SEGMENT REPORTING

3 Months Ended

Jan. 27, 2013

SEGMENT REPORTING

SEGMENT REPORTING

NOTE M 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
(in thousands)	January 27, 2013			January 29, 2012
Sales to Unaffiliated Customers
Grocery Products	$	334,140		$	269,479
Refrigerated Foods	1,063,401			1,083,525
Jennie-O Turkey Store	390,334			377,371
Specialty Foods	233,845			218,024
All Other	94,521			91,040
Total	$	2,116,241		$	2,039,439
Intersegment Sales
Grocery Products	$	—		$	—
Refrigerated Foods	2,443			2,413
Jennie-O Turkey Store	30,421			30,135
Specialty Foods	31			41
All Other	—			—
Total	$	32,895		$	32,589
Intersegment elimination	(32,895		)	(32,589		)
Total	$	—		$	—
Net Sales
Grocery Products	$	334,140		$	269,479
Refrigerated Foods	1,065,844			1,085,938
Jennie-O Turkey Store	420,755			407,506
Specialty Foods	233,876			218,065
All Other	94,521			91,040
Intersegment elimination	(32,895		)	(32,589		)
Total	$	2,116,241		$	2,039,439
Segment Operating Profit
Grocery Products	$	49,913		$	44,093
Refrigerated Foods	53,790			53,749
Jennie-O Turkey Store	58,945			76,762
Specialty Foods	23,761			16,647
All Other	17,111			12,471
Total segment operating profit	$	203,520		$	203,722
Net interest and investment expense (income)	1,284			1,624
General corporate expense	6,644			8,727
Noncontrolling interest	1,329			938
Earnings before income taxes	$	196,921		$	194,309