SEGMENT REPORTING

6 Months Ended

Apr. 26, 2015

SEGMENT REPORTING

SEGMENT REPORTING

NOTE MSEGMENT 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, and Dan’s Prize businesses.  Through fiscal 2014, this segment also included Precept Foods, LLC, a 50.01 percent owned joint venture that was dissolved at the end of the fiscal year.

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, CytoSport/Century Foods International, and Hormel Specialty Products operating segments.  This segment consists of the packaging and sale of private label shelf stable products, nutritional products, sugar, and condiments to industrial, 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.

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 26, 2015			April 27, 2014			April 26, 2015			April 27, 2014
Sales to Unaffiliated Customers
Grocery Products	$	397,265		$	392,030		$	807,016		$	793,550
Refrigerated Foods	1,022,511			1,111,244			2,166,726			2,239,665
Jennie-O Turkey Store	438,912			380,425			878,931			779,825
Specialty Foods	287,424			217,176			550,698			413,155
International & Other	133,233			143,991			271,047			261,343
Total	$	2,279,345		$	2,244,866		$	4,674,418		$	4,487,538
Intersegment Sales
Grocery Products	$	-		$	-		$	-		$	-
Refrigerated Foods	3,560			6,601			7,743			12,347
Jennie-O Turkey Store	36,398			36,870			71,782			69,999
Specialty Foods	25			18			46			52
International & Other	-			-			-			-
Total	$	39,983		$	43,489		$	79,571		$	82,398
Intersegment elimination	(39,983		)	(43,489		)	(79,571		)	(82,398		)
Total	$	-		$	-		$	-		$	-
Net Sales
Grocery Products	$	397,265		$	392,030		$	807,016		$	793,550
Refrigerated Foods	1,026,071			1,117,845			2,174,469			2,252,012
Jennie-O Turkey Store	475,310			417,295			950,713			849,824
Specialty Foods	287,449			217,194			550,744			413,207
International & Other	133,233			143,991			271,047			261,343
Intersegment elimination	(39,983		)	(43,489		)	(79,571		)	(82,398		)
Total	$	2,279,345		$	2,244,866		$	4,674,418		$	4,487,538

Segment Operating Profit
Grocery Products	$	55,327	$	54,890	$	96,702	$	111,232
Refrigerated Foods	114,837		75,397		215,989		160,696
Jennie-O Turkey Store	74,596		52,808		167,616		112,353
Specialty Foods	21,144		19,134		39,720		40,389
International & Other	21,383		20,863		35,767		43,420
Total segment operating profit	$	287,287	$	223,092	$	555,794	$	468,090
Net interest and investment expense (income)	1,966		3,399		3,895		5,320
General corporate expense	9,824		7,152		13,077		16,068
Noncontrolling interest	234		616		946		1,726
Earnings before income taxes	$	275,731	$	213,157	$	539,768	$	448,428