SEGMENT REPORTING

9 Months Ended

Jul. 31, 2011

SEGMENT REPORTING

SEGMENT REPORTING

NOTE L 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 All 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 between Hormel Foods Corporation and Cargill Meat Solutions Corporation, a wholly-owned subsidiary of Cargill, Incorporated.

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 All 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.

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 31, 2011			July 25, 2010			July 31, 2011			July 25, 2010
Sales to Unaffiliated Customers
Grocery Products	$	245,368		$	235,034		$	782,540		$	753,343
Refrigerated Foods	1,045,874			950,075			3,097,200			2,735,847
Jennie-O Turkey Store	327,809			295,862			1,058,279			908,364
Specialty Foods	207,025			187,065			603,371			570,941
All Other	84,516			62,415			249,801			189,185
Total	$	1,910,592		$	1,730,451		$	5,791,191		$	5,157,680
Intersegment Sales
Grocery Products	$	0		$	0		$	0		$	0
Refrigerated Foods	4,313			2,346			9,765			6,156
Jennie-O Turkey Store	32,059			30,151			93,202			78,458
Specialty Foods	22			38			104			92
All Other	0			0			0			0
Total	$	36,394		$	32,535		$	103,071		$	84,706
Intersegment elimination	(36,394		)	(32,535		)	(103,071		)	(84,706		)
Total	$	0		$	0		$	0		$	0
Net Sales
Grocery Products	$	245,368		$	235,034		$	782,540		$	753,343
Refrigerated Foods	1,050,187			952,421			3,106,965			2,742,003
Jennie-O Turkey Store	359,868			326,013			1,151,481			986,822
Specialty Foods	207,047			187,103			603,475			571,033
All Other	84,516			62,415			249,801			189,185
Intersegment elimination	(36,394		)	(32,535		)	(103,071		)	(84,706		)
Total	$	1,910,592		$	1,730,451		$	5,791,191		$	5,157,680
Segment Operating Profit
Grocery Products	$	30,428		$	25,596		$	118,038		$	112,788
Refrigerated Foods	56,820			64,539			223,204			190,250
Jennie-O Turkey Store	34,851			30,664			155,379			96,100
Specialty Foods	18,141			19,703			54,583			60,841
All Other	8,043			4823			26,480			16,678
Total segment operating profit	$	148,283		$	145,325		$	577,684		$	476,657
Net interest and investment expense (income)	5,484			6,183			16,837			17,452
General corporate expense	2,944			5,705			26,165			25,459
Noncontrolling interest	1,483			994			3,815			2,729
Earnings before income taxes	$	141,338		$	134,431		$	538,497		$	436,475