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SEGMENT REPORTING
 6 Months Ended
Apr. 29, 2012
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.

 

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

 

Six Months Ended

 

(in thousands)

 

April 29,
2012

 

May 1,
2011

 

April 29,
2012

 

May 1,
2011

 

Sales to Unaffiliated Customers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grocery Products

 

$

263,993

 

 

$

260,273

 

 

$

533,472

 

 

$

537,172

 

 

Refrigerated Foods

 

 

1,031,975

 

 

 

1,040,624

 

 

 

2,115,500

 

 

 

2,051,326

 

 

Jennie-O Turkey Store

 

 

391,053

 

 

 

365,953

 

 

 

768,424

 

 

 

730,470

 

 

Specialty Foods

 

 

228,947

 

 

 

205,001

 

 

 

446,971

 

 

 

396,346

 

 

All Other

 

 

96,891

 

 

 

87,190

 

 

 

187,931

 

 

 

165,285

 

 

Total

 

$

2,012,859

 

 

$

1,959,041

 

 

$

4,052,298

 

 

$

3,880,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grocery Products

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

Refrigerated Foods

 

 

3,131

 

 

 

3,198

 

 

 

5,544

 

 

 

5,452

 

 

Jennie-O Turkey Store

 

 

32,585

 

 

 

33,885

 

 

 

62,720

 

 

 

61,143

 

 

Specialty Foods

 

 

26

 

 

 

40

 

 

 

67

 

 

 

82

 

 

All Other

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

Total

 

$

35,742

 

 

$

37,123

 

 

$

68,331

 

 

$

66,677

 

 

Intersegment elimination

 

 

(35,742

)

 

 

(37,123

)

 

 

(68,331

)

 

 

(66,677

)

 

Total

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grocery Products

 

$

263,993

 

 

$

260,273

 

 

$

533,472

 

 

$

537,172

 

 

Refrigerated Foods

 

 

1,035,106

 

 

 

1,043,822

 

 

 

2,121,044

 

 

 

2,056,778

 

 

Jennie-O Turkey Store

 

 

423,638

 

 

 

399,838

 

 

 

831,144

 

 

 

791,613

 

 

Specialty Foods

 

 

228,973

 

 

 

205,041

 

 

 

447,038

 

 

 

396,428

 

 

All Other

 

 

96,891

 

 

 

87,190

 

 

 

187,931

 

 

 

165,285

 

 

Intersegment elimination

 

 

(35,742

)

 

 

(37,123

)

 

 

(68,331

)

 

 

(66,677

)

 

Total

 

$

2,012,859

 

 

$

1,959,041

 

 

$

4,052,298

 

 

$

3,880,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grocery Products

 

$

42,858

 

 

$

39,048

 

 

$

86,951

 

 

$

87,610

 

 

Refrigerated Foods

 

 

53,009

 

 

 

70,250

 

 

 

106,758

 

 

 

166,384

 

 

Jennie-O Turkey Store

 

 

70,198

 

 

 

46,703

 

 

 

146,960

 

 

 

120,528

 

 

Specialty Foods

 

 

20,859

 

 

 

19,164

 

 

 

37,506

 

 

 

36,442

 

 

All Other

 

 

12,855

 

 

 

8,444

 

 

 

25,326

 

 

 

18,437

 

 

Total segment operating profit

 

$

199,779

 

 

$

183,609

 

 

$

403,501

 

 

$

429,401

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest and investment expense (income)

 

 

945

 

 

 

5,215

 

 

 

2,569

 

 

 

11,353

 

 

General corporate expense

 

 

6,088

 

 

 

11,969

 

 

 

14,815

 

 

 

23,221

 

 

Noncontrolling interest

 

 

1,048

 

 

 

1,123

 

 

 

1,986

 

 

 

2,332

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

193,794

 

 

$

167,548

 

 

$

388,103

 

 

$

397,159