Reportable Segments

3 Months Ended

Jul. 31, 2016

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

We operate in one industry: the manufacturing and marketing of food and beverage products. We have three reportable segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, and U.S. Retail Pet Foods. Within our segment results, International and Foodservice represents a combination of the strategic business areas not included in the U.S. retail market segments. The U.S. Retail Coffee segment primarily includes the domestic sales of Folgers^®, Dunkin’ Donuts^®, and Café Bustelo^® branded coffee; the U.S. Retail Consumer Foods segment primarily includes the domestic sales of Jif^®, Smucker’s^®, Crisco^®, andPillsbury^® branded products; and the U.S. Retail Pet Foods segment primarily includes the domestic sales of Meow Mix^®, Milk-Bone^®, Natural Balance^®, Kibbles ’n Bits^®, 9Lives^®, Pup-Peroni^®, Nature’s Recipe^®, and Gravy Train^®branded products. International and Foodservice is comprised of products distributed domestically and in foreign countries through retail channels and foodservice distributors and operators (e.g., restaurants, lodging, schools and universities, health care operators).

Segment profit represents net sales, less direct and allocable operating expenses, and is consistent with the way in which we manage our segments. However, we do not represent that the segments, if operated independently, would report operating profit equal to the segment profit set forth below as segment profit excludes certain expenses such as corporate administrative expenses, unallocated gains and losses on commodity and foreign currency exchange derivative activities, and amortization expense related to intangible assets, including any related impairment charges. Effective May 1, 2016, the segment profit calculation was revised to exclude amortization expense related to intangible assets as we believe that excluding amortization expense related to intangible assets from segment operating results is more reflective of our operating performance and the way in which we manage our business.

Consistent with prior periods, commodity and foreign currency exchange derivative gains and losses are reported in unallocated derivative gains and losses outside of segment operating results until the related inventory is sold. At that time, we reclassify the hedge gains and losses from unallocated derivative gains and losses to segment profit, allowing our segments to realize the economic effect of the hedge without experiencing any mark-to-market volatility. We would expect that any gain or loss in the estimated fair value of the derivatives would generally be offset by a change in the estimated fair value of the underlying exposures.

Prior year segment results have been modified to conform to the revised segment profit presentation excluding amortization expense related to intangible assets.

	Three Months Ended July 31,
	2016			2015
Net sales:
U.S. Retail Coffee	$	513.3		$	565.0
U.S. Retail Consumer Foods	537.0			582.2
U.S. Retail Pet Foods	519.5			549.9
International and Foodservice	246.0			254.9
Total net sales	$	1,815.8		$	1,952.0
Segment profit:
U.S. Retail Coffee	$	173.8		$	173.8
U.S. Retail Consumer Foods	111.4			119.4
U.S. Retail Pet Foods	122.2			116.8
International and Foodservice	39.5			36.1
Total segment profit	$	446.9		$	446.1
Amortization	(51.7		)	(53.0		)
Interest expense – net	(41.5		)	(44.4		)
Unallocated derivative gains (losses)	7.7			(10.0		)
Cost of products sold – special project costs (A)	(4.0		)	(3.1		)
Other special project costs (A)	(22.2		)	(22.9		)
Corporate administrative expenses	(82.9		)	(90.0		)
Other income – net	1.1			0.1
Income before income taxes	$	253.4		$	222.8

(A) Special project costs include merger and integration and restructuring costs. For more information, see Note 4: Integration and Restructuring Costs.