SEGMENT REPORTING

9 Months Ended

Jul. 28, 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 International & 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 International & 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.  This segment was previously the All Other segment, and was renamed in the second quarter of fiscal 2013 with no change in the composition of the segment.

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 28, 2013			July 29, 2012			July 28, 2013			July 29, 2012
Sales to Unaffiliated Customers
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,068,587			1,043,311			3,143,358			3,158,811
Jennie-O Turkey Store	367,125			351,604			1,142,198			1,120,028
Specialty Foods	240,512			230,072			720,048			677,043
International & Other	113,004			86,024			324,906			273,955
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Intersegment Sales
Grocery Products	$	—		$	—		$	—		$	—
Refrigerated Foods	4,654			2,385			10,393			7,929
Jennie-O Turkey Store	29,559			29,901			89,542			92,621
Specialty Foods	23			41			76			108
International & Other	—			—			—			—
Total	$	34,236		$	32,327		$	100,011		$	100,658
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	—		$	—		$	—		$	—
Net Sales
Grocery Products	$	370,297		$	297,177		$	1,097,942		$	830,649
Refrigerated Foods	1,073,241			1,045,696			3,153,751			3,166,740
Jennie-O Turkey Store	396,684			381,505			1,231,740			1,212,649
Specialty Foods	240,535			230,113			720,124			677,151
International & Other	113,004			86,024			324,906			273,955
Intersegment elimination	(34,236		)	(32,327		)	(100,011		)	(100,658		)
Total	$	2,159,525		$	2,008,188		$	6,428,452		$	6,060,486
Segment Operating Profit
Grocery Products	$	52,962		$	40,052		$	150,170		$	127,003
Refrigerated Foods	44,769			60,757			153,239			167,515
Jennie-O Turkey Store	45,623			39,106			156,567			186,066
Specialty Foods	23,170			21,490			72,898			58,996
International & Other	16,692			12,437			49,421			37,763
Total segment operating profit	$	183,216		$	173,842		$	582,295		$	577,343
Net interest and investment expense (income)	3,577			2,363			6,887			4,932
General corporate expense	2,833			3,225			19,228			18,040
Noncontrolling interest	270			1,240			2,720			3,226
Earnings before income taxes	$	177,076		$	169,494		$	558,900		$	557,597