SEGMENT REPORTING

6 Months Ended

Apr. 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 and Affiliated Foods.

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.  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				Six Months Ended
(in thousands)	April 24, 2016		April 26, 2015		April 24, 2016		April 26, 2015
Sales to Unaffiliated Customers
Grocery Products	$	401,472	$	397,265	$	793,690	$	807,016
Refrigerated Foods	1,092,479		1,022,511		2,254,600		2,166,726
Jennie-O Turkey Store	423,540		438,912		795,606		878,931
Specialty Foods	272,484		287,424		510,263		550,698
International & Other	110,260		133,233		238,748		271,047
Total	$	2,300,235	$	2,279,345	$	4,592,907	$	4,674,418
Intersegment Sales
Grocery Products	$	-	$	-	$	-	$	-
Refrigerated Foods	3,657		3,560		5,987		7,743
Jennie-O Turkey Store	30,280		36,398		60,683		71,782
Specialty Foods	9		25		9		46
International & Other	-		-		-		-
Total	$	33,946	$	39,983	$	66,679	$	79,571
Intersegment elimination	(33,946)		(39,983)		(66,679)		(79,571)
Total	$	-	$	-	$	-	$	-
Net Sales
Grocery Products	$	401,472	$	397,265	$	793,690	$	807,016
Refrigerated Foods	1,096,136		1,026,071		2,260,587		2,174,469
Jennie-O Turkey Store	453,820		475,310		856,289		950,713
Specialty Foods	272,493		287,449		510,272		550,744
International & Other	110,260		133,233		238,748		271,047
Intersegment elimination	(33,946)		(39,983)		(66,679)		(79,571)
Total	$	2,300,235	$	2,279,345	$	4,592,907	$	4,674,418
Segment Operating Profit
Grocery Products	$	67,110	$	55,327	$	132,383	$	96,702
Refrigerated Foods	130,002		114,837		296,910		215,989
Jennie-O Turkey Store	89,678		74,596		180,981		167,616
Specialty Foods	36,853		21,144		63,646		39,720
International & Other	14,244		21,383		38,531		35,767
Total segment operating profit	$	337,887	$	287,287	$	712,451	$	555,794
Net interest and investment expense (income)	(380)		1,966		4,990		3,895
General corporate expense	14,057		9,824		29,189		13,077
Noncontrolling interest	(13)		234		93		946
Earnings before income taxes	$	324,197	$	275,731	$	678,365	$	539,768