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 four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. As a result of a business realignment at the beginning of fiscal 2018, the former Specialty Foods segment results are now reported as part of the Grocery Products segment. Periods presented herein have been recast to reflect this change.

The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture.

The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, and poultry products for retail, foodservice, and fresh product customers.

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

Intersegment sales are recorded at 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 these segments, if operated independently, would report the operating profit and other financial information shown below.



	Three Months Ended						Six Months Ended
(in thousands)	April 29, 2018			April 30, 2017			April 29, 2018			April 30, 2017
Sales to Unaffiliated Customers
Grocery Products	$	631,550		$	640,419		$	1,245,420		$	1,250,793
Refrigerated Foods	1,166,967			1,027,486			2,343,423			2,150,525
Jennie-O Turkey Store	371,916			388,237			762,564			809,226
International & Other	160,135			131,167			310,454			256,992
Total	$	2,330,568		$	2,187,309		$	4,661,861		$	4,467,536

Intersegment Sales
Grocery Products	$	10		$	10		$	14		$	15
Refrigerated Foods	1,386			1,677			3,550			3,816
Jennie-O Turkey Store	25,539			27,560			50,228			55,816
International & Other	—			—			—			—
Total	26,935			29,247			53,792			59,647
Intersegment elimination	(26,935		)	(29,247		)	(53,792		)	(59,647		)
Total	$	—		$	—		$	—		$	—

Net Sales
Grocery Products	$	631,560		$	640,429		$	1,245,434		$	1,250,808
Refrigerated Foods	1,168,353			1,029,163			2,346,973			2,154,341
Jennie-O Turkey Store	397,455			415,797			812,792			865,042
International & Other	160,135			131,167			310,454			256,992
Intersegment elimination	(26,935		)	(29,247		)	(53,792		)	(59,647		)
Total	$	2,330,568		$	2,187,309		$	4,661,861		$	4,467,536

Segment Operating Profit
Grocery Products	$	95,651		$	108,297		$	195,628		$	200,673
Refrigerated Foods	154,192			130,194			297,141			304,002
Jennie-O Turkey Store	42,356			63,786			92,230			131,966
International & Other	20,850			19,617			45,505			45,080
Total segment operating profit	313,049			321,894			630,504			681,721
Net interest and investment expense (income)	9,490			205			10,913			782
General corporate expense	6,814			5,822			17,785			10,443
Noncontrolling interest	138			(40		)	242			116
Earnings Before Income Taxes	$	296,883		$	315,827		$	602,048		$	670,612