SEGMENT REPORTING

3 Months Ended

Jan. 24, 2016

SEGMENT REPORTING

SEGMENT REPORTING

NOTE NSEGMENT 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 consists primarily of the processing, marketing, and sale of branded and unbranded pork and beef products for retail, foodservice, and fresh product customers.  This segment includes the results of Applegate Farms, LLC (Applegate) and Affiliated Foods (Farmer John, Burke, and Dan’s Prize).

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 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 includes the results of DCB, CytoSport/Century Foods International, and Hormel Specialty Products (HSP).  At the end of fiscal 2015, a portion of DCB was classified as held for sale.  See additional discussion regarding the Company’s assets held for sale in Note E.

The International & Other segment includes Hormel Foods International which manufactures, markets, and sells Company products internationally.  This segment also includes the results from the Company’s international joint ventures.

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 24, 2016		January 25, 2015
Sales to Unaffiliated Customers
Grocery Products	$	392,218	$	409,751
Refrigerated Foods	1,162,121		1,144,215
Jennie-O Turkey Store	372,066		440,019
Specialty Foods	237,779		263,274
International & Other	128,488		137,814
Total	$	2,292,672	$	2,395,073
Intersegment Sales
Grocery Products	$	-	$	-
Refrigerated Foods	2,330		4,183
Jennie-O Turkey Store	30,403		35,384
Specialty Foods	-		21
International & Other	-		-
Total	$	32,733	$	39,588
Intersegment elimination	(32,733)		(39,588)
Total	$	-	$	-
Net Sales
Grocery Products	$	392,218	$	409,751
Refrigerated Foods	1,164,451		1,148,398
Jennie-O Turkey Store	402,469		475,403
Specialty Foods	237,779		263,295
International & Other	128,488		137,814
Intersegment elimination	(32,733)		(39,588)
Total	$	2,292,672	$	2,395,073
Segment Operating Profit
Grocery Products	$	65,273	$	41,375
Refrigerated Foods	166,908		101,152
Jennie-O Turkey Store	91,303		93,020
Specialty Foods	26,793		18,576
International & Other	24,287		14,384
Total segment operating profit	$	374,564	$	268,507
Net interest and investment expense (income)	5,370		1,929
General corporate expense	15,132		3,253
Noncontrolling interest	106		712
Earnings before income taxes	$	354,168	$	264,037