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SEGMENT REPORTING
 9 Months Ended
Jul. 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

 

Nine Months Ended

 

(in thousands)

 

July 29,
2012

 

July 31,
2011

 

July 29,
2012

 

July 31,
2011

 

Sales to Unaffiliated Customers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Grocery Products

 

 $

297,177 

 

 

 $

245,368 

 

 

 $

830,649 

 

 

 $

782,540 

 

 

   Refrigerated Foods

 

 

1,043,311 

 

 

 

1,045,874 

 

 

 

3,158,811 

 

 

 

3,097,200 

 

 

   Jennie-O Turkey Store

 

 

351,604 

 

 

 

327,809 

 

 

 

1,120,028 

 

 

 

1,058,279 

 

 

   Specialty Foods

 

 

230,072 

 

 

 

207,025 

 

 

 

677,043 

 

 

 

603,371 

 

 

   All Other

 

 

86,024 

 

 

 

84,516 

 

 

 

273,955 

 

 

 

249,801 

 

 

Total

 

 $

2,008,188 

 

 

 $

1,910,592 

 

 

 $

6,060,486 

 

 

 $

5,791,191 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Grocery Products

 

 $

- 

 

 

 $

- 

 

 

 $

- 

 

 

 $

- 

 

 

   Refrigerated Foods

 

 

2,385 

 

 

 

4,313 

 

 

 

7,929 

 

 

 

9,765 

 

 

   Jennie-O Turkey Store

 

 

29,901 

 

 

 

32,059 

 

 

 

92,621 

 

 

 

93,202 

 

 

   Specialty Foods

 

 

41 

 

 

 

22 

 

 

 

108 

 

 

 

104 

 

 

   All Other

 

 

- 

 

 

 

- 

 

 

 

- 

 

 

 

- 

 

 

Total

 

 $

32,327 

 

 

 $

36,394 

 

 

 $

100,658 

 

 

$

103,071 

 

 

   Intersegment elimination

 

 

(32,327)

 

 

 

(36,394)

 

 

 

(100,658)

 

 

 

(103,071)

 

 

Total

 

 $

- 

 

 

 $

- 

 

 

 $

- 

 

 

 $

- 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Grocery Products

 

 $

297,177 

 

 

 $

245,368 

 

 

 $

830,649 

 

 

 $

782,540 

 

 

   Refrigerated Foods

 

 

1,045,696 

 

 

 

1,050,187 

 

 

 

3,166,740 

 

 

 

3,106,965 

 

 

   Jennie-O Turkey Store

 

 

381,505 

 

 

 

359,868 

 

 

 

1,212,649 

 

 

 

1,151,481 

 

 

   Specialty Foods

 

 

230,113 

 

 

 

207,047 

 

 

 

677,151 

 

 

 

603,475 

 

 

   All Other

 

 

86,024 

 

 

 

84,516 

 

 

 

273,955 

 

 

 

249,801 

 

 

   Intersegment elimination

 

 

(32,327)

 

 

 

(36,394)

 

 

 

(100,658)

 

 

 

(103,071)

 

 

Total

 

 $

2,008,188 

 

 

 $

1,910,592 

 

 

 $

6,060,486 

 

 

 $

5,791,191 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Grocery Products

 

 $

40,052 

 

 

 $

30,428 

 

 

 $

127,003 

 

 

 $

118,038 

 

 

   Refrigerated Foods

 

 

60,757 

 

 

 

56,820 

 

 

 

167,515 

 

 

 

223,204 

 

 

   Jennie-O Turkey Store

 

 

39,106 

 

 

 

34,851 

 

 

 

186,066 

 

 

 

155,379 

 

 

   Specialty Foods

 

 

21,490 

 

 

 

18,141 

 

 

 

58,996 

 

 

 

54,583 

 

 

   All Other

 

 

12,437 

 

 

 

8,043 

 

 

 

37,763 

 

 

 

26,480 

 

 

Total segment operating profit

 

 $

173,842 

 

 

 $

148,283 

 

 

 $

577,343 

 

 

 $

577,684 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Net interest and investment expense (income)

 

 

2,363 

 

 

 

5,484 

 

 

 

4,932 

 

 

 

16,837 

 

 

   General corporate expense

 

 

3,225 

 

 

 

2,944 

 

 

 

18,040 

 

 

 

26,165 

 

 

   Noncontrolling interest

 

 

1,240 

 

 

 

1,483 

 

 

 

3,226 

 

 

 

3,815 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 $

169,494 

 

 

 $

141,338 

 

 

 $

557,597 

 

 

 $

538,497