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						Nine Months Ended
(in thousands)	July 29, 2018			July 30, 2017			July 29, 2018			July 30, 2017
Sales to Unaffiliated Customers
Grocery Products	$	617,727		$	618,859		$	1,863,147		$	1,869,652
Refrigerated Foods	1,195,763			1,086,546			3,539,186			3,237,071
Jennie-O Turkey Store	398,058			369,078			1,160,622			1,178,304
International & Other	147,594			132,892			458,048			389,884
Total	$	2,359,142		$	2,207,375		$	7,021,003		$	6,674,911

Intersegment Sales
Grocery Products	$	14		$	7		$	28		$	22
Refrigerated Foods	1,660			1,223			5,210			5,039
Jennie-O Turkey Store	28,069			29,264			78,297			85,080
International & Other	—			—			—			—
Total	29,743			30,494			83,535			90,141
Intersegment elimination	(29,743		)	(30,494		)	(83,535		)	(90,141		)
Total	$	—		$	—		$	—		$	—

Net Sales
Grocery Products	$	617,741		$	618,866		$	1,863,175		$	1,869,674
Refrigerated Foods	1,197,423			1,087,769			3,544,396			3,242,110
Jennie-O Turkey Store	426,127			398,342			1,238,919			1,263,384
International & Other	147,594			132,892			458,048			389,884
Intersegment elimination	(29,743		)	(30,494		)	(83,535		)	(90,141		)
Total	$	2,359,142		$	2,207,375		$	7,021,003		$	6,674,911

Segment Operating Profit
Grocery Products	$	85,540		$	82,116		$	281,168		$	282,789
Refrigerated Foods	138,497			138,314			435,638			442,316
Jennie-O Turkey Store	34,625			44,986			126,855			176,952
International & Other	18,646			17,111			64,151			62,191
Total segment operating profit	277,308			282,527			907,812			964,248
Net interest and investment expense (income)	3,834			1,681			14,747			2,463
General corporate expense	15,852			2,865			33,637			13,308
Noncontrolling interest	110			43			352			159
Earnings Before Income Taxes	$	257,732		$	278,024		$	859,780		$	948,636