Business Segment and Geographic Information

6 Months Ended

Nov. 28, 2021

Business Segment and Geographic Information [Abstract]

Business Segment and Geographic Information

(17) Business Segment and Geographic Information

We operate in the packaged foods industry. Our operating segments are as follows: North America Retail; Pet; Convenience Stores & Foodservice; Europe & Australia; and Asia & Latin America.

Our North America Retail operating segment reflects business with a wide variety of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, and e-commerce grocery providers. Our product categories in this business segment are ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and

baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of organic products including ready-to-eat cereal, frozen and shelf-stable vegetables, meal kits, fruit snacks, snack bars, and refrigerated yogurt.

Our Pet operating segment includes pet food products sold primarily in the United States in national pet superstore chains, e-commerce retailers, grocery stores, regional pet store chains, mass merchandisers, and veterinary clinics and hospitals. Our product categories include dog and cat food (dry foods, wet foods, and treats) made with whole meats, fruits, and vegetables and other high-quality natural ingredients. Our tailored pet product offerings address specific dietary, lifestyle, and life-stage needs and span different product types, diet types, breed sizes for dogs, lifestages, flavors, product functions and textures, and cuts for wet foods.

Our major product categories in our Convenience Stores & Foodservice operating segment are ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, baking mixes, and bakery flour. Many products we sell are branded to the consumer and nearly all are branded to our customers. We sell to distributors and operators in many customer channels including foodservice, convenience stores, vending, and supermarket bakeries in the United States.

Our Europe & Australia operating segment reflects retail and foodservice businesses in the greater Europe and Australia regions. Our product categories include refrigerated yogurt, meal kits, snack bars, super-premium ice cream, refrigerated and frozen dough products, shelf stable vegetables, and dessert and baking mixes. Revenues from franchise fees are reported in the region or country where the franchisee is located.

Our Asia & Latin America operating segment consists of retail and foodservice businesses in the greater Asia and South America regions. Our product categories include super-premium ice cream and frozen desserts, meal kits, dessert and baking mixes, snack bars, salty snacks, refrigerated and frozen dough products, and wellness beverages. We also sell super-premium ice cream and frozen desserts directly to consumers through owned retail shops. Our Asia & Latin America segment also includes products manufactured in the United States for export, mainly to Caribbean and Latin American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from export activities and franchise fees are reported in the region or country where the end customer or franchisee is located.

Operating profit for these segments excludes unallocated corporate items, gain or loss on divestitures, and restructuring, impairment, and other exit costs. Unallocated corporate items include corporate overhead expenses, variances to planned North American employee benefits and incentives, certain charitable contributions, restructuring initiative project-related costs, and other items that are not part of our measurement of segment operating performance. These include gains and losses arising from the revaluation of certain grain inventories and gains and losses from mark-to-market valuation of certain commodity positions until passed back to our operating segments. These items affecting operating profit are centrally managed at the corporate level and are excluded from the measure of segment profitability reviewed by executive management. Under our supply chain organization, our manufacturing, warehouse, and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity. As a result, fixed assets and depreciation and amortization expenses are neither maintained nor available by operating segment.

Our operating segment results were as follows:

		Quarter Ended				Six-Month Period Ended
In Millions	Nov. 28, 2021			Nov. 29, 2020	Nov. 28, 2021		Nov. 29, 2020
Net sales:
North America Retail	$	2,975.5	$	2,921.5	$	5,614.4	$	5,628.5
Pet		593.4		460.0		1,081.4		851.7
Convenience Stores & Foodservice		540.7		440.5		1,023.1		832.1
Europe & Australia		463.9		467.4		981.4		958.4
Asia & Latin America		450.5		430.0		863.6		812.7
Total	$	5,024.0	$	4,719.4	$	9,563.9	$	9,083.4
Operating profit:
North America Retail	$	649.3	$	701.7	$	1,267.3	$	1,397.1
Pet		131.5		119.3		246.7		209.6
Convenience Stores & Foodservice		94.0		78.3		196.4		147.9
Europe & Australia		15.8		35.7		61.0		88.9
Asia & Latin America		43.6		30.4		59.0		50.5
Total segment operating profit	$	934.2	$	965.4	$	1,830.4	$	1,894.0
Unallocated corporate items		131.8		48.4		188.0		122.8
Restructuring, impairment, and other exit costs (recoveries)		2.3		0.4		(2.0)		0.9
Operating profit	$	800.1	$	916.6	$	1,644.4	$	1,770.3

Net sales for our North America Retail operating units were as follows:

	Quarter Ended				Six-Month Period Ended
In Millions	Nov. 28, 2021		Nov. 29, 2020		Nov. 28, 2021		Nov. 29, 2020
U.S. Meals & Baking	$	1,317.0	$	1,371.7	$	2,335.8	$	2,463.2
U.S. Cereal		615.4		597.5		1,229.5		1,248.2
U.S. Snacks		560.5		484.2		1,097.1		1,003.3
Canada		257.6		242.6		496.9		457.2
U.S. Yogurt and Other		225.0		225.5		455.1		456.6
Total	$	2,975.5	$	2,921.5	$	5,614.4	$	5,628.5

Net sales by class of similar products were as follows:

	Quarter Ended				Six-Month Period Ended
In Millions	Nov. 28, 2021		Nov. 29, 2020		Nov. 28, 2021		Nov. 29, 2020
Snacks	$	947.6	$	845.0	$	1,902.1	$	1,736.7
Convenient meals		789.8		820.2		1,485.3		1,549.8
Cereal		742.2		701.4		1,473.2		1,453.3
Pet		593.4		460.0		1,081.4		851.7
Yogurt		507.1		520.2		1,013.0		1,008.2
Dough		607.0		574.5		1,012.2		958.8
Baking mixes and ingredients		517.2		478.8		913.5		876.8
Super-premium ice cream		200.0		199.5		444.8		432.4
Other		119.7		119.8		238.4		215.7
Total	$	5,024.0	$	4,719.4	$	9,563.9	$	9,083.4