Reportable Segments

12 Months Ended

Apr. 30, 2020

Note 5: Reportable Segments

We operate in one industry: the manufacturing and marketing of food and beverage products. We have four reportable segments: U.S. Retail Pet Foods, U.S. Retail Coffee, U.S. Retail Consumer Foods, and International and Away From Home.

The U.S. Retail Pet Foods segment primarily includes domestic sales of Rachael Ray Nutrish, Meow Mix, Milk-Bone,

Kibbles ’n Bits, 9Lives, Natural Balance, Nature’s Recipe, and Pup-Peroni branded products; the U.S. Retail Coffee segment primarily includes the domestic sales of Folgers, Dunkin’, and Café Bustelo branded coffee; and the U.S. Retail Consumer Foods segment primarily includes domestic sales of Smucker’s, Jif , and Crisco branded products. The International and Away From Home segment comprises products distributed domestically and in foreign countries through retail channels and foodservice distributors and operators (e.g., health care operators, restaurants, lodging, hospitality, offices, K-12, colleges and universities, and convenience stores).

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, as well as amortization expense and impairment charges related to intangible assets.

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.


	Year Ended April 30,
	2020		2019		2018
Net sales:
U.S. Retail Pet Foods	$	2,869.5	$	2,879.5	$	2,165.3
U.S. Retail Coffee	2,149.5		2,122.3		2,086.8
U.S. Retail Consumer Foods	1,731.7		1,761.5		1,985.6
International and Away From Home	1,050.3		1,074.7		1,119.4
Total net sales	$	7,801.0	$	7,838.0	$	7,357.1
Segment profit:
U.S. Retail Pet Foods	$	552.7	$	503.4	$	439.4
U.S. Retail Coffee	691.0		676.3		612.4
U.S. Retail Consumer Foods	389.7		406.1		475.3
International and Away From Home	173.4		198.5		200.1
Total segment profit	$	1,806.8	$	1,784.3	$	1,727.2
Amortization	(236.3)		(240.3)		(206.8)
Goodwill impairment charges	—		(97.9)		(145.0)
Other intangible assets impairment charges	(52.4)		(107.2)		(31.9)
Interest expense – net	(189.2)		(207.9)		(174.1)
Unallocated derivative gains (losses)	19.6		(54.2)		37.3
Cost of products sold – special project costs ^(A)	—		—		(3.9)
Other special project costs ^(A)	(16.5)		(64.1)		(45.4)
Corporate administrative expenses	(298.1)		(292.0)		(287.5)
Other income (expense) – net	(7.2)		(19.1)		(8.9)
Income before income taxes	$	1,026.7	$	701.6	$	861.0
Assets:
U.S. Retail Pet Foods	$	7,731.4	$	7,847.0	$	5,932.3
U.S. Retail Coffee	4,787.4		4,771.9		4,815.4
U.S. Retail Consumer Foods	2,873.1		2,850.8		3,217.5
International and Away From Home	1,048.0		1,019.5		1,043.9
Unallocated ^(B)	530.5		222.1		292.1
Total assets	$	16,970.4	$	16,711.3	$	15,301.2
Depreciation, amortization, and impairment charges:
U.S. Retail Pet Foods	$	243.0	$	301.4	$	314.8
U.S. Retail Coffee	96.4		98.3		96.6
U.S. Retail Consumer Foods	72.5		162.4		80.2
International and Away From Home	51.9		52.8		57.8
Unallocated ^(C)	35.1		36.5		40.6
Total depreciation, amortization, and impairment charges	$	498.9	$	651.4	$	590.0
Additions to property, plant, and equipment:
U.S. Retail Pet Foods	$	60.1	$	136.0	$	34.3
U.S. Retail Coffee	62.4		63.9		89.4
U.S. Retail Consumer Foods	107.7		138.9		168.9
International and Away From Home	39.1		21.0		29.3
Total additions to property, plant, and equipment	$	269.3	$	359.8	$	321.9

(A)Special project costs include integration and restructuring costs. For more information, see Note 3: Integration and Restructuring Costs.

(B)Primarily represents unallocated cash and cash equivalents and corporate-held investments.

(C)Primarily represents unallocated corporate administrative expense, mainly depreciation and software amortization.

The following table presents certain geographical information.


	Year Ended April 30,
	2020		2019		2018
Net sales:
United States	$	7,247.9	$	7,298.0	$	6,786.5
International:
Canada	$	445.3	$	421.9	$	431.8
All other international	107.8		118.1		138.8
Total international	$	553.1	$	540.0	$	570.6
Total net sales	$	7,801.0	$	7,838.0	$	7,357.1
Assets:
United States	$	16,547.6	$	16,338.0	$	14,828.2
International:
Canada	$	421.3	$	362.1	$	428.7
All other international	1.5		11.2		44.3
Total international	$	422.8	$	373.3	$	473.0
Total assets	$	16,970.4	$	16,711.3	$	15,301.2
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	2,209.9	$	2,037.5	$	1,869.8
International:
Canada	$	54.3	$	18.9	$	17.4
All other international	—		—		0.3
Total international	$	54.3	$	18.9	$	17.7
Total long-lived assets (excluding goodwill and other intangible assets)	$	2,264.2	$	2,056.4	$	1,887.5

The following table presents product category information.


	Year Ended April 30,
	2020		2019		2018		Primary Reportable Segment ^(A)
Coffee	$	2,475.4	$	2,479.4	$	2,469.7	U.S. Retail Coffee
Dog food	1,217.6		1,313.1		756.8		U.S. Retail Pet Foods
Cat food	869.2		812.8		702.5		U.S. Retail Pet Foods
Pet snacks	849.7		815.1		767.2		U.S. Retail Pet Foods
Peanut butter	730.6		756.6		745.1		U.S. Retail Consumer Foods
Fruit spreads	370.3		341.6		353.8		U.S. Retail Consumer Foods
Frozen handheld	365.0		289.0		254.1		U.S. Retail Consumer Foods
Shortening and oils	262.3		253.6		258.1		U.S. Retail Consumer Foods
Portion control	153.3		162.7		160.3		International and Away From Home
Juices and beverages	125.7		123.9		140.8		U.S. Retail Consumer Foods
Baking mixes and ingredients	89.9		185.2		437.9		International and Away From Home ^(B)
Other	292.0		305.0		310.8		International and Away From Home
Total net sales	$	7,801.0	$	7,838.0	$	7,357.1

(A)The primary reportable segment generally represents at least 75 percent of total net sales for each respective product category.

(B)During 2019 and 2018, the primary reportable segment was U.S. Retail Consumer Foods, as the majority of the net sales within this category were related to the divested U.S. baking business. For more information, see Note 4: Divestiture.

Sales to Walmart Inc. and subsidiaries amounted to 32 percent, 32 percent, and 31 percent of net sales in 2020, 2019, and 2018, respectively. These sales are primarily included in our U.S. retail market segments. No other customer exceeded

10 percent of net sales for any year. Trade receivables at April 30, 2020 and 2019, included amounts due from Walmart Inc. and subsidiaries of $131.9 and $137.7, respectively.