating results for both of these SKIPPY® acquisitions have been included in the Company’s Consolidated Statements of Operations from the date of acquisition and are primarily reflected in the Grocery Products and International & Other reporting segments. The China based business contributed an incremental $28.9 million of net sales for fiscal year 2014. The United States based business contributed an incremental $86.5 million of net sales for the first quarter of fiscal year 2014, and an incremental $272.8 million of net sales for fiscal year 2013.

Pro forma results of operations are not presented, as no acquisitions in fiscal years 2015, 2014, or 2013 were considered material, individually or in the aggregate, to the consolidated Company.

NOTE C

Inventories

Principal components of inventories are:

	October 25,		October 26,
(in thousands)	2015		2014
Finished products	$ 553,298		$    604,946
Raw materials and work-in-process		239,174		274,105
Materials and supplies		200,793		175,501
Total	$ 993,265		$ 1,054,552

NOTE D

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal years ended October 25, 2015, and October 26, 2014, are presented in the table below. Additions during fiscal year ended October 25, 2015 are entirely due to the acquisition of Applegate on July 13, 2015. The goodwill amounts are preliminary pending final purchase adjustments. The impairment charge is related to the Company’s assets held for sale. See additional discussion regarding the Company’s assets held for sale in Note E. Purchase adjustments during the year relate to the CytoSport acquisition. The additions during the prior fiscal year ended October 26, 2014, were due to the acquisitions of CytoSport on August 11, 2014, and the China based SKIPPY® peanut butter business on November 26, 2013.

	Grocery	Refrigerated		Specialty	International
(in thousands)	Products	Foods	JOTS	Foods	& Other	Total
Balance as of October 27, 2013	$ 322,942	$   96,643	$ 203,214	$ 207,028	$ 104,645	$    934,472
Goodwill acquired	–	–	–	263,829	28,105	291,934
Balance as of October 26, 2014	$ 322,942	$   96,643	$ 203,214	$ 470,857	$ 132,750	$ 1,226,406
Goodwill acquired	–	488,476	–	–	–	488,476
Purchase Adjustments	–	–	–	7,096	–	7,096
Impairment charge	–	–	–	(21,537)	–	(21,537)
Product line Disposal	(521)	(435)	–	–	(1)	(957)
Balance as of October 25, 2015	$ 322,421	$ 584,684	$ 203,214	$ 456,416	$ 132,749	$ 1,699,484

The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below. In fiscal year 2015, customer relationships of $25.1 million and non-compete agreements of $1.2 million were acquired during the third quarter related to Applegate. In fiscal year 2014, customer relationships of $21.6 million were acquired during the fourth quarter related to CytoSport and $2.6 million were acquired during the first quarter related to the China based SKIPPY® peanut butter business. Through the final purchase accounting valuation of CytoSport in fiscal year 2015, the value of the customer relationships was raised to $23.3 million.

	October 25, 2015			October 26, 2014
	Gross		Weighted-	Gross		Weighted-
	Carrying	Accumulated	Avg Life	Carrying	Accumulated	Avg Life
(in thousands)	Amount	Amortization	(in Years)	Amount	Amortization	(in Years)
Customer lists/relationships	$ 83,190	$ (13,939)	12.1	$   67,540	$ (19,336)	11.0
Formulas and recipes	7,490	(6,865)	7.2	17,854	(15,955)	8.8
Proprietary software and technology	7,010	(6,901)	8.1	14,820	(13,542)	10.2
Other intangibles	2,370	(1,195)	7.5	4,746	(4,503)	7.4
Total	$100,060	$ (28,900)	11.3	$ 104,960	$ (53,336)	10.4

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Amortization expense for the last three fiscal years was as follows:

(in millions)
2015	$8.1
2014	9.4
2013	9.5

Estimated annual amortization expense for the five fiscal years after October 25, 2015, is as follows:

(in millions)
2016	$8.2
2017	7.6
2018	7.0
2019	7.0
2020	6.8

The carrying amounts for indefinite-lived intangible assets are in the following table. The increase in fiscal year 2015 represents the fair value of the tradenames acquired with Applegate.

	October 25,	October 26,
(in thousands)	2015	2014
Brand/tradename/trademarks	$748,075	$495,282
Other intangibles	7,984	7,984
Total	$756,059	$503,266

During the fourth quarter of fiscal years 2015 and 2014, the Company completed the required annual impairment tests of indefinite-lived intangible assets and goodwill. The goodwill impairment charge referred to above was recorded in fiscal year 2015 and no impairment was indicated in fiscal year 2014. Useful lives of intangible assets were also reviewed during this process, with no changes identified.

NOTE E

Assets Held For Sale

In fiscal year 2015, the Company began actively marketing a portion of Diamond Crystal Brands (DCB). Through this process, the Company identified the specific assets and liabilities to be sold and allocated goodwill based on the relative fair values of the assets held for sale and the assets that will be retained by the Company. The Company determined the carrying value of the DCB assets held for sale more likely than not exceeded its fair value, requiring a two step test for impairment. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. An impairment charge of $21.5 million was recorded for the assets held for sale. This impairment is recorded on the Company’s Consolidated Statements of Operations on the line item “Goodwill impairment charge.” DCB is reported within

the Company’s Specialty Foods segment. The portion of the business held for sale is not material to the Company’s annual net sales, net earnings, or earnings per share.

Amounts classified as assets and liabilities held for sale at October 25, 2015 are presented on the Company’s Consolidated Statement of Financial Position within their respective accounts, and include the following:

Assets held for sale (in thousands)
Current assets	$  26,057
Goodwill	51,811
Intangibles	5,389
Property, plant and equipment	31,678
Total assets held for sale	$114,935

Liabilities held for sale (in thousands)
Total current liabilities held for sale	$    3,191

NOTE F

Long-term Debt and Other

Borrowing Arrangements

Long-term debt consists of:

	October 25,	October 26,
(in thousands)	2015	2014
Senior unsecured notes, with interest at 4.125%, interest due semi-annually through April 2021 maturity date	$250,000	$250,000
Less current maturities	–	–
Total	$250,000	$250,000

The Company has a $400.0 million unsecured revolving line of credit which matures in June 2020 and bears interest at a variable rate based on LIBOR. A fixed fee is paid for the availability of this credit line. As of October 25, 2015, and October 26, 2014, the Company had no outstanding draws from this line of credit.

The Company also has a $300.0 million term loan facility that expires December 2016 that bears interest at a variable rate based on LIBOR. As of October 25, 2015, the Company had $185.0 million outstanding on the loan facility and no outstanding draws as of October 26, 2014.

The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position. At the end of the current fiscal year, the Company was in compliance with all of these covenants.

Total interest paid in the last three fiscal years is as follows:

(in millions)
2015	$13.1
2014	12.7
2013	12.5

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NOTE G

Pension and Other Post-retirement Benefits

The Company has several defined benefit plans and defined contribution plans covering most employees. Total costs associated with the Company’s defined contribution benefit plans in 2015, 2014, and 2013 were $31.7 million, $30.1 million, and $29.9 million, respectively. Benefits for defined benefit pension plans covering hourly employees are provided based on stated amounts for each year of service, while plan benefits covering salaried employees are based on final average compensation. The Company’s funding policy is to make annual contributions of not less than the minimum required by applicable regulations. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 9-23 years.

Certain groups of employees are eligible for post-retirement health or welfare benefits. Benefits for retired employees vary for each group depending on respective retirement dates and applicable plan coverage in effect. Contribution requirements for retired employees are governed by the Retiree Health

Care Payment Program and may change each year as the cost to provide coverage is determined. Eligible employees hired after January 1, 1990, may receive post-retirement medical coverage but must pay the full cost of the coverage. On October 17, 2012, the plan was amended, effective April 1, 2013, to terminate coverage for certain nonunion retirees who retired on or after August 1, 2002, and who are or will be Medicare eligible. If the cost of the nonunion retiree coverage is currently subsidized by the Company for the affected retirees, credits will be established in a health reimbursement account to help reimburse the retiree for the cost of purchasing coverage in the individual market. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 6-18 years.

In 2011, an amendment was enacted for a defined benefit plan which included a change in the pension formula effective January 1, 2017. The amended formula remains a defined benefit formula, but will base the accrued benefit credit on age and service and define the benefit as a lump sum. Effective October 31, 2016, the 401(k) match for these participants will be increased.

Net periodic cost of defined benefit plans included the following:

	Pension Benefits			Post-retirement Benefits
(in thousands)	2015	2014	2013	2015	2014	2013
Service cost	$ 28,795	$ 25,935	$ 30,979	$   1,795	$   1,963		$   2,494
Interest cost	52,522	53,030	47,688	13,479	15,279		14,910
Expected return on plan assets	(88,792)	(83,702)	(73,144)	–	–		–
Amortization of prior service cost	(4,878)	(4,971)	(5,079)	(1,337)	(1,337)		(1,332)
Recognized actuarial loss (gain)	18,476	12,697	34,019	(2)	(2)		7,719
Curtailment charge	–	–	6	–	–		–
Net periodic cost	$  6,123	$   2,989	$ 34,469	$ 13,935	$ 15,903		$ 23,791

The following amounts have not been recognized in net periodic pension cost and are included in accumulated other comprehensive loss:

(in thousands)	Pension Benefits				Post-retirement Benefits
	2015		2014		2015		2014
Unrecognized prior service credit		$    32,490		$    37,368		$    2,844		$    4,180
Unrecognized actuarial losses		(360,949)		(343,398)		(40,590)		(30,250)

The following amounts are expected to be recognized in net periodic benefit expense in fiscal year 2016:

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
Amortized prior service credit	$ (4,878)	$ (1,337)
Recognized actuarial losses	18,693	1,303

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The following is a reconciliation of the beginning and ending balances of the benefit obligation, the fair value of plan assets, and the funded status of the plans as of the October 25, 2015, and the October 26, 2014, measurement dates:

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in benefit obligation:
Benefit obligation at beginning of year	$1,235,769	$1,098,060	$330,841	$334,447
Service cost	28,795	25,935	1,795	1,963
Interest cost	52,522	53,030	13,479	15,279
Actuarial (gain) loss	(16,872)	108,047	10,339	927
Employee contributions	–	–	2,798	2,715
Medicare Part D subsidy	–	–	1,313	1,941
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Benefit obligation at end of year	$1,248,209	$1,235,769	$334,544	$330,841

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in plan assets:
Fair value of plan assets at beginning of year	$1,168,765	$1,087,315	$            –	$            –
Actual return on plan assets	35,870	101,025	–	–
Employee contributions	–	–	2,798	2,715
Employer contributions	27,147	29,728	23,223	23,716
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Fair value of plan assets at end of year	$1,179,777	$1,168,765	$            –	$              –
Funded status at end of year	$    (68,432)	$    (67,004)	$(334,544)	$ (330,841)

Amounts recognized in the Consolidated Statements of Financial Position as of October 25, 2015, and October 26, 2014, are as follows:

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Pension assets	$  132,861	$  130,284	$            –	$            –
Employee related expenses	(4,931)	(4,532)	(21,645)	(20,904)
Pension and post-retirement benefits	(196,362)	(192,756)	(312,899)	(309,937)
Net amount recognized	$   (68,432)	$  (67,004)	$(334,544)	$(330,841)

The following table provides information for pension plans with accumulated benefit obligations in excess of plan assets:

(in thousands)	2015	2014
Projected benefit obligation	$201,293	$197,288
Accumulated benefit obligation	193,913	186,085
Fair value of plan assets	–	–

Weighted-average assumptions used to determine benefit obligations are as follows:

	2015	2014
Discount rate	4.50%	4.31%
Rate of future compensation increase
(for plans that base benefits on final compensation level)	3.92%	3.94%

Weighted-average assumptions used to determine net periodic benefit costs are as follows:

	2015	2014	2013
Discount rate	4.31%	4.89%	4.05%
Rate of future compensation increase (for plans that base benefits on final compensation level)	3.94%	3.91%	3.97%
Expected long-term return on plan assets	7.70%	7.80%	7.90%

The expected long-term rate of return on plan assets is based on fair value and is developed in consultation with outside advisors. A range is determined based on the composition of the asset portfolio, historical long-term rates of return, and estimates of future performance.

For measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered health care benefits for pre-Medicare and post-Medicare retirees’ coverage is assumed for 2016. The pre-Medicare and post-Medicare rate is assumed to decrease to 5.0% for 2021, and remain at that level thereafter.

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The assumed discount rate, expected long-term rate of return on plan assets, rate of future compensation increase, and health care cost trend rate have a significant impact on the amounts reported for the benefit plans. A one-percentage-point change in these rates would have the following effects:

	1-Percentage-Point
	Expense		Benefit Obligation
(in thousands)	Increase	Decrease	Increase	Decrease
Pension Benefits:
Discount rate	$(12,892)	$16,810	$(157,394)	$197,869
Expected long-term rate of return on plan assets	(11,629)	11,629	–	–
Rate of future compensation increase	461	(442)	2,504	(2,417)
Post-retirement Benefits:
Discount rate	$       (64)	$  5,035	$  (33,462)	$  40,619
Health care cost trend rate	1,749	(1,451)	38,194	(31,112)

The actual and target weighted-average asset allocations for the Company’s pension plan assets as of the plan measurement date are as follows:

	2015		2014
Asset Category	Actual	Target Range	Actual	Target Range
Large Capitalization Equity	38.8%	15-35%	33.0%	15-35%
Small Capitalization Equity	5.4%	5-15%	6.0%	5-15%
International Equity	14.0%	15-25%	20.8%	15-25%
Private Equity	6.1%	0-15%	5.0%	0-15%
Total Equity Securities	64.3%	50-75%	64.8%	55-75%
Fixed Income	34.3%	25-45%	34.0%	25-45%
Real Estate	–	0-10%	–	–
Cash and Cash Equivalents	1.4%	–	1.2%	–

Target allocations are established in consultation with outside advisors through the use of asset-liability modeling to attempt to match the duration of the plan assets with the duration of the Company’s projected benefit liability. The asset allocation strategy attempts to minimize the long-term cost of pension benefits, reduce the volatility of pension expense, and achieve a healthy funded status for the plans.

During 2014, the 1.7 million shares of Company common stock held in plan assets were sold. Dividends paid during 2014 on shares held by the plan were $0.7 million.

Based on the October 25, 2015 measurement date, the Company anticipates making contributions of $24.1 million to fund the pension plans during fiscal year 2016. The Company also expects to make contributions of $27.2 million during 2016 that represent benefit payments for unfunded plans.

Benefits expected to be paid over the next ten fiscal years are as follows:

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
2016	$ 53,515	$ 22,113
2017	55,661	22,441
2018	58,010	22,612
2019	60,934	22,711
2020	63,916	22,621
2021 – 2025	361,518	108,832

Post-retirement benefits are net of expected federal subsidy receipts related to prescription drug benefits granted under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which are estimated to be $2.4 million per year through 2025.

50

The fair values of the defined benefit pension plan investments as of October 25, 2015, and October 26, 2014, by asset category and fair value hierarchy level, are as follows:

	Fair Value Measurements at October 25, 2015
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     16,551		$  16,551		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   300,735		$175,206		$125,529		$         –
Foreign	36,637		36,637		–		–
World	120,206		–		120,206		–
Total Large Capitalization Equity		$   457,578		$211,843		$245,735		$         –
Small Capitalization Equity(3)
Domestic		$     55,513		$  55,513		$           –		$         –
Foreign	8,246		8,246		–		–
Total Small Capitalization Equity		$     63,759		$  63,759		$           –		$         –
International Equity(4)
Mutual fund		$   101,062		$           –		$101,062		$         –
Collective trust	63,861		–		63,861		–
Total International Equity		$   164,923		$           –		$164,923		$         –
Private Equity(5)
Domestic		$     54,748		$           –		$           –		$54,748
International	17,027		–		–		17,027
Total Private Equity		$     71,775		$           –		$           –		$71,775
Total Equity		$   758,035		$275,602		$410,658		$71,775
Fixed Income(6)
US government issues		$   130,456		$104,460		$  25,996		$         –
Municipal issues	20,211		–		20,211		–
Corporate issues – domestic	210,035		–		210,035		–
Corporate issues – foreign	44,489		–		44,489		–
Total Fixed Income		$   405,191		$104,460		$300,731		$         –
Total Investments at Fair Value		$1,179,777		$396,613		$711,389		$71,775

51

	Fair Value Measurements at October 26, 2014
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     14,342		$  14,342		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   351,195		$196,977		$154,218		$         –
Foreign	34,126		34,126		–		–
Total Large Capitalization Equity		$   385,321		$231,103		$154,218		$         –
Small Capitalization Equity(3)
Domestic		$     62,521		$  62,521		$           –		$         –
Foreign	8,031		8,031		–		–
Total Small Capitalization Equity		$     70,552		$  70,552		$           –		$         –
International Equity(4)
Mutual fund		$     69,393		$           –		$  69,393		$         –
Collective trust	173,008		–		173,008		–
Total International Equity		$   242,401		$           –		$242,401		$         –
Private Equity(5)
Domestic		$     43,340		$           –		$           –		$43,340
International	15,383		–		–		15,383
Total Private Equity		$     58,723		$           –		$           –		$58,723
Total Equity		$   756,997		$301,655		$396,619		$58,723
Fixed Income(6)
US government issues		$   126,894		$  96,199		$  30,695		$         –
Municipal issues	20,232		–		20,232		–
Corporate issues – domestic	212,299		–		212,299		–
Corporate issues – foreign	38,001		–		38,001		–
Total Fixed Income		$   397,426		$  96,199		$301,227		$         –
Total Investments at Fair Value		$1,168,765		$412,196		$697,846		$58,723

The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:

(1)Cash Equivalents: These Level 1 investments consist primarily of money market mutual funds that are highly liquid and traded in active markets.

(2)Large Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investment includes mutual funds consisting of a mix of U.S. and foreign common stocks that are valued at the publicly available net asset value (NAV) of shares held by the pension plans at year end.

(3)Small Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded.

(4)International Equity: These Level 2 investments include a mix of collective investment funds and mutual funds. The mutual funds are valued at the publicly available NAV of shares held by the pension plans at year end. The value of the collective investment funds is based on the fair value of the underlying investments and the NAV can be calculated for these funds.

(5)Private Equity: These Level 3 investments consist of various collective investment funds, which are managed by a third party, that invest in a well-diversified portfolio of equity investments from top performing, high quality firms that focus on U.S. and foreign small to mid-markets, venture capitalists, and entrepreneurs with a concentration in areas of innovation. Investment strategies include buyouts, growth capital, buildups, and distressed, as well as early stages of company development mainly in the U.S. The fair value of the units for these investments is based on the fair value of the underlying investments, and the NAV can be calculated for these funds.

(6)Fixed Income: The Level 1 investments include U.S. Treasury bonds and notes, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investments consist principally of U.S. government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources; municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources; and mutual funds invested in long-duration corporate bonds that are valued at the publicly available NAV of shares held by the pension plans at year-end.

52

A reconciliation of the beginning and ending balance of the investments measured at fair value using significant unobservable inputs (Level 3) is as follows:

(in thousands)	2015	2014
Beginning Balance	$58,723	$45,783
Purchases, issuances, and settlements (net)	(3,574)	3,050
Unrealized gains	7,741	4,260
Realized gains	7,623	4,479
Interest and dividend income	1,262	1,151
Ending Balance	$71,775	$58,723

The Company has commitments totaling $85.0 million for the private equity investments within the pension plans. The unfunded private equity commitment balance for each investment category as of October 25, 2015, and October 26, 2014 is as follows:

(in thousands)	2015	2014
Domestic equity	$  9,264	$17,659
International equity	9,514	12,640
Unfunded commitment balance	$18,778	$30,299

Funding for future private equity capital calls will come from existing pension plan asset investments and not from additional cash contributions into the Company’s pension plans.

NOTE H

Derivatives and Hedging

The Company uses hedging programs to manage price risk associated with commodity purchases. These programs utilize futures contracts, options, and swaps to manage the Company’s exposure to price fluctuations in the commodities markets. The Company has determined that its programs which are designated as hedges are highly effective in offsetting the changes in fair value or cash flows generated by the items hedged.

Cash Flow Hedges: The Company currently utilizes corn futures to offset price fluctuations in the Company’s future direct grain purchases, and has historically entered into various swaps to hedge the purchases of grain at certain plant locations. The financial instruments are designated and accounted for as cash flow hedges, and the Company measures the effectiveness of the hedges at least quarterly. 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 period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. The Company typically does not hedge its grain exposure

beyond the next two upcoming fiscal years. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	20.1 million bushels	18.3 million bushels

As of October 25, 2015, the Company has included in AOCL hedging gains of $1.0 million (before tax) relating to its positions, compared to losses of $14.8 million (before tax) as of October 26, 2014. The Company expects to recognize the majority of these gains over the next 12 months.

Fair Value Hedges: The Company utilizes futures to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers. 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. The futures contracts are designated and accounted for as fair value hedges, and the Company measures the effectiveness of the hedges at least quarterly. 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 are recorded on the Consolidated Statement of Financial Position as a current asset and liability, respectively. Effective gains or losses related to these fair value hedges are recognized through cost of products sold in the period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts designated as fair value hedges:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	5.3 million bushels	8.0 million bushels
Lean hogs	0.4 million cwt	0.7 million cwt

Other Derivatives: The Company holds certain futures and options 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.

As of October 25, 2015, and October 26, 2014, the Company had the following outstanding futures and options contracts related to these programs:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	2.6 million bushels	2.9 million bushels
Soybean meal	11,500 tons	–

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Fair Values: The fair values of the Company’s derivative instruments as of October 25, 2015, and October 26, 2014, were as follows:

		Fair Value(1)
	Location on Consolidated	October 25,	October 26,
(in thousands)	Statements of Financial Position	2015	2014
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$305	$(7,124)
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	248	(938)
Total Asset Derivatives		$553	$(8,062)

(1)Amounts represent the gross fair value of 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 derivative in the Consolidated Statement of Financial Position. See Note M for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

Derivative Gains and Losses: Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the fiscal year ended October 25, 2015, and October 26, 2014, were as follows:

	Gain/(Loss) Recognized			Gain/(Loss) Reclassified		Gain/(Loss) Recognized
	in AOCL			from AOCL into Earnings		in Earnings
	(Effective Portion)(1)			(Effective Portion)(1)		(Ineffective Portion)(2) (4)
	Fiscal Year Ended			Fiscal Year Ended		Fiscal Year Ended
	October 25,	October 26,	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Cash Flow Hedges:	2015	2014	Statements of Operations	2015	2014	2015	2014
Commodity contracts	$3,409	$(16,701)	Cost of products sold	$(12,369)	$(10,925)	$(6,127)	$193

		Gain/(Loss)		Gain/(Loss)
		Recognized in Earnings		Recognized in Earnings
		(Effective Portion)(3)		(Ineffective Portion)(2) (5)
		Fiscal Year Ended		Fiscal Year Ended
	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Fair Value Hedges:	Statements of Operations	2015	2014	2015	2014
Commodity contracts	Cost of products sold	$(4,297)	$(21,608)	$2,547	$322

		Gain/(Loss)
		Recognized in Earnings
		Fiscal Year Ended
Derivatives Not	Location on Consolidated	October 25,	October 26,
Designated as Hedges:	Statements of Operations	2015	2014
Commodity contracts	Cost of products sold	$(269)	$(2,083)

(1)Amounts represent gains or losses in AOCL before tax. See Note J for the after tax impact of these gains or losses on net earnings.

(2)There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2015 includes the mark-to-market impact on certain corn futures contracts which resulted from a temporary suspension of hedge accounting due to market volatility.

(3)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 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.

(4)There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year.

(5)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.

NOTE I

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 Statements of Financial Position as investments in and receivables from affiliates.

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Investments in and receivables from affiliates consists of the following:

			October 25,	October 26,
(in thousands)	Segment	% Owned	2015	2014
MegaMex Foods, LLC	Grocery Products	50%	$ 200,110	$ 208,221
Foreign Joint Ventures	International & Other	Various (26 – 50%)	58,888	56,230
Total			$ 258,998	$ 264,451

Equity in earnings of affiliates consists of the following:

(in thousands)	Segment	2015		2014	2013
MegaMex Foods, LLC	Grocery Products	$ 26,849		$ 14,415	$ 17,261
Foreign Joint Ventures	International & Other	(2,962	)	3,170	3,252
Total		$ 23,887		$ 17,585	$ 20,513

Equity in earnings in fiscal year 2015 included charges related to the exit from international joint venture businesses. Dividends received from affiliates for the fiscal years ended October 25, 2015, October 26, 2014, and October 27, 2013, were $37.3 million, $22.8 million, and $34.0 million, respectively. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $16.2 million is remaining as of October 25, 2015. This difference is being amortized through equity in earnings of affiliates.

NOTE J

Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss are as follows:

							Accumulated
	Foreign				Deferred		Other
	Currency		Pension &		Gain (Loss)		Comprehensive
(in thousands)	Translation		Other Benefits		– Hedging		Loss
Balance at October 28, 2012	$12,415		$ (345,465	)	$  9,481		$ (323,569	)
Unrecognized gains (losses):
Gross	(3,024	)	273,408		(18,329	)	252,055
Tax effect	–		(102,846	)	6,898		(95,948	)
Reclassification into net earnings:
Gross	–		35,327	(1)	(5,871	)(2)	29,456
Tax effect	–		(13,425	)	2,217		(11,208	)
Net of tax amount	(3,024	)	192,464		(15,085	)	174,355
Balance at October 27, 2013	$ 9,391		$ (153,001	)	$ (5,604	)	$ (149,214	)
Unrecognized gains (losses):
Gross	(1,911	)	(91,684	)	(16,701	)	(110,296	)
Tax effect	–		34,737		6,305		41,042
Reclassification into net earnings:
Gross	–		6,387	(1)	10,925	(2)	17,312
Tax effect	–		(2,425	)	(4,119	)	(6,544	)
Net of tax amount	(1,911	)	(52,985	)	(3,590	)	(58,486	)
Balance at October 26, 2014	$ 7,480		$ (205,986	)	$ (9,194	)	$ (207,700	)
Unrecognized gains (losses):
Gross	(6,116	)	(46,389	)	3,409		(49,096	)
Tax effect	–		17,492		(1,285	)	16,207
Reclassification into net earnings:
Gross	–		12,259	(1)	12,369	(2)	24,628
Tax effect	–		(4,642	)	(4,670	)	(9,312	)
Net of tax amount	(6,116	)	(21,280	)	9,823		(17,573	)
Purchase of additional ownership of noncontrolling interest	(395	)	–		–		(395	)
Balance at October 25, 2015	$   969		$ (227,266	)	$     629		$ (225,668	)

(1)Included in computation of net periodic cost (see Note G for additional details).

(2)Included in cost of products sold in the Consolidated Statements of Operations.

55

NOTE K

Income Taxes

The components of the provision for income taxes are as follows:

(in thousands)	2015	2014	2013
Current:
U.S. Federal	$ 299,557	$ 264,533	$ 231,359
State	39,817	34,034	30,671
Foreign	10,526	7,759	5,334
Total current	349,900	306,326	267,364
Deferred:
U.S. Federal	18,451	8,756	1,080
State	1,070	873	(194	)
Foreign	458	171	181
Total deferred	19,979	9,800	1,067
Total provision for income taxes	$ 369,879	$ 316,126	$ 268,431

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company believes that, based upon its lengthy and consistent history of profitable operations, it is more likely than not the net deferred tax assets of $22.8 million will be realized on future tax returns, primarily from the generation of future taxable income. Significant components of the deferred income tax liabilities and assets are as follows:

	October 25,		October 26,
(in thousands)	2015		2014
Deferred tax liabilities:
Goodwill and intangible assets	$(213,312	)	$ (168,167	)
Tax over book depreciation and basis differences	(94,496	)	(85,623	)
Other, net	(18,788	)	(30,252	)
Deferred tax assets:
Pension and post-retirement benefits	154,306		152,392
Employee compensation related liabilities	109,061		101,706
Marketing and promotional accruals	37,603		28,703
Other accruals not currently deductible	–		13,010
Other, net	48,432		51,082
Net deferred tax assets	$    22,806		$  62,851

Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	2015		2014		2013
U.S. statutory rate	35.0	%	35.0	%	35.0	%
State taxes on income, net of federal tax benefit	2.7		2.8		2.7
Domestic production activities deduction	(2.6	)	(2.7	)	(2.4	)
All other, net	(0.1	)	(0.8	)	(1.7	)
Effective tax rate	35.0	%	34.3	%	33.6	%

No provision has been made for U.S. federal income taxes on certain undistributed earnings of foreign subsidiaries and joint ventures that the Company intends to permanently invest or that may be remitted substantially tax-free. The total of undistributed earnings that would be subject to federal income tax if remitted under existing law is approximately $109.3 million as of October 25, 2015. Determination of the unrecognized deferred tax liability related to these earnings is not practicable because of the complexities with its hypothetical calculation. Upon distribution of these earnings, we will be subject to U.S. taxes and withholding taxes payable to various foreign governments. A credit for foreign taxes already paid would be available to reduce the U.S. tax liability.

Total income taxes paid during fiscal years 2015, 2014, and 2013 were $296.5 million, $285.8 million, and $226.2 million, respectively.

The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2014 and 2015.

(in thousands)
Balance as of October 27, 2013	$ 20,085
Tax positions related to the current period:
Increases	4,693
Decreases	(670	)
Tax positions related to prior periods:
Increases	4,455
Decreases	(3,245	)
Settlements	(573	)
Decreases related to a lapse of applicable statute of limitations	(2,137	)
Balance as of October 26, 2014	$ 22,608
Tax positions related to the current period:
Increases	2,920
Decreases	–
Tax positions related to prior periods:
Increases	1,629
Decreases	(796	)
Settlements	(2,839	)
Decreases related to a lapse of applicable statute of limitations	(2,185	)
Balance as of October 25, 2015	$ 21,337

56

The amount of unrecognized tax benefits, including interest and penalties, at October 25, 2015, recorded in other long-term liabilities was $24.6 million, of which $16.0 million would impact the Company’s effective tax rate if recognized. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with losses of $1.0 million included in expense for fiscal year 2015. The amount of accrued interest and penalties at October 25, 2015, associated with unrecognized tax benefits was $3.2 million.

The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) is currently examining fiscal years 2013, 2014, and 2015. During the first quarter of fiscal year 2015, the Company entered into a voluntary program to work with the I.R.S. called Compliance Assurance Process (CAP). The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2015 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time.

The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2010. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

NOTE L

Stock-Based Compensation

The Company issues stock options and nonvested shares as part of its stock incentive plans for employees and non-employee directors. The Company’s policy is to grant options with the exercise price equal to the market price of the common stock on the date of grant. Options typically vest over four years and expire ten years after the date of the grant. The Company recognizes stock-based compensation expense ratably over the shorter of the requisite service period or vesting period. The fair value of stock-based compensation granted to retirement-eligible individuals is expensed at the time of grant.

A reconciliation of the number of options outstanding and exercisable (in thousands) as of October 25, 2015, and changes during the fiscal year then ended, is as follows:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Term	Value
Outstanding at October 26, 2014	17,402	$24.61
Granted	1,514	52.55
Exercised	1,716	18.61
Forfeited	1	18.71
Outstanding at October 25, 2015	17,199	$27.67	5.0 yrs	$699,294
Exercisable at October 25, 2015	12,899	$22.83	4.1 yrs	$586,844

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$    9.84	$    9.70	$    5.50
Intrinsic value of exercised options	$67,516	$74,972	$77,610

The fair value of each option award is calculated on the date of grant using the Black-Scholes valuation model utilizing the following weighted-average assumptions:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Risk-free interest rate	2.1%	2.5%	1.4%
Dividend yield	1.9%	1.8%	2.1%
Stock price volatility	19.0%	20.0%	20.0%
Expected option life	8 years	8 years	8 years

As part of the annual valuation process, the Company reassesses the appropriateness of the inputs used in the valuation models. The Company establishes the risk-free interest rate using stripped U.S. Treasury yields as of the grant date where the remaining term is approximately the expected life of the option. The dividend yield is set based on the dividend rate

57

approved by the Company’s Board of Directors and the stock price on the grant date. The expected volatility assumption is set based primarily on historical volatility. As a reasonableness test, implied volatility from exchange traded options is also examined to validate the volatility range obtained from the historical analysis. The expected life assumption is set based on an analysis of past exercise behavior by option holders. In performing the valuations for option grants, the Company has not stratified option holders as exercise behavior has historically been consistent across all employee and non-employee director groups.

The Company’s nonvested shares granted on or before September 26, 2010, vest after five years or upon retirement. Nonvested shares granted between September 27, 2010, and July 27, 2014, vest after one year. Nonvested shares granted on or after July 28, 2014 vest on the earlier of the day before the Company’s next annual meeting date or one year. A reconciliation of the nonvested shares (in thousands) as of October 25, 2015 and changes during the fiscal year then ended, is as follows:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Nonvested at October 26, 2014	70	$33.58
Granted	37	51.74
Vested	70	33.58
Forfeited	–	–
Nonvested at October 25, 2015	37	$51.74

The weighted-average grant date fair value of nonvested shares granted, the total fair value (in thousands) of nonvested shares granted, and the fair value (in thousands) of shares that have vested during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$51.74	$44.12	$35.42
Fair value of nonvested shares granted	$1,920	$1,760	$1,600
Fair value of shares vested	$2,347	$2,085	$1,824

Stock-based compensation expense, along with the related income tax benefit, for each of the past three fiscal years is presented in the table below:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
Stock-based compensation expense recognized	$15,717	$14,393	$17,596
Income tax benefit recognized	(5,967)	(5,469)	(6,655)
After-tax stock-based compensation expense	$  9,750	$  8,924	$10,941

At October 25, 2015, there was $9.3 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans. This compensation is expected to be recognized over a weighted-average period of approximately 2.6 years. During fiscal years 2015, 2014, and 2013, cash received from stock option exercises was $10.5 million, $10.5 million, and $30.2 million, respectively. The total tax benefit to be realized for tax deductions from these option exercises was $25.6 million, $28.4 million, and $29.4 million, respectively.

Shares issued for option exercises and nonvested shares may be either authorized but unissued shares, or shares of treasury stock acquired in the open market or otherwise. The number of shares available for future grants was 25.1 million at October 25, 2015, 26.6 million at October 26, 2014, and 27.9 million at October 27, 2013.

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NOTE M

Fair Value Measurements

Pursuant to the provisions of ASC 820, the Company’s financial assets and liabilities carried at fair value on a recurring basis in the consolidated financial statements as of October 25, 2015, and October 26, 2014, and their level within the fair value hierarchy, are presented in the table below.

	Fair Value Measurements at October 25, 2015
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 25,	for Identical	Observable	Unobservable
(in thousands)	2015	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 347,239	$ 347,239	$         –	$ –
Other trading securities(2)	119,668	39,329	80,339	–
Commodity derivatives(3)	6,485	6,485	–	–
Total Assets at Fair Value	$ 473,392	$ 393,053	$ 80,339	$ –
Liabilities at Fair Value:
Deferred compensation(2)	$  57,869	$  25,272	$ 32,597	$ –
Total Liabilities at Fair Value	$  57,869	$  25,272	$ 32,597	$ –

	Fair Value Measurements at October 26, 2014
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 26,	for Identical	Observable	Unobservable
(in thousands)	2014	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 334,174	$ 334,174	$        –	$  –
Other trading securities(2)	117,249	39,120	78,129	–
Commodity derivatives(3)	3,461	3,461	–	–
Total Assets at Fair Value	$ 454,884	$ 376,755	$ 78,129	$  –
Liabilities at Fair Value:
Deferred compensation(2)	$  54,809	$  23,642	$ 31,167	$  –
Total Liabilities at Fair Value	$  54,809	$  23,642	$ 31,167	$  –

The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above:

(1)The Company’s cash equivalents consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. As these investments have a maturity date of three months or less, the carrying value approximates fair value.

(2)The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio that supports the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue, and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates, and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2.

(3)The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available and therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. 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 net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions).

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The Company’s financial assets and liabilities also include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Statements of Financial Position. Based on borrowing rates available to the Company for long-term financing with similar terms and average maturities, the fair value of long-term debt, utilizing discounted cash flows (Level 2), was $268.4 million as of October 25, 2015, and $273.8 million as of October 26, 2014.

In accordance with the provisions of ASC 820, the Company also measures certain nonfinancial assets and liabilities at fair value that are recognized or disclosed on a nonrecurring basis (e.g. goodwill, intangible assets, and property, plant and equipment). During the fourth quarter of fiscal year 2015, a $21.5 million goodwill impairment charge was recorded for the portion of DCB held for sale. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. See additional discussion regarding the Company’s assets held for sale in Note E. During fiscal years 2015, 2014, and 2013, there were no other material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

NOTE N

Commitments and Contingencies

In order to ensure a steady supply of hogs and turkeys, and to keep the cost of products stable, the Company has entered into contracts with producers for the purchase of hogs and turkeys at formula-based prices over periods up to 10 years. The Company has also entered into grow-out contracts with independent farmers to raise turkeys for the Company for periods up to 25 years. Under these arrangements, the Company owns the livestock, feed, and other supplies while the independent farmers provide facilities and labor. The Company has also contracted for the purchase of corn, soybean meal, and other feed ingredients from independent suppliers for periods up to three years. Under these contracts, the Company is committed at October 25, 2015, to make purchases, assuming current price levels, as follows:

(in thousands)
2016	$ 1,427,178
2017	959,812
2018	688,677
2019	449,439
2020	326,233
Later Years	293,510
Total	$ 4,144,849

Purchases under these contracts for fiscal years 2015, 2014, and 2013 were $1.6 billion, $2.2 billion, and $2.0 billion, respectively.

The Company has noncancelable operating lease commitments on facilities and equipment at October 25, 2015, as follows:

(in thousands)
2016	$11,250
2017	6,041
2018	4,586
2019	3,545
2020	3,034
Later Years	6,738
Total	$35,194

The Company expensed $22.4 million, $21.1 million, and $21.6 million for rent in fiscal years 2015, 2014, and 2013, respectively.

The Company has commitments to expend approximately $254.3 million to complete construction in progress at various locations as of October 25, 2015.

The Company also has purchase obligations that are not reflected in the consolidated statements of financial position, representing open purchase orders and contracts related to the procurement of raw materials, supplies, and various services. As of October 25, 2015, commitments related to those purchase orders, and all known contracts exceeding $1.0 million, are shown below. The Company primarily purchases goods and services on an as-needed basis and therefore, amounts in the table represent only a portion of expected future cash expenditures.

(in thousands)
2016	$518,158
2017	28,212
2018	27,102
2019	2,794
2020	1,931
Later Years	8,866
Total	$587,063

As of October 25, 2015, the Company has $44.1 million of standby letters of credit issued on its behalf. The standby letters of credit are primarily related to the Company’s self-insured workers compensation programs. However, that amount also includes revocable standby letters of credit totaling $4.0 million for obligations of an affiliated party that may arise under workers compensation claims. Letters of credit are not reflected in the Company’s consolidated statements of financial position.

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The Company is involved on an ongoing basis in litigation arising in the ordinary course of business. In the opinion of management, the outcome of litigation currently pending will not materially affect the Company’s results of operations, financial condition, or liquidity.

NOTE O

Earnings Per Share Data

The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share for all years presented. A reconciliation of the shares used in the computation is as follows:

(in thousands)	2015	2014	2013
Basic weighted-average
shares outstanding	264,072	263,812	264,317
Dilutive potential
common shares	6,429	6,404	5,907
Diluted weighted-average
shares outstanding	270,501	270,216	270,224

For fiscal years 2015, 2014, and 2013, a total of 0.5 million, 0.4 million, and 0.4 million weighted-average outstanding stock options, respectively, were not included in the computation of dilutive potential common shares since their inclusion would have had an antidilutive effect on earnings per share.

NOTE P

Segment Reporting

The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.

The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex joint venture.

The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers. This segment includes the results of Applegate and Affiliated Foods (Farmer John, Burke, and Dan’s Prize).

The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and fresh product customers.

The Specialty Foods segment consists of the packaging and sale of private label shelf stable products, nutritional products, sugar, and condiments to industrial, retail, and foodservice customers including the results of Diamond Crystal Brands (DCB), CytoSport/Century Foods International, and Hormel Specialty Products (HSP). As of the end of fiscal year 2015, a portion of DCB is held for sale. The segment operating results for fiscal year 2015 include the related goodwill impairment charge of $21.5 million. See additional discussion regarding the Company’s assets held for sale in Note E.

The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures.

Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the following table as net interest and investment expense (income), general corporate expense, and noncontrolling interest when reconciling to earnings before income taxes.

Sales and operating profits for each of the Company’s reportable segments and reconciliation to earnings before income taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

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(in thousands)	2015		2014		2013
Net Sales (to unaffiliated
customers)
Grocery Products		$ 1,617,680		$1,558,265		$1,517,557
Refrigerated Foods		4,372,347		4,644,179		4,251,515
Jennie-O Turkey Store		1,635,776		1,672,452		1,601,868
Specialty Foods		1,103,359		907,120		932,533
International & Other		534,701		534,240		448,181
Total		$ 9,263,863		$9,316,256		$8,751,654
Intersegment Sales
Grocery Products		$               –		$              –		$              –
Refrigerated Foods		13,058		23,163		17,359
Jennie-O Turkey Store		128,195		144,137		123,420
Specialty Foods		64		122		108
International & Other		–		–		–
Total		141,317		167,422		140,887
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$               –		$              –		$              –
Segment Net Sales
Grocery Products		$ 1,617,680		$1,558,265		$1,517,557
Refrigerated Foods		4,385,405		4,667,342		4,268,874
Jennie-O Turkey Store		1,763,971		1,816,589		1,725,288
Specialty Foods		1,103,423		907,242		932,641
International & Other		534,701		534,240		448,181
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$ 9,263,863		$9,316,256		$8,751,654
Segment Operating Profit
Grocery Products		$    228,582		$   195,064		$   213,646
Refrigerated Foods		424,968		338,020		232,692
Jennie-O Turkey Store		276,217		272,362		222,117
Specialty Foods		93,258		71,514		88,873
International & Other		78,318		84,745		71,490
Total segment
operating profit		$ 1,101,343		$   961,705		$   828,818
Net interest and
investment expense
(income)		10,177		9,468		7,482
General corporate
expense		35,199		33,434		26,694
Noncontrolling interest		1,176		3,349		3,865
Earnings Before
Income Taxes		$ 1,057,143		$   922,152		$   798,507

(in thousands)	2015		2014		2013
Assets
Grocery Products		$1,214,988		$1,249,631		$1,237,405
Refrigerated Foods		1,973,424		1,215,694		1,218,418
Jennie-O Turkey Store		811,693		857,697		819,343
Specialty Foods		988,455		1,013,420		469,599
International & Other		446,164		406,249		361,038
Corporate		705,107		712,928		810,077
Total		$6,139,831		$5,455,619		$4,915,880
Additions to Property,
Plant and Equipment
Grocery Products		$     18,104		$     31,741		$     10,100
Refrigerated Foods		54,074		61,183		58,523
Jennie-O Turkey Store		32,250		25,761		22,863
Specialty Foods		5,309		3,266		3,606
International & Other		18,576		4,896		2,973
Corporate		15,750		32,291		8,697
Total		$   144,063		$   159,138		$   106,762
Depreciation and
Amortization
Grocery Products		$     26,972		$     25,883		$     22,912
Refrigerated Foods		53,325		57,709		57,879
Jennie-O Turkey Store		28,262		27,091		26,921
Specialty Foods		11,075		8,999		9,232
International & Other		3,372		3,541		1,906
Corporate		10,428		6,821		6,000
Total		$   133,434		$   130,044		$   124,850

The Company’s products primarily consist of meat and other food products. 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,

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dessert and drink mixes, and industrial gelatin products. The percentages of total revenues contributed by classes of similar products for the last three fiscal years are as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Perishable	53.0%	54.5%	53.3%
Poultry	18.6	18.4	18.8
Shelf-stable	18.4	19.0	19.0
Miscellaneous	10.0	8.1	8.9
	100.0%	100.0%	100.0%

Revenues from external customers are classified as domestic or foreign based on the destination where title passes. No individual foreign country is material to the consolidated results. Additionally, the Company’s long-lived assets located

in foreign countries are not significant. Total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years are as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
United States	$8,721,722	$8,708,042	$8,193,730
Foreign	542,141	608,214	557,924
	$9,263,863	$9,316,256	$8,751,654

In fiscal 2015, sales to Wal-Mart Stores, Inc. (Wal-Mart) represented $1.43 billion or 13.9 percent of the Company’s consolidated revenues (measured as gross sales less returns and allowances). In fiscal 2014, sales to Wal-Mart represented $1.43 billion or 14.1 percent of the Company’s consolidated revenues. Wal-Mart is a customer for all five segments of the Company.

NOTE Q

Quarterly Results of Operations (Unaudited)

The following tabulations reflect the unaudited quarterly results of operations for the years ended October 25, 2015, and October 26, 2014.

				Net Earnings
				Attributable to	Basic	Diluted
		Gross	Net	Hormel Foods	Earnings	Earnings
(in thousands, except per share data)	Net Sales	Profit	Earnings	Corporation(1)	Per Share	Per Share
2015
First quarter	$ 2,395,073	$ 444,605	$ 172,430	$ 171,718	$ 0.65	$ 0.64
Second quarter	2,279,345	459,556	180,435	180,201	0.68	0.67
Third quarter	2,188,587	409,390	146,956	146,938	0.56	0.54
Fourth quarter	2,400,858	495,030	187,443	187,231	0.71	0.69
2014
First quarter	$ 2,242,672	$ 398,642	$ 154,458	$ 153,348	$ 0.58	$ 0.57
Second quarter	2,244,866	378,758	140,706	140,090	0.53	0.52
Third quarter	2,284,947	363,999	139,014	137,975	0.52	0.51
Fourth quarter	2,543,771	423,584	171,848	171,264	0.65	0.63

(1) Excludes net earnings attributable to the Company’s noncontrolling interests.

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Shareholder Information

Independent Auditors

Ernst & Young LLP

220 South Sixth Street, Ste. 1400

Minneapolis, MN 55402-4509

Stock Listing

Hormel Foods Corporation’s common stock is traded on the New York Stock Exchange under the symbol HRL. The CUSIP number is 440452100.

There are approximately 11,700 record stockholders and 70,600 stockholders whose shares are held in street name by brokerage firms and financial institutions.

Common Stock Data

The high and low prices of the company’s common stock and the dividends per share declared for each fiscal quarter of 2015 and 2014, respectively, are shown below:

2015	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	69.97	56.89	0.25
2014	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

Transfer Agent and Registrar

Wells Fargo Shareowner Services

1110 Centre Pointe Curve, Suite 101

MAC N9173-010

Mendota Heights, MN 55120

www.shareowneronline.com

For the convenience of stockholders, a toll free number (1-877-536-3559) can be used whenever questions arise regarding changes in registered ownership, lost or stolen certificates, address changes, or other matters pertaining to

the transfer of stock or stockholder records. When requesting information, stockholders must provide their Wells Fargo account number or tax identification number, the name(s) in which their stock is registered, and their record address.

The company participates in the Direct Registration Profile Modification System (DRPMS). Transfers or issuances of shares are now issued in book-entry form, unless you specifically request a stock certificate. A statement will be delivered to you reflecting any transactions processed in your account.

The transfer agent makes stockholder account data available to stockholders of record via the Internet. This service allows stockholders to view various account details, such as certificate information, dividend payment history, and/or dividend reinvestment plan records, over a secure Internet connection with the required entry of an account number and authentication ID. Information is available 24 hours per day, 7 days a week. If you are interested, you may use the web site www.shareowneronline.com and access “Sign Up Now!” to arrange for setup.

Dividend Reinvestment Plan

Hormel Foods Corporation’s Dividend Reinvestment Plan, available to record stockholders, allows for full dividend reinvestment and voluntary cash purchases with brokerage commissions or other service fees paid by the Company. Automatic debit for cash contribution is also available. This is a convenient method to have money automatically withdrawn each month from a checking or savings account and invested in your Dividend Reinvestment Plan account. To enroll in the plan or obtain additional information, contact Wells Fargo Shareowner Services, using the address or telephone number provided, listed previously in this section as Company transfer agent and registrar. Enrollment in the plan is also available on the Internet at www.shareowneronline.com.

An optional direct dividend deposit service offers stockholders a convenient method of having quarterly dividend payments electronically deposited into their personal checking or savings account. The dividend payment is made in the account each payment date, providing stockholders with immediate use of their money. For information about the service and how to participate, contact Wells Fargo Shareowner Services, transfer agent. You may also activate this feature on the Internet at www.shareowneronline.com.

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Dividends

The declaration of dividends and all dates related to the declaration of dividends are subject to the judgment and discretion of the Board of Directors of Hormel Foods Corporation. Quarterly dividends are typically paid on the 15th of February, May, August, and November. Postal delays may cause receipt dates to vary.

Reports and Publications

Copies of the Company’s Form 10-K (annual report) and Form 10-Q (quarterly report) to the Securities and Exchange Commission (SEC), proxy statement, all news releases and other corporate literature are available free upon request by calling (507) 437-5345 or by accessing the information on the Internet at www.hormelfoods.com. Notice and access to the Company’s Annual Report is mailed approximately one month before the Annual Meeting. The Annual Report can be viewed at the Web site named above or a hard copy will be available free upon request via email, mail, or by calling (507) 437-5571.

Annual Meeting

The Annual Meeting of Stockholders will be held on Tuesday, January 26, 2016 in the Richard L. Knowlton Auditorium at Austin (Minn.) High School. The meeting will convene at 8:00 p.m. (CT).

Questions about Hormel Foods

Stockholder Inquiries

(507) 437-5944

Analyst/Investor Inquiries

(507) 437-5248

Media Inquiries

(507) 437-5345

Consumer Response

Inquiries regarding products of Hormel Foods Corporation should be addressed:

Consumer Response

Hormel Foods Corporation

1 Hormel Place

Austin, MN 55912-3680

or call 1-800-523-4635

Trademarks

References to the Company’s brands or products in italics within this report represent valuable trademarks owned or licensed by Hormel Foods, LLC or other subsidiaries of Hormel Foods Corporation.

Stock Performance Chart

Comparison of 5-year cumulative total return*

— Hormel Foods Corporation     – – – S&P 500    ··· S&P / 500 Packaged Foods & Meats

*$100 invested on 10/29/10 in stock or index - including reinvestment of dividends.

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Corporate Officers

Jeffrey M. Ettinger*	Lawrence C. Lyons	Kurt F. Mueller
Chairman of the Board and	Senior Vice President,	Vice President,
Chief Executive Officer	Human Resources	Senior Vice President, Sales
		Consumer Products Sales
James P. Snee*	Lori J. Marco
President and Chief Operating Officer	Senior Vice President,	Jeff A. Nuytten
(effective 10/26/2015)	External Affairs and General Counsel	Vice President,
		Refrigerated Foods Operations
Jody H. Feragen*	Kevin L. Myers, Ph.D.
Executive Vice President and	Senior Vice President,	Mark J. Ourada
Chief Financial Officer	Research and Development	Vice President,
		Foodservice Sales
Steven G. Binder	D. Scott Aakre
Executive Vice President;	Vice President,	James R. Schroeder
President, Hormel Business Units	Corporate Innovation	Vice President,
	and New Product Development	Engineering
Jeffrey R. Baker
Group Vice President,	Richard A. Carlson	Patrick J. Schwab
Foodservice	Vice President,	Vice President
(effective 10/26/2015)	Quality Management	Senior Vice President, Sales
		Consumer Products Sales
Deanna T. Brady	Mark A. Coffey
Group Vice President;	Vice President,	James N. Sheehan
President, Consumer Products Sales	Affiliated Business Units	Vice President and
(effective 10/26/2015)	Refrigerated Foods	Controller
Thomas R. Day	Patrick J. Connor	Donald J. Temperley
Group Vice President,	Vice President,	Vice President,
Refrigerated Foods	Senior Vice President, Sales	Grocery Products Operations
	Consumer Products Sales
Donald H. Kremin		Mark D. Vaupel
Group Vice President,	Roland G. Gentzler	Vice President,
Specialty Foods	Vice President, Finance	Information Technology Services
	and Treasurer
Glenn R. Leitch		Steven J. Venenga
Group Vice President;	Jeffrey A. Grev	Vice President,
President, Jennie-O Turkey Store, Inc.	Vice President,	Meat Products Marketing
	Legislative Affairs
James M. Splinter		Wendy A. Watkins
Group Vice President,	Fred D. Halvin	Vice President,
Grocery Products	Vice President,	Corporate Communications
	Corporate Development
Larry L. Vorpahl		David F. Weber
Group Vice President;	Brian D. Johnson	Vice President,
President, Hormel Foods International	Vice President and	Foodservice Marketing
Corporation	Corporate Secretary	(effective 10/26/2015)
(effective 10/26/2015)
	Luis G. Marconi	James T. Anderson
Bryan D. Farnsworth	Vice President,	Assistant Controller
Senior Vice President,	Grocery Products Marketing
Supply Chain		*Director

Printed on recycled paper. Please recycle.
Cover and pages 1-12 contain 10% total recovered fiber/all post-consumer waste, FSC:® Certified Fiber. Pages 13-66 contain 30% total recovered fiber/all post-consumer waste, FSC:® Certified Fiber.

66

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF HORMEL FOODS CORPORATION

The Company owns the indicated percentage of the issued and outstanding stock or other equity interests of the following entities:

Name of Subsidiary	State or Country of Incorporation	Ownership Percentage
Alma Foods, LLC	Delaware	100%
Applegate Farms, LLC	Delaware	100%
Applegate Investment Corporation	Delaware	100%
Beijing Hormel Business Management Co. Ltd.	China	100%
Beijing Hormel Foods Co. Ltd.	China	80%
Burke Marketing Corporation	Iowa	100%
Campoco, Inc.	Minnesota	100%
Century Foods International, LLC	Delaware	100%
Century Foods Land Development, LLC	Delaware	100%
Champ, LLC	Delaware	100%
ChampBEV, Inc.	California	100%
Clougherty Packing, LLC	Delaware	100%
Creative Contract Packaging, LLC	Delaware	100%
CytoSport, Inc.	California	100%
CytoSport Holdings, Inc.	Delaware	100%
Dan’s Prize, Inc.	Minnesota	100%
Diamond Crystal Brands, Inc.	Delaware	100%
Diamond Crystal Bremen, LLC	Delaware	100%
Diamond Crystal Duluth, LLC	Delaware	100%
Diamond Crystal Sales, LLC	Delaware	100%
Diversified Foods Insurance Company, LLC	Vermont	100%
Dold Foods, LLC	Delaware	100%
FJ Foodservice, LLC	Delaware	100%
Fort Dodge Foods, LLC	Delaware	100%
GMP Manufacturing, Inc.	California	100%
HF International Holdings C.V	Netherlands	100%
Hormel Canada, Ltd.	Canada	100%
Hormel (China) Investments Co. Ltd.	China	100%
Hormel Financial Services Corporation	Minnesota	100%
Hormel Foods Australia Pty Limited	Australia	100%
Hormel Foods Corporate Services, LLC	Delaware	100%
Hormel Foods International Corporation	Delaware	100%
Hormel Foods Japan K.K.	Japan	100%
Hormel Foods, LLC	Minnesota	100%
Hormel Foods Sales, LLC	Delaware	100%
Hormel International Investments, LLC	Delaware	100%
Hormel MM Holding Corporation	Delaware	100%
Hormel Netherlands B.V.	Netherlands	100%
Jennie-O Turkey Store, Inc.	Minnesota	100%
Jennie-O Turkey Store International, Inc.	Minnesota	100%
Jennie-O Turkey Store, LLC	Minnesota	100%
Jennie-O Turkey Store Sales, LLC	Delaware	100%
Jiaxing Hormel Foods Co. Ltd.	China	100%
JJOTS, LLC	Minnesota	100%
Lloyd’s Barbeque Company, LLC	Delaware	100%
Logistic Service, LLC	Delaware	100%
Melting Pot Foods, LLC	Delaware	100%
Mespil, Inc.	Delaware	100%
Mexican Accent, LLC	Delaware	100%
Mountain Prairie, LLC	Colorado	100%
Osceola Food, LLC	Delaware	100%
PFFJ, LLC	Delaware	100%

1

Name of Subsidiary (continued)	State or Country of Incorporation	Ownership Percentage
Progressive Processing, LLC	Delaware	100%
Provena Foods Inc.	California	100%
Rochelle Foods, LLC	Delaware	100%
Saag’s Products, LLC	Delaware	100%
Shanghai Hormel Foods Co. Ltd.	China	100%
Skippy Foods, LLC	Minnesota	100%
Stagg Foods, LLC	Delaware	100%
Valley Fresh, Inc.	Delaware	100%
West Central Turkeys, LLC	Delaware	100%

2

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Hormel Foods Corporation of our reports dated December 16, 2015, with respect to the consolidated financial statements of Hormel Foods Corporation, and the effectiveness of internal control over financial reporting of Hormel Foods Corporation, included in the 2015 Annual Report to Shareholders of Hormel Foods Corporation.

Our audits also included the financial statement schedule of Hormel Foods Corporation listed in Item 15(a). This schedule is the responsibility of Hormel Foods Corporation’s management. Our responsibility is to express an opinion based on our audits. In our opinion, as to which the date is December 16, 2015, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in Registration Statement Number 33-14615 on Form S-8 dated May 27, 1987, in Post-Effective Amendment Number 1 to Registration Statement Number 33-29053 on Form S-8 dated January 26, 1990, in Registration Statement Number 333-44178 on Form S-8 dated August 21, 2000, in Registration Statement Numbers 333-102805, 333-102806, 333-102808, and 333-102810 on Forms S-8 dated January 29, 2003, in Registration Statement Number 333-110776 on Form S-8 dated November 26, 2003, in Registration Statement Number 333-131625 on Form S-8 dated February 7, 2006, in Registration Statement Number 333-136642 on Form S-8 dated August 15, 2006, in Registration Statement Number 333-162405 on Form S-8 dated October 9, 2009, in Registration Statement Number 333-173284 on Form S-3ASR dated April 4, 2011, in Registration Statement Number 333-190714 on Form S-8 dated August 19, 2013, in Registration Statement Numbers 333-191719 and 333-191720 on Forms S-8 dated October 15, 2013, and in Registration Statement Number 333-195916 on Form S-3ASR dated May 13, 2014, of our report dated December 16, 2015, with respect to the consolidated financial statements of Hormel Foods Corporation incorporated herein by reference, our report dated December 16, 2015, with respect to the effectiveness of internal control over financial reporting of Hormel Foods Corporation incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule included in this Annual Report (Form 10-K) of Hormel Foods Corporation for the fiscal year ended October 25, 2015.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

December 16, 2015

1

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints each of James N. Sheehan, Roland G. Gentzler, and James T. Anderson with full power to each to act without the other, his or her true and lawful attorney-in-fact and agent with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Annual Report on Form 10-K of Hormel Foods Corporation (“Hormel”) for Hormel’s fiscal year ended October 25, 2015, and any or all amendments to said Annual Report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and to file the same with such other authorities as necessary, granting unto each such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each such attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

Signature	Title	Date
/s/ Jeffrey M. Ettinger	Chairman of the Board, Chief Executive Officer,	November 23, 2015
Jeffrey M. Ettinger	and Director (Principal Executive Officer)
/s/ James P. Snee	President, Chief Operating Officer and Director	November 23,2015
James P. Snee
/s/ Jody H. Feragen	Executive Vice President, Chief Financial	November 23, 2015
Jody H. Feragen	Officer, and Director (Principal Financial Officer)
/s/ James N. Sheehan	Vice President and Controller	November 23, 2015
James N. Sheehan	(Principal Accounting Officer)
/s/ Gary C. Bhojwani	Director	November 23, 2015
Gary C. Bhojwani
/s/ Terrell K. Crews	Director	November 23, 2015
Terrell K. Crews
/s/ Glenn S. Forbes	Director	November 23, 2015
Glenn S. Forbes
/s/ Stephen M. Lacy	Director	November 23, 2015
Stephen M. Lacy
/s/ John L. Morrison	Director	November 23, 2015
John L. Morrison
/s/ Elsa A. Muranos	Director	November 23, 2015
Elsa A. Murano
/s/ Robert C. Nakasone	Director	November 23, 2015
Robert C. Nakasone
/s/ Susan K. Nestagard	Director	November 23, 2015
Susan K. Nestegard
/s/ Dakota A. Pippins	Director	November 23, 2015
Dakota A. Pippins
/s/ Christopher J. Policinski	Director	November 23, 2015
Christopher J. Policinski
/s/ Sally J. Smith	Director	November 23, 2015
Sally J. Smith
/s/ Steven A. White	Director	November 23, 2015
Steven A. White

1

EX-31.1

EXHIBIT 31.1

CERTIFICATION REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey M. Ettinger, certify that:

1.I have reviewed this Annual Report on Form 10-K of Hormel Foods Corporation for the fiscal year ended October 25, 2015;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: December 16, 2015	Signed:	/s/ JEFFREY M. ETTINGER
		JEFFREY M. ETTINGER
		Chairman of the Board and Chief Executive Officer

1

EX-31.2

EXHIBIT 31.2

CERTIFICATION REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jody H. Feragen, certify that:

1.I have reviewed this Annual Report on Form 10-K of Hormel Foods Corporation for the fiscal year ended October 25, 2015;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: December 16, 2015	Signed:	/s/ JODY H. FERAGEN
		JODY H. FERAGEN
		Executive Vice President and
		Chief Financial Officer

1

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Hormel Foods Corporation (the “Company”) for the period ended October 25, 2015, as filed with the Securities and Exchange Commission (the “Report”), the undersigned hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: December 16, 2015	/s/ JEFFREY M. ETTINGER
	JEFFREY M. ETTINGER
	Chairman of the Board and Chief Executive Officer
Dated: December 16, 2015	/s/ JODY H. FERAGEN
	JODY H. FERAGEN
	Executive Vice President and Chief Financial Officer

1

XML

Document and Entity Information - USD ($)	12 Months Ended
	Oct. 25, 2015	Nov. 27, 2015	Apr. 26, 2015
Entity Registrant Name	HORMEL FOODS CORP /DE/
Entity Central Index Key	0000048465
Document Type	10-K
Document Period End Date	Oct. 25, 2015
Amendment Flag	false
Current Fiscal Year End Date	--10-25
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 7,354,755,988
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Common Stock
Entity Common Stock, Shares Outstanding		264,228,740
Common stock, non-voting
Entity Common Stock, Shares Outstanding		0

XML

Consolidated Statements of Financial Position - USD ($) $ in Thousands	Oct. 25, 2015	Oct. 26, 2014
CURRENT ASSETS
Cash and cash equivalents	$ 347,239	$ 334,174
Accounts receivable (net of allowance for doubtful accounts of $4,086 at October 25, 2015, and $4,050 at October 26, 2014)	605,689	609,526
Inventories	993,265	1,054,552
Income taxes receivable	6,132	25,678
Deferred income taxes	86,902	86,853
Prepaid expenses	14,383	15,250
Other current assets	9,422	6,738
TOTAL CURRENT ASSETS	2,063,032	2,132,771
GOODWILL	1,699,484	1,226,406
OTHER INTANGIBLES	827,219	554,890
PENSION ASSETS	132,861	130,284
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES	258,998	264,451
OTHER ASSETS	146,498	145,050
PROPERTY, PLANT AND EQUIPMENT
Land	71,192	61,809
Buildings	815,643	803,722
Equipment	1,679,100	1,597,044
Construction in progress	79,964	119,657
Property, Plant and Equipment, Gross	2,645,899	2,582,232
Less allowance for depreciation	(1,634,160)	(1,580,465)
Property, Plant and Equipment, Net	1,011,739	1,001,767
TOTAL ASSETS	6,139,831	5,455,619
CURRENT LIABILITIES
Accounts payable	495,317	484,042
Short-term debt	185,000
Accrued expenses	71,777	76,836
Accrued workers compensation	37,009	35,406
Accrued marketing expenses	119,153	89,561
Employee related expenses	232,309	209,874
Taxes payable	6,764	5,507
Interest and dividends payable	66,696	53,466
TOTAL CURRENT LIABILITIES	1,214,025	954,692
LONG-TERM DEBT--less current maturities	250,000	250,000
PENSION AND POST-RETIREMENT BENEFITS	509,261	502,693
OTHER LONG-TERM LIABILITIES	101,056	112,176
DEFERRED INCOME TAXES	$ 64,096	$ 24,002
SHAREHOLDERS' INVESTMENT
Preferred stock, par value $.01 a share - authorized 160,000,000 shares; issued - none
Accumulated other comprehensive loss	$ (225,668)	$ (207,700)
Retained earnings	4,216,125	3,805,654
HORMEL FOODS CORPORATION SHAREHOLDERS' INVESTMENT	3,998,198	3,605,678
NONCONTROLLING INTEREST	3,195	6,378
TOTAL SHAREHOLDERS' INVESTMENT	4,001,393	3,612,056
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT	$ 6,139,831	$ 5,455,619
Common stock, non-voting
SHAREHOLDERS' INVESTMENT
Common stock
Common Stock
SHAREHOLDERS' INVESTMENT
Common stock	$ 7,741	$ 7,724

XML

Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Thousands	Oct. 25, 2015	Oct. 26, 2014
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 4,086	$ 4,050
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	160,000,000	160,000,000
Preferred stock, issued shares	0	0
Common stock, non-voting
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	400,000,000	400,000,000
Common stock, issued shares	0	0
Common Stock
Common stock, par value (in dollars per share)	$ 0.0293	$ 0.0293
Common stock, authorized shares	800,000,000	800,000,000
Common stock, issued shares	264,205,814	263,613,201

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Consolidated Statements of Operations
Net sales	$ 9,263,863	$ 9,316,256	$ 8,751,654
Cost of products sold	7,455,282	7,751,273	7,338,838
GROSS PROFIT	1,808,581	1,564,983	1,412,816
Selling, general and administrative	743,611	650,948	627,340
Goodwill impairment charge	21,537
Equity in earnings of affiliates	23,887	17,585	20,513
OPERATING INCOME	1,067,320	931,620	805,989
Other income and expense:
Interest and investment income (loss)	2,934	3,236	4,971
Interest expense	(13,111)	(12,704)	(12,453)
EARNINGS BEFORE INCOME TAXES	1,057,143	922,152	798,507
Provision for income taxes	369,879	316,126	268,431
NET EARNINGS	687,264	606,026	530,076
Less: Net earnings attributable to noncontrolling interest	1,176	3,349	3,865
NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION	$ 686,088	$ 602,677	$ 526,211
NET EARNINGS PER SHARE:
BASIC (in dollars per share)	$ 2.60	$ 2.28	$ 1.99
DILUTED (in dollars per share)	$ 2.54	$ 2.23	$ 1.95
WEIGHTED-AVERAGE SHARES OUTSTANDING:
BASIC (in shares)	264,072	263,812	264,317
DILUTED (in shares)	270,501	270,216	270,224

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Consolidated Statements of Comprehensive Income
Net earnings	$ 687,264	$ 606,026	$ 530,076
Other comprehensive income (loss), net of tax:
Foreign currency translation	(7,135)	(1,921)	(2,820)
Pension and other benefits	(21,280)	(52,985)	192,464
Deferred hedging	9,823	(3,590)	(15,085)
Total Other Comprehensive Income (Loss)	(18,592)	(58,496)	174,559
Comprehensive income	668,672	547,530	704,635
Less: Comprehensive income attributable to noncontrolling interest	947	3,339	4,069
Comprehensive Income Attributable to Hormel Foods Corporation	$ 667,725	$ 544,191	$ 700,566

XML

Consolidated Statements of Changes in Shareholders' Investment - USD ($) shares in Thousands, $ in Thousands	3 Months Ended				12 Months Ended
	Oct. 25, 2015	Jan. 25, 2015	Oct. 26, 2014	Jan. 26, 2014	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Increase (Decrease) in Shareholders' Investment
Balance		$ 3,612,056		$ 3,316,579	$ 3,612,056	$ 3,316,579	$ 2,824,925
Net earnings	$ 187,443	172,430	$ 171,848	154,458	687,264	606,026	530,076
Other comprehensive income (loss)					(18,592)	(58,496)	174,559
Purchases of common stock					(24,928)	(58,937)	(70,819)
Stock-based compensation expense					15,717	14,393	17,596
Exercise of stock options/nonvested shares					9,555	6,103	24,024
Purchase of additional ownership from noncontrolling interest					(14,035)
Distribution to noncontrolling interest					(1,581)	(2,500)	(4,000)
Declared cash dividends - $1.00, $0.80 and $0.68 per share for the years ended October 25, 2015, October 26, 2014 and October 27, 2013, respectively					(264,063)	(211,112)	(179,782)
Balance	4,001,393		3,612,056		4,001,393	3,612,056	3,316,579
Common Stock
Increase (Decrease) in Shareholders' Investment
Balance		$ 7,724		$ 7,725	$ 7,724	$ 7,725	$ 7,707
Balance (in shares)		263,613		263,658	263,613	263,658	263,044
Stock-based compensation expense					$ 1	$ 1
Exercise of stock options/nonvested shares					$ 28	$ 35	$ 69
Exercise of stock options/nonvested shares, shares					993	1,212	2,359
Shares retired					$ (12)	$ (37)	$ (51)
Shares retired, shares					(400)	(1,257)	(1,745)
Balance	$ 7,741		$ 7,724		$ 7,741	$ 7,724	$ 7,725
Balance (in shares)	264,206		263,613		264,206	263,613	263,658
Treasury Stock
Increase (Decrease) in Shareholders' Investment
Purchases of common stock					$ (24,928)	$ (58,937)	$ (70,819)
Purchases of common stock, shares					(400)	(1,257)	(1,745)
Shares retired					$ 24,928	$ 58,937	$ 70,819
Shares retired, shares					400	1,257	1,745
Additional Paid-in Capital
Increase (Decrease) in Shareholders' Investment
Stock-based compensation expense					$ 15,716	$ 14,392	$ 17,596
Exercise of stock options/nonvested shares					9,527	6,068	23,955
Shares retired					(13,362)	(20,460)	(41,551)
Purchase of additional ownership from noncontrolling interest					(11,881)
Retained Earnings
Increase (Decrease) in Shareholders' Investment
Balance		$ 3,805,654		$ 3,452,529	3,805,654	3,452,529	3,135,317
Net earnings					686,088	602,677	526,211
Shares retired					(11,554)	(38,440)	(29,217)
Declared cash dividends - $1.00, $0.80 and $0.68 per share for the years ended October 25, 2015, October 26, 2014 and October 27, 2013, respectively					(264,063)	(211,112)	(179,782)
Balance	$ 4,216,125		$ 3,805,654		4,216,125	3,805,654	3,452,529
Accumulated Other Comprehensive Income (Loss)
Increase (Decrease) in Shareholders' Investment
Balance		(207,700)		(149,214)	(207,700)	(149,214)	(323,569)
Other comprehensive income (loss)					(18,363)	(58,486)	174,355
Purchase of additional ownership from noncontrolling interest					395
Balance	(225,668)		(207,700)		(225,668)	(207,700)	(149,214)
Non-controlling Interest
Increase (Decrease) in Shareholders' Investment
Balance		$ 6,378		$ 5,539	6,378	5,539	5,470
Net earnings					1,176	3,349	3,865
Other comprehensive income (loss)					(229)	(10)	204
Purchase of additional ownership from noncontrolling interest					(2,549)
Distribution to noncontrolling interest					(1,581)	(2,500)	(4,000)
Balance	$ 3,195		$ 6,378		$ 3,195	$ 6,378	$ 5,539

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Consolidated Statements of Changes in Shareholders' Investment (Parenthetical) - $ / shares	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Consolidated Statements of Changes in Shareholders' Investment
Declared cash dividends (in dollars per share)	$ 1.00	$ 0.80	$ 0.68

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
OPERATING ACTIVITIES
Net earnings	$ 687,264	$ 606,026	$ 530,076
Adjustments to reconcile to net cash provided by operating activities:
Depreciation	125,292	120,692	115,371
Amortization of intangibles	8,142	9,352	9,479
Goodwill impairment charge	21,537
Equity in earnings of affiliates, net of dividends	13,438	5,246	13,507
Provision for deferred income taxes	19,979	9,800	1,067
Gain on property/equipment sales and plant facilities	(5,240)	(1,667)	(2,127)
Non-cash investment activities	(847)	(1,387)	(2,705)
Stock-based compensation expense	15,717	14,393	17,596
Excess tax benefit from stock-based compensation	(22,950)	(24,700)	(23,406)
Other			963
Changes in operating assets and liabilities, net of acquisitions:
Decrease (increase) in accounts receivable	22,451	(20,486)	(44,459)
Decrease (increase) in inventories	82,437	(21,645)	31,699
Decrease (increase) in prepaid expenses and other current assets	62,635	11,592	(9,792)
(Decrease) increase in pension and post-retirement benefits	(28,999)	(32,644)	11,283
Increase (decrease) in accounts payable and accrued expenses	(7,429)	72,307	(10,747)
Other	(1,435)
NET CASH PROVIDED BY OPERATING ACTIVITIES	991,992	746,879	637,805
INVESTING ACTIVITIES
Net sale of trading securities			77,558
Acquisitions of businesses/intangibles	(770,587)	(466,204)	(665,415)
Purchases of property/equipment	(144,063)	(159,138)	(106,762)
Proceeds from sales of property/equipment	18,501	10,285	10,164
(Increase) decrease in investments, equity in	(4,798)	(1,718)	(6,619)
NET CASH USED IN INVESTING ACTIVITIES	(900,947)	(616,775)	(691,074)
FINANCING ACTIVITIES
Proceeds from short-term debt	350,000	115,000	25,000
Principal payments on short-term debt	(165,000)	(115,000)	(25,000)
Dividends paid on common stock	(250,834)	(203,156)	(174,320)
Share repurchase	(24,928)	(58,937)	(70,819)
Proceeds from exercise of stock options	10,468	10,523	30,212
Excess tax benefit from stock-based compensation	22,950	24,700	23,406
Distribution to noncontrolling interest	(1,581)	(2,500)	(4,000)
Payments to noncontrolling interest	(11,702)
NET CASH USED IN FINANCING ACTIVITIES	(70,627)	(229,370)	(195,521)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(7,353)	(574)	416
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	13,065	(99,840)	(248,374)
Cash and cash equivalents at beginning of year	334,174	434,014	682,388
CASH AND CASH EQUIVALENTS AT END OF YEAR	$ 347,239	$ 334,174	$ 434,014

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Summary of Significant Accounting Policies

12 Months Ended

Oct. 25, 2015

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

NOTE A

Summary of Significant Accounting Policies

Principles of Consolidation: The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits.

Use of Estimates: 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.

Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal years 2015, 2014, and 2013 consisted of 52 weeks. Fiscal year 2016 will consist of 53 weeks.

Subsequent Event: On November 25, 2015, subsequent to the end of the fiscal year, the Company announced that its Board of Directors authorized a two-for-one split of the Company’s common stock. Stockholder approval of the stock split is required during the Company’s Annual Meeting to be held on January 26, 2016.

Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. The Company’s cash equivalents as of October 25, 2015, and October 26, 2014, consisted primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts.

Fair Value Measurements: Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows:

Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.

Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

See additional discussion regarding the Company’s fair value measurements in Notes G, H, and M.

Investments: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans, which is included in other assets on the Consolidated Statements of Financial Position. The securities held by the trust are classified as trading securities and consist mainly of fixed return investments. Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings. Securities held by the trust generated gains of $2.4 million, $2.9 million, and $4.6 million for fiscal years 2015, 2014, and 2013, respectively.

Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally under the average cost method. Adjustments to the Company’s lower of cost or market inventory reserve are reflected in cost of products sold in the Consolidated Statements of Operations.

Property, Plant and Equipment: Property, plant and equipment are stated at cost. The Company uses the straight-line method in computing depreciation. The annual provisions for depreciation have been computed principally using the following ranges of asset lives: buildings 20 to 40 years, machinery and equipment 5 to 10 years.

Internal-use software development and implementation costs are expensed until the Company has determined that the software will result in probable future economic benefits, and management has committed to funding the project. Thereafter, all material development and implementation costs, and purchased software costs, are capitalized and amortized using the straight-line method over the remaining estimated useful lives.

Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise.

In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test.

In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results.

If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. First, the fair value of each reporting unit is compared to its corresponding carrying value, including goodwill. The fair value of each reporting unit is estimated using discounted cash flow valuations (Level 3), which incorporate assumptions regarding future growth rates, terminal values, and discount rates. The estimates and assumptions used consider historical performance and are consistent with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference.

During fiscal years 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal year 2015. See additional discussion regarding the Company’s assets held for sale in Note E.

In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test.

In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that may impact their intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset.

If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment.

Based on the qualitative assessment conducted in fiscal year 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal years 2015, 2014, or 2013.

Impairment of Long-lived Assets and Definite-Lived Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews long-lived assets and definite-lived intangible assets for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets and any related goodwill, the carrying value is reduced to the estimated fair value. No material write-downs were recorded in fiscal years 2015, 2014, or 2013.

Assets Held For Sale: The Company classifies assets as held for sale when management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value or the fair market value, less costs to sell. See additional discussion regarding the Company’s assets held for sale in Note E.

Employee Benefit Plans: The Company has elected to use the corridor approach to recognize expenses related to its defined benefit pension and post-retirement benefit plans. Under the corridor approach, actuarial gains or losses resulting from experience different from that assumed and from changes in assumptions are deferred and amortized over future periods. For the defined benefit pension plans, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year. For the post-retirement plan, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the accumulated pension benefit obligation at the beginning of the year. For plans with active employees, net gains or losses in excess of the corridor are amortized over the average remaining service period of participating employees expected to receive benefits under those plans. For plans with only retiree participants, net gains or losses in excess of the corridor are amortized over the average remaining life of the retirees receiving benefits under those plans.

Contingent Liabilities: The Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. 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. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range that constitutes the Company’s best estimate. The Company also discloses the nature of and range of loss for claims against the Company when losses are reasonably possible and material.

Foreign Currency Translation: Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the statement of financial position date, and amounts in the statement of operations are translated at the average monthly exchange rate. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of accumulated other comprehensive loss in shareholders’ investment.

When calculating foreign currency translation, the Company deemed its foreign investments to be permanent in nature and has not provided for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars.

Derivatives and Hedging Activity: The Company uses commodity and currency positions to manage its exposure to price fluctuations in those markets. The contracts are recorded at fair value on the Consolidated Statements of Financial Position within other current assets or accounts payable. Additional information on hedging activities is presented in Note H.

Equity Method Investments: The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control. The Company accounts for such investments under the equity method of accounting, and its underlying share of each investee’s equity is reported in the Consolidated Statements of Financial Position as part of investments in and receivables from affiliates.

The Company regularly monitors and evaluates the fair value of our equity investments. If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in equity in earnings of affiliates in the Consolidated Statements of Operations. The Company’s equity investments do not have a readily determinable fair value as none of them are publicly traded. The fair values of the Company’s private equity investments are determined by discounting the estimated future cash flows of each entity. These cash flow estimates include assumptions on growth rates and future currency exchange rates (Level 3). Excluding charges related to the exit from international joint venture businesses in fiscal year 2015, there were no other charges on any of the Company’s equity investments in fiscal years 2015, 2014, or 2013.

See additional discussion regarding the Company’s equity method investments in Note I.

Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured.

The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contract accruals are based on a review of the unpaid outstanding contracts on which performance has taken place. Estimates used to determine the revenue reduction include the level of customer performance and the historical spend rate versus contracted rates.

Allowance for Doubtful Accounts: The Company estimates the allowance for doubtful accounts based on a combination of factors, including the age of its accounts receivable balances, customer history, collection experience, and current market factors. Additionally, a specific reserve may be established if the Company becomes aware of a customer’s inability to meet its financial obligations.

Advertising Expenses: Advertising costs are expensed when incurred. Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research. Advertising costs for fiscal years 2015, 2014, and 2013 were $145.3 million, $114.4 million, and $89.9 million, respectively.

Shipping and Handling Costs: The Company’s shipping and handling expenses are included in cost of products sold.

Research and Development Expenses: Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses incurred for fiscal years 2015, 2014, and 2013 were $32.0 million, $29.9 million, and $29.9 million, respectively.Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

In accordance with ASC 740, Income Taxes, the Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Employee Stock Options: The Company records stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation. For options subject to graded vesting, the Company recognizes stock-based compensation expense ratably over the shorter of the vesting period or requisite service period. Stock-based compensation expense for grants made to retirement-eligible employees is recognized on the date of grant.

Share Repurchases: During fiscal year 2013, 1.2 million shares were purchased as part of a 2010 program at an average price of $39.67, fully depleting that program.

On January 29, 2013, the Company’s Board of Directors authorized the repurchase 10.0 million shares of its common stock with no expiration date. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation under this authorization at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. During fiscal year 2014, 1.3 million shares were purchased at an average price of $46.87 and 0.6 million shares were purchased during fiscal year 2013 at an average price of $42.54.

Supplemental Cash Flow Information: Non-cash investment activities presented on the Consolidated Statements of Cash Flows generally consist of unrealized gains or losses on the Company’s rabbi trust. The noted investments are included in other assets or short-term marketable securities on the Consolidated Statements of Financial Position. Changes in the value of these investments are included in the Company’s net earnings and are presented in the Consolidated Statements of Operations as either interest and investment income or interest expense, as appropriate.

On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership of that business. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture. The difference between the fair value of the consideration given and the reduction in the noncontrolling interest was recognized as an $11.9 million reduction in additional paid-in capital attributable to the Company. The Company will continue to manufacture at the Shanghai facility by leasing the land use rights and buildings from the previous minority partner.

Accounting Changes and Recent Accounting Pronouncements: In January 2014, the FASB updated the guidance within ASC 323, Investments-Equity Method and Joint Ventures. The update provides guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to make an accounting policy election to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The updated guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2016, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2014, the Financial Accounting Standards Board (FASB) updated the guidance within ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard update only requires disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The updated guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company early adopted the new provisions of this accounting standard in the fourth quarter of fiscal year 2015, and determined it did not have any transactions qualifying as a discontinued operation under the new guidance.

In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. generally accepted accounting principles and international financial reporting standards and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. On July 8, 2015, the FASB approved a one-year deferral of the effective date. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. Accordingly, the Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2019, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 835, Interest. The update provides guidance on simplifying the presentation of debt issuance cost. The amendments require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 715, Compensation – Retirement Benefits. The update provides guidance on simplifying the measurement date for defined benefit plan assets and obligations. The amendments allow employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year ends. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and adoption is not expected to have a material impact on its consolidated financial statements.

In May 2015, the FASB updated the guidance within ASC 820, Fair Value Measurements and Disclosures. The update provides guidance on the disclosures for investments in certain entities that calculate net asset value (NAV) per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share (or its equivalent) as a practical expedient. The updated guidance is to be applied retrospectively and is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

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Acquisitions

12 Months Ended

Oct. 25, 2015

Acquisitions

Acquisitions

NOTE B

Acquisitions

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 purchase accounting adjustments, and was funded by the Company with cash on hand and by utilizing short-term financing.

Applegate® is the No. 1 brand in natural and organic value-added prepared meats and this acquisition will allow the Company to expand the breadth of its protein offerings to provide consumers more choice in that fast growing category.

The acquisition was accounted for as a business combination using the acquisition method. The Company is in the process of obtaining an independent appraisal. Therefore, a preliminary allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Accounts receivable	$ 25,574
Inventory	22,089
Prepaid and other assets	2,916
Property, plant and equipment	3,463
Intangible assets	275,900
Goodwill	488,476
Current liabilities	(23,420)
Deferred taxes	(20,935)
Purchase price	$ 774,063

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the potential to expand presence in the natural and organic channels and the supply chain for natural and organic products. A portion of the goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Refrigerated Foods reporting segment.

The Company recognized approximately $9.0 million of transaction costs in fiscal year 2015 related to the acquisition and the charges were reported in selling, general and administrative expense in the Company’s Consolidated Statements of Operations.

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 Refrigerated Foods reporting segment. The acquisition contributed $92.8 million of net sales since the date of acquisition.

On August 11, 2014, the Company acquired CytoSport Holdings, Inc. (CytoSport) of Benicia, California for a final purchase price of $420.9 million in cash. The purchase price was funded by the Company with cash on hand and by utilizing funds from its revolving line of credit. The agreement provides for a potential additional payment of up to $20.0 million subject to meeting specific financial performance criteria over the two years subsequent to the year of acquisition. The Company recognized a $10.3 million liability related to this potential payment through purchase accounting. In fiscal year 2015, the Company had a positive $8.9 million adjustment related to this accrual due to a current evaluation of net sales and earnings targets associated with the acquisition.

CytoSport is the maker of Muscle Milk® products and is a leading provider of premium protein products in the sports nutrition category. CytoSport’s brands align with the Company’s focus on protein while further diversifying the Company’s portfolio.

The acquisition was accounted for as a business combination using the acquisition method. The Company has estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. The final allocation of the purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Accounts receivable	$ 30,580
Inventory	62,246
Prepaid and other assets	3,133
Property, plant and equipment	8,119
Intangible assets	188,500
Goodwill	270,925
Current liabilities	(52,811)
Long-term liabilities	(30,140)
Deferred taxes	(59,700)
Purchase price	$ 420,852

The liabilities shown above include $15.0 million representing potential payments owed under a supplier agreement, which are contingent on future production levels through fiscal year 2018.

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, manufacturing synergies, and the potential to expand presence in alternate channels. The goodwill balance is not expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Specialty Foods and International & Other reporting segments.

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 Specialty Foods and International & Other reporting segments. The acquisition contributed an incremental $249.7 million of net sales for fiscal year 2015, and incremental $73.5 million of net sales for fiscal year 2014. The Company recognized approximately $4.8 million of transaction costs in fiscal year 2014 related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

On November 26, 2013, the Company acquired the China based SKIPPY® peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. for a final purchase price of $41.9 million in cash. This acquisition included the Weifang, China manufacturing facility and all sales in Mainland China. The purchase price was funded by the Company with cash on hand.

SKIPPY® is a well-established brand that allows the Company to expand its presence in the center of the store with a non-meat protein product and reinforces the Company’s balanced product portfolio. The acquisition also provides the opportunity to strengthen the Company’s global presence and complements the international sales strategy for the SPAM®family of products.

On January 31, 2013, the Company had previously acquired the United States based SKIPPY® peanut butter business from Unilever United States Inc. for a final purchase price of $665.4 million in cash. This acquisition included the Little Rock, Arkansas manufacturing facility and all sales worldwide, except sales in Mainland China. The purchase price was funded by the Company with cash on hand generated from operations and liquidating marketable securities.

The acquisition was accounted for as a business combination using the acquisition method. The Company estimated the acquisition date fair values of the assets acquired and liabilities assumed, using independent appraisals and other analyses, and determined final working capital adjustments. Therefore, an allocation of the final purchase price to the acquired assets, liabilities, and goodwill is presented in the table below.

(in thousands)
Inventory	$ 49,156
Property, plant and equipment	48,461
Intangible assets	264,500
Goodwill	303,597
Current liabilities	(299)
Purchase price	$ 665,415

Goodwill is calculated as the excess of the purchase price over the fair value of the net assets recognized. The goodwill recorded as part of the acquisition primarily reflects the value of the assembled workforce, cost synergies, and the potential to integrate and expand existing product lines. The goodwill balance is expected to be deductible for income tax purposes. The goodwill and intangible assets have been allocated to the Grocery Products and International & Other reporting segments.

The Company recognized approximately $7.7 million of transaction costs in fiscal year 2013 (excluding transitional service expenses) related to the acquisition and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

Operating results for both of these SKIPPY® acquisitions have been included in the Company’s Consolidated Statements of Operations from the date of acquisition and are primarily reflected in the Grocery Products and International & Other reporting segments. The China based business contributed an incremental $28.9 million of net sales for fiscal year 2014. The United States based business contributed an incremental $86.5 million of net sales for the first quarter of fiscal year 2014, and an incremental $272.8 million of net sales for fiscal year 2013.

Pro forma results of operations are not presented, as no acquisitions in fiscal years 2015, 2014, or 2013 were considered material, individually or in the aggregate, to the consolidated Company.

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Inventories

12 Months Ended

Oct. 25, 2015

Inventories

Inventories

NOTE C

Inventories

Principal components of inventories are:

	October 25,		October 26,
(in thousands)	2015		2014
Finished products	$ 553,298		$    604,946
Raw materials and work-in-process		239,174		274,105
Materials and supplies		200,793		175,501
Total	$ 993,265		$ 1,054,552

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Goodwill and Intangible Assets

12 Months Ended

Oct. 25, 2015

Goodwill and Intangible Assets

Goodwill and Intangible Assets

NOTE D

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal years ended October 25, 2015, and October 26, 2014, are presented in the table below. Additions during fiscal year ended October 25, 2015 are entirely due to the acquisition of Applegate on July 13, 2015. The goodwill amounts are preliminary pending final purchase adjustments. The impairment charge is related to the Company’s assets held for sale. See additional discussion regarding the Company’s assets held for sale in Note E. Purchase adjustments during the year relate to the CytoSport acquisition. The additions during the prior fiscal year ended October 26, 2014, were due to the acquisitions of CytoSport on August 11, 2014, and the China based SKIPPY® peanut butter business on November 26, 2013.

	Grocery	Refrigerated		Specialty	International
(in thousands)	Products	Foods	JOTS	Foods	& Other	Total
Balance as of October 27, 2013	$ 322,942	$   96,643	$ 203,214	$ 207,028	$ 104,645	$    934,472
Goodwill acquired	–	–	–	263,829	28,105	291,934
Balance as of October 26, 2014	$ 322,942	$   96,643	$ 203,214	$ 470,857	$ 132,750	$ 1,226,406
Goodwill acquired	–	488,476	–	–	–	488,476
Purchase Adjustments	–	–	–	7,096	–	7,096
Impairment charge	–	–	–	(21,537)	–	(21,537)
Product line Disposal	(521)	(435)	–	–	(1)	(957)
Balance as of October 25, 2015	$ 322,421	$ 584,684	$ 203,214	$ 456,416	$ 132,749	$ 1,699,484

The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below. In fiscal year 2015, customer relationships of $25.1 million and non-compete agreements of $1.2 million were acquired during the third quarter related to Applegate. In fiscal year 2014, customer relationships of $21.6 million were acquired during the fourth quarter related to CytoSport and $2.6 million were acquired during the first quarter related to the China based SKIPPY® peanut butter business. Through the final purchase accounting valuation of CytoSport in fiscal year 2015, the value of the customer relationships was raised to $23.3 million.

	October 25, 2015			October 26, 2014
	Gross		Weighted-	Gross		Weighted-
	Carrying	Accumulated	Avg Life	Carrying	Accumulated	Avg Life
(in thousands)	Amount	Amortization	(in Years)	Amount	Amortization	(in Years)
Customer lists/relationships	$ 83,190	$ (13,939)	12.1	$   67,540	$ (19,336)	11.0
Formulas and recipes	7,490	(6,865)	7.2	17,854	(15,955)	8.8
Proprietary software and technology	7,010	(6,901)	8.1	14,820	(13,542)	10.2
Other intangibles	2,370	(1,195)	7.5	4,746	(4,503)	7.4
Total	$ 100,060	$ (28,900)	11.3	$ 104,960	$ (53,336)	10.4

Amortization expense for the last three fiscal years was as follows:

(in millions)
2015	$ 8.1
2014	9.4
2013	9.5

Estimated annual amortization expense for the five fiscal years after October 25, 2015, is as follows:

(in millions)
2016	$ 8.2
2017	7.6
2018	7.0
2019	7.0
2020	6.8

The carrying amounts for indefinite-lived intangible assets are in the following table. The increase in fiscal year 2015 represents the fair value of the tradenames acquired with Applegate.

	October 25,	October 26,
(in thousands)	2015	2014
Brand/tradename/trademarks	$ 748,075	$ 495,282
Other intangibles	7,984	7,984
Total	$ 756,059	$ 503,266

During the fourth quarter of fiscal years 2015 and 2014, the Company completed the required annual impairment tests of indefinite-lived intangible assets and goodwill. The goodwill impairment charge referred to above was recorded in fiscal year 2015 and no impairment was indicated in fiscal year 2014. Useful lives of intangible assets were also reviewed during this process, with no changes identified.

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Assets Held For Sale

12 Months Ended

Oct. 25, 2015

Assets Held For Sale

Assets Held For Sale

NOTE E

Assets Held For Sale

In fiscal year 2015, the Company began actively marketing a portion of Diamond Crystal Brands (DCB). Through this process, the Company identified the specific assets and liabilities to be sold and allocated goodwill based on the relative fair values of the assets held for sale and the assets that will be retained by the Company. The Company determined the carrying value of the DCB assets held for sale more likely than not exceeded its fair value, requiring a two step test for impairment. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. An impairment charge of $21.5 million was recorded for the assets held for sale. This impairment is recorded on the Company’s Consolidated Statements of Operations on the line item “Goodwill impairment charge.” DCB is reported within the Company’s Specialty Foods segment. The portion of the business held for sale is not material to the Company’s annual net sales, net earnings, or earnings per share.

Amounts classified as assets and liabilities held for sale at October 25, 2015 are presented on the Company’s Consolidated Statement of Financial Position within their respective accounts, and include the following:

Assets held for sale (in thousands)
Current assets	$  26,057
Goodwill	51,811
Intangibles	5,389
Property, plant and equipment	31,678
Total assets held for sale	$ 114,935

Liabilities held for sale (in thousands)
Total current liabilities held for sale	$    3,191

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Long-term Debt and Other Borrowing Arrangements

12 Months Ended

Oct. 25, 2015

Long-term Debt and Other Borrowing Arrangements

Long-term Debt and Other Borrowing Arrangements

NOTE F

Long-term Debt and Other

Borrowing Arrangements

Long-term debt consists of:

	October 25,	October 26,
(in thousands)	2015	2014
Senior unsecured notes, with interest at 4.125%, interest due semi-annually through April 2021 maturity date	$ 250,000	$ 250,000
Less current maturities	–	–
Total	$ 250,000	$ 250,000

The Company has a $400.0 million unsecured revolving line of credit which matures in June 2020 and bears interest at a variable rate based on LIBOR. A fixed fee is paid for the availability of this credit line. As of October 25, 2015, and October 26, 2014, the Company had no outstanding draws from this line of credit.

The Company also has a $300.0 million term loan facility that expires December 2016 that bears interest at a variable rate based on LIBOR. As of October 25, 2015, the Company had $185.0 million outstanding on the loan facility and no outstanding draws as of October 26, 2014.

The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position. At the end of the current fiscal year, the Company was in compliance with all of these covenants.

Total interest paid in the last three fiscal years is as follows:

(in millions)
2015	$ 13.1
2014	12.7
2013	12.5

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Pension and Other Post-retirement Benefits

12 Months Ended

Oct. 25, 2015

Pension and Other Post-retirement Benefits

Pension and Other Post-retirement Benefits

NOTE G

Pension and Other Post-retirement Benefits

The Company has several defined benefit plans and defined contribution plans covering most employees. Total costs associated with the Company’s defined contribution benefit plans in 2015, 2014, and 2013 were $31.7 million, $30.1 million, and $29.9 million, respectively. Benefits for defined benefit pension plans covering hourly employees are provided based on stated amounts for each year of service, while plan benefits covering salaried employees are based on final average compensation. The Company’s funding policy is to make annual contributions of not less than the minimum required by applicable regulations. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 9-23 years.

Certain groups of employees are eligible for post-retirement health or welfare benefits. Benefits for retired employees vary for each group depending on respective retirement dates and applicable plan coverage in effect. Contribution requirements for retired employees are governed by the Retiree Health

Care Payment Program and may change each year as the cost to provide coverage is determined. Eligible employees hired after January 1, 1990, may receive post-retirement medical coverage but must pay the full cost of the coverage. On October 17, 2012, the plan was amended, effective April 1, 2013, to terminate coverage for certain nonunion retirees who retired on or after August 1, 2002, and who are or will be Medicare eligible. If the cost of the nonunion retiree coverage is currently subsidized by the Company for the affected retirees, credits will be established in a health reimbursement account to help reimburse the retiree for the cost of purchasing coverage in the individual market. Actuarial gains and losses and any adjustments resulting from plan amendments are deferred and amortized to expense over periods ranging from 6-18 years.

In 2011, an amendment was enacted for a defined benefit plan which included a change in the pension formula effective January 1, 2017. The amended formula remains a defined benefit formula, but will base the accrued benefit credit on age and service and define the benefit as a lump sum. Effective October 31, 2016, the 401(k) match for these participants will be increased.

Net periodic cost of defined benefit plans included the following:

	Pension Benefits			Post-retirement Benefits
(in thousands)	2015	2014	2013	2015	2014	2013
Service cost	$ 28,795	$ 25,935	$ 30,979	$   1,795	$   1,963		$   2,494
Interest cost	52,522	53,030	47,688	13,479	15,279		14,910
Expected return on plan assets	(88,792)	(83,702)	(73,144)	–	–		–
Amortization of prior service cost	(4,878)	(4,971)	(5,079)	(1,337)	(1,337)		(1,332)
Recognized actuarial loss (gain)	18,476	12,697	34,019	(2)	(2)		7,719
Curtailment charge	–	–	6	–	–		–
Net periodic cost	$  6,123	$   2,989	$ 34,469	$ 13,935	$ 15,903		$ 23,791

The following amounts have not been recognized in net periodic pension cost and are included in accumulated other comprehensive loss:

(in thousands)	Pension Benefits				Post-retirement Benefits
	2015		2014		2015		2014
Unrecognized prior service credit		$    32,490		$    37,368		$    2,844		$    4,180
Unrecognized actuarial losses		(360,949)		(343,398)		(40,590)		(30,250)

The following amounts are expected to be recognized in net periodic benefit expense in fiscal year 2016:

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
Amortized prior service credit	$ (4,878)	$ (1,337)
Recognized actuarial losses	18,693	1,303

The following is a reconciliation of the beginning and ending balances of the benefit obligation, the fair value of plan assets, and the funded status of the plans as of the October 25, 2015, and the October 26, 2014, measurement dates:

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in benefit obligation:
Benefit obligation at beginning of year	$ 1,235,769	$ 1,098,060	$ 330,841	$ 334,447
Service cost	28,795	25,935	1,795	1,963
Interest cost	52,522	53,030	13,479	15,279
Actuarial (gain) loss	(16,872)	108,047	10,339	927
Employee contributions	–	–	2,798	2,715
Medicare Part D subsidy	–	–	1,313	1,941
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Benefit obligation at end of year	$ 1,248,209	$ 1,235,769	$ 334,544	$ 330,841

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in plan assets:
Fair value of plan assets at beginning of year	$ 1,168,765	$ 1,087,315	$             –	$             –
Actual return on plan assets	35,870	101,025	–	–
Employee contributions	–	–	2,798	2,715
Employer contributions	27,147	29,728	23,223	23,716
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Fair value of plan assets at end of year	$ 1,179,777	$ 1,168,765	$             –	$              –
Funded status at end of year	$ (68,432)	$    (67,004)	$ (334,544)	$ (330,841)

Amounts recognized in the Consolidated Statements of Financial Position as of October 25, 2015, and October 26, 2014, are as follows:

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Pension assets	$ 132,861	$  130,284	$             –	$             –
Employee related expenses	(4,931)	(4,532)	(21,645)	(20,904)
Pension and post-retirement benefits	(196,362)	(192,756)	(312,899)	(309,937)
Net amount recognized	$ (68,432)	$  (67,004)	$ (334,544)	$ (330,841)

The following table provides information for pension plans with accumulated benefit obligations in excess of plan assets:

(in thousands)	2015	2014
Projected benefit obligation	$ 201,293	$ 197,288
Accumulated benefit obligation	193,913	186,085
Fair value of plan assets	–	–

Weighted-average assumptions used to determine benefit obligations are as follows:

	2015	2014
Discount rate	4.50%	4.31%
Rate of future compensation increase
(for plans that base benefits on final compensation level)	3.92%	3.94%

Weighted-average assumptions used to determine net periodic benefit costs are as follows:

	2015	2014	2013
Discount rate	4.31%	4.89%	4.05%
Rate of future compensation increase (for plans that base benefits on final compensation level)	3.94%	3.91%	3.97%
Expected long-term return on plan assets	7.70%	7.80%	7.90%

The expected long-term rate of return on plan assets is based on fair value and is developed in consultation with outside advisors. A range is determined based on the composition of the asset portfolio, historical long-term rates of return, and estimates of future performance.

For measurement purposes, an 8.0% annual rate of increase in the per capita cost of covered health care benefits for pre-Medicare and post-Medicare retirees’ coverage is assumed for 2016. The pre-Medicare and post-Medicare rate is assumed to decrease to 5.0% for 2021, and remain at that level thereafter.

The assumed discount rate, expected long-term rate of return on plan assets, rate of future compensation increase, and health care cost trend rate have a significant impact on the amounts reported for the benefit plans. A one-percentage-point change in these rates would have the following effects:

	1-Percentage-Point
	Expense		Benefit Obligation
(in thousands)	Increase	Decrease	Increase	Decrease
Pension Benefits:
Discount rate	$ (12,892)	$ 16,810	$ (157,394)	$ 197,869
Expected long-term rate of return on plan assets	(11,629)	11,629	–	–
Rate of future compensation increase	461	(442)	2,504	(2,417)
Post-retirement Benefits:
Discount rate	$       (64)	$  5,035	$  (33,462)	$  40,619
Health care cost trend rate	1,749	(1,451)	38,194	(31,112)

The actual and target weighted-average asset allocations for the Company’s pension plan assets as of the plan measurement date are as follows:

	2015		2014
Asset Category	Actual	Target Range	Actual	Target Range
Large Capitalization Equity	38.8%	15-35%	33.0%	15-35%
Small Capitalization Equity	5.4%	5-15%	6.0%	5-15%
International Equity	14.0%	15-25%	20.8%	15-25%
Private Equity	6.1%	0-15%	5.0%	0-15%
Total Equity Securities	64.3%	50-75%	64.8%	55-75%
Fixed Income	34.3%	25-45%	34.0%	25-45%
Real Estate	–	0-10%	–	–
Cash and Cash Equivalents	1.4%	–	1.2%	–

Target allocations are established in consultation with outside advisors through the use of asset-liability modeling to attempt to match the duration of the plan assets with the duration of the Company’s projected benefit liability. The asset allocation strategy attempts to minimize the long-term cost of pension benefits, reduce the volatility of pension expense, and achieve a healthy funded status for the plans.

During 2014, the 1.7 million shares of Company common stock held in plan assets were sold. Dividends paid during 2014 on shares held by the plan were $0.7 million.

Based on the October 25, 2015 measurement date, the Company anticipates making contributions of $24.1 million to fund the pension plans during fiscal year 2016. The Company also expects to make contributions of $27.2 million during 2016 that represent benefit payments for unfunded plans.

Benefits expected to be paid over the next ten fiscal years are as follows:

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
2016	$ 53,515	$ 22,113
2017	55,661	22,441
2018	58,010	22,612
2019	60,934	22,711
2020	63,916	22,621
2021 – 2025	361,518	108,832

Post-retirement benefits are net of expected federal subsidy receipts related to prescription drug benefits granted under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, which are estimated to be $2.4 million per year through 2025.

The fair values of the defined benefit pension plan investments as of October 25, 2015, and October 26, 2014, by asset category and fair value hierarchy level, are as follows:

	Fair Value Measurements at October 25, 2015
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     16,551		$  16,551		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   300,735		$ 175,206		$ 125,529		$         –
Foreign	36,637		36,637		–		–
World	120,206		–		120,206		–
Total Large Capitalization Equity		$   457,578		$ 211,843		$ 245,735		$         –
Small Capitalization Equity(3)
Domestic		$     55,513		$  55,513		$           –		$         –
Foreign	8,246		8,246		–		–
Total Small Capitalization Equity		$     63,759		$  63,759		$           –		$         –
International Equity(4)
Mutual fund		$   101,062		$           –		$ 101,062		$         –
Collective trust	63,861		–		63,861		–
Total International Equity		$   164,923		$           –		$ 164,923		$         –
Private Equity(5)
Domestic		$     54,748		$           –		$           –		$ 54,748
International	17,027		–		–		17,027
Total Private Equity		$     71,775		$           –		$           –		$ 71,775
Total Equity		$   758,035		$ 275,602		$ 410,658		$ 71,775
Fixed Income(6)
US government issues		$   130,456		$ 104,460		$  25,996		$         –
Municipal issues	20,211		–		20,211		–
Corporate issues – domestic	210,035		–		210,035		–
Corporate issues – foreign	44,489		–		44,489		–
Total Fixed Income		$   405,191		$ 104,460		$ 300,731		$         –
Total Investments at Fair Value		$ 1,179,777		$ 396,613		$ 711,389		$ 71,775

	Fair Value Measurements at October 26, 2014
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     14,342		$  14,342		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   351,195		$ 196,977		$ 154,218		$         –
Foreign	34,126		34,126		–		–
Total Large Capitalization Equity		$   385,321		$ 231,103		$ 154,218		$         –
Small Capitalization Equity(3)
Domestic		$     62,521		$  62,521		$           –		$         –
Foreign	8,031		8,031		–		–
Total Small Capitalization Equity		$     70,552		$  70,552		$           –		$         –
International Equity(4)
Mutual fund		$     69,393		$           –		$  69,393		$         –
Collective trust	173,008		–		173,008		–
Total International Equity		$   242,401		$           –		$ 242,401		$         –
Private Equity(5)
Domestic		$     43,340		$           –		$           –		$ 43,340
International	15,383		–		–		15,383
Total Private Equity		$     58,723		$           –		$           –		$ 58,723
Total Equity		$   756,997		$ 301,655		$ 396,619		$ 58,723
Fixed Income(6)
US government issues		$   126,894		$  96,199		$  30,695		$         –
Municipal issues	20,232		–		20,232		–
Corporate issues – domestic	212,299		–		212,299		–
Corporate issues – foreign	38,001		–		38,001		–
Total Fixed Income		$   397,426		$  96,199		$ 301,227		$         –
Total Investments at Fair Value		$ 1,168,765		$ 412,196		$ 697,846		$ 58,723

The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:

⁽¹⁾ Cash Equivalents: These Level 1 investments consist primarily of money market mutual funds that are highly liquid and traded in active markets.

⁽²⁾ Large Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investment includes mutual funds consisting of a mix of U.S. and foreign common stocks that are valued at the publicly available net asset value (NAV) of shares held by the pension plans at year end.

⁽³⁾ Small Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded.

⁽⁴⁾ International Equity: These Level 2 investments include a mix of collective investment funds and mutual funds. The mutual funds are valued at the publicly available NAV of shares held by the pension plans at year end. The value of the collective investment funds is based on the fair value of the underlying investments and the NAV can be calculated for these funds.

⁽⁵⁾ Private Equity: These Level 3 investments consist of various collective investment funds, which are managed by a third party, that invest in a well-diversified portfolio of equity investments from top performing, high quality firms that focus on U.S. and foreign small to mid-markets, venture capitalists, and entrepreneurs with a concentration in areas of innovation. Investment strategies include buyouts, growth capital, buildups, and distressed, as well as early stages of company development mainly in the U.S. The fair value of the units for these investments is based on the fair value of the underlying investments, and the NAV can be calculated for these funds.

⁽⁶⁾ Fixed Income: The Level 1 investments include U.S. Treasury bonds and notes, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investments consist principally of U.S. government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources; municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources; and mutual funds invested in long-duration corporate bonds that are valued at the publicly available NAV of shares held by the pension plans at year-end.

A reconciliation of the beginning and ending balance of the investments measured at fair value using significant unobservable inputs (Level 3) is as follows:

(in thousands)	2015	2014
Beginning Balance	$ 58,723	$ 45,783
Purchases, issuances, and settlements (net)	(3,574)	3,050
Unrealized gains	7,741	4,260
Realized gains	7,623	4,479
Interest and dividend income	1,262	1,151
Ending Balance	$ 71,775	$ 58,723

The Company has commitments totaling $85.0 million for the private equity investments within the pension plans. The unfunded private equity commitment balance for each investment category as of October 25, 2015, and October 26, 2014 is as follows:

(in thousands)	2015	2014
Domestic equity	$  9,264	$ 17,659
International equity	9,514	12,640
Unfunded commitment balance	$ 18,778	$ 30,299

Funding for future private equity capital calls will come from existing pension plan asset investments and not from additional cash contributions into the Company’s pension plans.

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Derivatives and Hedging

12 Months Ended

Oct. 25, 2015

Derivatives and Hedging

Derivatives and Hedging

NOTE H

Derivatives and Hedging

The Company uses hedging programs to manage price risk associated with commodity purchases. These programs utilize futures contracts, options, and swaps to manage the Company’s exposure to price fluctuations in the commodities markets. The Company has determined that its programs which are designated as hedges are highly effective in offsetting the changes in fair value or cash flows generated by the items hedged.

Cash Flow Hedges: The Company currently utilizes corn futures to offset price fluctuations in the Company’s future direct grain purchases, and has historically entered into various swaps to hedge the purchases of grain at certain plant locations. The financial instruments are designated and accounted for as cash flow hedges, and the Company measures the effectiveness of the hedges at least quarterly. 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 period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. The Company typically does not hedge its grain exposure beyond the next two upcoming fiscal years. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	20.1 million bushels	18.3 million bushels

As of October 25, 2015, the Company has included in AOCL hedging gains of $1.0 million (before tax) relating to its positions, compared to losses of $14.8 million (before tax) as of October 26, 2014. The Company expects to recognize the majority of these gains over the next 12 months.

Fair Value Hedges: The Company utilizes futures to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s commodity suppliers. 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. The futures contracts are designated and accounted for as fair value hedges, and the Company measures the effectiveness of the hedges at least quarterly. 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 are recorded on the Consolidated Statement of Financial Position as a current asset and liability, respectively. Effective gains or losses related to these fair value hedges are recognized through cost of products sold in the period or periods in which the hedged transactions affect earnings. Any gains or losses related to hedge ineffectiveness are recognized in the current period cost of products sold. As of October 25, 2015, and October 26, 2014, the Company had the following outstanding commodity futures contracts designated as fair value hedges:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	5.3 million bushels	8.0 million bushels
Lean hogs	0.4 million cwt	0.7 million cwt

Other Derivatives: The Company holds certain futures and options 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.

As of October 25, 2015, and October 26, 2014, the Company had the following outstanding futures and options contracts related to these programs:

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	2.6 million bushels	2.9 million bushels
Soybean meal	11,500 tons	–

Fair Values: The fair values of the Company’s derivative instruments as of October 25, 2015, and October 26, 2014, were as follows:

		Fair Value(1)
	Location on Consolidated	October 25,	October 26,
(in thousands)	Statements of Financial Position	2015	2014
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$ 305	$ (7,124)
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	248	(938)
Total Asset Derivatives		$ 553	$ (8,062)

⁽¹⁾ Amounts represent the gross fair value of 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 derivative in the Consolidated Statement of Financial Position. See Note M for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

Derivative Gains and Losses: Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the fiscal year ended October 25, 2015, and October 26, 2014, were as follows:

	Gain/(Loss) Recognized			Gain/(Loss) Reclassified		Gain/(Loss) Recognized
	in AOCL			from AOCL into Earnings		in Earnings
	(Effective Portion)(1)			(Effective Portion)(1)		(Ineffective Portion)(2) (4)
	Fiscal Year Ended			Fiscal Year Ended		Fiscal Year Ended
	October 25,	October 26,	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Cash Flow Hedges:	2015	2014	Statements of Operations	2015	2014	2015	2014
Commodity contracts	$ 3,409	$ (16,701)	Cost of products sold	$ (12,369)	$ (10,925)	$ (6,127)	$ 193

		Gain/(Loss)		Gain/(Loss)
		Recognized in Earnings		Recognized in Earnings
		(Effective Portion)(3)		(Ineffective Portion)(2) (5)
		Fiscal Year Ended		Fiscal Year Ended
	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Fair Value Hedges:	Statements of Operations	2015	2014	2015	2014
Commodity contracts	Cost of products sold	$ (4,297)	$ (21,608)	$ 2,547	$ 322

		Gain/(Loss)
		Recognized in Earnings
		Fiscal Year Ended
Derivatives Not	Location on Consolidated	October 25,	October 26,
Designated as Hedges:	Statements of Operations	2015	2014
Commodity contracts	Cost of products sold	$ (269)	$ (2,083)

⁽¹⁾ Amounts represent gains or losses in AOCL before tax. See Note J for the after tax impact of these gains or losses on net earnings.

⁽²⁾ There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2015 includes the mark-to-market impact on certain corn futures contracts which resulted from a temporary suspension of hedge accounting due to market volatility.

⁽³⁾ 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 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.

⁽⁴⁾ There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year.

⁽⁵⁾ 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.

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Investments In and Receivables from Affiliates

12 Months Ended

Oct. 25, 2015

Investments In and Receivables from Affiliates

Investments In and Receivables from Affiliates

NOTE I

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 Statements of Financial Position as investments in and receivables from affiliates.

Investments in and receivables from affiliates consists of the following:

			October 25,	October 26,
(in thousands)	Segment	% Owned	2015	2014
MegaMex Foods, LLC	Grocery Products	50%	$ 200,110	$ 208,221
Foreign Joint Ventures	International & Other	Various (26 – 50%)	58,888	56,230
Total			$ 258,998	$ 264,451

Equity in earnings of affiliates consists of the following:

(in thousands)	Segment	2015		2014	2013
MegaMex Foods, LLC	Grocery Products	$ 26,849		$ 14,415	$ 17,261
Foreign Joint Ventures	International & Other	(2,962	)	3,170	3,252
Total		$ 23,887		$ 17,585	$ 20,513

Equity in earnings in fiscal year 2015 included charges related to the exit from international joint venture businesses. Dividends received from affiliates for the fiscal years ended October 25, 2015, October 26, 2014, and October 27, 2013, were $37.3 million, $22.8 million, and $34.0 million, respectively. The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, of which $16.2 million is remaining as of October 25, 2015. This difference is being amortized through equity in earnings of affiliates.

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Accumulated Other Comprehensive Loss

12 Months Ended

Oct. 25, 2015

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

NOTE J

Accumulated Other Comprehensive Loss

Components of accumulated other comprehensive loss are as follows:

							Accumulated
	Foreign				Deferred		Other
	Currency		Pension &		Gain (Loss)		Comprehensive
(in thousands)	Translation		Other Benefits		– Hedging		Loss
Balance at October 28, 2012	$ 12,415		$ (345,465	)	$ 9,481		$ (323,569	)
Unrecognized gains (losses):
Gross	(3,024	)	273,408		(18,329	)	252,055
Tax effect	–		(102,846	)	6,898		(95,948	)
Reclassification into net earnings:
Gross	–		35,327	(1)	(5,871	)(2)	29,456
Tax effect	–		(13,425	)	2,217		(11,208	)
Net of tax amount	(3,024	)	192,464		(15,085	)	174,355
Balance at October 27, 2013	$ 9,391		$ (153,001	)	$ (5,604	)	$ (149,214	)
Unrecognized gains (losses):
Gross	(1,911	)	(91,684	)	(16,701	)	(110,296	)
Tax effect	–		34,737		6,305		41,042
Reclassification into net earnings:
Gross	–		6,387	(1)	10,925	(2)	17,312
Tax effect	–		(2,425	)	(4,119	)	(6,544	)
Net of tax amount	(1,911	)	(52,985	)	(3,590	)	(58,486	)
Balance at October 26, 2014	$ 7,480		$ (205,986	)	$ (9,194	)	$ (207,700	)
Unrecognized gains (losses):
Gross	(6,116	)	(46,389	)	3,409		(49,096	)
Tax effect	–		17,492		(1,285	)	16,207
Reclassification into net earnings:
Gross	–		12,259	(1)	12,369	(2)	24,628
Tax effect	–		(4,642	)	(4,670	)	(9,312	)
Net of tax amount	(6,116	)	(21,280	)	9,823		(17,573	)
Purchase of additional ownership of noncontrolling interest	(395	)	–		–		(395	)
Balance at October 25, 2015	$ 969		$ (227,266	)	$ 629		$ (225,668	)

⁽¹⁾ Included in computation of net periodic cost (see Note G for additional details).

⁽²⁾ Included in cost of products sold in the Consolidated Statements of Operations.

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Income Taxes

12 Months Ended

Oct. 25, 2015

Income Taxes

Income Taxes

NOTE K

Income Taxes

The components of the provision for income taxes are as follows:

(in thousands)	2015	2014	2013
Current:
U.S. Federal	$ 299,557	$ 264,533	$ 231,359
State	39,817	34,034	30,671
Foreign	10,526	7,759	5,334
Total current	349,900	306,326	267,364
Deferred:
U.S. Federal	18,451	8,756	1,080
State	1,070	873	(194	)
Foreign	458	171	181
Total deferred	19,979	9,800	1,067
Total provision for income taxes	$ 369,879	$ 316,126	$ 268,431

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company believes that, based upon its lengthy and consistent history of profitable operations, it is more likely than not the net deferred tax assets of $22.8 million will be realized on future tax returns, primarily from the generation of future taxable income. Significant components of the deferred income tax liabilities and assets are as follows:

	October 25,		October 26,
(in thousands)	2015		2014
Deferred tax liabilities:
Goodwill and intangible assets	$ (213,312	)	$ (168,167	)
Tax over book depreciation and basis differences	(94,496	)	(85,623	)
Other, net	(18,788	)	(30,252	)
Deferred tax assets:
Pension and post-retirement benefits	154,306		152,392
Employee compensation related liabilities	109,061		101,706
Marketing and promotional accruals	37,603		28,703
Other accruals not currently deductible	–		13,010
Other, net	48,432		51,082
Net deferred tax assets	$    22,806		$ 62,851

Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	2015		2014		2013
U.S. statutory rate	35.0	%	35.0	%	35.0	%
State taxes on income, net of federal tax benefit	2.7		2.8		2.7
Domestic production activities deduction	(2.6	)	(2.7	)	(2.4	)
All other, net	(0.1	)	(0.8	)	(1.7	)
Effective tax rate	35.0	%	34.3	%	33.6	%

No provision has been made for U.S. federal income taxes on certain undistributed earnings of foreign subsidiaries and joint ventures that the Company intends to permanently invest or that may be remitted substantially tax-free. The total of undistributed earnings that would be subject to federal income tax if remitted under existing law is approximately $109.3 million as of October 25, 2015. Determination of the unrecognized deferred tax liability related to these earnings is not practicable because of the complexities with its hypothetical calculation. Upon distribution of these earnings, we will be subject to U.S. taxes and withholding taxes payable to various foreign governments. A credit for foreign taxes already paid would be available to reduce the U.S. tax liability.

Total income taxes paid during fiscal years 2015, 2014, and 2013 were $296.5 million, $285.8 million, and $226.2 million, respectively.

The following table sets forth changes in the unrecognized tax benefits, excluding interest and penalties, for fiscal years 2014 and 2015.

(in thousands)
Balance as of October 27, 2013	$ 20,085
Tax positions related to the current period:
Increases	4,693
Decreases	(670	)
Tax positions related to prior periods:
Increases	4,455
Decreases	(3,245	)
Settlements	(573	)
Decreases related to a lapse of applicable statute of limitations	(2,137	)
Balance as of October 26, 2014	$ 22,608
Tax positions related to the current period:
Increases	2,920
Decreases	–
Tax positions related to prior periods:
Increases	1,629
Decreases	(796	)
Settlements	(2,839	)
Decreases related to a lapse of applicable statute of limitations	(2,185	)
Balance as of October 25, 2015	$ 21,337

The amount of unrecognized tax benefits, including interest and penalties, at October 25, 2015, recorded in other long-term liabilities was $24.6 million, of which $16.0 million would impact the Company’s effective tax rate if recognized. The Company includes accrued interest and penalties related to uncertain tax positions in income tax expense, with losses of $1.0 million included in expense for fiscal year 2015. The amount of accrued interest and penalties at October 25, 2015, associated with unrecognized tax benefits was $3.2 million.

The Company is regularly audited by federal and state taxing authorities. The United States Internal Revenue Service (I.R.S.) is currently examining fiscal years 2013, 2014, and 2015. During the first quarter of fiscal year 2015, the Company entered into a voluntary program to work with the I.R.S. called Compliance Assurance Process (CAP). The objective of CAP is to contemporaneously work with the I.R.S. to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2015 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time.

The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2010. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, it is not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.

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Stock-Based Compensation

12 Months Ended

Oct. 25, 2015

Stock-Based Compensation

Stock-Based Compensation

NOTE L

Stock-Based Compensation

The Company issues stock options and nonvested shares as part of its stock incentive plans for employees and non-employee directors. The Company’s policy is to grant options with the exercise price equal to the market price of the common stock on the date of grant. Options typically vest over four years and expire ten years after the date of the grant. The Company recognizes stock-based compensation expense ratably over the shorter of the requisite service period or vesting period. The fair value of stock-based compensation granted to retirement-eligible individuals is expensed at the time of grant.

A reconciliation of the number of options outstanding and exercisable (in thousands) as of October 25, 2015, and changes during the fiscal year then ended, is as follows:

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Term	Value
Outstanding at October 26, 2014	17,402	$ 24.61
Granted	1,514	52.55
Exercised	1,716	18.61
Forfeited	1	18.71
Outstanding at October 25, 2015	17,199	$ 27.67	5.0 yrs	$ 699,294
Exercisable at October 25, 2015	12,899	$ 22.83	4.1 yrs	$ 586,844

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$    9.84	$    9.70	$    5.50
Intrinsic value of exercised options	$ 67,516	$ 74,972	$ 77,610

The fair value of each option award is calculated on the date of grant using the Black-Scholes valuation model utilizing the following weighted-average assumptions:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Risk-free interest rate	2.1%	2.5%	1.4%
Dividend yield	1.9%	1.8%	2.1%
Stock price volatility	19.0%	20.0%	20.0%
Expected option life	8 years	8 years	8 years

As part of the annual valuation process, the Company reassesses the appropriateness of the inputs used in the valuation models. The Company establishes the risk-free interest rate using stripped U.S. Treasury yields as of the grant date where the remaining term is approximately the expected life of the option. The dividend yield is set based on the dividend rate approved by the Company’s Board of Directors and the stock price on the grant date. The expected volatility assumption is set based primarily on historical volatility. As a reasonableness test, implied volatility from exchange traded options is also examined to validate the volatility range obtained from the historical analysis. The expected life assumption is set based on an analysis of past exercise behavior by option holders. In performing the valuations for option grants, the Company has not stratified option holders as exercise behavior has historically been consistent across all employee and non-employee director groups.

The Company’s nonvested shares granted on or before September 26, 2010, vest after five years or upon retirement. Nonvested shares granted between September 27, 2010, and July 27, 2014, vest after one year. Nonvested shares granted on or after July 28, 2014 vest on the earlier of the day before the Company’s next annual meeting date or one year. A reconciliation of the nonvested shares (in thousands) as of October 25, 2015 and changes during the fiscal year then ended, is as follows:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Nonvested at October 26, 2014	70	$ 33.58
Granted	37	51.74
Vested	70	33.58
Forfeited	–	–
Nonvested at October 25, 2015	37	$ 51.74

The weighted-average grant date fair value of nonvested shares granted, the total fair value (in thousands) of nonvested shares granted, and the fair value (in thousands) of shares that have vested during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$ 51.74	$ 44.12	$ 35.42
Fair value of nonvested shares granted	$ 1,920	$ 1,760	$ 1,600
Fair value of shares vested	$ 2,347	$ 2,085	$ 1,824

Stock-based compensation expense, along with the related income tax benefit, for each of the past three fiscal years is presented in the table below:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
Stock-based compensation expense recognized	$ 15,717	$ 14,393	$ 17,596
Income tax benefit recognized	(5,967)	(5,469)	(6,655)
After-tax stock-based compensation expense	$  9,750	$  8,924	$ 10,941

At October 25, 2015, there was $9.3 million of total unrecognized compensation expense from stock-based compensation arrangements granted under the plans. This compensation is expected to be recognized over a weighted-average period of approximately 2.6 years. During fiscal years 2015, 2014, and 2013, cash received from stock option exercises was $10.5 million, $10.5 million, and $30.2 million, respectively. The total tax benefit to be realized for tax deductions from these option exercises was $25.6 million, $28.4 million, and $29.4 million, respectively.

Shares issued for option exercises and nonvested shares may be either authorized but unissued shares, or shares of treasury stock acquired in the open market or otherwise. The number of shares available for future grants was 25.1 million at October 25, 2015, 26.6 million at October 26, 2014, and 27.9 million at October 27, 2013.

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Fair Value Measurements

12 Months Ended

Oct. 25, 2015

Fair Value Measurements

Fair Value Measurements

NOTE M

Fair Value Measurements

Pursuant to the provisions of ASC 820, the Company’s financial assets and liabilities carried at fair value on a recurring basis in the consolidated financial statements as of October 25, 2015, and October 26, 2014, and their level within the fair value hierarchy, are presented in the table below.

	Fair Value Measurements at October 25, 2015
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 25,	for Identical	Observable	Unobservable
(in thousands)	2015	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 347,239	$ 347,239	$          –	$  –
Other trading securities(2)	119,668	39,329	80,339	–
Commodity derivatives(3)	6,485	6,485	–	–
Total Assets at Fair Value	$ 473,392	$ 393,053	$ 80,339	$  –
Liabilities at Fair Value:
Deferred compensation(2)	$ 57,869	$ 25,272	$ 32,597	$  –
Total Liabilities at Fair Value	$ 57,869	$ 25,272	$ 32,597	$  –

	Fair Value Measurements at October 26, 2014
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 26,	for Identical	Observable	Unobservable
(in thousands)	2014	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 334,174	$ 334,174	$         –	$  –
Other trading securities(2)	117,249	39,120	78,129	–
Commodity derivatives(3)	3,461	3,461	–	–
Total Assets at Fair Value	$ 454,884	$ 376,755	$ 78,129	$  –
Liabilities at Fair Value:
Deferred compensation(2)	$ 54,809	$ 23,642	$ 31,167	$  –
Total Liabilities at Fair Value	$ 54,809	$ 23,642	$ 31,167	$  –

The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above:

⁽¹⁾ The Company’s cash equivalents consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. As these investments have a maturity date of three months or less, the carrying value approximates fair value.

⁽²⁾ The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio that supports the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue, and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates, and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2.

⁽³⁾ The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available and therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. 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 net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions).

The Company’s financial assets and liabilities also include accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value. The Company does not carry its long-term debt at fair value in its Consolidated Statements of Financial Position. Based on borrowing rates available to the Company for long-term financing with similar terms and average maturities, the fair value of long-term debt, utilizing discounted cash flows (Level 2), was $268.4 million as of October 25, 2015, and $273.8 million as of October 26, 2014.

In accordance with the provisions of ASC 820, the Company also measures certain nonfinancial assets and liabilities at fair value that are recognized or disclosed on a nonrecurring basis (e.g. goodwill, intangible assets, and property, plant and equipment). During the fourth quarter of fiscal year 2015, a $21.5 million goodwill impairment charge was recorded for the portion of DCB held for sale. The fair value of the net assets to be sold was determined using Level 2 inputs utilizing a market participant bid along with internal valuations of the business. See additional discussion regarding the Company’s assets held for sale in Note E. During fiscal years 2015, 2014, and 2013, there were no other material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

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Commitments and Contingencies

12 Months Ended

Oct. 25, 2015

Commitments and Contingencies

Commitments and Contingencies

NOTE N

Commitments and Contingencies

In order to ensure a steady supply of hogs and turkeys, and to keep the cost of products stable, the Company has entered into contracts with producers for the purchase of hogs and turkeys at formula-based prices over periods up to 10 years. The Company has also entered into grow-out contracts with independent farmers to raise turkeys for the Company for periods up to 25 years. Under these arrangements, the Company owns the livestock, feed, and other supplies while the independent farmers provide facilities and labor. The Company has also contracted for the purchase of corn, soybean meal, and other feed ingredients from independent suppliers for periods up to three years. Under these contracts, the Company is committed at October 25, 2015, to make purchases, assuming current price levels, as follows:

(in thousands)
2016	$ 1,427,178
2017	959,812
2018	688,677
2019	449,439
2020	326,233
Later Years	293,510
Total	$ 4,144,849

Purchases under these contracts for fiscal years 2015, 2014, and 2013 were $1.6 billion, $2.2 billion, and $2.0 billion, respectively.

The Company has noncancelable operating lease commitments on facilities and equipment at October 25, 2015, as follows:

(in thousands)
2016	$ 11,250
2017	6,041
2018	4,586
2019	3,545
2020	3,034
Later Years	6,738
Total	$ 35,194

The Company expensed $22.4 million, $21.1 million, and $21.6 million for rent in fiscal years 2015, 2014, and 2013, respectively.

The Company has commitments to expend approximately $254.3 million to complete construction in progress at various locations as of October 25, 2015.

The Company also has purchase obligations that are not reflected in the consolidated statements of financial position, representing open purchase orders and contracts related to the procurement of raw materials, supplies, and various services. As of October 25, 2015, commitments related to those purchase orders, and all known contracts exceeding $1.0 million, are shown below. The Company primarily purchases goods and services on an as-needed basis and therefore, amounts in the table represent only a portion of expected future cash expenditures.

(in thousands)
2016	$ 518,158
2017	28,212
2018	27,102
2019	2,794
2020	1,931
Later Years	8,866
Total	$ 587,063

The Company is involved on an ongoing basis in litigation arising in the ordinary course of business. In the opinion of management, the outcome of litigation currently pending will not materially affect the Company’s results of operations, financial condition, or liquidity.

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Earnings Per Share Data

12 Months Ended

Oct. 25, 2015

Earnings Per Share Data

Earnings Per Share Data

NOTE O

Earnings Per Share Data

The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share for all years presented. A reconciliation of the shares used in the computation is as follows:

(in thousands)	2015	2014	2013
Basic weighted-average
shares outstanding	264,072	263,812	264,317
Dilutive potential
common shares	6,429	6,404	5,907
Diluted weighted-average
shares outstanding	270,501	270,216	270,224

For fiscal years 2015, 2014, and 2013, a total of 0.5 million, 0.4 million, and 0.4 million weighted-average outstanding stock options, respectively, were not included in the computation of dilutive potential common shares since their inclusion would have had an antidilutive effect on earnings per share.

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Segment Reporting

12 Months Ended

Oct. 25, 2015

Segment Reporting

Segment Reporting

NOTE P

Segment Reporting

The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other.

The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market. This segment also includes the results from the Company’s MegaMex joint venture.

The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers. This segment includes the results of Applegate and Affiliated Foods (Farmer John, Burke, and Dan’s Prize).

The Jennie-O Turkey Store segment consists primarily of the processing, marketing, and sale of branded and unbranded turkey products for retail, foodservice, and fresh product customers.

The Specialty Foods segment consists of the packaging and sale of private label shelf stable products, nutritional products, sugar, and condiments to industrial, retail, and foodservice customers including the results of Diamond Crystal Brands (DCB), CytoSport/Century Foods International, and Hormel Specialty Products (HSP). As of the end of fiscal year 2015, a portion of DCB is held for sale. The segment operating results for fiscal year 2015 include the related goodwill impairment charge of $21.5 million. See additional discussion regarding the Company’s assets held for sale in Note E.

The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures.

Intersegment sales are recorded at prices that approximate cost and are eliminated in the Consolidated Statements of Operations. The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the following table as net interest and investment expense (income), general corporate expense, and noncontrolling interest when reconciling to earnings before income taxes.

Sales and operating profits for each of the Company’s reportable segments and reconciliation to earnings before income taxes are set forth below. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other financial information shown below.

(in thousands)	2015		2014		2013
Net Sales (to unaffiliated
customers)
Grocery Products		$ 1,617,680		$ 1,558,265		$ 1,517,557
Refrigerated Foods		4,372,347		4,644,179		4,251,515
Jennie-O Turkey Store		1,635,776		1,672,452		1,601,868
Specialty Foods		1,103,359		907,120		932,533
International & Other		534,701		534,240		448,181
Total		$ 9,263,863		$ 9,316,256		$ 8,751,654
Intersegment Sales
Grocery Products		$               –		$              –		$              –
Refrigerated Foods		13,058		23,163		17,359
Jennie-O Turkey Store		128,195		144,137		123,420
Specialty Foods		64		122		108
International & Other		–		–		–
Total		141,317		167,422		140,887
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$               –		$              –		$              –
Segment Net Sales
Grocery Products		$ 1,617,680		$ 1,558,265		$ 1,517,557
Refrigerated Foods		4,385,405		4,667,342		4,268,874
Jennie-O Turkey Store		1,763,971		1,816,589		1,725,288
Specialty Foods		1,103,423		907,242		932,641
International & Other		534,701		534,240		448,181
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$ 9,263,863		$ 9,316,256		$ 8,751,654
Segment Operating Profit
Grocery Products		$    228,582		$   195,064		$   213,646
Refrigerated Foods		424,968		338,020		232,692
Jennie-O Turkey Store		276,217		272,362		222,117
Specialty Foods		93,258		71,514		88,873
International & Other		78,318		84,745		71,490
Total segment
operating profit		$ 1,101,343		$   961,705		$   828,818
Net interest and
investment expense
(income)		10,177		9,468		7,482
General corporate
expense		35,199		33,434		26,694
Noncontrolling interest		1,176		3,349		3,865
Earnings Before
Income Taxes		$ 1,057,143		$   922,152		$   798,507

(in thousands)	2015		2014		2013
Assets
Grocery Products		$ 1,214,988		$ 1,249,631		$ 1,237,405
Refrigerated Foods		1,973,424		1,215,694		1,218,418
Jennie-O Turkey Store		811,693		857,697		819,343
Specialty Foods		988,455		1,013,420		469,599
International & Other		446,164		406,249		361,038
Corporate		705,107		712,928		810,077
Total		$ 6,139,831		$ 5,455,619		$ 4,915,880
Additions to Property,
Plant and Equipment
Grocery Products		$     18,104		$     31,741		$     10,100
Refrigerated Foods		54,074		61,183		58,523
Jennie-O Turkey Store		32,250		25,761		22,863
Specialty Foods		5,309		3,266		3,606
International & Other		18,576		4,896		2,973
Corporate		15,750		32,291		8,697
Total		$   144,063		$   159,138		$   106,762
Depreciation and
Amortization
Grocery Products		$     26,972		$     25,883		$     22,912
Refrigerated Foods		53,325		57,709		57,879
Jennie-O Turkey Store		28,262		27,091		26,921
Specialty Foods		11,075		8,999		9,232
International & Other		3,372		3,541		1,906
Corporate		10,428		6,821		6,000
Total		$   133,434		$   130,044		$   124,850

The Company’s products primarily consist of meat and other food products. 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. The percentages of total revenues contributed by classes of similar products for the last three fiscal years are as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Perishable	53.0%	54.5%	53.3%
Poultry	18.6	18.4	18.8
Shelf-stable	18.4	19.0	19.0
Miscellaneous	10.0	8.1	8.9
	100.0%	100.0%	100.0%

Revenues from external customers are classified as domestic or foreign based on the destination where title passes. No individual foreign country is material to the consolidated results. Additionally, the Company’s long-lived assets located

in foreign countries are not significant. Total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years are as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
United States	$ 8,721,722	$ 8,708,042	$ 8,193,730
Foreign	542,141	608,214	557,924
	$ 9,263,863	$ 9,316,256	$ 8,751,654

In fiscal 2015, sales to Wal-Mart Stores, Inc. (Wal-Mart) represented $1.43 billion or 13.9 percent of the Company’s consolidated revenues (measured as gross sales less returns and allowances). In fiscal 2014, sales to Wal-Mart represented $1.43 billion or 14.1 percent of the Company’s consolidated revenues. Wal-Mart is a customer for all five segments of the Company.

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Quarterly Results of Operations (Unaudited)

12 Months Ended

Oct. 25, 2015

Quarterly Results of Operations (Unaudited)

Quarterly Results of Operations (Unaudited)

NOTE Q

Quarterly Results of Operations (Unaudited)

The following tabulations reflect the unaudited quarterly results of operations for the years ended October 25, 2015, and October 26, 2014.

				Net Earnings
				Attributable to	Basic	Diluted
		Gross	Net	Hormel Foods	Earnings	Earnings
(in thousands, except per share data)	Net Sales	Profit	Earnings	Corporation(1)	Per Share	Per Share
2015
First quarter	$ 2,395,073	$ 444,605	$ 172,430	$ 171,718	$ 0.65	$ 0.64
Second quarter	2,279,345	459,556	180,435	180,201	0.68	0.67
Third quarter	2,188,587	409,390	146,956	146,938	0.56	0.54
Fourth quarter	2,400,858	495,030	187,443	187,231	0.71	0.69
2014
First quarter	$ 2,242,672	$ 398,642	$ 154,458	$ 153,348	$ 0.58	$ 0.57
Second quarter	2,244,866	378,758	140,706	140,090	0.53	0.52
Third quarter	2,284,947	363,999	139,014	137,975	0.52	0.51
Fourth quarter	2,543,771	423,584	171,848	171,264	0.65	0.63

⁽¹⁾ Excludes net earnings attributable to the Company’s noncontrolling interests.

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

12 Months Ended

Oct. 25, 2015

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

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.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Oct. 25, 2015

Summary of Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation: The consolidated financial statements include the accounts of Hormel Foods Corporation (the Company) and all of its majority-owned subsidiaries after elimination of intercompany accounts, transactions, and profits.

Use of Estimates

Use of Estimates: 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.

Fiscal Year

Fiscal Year: The Company’s fiscal year ends on the last Sunday in October. Fiscal years 2015, 2014, and 2013 consisted of 52 weeks. Fiscal year 2016 will consist of 53 weeks.

Subsequent Event

Subsequent Event: On November 25, 2015, subsequent to the end of the fiscal year, the Company announced that its Board of Directors authorized a two-for-one split of the Company’s common stock. Stockholder approval of the stock split is required during the Company’s Annual Meeting to be held on January 26, 2016.

Cash and Cash Equivalents

Cash and Cash Equivalents: The Company considers all investments with an original maturity of three months or less on their acquisition date to be cash equivalents. The Company’s cash equivalents as of October 25, 2015, and October 26, 2014, consisted primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts.

Fair Value Measurements

Fair Value Measurements: Pursuant to the provisions of Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (ASC 820), the Company measures certain assets and liabilities at fair value or discloses the fair value of certain assets and liabilities recorded at cost in the consolidated financial statements. Fair value is calculated as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). ASC 820 establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The Company classifies assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. The three levels are defined as follows:

Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.

Level 3: Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

See additional discussion regarding the Company’s fair value measurements in Notes G, H, and M.

Investments

Investments: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans, which is included in other assets on the Consolidated Statements of Financial Position. The securities held by the trust are classified as trading securities and consist mainly of fixed return investments. Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings. Securities held by the trust generated gains of $2.4 million, $2.9 million, and $4.6 million for fiscal years 2015, 2014, and 2013, respectively.

Inventories

Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally under the average cost method. Adjustments to the Company’s lower of cost or market inventory reserve are reflected in cost of products sold in the Consolidated Statements of Operations.

Property, Plant and Equipment

Property, Plant and Equipment: Property, plant and equipment are stated at cost. The Company uses the straight-line method in computing depreciation. The annual provisions for depreciation have been computed principally using the following ranges of asset lives: buildings 20 to 40 years, machinery and equipment 5 to 10 years.

Internal-use software development and implementation costs are expensed until the Company has determined that the software will result in probable future economic benefits, and management has committed to funding the project. Thereafter, all material development and implementation costs, and purchased software costs, are capitalized and amortized using the straight-line method over the remaining estimated useful lives.

Goodwill and Other Indefinite-Lived Intangibles

Goodwill and Other Indefinite-Lived Intangibles: Indefinite-lived intangible assets are originally recorded at their estimated fair values at date of acquisition and the residual of the purchase price is recorded to goodwill. Goodwill and other indefinite-lived intangible assets are allocated to reporting units that will receive the related sales and income. Goodwill and indefinite-lived intangible assets are tested annually for impairment, or more frequently if impairment indicators arise.

In conducting the annual impairment test for goodwill, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that the fair value of any reporting unit is less than its carrying amount. If the Company concludes this is the case, then a two-step quantitative test for goodwill impairment is performed for the appropriate reporting units. Otherwise, the Company concludes no impairment is indicated and does not perform the two-step test.

In conducting the initial qualitative assessment, the Company analyzes actual and projected growth trends for net sales, gross margin, and segment profit for each reporting unit, as well as historical performance versus plan and the results of prior quantitative tests performed. Additionally, the Company assesses critical areas that may impact its business, including macroeconomic conditions and the related impact, market related exposures, any plans to market all or a portion of their business, competitive changes, new or discontinued product lines, changes in key personnel, or any other potential risks to their projected financial results.

If performed, the quantitative goodwill impairment test is a two-step process performed at the reporting unit level. First, the fair value of each reporting unit is compared to its corresponding carrying value, including goodwill. The fair value of each reporting unit is estimated using discounted cash flow valuations (Level 3), which incorporate assumptions regarding future growth rates, terminal values, and discount rates. The estimates and assumptions used consider historical performance and are consistent with the assumptions used in determining future profit plans for each reporting unit, which are approved by the Company’s Board of Directors. If the first step results in the carrying value exceeding the fair value of any reporting unit, then a second step must be completed in order to determine the amount of goodwill impairment that should be recorded. In the second step, the implied fair value of the reporting unit’s goodwill is determined by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill in a manner similar to a purchase price allocation. The implied fair value of the goodwill that results from the application of this second step is then compared to the carrying amount of the goodwill and an impairment charge is recorded for the difference.

During fiscal years 2015, 2014, and 2013, as a result of the qualitative testing performed, no impairment charges were recorded other than for the Company’s assets held for sale in fiscal year 2015. See additional discussion regarding the Company’s assets held for sale in Note E.

In conducting the annual impairment test for its indefinite-lived intangible assets, the Company first performs a qualitative assessment to determine whether it is more likely than not (> 50% likelihood) that an indefinite-lived intangible asset is impaired. If the Company concludes that this is the case, then a quantitative test for impairment must be performed. Otherwise, the Company does not need to perform a quantitative test.

In conducting the initial qualitative assessment, the Company analyzes growth rates for historical and projected net sales and the results of prior quantitative tests performed. Additionally, each reporting unit assesses critical areas that may impact their intangible assets or the applicable royalty rates to determine if there are factors that could indicate impairment of the asset.

If performed, the quantitative impairment test compares the fair value and carrying value of the indefinite-lived intangible asset. The fair value of indefinite-lived intangible assets is primarily determined on the basis of estimated discounted value, using the relief from royalty method (Level 3), which incorporates assumptions regarding future sales projections and discount rates. If the carrying value exceeds fair value, the indefinite-lived intangible asset is considered impaired and an impairment charge is recorded for the difference. Even if not required, the Company periodically elects to perform the quantitative test in order to confirm the qualitative assessment.

Based on the qualitative assessment conducted in fiscal year 2015, performance of the quantitative test was not required for any of the Company’s indefinite-lived intangible assets. No impairment charges were recorded for indefinite-lived intangible assets for fiscal years 2015, 2014, or 2013.

Impairment of Long-lived and Definite-Lived Intangible Assets

Impairment of Long-lived Assets and Definite-Lived Intangible Assets: Definite-lived intangible assets are amortized over their estimated useful lives. The Company reviews long-lived assets and definite-lived intangible assets for impairment annually, or more frequently when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment indicators are present and the estimated future undiscounted cash flows are less than the carrying value of the assets and any related goodwill, the carrying value is reduced to the estimated fair value. No material write-downs were recorded in fiscal years 2015, 2014, or 2013.

Assets Held For Sale

Assets Held For Sale: The Company classifies assets as held for sale when management approves and commits to a formal plan of sale with the expectation the sale will be completed within one year. The net assets of the business held for sale are then recorded at the lower of their current carrying value or the fair market value, less costs to sell. See additional discussion regarding the Company’s assets held for sale in Note E.

Employee Benefit Plans

Employee Benefit Plans: The Company has elected to use the corridor approach to recognize expenses related to its defined benefit pension and post-retirement benefit plans. Under the corridor approach, actuarial gains or losses resulting from experience different from that assumed and from changes in assumptions are deferred and amortized over future periods. For the defined benefit pension plans, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the greater of the projected benefit obligation or the fair value of plan assets at the beginning of the year. For the post-retirement plan, the unrecognized gains and losses are amortized when the net gain or loss exceeds 10.0% of the accumulated pension benefit obligation at the beginning of the year. For plans with active employees, net gains or losses in excess of the corridor are amortized over the average remaining service period of participating employees expected to receive benefits under those plans. For plans with only retiree participants, net gains or losses in excess of the corridor are amortized over the average remaining life of the retirees receiving benefits under those plans.

Contingent Liabilities

Contingent Liabilities: The Company may be subject to investigations, legal proceedings, or claims related to the on-going operation of its business, including claims both by and against the Company. 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. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. Where the Company is able to reasonably estimate a range of potential losses, the Company records the amount within that range that constitutes the Company’s best estimate. The Company also discloses the nature of and range of loss for claims against the Company when losses are reasonably possible and material.

Foreign Currency Translation

Foreign Currency Translation: Assets and liabilities denominated in foreign currency are translated at the current exchange rate as of the statement of financial position date, and amounts in the statement of operations are translated at the average monthly exchange rate. Translation adjustments resulting from fluctuations in exchange rates are recorded as a component of accumulated other comprehensive loss in shareholders’ investment.

When calculating foreign currency translation, the Company deemed its foreign investments to be permanent in nature and has not provided for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars.

Derivatives and Hedging Activity

Derivatives and Hedging Activity: The Company uses commodity and currency positions to manage its exposure to price fluctuations in those markets. The contracts are recorded at fair value on the Consolidated Statements of Financial Position within other current assets or accounts payable. Additional information on hedging activities is presented in Note H.

Equity Method Investments

Equity Method Investments: The Company has a number of investments in joint ventures where its voting interests are in excess of 20 percent but not greater than 50 percent and for which there are no other indicators of control. The Company accounts for such investments under the equity method of accounting, and its underlying share of each investee’s equity is reported in the Consolidated Statements of Financial Position as part of investments in and receivables from affiliates.

The Company regularly monitors and evaluates the fair value of our equity investments. If events and circumstances indicate that a decline in the fair value of these assets has occurred and is other than temporary, the Company will record a charge in equity in earnings of affiliates in the Consolidated Statements of Operations. The Company’s equity investments do not have a readily determinable fair value as none of them are publicly traded. The fair values of the Company’s private equity investments are determined by discounting the estimated future cash flows of each entity. These cash flow estimates include assumptions on growth rates and future currency exchange rates (Level 3). Excluding charges related to the exit from international joint venture businesses in fiscal year 2015, there were no other charges on any of the Company’s equity investments in fiscal years 2015, 2014, or 2013.

See additional discussion regarding the Company’s equity method investments in Note I.

Revenue Recognition

Revenue Recognition: The Company recognizes sales when title passes upon delivery of its products to customers, net of applicable provisions for discounts, returns, and allowances. Products are delivered upon receipt of customer purchase orders with acceptable terms, including price and collectability that is reasonably assured.

The Company offers various sales incentives to customers and consumers. Incentives that are offered off-invoice include prompt pay allowances, will call allowances, spoilage allowances, and temporary price reductions. These incentives are recognized as reductions of revenue at the time title passes. Coupons are used as an incentive for consumers to purchase various products. The coupons reduce revenues at the time they are offered, based on estimated redemption rates. Promotional contracts are performed by customers to promote the Company’s products to consumers. These incentives reduce revenues at the time of performance through direct payments and accrued promotional funds. Accrued promotional funds are unpaid liabilities for promotional contracts in process or completed at the end of a quarter or fiscal year. Promotional contract accruals are based on a review of the unpaid outstanding contracts on which performance has taken place. Estimates used to determine the revenue reduction include the level of customer performance and the historical spend rate versus contracted rates.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts: The Company estimates the allowance for doubtful accounts based on a combination of factors, including the age of its accounts receivable balances, customer history, collection experience, and current market factors. Additionally, a specific reserve may be established if the Company becomes aware of a customer’s inability to meet its financial obligations.

Advertising Expenses

Advertising Expenses: Advertising costs are expensed when incurred. Advertising expenses include all media advertising but exclude the costs associated with samples, demonstrations, and market research. Advertising costs for fiscal years 2015, 2014, and 2013 were $145.3 million, $114.4 million, and $89.9 million, respectively.

Shipping and Handling Costs

Shipping and Handling Costs: The Company’s shipping and handling expenses are included in cost of products sold.

Research and Development Expenses

Research and Development Expenses: Research and development costs are expensed as incurred and are included in selling, general and administrative expenses. Research and development expenses incurred for fiscal years 2015, 2014, and 2013 were $32.0 million, $29.9 million, and $29.9 million, respectively.Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

In accordance with ASC 740, Income Taxes, the Company recognizes a tax position in its financial statements when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. That position is then measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Income Taxes

Income Taxes: The Company records income taxes in accordance with the liability method of accounting. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax law. Changes in enacted tax rates are reflected in the tax provision as they occur.

Employee Stock Options

Employee Stock Options: The Company records stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation. For options subject to graded vesting, the Company recognizes stock-based compensation expense ratably over the shorter of the vesting period or requisite service period. Stock-based compensation expense for grants made to retirement-eligible employees is recognized on the date of grant.

Share Repurchases

Share Repurchases: During fiscal year 2013, 1.2 million shares were purchased as part of a 2010 program at an average price of $39.67, fully depleting that program.

On January 29, 2013, the Company’s Board of Directors authorized the repurchase 10.0 million shares of its common stock with no expiration date. During fiscal year 2015, 0.4 million shares were repurchased from The Hormel Foundation under this authorization at the average closing price for the three days of September 15, September 16, and September 17, 2015, or $62.32. During fiscal year 2014, 1.3 million shares were purchased at an average price of $46.87 and 0.6 million shares were purchased during fiscal year 2013 at an average price of $42.54.

Supplemental Cash Flow Information

Supplemental Cash Flow Information: Non-cash investment activities presented on the Consolidated Statements of Cash Flows generally consist of unrealized gains or losses on the Company’s rabbi trust. The noted investments are included in other assets or short-term marketable securities on the Consolidated Statements of Financial Position. Changes in the value of these investments are included in the Company’s net earnings and are presented in the Consolidated Statements of Operations as either interest and investment income or interest expense, as appropriate.

On March 16, 2015, the Company purchased the remaining 19.29% ownership interest in its Shanghai Hormel Foods Corporation joint venture from the minority partner Shanghai Shangshi Meat Products Co. Ltd., resulting in 100.0% ownership of that business. The interest was purchased with $11.7 million in cash, along with the transfer of land use rights and buildings held by the joint venture. The difference between the fair value of the consideration given and the reduction in the noncontrolling interest was recognized as an $11.9 million reduction in additional paid-in capital attributable to the Company. The Company will continue to manufacture at the Shanghai facility by leasing the land use rights and buildings from the previous minority partner.

Accounting Changes and Recent Accounting Pronouncements

Accounting Changes and Recent Accounting Pronouncements: In January 2014, the FASB updated the guidance within ASC 323, Investments-Equity Method and Joint Ventures. The update provides guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to make an accounting policy election to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The updated guidance is to be applied retrospectively and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2016, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2014, the Financial Accounting Standards Board (FASB) updated the guidance within ASC 205, Presentation of Financial Statements and ASC 360, Property, Plant, and Equipment. This update raises the threshold for a disposal to qualify as a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. The standard update only requires disposals of components of an entity (or groups of components) that represent a strategic shift that has or will have a major effect on the reporting entity’s operations are reported in the financial statements as discontinued operations. The standard also requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The updated guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014, with early adoption permitted. The Company early adopted the new provisions of this accounting standard in the fourth quarter of fiscal year 2015, and determined it did not have any transactions qualifying as a discontinued operation under the new guidance.

In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers. This topic converges the guidance within U.S. generally accepted accounting principles and international financial reporting standards and supersedes ASC 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. On July 8, 2015, the FASB approved a one-year deferral of the effective date. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and early adoption is not permitted. Accordingly, the Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2019, and adoption is not expected to have a material impact on the consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 835, Interest. The update provides guidance on simplifying the presentation of debt issuance cost. The amendments require debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

In April 2015, the FASB updated the guidance within ASC 715, Compensation – Retirement Benefits. The update provides guidance on simplifying the measurement date for defined benefit plan assets and obligations. The amendments allow employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year ends. The new guidance is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the new provisions of this accounting standard at the beginning of fiscal year 2017, and adoption is not expected to have a material impact on its consolidated financial statements.

In May 2015, the FASB updated the guidance within ASC 820, Fair Value Measurements and Disclosures. The update provides guidance on the disclosures for investments in certain entities that calculate net asset value (NAV) per share (or its equivalent). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the NAV per share (or its equivalent) as a practical expedient. The updated guidance is to be applied retrospectively and is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted. The Company expects to adopt the provisions of this new accounting standard at the beginning of fiscal year 2017, and is currently assessing the impact on its consolidated financial statements.

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Acquisitions (Tables)

12 Months Ended

Oct. 25, 2015

Applegate

Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill

(in thousands)
Accounts receivable	$ 25,574
Inventory	22,089
Prepaid and other assets	2,916
Property, plant and equipment	3,463
Intangible assets	275,900
Goodwill	488,476
Current liabilities	(23,420)
Deferred taxes	(20,935)
Purchase price	$ 774,063

CytoSport Holdings

Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill

(in thousands)
Accounts receivable	$ 30,580
Inventory	62,246
Prepaid and other assets	3,133
Property, plant and equipment	8,119
Intangible assets	188,500
Goodwill	270,925
Current liabilities	(52,811)
Long-term liabilities	(30,140)
Deferred taxes	(59,700)
Purchase price	$ 420,852

SKIPPY

Schedule of allocation of the purchase price to the acquired assets, liabilities, and goodwill

(in thousands)
Inventory	$ 49,156
Property, plant and equipment	48,461
Intangible assets	264,500
Goodwill	303,597
Current liabilities	(299)
Purchase price	$ 665,415

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Inventories (Tables)

12 Months Ended

Oct. 25, 2015

Inventories

Principal components of inventories

	October 25,		October 26,
(in thousands)	2015		2014
Finished products	$ 553,298		$    604,946
Raw materials and work-in-process		239,174		274,105
Materials and supplies		200,793		175,501
Total	$ 993,265		$ 1,054,552

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Oct. 25, 2015

Goodwill and Intangible Assets

Schedule of changes in the carrying amount of goodwill

	Grocery	Refrigerated		Specialty	International
(in thousands)	Products	Foods	JOTS	Foods	& Other	Total
Balance as of October 27, 2013	$ 322,942	$   96,643	$ 203,214	$ 207,028	$ 104,645	$    934,472
Goodwill acquired	–	–	–	263,829	28,105	291,934
Balance as of October 26, 2014	$ 322,942	$   96,643	$ 203,214	$ 470,857	$ 132,750	$ 1,226,406
Goodwill acquired	–	488,476	–	–	–	488,476
Purchase Adjustments	–	–	–	7,096	–	7,096
Impairment charge	–	–	–	(21,537)	–	(21,537)
Product line Disposal	(521)	(435)	–	–	(1)	(957)
Balance as of October 25, 2015	$ 322,421	$ 584,684	$ 203,214	$ 456,416	$ 132,749	$ 1,699,484

Schedule of gross carrying amount and accumulated amortization for definite-lived intangible assets

	October 25, 2015			October 26, 2014
	Gross		Weighted-	Gross		Weighted-
	Carrying	Accumulated	Avg Life	Carrying	Accumulated	Avg Life
(in thousands)	Amount	Amortization	(in Years)	Amount	Amortization	(in Years)
Customer lists/relationships	$ 83,190	$ (13,939)	12.1	$   67,540	$ (19,336)	11.0
Formulas and recipes	7,490	(6,865)	7.2	17,854	(15,955)	8.8
Proprietary software and technology	7,010	(6,901)	8.1	14,820	(13,542)	10.2
Other intangibles	2,370	(1,195)	7.5	4,746	(4,503)	7.4
Total	$ 100,060	$ (28,900)	11.3	$ 104,960	$ (53,336)	10.4

Schedule of amortization expense

(in millions)
2015	$ 8.1
2014	9.4
2013	9.5

Schedule of estimated annual amortization expense

Estimated annual amortization expense for the five fiscal years after October 25, 2015, is as follows:

(in millions)
2016	$ 8.2
2017	7.6
2018	7.0
2019	7.0
2020	6.8

Schedule of carrying amounts for indefinite-lived intangible assets

	October 25,	October 26,
(in thousands)	2015	2014
Brand/tradename/trademarks	$ 748,075	$ 495,282
Other intangibles	7,984	7,984
Total	$ 756,059	$ 503,266

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Assets Held For Sale (Tables)

12 Months Ended

Oct. 25, 2015

Assets Held For Sale

Schedule of assets and liabilities held for sale

Amounts classified as assets and liabilities held for sale at October 25, 2015 are presented on the Company’s Consolidated Statement of Financial Position within their respective accounts, and include the following:

Assets held for sale (in thousands)
Current assets	$  26,057
Goodwill	51,811
Intangibles	5,389
Property, plant and equipment	31,678
Total assets held for sale	$ 114,935

Liabilities held for sale (in thousands)
Total current liabilities held for sale	$    3,191

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Long-term Debt and Other Borrowing Arrangements (Tables)

12 Months Ended

Oct. 25, 2015

Long-term Debt and Other Borrowing Arrangements

Schedule of long-term debt

	October 25,	October 26,
(in thousands)	2015	2014
Senior unsecured notes, with interest at 4.125%, interest due semi-annually through April 2021 maturity date	$ 250,000	$ 250,000
Less current maturities	–	–
Total	$ 250,000	$ 250,000

Schedule of interest paid

(in millions)
2015	$ 13.1
2014	12.7
2013	12.5

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Pension and Other Post-retirement Benefits (Tables)

12 Months Ended

Oct. 25, 2015

Pension and Other Post-retirement Benefits

Schedule of net periodic cost of defined benefit plans

	Pension Benefits			Post-retirement Benefits
(in thousands)	2015	2014	2013	2015	2014	2013
Service cost	$ 28,795	$ 25,935	$ 30,979	$   1,795	$   1,963		$   2,494
Interest cost	52,522	53,030	47,688	13,479	15,279		14,910
Expected return on plan assets	(88,792)	(83,702)	(73,144)	–	–		–
Amortization of prior service cost	(4,878)	(4,971)	(5,079)	(1,337)	(1,337)		(1,332)
Recognized actuarial loss (gain)	18,476	12,697	34,019	(2)	(2)		7,719
Curtailment charge	–	–	6	–	–		–
Net periodic cost	$  6,123	$   2,989	$ 34,469	$ 13,935	$ 15,903		$ 23,791

Schedule of amounts that have not been recognized in net periodic pension cost and are included in accumulated other comprehensive loss

(in thousands)	Pension Benefits				Post-retirement Benefits
	2015		2014		2015		2014
Unrecognized prior service credit		$    32,490		$    37,368		$    2,844		$    4,180
Unrecognized actuarial losses		(360,949)		(343,398)		(40,590)		(30,250)

Schedule of amounts that are expected to be recognized in net periodic benefit expense in fiscal year 2016

The following amounts are expected to be recognized in net periodic benefit expense in fiscal year 2016:

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
Amortized prior service credit	$ (4,878)	$ (1,337)
Recognized actuarial losses	18,693	1,303

Schedule of reconciliation of the beginning and ending balances of the benefit obligation, the fair value of plan assets, and the funded status of the plans

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in benefit obligation:
Benefit obligation at beginning of year	$ 1,235,769	$ 1,098,060	$ 330,841	$ 334,447
Service cost	28,795	25,935	1,795	1,963
Interest cost	52,522	53,030	13,479	15,279
Actuarial (gain) loss	(16,872)	108,047	10,339	927
Employee contributions	–	–	2,798	2,715
Medicare Part D subsidy	–	–	1,313	1,941
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Benefit obligation at end of year	$ 1,248,209	$ 1,235,769	$ 334,544	$ 330,841

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Change in plan assets:
Fair value of plan assets at beginning of year	$ 1,168,765	$ 1,087,315	$             –	$             –
Actual return on plan assets	35,870	101,025	–	–
Employee contributions	–	–	2,798	2,715
Employer contributions	27,147	29,728	23,223	23,716
Benefits paid	(52,005)	(49,303)	(26,021)	(26,431)
Fair value of plan assets at end of year	$ 1,179,777	$ 1,168,765	$             –	$              –
Funded status at end of year	$ (68,432)	$    (67,004)	$ (334,544)	$ (330,841)

Schedule of amounts recognized in the Consolidated Statements of Financial Position

	Pension Benefits		Post-retirement Benefits
(in thousands)	2015	2014	2015	2014
Pension assets	$ 132,861	$  130,284	$             –	$             –
Employee related expenses	(4,931)	(4,532)	(21,645)	(20,904)
Pension and post-retirement benefits	(196,362)	(192,756)	(312,899)	(309,937)
Net amount recognized	$ (68,432)	$  (67,004)	$ (334,544)	$ (330,841)

Schedule of information for pension plans with accumulated benefit obligations in excess of plan assets

(in thousands)	2015	2014
Projected benefit obligation	$ 201,293	$ 197,288
Accumulated benefit obligation	193,913	186,085
Fair value of plan assets	–	–

Schedule of weighted-average assumptions used to determine benefit obligations and net periodic benefit costs

Weighted-average assumptions used to determine benefit obligations are as follows:

	2015	2014
Discount rate	4.50%	4.31%
Rate of future compensation increase
(for plans that base benefits on final compensation level)	3.92%	3.94%

Weighted-average assumptions used to determine net periodic benefit costs are as follows:

	2015	2014	2013
Discount rate	4.31%	4.89%	4.05%
Rate of future compensation increase (for plans that base benefits on final compensation level)	3.94%	3.91%	3.97%
Expected long-term return on plan assets	7.70%	7.80%	7.90%

Schedule of effects of one-percentage-point change in assumed discount rate, expected long-term rate of return on plan assets, rate of future compensation increase, and health care cost trend rate

	1-Percentage-Point
	Expense		Benefit Obligation
(in thousands)	Increase	Decrease	Increase	Decrease
Pension Benefits:
Discount rate	$ (12,892)	$ 16,810	$ (157,394)	$ 197,869
Expected long-term rate of return on plan assets	(11,629)	11,629	–	–
Rate of future compensation increase	461	(442)	2,504	(2,417)
Post-retirement Benefits:
Discount rate	$       (64)	$  5,035	$  (33,462)	$  40,619
Health care cost trend rate	1,749	(1,451)	38,194	(31,112)

Schedule of actual and target weighted-average asset allocations for pension plan assets

	2015		2014
Asset Category	Actual	Target Range	Actual	Target Range
Large Capitalization Equity	38.8%	15-35%	33.0%	15-35%
Small Capitalization Equity	5.4%	5-15%	6.0%	5-15%
International Equity	14.0%	15-25%	20.8%	15-25%
Private Equity	6.1%	0-15%	5.0%	0-15%
Total Equity Securities	64.3%	50-75%	64.8%	55-75%
Fixed Income	34.3%	25-45%	34.0%	25-45%
Real Estate	–	0-10%	–	–
Cash and Cash Equivalents	1.4%	–	1.2%	–

Schedule of benefits expected to be paid over the next ten fiscal years

		Post-
	Pension	retirement
(in thousands)	Benefits	Benefits
2016	$ 53,515	$ 22,113
2017	55,661	22,441
2018	58,010	22,612
2019	60,934	22,711
2020	63,916	22,621
2021 – 2025	361,518	108,832

Schedule of fair values of the defined benefit pension plan investments

	Fair Value Measurements at October 25, 2015
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     16,551		$  16,551		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   300,735		$ 175,206		$ 125,529		$         –
Foreign	36,637		36,637		–		–
World	120,206		–		120,206		–
Total Large Capitalization Equity		$   457,578		$ 211,843		$ 245,735		$         –
Small Capitalization Equity(3)
Domestic		$     55,513		$  55,513		$           –		$         –
Foreign	8,246		8,246		–		–
Total Small Capitalization Equity		$     63,759		$  63,759		$           –		$         –
International Equity(4)
Mutual fund		$   101,062		$           –		$ 101,062		$         –
Collective trust	63,861		–		63,861		–
Total International Equity		$   164,923		$           –		$ 164,923		$         –
Private Equity(5)
Domestic		$     54,748		$           –		$           –		$ 54,748
International	17,027		–		–		17,027
Total Private Equity		$     71,775		$           –		$           –		$ 71,775
Total Equity		$   758,035		$ 275,602		$ 410,658		$ 71,775
Fixed Income(6)
US government issues		$   130,456		$ 104,460		$  25,996		$         –
Municipal issues	20,211		–		20,211		–
Corporate issues – domestic	210,035		–		210,035		–
Corporate issues – foreign	44,489		–		44,489		–
Total Fixed Income		$   405,191		$ 104,460		$ 300,731		$         –
Total Investments at Fair Value		$ 1,179,777		$ 396,613		$ 711,389		$ 71,775

	Fair Value Measurements at October 26, 2014
			Quoted Prices
			in Active		Significant Other		Significant
			Markets for		Observable		Unobservable
	Total		Identical Assets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2		(Level 3)
Investments at Fair Value:
Cash Equivalents(1)		$     14,342		$  14,342		$           –		$         –
Large Capitalization Equity(2)
Domestic		$   351,195		$ 196,977		$ 154,218		$         –
Foreign	34,126		34,126		–		–
Total Large Capitalization Equity		$   385,321		$ 231,103		$ 154,218		$         –
Small Capitalization Equity(3)
Domestic		$     62,521		$  62,521		$           –		$         –
Foreign	8,031		8,031		–		–
Total Small Capitalization Equity		$     70,552		$  70,552		$           –		$         –
International Equity(4)
Mutual fund		$     69,393		$           –		$  69,393		$         –
Collective trust	173,008		–		173,008		–
Total International Equity		$   242,401		$           –		$ 242,401		$         –
Private Equity(5)
Domestic		$     43,340		$           –		$           –		$ 43,340
International	15,383		–		–		15,383
Total Private Equity		$     58,723		$           –		$           –		$ 58,723
Total Equity		$   756,997		$ 301,655		$ 396,619		$ 58,723
Fixed Income(6)
US government issues		$   126,894		$  96,199		$  30,695		$         –
Municipal issues	20,232		–		20,232		–
Corporate issues – domestic	212,299		–		212,299		–
Corporate issues – foreign	38,001		–		38,001		–
Total Fixed Income		$   397,426		$  96,199		$ 301,227		$         –
Total Investments at Fair Value		$ 1,168,765		$ 412,196		$ 697,846		$ 58,723

The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy:

⁽¹⁾ Cash Equivalents: These Level 1 investments consist primarily of money market mutual funds that are highly liquid and traded in active markets.

⁽²⁾ Large Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investment includes mutual funds consisting of a mix of U.S. and foreign common stocks that are valued at the publicly available net asset value (NAV) of shares held by the pension plans at year end.

⁽³⁾ Small Capitalization Equity: The Level 1 investments include a mix of predominately U.S. common stocks and foreign common stocks, which are valued at the closing price reported on the active market in which the individual securities are traded.

⁽⁴⁾ International Equity: These Level 2 investments include a mix of collective investment funds and mutual funds. The mutual funds are valued at the publicly available NAV of shares held by the pension plans at year end. The value of the collective investment funds is based on the fair value of the underlying investments and the NAV can be calculated for these funds.

⁽⁵⁾ Private Equity: These Level 3 investments consist of various collective investment funds, which are managed by a third party, that invest in a well-diversified portfolio of equity investments from top performing, high quality firms that focus on U.S. and foreign small to mid-markets, venture capitalists, and entrepreneurs with a concentration in areas of innovation. Investment strategies include buyouts, growth capital, buildups, and distressed, as well as early stages of company development mainly in the U.S. The fair value of the units for these investments is based on the fair value of the underlying investments, and the NAV can be calculated for these funds.

⁽⁶⁾ Fixed Income: The Level 1 investments include U.S. Treasury bonds and notes, which are valued at the closing price reported on the active market in which the individual securities are traded. The Level 2 investments consist principally of U.S. government securities, which are valued daily using institutional bond quote sources and mortgage-backed securities pricing sources; municipal, domestic, and foreign securities, which are valued daily using institutional bond quote sources; and mutual funds invested in long-duration corporate bonds that are valued at the publicly available NAV of shares held by the pension plans at year-end.

Schedule of reconciliation of the beginning and ending balance of the investments measured at fair value using significant unobservable inputs (Level 3)

(in thousands)	2015	2014
Beginning Balance	$ 58,723	$ 45,783
Purchases, issuances, and settlements (net)	(3,574)	3,050
Unrealized gains	7,741	4,260
Realized gains	7,623	4,479
Interest and dividend income	1,262	1,151
Ending Balance	$ 71,775	$ 58,723

Schedule of unfunded private equity commitment balance for each investment category

(in thousands)	2015	2014
Domestic equity	$  9,264	$ 17,659
International equity	9,514	12,640
Unfunded commitment balance	$ 18,778	$ 30,299

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Derivatives and Hedging (Tables)

12 Months Ended

Oct. 25, 2015

Derivatives and hedging

Schedule of fair values of derivative instruments

		Fair Value(1)
	Location on Consolidated	October 25,	October 26,
(in thousands)	Statements of Financial Position	2015	2014
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$ 305	$ (7,124)
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	248	(938)
Total Asset Derivatives		$ 553	$ (8,062)

⁽¹⁾ Amounts represent the gross fair value of 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 derivative in the Consolidated Statement of Financial Position. See Note M for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

Schedule of gains or losses (before tax) related to derivative instruments

	Gain/(Loss) Recognized			Gain/(Loss) Reclassified		Gain/(Loss) Recognized
	in AOCL			from AOCL into Earnings		in Earnings
	(Effective Portion)(1)			(Effective Portion)(1)		(Ineffective Portion)(2) (4)
	Fiscal Year Ended			Fiscal Year Ended		Fiscal Year Ended
	October 25,	October 26,	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Cash Flow Hedges:	2015	2014	Statements of Operations	2015	2014	2015	2014
Commodity contracts	$ 3,409	$ (16,701)	Cost of products sold	$ (12,369)	$ (10,925)	$ (6,127)	$ 193

		Gain/(Loss)		Gain/(Loss)
		Recognized in Earnings		Recognized in Earnings
		(Effective Portion)(3)		(Ineffective Portion)(2) (5)
		Fiscal Year Ended		Fiscal Year Ended
	Location on Consolidated	October 25,	October 26,	October 25,	October 26,
Fair Value Hedges:	Statements of Operations	2015	2014	2015	2014
Commodity contracts	Cost of products sold	$ (4,297)	$ (21,608)	$ 2,547	$ 322

		Gain/(Loss)
		Recognized in Earnings
		Fiscal Year Ended
Derivatives Not	Location on Consolidated	October 25,	October 26,
Designated as Hedges:	Statements of Operations	2015	2014
Commodity contracts	Cost of products sold	$ (269)	$ (2,083)

⁽¹⁾ Amounts represent gains or losses in AOCL before tax. See Note J for the after tax impact of these gains or losses on net earnings.

⁽²⁾ There were no gains or losses excluded from the assessment of hedge effectiveness during the fiscal year. Fiscal year 2015 includes the mark-to-market impact on certain corn futures contracts which resulted from a temporary suspension of hedge accounting due to market volatility.

⁽³⁾ 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 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.

⁽⁴⁾ There were no gains or losses resulting from the discontinuance of cash flow hedges during the fiscal year.

⁽⁵⁾ 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.

Derivatives not designated as hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	2.6 million bushels	2.9 million bushels
Soybean meal	11,500 tons	–

Cash Flow Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	20.1 million bushels	18.3 million bushels

Fair Value Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	October 25, 2015	October 26, 2014
Corn	5.3 million bushels	8.0 million bushels
Lean hogs	0.4 million cwt	0.7 million cwt

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Investments In and Receivables from Affiliates (Tables)

12 Months Ended

Oct. 25, 2015

Investments In and Receivables from Affiliates

Schedule of investments in and receivables from affiliates

			October 25,	October 26,
(in thousands)	Segment	% Owned	2015	2014
MegaMex Foods, LLC	Grocery Products	50%	$ 200,110	$ 208,221
Foreign Joint Ventures	International & Other	Various (26 – 50%)	58,888	56,230
Total			$ 258,998	$ 264,451

Schedule of equity in earnings of affiliates

(in thousands)	Segment	2015		2014	2013
MegaMex Foods, LLC	Grocery Products	$ 26,849		$ 14,415	$ 17,261
Foreign Joint Ventures	International & Other	(2,962	)	3,170	3,252
Total		$ 23,887		$ 17,585	$ 20,513

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Oct. 25, 2015

Accumulated Other Comprehensive Loss

Schedule of components of accumulated other comprehensive loss

							Accumulated
	Foreign				Deferred		Other
	Currency		Pension &		Gain (Loss)		Comprehensive
(in thousands)	Translation		Other Benefits		– Hedging		Loss
Balance at October 28, 2012	$ 12,415		$ (345,465	)	$ 9,481		$ (323,569	)
Unrecognized gains (losses):
Gross	(3,024	)	273,408		(18,329	)	252,055
Tax effect	–		(102,846	)	6,898		(95,948	)
Reclassification into net earnings:
Gross	–		35,327	(1)	(5,871	)(2)	29,456
Tax effect	–		(13,425	)	2,217		(11,208	)
Net of tax amount	(3,024	)	192,464		(15,085	)	174,355
Balance at October 27, 2013	$ 9,391		$ (153,001	)	$ (5,604	)	$ (149,214	)
Unrecognized gains (losses):
Gross	(1,911	)	(91,684	)	(16,701	)	(110,296	)
Tax effect	–		34,737		6,305		41,042
Reclassification into net earnings:
Gross	–		6,387	(1)	10,925	(2)	17,312
Tax effect	–		(2,425	)	(4,119	)	(6,544	)
Net of tax amount	(1,911	)	(52,985	)	(3,590	)	(58,486	)
Balance at October 26, 2014	$ 7,480		$ (205,986	)	$ (9,194	)	$ (207,700	)
Unrecognized gains (losses):
Gross	(6,116	)	(46,389	)	3,409		(49,096	)
Tax effect	–		17,492		(1,285	)	16,207
Reclassification into net earnings:
Gross	–		12,259	(1)	12,369	(2)	24,628
Tax effect	–		(4,642	)	(4,670	)	(9,312	)
Net of tax amount	(6,116	)	(21,280	)	9,823		(17,573	)
Purchase of additional ownership of noncontrolling interest	(395	)	–		–		(395	)
Balance at October 25, 2015	$ 969		$ (227,266	)	$ 629		$ (225,668	)

⁽¹⁾ Included in computation of net periodic cost (see Note G for additional details).

⁽²⁾ Included in cost of products sold in the Consolidated Statements of Operations.

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Income Taxes (Tables)

12 Months Ended

Oct. 25, 2015

Income Taxes

Schedule of components of provision for income taxes

(in thousands)	2015	2014	2013
Current:
U.S. Federal	$ 299,557	$ 264,533	$ 231,359
State	39,817	34,034	30,671
Foreign	10,526	7,759	5,334
Total current	349,900	306,326	267,364
Deferred:
U.S. Federal	18,451	8,756	1,080
State	1,070	873	(194	)
Foreign	458	171	181
Total deferred	19,979	9,800	1,067
Total provision for income taxes	$ 369,879	$ 316,126	$ 268,431

Schedule of significant components of the deferred income tax liabilities and assets

	October 25,		October 26,
(in thousands)	2015		2014
Deferred tax liabilities:
Goodwill and intangible assets	$ (213,312	)	$ (168,167	)
Tax over book depreciation and basis differences	(94,496	)	(85,623	)
Other, net	(18,788	)	(30,252	)
Deferred tax assets:
Pension and post-retirement benefits	154,306		152,392
Employee compensation related liabilities	109,061		101,706
Marketing and promotional accruals	37,603		28,703
Other accruals not currently deductible	–		13,010
Other, net	48,432		51,082
Net deferred tax assets	$    22,806		$ 62,851

Schedule of reconciliation of the statutory federal income tax rate to the effective tax rate

	2015		2014		2013
U.S. statutory rate	35.0	%	35.0	%	35.0	%
State taxes on income, net of federal tax benefit	2.7		2.8		2.7
Domestic production activities deduction	(2.6	)	(2.7	)	(2.4	)
All other, net	(0.1	)	(0.8	)	(1.7	)
Effective tax rate	35.0	%	34.3	%	33.6	%

Schedule of changes in the unrecognized tax benefits, excluding interest and penalties

(in thousands)
Balance as of October 27, 2013	$ 20,085
Tax positions related to the current period:
Increases	4,693
Decreases	(670	)
Tax positions related to prior periods:
Increases	4,455
Decreases	(3,245	)
Settlements	(573	)
Decreases related to a lapse of applicable statute of limitations	(2,137	)
Balance as of October 26, 2014	$ 22,608
Tax positions related to the current period:
Increases	2,920
Decreases	–
Tax positions related to prior periods:
Increases	1,629
Decreases	(796	)
Settlements	(2,839	)
Decreases related to a lapse of applicable statute of limitations	(2,185	)
Balance as of October 25, 2015	$ 21,337

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Stock-Based Compensation (Tables)

12 Months Ended

Oct. 25, 2015

Stock-Based Compensation

Schedule of reconciliation of the number of options outstanding and exercisable

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Shares	Price	Term	Value
Outstanding at October 26, 2014	17,402	$ 24.61
Granted	1,514	52.55
Exercised	1,716	18.61
Forfeited	1	18.71
Outstanding at October 25, 2015	17,199	$ 27.67	5.0 yrs	$ 699,294
Exercisable at October 25, 2015	12,899	$ 22.83	4.1 yrs	$ 586,844

Schedule of weighted-average grant date fair value of stock options granted, and the total intrinsic value of options exercised

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$    9.84	$    9.70	$    5.50
Intrinsic value of exercised options	$ 67,516	$ 74,972	$ 77,610

Schedule of weighted-average assumptions used to calculate fair value of each option award

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Risk-free interest rate	2.1%	2.5%	1.4%
Dividend yield	1.9%	1.8%	2.1%
Stock price volatility	19.0%	20.0%	20.0%
Expected option life	8 years	8 years	8 years

Schedule of reconciliation of the nonvested shares

A reconciliation of the nonvested shares (in thousands) as of October 25, 2015 and changes during the fiscal year then ended, is as follows:

		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Nonvested at October 26, 2014	70	$ 33.58
Granted	37	51.74
Vested	70	33.58
Forfeited	–	–
Nonvested at October 25, 2015	37	$ 51.74

Schedule of weighted-average grant date fair value of nonvested shares granted, the total fair value of nonvested shares granted, and the fair value of nonvested shares vested

The weighted-average grant date fair value of nonvested shares granted, the total fair value (in thousands) of nonvested shares granted, and the fair value (in thousands) of shares that have vested during each of the past three fiscal years is as follows:

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Weighted-average grant date fair value	$ 51.74	$ 44.12	$ 35.42
Fair value of nonvested shares granted	$ 1,920	$ 1,760	$ 1,600
Fair value of shares vested	$ 2,347	$ 2,085	$ 1,824

Schedule of stock-based compensation expense, along with the related income tax benefit

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
Stock-based compensation expense recognized	$ 15,717	$ 14,393	$ 17,596
Income tax benefit recognized	(5,967)	(5,469)	(6,655)
After-tax stock-based compensation expense	$  9,750	$  8,924	$ 10,941

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Fair Value Measurements (Tables)

12 Months Ended

Oct. 25, 2015

Fair Value Measurements

Schedule of financial assets and liabilities carried at fair value on a recurring basis

	Fair Value Measurements at October 25, 2015
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 25,	for Identical	Observable	Unobservable
(in thousands)	2015	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 347,239	$ 347,239	$          –	$  –
Other trading securities(2)	119,668	39,329	80,339	–
Commodity derivatives(3)	6,485	6,485	–	–
Total Assets at Fair Value	$ 473,392	$ 393,053	$ 80,339	$  –
Liabilities at Fair Value:
Deferred compensation(2)	$ 57,869	$ 25,272	$ 32,597	$  –
Total Liabilities at Fair Value	$ 57,869	$ 25,272	$ 32,597	$  –

	Fair Value Measurements at October 26, 2014
		Quoted Prices in
	Fair Value at	Active Markets	Significant Other	Significant
	October 26,	for Identical	Observable	Unobservable
(in thousands)	2014	Assets (Level 1)	Inputs (Level 2)	Inputs (Level 3)
Assets at Fair Value:
Cash and cash equivalents(1)	$ 334,174	$ 334,174	$         –	$  –
Other trading securities(2)	117,249	39,120	78,129	–
Commodity derivatives(3)	3,461	3,461	–	–
Total Assets at Fair Value	$ 454,884	$ 376,755	$ 78,129	$  –
Liabilities at Fair Value:
Deferred compensation(2)	$ 54,809	$ 23,642	$ 31,167	$  –
Total Liabilities at Fair Value	$ 54,809	$ 23,642	$ 31,167	$  –

The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above:

⁽¹⁾ The Company’s cash equivalents consist primarily of bank deposits, money market funds rated AAA, or other highly liquid investment accounts. As these investments have a maturity date of three months or less, the carrying value approximates fair value.

⁽²⁾ The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio that supports the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue, and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates, and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2.

⁽³⁾ The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available and therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. 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 net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions).

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Commitments and Contingencies (Tables)

12 Months Ended

Oct. 25, 2015

Commitments and Contingencies

Schedule of purchase commitments

Under these contracts, the Company is committed at October 25, 2015, to make purchases, assuming current price levels, as follows:

(in thousands)
2016	$ 1,427,178
2017	959,812
2018	688,677
2019	449,439
2020	326,233
Later Years	293,510
Total	$ 4,144,849

Schedule of noncancelable operating lease commitments

The Company has noncancelable operating lease commitments on facilities and equipment at October 25, 2015, as follows:

(in thousands)
2016	$ 11,250
2017	6,041
2018	4,586
2019	3,545
2020	3,034
Later Years	6,738
Total	$ 35,194

Schedule of purchase obligations that are not reflected in the consolidated statements of financial position

As of October 25, 2015, commitments related to those purchase orders, and all known contracts exceeding $1.0 million, are shown below.

(in thousands)
2016	$ 518,158
2017	28,212
2018	27,102
2019	2,794
2020	1,931
Later Years	8,866
Total	$ 587,063

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Earnings Per Share Data (Tables)

12 Months Ended

Oct. 25, 2015

Earnings Per Share Data

Schedule of denominator for the computation of basic and diluted earnings per share

(in thousands)	2015	2014	2013
Basic weighted-average
shares outstanding	264,072	263,812	264,317
Dilutive potential
common shares	6,429	6,404	5,907
Diluted weighted-average
shares outstanding	270,501	270,216	270,224

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Segment Reporting (Tables)

12 Months Ended

Oct. 25, 2015

Segment Reporting

Schedule of operating profit and other financial information

(in thousands)	2015		2014		2013
Net Sales (to unaffiliated
customers)
Grocery Products		$ 1,617,680		$ 1,558,265		$ 1,517,557
Refrigerated Foods		4,372,347		4,644,179		4,251,515
Jennie-O Turkey Store		1,635,776		1,672,452		1,601,868
Specialty Foods		1,103,359		907,120		932,533
International & Other		534,701		534,240		448,181
Total		$ 9,263,863		$ 9,316,256		$ 8,751,654
Intersegment Sales
Grocery Products		$               –		$              –		$              –
Refrigerated Foods		13,058		23,163		17,359
Jennie-O Turkey Store		128,195		144,137		123,420
Specialty Foods		64		122		108
International & Other		–		–		–
Total		141,317		167,422		140,887
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$               –		$              –		$              –
Segment Net Sales
Grocery Products		$ 1,617,680		$ 1,558,265		$ 1,517,557
Refrigerated Foods		4,385,405		4,667,342		4,268,874
Jennie-O Turkey Store		1,763,971		1,816,589		1,725,288
Specialty Foods		1,103,423		907,242		932,641
International & Other		534,701		534,240		448,181
Intersegment
elimination		(141,317)		(167,422)		(140,887)
Total		$ 9,263,863		$ 9,316,256		$ 8,751,654
Segment Operating Profit
Grocery Products		$    228,582		$   195,064		$   213,646
Refrigerated Foods		424,968		338,020		232,692
Jennie-O Turkey Store		276,217		272,362		222,117
Specialty Foods		93,258		71,514		88,873
International & Other		78,318		84,745		71,490
Total segment
operating profit		$ 1,101,343		$   961,705		$   828,818
Net interest and
investment expense
(income)		10,177		9,468		7,482
General corporate
expense		35,199		33,434		26,694
Noncontrolling interest		1,176		3,349		3,865
Earnings Before
Income Taxes		$ 1,057,143		$   922,152		$   798,507

(in thousands)	2015		2014		2013
Assets
Grocery Products		$ 1,214,988		$ 1,249,631		$ 1,237,405
Refrigerated Foods		1,973,424		1,215,694		1,218,418
Jennie-O Turkey Store		811,693		857,697		819,343
Specialty Foods		988,455		1,013,420		469,599
International & Other		446,164		406,249		361,038
Corporate		705,107		712,928		810,077
Total		$ 6,139,831		$ 5,455,619		$ 4,915,880
Additions to Property,
Plant and Equipment
Grocery Products		$     18,104		$     31,741		$     10,100
Refrigerated Foods		54,074		61,183		58,523
Jennie-O Turkey Store		32,250		25,761		22,863
Specialty Foods		5,309		3,266		3,606
International & Other		18,576		4,896		2,973
Corporate		15,750		32,291		8,697
Total		$   144,063		$   159,138		$   106,762
Depreciation and
Amortization
Grocery Products		$     26,972		$     25,883		$     22,912
Refrigerated Foods		53,325		57,709		57,879
Jennie-O Turkey Store		28,262		27,091		26,921
Specialty Foods		11,075		8,999		9,232
International & Other		3,372		3,541		1,906
Corporate		10,428		6,821		6,000
Total		$   133,434		$   130,044		$   124,850

Schedule of percentages of total revenues contributed by classes of similar products

	Fiscal Year Ended
	October 25,	October 26,	October 27,
	2015	2014	2013
Perishable	53.0%	54.5%	53.3%
Poultry	18.6	18.4	18.8
Shelf-stable	18.4	19.0	19.0
Miscellaneous	10.0	8.1	8.9
	100.0%	100.0%	100.0%

Schedule of total revenues attributable to U.S. and all foreign countries

	Fiscal Year Ended
	October 25,	October 26,	October 27,
(in thousands)	2015	2014	2013
United States	$ 8,721,722	$ 8,708,042	$ 8,193,730
Foreign	542,141	608,214	557,924
	$ 9,263,863	$ 9,316,256	$ 8,751,654

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Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

Oct. 25, 2015

Quarterly Results of Operations (Unaudited)

Schedule of unaudited quarterly results of operations

				Net Earnings
				Attributable to	Basic	Diluted
		Gross	Net	Hormel Foods	Earnings	Earnings
(in thousands, except per share data)	Net Sales	Profit	Earnings	Corporation(1)	Per Share	Per Share
2015
First quarter	$ 2,395,073	$ 444,605	$ 172,430	$ 171,718	$ 0.65	$ 0.64
Second quarter	2,279,345	459,556	180,435	180,201	0.68	0.67
Third quarter	2,188,587	409,390	146,956	146,938	0.56	0.54
Fourth quarter	2,400,858	495,030	187,443	187,231	0.71	0.69
2014
First quarter	$ 2,242,672	$ 398,642	$ 154,458	$ 153,348	$ 0.58	$ 0.57
Second quarter	2,244,866	378,758	140,706	140,090	0.53	0.52
Third quarter	2,284,947	363,999	139,014	137,975	0.52	0.51
Fourth quarter	2,543,771	423,584	171,848	171,264	0.65	0.63

⁽¹⁾ Excludes net earnings attributable to the Company’s noncontrolling interests.

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Summary of Significant Accounting Policies (Details) $ in Millions			12 Months Ended
	Dec. 16, 2015	Nov. 25, 2015	Oct. 25, 2015 USD ($)	Oct. 26, 2014 USD ($)	Oct. 27, 2013 USD ($)
Fiscal year term			364 days	364 days	364 days
Rabbi trust
Investments
Gains related to securities held			$ 2.4	$ 2.9	$ 4.6
2016
Fiscal year term	371 days
Common Stock
Subsequent Event
Authorized stock split ratio		2

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Summary of Significant Accounting Policies (Details 2) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013	Jan. 29, 2013
Goodwill and Other Intangibles
Goodwill impairment charges	$ 0	$ 0	$ 0
Indefinite-lived intangible assets impairment charges	0	0	0
Advertising Expenses
Advertising costs	145,300	114,400	89,900
Research and Development Expenses
Research and development expense	$ 32,000	$ 29,900	$ 29,900
Minimum
Equity Method Investments
Ownership percentage	20.00%
Maximum
Equity Method Investments
Ownership percentage	50.00%
2010 Program | Common Stock
Shares Repurchases
Stock repurchased (in shares)			1.2
Average price of shares repurchased (in dollars per share)	$ 39.67
2013 Program | Common Stock
Shares Repurchases
Stock repurchased (in shares)	0.4	1.3	0.6
Average price of shares repurchased (in dollars per share)	$ 62.32	$ 46.87	$ 42.54
Number of shares authorized to be repurchased (in shares)				10.0
Buildings | Minimum
Estimated useful life	20 years
Buildings | Maximum
Estimated useful life	40 years
Machinery and equipment | Minimum
Estimated useful life	5 years
Machinery and equipment | Maximum
Estimated useful life	10 years

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Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands		12 Months Ended
	Mar. 16, 2015	Oct. 25, 2015
Supplemental Cash Flow Information
Cash amount of ownership interest purchased		$ 11,702
Reduction in additional paid-in capital		$ 14,035
Shanghai Shangshi Meat Products Co. Ltd.
Supplemental Cash Flow Information
Percent of ownership interest purchased	19.29%
Ownership percentage	100.00%
Cash amount of ownership interest purchased	$ 11,700
Reduction in additional paid-in capital	$ 11,900

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Acquisitions (Detail) - USD ($) $ in Thousands					3 Months Ended									12 Months Ended
	May. 26, 2015	Aug. 11, 2014	Nov. 26, 2013	Jan. 31, 2013	Oct. 25, 2015	Oct. 25, 2015	Jul. 26, 2015	Apr. 26, 2015	Jan. 25, 2015	Oct. 26, 2014	Jul. 27, 2014	Apr. 27, 2014	Jan. 26, 2014	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013	Jul. 13, 2015
Acquisitions
Purchase price														$ 770,587	$ 466,204	$ 665,415
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Goodwill					$ 1,699,484	$ 1,699,484				$ 1,226,406				1,699,484	1,226,406	934,472
Net sales					2,400,858		$ 2,188,587	$ 2,279,345	$ 2,395,073	$ 2,543,771	$ 2,284,947	$ 2,244,866	$ 2,242,672	9,263,863	9,316,256	8,751,654
Applegate
Acquisitions
Purchase price	$ 774,100
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Accounts receivable																	$ 25,574
Inventory																	22,089
Prepaid and other assets																	2,916
Property, plant and equipment																	3,463
Intangible assets																	275,900
Goodwill																	488,476
Current liabilities																	(23,420)
Deferred taxes																	(20,935)
Purchase price																	$ 774,063
Transaction costs					9,000	9,000								9,000
Net sales						92,800
CytoSport Holdings
Acquisitions
Purchase price		$ 420,900
Potential additional payment		$ 20,000
Term for additional payment		2 years
Recognized amount related to potential additional payment					$ 10,300	$ 10,300								10,300
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Accounts receivable		$ 30,580
Inventory		62,246
Prepaid and other assets		3,133
Property, plant and equipment		8,119
Intangible assets		188,500
Goodwill		270,925
Current liabilities		(52,811)
Long-term liabilities		(30,140)
Deferred taxes		(59,700)
Purchase price		420,852
Potential payments owed under a supplier agreement		$ 15,000
Adjustment to potential payment														8,900
Net sales														$ 249,700	73,500
Transaction costs (excluding transitional service expenses) related to the acquisition																4,800
SKIPPY | China
Acquisitions
Purchase price			$ 41,900
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Net sales															$ 28,900
SKIPPY | Worldwide, except sales in mainland China
Acquisitions
Purchase price				$ 665,400
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Inventory				49,156
Property, plant and equipment				48,461
Intangible assets				264,500
Goodwill				303,597
Current liabilities				(299)
Purchase price				$ 665,415
Net sales													$ 86,500			272,800
Transaction costs (excluding transitional service expenses) related to the acquisition																$ 7,700

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Inventories (Details) - USD ($) $ in Thousands	Oct. 25, 2015	Oct. 26, 2014
Inventories
Finished products	$ 553,298	$ 604,946
Raw materials and work-in-process	239,174	274,105
Materials and supplies	200,793	175,501
Total	$ 993,265	$ 1,054,552

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 1,226,406	$ 934,472
Goodwill acquired	488,476	291,934
Purchase Adjustments	7,096
Impairment charge	(21,537)
Product line Disposal	(957)
Balance at the end of the period	1,699,484	1,226,406
Grocery Products
Changes in the carrying amount of goodwill
Balance at the beginning of the period	322,942	322,942
Product line Disposal	(521)
Balance at the end of the period	322,421	322,942
Refrigerated Foods
Changes in the carrying amount of goodwill
Balance at the beginning of the period	96,643	96,643
Goodwill acquired	488,476
Product line Disposal	(435)
Balance at the end of the period	584,684	96,643
Jennie-O Turkey Store
Changes in the carrying amount of goodwill
Balance at the beginning of the period	203,214	203,214
Balance at the end of the period	203,214	203,214
Specialty Foods
Changes in the carrying amount of goodwill
Balance at the beginning of the period	470,857	207,028
Goodwill acquired		263,829
Purchase Adjustments	7,096
Impairment charge	(21,537)
Balance at the end of the period	456,416	470,857
International & Other
Changes in the carrying amount of goodwill
Balance at the beginning of the period	132,750	104,645
Goodwill acquired		28,105
Product line Disposal	(1)
Balance at the end of the period	$ 132,749	$ 132,750

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Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Gross Carrying Amount		$ 100,060	$ 104,960
Accumulated Amortization		$ (28,900)	$ (53,336)
Weighted-Avg Life		11 years 3 months 18 days	10 years 4 months 24 days
Amortization expense	$ 8,142	$ 9,352	$ 9,479
Estimated Amortization Expense
2016	8,200
2017	7,600
2018	7,000
2019	7,000
2020	6,800
Customer lists/relationships
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Gross Carrying Amount		83,190	67,540
Accumulated Amortization		$ (13,939)	$ (19,336)
Weighted-Avg Life		12 years 1 month 6 days	11 years
Customer lists/relationships | Applegate
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Definite-lived intangible assets acquired	25,100
Customer lists/relationships | CytoSport Holdings
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Definite-lived intangible assets acquired	23,300	$ 21,600
Customer lists/relationships | SKIPPY | China
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Definite-lived intangible assets acquired		2,600
Noncompete agreements | Applegate
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Definite-lived intangible assets acquired	$ 1,200
Formulas and recipes
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Gross Carrying Amount		7,490	$ 17,854
Accumulated Amortization		$ (6,865)	$ (15,955)
Weighted-Avg Life		7 years 2 months 12 days	8 years 9 months 18 days
Proprietary software and technology
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Gross Carrying Amount		$ 7,010	$ 14,820
Accumulated Amortization		$ (6,901)	$ (13,542)
Weighted-Avg Life		8 years 1 month 6 days	10 years 2 months 12 days
Other intangibles
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Gross Carrying Amount		$ 2,370	$ 4,746
Accumulated Amortization		$ (1,195)	$ (4,503)
Weighted-Avg Life		7 years 6 months	7 years 4 months 24 days

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Goodwill and Intangible Assets (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	$ 756,059	$ 503,266
Goodwill impairment charges	0	0	$ 0
Brands/tradename/trademarks
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	748,075	495,282
Other intangibles
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	$ 7,984	$ 7,984

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Assets Held For Sale (Details) - Portion of DCB - Assets Held For Sale. $ in Thousands	12 Months Ended
	Oct. 25, 2015 USD ($)
Assets Held For Sale
Impairment charge	$ 21,500
Assets held for sale
Current assets	26,057
Goodwill	51,811
Intangibles	5,389
Property, plant and equipment	31,678
Total assets held for sale	114,935
Liabilities held for sale
Total current liabilities held for sale	$ 3,191

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Long-term Debt and Other Borrowing Arrangements (Detail) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Long-term Debt and Other Borrowing Arrangements
Total	$ 250,000	$ 250,000
Outstanding amount	185,000
Interest paid	13,100	12,700	$ 12,500
4.125% Senior unsecured notes, due April 2021
Long-term Debt and Other Borrowing Arrangements
Long-term debt	$ 250,000	$ 250,000
Interest rate (as a percent)	4.125%	4.125%
Revolving line of credit
Long-term Debt and Other Borrowing Arrangements
Maximum borrowing capacity	$ 400,000
Outstanding draws	0	$ 0
Term loan facility
Long-term Debt and Other Borrowing Arrangements
Maximum borrowing capacity	300,000
Outstanding amount	$ 185,000	$ 0

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Pension and Other Post-retirement Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Pension and other post-retirement benefits
Costs associated with the defined contribution benefit plans	$ 31,700	$ 30,100	$ 29,900
Amounts recognized in the Consolidated Statements of Financial Position
Pension assets	132,861	130,284
Pension and post-retirement benefits	(509,261)	(502,693)
Pension Benefits
Net periodic cost of defined benefit plans
Service cost	28,795	25,935	30,979
Interest cost	52,522	53,030	47,688
Expected return on plan assets	(88,792)	(83,702)	(73,144)
Amortization of prior service cost	(4,878)	(4,971)	(5,079)
Recognized actuarial loss (gain)	18,476	12,697	34,019
Curtailment charge			6
Net periodic cost	6,123	2,989	34,469
Amounts recognized in accumulated other comprehensive loss
Unrecognized prior service credit	32,490	37,368
Unrecognized actuarial gains (losses)	(360,949)	(343,398)
Amount of prior service credit (cost) included in accumulated other comprehensive loss expected to be recognized during next year	(4,878)
Amount of actuarial loss included in accumulated other comprehensive loss expected to be recognized during next year	18,693
Change in benefit obligation:
Benefit obligation at beginning of year	1,235,769	1,098,060
Service cost	28,795	25,935	30,979
Interest cost	52,522	53,030	47,688
Actuarial loss (gain)	(16,872)	108,047
Benefits paid	(52,005)	(49,303)
Benefit obligation at end of year	1,248,209	1,235,769	1,098,060
Changes in fair value
Fair value of plan assets at beginning of year	1,168,765	1,087,315
Actual return on plan assets	35,870	101,025
Employer contributions	27,147	29,728
Benefits paid	(52,005)	(49,303)
Fair value of plan assets at end of year	1,179,777	1,168,765	1,087,315
Funded status at end of year	(68,432)	(67,004)
Amounts recognized in the Consolidated Statements of Financial Position
Pension assets	132,861	130,284
Employee related expenses	(4,931)	(4,532)
Pension and post-retirement benefits	(196,362)	(192,756)
Net amount recognized	(68,432)	(67,004)
Accumulated benefit obligation in excess of plan assets
Projected benefit obligation	201,293	197,288
Accumulated benefit obligation	$ 193,913	186,085
Pension Benefits | Minimum
Accumulated benefit obligation in excess of plan assets
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments	9 years
Pension Benefits | Maximum
Accumulated benefit obligation in excess of plan assets
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments	23 years
Post-retirement Benefits
Net periodic cost of defined benefit plans
Service cost	$ 1,795	1,963	2,494
Interest cost	13,479	15,279	14,910
Amortization of prior service cost	(1,337)	(1,337)	(1,332)
Recognized actuarial loss (gain)	(2)	(2)	7,719
Net periodic cost	13,935	15,903	23,791
Amounts recognized in accumulated other comprehensive loss
Unrecognized prior service credit	2,844	4,180
Unrecognized actuarial gains (losses)	(40,590)	(30,250)
Amount of prior service credit (cost) included in accumulated other comprehensive loss expected to be recognized during next year	(1,337)
Amount of actuarial loss included in accumulated other comprehensive loss expected to be recognized during next year	1,303
Change in benefit obligation:
Benefit obligation at beginning of year	330,841	334,447
Service cost	1,795	1,963	2,494
Interest cost	13,479	15,279	14,910
Actuarial loss (gain)	10,339	927
Employee contributions	2,798	2,715
Medicare Part D subsidy	1,313	1,941
Benefits paid	(26,021)	(26,431)
Benefit obligation at end of year	334,544	330,841	$ 334,447
Changes in fair value
Employee contributions	2,798	2,715
Employer contributions	23,223	23,716
Benefits paid	(26,021)	(26,431)
Funded status at end of year	(334,544)	(330,841)
Amounts recognized in the Consolidated Statements of Financial Position
Employee related expenses	(21,645)	(20,904)
Pension and post-retirement benefits	(312,899)	(309,937)
Net amount recognized	$ (334,544)	$ (330,841)
Post-retirement Benefits | Minimum
Accumulated benefit obligation in excess of plan assets
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments	6 years
Post-retirement Benefits | Maximum
Accumulated benefit obligation in excess of plan assets
Amortization period of actuarial gains and losses and any adjustments resulting from plan amendments	18 years

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Pension and Other Post-retirement Benefits (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Pension Benefits
Weighted-average assumptions used to determine benefit obligations
Discount rate (as a percent)	4.50%	4.31%
Rate of future compensation increase (as a percent)	3.92%	3.94%
Weighted-average assumptions used to determine net periodic benefit costs
Discount rate (as a percent)	4.31%	4.89%	4.05%
Rate of future compensation increase (as a percent)	3.94%	3.91%	3.97%
Expected long-term return on plan assets (as a percent)	7.70%	7.80%	7.90%
Effect of one-percentage-point change
Effect of one-percentage-point increase in discount rate on expense	$ (12,892)
Effect of one-percentage-point decrease in discount rate on expense	16,810
Effect of one-percentage-point increase in discount rate on benefit obligation	(157,394)
Effect of one-percentage-point decrease in discount rate on benefit obligation	197,869
Effect of one-percentage-point increase in expected long-term rate of return on plan assets	(11,629)
Effect of one-percentage-point decrease in expected long-term rate of return on plan assets	11,629
Effect of one-percentage-point increase in rate of future compensation increase on expense	461
Effect of one-percentage-point decrease in rate of future compensation increase on expense	(442)
Effect of one-percentage-point increase in rate of future compensation increase on benefit obligation	2,504
Effect of one-percentage-point decrease in rate of future compensation increase on benefit obligation	$ (2,417)
Post-retirement Benefits
Weighted-average assumptions used to determine net periodic benefit costs
Increase in per capita cost of covered health care benefits assumed for next fiscal year (as a percent)	8.00%
Expected ultimate pre-Medicare and post-Medicare rate (as a percent)	5.00%
Year that reaches the ultimate trend rate	2021
Effect of one-percentage-point change
Effect of one-percentage-point increase in discount rate on expense	$ (64)
Effect of one-percentage-point decrease in discount rate on expense	5,035
Effect of one-percentage-point increase in discount rate on benefit obligation	(33,462)
Effect of one-percentage-point decrease in discount rate on benefit obligation	40,619
Effect of one-percentage-point increase in health care cost trend rate on expense	1,749
Effect of one-percentage-point decrease in health care cost trend rate on expense	(1,451)
Effect of one-percentage-point increase in health care cost trend rate on benefit obligation	38,194
Effect of one-percentage-point decrease in health care cost trend rate on benefit obligation	$ (31,112)

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Pension and Other Post-retirement Benefits (Details 3) - USD ($) $ in Thousands, shares in Millions	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014
Pension Benefits
Pension and other post-retirement benefits
Number of shares of common stock of the Company included in plan assets sold during the year		1.7
Dividends paid on employer shares held by the plan		$ 700
Employers contribution in next fiscal year	$ 24,100
Expected contribution representing benefit payments for unfunded plans during next fiscal year	27,200
Expected future benefit payments
2016	53,515
2017	55,661
2018	58,010
2019	60,934
2020	63,916
2021 - 2025	$ 361,518
Pension Benefits | Large Capitalization Equity
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	38.80%	33.00%
Pension Benefits | Large Capitalization Equity | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	15.00%	15.00%
Pension Benefits | Large Capitalization Equity | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	35.00%	35.00%
Pension Benefits | Small Capitalization Equity
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	5.40%	6.00%
Pension Benefits | Small Capitalization Equity | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	5.00%	5.00%
Pension Benefits | Small Capitalization Equity | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	15.00%	15.00%
Pension Benefits | International Equity
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	14.00%	20.80%
Pension Benefits | International Equity | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	15.00%	15.00%
Pension Benefits | International Equity | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	25.00%	25.00%
Pension Benefits | Private Equity
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	6.10%	5.00%
Pension Benefits | Private Equity | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	0.00%	0.00%
Pension Benefits | Private Equity | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	15.00%	15.00%
Pension Benefits | Equity Securities
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	64.30%	64.80%
Pension Benefits | Equity Securities | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	50.00%	55.00%
Pension Benefits | Equity Securities | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	75.00%	75.00%
Pension Benefits | Fixed Income
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	34.30%	34.00%
Pension Benefits | Fixed Income | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	25.00%	25.00%
Pension Benefits | Fixed Income | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	45.00%	45.00%
Pension Benefits | Real Estate | Minimum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	0.00%
Pension Benefits | Real Estate | Maximum
Pension and other post-retirement benefits
Target range of weighted-average asset allocations (as a percent)	10.00%
Pension Benefits | Cash and Cash Equivalents
Pension and other post-retirement benefits
Actual weighted-average asset allocations (as a percent)	1.40%	1.20%
Post-retirement Benefits
Expected future benefit payments
2016	$ 22,113
2017	22,441
2018	22,612
2019	22,711
2020	22,621
2021 - 2025	108,832
Expected federal subsidy receipts related to prescription drug benefits per year through 2024	$ 2,400

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Pension and Other Post-retirement Benefits (Details 4) - Pension Benefits - USD ($) $ in Thousands	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	$ 1,179,777	$ 1,168,765	$ 1,087,315
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	396,613	412,196
Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	711,389	697,846
Significant Other Unobservable Inputs (Level 3)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	71,775	58,723	$ 45,783
Cash and Cash Equivalents
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	16,551	14,342
Cash and Cash Equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	16,551	14,342
Large Capitalization Equity
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	457,578	385,321
Large Capitalization Equity | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	211,843	231,103
Large Capitalization Equity | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	245,735	154,218
Large Capitalization Equity - Domestic
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	300,735	351,195
Large Capitalization Equity - Domestic | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	175,206	196,977
Large Capitalization Equity - Domestic | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	125,529	154,218
Large Capitalization Equity - Foreign
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	36,637	34,126
Large Capitalization Equity - Foreign | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	36,637	34,126
Large Capitalization Equity - World
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	120,206
Large Capitalization Equity - World | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	120,206
Small Capitalization Equity
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	63,759	70,552
Small Capitalization Equity | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	63,759	70,552
Small Capitalization Equity - Domestic
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	55,513	62,521
Small Capitalization Equity - Domestic | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	55,513	62,521
Small Capitalization Equity - Foreign
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	8,246	8,031
Small Capitalization Equity - Foreign | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	8,246	8,031
International Equity
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	164,923	242,401
International Equity | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	164,923	242,401
Mutual fund
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	101,062	69,393
Mutual fund | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	101,062	69,393
Collective trust
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	63,861	173,008
Collective trust | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	63,861	173,008
Private Equity
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	71,775	58,723
Private Equity | Significant Other Unobservable Inputs (Level 3)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	71,775	58,723
Private Equity - Domestic
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	54,748	43,340
Private Equity - Domestic | Significant Other Unobservable Inputs (Level 3)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	54,748	43,340
Private Equity - International
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	17,027	15,383
Private Equity - International | Significant Other Unobservable Inputs (Level 3)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	17,027	15,383
Equity Securities
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	758,035	756,997
Equity Securities | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	275,602	301,655
Equity Securities | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	410,658	396,619
Equity Securities | Significant Other Unobservable Inputs (Level 3)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	71,775	58,723
Fixed Income
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	405,191	397,426
Fixed Income | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	104,460	96,199
Fixed Income | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	300,731	301,227
US government issues
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	130,456	126,894
US government issues | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	104,460	96,199
US government issues | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	25,996	30,695
Municipal issues
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	20,211	20,232
Municipal issues | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	20,211	20,232
Corporate issues domestic
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	210,035	212,299
Corporate issues domestic | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	210,035	212,299
Corporate issues foreign
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	44,489	38,001
Corporate issues foreign | Significant Other Observable Inputs (Level 2)
Fair values of defined benefit pension plan investments by asset category and fair value hierarchy level
Total Investments at Fair Value	$ 44,489	$ 38,001

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Pension and Other Post-retirement Benefits (Details 5) - Pension Benefits - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014
Changes in fair value
Fair value of plan assets at beginning of year	$ 1,168,765	$ 1,087,315
Fair value of plan assets at end of year	1,179,777	1,168,765
Significant Other Unobservable Inputs (Level 3)
Changes in fair value
Fair value of plan assets at beginning of year	58,723	45,783
Purchases, issuances and settlements (net)	(3,574)	3,050
Unrealized gains	7,741	4,260
Realized gains	7,623	4,479
Interest and dividend income	1,262	1,151
Fair value of plan assets at end of year	$ 71,775	$ 58,723

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Pension and Other Post-retirement Benefits (Details 6) - Pension Benefits - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014
Investment commitment
Unfunded commitments for investments	$ 18,778	$ 30,299
Private Equity
Investment commitment
Commitment for investments	85,000	85,000
Private Equity - Domestic
Investment commitment
Unfunded commitments for investments	9,264	17,659
Private Equity - International
Investment commitment
Unfunded commitments for investments	$ 9,514	$ 12,640

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Derivatives and Hedging (Details) item in Millions, bu in Millions, $ in Millions	12 Months Ended
	Oct. 25, 2015 USD ($) item T bu	Oct. 26, 2014 USD ($) item bu
Derivatives and hedging
Maximum number of upcoming fiscal years to hedge grain or natural gas exposure	2 years
Accumulated change, pretax, in accumulated gains and (losses) from derivative instruments designated and qualifying as the effective portion of cash flow hedges | $	$ 1.0	$ (14.8)
The Company expects to recognize the majority of hedging losses over this period	12 months
Corn | Derivatives not designated as hedges
Derivatives and hedging
Futures contracts, volume (in million bushels)	2.6	2.9
Corn | Cash Flow Hedges
Derivatives and hedging
Futures contracts, volume (in million bushels)	20.1	18.3
Corn | Fair Value Hedges
Derivatives and hedging
Futures contracts, volume (in million bushels)	5.3	8.0
Lean hogs | Fair Value Hedges
Derivatives and hedging
Futures contracts, volume ( in centum weight) | item	0.4	0.7
Soybean meal | Derivatives not designated as hedges
Derivatives and hedging
Futures contracts, volume (in tons) | T	11,500

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Derivatives and Hedging (Details 2) - USD ($) $ in Thousands	Oct. 25, 2015	Oct. 26, 2014
Derivatives fair value
Asset Derivatives, Other current assets	$ 553	$ (8,062)
Derivatives designated as hedges | Commodity contracts | Other current assets
Derivatives fair value
Asset Derivatives, Other current assets	305	(7,124)
Derivatives not designated as hedges | Commodity contracts | Other current assets
Derivatives fair value
Asset Derivatives, Other current assets	$ 248	$ (938)

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Derivatives and Hedging (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014
Derivative instruments gains or losses (before tax)
Gains or losses excluded from the assessment of cash flow hedge effectiveness	$ 0	$ 0
Gains or losses excluded from the assessment of fair value hedge effectiveness	0	0
Gains or losses resulting from the discontinuance of cash flow hedges	0	0
Gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge	0	0
Derivatives not designated as hedges | Commodity contracts | Cost of products sold
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Earnings	(269)	(2,083)
Cash Flow Hedges | Commodity contracts
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in AOCL (Effective Portion)	3,409	(16,701)
Cash Flow Hedges | Commodity contracts | Cost of products sold
Derivative instruments gains or losses (before tax)
Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion)	(12,369)	(10,925)
Gain/(Loss) Recognized in Earnings (Ineffective Portion)	(6,127)	193
Fair Value Hedges | Derivatives designated as hedges | Commodity contracts | Cost of products sold
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Earnings (Effective Portion)	(4,297)	(21,608)
Gain/(Loss) Recognized in Earnings (Ineffective Portion)	$ 2,547	$ 322

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Investments In and Receivables from Affiliates (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013	Oct. 26, 2009
Investments In and Receivables from Affiliates
Investments in and receivables from affiliates	$ 258,998	$ 264,451
Equity in earnings of affiliates	23,887	17,585	$ 20,513
Dividends received from affiliates	$ 37,300	22,800	34,000
Minimum
Investments In and Receivables from Affiliates
Ownership percentage	20.00%
Maximum
Investments In and Receivables from Affiliates
Ownership percentage	50.00%
MegaMex Foods, LLC
Investments In and Receivables from Affiliates
Ownership percentage	50.00%
Investments in and receivables from affiliates	$ 200,110	208,221
Equity in earnings of affiliates	26,849	14,415	17,261
Excess of investment over the underlying equity in net assets of the joint venture	16,200			$ 21,300
Foreign Joint Ventures
Investments In and Receivables from Affiliates
Investments in and receivables from affiliates	58,888	56,230
Equity in earnings of affiliates	$ (2,962)	$ 3,170	$ 3,252
Foreign Joint Ventures | Minimum
Investments In and Receivables from Affiliates
Ownership percentage	26.00%
Foreign Joint Ventures | Maximum
Investments In and Receivables from Affiliates
Ownership percentage	50.00%

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Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Accumulated Other Comprehensive Loss
Balance at beginning of period	$ 3,605,678
Reclassification into net earnings:
Balance at end of period	3,998,198	$ 3,605,678
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Loss
Balance at beginning of period	(207,700)	(149,214)	$ (323,569)
Unrecognized gains (losses):
Gross	(49,096)	(110,296)	252,055
Tax effect	16,207	41,042	(95,948)
Reclassification into net earnings:
Gross	24,628	17,312	29,456
Tax effect	(9,312)	(6,544)	(11,208)
Net tax amount	(17,573)	(58,486)	174,355
Purchase of additional ownership	(395)
Balance at end of period	(225,668)	(207,700)	(149,214)
Foreign Currency Translation
Accumulated Other Comprehensive Loss
Balance at beginning of period	7,480	9,391	12,415
Unrecognized gains (losses):
Gross	(6,116)	(1,911)	(3,024)
Reclassification into net earnings:
Net tax amount	(6,116)	(1,911)	(3,024)
Purchase of additional ownership	(395)
Balance at end of period	969	7,480	9,391
Pension & Other Benefits
Accumulated Other Comprehensive Loss
Balance at beginning of period	(205,986)	(153,001)	(345,465)
Unrecognized gains (losses):
Gross	(46,389)	(91,684)	273,408
Tax effect	17,492	34,737	(102,846)
Reclassification into net earnings:
Gross	12,259	6,387	35,327
Tax effect	(4,642)	(2,425)	(13,425)
Net tax amount	(21,280)	(52,985)	192,464
Balance at end of period	(227,266)	(205,986)	(153,001)
Deferred Gain (Loss) - Hedging
Accumulated Other Comprehensive Loss
Balance at beginning of period	(9,194)	(5,604)	9,481
Unrecognized gains (losses):
Gross	3,409	(16,701)	(18,329)
Tax effect	(1,285)	6,305	6,898
Reclassification into net earnings:
Gross	12,369	10,925	(5,871)
Tax effect	(4,670)	(4,119)	2,217
Net tax amount	9,823	(3,590)	(15,085)
Balance at end of period	$ 629	$ (9,194)	$ (5,604)

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Income Taxes (Detail) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Current:
U.S. Federal	$ 299,557	$ 264,533	$ 231,359
State	39,817	34,034	30,671
Foreign	10,526	7,759	5,334
Total current	349,900	306,326	267,364
Deferred:
U.S. Federal	18,451	8,756	1,080
State	1,070	873	(194)
Foreign	458	171	181
Total deferred	19,979	9,800	1,067
Total provision for income taxes	369,879	316,126	$ 268,431
Deferred tax liabilities:
Goodwill and intangible assets	(213,312)	(168,167)
Tax over book depreciation and basis differences	(94,496)	(85,623)
Other, net	(18,788)	(30,252)
Deferred tax assets:
Pension and post-retirement benefits	154,306	152,392
Employee compensation related liabilities	109,061	101,706
Marketing and promotional accruals	37,603	28,703
Other accruals not currently deductible		13,010
Other, net	48,432	51,082
Net deferred tax assets	$ 22,806	$ 62,851
Reconciliation of the statutory federal income tax rate to the effective tax rate
U.S. statutory rate (as a percent)	35.00%	35.00%	35.00%
State taxes on income, net of federal tax benefit (as a percent)	2.70%	2.80%	2.70%
Domestic production activities deduction (as a percent)	(2.60%)	(2.70%)	(2.40%)
All other, net (as a percent)	(0.10%)	(0.80%)	(1.70%)
Effective tax rate (as a percent)	35.00%	34.30%	33.60%
Undistributed earnings of foreign subsidiaries and joint ventures	$ 109,300
Income taxes paid	296,500	$ 285,800	$ 226,200
Changes in unrecognized tax benefits
Balance at the beginning of the period	22,608	20,085
Tax positions related to the current period
Increases	2,920	4,693
Decreases		(670)
Tax positions related to prior periods:
Increases	1,629	4,455
Decreases	(796)	(3,245)
Settlements	(2,839)	(573)
Decreases related to a lapse of applicable statute of limitations	(2,185)	(2,137)
Balance at the end of the period	21,337	$ 22,608	$ 20,085
Unrecognized tax benefits including interest and penalties	24,600
Portion of unrecognized tax benefit including interest and penalties, that if recognized, would impact effective tax rate	16,000
Interest and penalties expense related to uncertain tax positions recognized in income tax expense	1,000
Accrued interest and penalties, associated with unrecognized tax benefits	$ 3,200

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Stock-Based Compensation (Details)	12 Months Ended
	Oct. 25, 2015
Stock options
Stock-based compensation
Vesting period	4 years
Stock option expiration period	10 years
Nonvested shares | Shares granted on or before September 26, 2010
Stock-based compensation
Vesting period	5 years
Nonvested shares | Shares granted between September 27, 2010, and July 27, 2014
Stock-based compensation
Vesting period	1 year
Nonvested shares | Minimum | Shares granted on or after July 29, 2014
Stock-based compensation
Vesting period	1 year

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Stock-Based Compensation (Details 2) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Stock-based compensation expense, along with the related income tax benefit
Stock based compensation expense recognized	$ 15,717	$ 14,393	$ 17,596
Income tax benefit recognized	(5,967)	(5,469)	(6,655)
After-tax stock-based compensation expense	$ 9,750	$ 8,924	$ 10,941
Period for recognition of unrecognized stock-based compensation expense	2 years 7 months 6 days
Stock-based compensation expense unrecognized	$ 9,300
Number of shares available for future grants	25,100	26,600	27,900
Stock options
Stock-based compensation
Cash received from stock options exercised	$ 10,500	$ 10,500	$ 30,200
Tax benefit realized from stock options, aggregate	$ 25,600	$ 28,400	$ 29,400
Reconciliation of Stock Options
Outstanding, at the beginning of the period (in shares)	17,402
Granted (in shares)	1,514
Exercised (in shares)	1,716
Forfeited (in shares)	1
Outstanding, at the end of the period (in shares)	17,199	17,402
Exercisable at the end of the period (in shares)	12,899
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 24.61
Granted (in dollars per share)	52.55
Exercised (in dollars per share)	18.61
Forfeited (in dollars per share)	18.71
Outstanding at the end of the period (in dollars per share)	27.67	$ 24.61
Exercisable at end of period (in dollars per share)	$ 22.83
Weighted-Average Remaining Contractual Term
Outstanding at the end of the period	5 years
Exercisable at end of period	4 years 1 month 6 days
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 699,294
Exercisable at end of period	$ 586,844
Weighted-average grant date fair value of stock options granted, and the total intrinsic value of options exercised
Weighted-average grant date fair value of options granted (in dollars per share)	$ 9.84	$ 9.70	$ 5.50
Intrinsic value of exercised options	$ 67,516	$ 74,972	$ 77,610
Weighted-average assumptions used to calculate fair value of each ordinary option award
Risk-free interest rate (as a percent)	2.10%	2.50%	1.40%
Dividend yield (as a percent)	1.90%	1.80%	2.10%
Stock price volatility (as a percent)	19.00%	20.00%	20.00%
Expected option life	8 years	8 years	8 years
Nonvested shares
Reconciliation of the nonvested shares
Nonvested shares at the beginning of the period	70
Nonvested shares granted in period	37
Nonvested shares vested in period	70
Nonvested shares at the end of the period	37	70
Weighted Average Grant Date Fair Value
Nonvested shares at the beginning of the period (in dollars per share)	$ 33.58
Nonvested shares granted in period (in dollars per share)	51.74	$ 44.12	$ 35.42
Nonvested shares vested in period (in dollars per share)	33.58
Nonvested shares at the end of the period (in dollars per share)	$ 51.74	$ 33.58
Weighted-average grant date fair value, the total fair value of nonvested shares granted, and the fair value of shares that have vested
Fair value of nonvested shares granted	$ 1,920	$ 1,760	$ 1,600
Fair value of shares vested	$ 2,347	$ 2,085	$ 1,824

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Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Oct. 25, 2015		Oct. 25, 2015		Oct. 26, 2014
Methods and assumptions used to estimate the fair value of the financial assets and liabilities
Guarantee period at issue for rate of return on fixed income funds			1 year
Recognized right to reclaim net cash collateral	$ 2,300		$ 2,300		$ 11,500
Cash collateral posted	13,700		13,700		55,600
Realized losses on closed positions	11,400		11,400		44,100
Fair value, long-term debt
Fair value of long-term debt (including current maturities)	268,400		268,400		273,800
Asset Impairment Charges [Abstract]
Goodwill impairment charge			21,537
Recurring basis | Fair Value
Assets at Fair Value:
Cash and cash equivalents	347,239	[1]	347,239	[1]	334,174
Other trading securities	119,668	[2]	119,668	[2]	117,249	[1]
Commodity derivatives	6,485		6,485		3,461	[2]
Total Assets at Fair Value	473,392		473,392		454,884
Liabilities at Fair Value:
Deferred compensation	57,869		57,869		54,809	[1]
Total Liabilities at Fair Value	57,869		57,869		54,809
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets at Fair Value:
Cash and cash equivalents	347,239	[1]	347,239	[1]	334,174
Other trading securities	39,329	[2]	39,329	[2]	39,120	[1]
Commodity derivatives	6,485		6,485		3,461	[2]
Total Assets at Fair Value	393,053		393,053		376,755
Liabilities at Fair Value:
Deferred compensation	25,272		25,272		23,642	[1]
Total Liabilities at Fair Value	25,272		25,272		23,642
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets at Fair Value:
Other trading securities	80,339	[2]	80,339	[2]	78,129	[1]
Total Assets at Fair Value	80,339		80,339		78,129
Liabilities at Fair Value:
Deferred compensation	32,597		32,597		31,167	[1]
Total Liabilities at Fair Value	32,597		$ 32,597		$ 31,167
Assets Held For Sale. | Portion of DCB | Significant Other Observable Inputs (Level 2)
Asset Impairment Charges [Abstract]
Goodwill impairment charge	$ 21,500

[1] The Company holds trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is included in other assets on the Consolidated Statements of Financial Position and is valued based on the underlying fair value of each fund held by the trust. A majority of the funds held related to the supplemental executive retirement plans have been invested in fixed income funds managed by a third party. The declared rate on these funds is set based on a formula using the yield of the general account investment portfolio that supports the fund, adjusted for expenses and other charges. The rate is guaranteed for one year at issue, and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. As the value is based on adjusted market rates, and the fixed rate is only reset on an annual basis, these funds are classified as Level 2. The remaining funds held are also managed by a third party, and include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. Therefore. these securities are classified as Level 1. The related deferred compensation liabilities are included in other long-term liabilities on the Consolidated Statements of Financial Position and are valued based on the underlying investment selections held in each participant’s account. Investment options generally mirror those funds held by the rabbi trust, for which there is an active quoted market. Therefore, these investment balances are classified as Level 1. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percentage of the I.R.S. Applicable Federal Rates in effect and therefore these balances are classified as Level 2.

[2] The Company’s commodity derivatives represent futures contracts used in its hedging or other programs to offset price fluctuations associated with purchases of corn and soybean meal, and to minimize the price risk assumed when forward priced contracts are offered to the Company’s commodity suppliers. The Company’s futures contracts for corn and soybean meal are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available and therefore these contracts are classified as Level 1. All derivatives are reviewed for potential credit risk and risk of nonperformance. 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 net balance for each program is included in other current assets or accounts payable, as appropriate, in the Consolidated Statements of Financial Position. As of October 25, 2015, the Company has recognized the right to reclaim net cash collateral of $2.3 million from various counterparties (including $13.7 million of cash less $11.4 million of realized losses on closed positions). As of October 26, 2014, the Company had recognized the right to reclaim net cash collateral of $11.5 million from various counterparties (including $55.6 million of cash less $44.1 million of realized losses on closed positions).

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Commitments and Contingencies (Detail) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Purchase commitments
2016	$ 1,427,178
2017	959,812
2018	688,677
2019	449,439
2020	326,233
Later Years	293,510
Total	4,144,849
Purchases under contracts	1,600,000	$ 2,200,000	$ 2,000,000
Noncancelable operating lease commitments
2016	11,250
2017	6,041
2018	4,586
2019	3,545
2020	3,034
Later years	6,738
Total	35,194
Expenses under noncancelable operating lease commitments	22,400	$ 21,100	$ 21,600
Approximate amount of commitments to complete construction in progress at various locations	254,300
Standby letters of credit	44,100
Revocable standby letter of credit	4,000
Portion of expected future cash expenditures
Purchase commitments
Contract value threshold	1,000
2016	518,158
2017	28,212
2018	27,102
2019	2,794
2020	1,931
Later Years	8,866
Total	$ 587,063
Hogs and turkeys | Maximum
Purchase commitments
Purchase commitments, time period	10 years
Grow-out contracts | Maximum
Purchase commitments
Purchase commitments, time period	25 years
Corn, soybean meal and other feed | Maximum
Purchase commitments
Purchase commitments, time period	3 years

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Earnings Per Share Data (Details) - shares shares in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Earnings Per Share Data
Basic weighted-average shares outstanding	264,072	263,812	264,317
Dilutive potential common shares	6,429	6,404	5,907
Diluted weighted-average shares outstanding	270,501	270,216	270,224
Weighted average stock options not included in the computation of dilutive potential common shares	500	400	400

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Segment Reporting (Detail) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 25, 2015 USD ($)	Jul. 26, 2015 USD ($)	Apr. 26, 2015 USD ($)	Jan. 25, 2015 USD ($)	Oct. 26, 2014 USD ($)	Jul. 27, 2014 USD ($)	Apr. 27, 2014 USD ($)	Jan. 26, 2014 USD ($)	Oct. 25, 2015 USD ($) segment	Oct. 26, 2014 USD ($)	Oct. 27, 2013 USD ($)
Operating profit and other financial information
Goodwill impairment charge									$ 21,537
Number of reportable business segments | segment									5
Sales	$ 2,400,858	$ 2,188,587	$ 2,279,345	$ 2,395,073	$ 2,543,771	$ 2,284,947	$ 2,244,866	$ 2,242,672	$ 9,263,863	$ 9,316,256	$ 8,751,654
Segment Operating Profit									1,067,320	931,620	805,989
Net interest and investment expense									10,177	9,468	7,482
General corporate expense									35,199	33,434	26,694
Noncontrolling interest									1,176	3,349	3,865
EARNINGS BEFORE INCOME TAXES									1,057,143	922,152	798,507
Assets	6,139,831				5,455,619				6,139,831	5,455,619	4,915,880
Additions to Property, Plant and Equipment									144,063	159,138	106,762
Depreciation and Amortization									133,434	130,044	124,850
Intersegment sales
Operating profit and other financial information
Sales									141,317	167,422	140,887
Operating segment
Operating profit and other financial information
Sales									9,263,863	9,316,256	8,751,654
Segment Operating Profit									1,101,343	961,705	828,818
Intersegment elimination
Operating profit and other financial information
Sales									(141,317)	(167,422)	(140,887)
Corporate
Operating profit and other financial information
Assets	705,107				712,928				705,107	712,928	810,077
Additions to Property, Plant and Equipment									15,750	32,291	8,697
Depreciation and Amortization									10,428	6,821	6,000
Grocery Products
Operating profit and other financial information
Sales									1,617,680	1,558,265	1,517,557
Assets	1,214,988				1,249,631				1,214,988	1,249,631	1,237,405
Additions to Property, Plant and Equipment									18,104	31,741	10,100
Depreciation and Amortization									26,972	25,883	22,912
Grocery Products | Operating segment
Operating profit and other financial information
Sales									1,617,680	1,558,265	1,517,557
Segment Operating Profit									228,582	195,064	213,646
Refrigerated Foods
Operating profit and other financial information
Sales									4,372,347	4,644,179	4,251,515
Assets	1,973,424				1,215,694				1,973,424	1,215,694	1,218,418
Additions to Property, Plant and Equipment									54,074	61,183	58,523
Depreciation and Amortization									53,325	57,709	57,879
Refrigerated Foods | Intersegment sales
Operating profit and other financial information
Sales									13,058	23,163	17,359
Refrigerated Foods | Operating segment
Operating profit and other financial information
Sales									4,385,405	4,667,342	4,268,874
Segment Operating Profit									424,968	338,020	232,692
Jennie-O Turkey Store
Operating profit and other financial information
Sales									1,635,776	1,672,452	1,601,868
Assets	811,693				857,697				811,693	857,697	819,343
Additions to Property, Plant and Equipment									32,250	25,761	22,863
Depreciation and Amortization									28,262	27,091	26,921
Jennie-O Turkey Store | Intersegment sales
Operating profit and other financial information
Sales									128,195	144,137	123,420
Jennie-O Turkey Store | Operating segment
Operating profit and other financial information
Sales									1,763,971	1,816,589	1,725,288
Segment Operating Profit									276,217	272,362	222,117
Specialty Foods
Operating profit and other financial information
Goodwill impairment charge									21,537
Sales									1,103,359	907,120	932,533
Assets	988,455				1,013,420				988,455	1,013,420	469,599
Additions to Property, Plant and Equipment									5,309	3,266	3,606
Depreciation and Amortization									11,075	8,999	9,232
Specialty Foods | Intersegment sales
Operating profit and other financial information
Sales									64	122	108
Specialty Foods | Operating segment
Operating profit and other financial information
Sales									1,103,423	907,242	932,641
Segment Operating Profit									93,258	71,514	88,873
International & Other
Operating profit and other financial information
Sales									534,701	534,240	448,181
Assets	$ 446,164				$ 406,249				446,164	406,249	361,038
Additions to Property, Plant and Equipment									18,576	4,896	2,973
Depreciation and Amortization									3,372	3,541	1,906
International & Other | Operating segment
Operating profit and other financial information
Sales									534,701	534,240	448,181
Segment Operating Profit									78,318	$ 84,745	$ 71,490
Assets Held For Sale. | Portion of DCB | Specialty Foods
Operating profit and other financial information
Goodwill impairment charge									$ 21,500

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Segment Reporting (Details 2) - Revenues	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Percentage of revenue by classes of products
Percentage of total revenues	100.00%	100.00%	100.00%
Perishable
Percentage of revenue by classes of products
Percentage of total revenues	53.00%	54.50%	53.30%
Poultry
Percentage of revenue by classes of products
Percentage of total revenues	18.60%	18.40%	18.80%
Shelf-stable
Percentage of revenue by classes of products
Percentage of total revenues	18.40%	19.00%	19.00%
Miscellaneous
Percentage of revenue by classes of products
Percentage of total revenues	10.00%	8.10%	8.90%

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Segment Reporting (Details 3) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 25, 2015	Jul. 26, 2015	Apr. 26, 2015	Jan. 25, 2015	Oct. 26, 2014	Jul. 27, 2014	Apr. 27, 2014	Jan. 26, 2014	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Revenues attributable to U.S. and Foreign countries
Revenue, Net	$ 2,400,858	$ 2,188,587	$ 2,279,345	$ 2,395,073	$ 2,543,771	$ 2,284,947	$ 2,244,866	$ 2,242,672	$ 9,263,863	$ 9,316,256	$ 8,751,654
United States
Revenues attributable to U.S. and Foreign countries
Revenue, Net									8,721,722	8,708,042	8,193,730
Foreign
Revenues attributable to U.S. and Foreign countries
Revenue, Net									$ 542,141	$ 608,214	$ 557,924

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Segment Reporting (Details 4) - Revenues - USD ($) $ in Millions	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Revenues from major customer
Concentration risk (as a percent)	100.00%	100.00%	100.00%
Customer concentration | Wal-Mart Stores
Revenues from major customer
Gross sales, less returns and allowances	$ 1,430	$ 1,430
Concentration risk (as a percent)	13.90%	14.10%

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Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Oct. 25, 2015	Jul. 26, 2015	Apr. 26, 2015	Jan. 25, 2015	Oct. 26, 2014	Jul. 27, 2014	Apr. 27, 2014	Jan. 26, 2014	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Quarterly Results of Operations (Unaudited)
Net sales	$ 2,400,858	$ 2,188,587	$ 2,279,345	$ 2,395,073	$ 2,543,771	$ 2,284,947	$ 2,244,866	$ 2,242,672	$ 9,263,863	$ 9,316,256	$ 8,751,654
Gross Profit	495,030	409,390	459,556	444,605	423,584	363,999	378,758	398,642	1,808,581	1,564,983	1,412,816
Net earnings	187,443	146,956	180,435	172,430	171,848	139,014	140,706	154,458	687,264	606,026	530,076
Net Earnings Attributable to Hormel Foods Corporation	$ 187,231	$ 146,938	$ 180,201	$ 171,718	$ 171,264	$ 137,975	$ 140,090	$ 153,348	$ 686,088	$ 602,677	$ 526,211
Basic Earnings Per Share (in dollars per share)	$ 0.71	$ 0.56	$ 0.68	$ 0.65	$ 0.65	$ 0.52	$ 0.53	$ 0.58	$ 2.60	$ 2.28	$ 1.99
Diluted Earnings Per Share (in dollars per share)	$ 0.69	$ 0.54	$ 0.67	$ 0.64	$ 0.63	$ 0.51	$ 0.52	$ 0.57	$ 2.54	$ 2.23	$ 1.95

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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 25, 2015	Oct. 26, 2014	Oct. 27, 2013
Change in valuation and qualifying accounts and reserves
Balance at Beginning of Period	$ 4,050	$ 4,000	$ 4,000
Additions/(Benefits) Charged to Costs and Expenses	(25)	4,076	476
Additions/(Benefits) Charged to Other Accounts Describe	36	50	0
Deductions-Describe, Uncollectible accounts written off	52	4,152	497
Deductions-Describe, Recoveries on accounts previously written off	(77)	(76)	(21)
Balance at End of Period	$ 4,086	$ 4,050	$ 4,000