SEGMENT REPORTING

9 Months Ended

Jul. 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				Nine Months Ended
(in thousands)	July 30, 2017		July 24, 2016		July 30, 2017		July 24, 2016
Sales to Unaffiliated Customers
Grocery Products	$	421,986	$	399,342	$	1,271,936	$	1,193,032
Refrigerated Foods	1,086,546		1,155,297		3,237,071		3,409,897
Jennie-O Turkey Store	369,078		403,953		1,178,304		1,199,559
Specialty Foods	196,873		212,197		597,716		722,460
International & Other	132,892		131,587		389,884		370,335
Total	$	2,207,375	$	2,302,376	$	6,674,911	$	6,895,283
Intersegment Sales
Grocery Products	$	-	$	-	$	-	$	-
Refrigerated Foods	1,223		1,648		5,039		7,635
Jennie-O Turkey Store	29,264		27,921		85,080		88,604
Specialty Foods	7		8		22		17
International & Other	-		-		-		-
Total	$	30,494	$	29,577	$	90,141	$	96,256
Intersegment elimination	(30,494)		(29,577)		(90,141)		(96,256)
Total	$	-	$	-	$	-	$	-
Net Sales
Grocery Products	$	421,986	$	399,342	$	1,271,936	$	1,193,032
Refrigerated Foods	1,087,769		1,156,945		3,242,110		3,417,532
Jennie-O Turkey Store	398,342		431,874		1,263,384		1,288,163
Specialty Foods	196,880		212,205		597,738		722,477
International & Other	132,892		131,587		389,884		370,335
Intersegment elimination	(30,494)		(29,577)		(90,141)		(96,256)
Total	$	2,207,375	$	2,302,376	$	6,674,911	$	6,895,283
Segment Operating Profit
Grocery Products	$	58,780	$	53,344	$	201,894	$	185,727
Refrigerated Foods	138,314		120,702		442,316		417,612
Jennie-O Turkey Store	44,986		56,147		176,952		237,128
Specialty Foods	23,336		27,089		80,895		90,735
International & Other	17,111		20,308		62,191		58,839
Total segment operating profit	$	282,527	$	277,590	$	964,248	$	990,041
Net interest and investment expense	1,681		673		2,463		5,663
General corporate expense	2,865		2,922		13,308		32,111
Less: Noncontrolling interest	43		122		159		215
Earnings before income taxes	$	278,024	$	274,117	$	948,636	$	952,482