SEGMENT REPORTING

3 Months Ended

Jan. 29, 2017

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 Foods, LLC joint venture.

The Refrigerated Foods segment consists primarily of the processing, marketing, and sale of branded and unbranded pork, beef, chicken, and turkey products products for retail, foodservice, and fresh product customers. 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 processing, marketing, and sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers.

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 29, 2017		January 24, 2016
Sales to Unaffiliated Customers
Grocery Products	$	417,745	$	392,218
Refrigerated Foods	1,123,039		1,162,121
Jennie-O Turkey Store	420,989		372,066
Specialty Foods	192,629		237,779
International & Other	125,825		128,488
Total	$	2,280,227	$	2,292,672
Intersegment Sales
Grocery Products	$	-	$	-
Refrigerated Foods	2,139		2,330
Jennie-O Turkey Store	28,256		30,403
Specialty Foods	5		-
International & Other	-		-
Total	$	30,400	$	32,733
Intersegment elimination	(30,400)		(32,733)
Total	$	-	$	-
Net Sales
Grocery Products	$	417,745	$	392,218
Refrigerated Foods	1,125,178		1,164,451
Jennie-O Turkey Store	449,245		402,469
Specialty Foods	192,634		237,779
International & Other	125,825		128,488
Intersegment elimination	(30,400)		(32,733)
Total	$	2,280,227	$	2,292,672
Segment Operating Profit
Grocery Products	$	65,627	$	65,273
Refrigerated Foods	173,808		166,908
Jennie-O Turkey Store	68,180		91,303
Specialty Foods	26,749		26,793
International & Other	25,463		24,287
Total segment operating profit	$	359,827	$	374,564
Net interest and investment expense (income)	577		5,370
General corporate expense	4,621		15,132
Less: Noncontrolling interest	156		106
Earnings before income taxes	$	354,785	$	354,168