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## Dear fellow shareholders, 

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Fiscal 2014 represented another excellent year for Hormel Foods, as we achieved record dollar sales of $9.3 billion and double-digit earnings growth of a record $2.23 per share. This strong performance was rewarded in the market, with our share price climbing over 20% this fiscal year. 

Refrigerated Foods achieved 45% operating profit growth on a sales increase of 9% in the face of extremely tight raw material supplies. With a focus on innovative product solutions such as Hormel ®  Bacon 1 TM fully cooked bacon in our foodservice channel and the expansion of our contemporary Hormel ® REV ®  wraps in the retail trade, we continued to expand our value- added portfolio. 

Jennie-O Turkey Store had strong profit increases and sales growth this year, driving demand with our Make The Switch ®  advertising campaign featuring ground turkey tacos. The team was able to capitalize on higher commodity turkey prices, along with continued growth of our value-added products, to deliver a double-digit segment profit increase. 

Through expansion of our existing refrigerated meats business, along with the addition of the SKIPPY ® peanut butter business in China early this year, the International & Other segment achieved another year of double-digit earnings and sales growth in 2014. 

Grocery Products faced significant headwinds this year, with meat protein input costs at record highs, squeez- ing segment margins. Despite those challenges, we continued to drive growth through our MegaMex Foods joint venture and SKIPPY ®  peanut butter. We also 

launched Skippy Yippee ™ , a national advertising cam- paign for our iconic peanut butter brand, after many years off the air. 

CytoSport acquisition In the third quarter we announced the acquisition of CytoSport Holdings, Inc., maker of Muscle Milk ®  protein-rich beverages and powders. This transaction expands the Specialty Foods segment offerings in sports nutrition products. Muscle Milk ®  is the number one brand of ready-to-drink protein-rich beverages, and the product line is an excellent fit for today’s on the go lifestyles. 

Dividends Hormel Foods has an outstanding history of returning cash to shareholders, and this year is no exception. We increased our dividend rate by 25% for fiscal 2015, on the heels of an 18% increase last year. The annual dividend rate in fiscal 2015 will be $1.00 per share, marking the 49th consecutive year we have increased our dividend. 

Corporate responsibility We continued to make great strides in our corporate responsibility initiatives in 2014 and were again recognized externally for many of our efforts. For example, we were acknowledged for our dedication to doing business responsibly with a 100 Best Corporate Citizens award by CR Magazine for the sixth consecutive year. We were also included on G.I. Jobs 

