SEGMENT REPORTING

6 Months Ended

Apr. 30, 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 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 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 30, 2017		April 24, 2016		April 30, 2017		April 24, 2016
Sales to Unaffiliated Customers
Grocery Products	$	432,205	$	401,472	$	849,950	$	793,690
Refrigerated Foods		1,027,486		1,092,479		2,150,525		2,254,600
Jennie-O Turkey Store		388,237		423,540		809,226		795,606
Specialty Foods		208,214		272,484		400,843		510,263
International & Other		131,167		110,260		256,992		238,748
Total	$	2,187,309	$	2,300,235	$	4,467,536	$	4,592,907
Intersegment Sales
Grocery Products	$	-	$	-	$	-	$	-
Refrigerated Foods		1,677		3,657		3,816		5,987
Jennie-O Turkey Store		27,560		30,280		55,816		60,683
Specialty Foods		10		9		15		9
International & Other		-		-		-		-
Total		29,247		33,946		59,647		66,679
Intersegment elimination		(29,247)		(33,946)		(59,647)		(66,679)
Total	$	-	$	-	$	-	$	-
Net Sales
Grocery Products	$	432,205	$	401,472	$	849,950	$	793,690
Refrigerated Foods		1,029,163		1,096,136		2,154,341		2,260,587
Jennie-O Turkey Store		415,797		453,820		865,042		856,289
Specialty Foods		208,224		272,493		400,858		510,272
International & Other		131,167		110,260		256,991		238,748
Intersegment elimination		(29,247)		(33,946)		(59,647)		(66,679)
Total	$	2,187,309	$	2,300,235	$	4,467,536	$	4,592,907
Segment Operating Profit
Grocery Products	$	77,487	$	67,110	$	143,114	$	132,383
Refrigerated Foods		130,194		130,002		304,002		296,910
Jennie-O Turkey Store		63,786		89,678		131,966		180,981
Specialty Foods		30,810		36,853		57,559		63,646
International & Other		19,617		14,244		45,080		38,531
Total segment operating profit		321,894		337,887		681,721		712,451
Net interest and investment expense (income)		205		(380)		782		4,990
General corporate expense		5,822		14,057		10,443		29,189
Less:  Noncontrolling interest		(40)		(13)		116		93
Earnings before income taxes	$	315,827	$	324,197	$	670,612	$	678,365