10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 28, 2013

or

oTRANSITION 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)

(507) 437-5611

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x YES o NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x YES o NO

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 o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at September 1, 2013
Common Stock	$.0293 par value	263,930,474
Common Stock Non-Voting	$.01 par value	-0-

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION — July 28, 2013 and October 28, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS — Three and Nine Months Ended July 28, 2013 and July 29, 2012
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT — Twelve Months Ended October 28, 2012 and Nine Months Ended July 28, 2013
CONSOLIDATED STATEMENTS OF CASH FLOWS — Nine Months Ended July 28, 2013 and July 29, 2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
CRITICAL ACCOUNTING POLICIES
RESULTS OF OPERATIONS
Overview
Consolidated Results
Segment Results
Related Party Transactions
LIQUIDITY AND CAPITAL RESOURCES
FORWARD-LOOKING STATEMENTS
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.	Exhibits
SIGNATURES

2

PART I — FINANCIAL INFORMATION

Item 1.  Financial Statements

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands, except share and per share amounts)

	July 28,			October 28,
	2013			2012
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	329,496		$	682,388
Short-term marketable securities	—			77,387
Accounts receivable	514,398			507,041
Inventories	1,003,736			950,521
Income taxes receivable	2,868			16,460
Deferred income taxes	76,502			68,560
Prepaid expenses	14,867			12,772
Other current assets	9,723			5,555
TOTAL CURRENT ASSETS	1,951,590			2,320,684
DEFERRED INCOME TAXES	137,542			144,245
GOODWILL	934,472			630,875
OTHER INTANGIBLES	380,410			123,072
PENSION ASSETS	49			49
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES	269,221			286,537
OTHER ASSETS	138,944			134,024
PROPERTY, PLANT AND EQUIPMENT
Land	58,589			56,258
Buildings	782,142			767,876
Equipment	1,519,715			1,435,630
Construction in progress	74,153			82,254
	2,434,599			2,342,018
Less allowance for depreciation	(1,485,578		)	(1,417,538		)
	949,021			924,480
TOTAL ASSETS	$	4,761,249		$	4,563,966

See Notes to Consolidated Financial Statements

3

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands, except share and per share amounts)

	July 28,			October 28,
	2013			2012
	(Unaudited)
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES
Accounts payable	$	369,887		$	385,877
Accrued expenses	32,467			49,792
Accrued workers compensation	37,169			33,543
Accrued marketing expenses	113,002			78,712
Employee related expenses	182,592			193,463
Taxes payable	6,128			4,864
Interest and dividends payable	48,239			40,049
TOTAL CURRENT LIABILITIES	789,484			786,300
PENSION AND POST-RETIREMENT BENEFITS	589,659			615,428
LONG-TERM DEBT—less current maturities	250,000			250,000
OTHER LONG-TERM LIABILITIES	78,222			87,313
SHAREHOLDERS’ INVESTMENT
Preferred stock, par value $.01 a share—authorized 160,000,000 shares; issued—none
Common stock, non-voting, par value $.01 a share—authorized 400,000,000 shares; issued—none
Common stock, par value $.0293 a share—authorized 800,000,000 shares;
issued 264,054,986 shares July 28, 2013
issued 263,044,280 shares October 28, 2012	7,737			7,707
Accumulated other comprehensive loss	(325,565		)	(323,569		)
Retained earnings	3,363,363			3,135,317
HORMEL FOODS CORPORATION SHAREHOLDERS’ INVESTMENT	3,045,535			2,819,455
NONCONTROLLING INTEREST	8,349			5,470
TOTAL SHAREHOLDERS’ INVESTMENT	3,053,884			2,824,925
TOTAL LIABILITIES AND SHAREHOLDERS’ INVESTMENT	$	4,761,249		$	4,563,966

See Notes to Consolidated Financial Statements

4

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Net sales	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Cost of products sold	1,829,219			1,701,132			5,401,152			5,080,414
GROSS PROFIT	330,306			307,056			1,027,300			980,072
Selling, general and administrative	150,999			145,022			479,896			446,183
Equity in earnings of affiliates	1,346			9,823			18,383			28,640
OPERATING INCOME	180,653			171,857			565,787			562,529
Other income and expense:
Interest and investment (expense) income	(455		)	844			2,471			4,772
Interest expense	(3,122		)	(3,207		)	(9,358		)	(9,704		)
EARNINGS BEFORE INCOME TAXES	177,076			169,494			558,900			557,597
Provision for income taxes	63,171			57,087			187,309			186,922
NET EARNINGS	113,905			112,407			371,591			370,675
Less: Net earnings attributable to noncontrolling interest	270			1,240			2,720			3,226
NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION	$	113,635		$	111,167		$	368,871		$	367,449
NET EARNINGS PER SHARE:
BASIC	$	0.43		$	0.42		$	1.39		$	1.39
DILUTED	$	0.42		$	0.41		$	1.37		$	1.37
WEIGHTED-AVERAGE SHARES OUTSTANDING:
BASIC	264,605			263,359			264,472			263,638
DILUTED	270,769			268,746			270,230			269,138
DIVIDENDS DECLARED PER SHARE:	$	0.17		$	0.15		$	0.51		$	0.45

See Notes to Consolidated Financial Statements

5

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)

	Three Months Ended					Nine Months Ended
	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
NET EARNINGS	$	113,905		$	112,407	$	371,591		$	370,675
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(3,613		)	873		(2,816		)	1,997
Pension and other benefits	6,484			2,538		17,520			6,107
Deferred hedging	(3,158		)	15,234		(16,541		)	(1,439		)
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME	(287		)	18,645		(1,837		)	6,665
COMPREHENSIVE INCOME	113,618			131,052		369,754			377,340
Less: Comprehensive income attributable to noncontrolling interest	376			1,252		2,879			3,304
COMPREHENSIVE INCOME ATTRIBUTABLE TO HORMEL FOODS CORPORATION	$	113,242		$	129,800	$	366,875		$	374,036

See Notes to Consolidated Financial Statements

6

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT

(in thousands, except per share amounts)

(Unaudited)

	Hormel Foods Corporation Shareholders
	Common Stock			Treasury Stock			Additional Paid-in Capital			Retained Earnings			Accumulated Other  Comprehensive Income (Loss)			Non- controlling Interest			Total Shareholders’ Investment
Balance at October 30, 2011	$	7,734		$	—		$	—		$	2,824,331		$	(175,483	)	$	3,234		$	2,659,816
Net earnings										500,050						4,911			504,961
Other comprehensive (loss) income													(148,086		)	51			(148,035		)
Purchases of common stock				(61,366		)													(61,366		)
Stock-based compensation expense							16,710												16,710
Exercise of stock options/nonvested shares	36			(295		)	13,576												13,317
Shares retired	(63		)	61,661			(30,286		)	(31,312		)							—
Proceeds from noncontrolling interest																774			774
Distribution to noncontrolling interest																(3,500		)	(3,500		)
Declared cash dividends - $.60 per share										(157,752		)							(157,752		)
Balance at October 28, 2012	$	7,707		$	—		$	—		$	3,135,317		$	(323,569	)	$	5,470		$	2,824,925
Net earnings										368,871						2,720			371,591
Other comprehensive (loss) income													(1,996		)	159			(1,837		)
Purchases of common stock				(45,668		)													(45,668		)
Stock-based compensation expense							16,429												16,429
Exercise of stock options/nonvested shares	64						23,418												23,482
Shares retired	(34		)	45,668			(39,847		)	(5,787		)							—
Declared cash dividends - $.51 per share										(135,038		)							(135,038		)
Balance at July 28, 2013	$	7,737		$	—		$	—		$	3,363,363		$	(325,565	)	$	8,349		$	3,053,884

See Notes to Consolidated Financial Statements

7

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Nine Months Ended
	July 28, 2013			July 29, 2012
OPERATING ACTIVITIES
Net earnings	$	371,591		$	370,675
Adjustments to reconcile to net cash provided by operating activities:
Depreciation	85,824			81,947
Amortization of intangibles	7,162			6,680
Equity in earnings of affiliates, net of dividends	15,636			(8,032		)
Provision for deferred income taxes	(6,009		)	183
Gain on property/equipment sales and plant facilities	(691		)	(245		)
Non-cash investment activities	(1,452		)	(2,527		)
Stock-based compensation expense	16,429			14,191
Excess tax benefit from stock-based compensation	(18,930		)	(6,827		)
Other	1,000			—
Changes in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable	(7,357		)	(13,315		)
Increase in inventories	(4,060		)	(41,224		)
Decrease in prepaid expenses and other current assets	5,603			11,868
Increase (decrease) in pension and post-retirement benefits	791			(14,749		)
Decrease in accounts payable and accrued expenses	(36,688		)	(114,572		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	428,849			284,053
INVESTING ACTIVITIES
Net sale of trading securities	77,558			—
Acquisitions of businesses/intangibles	(665,415		)	(168		)
Purchases of property/equipment	(68,731		)	(93,915		)
Proceeds from sales of property/equipment	6,519			3,510
(Increase) decrease in investments, equity in affiliates, and other assets	(4,810		)	17,661
NET CASH USED IN INVESTING ACTIVITIES	(654,879		)	(72,912		)
FINANCING ACTIVITIES
Proceeds from short-term debt	25,000			—
Principal payments on short-term debt	(25,000		)	—
Dividends paid on common stock	(129,426		)	(112,683		)
Share repurchase	(45,668		)	(50,692		)
Proceeds from exercise of stock options	29,268			13,910
Excess tax benefit from stock-based compensation	18,930			6,827
Proceeds from noncontrolling interest	—			774
NET CASH USED IN FINANCING ACTIVITIES	(126,896		)	(141,864		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	34			810
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(352,892		)	70,087
Cash and cash equivalents at beginning of year	682,388			463,130
CASH AND CASH EQUIVALENTS AT END OF QUARTER	$	329,496		$	533,217

See Notes to Consolidated Financial Statements

8

HORMEL FOODS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE AGENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year.  The balance sheet at October 28, 2012, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

Certain reclassifications of previously reported amounts have been made to conform to the current year presentation.  The reclassifications had no impact on net earnings as previously reported.

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.  Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings.  Securities held by the trust generated gains of $92 thousand and $2.8 million for the third quarter and nine months ended July 28, 2013, respectively, compared to gains of $0.5 million and $3.2 million for the third quarter and nine months ended July 29, 2012.  The majority of this portfolio is held in fixed return investments to reduce the exposure to volatility in equity markets.

During fiscal 2012 and 2013, the Company also held securities as part of an investment portfolio, which are classified as short-term marketable securities on the Consolidated Statements of Financial Position.  These investments are also trading securities.  Therefore, unrealized gains and losses are included in the Company’s earnings.  The Company recorded a gain of $0.2 million related to these investments during the first quarter of fiscal 2013, compared to gains of $0.2 million and $0.9 million for the third quarter and nine months ended July 29, 2012.  These securities were liquidated in the first quarter of fiscal 2013.

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 and other investments, amortization of affordable housing investments, and amortization of bond financing costs.  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.

9

Guarantees

The Company enters into various agreements guaranteeing specified obligations of affiliated parties.  The Company’s guarantees either terminate in one year or remain in place until such time as the Company revokes the agreement.  The Company currently provides revocable standby letters of credit totaling $6.2 million to guarantee obligations that may arise under worker compensation claims of an affiliated party.  This potential obligation is not reflected in the Company’s Consolidated Statements of Financial Position.

New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) updated the guidance within Accounting Standards Codification (ASC) 220, Comprehensive Income.  The update eliminates the option for companies to report other comprehensive income and its related components in the Statement of Changes in Stockholders’ Equity.  Instead, companies have the option to present total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous Statement of Comprehensive Income or in two separate but consecutive statements.  The updated guidance is to be applied retrospectively, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted.  The Company early adopted the provisions of this accounting standard during the fourth quarter of fiscal 2012, and adoption did not have a material impact on the consolidated financial statements, as it relates to presentation only.

In February 2013, the FASB further updated the guidance within ASC 220, Comprehensive Income.  The update requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income (AOCI) and changes in AOCI balances.  For significant items reclassified out of AOCI to net income in their entirety in the same reporting period, reporting is required about the effect of the reclassifications on the respective line items in the statement where net income is presented.  For items that are not reclassified to net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under United States Generally Accepted Accounting Principles is required.  The above information must be presented in one place, either parenthetically on the face of the financial statements by income statement line item, or in a note.  The updated guidance is to be applied prospectively, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012, with early adoption permitted.  The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2014, and adoption is not expected to have a material impact on the consolidated financial statements as it relates to presentation and disclosure only.

In December 2011, the FASB updated the guidance within ASC 210, Balance Sheet.  The update enhances disclosures related to the offsetting of certain assets and liabilities to enable users of financial statements to understand the effect of those arrangements on financial position.  The updated guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.  The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2014, and adoption is not expected to have a material impact on the consolidated financial statements.

NOTE BACQUISITIONS

On January 31, 2013, the Company acquired the United States based SKIPPY peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. for a purchase price of $665.4 million in cash.  This acquisition includes the Little Rock, Arkansas manufacturing facility and all sales worldwide, except sales in China.  The Company expects to close the acquisition of the China based SKIPPY peanut butter business by the end of fiscal year 2013 for an additional investment of approximately $42.0 million, subject to regulatory approvals and working capital adjustments.  The purchase price was funded by the Company with cash on hand generated from operations and liquidating marketable securities.

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.

10

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 has determined final working capital adjustments.  Therefore, an allocation of the 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 (excluding transitional service expenses) related to the acquisition through the third quarter of fiscal 2013, and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

Operating results for this acquisition have been included in the Company’s Consolidated Statement of Operations from the date of acquisition (i.e. beginning in the second quarter) and are primarily reflected in the Grocery Products and International & Other reporting segments.  The acquisition contributed $90.9 million of net sales for the third quarter.  Pro forma results are not presented, as the acquisition was not considered material to the consolidated Company.

NOTE CSTOCK-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 periods ranging from six months to four years and expire ten years after the grant date.  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 July 28, 2013, and changes during the nine months then ended, is as follows:

	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at October 28, 2012	20,454	$	19.67
Granted	2,218	32.19
Exercised	3,743	15.63
Forfeited	22	27.36
Outstanding at July 28, 2013	18,907	$	21.93	5.7 years	$	368,931
Exercisable at July 28, 2013	12,867	$	18.89	4.5 years	$	290,214

11

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during the third quarter and first nine months of fiscal years 2013 and 2012 are as follows:

	Three Months Ended				Nine Months Ended
	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
Weighted-average grant date fair value of options granted	$	7.75	N/A		$	5.50	$	5.64
Intrinsic value of exercised options	$	2,591	$	8,011	$	65,244	$	23,332

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.  No options were granted in the third quarter ended July 29, 2012.

	Three Months Ended			Nine Months Ended
	July 28, 2013		July 29, 2012	July 28, 2013		July 29, 2012
Risk-Free Interest Rate	1.4	%	N/A	1.4	%	1.8	%
Dividend Yield	1.7	%	N/A	2.1	%	2.0	%
Stock Price Volatility	20.0	%	N/A	20.0	%	21.0	%
Expected Option Life	8 years		N/A	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 after September 26, 2010, vest after one year.  A reconciliation of the nonvested shares (in thousands) as of July 28, 2013, and changes during the nine months then ended, is as follows:

	Shares	Weighted- Average Grant- Date Fair Value
Nonvested at October 28, 2012	139	$	21.47
Granted	45	35.42
Vested	70	24.93
Nonvested at July 28, 2013	114	$	24.86

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 the first nine months of fiscal years 2013 and 2012 are as follows:

	Nine Months Ended
	July 28, 2013		July 29, 2012
Weighted-average grant date fair value	$	35.42	$	28.97
Fair value of nonvested shares granted	$	1,600	$	1,304
Fair value of shares vested	$	1,758	$	2,324

12

Stock-based compensation expense, along with the related income tax benefit, for the third quarter and first nine months of fiscal years 2013 and 2012 is presented in the table below.

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Stock-based compensation expense recognized	$	4,523		$	3,062		$	16,429		$	14,191
Income tax benefit recognized	(1,710		)	(1,161		)	(6,212		)	(5,381		)
After-tax stock-based compensation expense	$	2,813		$	1,901		$	10,217		$	8,810

At July 28, 2013, there was $8.6 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 4.5 years.  During the third quarter and nine months ended July 28, 2013, cash received from stock option exercises was $0.7 million and $29.3 million, respectively, compared to $3.9 million and $13.9 million for the third quarter and nine months ended July 29, 2012.  The total tax benefit to be realized for tax deductions from these option exercises for the third quarter and nine months ended July 28, 2013, was $1.0 million and $24.7 million, respectively, compared to $3.0 million and $8.8 million in the comparable periods in fiscal 2012.

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.

NOTE DGOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three and nine months periods ended July 28, 2013, are presented in the tables below.  The additions during the three and nine months ending July 28, 2013 are entirely due to the acquisition of the United States based SKIPPY peanut butter business on January 31, 2013.

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of April 28, 2013	$	320,655	$	96,643	$	203,214	$	207,028	$	104,574	$	932,114
Goodwill acquired	2,287		—		—		—		71		2,358
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of October 28, 2012	$	123,316	$	96,643	$	203,214	$	207,028	$	674	$	630,875
Goodwill acquired	199,626		—		—		—		103,971		303,597
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

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The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below.  Customer relationships of $25.1 million were acquired during the second quarter of fiscal 2013 related to the United States based SKIPPY peanut butter business.

	July 28, 2013					October 28, 2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Customer lists/relationships	$	47,130	$	(17,449	)	$	22,148	$	(14,684	)
Proprietary software & technology	14,820		(11,645		)	22,000		(17,319		)
Formulas & recipes	17,854		(13,290		)	17,854		(11,686		)
Other intangibles	9,786		(8,055		)	13,586		(10,686		)
Total	$	89,590	$	(50,439	)	$	75,588	$	(54,375	)

Amortization expense was $2.4 million and $7.2 million for the third quarter and nine months ended July 28, 2013, respectively, compared to $2.2 million and $6.7 million for the third quarter and nine months ended July 29, 2012.

Estimated annual amortization expense (in thousands) for the five fiscal years after October 28, 2012, is as follows:

Fiscal Year	Estimated Amortization Expense
2013	$	9,479
2014	8,654
2015	5,474
2016	3,348
2017	2,918

The carrying amounts for indefinite-lived intangible assets are presented in the table below. The increase in fiscal 2013 represents the fair value of the trade name and trademarks acquired with the United States based SKIPPY peanut butter business.

(in thousands)	July 28, 2013		October 28, 2012
Brands/tradenames/trademarks	$	333,275	$	93,875
Other intangibles	7,984		7,984
Total	$	341,259	$	101,859

NOTE EINVESTMENTS 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:

			July 28,		October 28,
(in thousands)	Segment	% Owned	2013		2012
MegaMex Foods, LLC	Grocery Products	50%	$	202,106	$	205,315
Foreign Joint Ventures	International & Other	Various (26-50%)	67,115		81,222
Total			$	269,221	$	286,537

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Equity in earnings of affiliates consists of the following:

		Three Months Ended				Nine Months Ended
(in thousands)	Segment	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
MegaMex Foods, LLC	Grocery Products	$	976	$	9,489	$	15,620	$	25,614
Foreign Joint Ventures	International & Other	370		334		2,763		3,026
Total		$	1,346	$	9,823	$	18,383	$	28,640

The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, which is being amortized through equity in earnings of affiliates.

NOTE FEARNINGS PER SHARE DATA

The following table sets forth the denominator for the computation of basic and diluted earnings per share:

	Three Months Ended		Nine Months Ended
(in thousands)	July 28, 2013	July 29, 2012	July 28, 2013	July 29, 2012
Basic weighted-average shares outstanding	264,605	263,359	264,472	263,638
Dilutive potential common shares	6,164	5,387	5,758	5,500
Diluted weighted-average shares outstanding	270,769	268,746	270,230	269,138

For the third quarter and nine months ended July 28, 2013, one thousand and 0.5 million weighted-average stock options were not included in the computation of dilutive potential common shares since their inclusion would have had an antidilutive effect on earnings per share, compared to 2.6 million and 2.1 million for the third quarter and nine months ended July 29, 2012.

NOTE GACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss, net of tax, are as follows:

(in thousands)	July 28, 2013			October 28, 2012
Foreign currency translation	$	9,440		$	12,415
Pension & other benefits	(327,945		)	(345,465		)
Deferred (loss) gain on hedging	(7,060		)	9,481
Accumulated other comprehensive loss	$	(325,565	)	$	(323,569	)

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NOTE HINVENTORIES

Principal components of inventories are:

(in thousands)	July 28, 2013		October 28, 2012
Finished products	$	568,069	$	494,298
Raw materials and work-in-process	253,493		267,877
Materials and supplies	182,174		188,346
Total	$	1,003,736	$	950,521

NOTE IDERIVATIVES AND HEDGING

The Company uses hedging programs to manage price risk associated with commodity purchases.  These programs utilize futures contracts 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 the price fluctuation in the Company’s future direct grain purchases, and has historically entered into various swaps to hedge the purchases of grain and natural gas 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 on a regular basis.  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 or natural gas exposure beyond the next two upcoming fiscal years.  As of July 28, 2013, and October 28, 2012, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases:

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	18.7 million bushels	12.0 million bushels

As of July 28, 2013, the Company has included in AOCL, hedging losses of $11.3 million (before tax) relating to these positions, compared to gains of $15.2 million (before tax) as of October 28, 2012.  The Company expects to recognize the majority of these losses over the next 12 months.

Fair Value Hedges:  The Company utilizes futures to minimize the price risk assumed when 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 on a regular basis.  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 Statements 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 July 28, 2013, and October 28, 2012, the Company had the following outstanding commodity futures contracts designated as fair value hedges:

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	7.8 million bushels	8.0 million bushels
Lean hogs	1.2 million cwt	0.9 million cwt

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Other Derivatives:  During fiscal years 2013 and 2012, the Company has held certain futures to manage the Company’s exposure to fluctuations in commodity markets and foreign currencies.  The Company has not applied hedge accounting to these positions.  As of July 28, 2013, and October 28, 2012, the Company had the following outstanding futures contracts related to other programs:

	Volume
Commodity	July 28, 2013	October 28, 2012
Soybean meal	1,900 tons	—

	Notional Amount
Currency	July 28, 2013	October 28, 2012
Chinese Yuan Renminbi	CNY$ 251.7 million	N/A

Fair Values:  The fair values of the Company’s derivative instruments (in thousands) as of July 28, 2013, and October 28, 2012, were as follows:

	Location on Consolidated	Fair Value (1)
	Statements of Financial Position	July 28, 2013			October 28, 2012
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$	(12,493	)	$	7,483
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	178			—
Foreign exchange contracts	Other current assets	(79		)	—
Total Asset Derivatives		$	(12,394	)	$	7,483

(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 Statements of Financial Position.   See Note J - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.

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Derivative Gains and Losses:  Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the third quarter ended July 28, 2013, and July 29, 2012, were as follows:

	Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Three Months Ended					Consolidated	Three Months Ended						Three Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts	$	(5,913	)	$	25,749	Cost of products sold	$	(838	)	$	1,317		$	(259	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Three Months Ended						Three Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	2,327		$	(2,658	)	$	16		$	(2,407	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Three Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(266	)	$	—
Foreign exchange contracts						Net sales	$	(79	)	$	—

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Derivative Gains and Losses:  Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the nine months ended July 28, 2013, and July 29, 2012, were as follows:

	Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Nine Months Ended					Consolidated	Nine Months Ended					Nine Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts	$	(18,382	)	$	13,664	Cost of products sold	$	8,148		$	15,958	$	(485	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Nine Months Ended					Nine Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	4,869		$	2,691	$	71		$	(2,361	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Nine Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(999	)	$	46
Foreign exchange contracts						Net sales	$	(79	)	$	—

(1)Amounts represent gains or losses in AOCL before tax.  See the Consolidated Statements of Comprehensive Income 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 third quarter or first nine months of fiscal years 2013 and 2012.

(3)There were no gains or losses resulting from the discontinuance of cash flow hedges during the third quarter or first nine months of fiscal years 2013 and 2012.

(4)Amounts represent gains (losses) on commodity contracts designated as fair value hedges that were closed during the third quarter or first nine months of fiscal years 2013 and 2012, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.  Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.

(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 third quarter or first nine months of fiscal years 2013 and 2012.

NOTE JFAIR VALUE MEASUREMENTS

Pursuant to the provisions of 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.  Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement.  The three levels are defined as follows:

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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.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of July 28, 2013, and October 28, 2012, and their level within the fair value hierarchy, are presented in the tables below.

	Fair Value Measurements at July 28, 2013
(in thousands)	Fair Value at July 28, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	121,417		$	121,417	$	—		$	—
Other trading securities (2)	112,523			37,291		75,232			—
Commodity derivatives (3)	8,448			8,448		—			—
Foreign exchange contracts (5)	(79		)	—		(79		)	—
Total Assets at Fair Value	$	242,309		$	167,156	$	75,153		$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,837		$	18,080	$	29,757		$	—
Total Liabilities at Fair Value	$	47,837		$	18,080	$	29,757		$	—

	Fair Value Measurements at October 28, 2012
(in thousands)	Fair Value at October 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	483,441	$	483,441	$	—	$	—
Short-term marketable securities (4)	77,387		2,349		75,038		—
Other trading securities (2)	109,676		36,305		73,371		—
Commodity derivatives (3)	3,884		3,884		—		—
Total Assets at Fair Value	$	674,388	$	525,979	$	148,409	$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,953	$	16,866	$	31,087	$	—
Total Liabilities at Fair Value	$	47,953	$	16,866	$	31,087	$	—

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 money market funds rated AAA, and 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

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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 United States Internal Revenue Service (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 July 28, 2013, the Company has recognized the right to reclaim cash collateral of $25.9 million from, and the obligation to return cash collateral of $5.1 million to, various counterparties.  As of October 28, 2012, the Company had recognized the right to reclaim cash collateral of $27.5 million from, and the obligation to return cash collateral of $31.1 million to, various counterparties.

(4)During fiscal 2012 and 2013, the Company held trading securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary.  The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid.  The cash, U.S. government securities, and highly rated money market funds held by the portfolio are classified as Level 1.  The investment portfolio also included corporate bonds, international government securities, commercial paper, agency securities, mortgage-backed securities, and other asset-backed securities for which there is an active, quoted market.  Market prices are obtained from a variety of industry standard providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2.  These securities were liquidated in the first quarter of fiscal 2013.

(5)The Company periodically uses foreign currency contracts to hedge the impact of fluctuations in exchange rates on certain transactions denominated in foreign currencies.  As there is an active market for these currencies, and the fair value of the contracts is calculated using exchange rates and forward rates obtained from a third-party pricing source, the contracts are classified as Level 2.

The Company’s financial assets and liabilities also include cash, 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 $261.2 million as of July 28, 2013, and $283.6 million as of October 28, 2012.

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 nine months ended July 28, 2013, and July 29, 2012, there were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

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NOTE KPENSION AND OTHER POST-RETIREMENT BENEFITS

Net periodic benefit cost for pension and other post-retirement benefit plans consists of the following:

	Pension Benefits
	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Service cost	$	7,744		$	5,856		$	23,234		$	17,568
Interest cost	11,922			12,284			35,766			36,852
Expected return on plan assets	(18,286		)	(17,128		)	(54,858		)	(51,383		)
Amortization of prior service cost	(1,269		)	(1,269		)	(3,809		)	(3,809		)
Recognized actuarial loss	8,505			5,032			25,514			15,097
Net periodic cost	$	8,616		$	4,775		$	25,847		$	14,325

	Post-retirement Benefits
	Three Months Ended					Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Service cost	$	612		$	556	$	1,836		$	1,668
Interest cost	3,693			4,437		11,081			13,312
Amortization of prior service cost	(401		)	882		(999		)	2,678
Recognized actuarial loss (gain)	1,982			—		5,807			(2		)
Net periodic cost	$	5,886		$	5,875	$	17,725		$	17,656

During the third quarter of fiscal 2013, the Company made discretionary contributions of $22.1 million to fund its pension plans, compared to discretionary contributions of $27.3 million during the third quarter of fiscal 2012.

NOTE LINCOME TAXES

The amount of unrecognized tax benefits, including interest and penalties, at July 28, 2013, recorded in other long-term liabilities was $22.0 million, of which $14.6 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 an expense of $36 thousand and gains of $4.5 million included in expense in the third quarter and first nine months, respectively, of fiscal 2013.  The amount of accrued interest and penalties at July 28, 2013, associated with unrecognized tax benefits was $3.2 million.

The Company is regularly audited by federal and state taxing authorities.  During fiscal year 2012, the I.R.S. concluded its examination of the Company’s consolidated federal income tax returns for the fiscal years through 2009, and opened its examination for fiscal years 2010 and 2011.  The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2006.  While it is reasonably possible that one or more of these audits may be completed within the next 12 months and that 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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NOTE MSEGMENT 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 includes the Hormel Refrigerated operating segment and the Affiliated Business Units.  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.  The Affiliated Business Units include the Farmer John, Burke Corporation, Dan’s Prize, Saag’s Products, Inc., and Precept Foods businesses.  Precept Foods, LLC, is a 50.01 percent owned joint venture.

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 includes the Diamond Crystal Brands, Century Foods International, and Hormel Specialty Products operating segments.  This segment consists of the packaging and sale of various sugar and sugar substitute products, salt and pepper products, liquid portion products, dessert mixes, ready-to-drink products, sports nutrition products, gelatin products, and private label canned meats to retail and foodservice customers.  This segment also includes the processing, marketing, and sale of nutritional food products and supplements to hospitals, nursing homes, and other marketers of nutritional products.

The International & Other segment includes the Hormel Foods International operating segment, which manufactures, markets, and sells Company products internationally.  This segment also includes the results from the Company’s international joint ventures and miscellaneous corporate sales.  This segment was previously the All Other segment, and was renamed in the second quarter of fiscal 2013 with no change in the composition of the segment.

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 below as net interest and investment expense (income), general corporate expense, and noncontrolling interest when reconciling to earnings before income taxes.

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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.

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Sales to Unaffiliated Customers
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,068,587			1,043,311			3,143,358			3,158,811
Jennie-O Turkey Store	367,125			351,604			1,142,198			1,120,028
Specialty Foods	240,512			230,072			720,048			677,043
International & Other	113,004			86,024			324,906			273,955
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Intersegment Sales
Grocery Products	$	—		$	—		$	—		$	—
Refrigerated Foods	4,654			2,385			10,393			7,929
Jennie-O Turkey Store	29,559			29,901			89,542			92,621
Specialty Foods	23			41			76			108
International & Other	—			—			—			—
Total	$	34,236		$	32,327		$	100,011		$	100,658
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	—		$	—		$	—		$	—
Net Sales
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,073,241			1,045,696			3,153,751			3,166,740
Jennie-O Turkey Store	396,684			381,505			1,231,740			1,212,649
Specialty Foods	240,535			230,113			720,124			677,151
International & Other	113,004			86,024			324,906			273,955
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Segment Operating Profit
Grocery Products	$	52,962		$	40,052		$	150,170		$	127,003
Refrigerated Foods	44,769			60,757			153,239			167,515
Jennie-O Turkey Store	45,623			39,106			156,567			186,066
Specialty Foods	23,170			21,490			72,898			58,996
International & Other	16,692			12,437			49,421			37,763
Total segment operating profit	$	183,216		$	173,842		$	582,295		$	577,343
Net interest and investment expense (income)	3,577			2,363			6,887			4,932
General corporate expense	2,833			3,225			19,228			18,040
Noncontrolling interest	270			1,240			2,720			3,226
Earnings before income taxes	$	177,076		$	169,494		$	558,900		$	557,597

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

CRITICAL ACCOUNTING POLICIES

There have been no material changes in the Company’s Critical Accounting Policies, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

RESULTS OF OPERATIONS

Overview

The Company is a processor of branded and unbranded food products for retail, foodservice, and fresh product customers.  It operates in five reportable segments as described in Note M in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

For the third quarter of fiscal 2013, the Company reported net earnings per diluted share of $0.42, an increase of 2.4 percent compared to $0.41 per diluted share in the third quarter of fiscal 2012.  Significant factors impacting the third quarter of fiscal 2013 were:

·Grocery Products results were positively impacted by the new SKIPPY peanut butter business.

·Continued strength in export sales of the SPAM family of products and fresh pork, as well as the addition of the new SKIPPY peanut butter business, led to notable net sales and profit gains for the International & Other segment.

·Jennie-O Turkey Store delivered a strong quarter, with value-added growth and operational gains offsetting higher grain costs and lower commodity meat prices.

·Refrigerated Foods profits decreased during the quarter, as higher pork input costs negatively impacted margins.

·Profitability increased for Specialty Foods with the Diamond Crystal Brands and Century Foods International operating segments reporting improved results.

Consolidated Results

Net earnings attributable to the Company for the third quarter of fiscal 2013 increased 2.2 percent to $113.6 million compared to $111.2 million in the same quarter of fiscal 2012.  Diluted earnings per share for the third quarter increased to $0.42 from $0.41 last year.  Net earnings attributable to the Company for the first nine months of fiscal 2013 increased 0.4 percent to $368.9 million, from $367.4 million for the first nine months of fiscal 2012.  Diluted earnings per share for the nine months were $1.37 for both fiscal 2013 and fiscal 2012.

Net sales for the third quarter of fiscal 2013 increased 7.5 percent to a record $2.16 billion, versus $2.01 billion in fiscal 2012.  Tonnage increased 2.6 percent to 1.19 billion lbs. for the third quarter compared to 1.16 billion lbs. for the same quarter of last year.  Net sales for the first nine months of fiscal 2013 increased 6.1 percent to a record $6.43 billion from $6.06 billion in the nine months of fiscal 2012.  Tonnage for the first nine months increased 2.7 percent to 3.67 billion lbs. compared to 3.57 billion lbs. in 2012.

Net sales were enhanced by the addition of the SKIPPY peanut butter business acquired at the beginning of the second quarter.  These sales contributed an incremental $90.9 million of net sales and 54.5 million lbs. for the quarter, and $177.9 million of net sales and 103.1 million lbs. for the first nine months of fiscal 2013.  Additionally, top-line results for the first nine months were aided by the addition of Don Miguel Foods Corp. sales (additional product lines within the MegaMex joint venture) beginning in the third quarter of fiscal 2012 when the Company’s retail sales force assumed responsibility for these sales.  These sales contributed an incremental $103.2 million of net sales and 47.4 million lbs. to the top-line results for the first nine months of fiscal 2013.  Higher export sales of the SPAM family of products and fresh pork by the Company’s international business have also provided notable growth throughout fiscal 2013.  Improved value-added sales within the Refrigerated Foods, Specialty Foods, and Jennie-O Turkey Store segments also contributed to the record top-lines results for the quarter.

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Gross profit for the third quarter and first nine months of fiscal 2013 was $330.3 million and $1.03 billion, respectively, compared to $307.1 million and $980.1 million for the same periods last year.  Gross profit as a percentage of net sales for the third quarter and first nine months of fiscal 2013 was 15.3 percent and 16.0 percent, respectively, versus 15.3 percent and 16.2 percent for the comparable periods in the prior year.  Lower margins in the Refrigerated Foods segment were offset by strong performances from the Grocery Products, International & Other and Jennie-O Turkey Store segments.  The additional margins from SKIPPY sales boosted margins for both the Grocery Products and International & Other segments.  Additionally, continued strong margin gains were experienced on export sales of the SPAM family of products and fresh pork in the International & Other segment during the quarter, and higher margins on value-added products at Jennie-O Turkey Store.   These increases were able to overcome sharp increases in input costs which constricted operating margins in Refrigerated Foods.  Additionally, shipping and handling expenses to date in fiscal 2013 increased in four of the Company’s five segments.

Entering the fourth quarter, the Company expects continued improved results from the Grocery Products and International & Other segments aided by the addition of SKIPPY sales.  In addition, the Jennie-O Turkey Store segment began turning the corner in the third quarter and should maintain their momentum in the fourth quarter.  While higher input costs are negatively impacting our value-added margins in Refrigerated Foods, these headwinds are expected to moderate towards the end of the fiscal year.  The contract allowing Diamond Crystal Brands to sell SPLENDA® sweetener into foodservice trade channels expired at the end of July 2013 in the ordinary course of business, and results for the Specialty Foods segment will be challenged by the loss of these sales in the fourth quarter.

Selling, general and administrative expenses for the third quarter and nine months of fiscal 2013 were $151.0 million and $479.9 million, respectively, compared to $145.0 million and $446.2 million last year.  Selling, general and administrative expenses as a percentage of net sales was 7.0 percent and 7.5 percent for the third quarter and first nine months of fiscal 2013, respectively, compared to 7.2 percent and 7.4 percent for the comparable periods of the prior year.  Transition and transaction costs incurred related to the SKIPPY acquisition were the main drivers of the increased expense for first nine months of fiscal 2013 compared to the prior year.  Within the third quarter, a reduction in advertising expenses partially offset higher employee-related expenses.  The Company expects selling, general and administrative expenses to be approximately 7.5 percent of net sales for the full year in fiscal 2013.

Equity in earnings of affiliates was $1.3 million and $18.4 million for the third quarter and first nine months of fiscal 2013, respectively, compared to $9.8 million and $28.6 million last year.  The decrease is a result of lower earnings from the Company’s 50 percent owned MegaMex joint venture, which experienced higher incentive expense on the Fresherized Foods acquisition, unfavorable exchange rates, and higher input costs.  Results have been mixed for the Company’s international joint ventures, but resulted in an overall decline for those operations during the first nine months of fiscal 2013 compared to the prior year.

The effective tax rate for the third quarter and first nine months of fiscal 2013 was 35.7 and 33.5 percent, respectively, compared to 33.7 and 33.5 percent for the comparable quarter and first nine months of fiscal 2012.  The higher rate for the third quarter is primarily related to lower earnings in affiliates.  The Company expects a full-year effective tax rate of approximately 34.0 percent for fiscal 2013.

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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 M of the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

	Three Months Ended						Nine Months Ended
(in thousands)	July 28,  2013		July 29,  2012		% Change		July 28, 2013		July 29, 2012		% Change
Net Sales
Grocery Products	$	370,297	$	297,177	24.6		$	1,097,942	$	830,649	32.2
Refrigerated Foods	1,068,587		1,043,311		2.4		3,143,358		3,158,811		(0.5	)
Jennie-O Turkey Store	367,125		351,604		4.4		1,142,198		1,120,028		2.0
Specialty Foods	240,512		230,072		4.5		720,048		677,043		6.4
International & Other	113,004		86,024		31.4		324,906		273,955		18.6
Total	$	2,159,525	$	2,008,188	7.5		$	6,428,452	$	6,060,486	6.1
Segment Operating Profit
Grocery Products	$	52,962	$	40,052	32.2		$	150,170	$	127,003	18.2
Refrigerated Foods	44,769		60,757		(26.3	)	153,239		167,515		(8.5	)
Jennie-O Turkey Store	45,623		39,106		16.7		156,567		186,066		(15.9	)
Specialty Foods	23,170		21,490		7.8		72,898		58,996		23.6
International & Other	16,692		12,437		34.2		49,421		37,763		30.9
Total segment operating profit	$	183,216	$	173,842	5.4		$	582,295	$	577,343	0.9
Net interest and investment expense (income)	3,577		2,363		51.4		6,887		4,932		39.6
General corporate expense	2,833		3,225		(12.2	)	19,228		18,040		6.6
Noncontrolling interest	270		1,240		(78.2	)	2,720		3,226		(15.7	)
Earnings before income taxes	$	177,076	$	169,494	4.5		$	558,900	$	557,597	0.2

Grocery Products

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.

Grocery Products net sales increased 24.6 percent and 32.2 percent for the third quarter and nine months of fiscal 2013, respectively, compared to the same fiscal 2012 periods.  Tonnage increased 27.1 percent for the third quarter and 31.1 percent for the first nine months compared to the prior year.  The comparative results reflect the addition of the newly acquired SKIPPY peanut butter business beginning in the second quarter of fiscal 2013 and Don Miguel Foods Corp. sales (additional product lines within the MegaMex joint venture) beginning in the third quarter of fiscal 2012 when the Company’s retail sales force assumed responsibility for these sales.  The addition of the SKIPPY peanut butter business contributed an incremental $72.5 million of net sales and 44.1 million lbs. to the top-line results for the quarter.  On a combined basis, these businesses contributed an incremental $246.2 million of net sales and 132.6 million lbs. to the top-line results for the first nine months of fiscal 2013.

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This segment experienced sales growth for Dinty Moore stew, Hormel Mary Kitchen hash, and Hormel bacon toppings during the quarter.  Largely offsetting these gains were lower sales of the SPAM family of products due to the advertising campaigns around the 75th anniversary of SPAM in the third quarter of fiscal 2012, and reduced sales of Hormel Compleats microwave meals.  The Company introduced new Compleats breakfast trays and MVP snack kits at the end of the third quarter, which are expected to enhance results going forward.

Segment profit for Grocery Products increased 32.2 percent for the third quarter and 18.2 percent for the first nine months compared to fiscal 2012.  Along with the positive performance from the SKIPPY products, profit results for the third quarter benefitted from improved margin performance in Hormel bacon toppings, Hormel hash, and Dinty Moore beef stew.  Lower equity in earnings results from the MegaMex joint venture in the quarter offset profits due to higher incentive expense on the Fresherized Food acquisition, unfavorable exchange rates, and higher input costs.

Although increased input costs will remain a concern for Grocery Products during the remainder of the fiscal year, the Company believes the initiatives in place to drive sales growth should result in a strong finish to fiscal 2013.

Refrigerated Foods

The Refrigerated Foods segment includes the Hormel Refrigerated operating segment and the Affiliated Business Units.  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.  The Affiliated Business Units include the Farmer John, Burke Corporation, Dan’s Prize, Saag’s Products, Inc., and Precept Foods businesses.  Precept Foods, LLC, is a 50.01 percent owned joint venture.

Net sales for the Refrigerated Foods segment increased 2.4 percent for the third quarter and decreased 0.5 percent for the first nine months of fiscal 2013, compared to the same periods of fiscal 2012.  Tonnage decreased 3.5 percent and 3.3 percent for the third quarter and first nine months compared to the prior year, as planned reductions in this segment’s feed sales business in the second quarter of fiscal 2013 impacted volume comparisons.  Increased net sales for the third quarter were seen across the Refrigerated Foods portfolio.  Within the Foodservice business unit, sales of branded products such as Hormel pecanwood bacon, Hormel Fire Braised meats, and Hormel Natural Choice deli meats experienced significant growth.  On the retail side, this segment enjoyed strong sales of Hormel party trays, Hormel Natural Choice deli meats, and Hormel Cure 81 hams.  The new Hormel REV wraps were supported by an advertising campaign which began in late July.  Declines for the first nine months of 2013 primarily reflect lower sales of commodity pork items as harvest levels were reduced to limit the Company’s exposure to unfavorable pork operating margins.

Segment profit for Refrigerated Foods decreased 26.3 percent and 8.5 percent for the third quarter and first nine months of fiscal 2013, respectively, compared to the prior year.  Although processing margins improved during the quarter, continued high raw material costs constricted margins in certain retail categories, with bacon impacted most notably in the third quarter.

Going into the fourth quarter, the Company expects Refrigerated Foods to benefit from its value-added product lines, driven by a decline in pork input costs along with the benefit of earlier pricing actions.  Pork operating margins are expected to improve in the fourth quarter from third quarter performance.  Additionally, the Company is excited about the new product introductions of Hormel REV wraps and Hormel Fire Braised meats this year, which are expected to continue to benefit sales in the fourth quarter.

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Jennie-O Turkey Store

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

JOTS net sales increased 4.4 percent and 2.0 percent for the third quarter and first nine months of fiscal 2013, respectively, versus the comparable periods of fiscal 2012.  Tonnage increased 1.0 percent for the third quarter and decreased 1.3 percent for the first nine months, compared to prior year results.  JOTS value-added products within the foodservice and deli business units delivered sales gains for the quarter.  Retail sales of Jennie-O Turkey Store ground turkey chubs and turkey bacon also improved.  Total harvest volume during recent quarters was intentionally reduced compared to the prior year to reduce the segment’s exposure to weak commodity turkey prices, which tempered overall top-line results for the segment.

Segment profit for JOTS increased 16.7 percent for the third quarter and decreased 15.9 percent for the first nine months of fiscal 2013, compared to the prior year.  Higher value-added pricing helped cover a portion of increased input costs while lower commodity pricing reduced contributions compared to a year ago.  Corn and soybean meal input costs remain volatile and are expected to continue throughout the harvest season.

As JOTS began turning the corner in the third quarter, the Company anticipates that this segment will maintain its momentum through the remainder of the fiscal year.  However, recent volatile grain markets have been impacting the effectiveness of the Company’s hedging programs.  If this volatility continues and results in ineffective programs, JOTS may be required to take market gains or losses on its positions through earnings in future quarters.  Effectiveness will continue to be monitored and reassessed at the end of the fourth quarter.  At this time, the fourth quarter results are still expected to exceed last year on improved value-added results, continued operational improvements, and live production gains.

Specialty Foods

The Specialty Foods segment includes the Diamond Crystal Brands (DCB), Century Foods International (CFI), and Hormel Specialty Products (HSP) operating segments.  This segment consists of the packaging and sale of various sugar and sugar substitute products, salt and pepper products, liquid portion products, dessert mixes, ready-to-drink products, sports nutrition products, gelatin products, and private label canned meats to retail and foodservice customers.  This segment also includes the processing, marketing, and sale of nutritional food products and supplements to hospitals, nursing homes, and other marketers of nutritional products.

Specialty Foods net sales increased 4.5 percent for the third quarter and 6.4 percent for the first nine months of fiscal 2013, compared to the same periods of fiscal 2012.  Tonnage decreased 4.7 percent for the third quarter and was flat for the first nine months compared to the prior year.  Sales growth in DCB for the quarter was led by strong sweetener sales, and robust ingredient and canned meat sales in HSP also drove top-line increases.  Despite strong nutritional product and ready-to-drink sales, third quarter net sales for CFI were flat versus last year due to lower bulk sales.

Specialty Foods segment profit increased 7.8 percent in the third quarter and 23.6 percent for the first nine months, compared to fiscal 2012 results.  DCB posted segment profit results well ahead of last year driven by strong sweetener sales, as the Company negotiated a one month contract extension allowing DCB to sell SPLENDA® sweetener into foodservice trade channels through the end of July 2013.  CFI segment profit exceeded last year primarily due to a favorable ready-to-drink sales mix, which was partially offset by lower production efficiencies due to lower volumes.  HSP results were negatively impacted by high canned meat raw material costs, which were partially offset by stronger ingredient margins.

The Company expects fourth quarter results for Specialty Foods to be below last year due to the loss of the  SPLENDA® sweetener contract and continued higher raw material costs.

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International & Other

The International & Other segment includes the Hormel Foods International (HFI) operating segment, which manufactures, markets, and sells Company products internationally.  This segment also includes the results from the Company’s international joint ventures and miscellaneous corporate sales.  This segment was previously the All Other segment, and was renamed in the second quarter of fiscal 2013 with no change in the composition of the segment.

International & Other net sales increased 31.4 percent and 18.6 percent for the third quarter and first nine months of fiscal 2013, respectively, compared to fiscal 2012.  Strong export sales of the SPAM family of products and fresh pork along with improved performance by the Company’s China operations were the principal drivers of the top-line results for the third quarter.  The addition of worldwide SKIPPY sales (excluding Mainland China) also enhanced the top-line results, contributing $17.0 million of net sales and 9.6 million lbs. in the third quarter and $33.5 million of net sales and 17.1 million lbs. for the first nine months of fiscal 2013.

Segment profit also increased, up 34.2 percent for the third quarter and 30.9 percent for the first nine months of fiscal 2013, compared to fiscal 2012 results.  Robust exports of the SPAM family of products and fresh pork enhanced profits.  In addition, continued improved China performance resulted from strong sales growth, favorable input costs, and production efficiencies.

The Company expects HFI to continue to provide strong results again in the fourth quarter, as export sales of the SPAM family of products and fresh pork and continued positive results in China will drive performance over last year.  Additionally, SKIPPY sales will continue to have a positive impact on profit for the remainder of the year.  The Company expects to close on the acquisition of the SKIPPY China based business located in Weifang by the end of the fiscal year, subject to regulatory approvals.

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 third quarter and first nine months of fiscal 2013 represented a net expense of $3.6 million and $6.9 million, respectively, compared to a net expense of $2.4 million and $4.9 million for the comparable quarter and nine months of fiscal 2012.  The increased net expense for both the third quarter and nine months primarily reflects lower interest income, as the acquisition of the United States based SKIPPY peanut butter business decreased invested funds in the current year.  The Company’s rabbi trust has also experienced lower results in fiscal 2013.  Interest expense of $9.4 million for the first nine months of fiscal 2013 has decreased from $9.7 million in the prior year, and the Company anticipates that interest expense will approximate $12.0 to $14.0 million for the full year in fiscal 2013.

General corporate expense for the third quarter and first nine months of fiscal 2013 was $2.8 million and $19.2 million, respectively, compared to $3.2 million and $18.0 million for the comparable periods of fiscal 2012.  The lower third quarter expense resulted from reduced compensation and medical expenses.

Net earnings attributable to the Company’s noncontrolling interests were $0.3 million and $2.7 million for the third quarter and first nine months of fiscal 2013, respectively, compared to $1.2 million and $3.2 million for the comparable periods of fiscal 2012.  The decreased earnings for both the third quarter and nine months primarily reflect lower results from the Company’s Precept Foods business.

Related Party Transactions

There has been no material change in the information regarding Related Party Transactions that was disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

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LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents were $329.5 million at the end of the third quarter of fiscal year 2013 compared to $533.2 million at the end of the comparable fiscal 2012 period.

Cash provided by operating activities was $428.8 million in the first nine months of fiscal 2013 compared to $284.1 million in the same period of fiscal 2012.  Favorable overall changes in working capital balances and increased dividends received from the Company’s joint ventures compared to the prior year largely generated the increase.  Additionally, the Company made a discretionary contribution of $22.1 million in the third quarter of fiscal 2013 to fund its pension plans, compared to a contribution of $27.3 million in the third quarter of fiscal 2012.

Cash used in investing activities was $654.9 million in the first nine months of fiscal 2013, compared to $72.9 million in the same period of fiscal 2012.   In anticipation of the second quarter acquisition of the United States based SKIPPY peanut butter business from Unilever United States Inc., the Company liquidated its marketable securities portfolio at the end of the first quarter, which generated $77.6 million in cash.  The Company then completed that acquisition on January 31, 2013, for a purchase price of $665.4 million in cash, plus related expenses.  Fixed asset expenditures were $68.7 million in the first nine months of fiscal 2013 versus $93.9 million in the comparable period of fiscal 2012.  The Company currently estimates its fiscal 2013 fixed asset expenditures to be approximately $110.0 to $120.0 million.

Cash used in financing activities was $126.9 million in the first nine months of fiscal 2013 compared to $141.9 million in the same period of fiscal 2012.  The Company used $45.7 million for common stock repurchases in the first nine months of fiscal 2013, compared to $50.7 million in the same period of the prior year.  For additional information pertaining to the Company’s share repurchase plans or programs, see Part II, Item 2 “Unregistered Sales of Equity Securities and Use of Proceeds.”

Cash dividends paid to the Company’s shareholders also continue to be an ongoing financing activity for the Company.  Dividends paid in the first nine months of fiscal 2013 were $129.4 million compared to $112.7 million in the comparable period of fiscal 2012.  For fiscal 2013, the annual dividend rate was increased to $0.68 per share, representing the 47th consecutive annual dividend increase.  The Company has paid dividends for 340 consecutive quarters and expects to continue doing so.

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 third quarter of fiscal 2013, the Company was in compliance with all of these debt covenants.

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.

Maximizing the value returned to shareholders through dividend payments remains a priority for use of the Company’s strong cash position going forward.  The Company remains well positioned to take advantage of strategic acquisition opportunities and continues to evaluate options in that area.  Capital spending to enhance and expand current operations is ongoing, and share repurchase activity is also expected to continue throughout the remainder of the fiscal year.

Contractual Obligations and Commercial Commitments

The Company records income taxes in accordance with the provisions of ASC 740, Income Taxes.  The Company is unable to determine its contractual obligations by year related to this pronouncement, as the ultimate amount or timing of settlement of its reserves for income taxes cannot be reasonably estimated.  The total liability for unrecognized tax benefits, including interest and penalties, at July 28, 2013, was $22.0 million.

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As noted above, the Company acquired the United States based portion of the SKIPPY peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. on January 31, 2013, for a purchase price of $665.4 million.   The Company intends to close the acquisition of the China based portion of that business by the end of fiscal year 2013 for an additional investment of approximately $42.0 million, subject to regulatory approvals and working capital adjustments.  There have been no other material changes to the information regarding the Company’s future contractual financial obligations that was disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

Off-Balance Sheet Arrangements

As of July 28, 2013, and October 28, 2012, the Company had $44.0 million and $43.9 million, respectively, of standby letters of credit issued on its behalf.  The standby letters of credit are primarily related to the Company’s self-insured worker’s compensation programs.  However, that amount also includes $6.2 million of revocable standby letters of credit for obligations of an affiliated party that may arise under worker’s compensation claims.  Letters of credit are not reflected in the Company’s Consolidated Statements of Financial Position.

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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 this Quarterly Report on Form 10-Q, the Company’s Annual Report to Stockholders, other filings by the Company with the Securities and Exchange Commission (the 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 discussion of risk factors in Part II, Item 1A of this Quarterly Report on Form 10-Q 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.

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Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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 98 percent of the total hogs purchased by the Company during the first nine months of fiscal 2013 and 2012.  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 on a regular basis.  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 July 28, 2013, was $0.4 million compared to $(2.3) million as of October 28, 2012.

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 July 28, 2013, open contracts by $10.3 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.

To manage 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, 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 $10.7 million, before tax, on the Consolidated Statement of Financial Position as of July 28, 2013, compared to an unrealized gain of $9.5 million, before tax, as of October 28, 2012.

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 July 28, 2013, open grain contracts by $9.3 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 $6.3 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 rate for similar types of borrowing arrangements.

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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 July 28, 2013, the balance of these securities totaled $112.5 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 $3.7 million, while a 10 percent increase in value would have a positive impact of the same amount.

International:  While the Company does have international operations and operates in international markets, it considers its market risk in such activities to be immaterial.

Item 4.  Controls and Procedures

(a)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 its 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, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information the Company is required to disclose in reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Commission rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b)Internal Controls.

During the third quarter of fiscal year 2013, there has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.  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.  The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable.  However, future developments or settlements are uncertain and may require the Company to change such accruals as proceedings progress.  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 1A.  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;

·disruption to operations if government inspectors are unavailable due to furloughs;

·consumer product liability claims;

·product tampering; and

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

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.

The recent 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.

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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 ingredients, avocados, and peanuts 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, and peanuts as well as 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.

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), pneumo-virus, Porcine Circovirus 2 (PCV2), Porcine Reproduction & Respiratory Syndrome (PRRS), Foot-and-Mouth Disease (FMD), Porcine Epidemic Diarrhea Virus (PEDV), and Avian Influenza.  The outbreak of disease could adversely affect the Company’s supply of raw materials, increase the cost of production, and reduce operating margins.  Additionally, the outbreak of disease may hinder the Company’s ability to market and sell products both domestically and internationally.  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.

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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, and peanut butter.  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.  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 acquisition of the SKIPPY peanut butter business, 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.  Recently, the Company has agreed to end its hog supply contract with AgFeed USA, LLC.  The Company is confident there will be an adequate hog supply to replace the quantity represented by this contract and expects there will be no effect on operations.

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 constant 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.

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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 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.

The Company has approximately 19,800 employees worldwide, of which approximately 5,700 are 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 or that results in work slowdowns or stoppages could harm the Company’s financial results.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities in the Third Quarter of Fiscal 2013

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 29, 2013 – June 2, 2013	120,000	$	41.88	120,000	10,870,200
June 3, 2013 – June 30, 2013	463,800	39.02		463,800	10,406,400
July 1, 2013 – July 28, 2013	369,000	39.61		369,000	10,037,400
Total	952,800	$	39.61	952,800

(1)On May 26, 2010, the Company announced that its Board of Directors had authorized the Company to   repurchase up to 5,000,000 shares of common stock with no expiration date.  On November 22, 2010, the Board of Directors authorized a two-for-one split of the Company’s common stock.  As part of the resolution to approve that stock split, the number of shares remaining to be repurchased was adjusted proportionately.  The stock split was approved by shareholders and was subsequently effected on February 1, 2011.  All numbers in the table above reflect the impact of this stock split.

On January 31, 2013, the Company announced that its Board of Directors had authorized the repurchase of up to an additional 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.  The Company’s prior share repurchase program authorized in fiscal 2010 will be fully utilized prior to commencing purchases under this new authorization.

Item 6.  Exhibits

31.1Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002

31.2Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002

32.1Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INSXBRL Instance Document

101.SCHXBRL Taxonomy Extension Schema Document

101.CALXBRL Taxonomy Extension Calculation Linkbase Document

101.DEFXBRL Taxonomy Extension Definition Linkbase Document

101.LABXBRL Taxonomy Extension Labels Linkbase Document

101.PREXBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements 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
		(Registrant)
Date: September 6, 2013	By		/s/ JODY H. FERAGEN
			JODY H. FERAGEN
			Executive Vice President, Chief Financial Officer, and Director
			(Principal Financial Officer)
Date: September 6, 2013	By		/s/ JAMES N. SHEEHAN
			JAMES N. SHEEHAN
			Vice President and Controller
			(Principal Accounting Officer)

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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 Quarterly Report on Form 10-Q of Hormel Foods Corporation for the period ended July 28, 2013;

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 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 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: September 6, 2013	Signed:	/s/ JEFFREY M. ETTINGER
		JEFFREY M. ETTINGER
		Chairman of the Board, President, Chief Executive Officer, and Director

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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 Quarterly Report on Form 10-Q of Hormel Foods Corporation for the period ended July 28, 2013;

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 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 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: September 6, 2013	Signed:	/s/ JODY H. FERAGEN
		JODY H. FERAGEN
		Executive Vice President, Chief Financial Officer, and Director

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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 Quarterly Report of Hormel Foods Corporation (the “Company”) on Form 10-Q for the period ended July 28, 2013, 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: September 6, 2013	/s/ JEFFREY M. ETTINGER
	JEFFREY M. ETTINGER
	Chairman of the Board, President, Chief Executive Officer, and Director

Dated: September 6, 2013	/s/ JODY H. FERAGEN
	JODY H. FERAGEN
	Executive Vice President, Chief Financial Officer, and Director

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XML

DERIVATIVES AND HEDGING

9 Months Ended

Jul. 28, 2013

DERIVATIVES AND HEDGING

DERIVATIVES AND HEDGING

NOTE I DERIVATIVES AND HEDGING

The Company uses hedging programs to manage price risk associated with commodity purchases.  These programs utilize futures contracts 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 the price fluctuation in the Company’s future direct grain purchases, and has historically entered into various swaps to hedge the purchases of grain and natural gas 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 on a regular basis.  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 or natural gas exposure beyond the next two upcoming fiscal years.  As of July 28, 2013, and October 28, 2012, the Company had the following outstanding commodity futures contracts that were entered into to hedge forecasted purchases:

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	18.7 million bushels	12.0 million bushels

As of July 28, 2013, the Company has included in AOCL, hedging losses of $11.3 million (before tax) relating to these positions, compared to gains of $15.2 million (before tax) as of October 28, 2012.  The Company expects to recognize the majority of these losses over the next 12 months.

Fair Value Hedges:  The Company utilizes futures to minimize the price risk assumed when 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 on a regular basis.  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 Statements 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 July 28, 2013, and October 28, 2012, the Company had the following outstanding commodity futures contracts designated as fair value hedges:

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	7.8 million bushels	8.0 million bushels
Lean hogs	1.2 million cwt	0.9 million cwt

Other Derivatives:  During fiscal years 2013 and 2012, the Company has held certain futures to manage the Company’s exposure to fluctuations in commodity markets and foreign currencies.  The Company has not applied hedge accounting to these positions.  As of July 28, 2013, and October 28, 2012, the Company had the following outstanding futures contracts related to other programs:

	Volume
Commodity	July 28, 2013	October 28, 2012
Soybean meal	1,900 tons	—

	Notional Amount
Currency	July 28, 2013	October 28, 2012
Chinese Yuan Renminbi	CNY$ 251.7 million	N/A

Fair Values:  The fair values of the Company’s derivative instruments (in thousands) as of July 28, 2013, and October 28, 2012, were as follows:

	Location on Consolidated	Fair Value (1)
	Statements of Financial Position	July 28, 2013			October 28, 2012
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$	(12,493	)	$	7,483
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	178			—
Foreign exchange contracts	Other current assets	(79		)	—
Total Asset Derivatives		$	(12,394	)	$	7,483

(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 Statements of Financial Position.   See Note J - Fair Value Measurements 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 third quarter ended July 28, 2013, and July 29, 2012, were as follows:

	Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Three Months Ended					Consolidated	Three Months Ended						Three Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts	$	(5,913	)	$	25,749	Cost of products sold	$	(838	)	$	1,317		$	(259	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Three Months Ended						Three Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	2,327		$	(2,658	)	$	16		$	(2,407	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Three Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(266	)	$	—
Foreign exchange contracts						Net sales	$	(79	)	$	—

Derivative Gains and Losses:  Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the nine months ended July 28, 2013, and July 29, 2012, were as follows:

	Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Nine Months Ended					Consolidated	Nine Months Ended					Nine Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts	$	(18,382	)	$	13,664	Cost of products sold	$	8,148		$	15,958	$	(485	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Nine Months Ended					Nine Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	4,869		$	2,691	$	71		$	(2,361	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Nine Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(999	)	$	46
Foreign exchange contracts						Net sales	$	(79	)	$	—

(1) Amounts represent gains or losses in AOCL before tax.  See the Consolidated Statements of Comprehensive Income 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 third quarter or first nine months of fiscal years 2013 and 2012.

(3) There were no gains or losses resulting from the discontinuance of cash flow hedges during the third quarter or first nine months of fiscal years 2013 and 2012.

(4) Amounts represent gains (losses) on commodity contracts designated as fair value hedges that were closed during the third quarter or first nine months of fiscal years 2013 and 2012, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.  Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.

(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 third quarter or first nine months of fiscal years 2013 and 2012.

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 2,159,525	$ 2,008,188	$ 6,428,452	$ 6,060,486
Cost of products sold	1,829,219	1,701,132	5,401,152	5,080,414
GROSS PROFIT	330,306	307,056	1,027,300	980,072
Selling, general and administrative	150,999	145,022	479,896	446,183
Equity in earnings of affiliates	1,346	9,823	18,383	28,640
OPERATING INCOME	180,653	171,857	565,787	562,529
Other income and expense:
Interest and investment (expense) income	(455)	844	2,471	4,772
Interest expense	(3,122)	(3,207)	(9,358)	(9,704)
EARNINGS BEFORE INCOME TAXES	177,076	169,494	558,900	557,597
Provision for income taxes	63,171	57,087	187,309	186,922
NET EARNINGS	113,905	112,407	371,591	370,675
Less: Net earnings attributable to noncontrolling interest	270	1,240	2,720	3,226
NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION	$ 113,635	$ 111,167	$ 368,871	$ 367,449
NET EARNINGS PER SHARE:
BASIC (in dollars per share)	$ 0.43	$ 0.42	$ 1.39	$ 1.39
DILUTED (in dollars per share)	$ 0.42	$ 0.41	$ 1.37	$ 1.37
WEIGHTED-AVERAGE SHARES OUTSTANDING:
BASIC (in shares)	264,605	263,359	264,472	263,638
DILUTED (in shares)	270,769	268,746	270,230	269,138
DIVIDENDS DECLARED PER SHARE: (in dollars per share)	$ 0.17	$ 0.15	$ 0.51	$ 0.45

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ACQUISITIONS

9 Months Ended

Jul. 28, 2013

ACQUISITIONS

ACQUISITIONS

NOTE B ACQUISITIONS

On January 31, 2013, the Company acquired the United States based SKIPPY peanut butter business from Conopco, Inc. (doing business as Unilever United States Inc.), of Englewood Cliffs, N.J. for a purchase price of $665.4 million in cash.  This acquisition includes the Little Rock, Arkansas manufacturing facility and all sales worldwide, except sales in China.  The Company expects to close the acquisition of the China based SKIPPY peanut butter business by the end of fiscal year 2013 for an additional investment of approximately $42.0 million, subject to regulatory approvals and working capital adjustments.  The purchase price was funded by the Company with cash on hand generated from operations and liquidating marketable securities.

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.

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 has determined final working capital adjustments.  Therefore, an allocation of the 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 (excluding transitional service expenses) related to the acquisition through the third quarter of fiscal 2013, and the charges were reported in selling, general and administrative expense in the Consolidated Statement of Operations.

Operating results for this acquisition have been included in the Company’s Consolidated Statement of Operations from the date of acquisition (i.e. beginning in the second quarter) and are primarily reflected in the Grocery Products and International & Other reporting segments.  The acquisition contributed $90.9 million of net sales for the third quarter.  Pro forma results are not presented, as the acquisition was not considered material to the consolidated Company.

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GOODWILL AND INTANGIBLE ASSETS (Tables)

9 Months Ended

Jul. 28, 2013

GOODWILL AND INTANGIBLE ASSETS

Schedule of change in the carrying amount of goodwill

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of April 28, 2013	$	320,655	$	96,643	$	203,214	$	207,028	$	104,574	$	932,114
Goodwill acquired	2,287		—		—		—		71		2,358
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of October 28, 2012	$	123,316	$	96,643	$	203,214	$	207,028	$	674	$	630,875
Goodwill acquired	199,626		—		—		—		103,971		303,597
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

Schedule of gross carrying amount and accumulated amortization for definite-lived intangible assets

	July 28, 2013					October 28, 2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Customer lists/relationships	$	47,130	$	(17,449	)	$	22,148	$	(14,684	)
Proprietary software & technology	14,820		(11,645		)	22,000		(17,319		)
Formulas & recipes	17,854		(13,290		)	17,854		(11,686		)
Other intangibles	9,786		(8,055		)	13,586		(10,686		)
Total	$	89,590	$	(50,439	)	$	75,588	$	(54,375	)

Schedule of estimated annual amortization expense

Fiscal Year	Estimated Amortization Expense
2013	$	9,479
2014	8,654
2015	5,474
2016	3,348
2017	2,918

Schedule of carrying amounts for indefinite-lived intangible assets

(in thousands)	July 28, 2013		October 28, 2012
Brands/tradenames/trademarks	$	333,275	$	93,875
Other intangibles	7,984		7,984
Total	$	341,259	$	101,859

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FAIR VALUE MEASUREMENTS

9 Months Ended

Jul. 28, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE J FAIR VALUE MEASUREMENTS

Pursuant to the provisions of 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.  Assets and liabilities are classified 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.

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of July 28, 2013, and October 28, 2012, and their level within the fair value hierarchy, are presented in the tables below.

	Fair Value Measurements at July 28, 2013
(in thousands)	Fair Value at July 28, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	121,417		$	121,417	$	—		$	—
Other trading securities (2)	112,523			37,291		75,232			—
Commodity derivatives (3)	8,448			8,448		—			—
Foreign exchange contracts (5)	(79		)	—		(79		)	—
Total Assets at Fair Value	$	242,309		$	167,156	$	75,153		$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,837		$	18,080	$	29,757		$	—
Total Liabilities at Fair Value	$	47,837		$	18,080	$	29,757		$	—

	Fair Value Measurements at October 28, 2012
(in thousands)	Fair Value at October 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	483,441	$	483,441	$	—	$	—
Short-term marketable securities (4)	77,387		2,349		75,038		—
Other trading securities (2)	109,676		36,305		73,371		—
Commodity derivatives (3)	3,884		3,884		—		—
Total Assets at Fair Value	$	674,388	$	525,979	$	148,409	$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,953	$	16,866	$	31,087	$	—
Total Liabilities at Fair Value	$	47,953	$	16,866	$	31,087	$	—

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 money market funds rated AAA, and 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 United States Internal Revenue Service (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 July 28, 2013, the Company has recognized the right to reclaim cash collateral of $25.9 million from, and the obligation to return cash collateral of $5.1 million to, various counterparties.  As of October 28, 2012, the Company had recognized the right to reclaim cash collateral of $27.5 million from, and the obligation to return cash collateral of $31.1 million to, various counterparties.

(4) During fiscal 2012 and 2013, the Company held trading securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary.  The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid.  The cash, U.S. government securities, and highly rated money market funds held by the portfolio are classified as Level 1.  The investment portfolio also included corporate bonds, international government securities, commercial paper, agency securities, mortgage-backed securities, and other asset-backed securities for which there is an active, quoted market.  Market prices are obtained from a variety of industry standard providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2.  These securities were liquidated in the first quarter of fiscal 2013.

(5) The Company periodically uses foreign currency contracts to hedge the impact of fluctuations in exchange rates on certain transactions denominated in foreign currencies.  As there is an active market for these currencies, and the fair value of the contracts is calculated using exchange rates and forward rates obtained from a third-party pricing source, the contracts are classified as Level 2.

The Company’s financial assets and liabilities also include cash, 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 $261.2 million as of July 28, 2013, and $283.6 million as of October 28, 2012.

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 nine months ended July 28, 2013, and July 29, 2012, there were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

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PENSION AND OTHER POST-RETIREMENT BENEFITS (Details) (USD $)	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
Pension and other postretirement benefits
Discretionary Contribution to pension plans	$ 22,100,000	$ 27,300,000
Pension Benefits
Pension and other postretirement benefits
Service cost	7,744,000	5,856,000	23,234,000	17,568,000
Interest cost	11,922,000	12,284,000	35,766,000	36,852,000
Expected return on plan assets	(18,286,000)	(17,128,000)	(54,858,000)	(51,383,000)
Amortization of prior service cost	(1,269,000)	(1,269,000)	(3,809,000)	(3,809,000)
Recognized actuarial loss (gain)	8,505,000	5,032,000	25,514,000	15,097,000
Net periodic cost	8,616,000	4,775,000	25,847,000	14,325,000
Post-retirement Benefits
Pension and other postretirement benefits
Service cost	612,000	556,000	1,836,000	1,668,000
Interest cost	3,693,000	4,437,000	11,081,000	13,312,000
Amortization of prior service cost	(401,000)	882,000	(999,000)	2,678,000
Recognized actuarial loss (gain)	1,982,000		5,807,000	(2,000)
Net periodic cost	$ 5,886,000	$ 5,875,000	$ 17,725,000	$ 17,656,000

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GOODWILL AND INTANGIBLE ASSETS (Details 2) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012	Oct. 28, 2012	Apr. 28, 2013 Customer lists/relationships	Jul. 28, 2013 Customer lists/relationships	Oct. 28, 2012 Customer lists/relationships	Jul. 28, 2013 Proprietary software and technology	Oct. 28, 2012 Proprietary software and technology	Jul. 28, 2013 Formulas and recipes	Oct. 28, 2012 Formulas and recipes	Jul. 28, 2013 Other intangibles	Oct. 28, 2012 Other intangibles
Gross carrying amount and accumulated amortization for definite-lived intangible assets
Definite-lived intangible assets acquired						$ 25,100,000
Gross Carrying Amount	89,590,000		89,590,000		75,588,000		47,130,000	22,148,000	14,820,000	22,000,000	17,854,000	17,854,000	9,786,000	13,586,000
Accumulated Amortization	(50,439,000)		(50,439,000)		(54,375,000)		(17,449,000)	(14,684,000)	(11,645,000)	(17,319,000)	(13,290,000)	(11,686,000)	(8,055,000)	(10,686,000)
Amortization expense	2,400,000	2,200,000	7,162,000	6,680,000
Estimated Amortization Expense
2013	9,479,000		9,479,000
2014	8,654,000		8,654,000
2015	5,474,000		5,474,000
2016	3,348,000		3,348,000
2017	$ 2,918,000		$ 2,918,000

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

9 Months Ended

Jul. 28, 2013

ACCUMULATED OTHER COMPREHENSIVE LOSS

Schedule of components of accumulated other comprehensive loss, net of tax

(in thousands)	July 28, 2013			October 28, 2012
Foreign currency translation	$	9,440		$	12,415
Pension & other benefits	(327,945		)	(345,465		)
Deferred (loss) gain on hedging	(7,060		)	9,481
Accumulated other comprehensive loss	$	(325,565	)	$	(323,569	)

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EARNINGS PER SHARE DATA (Tables)

9 Months Ended

Jul. 28, 2013

EARNINGS PER SHARE DATA

Schedule of denominator for the computation of basic and diluted earnings per share

	Three Months Ended		Nine Months Ended
(in thousands)	July 28, 2013	July 29, 2012	July 28, 2013	July 29, 2012
Basic weighted-average shares outstanding	264,605	263,359	264,472	263,638
Dilutive potential common shares	6,164	5,387	5,758	5,500
Diluted weighted-average shares outstanding	270,769	268,746	270,230	269,138

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DERIVATIVES AND HEDGING (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
Derivative instruments gains or losses (before tax)
Gains or losses excluded from the assessment of cash flow hedge effectiveness	$ 0	$ 0	$ 0	$ 0
Gains or losses excluded from the assessment of fair value hedge effectiveness	0	0	0	0
Gains or losses resulting from the discontinuance of cash flow hedges	0	0	0	0
Gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge	0	0	0	0
Cash Flow Hedges | Commodity contracts
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion)	(5,913)	25,749	(18,382)	13,664
Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion)	(838)	1,317	8,148	15,958
Gain/(Loss) Recognized in Earnings (Ineffective Portion)	(259)		(485)
Fair Value Hedges | Commodity contracts
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Earnings (Effective Portion)	2,327	(2,658)	4,869	2,691
Gain/(Loss) Recognized in Earnings (Ineffective Portion)	16	(2,407)	71	(2,361)
Derivatives not designated as hedges | Commodity contracts
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Earnings	(266)		(999)	46
Derivatives not designated as hedges | Foreign exchange contracts
Derivative instruments gains or losses (before tax)
Gain/(Loss) Recognized in Earnings	$ (79)		$ (79)

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ACQUISITIONS (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013 SKIPPY Worldwide, except sales in China	Jul. 28, 2013 SKIPPY Worldwide, except sales in China	Jan. 31, 2013 SKIPPY Worldwide, except sales in China	Jan. 31, 2013 SKIPPY China
Acquisitions
Purchase price							$ 665,415,000
Additional investment								42,000,000
Allocation of the purchase price to the acquired assets, liabilities, and goodwill
Inventory							49,156,000
Property, plant and equipment							48,461,000
Intangible assets							264,500,000
Goodwill							303,597,000
Current liabilities							(299,000)
Purchase price							665,415,000
Transaction costs (excluding transitional service expenses) related to the acquisition						7,700,000
Net sales	$ 2,159,525,000	$ 2,008,188,000	$ 6,428,452,000	$ 6,060,486,000	$ 90,900,000

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INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES (Details) (USD $)	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012	Oct. 28, 2012
Investments in and receivables from affiliates
Investments in and receivables from affiliates	$ 269,221,000		$ 269,221,000		$ 286,537,000
Equity in earnings of affiliates	1,346,000	9,823,000	18,383,000	28,640,000
MegaMex Foods, LLC
Investments in and receivables from affiliates
Ownership percentage	50.00%		50.00%
Investments in and receivables from affiliates	202,106,000		202,106,000		205,315,000
Equity in earnings of affiliates	976,000	9,489,000	15,620,000	25,614,000
Excess of investment over the underlying equity in net assets of the joint venture	21,300,000		21,300,000
Foreign Joint Ventures
Investments in and receivables from affiliates
Investments in and receivables from affiliates	67,115,000		67,115,000		81,222,000
Equity in earnings of affiliates	$ 370,000	$ 334,000	$ 2,763,000	$ 3,026,000
Foreign Joint Ventures | Minimum
Investments in and receivables from affiliates
Ownership percentage	26.00%		26.00%
Foreign Joint Ventures | Maximum
Investments in and receivables from affiliates
Ownership percentage	50.00%		50.00%

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INCOME TAXES (Details) (USD $)	3 Months Ended	9 Months Ended
	Jul. 28, 2013	Jul. 28, 2013
INCOME TAXES
Unrecognized tax benefits including interest and penalties	$ 22,000,000	$ 22,000,000
Portion of unrecognized tax benefit including interest and penalties, that if recognized, would impact effective tax rate	14,600,000	14,600,000
Interest and penalties expense (gain) related to uncertain tax positions recognized in income tax expense	36,000	(4,500,000)
Accrued interest and penalties, associated with unrecognized tax benefits	$ 3,200,000	$ 3,200,000

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PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables)

9 Months Ended

Jul. 28, 2013

PENSION AND OTHER POST-RETIREMENT BENEFITS

Schedule of net periodic benefit cost for pension and other post-retirement benefit plans

	Pension Benefits
	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Service cost	$	7,744		$	5,856		$	23,234		$	17,568
Interest cost	11,922			12,284			35,766			36,852
Expected return on plan assets	(18,286		)	(17,128		)	(54,858		)	(51,383		)
Amortization of prior service cost	(1,269		)	(1,269		)	(3,809		)	(3,809		)
Recognized actuarial loss	8,505			5,032			25,514			15,097
Net periodic cost	$	8,616		$	4,775		$	25,847		$	14,325

	Post-retirement Benefits
	Three Months Ended					Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Service cost	$	612		$	556	$	1,836		$	1,668
Interest cost	3,693			4,437		11,081			13,312
Amortization of prior service cost	(401		)	882		(999		)	2,678
Recognized actuarial loss (gain)	1,982			—		5,807			(2		)
Net periodic cost	$	5,886		$	5,875	$	17,725		$	17,656

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INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2013	Oct. 28, 2012
INVENTORIES
Finished products	$ 568,069	$ 494,298
Raw materials and work-in-process	253,493	267,877
Materials and supplies	182,174	188,346
Total	$ 1,003,736	$ 950,521

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INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES (Tables)

9 Months Ended

Jul. 28, 2013

INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES

Schedule of investments in and receivables from affiliates

			July 28,		October 28,
(in thousands)	Segment	% Owned	2013		2012
MegaMex Foods, LLC	Grocery Products	50%	$	202,106	$	205,315
Foreign Joint Ventures	International & Other	Various (26-50%)	67,115		81,222
Total			$	269,221	$	286,537

Schedule of equity in earnings of affiliates

		Three Months Ended				Nine Months Ended
(in thousands)	Segment	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
MegaMex Foods, LLC	Grocery Products	$	976	$	9,489	$	15,620	$	25,614
Foreign Joint Ventures	International & Other	370		334		2,763		3,026
Total		$	1,346	$	9,823	$	18,383	$	28,640

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (EQUITY) (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Non-controlling Interest
Balance at Oct. 30, 2011	$ 2,659,816	$ 7,734			$ 2,824,331	$ (175,483)	$ 3,234
Increase (Decrease) in Shareholders' Equity
Net earnings	504,961				500,050		4,911
Other comprehensive (loss) income	(148,035)					(148,086)	51
Purchases of common stock	(61,366)		(61,366)
Stock-based compensation expense	16,710			16,710
Exercise of stock options/nonvested shares	13,317	36	(295)	13,576
Shares retired		(63)	61,661	(30,286)	(31,312)
Proceeds from noncontrolling interest	774						774
Distribution to noncontrolling interest	(3,500)						(3,500)
Declared cash dividends - $.51 and $.60 per share during the nine months period ended July 28, 2013, and for the year ended October 28, 2012, respectively	(157,752)				(157,752)
Balance at Oct. 28, 2012	2,824,925	7,707			3,135,317	(323,569)	5,470
Increase (Decrease) in Shareholders' Equity
Net earnings	371,591				368,871		2,720
Other comprehensive (loss) income	(1,837)					(1,996)	159
Purchases of common stock	(45,668)		(45,668)
Stock-based compensation expense	16,429			16,429
Exercise of stock options/nonvested shares	23,482	64		23,418
Shares retired		(34)	45,668	(39,847)	(5,787)
Declared cash dividends - $.51 and $.60 per share during the nine months period ended July 28, 2013, and for the year ended October 28, 2012, respectively	(135,038)				(135,038)
Balance at Jul. 28, 2013	$ 3,053,884	$ 7,737			$ 3,363,363	$ (325,565)	$ 8,349

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012
OPERATING ACTIVITIES
Net earnings	$ 371,591	$ 370,675
Adjustments to reconcile to net cash provided by operating activities:
Depreciation	85,824	81,947
Amortization of intangibles	7,162	6,680
Equity in earnings of affiliates, net of dividends	15,636	(8,032)
Provision for deferred income taxes	(6,009)	183
Gain on property/equipment sales and plant facilities	(691)	(245)
Non-cash investment activities	(1,452)	(2,527)
Stock-based compensation expense	16,429	14,191
Excess tax benefit from stock-based compensation	(18,930)	(6,827)
Other	1,000
Changes in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable	(7,357)	(13,315)
Increase in inventories	(4,060)	(41,224)
Decrease in prepaid expenses and other current assets	5,603	11,868
Increase (decrease) in pension and post-retirement benefits	791	(14,749)
Decrease in accounts payable and accrued expenses	(36,688)	(114,572)
NET CASH PROVIDED BY OPERATING ACTIVITIES	428,849	284,053
INVESTING ACTIVITIES
Net sale of trading securities	77,558
Acquisitions of businesses/intangibles	(665,415)	(168)
Purchases of property/equipment	(68,731)	(93,915)
Proceeds from sales of property/equipment	6,519	3,510
(Increase) decrease in investments, equity in affiliates, and other assets	(4,810)	17,661
NET CASH USED IN INVESTING ACTIVITIES	(654,879)	(72,912)
FINANCING ACTIVITIES
Proceeds from short-term debt	25,000
Principal payments on short-term debt	(25,000)
Dividends paid on common stock	(129,426)	(112,683)
Share repurchase	(45,668)	(50,692)
Proceeds from exercise of stock options	29,268	13,910
Excess tax benefit from stock-based compensation	18,930	6,827
Proceeds from noncontrolling interest		774
NET CASH USED IN FINANCING ACTIVITIES	(126,896)	(141,864)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	34	810
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(352,892)	70,087
Cash and cash equivalents at beginning of year	682,388	463,130
CASH AND CASH EQUIVALENTS AT END OF QUARTER	$ 329,496	$ 533,217

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STOCK-BASED COMPENSATION

9 Months Ended

Jul. 28, 2013

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE C 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 periods ranging from six months to four years and expire ten years after the grant date.  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 July 28, 2013, and changes during the nine months then ended, is as follows:

	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at October 28, 2012	20,454	$	19.67
Granted	2,218	32.19
Exercised	3,743	15.63
Forfeited	22	27.36
Outstanding at July 28, 2013	18,907	$	21.93	5.7 years	$	368,931
Exercisable at July 28, 2013	12,867	$	18.89	4.5 years	$	290,214

The weighted-average grant date fair value of stock options granted and the total intrinsic value of options exercised (in thousands) during the third quarter and first nine months of fiscal years 2013 and 2012 are as follows:

	Three Months Ended				Nine Months Ended
	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
Weighted-average grant date fair value of options granted	$	7.75	N/A		$	5.50	$	5.64
Intrinsic value of exercised options	$	2,591	$	8,011	$	65,244	$	23,332

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.  No options were granted in the third quarter ended July 29, 2012.

	Three Months Ended			Nine Months Ended
	July 28, 2013		July 29, 2012	July 28, 2013		July 29, 2012
Risk-Free Interest Rate	1.4	%	N/A	1.4	%	1.8	%
Dividend Yield	1.7	%	N/A	2.1	%	2.0	%
Stock Price Volatility	20.0	%	N/A	20.0	%	21.0	%
Expected Option Life	8 years		N/A	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 after September 26, 2010, vest after one year.  A reconciliation of the nonvested shares (in thousands) as of July 28, 2013, and changes during the nine months then ended, is as follows:

	Shares	Weighted- Average Grant- Date Fair Value
Nonvested at October 28, 2012	139	$	21.47
Granted	45	35.42
Vested	70	24.93
Nonvested at July 28, 2013	114	$	24.86

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 the first nine months of fiscal years 2013 and 2012 are as follows:

	Nine Months Ended
	July 28, 2013		July 29, 2012
Weighted-average grant date fair value	$	35.42	$	28.97
Fair value of nonvested shares granted	$	1,600	$	1,304
Fair value of shares vested	$	1,758	$	2,324

Stock-based compensation expense, along with the related income tax benefit, for the third quarter and first nine months of fiscal years 2013 and 2012 is presented in the table below.

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Stock-based compensation expense recognized	$	4,523		$	3,062		$	16,429		$	14,191
Income tax benefit recognized	(1,710		)	(1,161		)	(6,212		)	(5,381		)
After-tax stock-based compensation expense	$	2,813		$	1,901		$	10,217		$	8,810

At July 28, 2013, there was $8.6 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 4.5 years.  During the third quarter and nine months ended July 28, 2013, cash received from stock option exercises was $0.7 million and $29.3 million, respectively, compared to $3.9 million and $13.9 million for the third quarter and nine months ended July 29, 2012.  The total tax benefit to be realized for tax deductions from these option exercises for the third quarter and nine months ended July 28, 2013, was $1.0 million and $24.7 million, respectively, compared to $3.0 million and $8.8 million in the comparable periods in fiscal 2012.

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.

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GENERAL

9 Months Ended

Jul. 28, 2013

GENERAL

GENERAL

NOTE A GENERAL

Basis of Presentation

The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with generally accepted accounting principles for interim financial information, and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the interim period are not necessarily indicative of the results that may be expected for the full year.  The balance sheet at October 28, 2012, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2012.

Certain reclassifications of previously reported amounts have been made to conform to the current year presentation.  The reclassifications had no impact on net earnings as previously reported.

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.  Therefore, unrealized gains and losses associated with these investments are included in the Company’s earnings.  Securities held by the trust generated gains of $92 thousand and $2.8 million for the third quarter and nine months ended July 28, 2013, respectively, compared to gains of $0.5 million and $3.2 million for the third quarter and nine months ended July 29, 2012.  The majority of this portfolio is held in fixed return investments to reduce the exposure to volatility in equity markets.

During fiscal 2012 and 2013, the Company also held securities as part of an investment portfolio, which are classified as short-term marketable securities on the Consolidated Statements of Financial Position.  These investments are also trading securities.  Therefore, unrealized gains and losses are included in the Company’s earnings.  The Company recorded a gain of $0.2 million related to these investments during the first quarter of fiscal 2013, compared to gains of $0.2 million and $0.9 million for the third quarter and nine months ended July 29, 2012.  These securities were liquidated in the first quarter of fiscal 2013.

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 and other investments, amortization of affordable housing investments, and amortization of bond financing costs.  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.

Guarantees

The Company enters into various agreements guaranteeing specified obligations of affiliated parties.  The Company’s guarantees either terminate in one year or remain in place until such time as the Company revokes the agreement.  The Company currently provides revocable standby letters of credit totaling $6.2 million to guarantee obligations that may arise under worker compensation claims of an affiliated party.  This potential obligation is not reflected in the Company’s Consolidated Statements of Financial Position.

New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (FASB) updated the guidance within Accounting Standards Codification (ASC) 220, Comprehensive Income.  The update eliminates the option for companies to report other comprehensive income and its related components in the Statement of Changes in Stockholders’ Equity.  Instead, companies have the option to present total comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous Statement of Comprehensive Income or in two separate but consecutive statements.  The updated guidance is to be applied retrospectively, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, with early adoption permitted.  The Company early adopted the provisions of this accounting standard during the fourth quarter of fiscal 2012, and adoption did not have a material impact on the consolidated financial statements, as it relates to presentation only.

In February 2013, the FASB further updated the guidance within ASC 220, Comprehensive Income.  The update requires companies to report, in one place, information about reclassifications out of accumulated other comprehensive income (AOCI) and changes in AOCI balances.  For significant items reclassified out of AOCI to net income in their entirety in the same reporting period, reporting is required about the effect of the reclassifications on the respective line items in the statement where net income is presented.  For items that are not reclassified to net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under United States Generally Accepted Accounting Principles is required.  The above information must be presented in one place, either parenthetically on the face of the financial statements by income statement line item, or in a note.  The updated guidance is to be applied prospectively, and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012, with early adoption permitted.  The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2014, and adoption is not expected to have a material impact on the consolidated financial statements as it relates to presentation and disclosure only.

In December 2011, the FASB updated the guidance within ASC 210, Balance Sheet.  The update enhances disclosures related to the offsetting of certain assets and liabilities to enable users of financial statements to understand the effect of those arrangements on financial position.  The updated guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.  The Company will adopt the new provisions of this accounting standard at the beginning of fiscal year 2014, and adoption is not expected to have a material impact on the consolidated financial statements.

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EARNINGS PER SHARE DATA (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
EARNINGS PER SHARE DATA
Basic weighted-average shares outstanding	264,605	263,359	264,472	263,638
Dilutive potential common shares	6,164	5,387	5,758	5,500
Diluted weighted-average shares outstanding	270,769	268,746	270,230	269,138
Weighted average stock options not included in the computation of dilutive potential common shares	1	2,600	500	2,100

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INVENTORIES (Tables)

9 Months Ended

Jul. 28, 2013

INVENTORIES

Principal components of inventories

(in thousands)	July 28, 2013		October 28, 2012
Finished products	$	568,069	$	494,298
Raw materials and work-in-process	253,493		267,877
Materials and supplies	182,174		188,346
Total	$	1,003,736	$	950,521

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SEGMENT REPORTING (Tables)

9 Months Ended

Jul. 28, 2013

SEGMENT REPORTING

Schedule of operating profit and other financial information

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Sales to Unaffiliated Customers
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,068,587			1,043,311			3,143,358			3,158,811
Jennie-O Turkey Store	367,125			351,604			1,142,198			1,120,028
Specialty Foods	240,512			230,072			720,048			677,043
International & Other	113,004			86,024			324,906			273,955
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Intersegment Sales
Grocery Products	$	—		$	—		$	—		$	—
Refrigerated Foods	4,654			2,385			10,393			7,929
Jennie-O Turkey Store	29,559			29,901			89,542			92,621
Specialty Foods	23			41			76			108
International & Other	—			—			—			—
Total	$	34,236		$	32,327		$	100,011		$	100,658
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	—		$	—		$	—		$	—
Net Sales
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,073,241			1,045,696			3,153,751			3,166,740
Jennie-O Turkey Store	396,684			381,505			1,231,740			1,212,649
Specialty Foods	240,535			230,113			720,124			677,151
International & Other	113,004			86,024			324,906			273,955
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Segment Operating Profit
Grocery Products	$	52,962		$	40,052		$	150,170		$	127,003
Refrigerated Foods	44,769			60,757			153,239			167,515
Jennie-O Turkey Store	45,623			39,106			156,567			186,066
Specialty Foods	23,170			21,490			72,898			58,996
International & Other	16,692			12,437			49,421			37,763
Total segment operating profit	$	183,216		$	173,842		$	582,295		$	577,343
Net interest and investment expense (income)	3,577			2,363			6,887			4,932
General corporate expense	2,833			3,225			19,228			18,040
Noncontrolling interest	270			1,240			2,720			3,226
Earnings before income taxes	$	177,076		$	169,494		$	558,900		$	557,597

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GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended										3 Months Ended	9 Months Ended
	Jul. 28, 2013	Jul. 28, 2013	Jul. 28, 2013 Grocery Products	Jul. 28, 2013 Grocery Products	Jul. 28, 2013 Refrigerated Foods	Apr. 28, 2013 Refrigerated Foods	Oct. 28, 2012 Refrigerated Foods	Jul. 28, 2013 JOTS	Apr. 28, 2013 JOTS	Oct. 28, 2012 JOTS	Jul. 28, 2013 Specialty Foods	Apr. 28, 2013 Specialty Foods	Oct. 28, 2012 Specialty Foods	Jul. 28, 2013 International & Other	Jul. 28, 2013 International & Other
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 932,114	$ 630,875	$ 320,655	$ 123,316	$ 96,643	$ 96,643	$ 96,643	$ 203,214	$ 203,214	$ 203,214	$ 207,028	$ 207,028	$ 207,028	$ 104,574	$ 674
Goodwill acquired	2,358	303,597	2,287	199,626										71	103,971
Balance at the end of the period	$ 934,472	$ 934,472	$ 322,942	$ 322,942	$ 96,643	$ 96,643	$ 96,643	$ 203,214	$ 203,214	$ 203,214	$ 207,028	$ 207,028	$ 207,028	$ 104,645	$ 104,645

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SEGMENT REPORTING (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013 segment	Jul. 29, 2012
SEGMENT REPORTING
Number of reportable business segments			5
Operating profit and other financial information
Sales to Unaffiliated Customers	$ 2,159,525	$ 2,008,188	$ 6,428,452	$ 6,060,486
Intersegment Sales	34,236	32,327	100,011	100,658
Net Sales	2,159,525	2,008,188	6,428,452	6,060,486
Segment Operating Profit	183,216	173,842	582,295	577,343
Net interest and investment expense (income)	3,577	2,363	6,887	4,932
General corporate expense	2,833	3,225	19,228	18,040
Noncontrolling interest	270	1,240	2,720	3,226
EARNINGS BEFORE INCOME TAXES	177,076	169,494	558,900	557,597
Grocery Products
Operating profit and other financial information
Sales to Unaffiliated Customers	370,297	297,177	1,097,942	830,649
Net Sales	370,297	297,177	1,097,942	830,649
Segment Operating Profit	52,962	40,052	150,170	127,003
Refrigerated Foods
Operating profit and other financial information
Sales to Unaffiliated Customers	1,068,587	1,043,311	3,143,358	3,158,811
Intersegment Sales	4,654	2,385	10,393	7,929
Net Sales	1,073,241	1,045,696	3,153,751	3,166,740
Segment Operating Profit	44,769	60,757	153,239	167,515
Jennie-O Turkey Store
Operating profit and other financial information
Sales to Unaffiliated Customers	367,125	351,604	1,142,198	1,120,028
Intersegment Sales	29,559	29,901	89,542	92,621
Net Sales	396,684	381,505	1,231,740	1,212,649
Segment Operating Profit	45,623	39,106	156,567	186,066
Specialty Foods
Operating profit and other financial information
Sales to Unaffiliated Customers	240,512	230,072	720,048	677,043
Intersegment Sales	23	41	76	108
Net Sales	240,535	230,113	720,124	677,151
Segment Operating Profit	23,170	21,490	72,898	58,996
International & Other
Operating profit and other financial information
Sales to Unaffiliated Customers	113,004	86,024	324,906	273,955
Net Sales	113,004	86,024	324,906	273,955
Segment Operating Profit	16,692	12,437	49,421	37,763
Intersegment elimination
Operating profit and other financial information
Intersegment Sales	(34,236)	(32,327)	(100,011)	(100,658)
Net Sales	$ (34,236)	$ (32,327)	$ (100,011)	$ (100,658)
Precept Foods, LLC
Operating profit and other financial information
Ownership percentage held by entity in joint venture			50.01%

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DERIVATIVES AND HEDGING (Details 2) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2013	Oct. 28, 2012
Derivatives fair value
Asset Derivatives, Other current assets	$ (12,394)	$ 7,483
Derivatives designated as hedges | Commodity contracts | Other current assets
Derivatives fair value
Asset Derivatives, Other current assets	(12,493)	7,483
Derivatives not designated as hedges | Commodity contracts | Other current assets
Derivatives fair value
Asset Derivatives, Other current assets	178
Derivatives not designated as hedges | Foreign exchange contracts | Other current assets
Derivatives fair value
Asset Derivatives, Other current assets	$ (79)

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) (USD $)	Jul. 28, 2013	Oct. 28, 2012
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	264,054,986	263,044,280

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EARNINGS PER SHARE DATA

9 Months Ended

Jul. 28, 2013

EARNINGS PER SHARE DATA

EARNINGS PER SHARE DATA

NOTE F EARNINGS PER SHARE DATA

The following table sets forth the denominator for the computation of basic and diluted earnings per share:

	Three Months Ended		Nine Months Ended
(in thousands)	July 28, 2013	July 29, 2012	July 28, 2013	July 29, 2012
Basic weighted-average shares outstanding	264,605	263,359	264,472	263,638
Dilutive potential common shares	6,164	5,387	5,758	5,500
Diluted weighted-average shares outstanding	270,769	268,746	270,230	269,138

For the third quarter and nine months ended July 28, 2013, one thousand and 0.5 million weighted-average stock options were not included in the computation of dilutive potential common shares since their inclusion would have had an antidilutive effect on earnings per share, compared to 2.6 million and 2.1 million for the third quarter and nine months ended July 29, 2012.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
NET EARNINGS	$ 113,905	$ 112,407	$ 371,591	$ 370,675
Other comprehensive (loss) income, net of tax:
Foreign currency translation	(3,613)	873	(2,816)	1,997
Pension and other benefits	6,484	2,538	17,520	6,107
Deferred hedging	(3,158)	15,234	(16,541)	(1,439)
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME	(287)	18,645	(1,837)	6,665
COMPREHENSIVE INCOME	113,618	131,052	369,754	377,340
Less: Comprehensive income attributable to noncontrolling interest	376	1,252	2,879	3,304
COMPREHENSIVE INCOME ATTRIBUTABLE TO HORMEL FOODS CORPORATION	$ 113,242	$ 129,800	$ 366,875	$ 374,036

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $) In Thousands, unless otherwise specified	Jul. 28, 2013	Oct. 28, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 329,496	$ 682,388
Short-term marketable securities		77,387
Accounts receivable	514,398	507,041
Inventories	1,003,736	950,521
Income taxes receivable	2,868	16,460
Deferred income taxes	76,502	68,560
Prepaid expenses	14,867	12,772
Other current assets	9,723	5,555
TOTAL CURRENT ASSETS	1,951,590	2,320,684
DEFERRED INCOME TAXES	137,542	144,245
GOODWILL	934,472	630,875
OTHER INTANGIBLES	380,410	123,072
PENSION ASSETS	49	49
INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES	269,221	286,537
OTHER ASSETS	138,944	134,024
PROPERTY, PLANT AND EQUIPMENT
Land	58,589	56,258
Buildings	782,142	767,876
Equipment	1,519,715	1,435,630
Construction in progress	74,153	82,254
Property, Plant and Equipment, Gross	2,434,599	2,342,018
Less allowance for depreciation	(1,485,578)	(1,417,538)
Property, Plant and Equipment, Net	949,021	924,480
TOTAL ASSETS	4,761,249	4,563,966
CURRENT LIABILITIES
Accounts payable	369,887	385,877
Accrued expenses	32,467	49,792
Accrued workers compensation	37,169	33,543
Accrued marketing expenses	113,002	78,712
Employee related expenses	182,592	193,463
Taxes payable	6,128	4,864
Interest and dividends payable	48,239	40,049
TOTAL CURRENT LIABILITIES	789,484	786,300
PENSION AND POST-RETIREMENT BENEFITS	589,659	615,428
LONG-TERM DEBT-less current maturities	250,000	250,000
OTHER LONG-TERM LIABILITIES	78,222	87,313
SHAREHOLDERS' INVESTMENT
Preferred stock, par value $.01 a share-authorized 160,000,000 shares; issued-none
Accumulated other comprehensive loss	(325,565)	(323,569)
Retained earnings	3,363,363	3,135,317
HORMEL FOODS CORPORATION SHAREHOLDERS' INVESTMENT	3,045,535	2,819,455
NONCONTROLLING INTEREST	8,349	5,470
TOTAL SHAREHOLDERS' INVESTMENT	3,053,884	2,824,925
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT	4,761,249	4,563,966
Common stock, non-voting
SHAREHOLDERS' INVESTMENT
Common stock
Common stock
SHAREHOLDERS' INVESTMENT
Common stock	$ 7,737	$ 7,707

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DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Jul. 28, 2013

Derivatives and hedging

Schedule of fair values of derivative instruments

	Location on Consolidated	Fair Value (1)
	Statements of Financial Position	July 28, 2013			October 28, 2012
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$	(12,493	)	$	7,483
Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	178			—
Foreign exchange contracts	Other current assets	(79		)	—
Total Asset Derivatives		$	(12,394	)	$	7,483

(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 Statements of Financial Position.   See Note J - Fair Value Measurements 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 in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Three Months Ended					Consolidated	Three Months Ended						Three Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts	$	(5,913	)	$	25,749	Cost of products sold	$	(838	)	$	1,317		$	(259	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)						Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Three Months Ended						Three Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	2,327		$	(2,658	)	$	16		$	(2,407	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Three Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(266	)	$	—
Foreign exchange contracts						Net sales	$	(79	)	$	—

	Gain/(Loss) Recognized in Accumulated Other Comprehensive Loss (AOCL) (Effective Portion) (1)					Location on	Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (3)
	Nine Months Ended					Consolidated	Nine Months Ended					Nine Months Ended
Cash Flow Hedges:	July 28, 2013			July 29, 2012		Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts	$	(18,382	)	$	13,664	Cost of products sold	$	8,148		$	15,958	$	(485	)	$	—
						Location on	Gain/(Loss) Recognized in Earnings (Effective Portion) (4)					Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
						Consolidated	Nine Months Ended					Nine Months Ended
Fair Value Hedges:						Statements of Operations	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	4,869		$	2,691	$	71		$	(2,361	)
						Location on	Gain/(Loss) Recognized in Earnings
						Consolidated	Nine Months Ended
Derivatives Not Designated as Hedges:						Statements of Operations	July 28, 2013			July 29, 2012
Commodity contracts						Cost of products sold	$	(999	)	$	46
Foreign exchange contracts						Net sales	$	(79	)	$	—

(1) Amounts represent gains or losses in AOCL before tax.  See the Consolidated Statements of Comprehensive Income 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 third quarter or first nine months of fiscal years 2013 and 2012.

(3) There were no gains or losses resulting from the discontinuance of cash flow hedges during the third quarter or first nine months of fiscal years 2013 and 2012.

(4) Amounts represent gains (losses) on commodity contracts designated as fair value hedges that were closed during the third quarter or first nine months of fiscal years 2013 and 2012, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment.  Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.

(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 third quarter or first nine months of fiscal years 2013 and 2012.

Derivatives not designated as hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	July 28, 2013	October 28, 2012
Soybean meal	1,900 tons	—

	Notional Amount
Currency	July 28, 2013	October 28, 2012
Chinese Yuan Renminbi	CNY$ 251.7 million	N/A

Cash Flow Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	18.7 million bushels	12.0 million bushels

Fair Value Hedges

Derivatives and hedging

Schedule of outstanding commodity futures contracts

	Volume
Commodity	July 28, 2013	October 28, 2012
Corn	7.8 million bushels	8.0 million bushels
Lean hogs	1.2 million cwt	0.9 million cwt

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Jul. 28, 2013

STOCK-BASED COMPENSATION

Schedule of reconciliation of the number of options outstanding and exercisable

	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value (in thousands)
Outstanding at October 28, 2012	20,454	$	19.67
Granted	2,218	32.19
Exercised	3,743	15.63
Forfeited	22	27.36
Outstanding at July 28, 2013	18,907	$	21.93	5.7 years	$	368,931
Exercisable at July 28, 2013	12,867	$	18.89	4.5 years	$	290,214

Schedule of weighted-average grant date fair value of stock options granted, and the total intrinsic value of options exercised

	Three Months Ended				Nine Months Ended
	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
Weighted-average grant date fair value of options granted	$	7.75	N/A		$	5.50	$	5.64
Intrinsic value of exercised options	$	2,591	$	8,011	$	65,244	$	23,332

Schedule of weighted-average assumptions used to calculate fair value of each option award

	Three Months Ended			Nine Months Ended
	July 28, 2013		July 29, 2012	July 28, 2013		July 29, 2012
Risk-Free Interest Rate	1.4	%	N/A	1.4	%	1.8	%
Dividend Yield	1.7	%	N/A	2.1	%	2.0	%
Stock Price Volatility	20.0	%	N/A	20.0	%	21.0	%
Expected Option Life	8 years		N/A	8 years		8 years

Schedule of reconciliation of the nonvested shares

	Shares	Weighted- Average Grant- Date Fair Value
Nonvested at October 28, 2012	139	$	21.47
Granted	45	35.42
Vested	70	24.93
Nonvested at July 28, 2013	114	$	24.86

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

	Nine Months Ended
	July 28, 2013		July 29, 2012
Weighted-average grant date fair value	$	35.42	$	28.97
Fair value of nonvested shares granted	$	1,600	$	1,304
Fair value of shares vested	$	1,758	$	2,324

Schedule of stock-based compensation expense, along with the related income tax benefit

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Stock-based compensation expense recognized	$	4,523		$	3,062		$	16,429		$	14,191
Income tax benefit recognized	(1,710		)	(1,161		)	(6,212		)	(5,381		)
After-tax stock-based compensation expense	$	2,813		$	1,901		$	10,217		$	8,810

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DERIVATIVES AND HEDGING (Details) In Millions, unless otherwise specified	9 Months Ended
	Jul. 28, 2013 USD ($)	Oct. 28, 2012 USD ($)	Jul. 28, 2013 Corn Cash Flow Hedges bu	Oct. 28, 2012 Corn Cash Flow Hedges bu	Jul. 28, 2013 Corn Fair Value Hedges bu	Oct. 28, 2012 Corn Fair Value Hedges bu	Jul. 28, 2013 Lean hogs Fair Value Hedges CWT	Oct. 28, 2012 Lean hogs Fair Value Hedges CWT	Jul. 28, 2013 Soybean meal Derivatives not designated as hedges T	Jul. 28, 2013 Chinese Yuan Renminbi Derivatives not designated as hedges CNY
Derivatives and hedging
Maximum number of upcoming fiscal years to hedge grain or natural gas exposure	2 years
Futures contracts, volume			18,700,000	12,000,000	7,800,000	8,000,000	1,200,000	900,000	1,900
Notional Amount										251.7
Accumulated change, pretax, in accumulated gains and losses from derivative instruments designated and qualifying as the effective portion of cash flow hedges	$ (11.3)	$ 15.2
The Company expects to recognize the majority of hedging losses over this period	12 months

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GOODWILL AND INTANGIBLE ASSETS (Details 3) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2013	Oct. 28, 2012
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	$ 341,259	$ 101,859
Brands/tradenames/trademarks
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	333,275	93,875
Other intangibles
Carrying amounts for indefinite-lived intangible assets
Carrying amounts for indefinite-lived intangible assets	$ 7,984	$ 7,984

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STOCK-BASED COMPENSATION (Details)	9 Months Ended
	Jul. 28, 2013
Stock options
Stock-based compensation
Stock option expiration period	10 years
Stock options | Minimum
Stock-based compensation
Vesting period	6 months
Stock options | Maximum
Stock-based compensation
Vesting period	4 years
Nonvested shares
Stock-based compensation
Vesting period for nonvested shares issued on or before September 26, 2010	5 years
Vesting period for nonvested shares issued after September 26, 2010	1 year

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STOCK-BASED COMPENSATION (Details 2) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012
Stock-based compensation expense, along with the related income tax benefit
Stock based compensation expense recognized	$ 4,523,000	$ 3,062,000	$ 16,429,000	$ 14,191,000
Income tax benefit recognized	(1,710,000)	(1,161,000)	(6,212,000)	(5,381,000)
After-tax stock-based compensation expense	2,813,000	1,901,000	10,217,000	8,810,000
Stock-based compensation expense unrecognized	8,600,000		8,600,000
Period for recognition of unrecognized stock-based compensation expense			4 years 6 months
Stock options
Stock-based compensation
Cash received from stock options exercised	700,000	3,900,000	29,300,000	13,900,000
Tax benefit realized from stock options, aggregate	1,000,000	3,000,000	24,700,000	8,800,000
Reconciliation of Stock Options
Outstanding, at the beginning of the period (in shares)			20,454
Granted (in shares)		0	2,218
Exercised (in shares)			3,743
Forfeited (in shares)			22
Outstanding, at the end of the period (in shares)	18,907		18,907
Exercisable at the end of the period (in shares)	12,867		12,867
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 19.67
Granted (in dollars per share)			$ 32.19
Exercised (in dollars per share)			$ 15.63
Forfeited (in dollars per share)			$ 27.36
Outstanding at the end of the period (in dollars per share)	$ 21.93		$ 21.93
Exercisable at end of period (in dollars per share)	$ 18.89		$ 18.89
Weighted Average Remaining Contractual Term
Outstanding at the end of the period			5 years 8 months 12 days
Exercisable at end of period			4 years 6 months
Aggregate Intrinsic Value
Outstanding at the end of the period	368,931,000		368,931,000
Exercisable at end of period	290,214,000		290,214,000
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)	$ 7.75		$ 5.50	$ 5.64
Intrinsic value of exercised options	2,591,000	8,011,000	65,244,000	23,332,000
Weighted-average assumptions used to calculate fair value of each ordinary option award
Risk free interest rate (as a percent)	1.40%		1.40%	1.80%
Dividend yield (as a percent)	1.70%		2.10%	2.00%
Stock price volatility (as a percent)	20.00%		20.00%	21.00%
Expected Option Life	8 years		8 years	8 years
Nonvested shares
Reconciliation of the nonvested shares
Nonvested shares at the beginning of the period			139
Nonvested shares granted in period			45
Nonvested shares vested in period			70
Nonvested shares at the end of the period	114		114
Weighted-average grant date fair value and total fair value of nonvested shares granted, vested and forfeited
Nonvested shares at the beginning of the period (in dollars per share)			$ 21.47
Nonvested shares granted in period (in dollars per share)			$ 35.42	$ 28.97
Nonvested shares vested in period (in dollars per share)			$ 24.93
Nonvested shares at the end of the period (in dollars per share)	$ 24.86		$ 24.86
Fair value of nonvested shares granted			1,600,000	1,304,000
Fair value of shares vested			$ 1,758,000	$ 2,324,000

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INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES

9 Months Ended

Jul. 28, 2013

INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES

INVESTMENTS IN AND RECEIVABLES FROM AFFILIATES

NOTE E 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:

			July 28,		October 28,
(in thousands)	Segment	% Owned	2013		2012
MegaMex Foods, LLC	Grocery Products	50%	$	202,106	$	205,315
Foreign Joint Ventures	International & Other	Various (26-50%)	67,115		81,222
Total			$	269,221	$	286,537

Equity in earnings of affiliates consists of the following:

		Three Months Ended				Nine Months Ended
(in thousands)	Segment	July 28, 2013		July 29, 2012		July 28, 2013		July 29, 2012
MegaMex Foods, LLC	Grocery Products	$	976	$	9,489	$	15,620	$	25,614
Foreign Joint Ventures	International & Other	370		334		2,763		3,026
Total		$	1,346	$	9,823	$	18,383	$	28,640

The Company recognized a basis difference of $21.3 million associated with the formation of MegaMex Foods, LLC, which is being amortized through equity in earnings of affiliates.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Jul. 28, 2013

FAIR VALUE MEASUREMENTS

Schedule of financial assets and liabilities measured at fair value on a recurring basis

	Fair Value Measurements at July 28, 2013
(in thousands)	Fair Value at July 28, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	121,417		$	121,417	$	—		$	—
Other trading securities (2)	112,523			37,291		75,232			—
Commodity derivatives (3)	8,448			8,448		—			—
Foreign exchange contracts (5)	(79		)	—		(79		)	—
Total Assets at Fair Value	$	242,309		$	167,156	$	75,153		$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,837		$	18,080	$	29,757		$	—
Total Liabilities at Fair Value	$	47,837		$	18,080	$	29,757		$	—

	Fair Value Measurements at October 28, 2012
(in thousands)	Fair Value at October 28, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets at Fair Value:
Cash equivalents (1)	$	483,441	$	483,441	$	—	$	—
Short-term marketable securities (4)	77,387		2,349		75,038		—
Other trading securities (2)	109,676		36,305		73,371		—
Commodity derivatives (3)	3,884		3,884		—		—
Total Assets at Fair Value	$	674,388	$	525,979	$	148,409	$	—
Liabilities at Fair Value:
Deferred compensation (2)	$	47,953	$	16,866	$	31,087	$	—
Total Liabilities at Fair Value	$	47,953	$	16,866	$	31,087	$	—

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 money market funds rated AAA, and 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 United States Internal Revenue Service (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 July 28, 2013, the Company has recognized the right to reclaim cash collateral of $25.9 million from, and the obligation to return cash collateral of $5.1 million to, various counterparties.  As of October 28, 2012, the Company had recognized the right to reclaim cash collateral of $27.5 million from, and the obligation to return cash collateral of $31.1 million to, various counterparties.

(4) During fiscal 2012 and 2013, the Company held trading securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary.  The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid.  The cash, U.S. government securities, and highly rated money market funds held by the portfolio are classified as Level 1.  The investment portfolio also included corporate bonds, international government securities, commercial paper, agency securities, mortgage-backed securities, and other asset-backed securities for which there is an active, quoted market.  Market prices are obtained from a variety of industry standard providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2.  These securities were liquidated in the first quarter of fiscal 2013.

(5) The Company periodically uses foreign currency contracts to hedge the impact of fluctuations in exchange rates on certain transactions denominated in foreign currencies.  As there is an active market for these currencies, and the fair value of the contracts is calculated using exchange rates and forward rates obtained from a third-party pricing source, the contracts are classified as Level 2.

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) (USD $) In Thousands, unless otherwise specified	Jul. 28, 2013	Oct. 28, 2012
Accumulated Other Comprehensive Loss
Foreign currency translation	$ 9,440	$ 12,415
Pension & other benefits	(327,945)	(345,465)
Deferred (loss) gain on hedging	(7,060)	9,481
Accumulated other comprehensive loss	$ (325,565)	$ (323,569)

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INVENTORIES

9 Months Ended

Jul. 28, 2013

INVENTORIES

INVENTORIES

NOTE H INVENTORIES

Principal components of inventories are:

(in thousands)	July 28, 2013		October 28, 2012
Finished products	$	568,069	$	494,298
Raw materials and work-in-process	253,493		267,877
Materials and supplies	182,174		188,346
Total	$	1,003,736	$	950,521

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GOODWILL AND INTANGIBLE ASSETS

9 Months Ended

Jul. 28, 2013

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

NOTE D GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill for the three and nine months periods ended July 28, 2013, are presented in the tables below.  The additions during the three and nine months ending July 28, 2013 are entirely due to the acquisition of the United States based SKIPPY peanut butter business on January 31, 2013.

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of April 28, 2013	$	320,655	$	96,643	$	203,214	$	207,028	$	104,574	$	932,114
Goodwill acquired	2,287		—		—		—		71		2,358
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

(in thousands)	Grocery Products		Refrigerated Foods		JOTS		Specialty Foods		International & Other		Total
Balance as of October 28, 2012	$	123,316	$	96,643	$	203,214	$	207,028	$	674	$	630,875
Goodwill acquired	199,626		—		—		—		103,971		303,597
Balance as of July 28, 2013	$	322,942	$	96,643	$	203,214	$	207,028	$	104,645	$	934,472

The gross carrying amount and accumulated amortization for definite-lived intangible assets are presented in the table below.  Customer relationships of $25.1 million were acquired during the second quarter of fiscal 2013 related to the United States based SKIPPY peanut butter business.

	July 28, 2013					October 28, 2012
(in thousands)	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Customer lists/relationships	$	47,130	$	(17,449	)	$	22,148	$	(14,684	)
Proprietary software & technology	14,820		(11,645		)	22,000		(17,319		)
Formulas & recipes	17,854		(13,290		)	17,854		(11,686		)
Other intangibles	9,786		(8,055		)	13,586		(10,686		)
Total	$	89,590	$	(50,439	)	$	75,588	$	(54,375	)

Amortization expense was $2.4 million and $7.2 million for the third quarter and nine months ended July 28, 2013, respectively, compared to $2.2 million and $6.7 million for the third quarter and nine months ended July 29, 2012.

Estimated annual amortization expense (in thousands) for the five fiscal years after October 28, 2012, is as follows:

Fiscal Year	Estimated Amortization Expense
2013	$	9,479
2014	8,654
2015	5,474
2016	3,348
2017	2,918

The carrying amounts for indefinite-lived intangible assets are presented in the table below. The increase in fiscal 2013 represents the fair value of the trade name and trademarks acquired with the United States based SKIPPY peanut butter business.

(in thousands)	July 28, 2013		October 28, 2012
Brands/tradenames/trademarks	$	333,275	$	93,875
Other intangibles	7,984		7,984
Total	$	341,259	$	101,859

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT (Parenthetical) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 28, 2013	Jul. 29, 2012	Jul. 28, 2013	Jul. 29, 2012	Oct. 28, 2012
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT
Declared cash dividends (in dollars per share)	$ 0.17	$ 0.15	$ 0.51	$ 0.45	$ 0.60

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FAIR VALUE MEASUREMENTS (Details) (USD $)	9 Months Ended
	Jul. 28, 2013	Oct. 28, 2012
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 cash collateral	$ 25,900,000	$ 27,500,000
Recognized obligation to return cash collateral	5,100,000	31,100,000
Fair value, long-term debt
Fair value of long-term debt (including current maturities)	261,200,000	283,600,000
Recurring basis | Fair Value
Assets at Fair Value:
Cash equivalents	121,417,000	483,441,000
Short-term marketable securities		77,387,000
Other trading securities	112,523,000	109,676,000
Commodity asset derivatives, net of the effects of master netting arrangements	8,448,000	3,884,000
Foreign exchange contracts	(79,000)
Total Assets at Fair Value	242,309,000	674,388,000
Liabilities at Fair Value:
Deferred compensation	47,837,000	47,953,000
Total Liabilities at Fair Value	47,837,000	47,953,000
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets at Fair Value:
Cash equivalents	121,417,000	483,441,000
Short-term marketable securities		2,349,000
Other trading securities	37,291,000	36,305,000
Commodity asset derivatives, net of the effects of master netting arrangements	8,448,000	3,884,000
Total Assets at Fair Value	167,156,000	525,979,000
Liabilities at Fair Value:
Deferred compensation	18,080,000	16,866,000
Total Liabilities at Fair Value	18,080,000	16,866,000
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets at Fair Value:
Short-term marketable securities		75,038,000
Other trading securities	75,232,000	73,371,000
Foreign exchange contracts	(79,000)
Total Assets at Fair Value	75,153,000	148,409,000
Liabilities at Fair Value:
Deferred compensation	29,757,000	31,087,000
Total Liabilities at Fair Value	$ 29,757,000	$ 31,087,000

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GENERAL (Details) (USD $)	9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Jul. 28, 2013	Jul. 28, 2013 Revocable standby letters of credit	Jul. 28, 2013 Rabbi trust	Jul. 29, 2012 Rabbi trust	Jul. 28, 2013 Rabbi trust	Jul. 29, 2012 Rabbi trust	Jan. 27, 2013 Short-term marketable securities	Jul. 29, 2012 Short-term marketable securities	Jul. 29, 2012 Short-term marketable securities
Investments
Gains (Losses) related to securities held			$ 92,000	$ 500,000	$ 2,800,000	$ 3,200,000	$ 200,000	$ 200,000	$ 900,000
Guarantees
Guarantee term	The Company's guarantees either terminate in one year or remain in place until such time as the Company revokes the agreement
Standby letters of credit amount to guarantee obligations that may arise under worker compensation claims of an affiliated party		$ 6,200,000

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PENSION AND OTHER POST-RETIREMENT BENEFITS

9 Months Ended

Jul. 28, 2013

PENSION AND OTHER POST-RETIREMENT BENEFITS

PENSION AND OTHER POST-RETIREMENT BENEFITS

NOTE K PENSION AND OTHER POST-RETIREMENT BENEFITS

Net periodic benefit cost for pension and other post-retirement benefit plans consists of the following:

	Pension Benefits
	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Service cost	$	7,744		$	5,856		$	23,234		$	17,568
Interest cost	11,922			12,284			35,766			36,852
Expected return on plan assets	(18,286		)	(17,128		)	(54,858		)	(51,383		)
Amortization of prior service cost	(1,269		)	(1,269		)	(3,809		)	(3,809		)
Recognized actuarial loss	8,505			5,032			25,514			15,097
Net periodic cost	$	8,616		$	4,775		$	25,847		$	14,325

	Post-retirement Benefits
	Three Months Ended					Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012		July 28, 2013			July 29, 2012
Service cost	$	612		$	556	$	1,836		$	1,668
Interest cost	3,693			4,437		11,081			13,312
Amortization of prior service cost	(401		)	882		(999		)	2,678
Recognized actuarial loss (gain)	1,982			—		5,807			(2		)
Net periodic cost	$	5,886		$	5,875	$	17,725		$	17,656

During the third quarter of fiscal 2013, the Company made discretionary contributions of $22.1 million to fund its pension plans, compared to discretionary contributions of $27.3 million during the third quarter of fiscal 2012.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

9 Months Ended

Jul. 28, 2013

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE G ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss, net of tax, are as follows:

(in thousands)	July 28, 2013			October 28, 2012
Foreign currency translation	$	9,440		$	12,415
Pension & other benefits	(327,945		)	(345,465		)
Deferred (loss) gain on hedging	(7,060		)	9,481
Accumulated other comprehensive loss	$	(325,565	)	$	(323,569	)

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ACQUISITIONS (Tables)

9 Months Ended

Jul. 28, 2013

ACQUISITIONS

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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INCOME TAXES

9 Months Ended

Jul. 28, 2013

INCOME TAXES

INCOME TAXES

NOTE L INCOME TAXES

The amount of unrecognized tax benefits, including interest and penalties, at July 28, 2013, recorded in other long-term liabilities was $22.0 million, of which $14.6 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 an expense of $36 thousand and gains of $4.5 million included in expense in the third quarter and first nine months, respectively, of fiscal 2013.  The amount of accrued interest and penalties at July 28, 2013, associated with unrecognized tax benefits was $3.2 million.

The Company is regularly audited by federal and state taxing authorities.  During fiscal year 2012, the I.R.S. concluded its examination of the Company’s consolidated federal income tax returns for the fiscal years through 2009, and opened its examination for fiscal years 2010 and 2011.  The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2006.  While it is reasonably possible that one or more of these audits may be completed within the next 12 months and that 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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Document and Entity Information	9 Months Ended
	Jul. 28, 2013	Sep. 01, 2013 Common Stock	Sep. 01, 2013 Common Stock Non-Voting
Entity Registrant Name	HORMEL FOODS CORP /DE/
Entity Central Index Key	0000048465
Document Type	10-Q
Document Period End Date	Jul. 28, 2013
Amendment Flag	false
Current Fiscal Year End Date	--10-27
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		263,930,474	0
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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SEGMENT REPORTING

9 Months Ended

Jul. 28, 2013

SEGMENT REPORTING

SEGMENT REPORTING

NOTE M 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 includes the Hormel Refrigerated operating segment and the Affiliated Business Units.  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.  The Affiliated Business Units include the Farmer John, Burke Corporation, Dan’s Prize, Saag’s Products, Inc., and Precept Foods businesses.  Precept Foods, LLC, is a 50.01 percent owned joint venture.

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 includes the Diamond Crystal Brands, Century Foods International, and Hormel Specialty Products operating segments.  This segment consists of the packaging and sale of various sugar and sugar substitute products, salt and pepper products, liquid portion products, dessert mixes, ready-to-drink products, sports nutrition products, gelatin products, and private label canned meats to retail and foodservice customers.  This segment also includes the processing, marketing, and sale of nutritional food products and supplements to hospitals, nursing homes, and other marketers of nutritional products.

The International & Other segment includes the Hormel Foods International operating segment, which manufactures, markets, and sells Company products internationally.  This segment also includes the results from the Company’s international joint ventures and miscellaneous corporate sales.  This segment was previously the All Other segment, and was renamed in the second quarter of fiscal 2013 with no change in the composition of the segment.

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 below 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.

	Three Months Ended						Nine Months Ended
(in thousands)	July 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Sales to Unaffiliated Customers
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,068,587			1,043,311			3,143,358			3,158,811
Jennie-O Turkey Store	367,125			351,604			1,142,198			1,120,028
Specialty Foods	240,512			230,072			720,048			677,043
International & Other	113,004			86,024			324,906			273,955
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Intersegment Sales
Grocery Products	$	—		$	—		$	—		$	—
Refrigerated Foods	4,654			2,385			10,393			7,929
Jennie-O Turkey Store	29,559			29,901			89,542			92,621
Specialty Foods	23			41			76			108
International & Other	—			—			—			—
Total	$	34,236		$	32,327		$	100,011		$	100,658
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	—		$	—		$	—		$	—
Net Sales
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,073,241			1,045,696			3,153,751			3,166,740
Jennie-O Turkey Store	396,684			381,505			1,231,740			1,212,649
Specialty Foods	240,535			230,113			720,124			677,151
International & Other	113,004			86,024			324,906			273,955
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Segment Operating Profit
Grocery Products	$	52,962		$	40,052		$	150,170		$	127,003
Refrigerated Foods	44,769			60,757			153,239			167,515
Jennie-O Turkey Store	45,623			39,106			156,567			186,066
Specialty Foods	23,170			21,490			72,898			58,996
International & Other	16,692			12,437			49,421			37,763
Total segment operating profit	$	183,216		$	173,842		$	582,295		$	577,343
Net interest and investment expense (income)	3,577			2,363			6,887			4,932
General corporate expense	2,833			3,225			19,228			18,040
Noncontrolling interest	270			1,240			2,720			3,226
Earnings before income taxes	$	177,076		$	169,494		$	558,900		$	557,597