SEGMENT REPORTING

9 Months Ended

Jul. 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, the Affiliated Business Units, and Applegate.  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				Nine Months Ended
(in thousands)	July 26, 2015		July 27, 2014		July 26, 2015		July 27, 2014
Sales to Unaffiliated Customers
Grocery Products	$	388,094	$	359,549	$	1,195,110	$	1,153,099
Refrigerated Foods	1,056,125		1,192,624		3,222,851		3,432,289
Jennie-O Turkey Store	336,533		382,647		1,215,464		1,162,472
Specialty Foods	282,774		216,406		833,472		629,561
International & Other	125,061		133,721		396,108		395,064
Total	$	2,188,587	$	2,284,947	$	6,863,005	$	6,772,485
Intersegment Sales
Grocery Products	$	-	$	-	$	-	$	-
Refrigerated Foods	2,440		3,451		10,183		15,798
Jennie-O Turkey Store	27,241		35,128		99,023		105,127
Specialty Foods	18		47		64		99
International & Other	-		-		-		-
Total	$	29,699	$	38,626	$	109,270	$	121,024
Intersegment elimination	(29,699)		(38,626)		(109,270)		(121,024)
Total	$	-	$	-	$	-	$	-
Net Sales
Grocery Products	$	388,094	$	359,549	$	1,195,110	$	1,153,099
Refrigerated Foods	1,058,565		1,196,075		3,233,034		3,448,087
Jennie-O Turkey Store	363,774		417,775		1,314,487		1,267,599
Specialty Foods	282,792		216,453		833,536		629,660
International & Other	125,061		133,721		396,108		395,064
Intersegment elimination	(29,699)		(38,626)		(109,270)		(121,024)
Total	$	2,188,587	$	2,284,947	$	6,863,005	$	6,772,485
Segment Operating Profit
Grocery Products	$	53,108	$	33,781	$	149,810	$	145,013
Refrigerated Foods	97,692		90,028		313,681		250,724
Jennie-O Turkey Store	35,374		64,756		202,990		177,109
Specialty Foods	31,190		17,378		70,910		57,767
International & Other	19,251		18,696		55,018		62,116
Total segment operating profit	$	236,615	$	224,639	792,409		692,729
Net interest and investment expense	2,941		1,522		6,836		6,842
General corporate expense	5,473		11,174		18,550		27,242
Noncontrolling interest	18		1,039		964		2,765
Earnings before income taxes	$	228,219	$	212,982	$	767,987	$	661,410