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Segment Reporting
 12 Months Ended
Sep. 27, 2014
Segment Reporting [Abstract]  
Segment Reporting
SEGMENT REPORTING
We operate in five segments: Chicken, Beef, Pork, Prepared Foods and International. We measure segment profit as operating income (loss).
During the second quarter of fiscal 2014, we began reporting our International operation as a separate segment, which was previously included in our Chicken segment. Our International segment became a separate reportable segment as a result of changes to our internal financial reporting to align with previously announced executive leadership changes. All periods presented have been reclassified to reflect this change. Beef, Pork, Prepared Foods and Other results were not impacted by this change.
Chicken: Chicken includes our domestic operations related to raising and processing live chickens into fresh, frozen and value-added chicken products, as well as sales from allied products. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets. This segment also includes logistics operations to move products through our domestic supply chain and the global operations of our chicken breeding stock subsidiary.
Beef: Beef includes our operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets. This segment also includes sales from allied products such as hides and variety meats, as well as logistics operations to move products through the supply chain.
Pork: Pork includes our operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets. This segment also includes our live swine group, related allied product processing activities and logistics operations to move products through the supply chain.
Prepared Foods: Prepared Foods includes our operations related to manufacturing and marketing frozen and refrigerated food products and logistics operations to move products through the supply chain. Products primarily include pepperoni, bacon, sausage, beef and pork pizza toppings, pizza crusts, flour and corn tortilla products, appetizers, prepared meals, ethnic foods, soups, sauces, side dishes, meat dishes, breadsticks and processed meats. Products are marketed domestically to food retailers, foodservice distributors, restaurant operators, hotel chains and noncommercial foodservice establishments such as schools, healthcare facilities, the military and other food processors, as well as to international export markets.
On August 28, 2014, we completed the acquisition of Hillshire Brands, a manufacturer and marketer of branded, convenient foods which includes brands such as Jimmy Dean®, Ball Park®, Hillshire Farm®, State Fair®, Van's®, Sara Lee® frozen bakery and Chef Pierre® pies as well as artisanal brands Aidells®, Gallo Salame®, and Golden Island® premium jerky. Hillshire Brands' one month results from operations for fiscal 2014 are included in the Prepared Foods segment.
International: International includes our foreign operations primarily related to raising and processing live chickens into fresh, frozen and value-added chicken products in Brazil, China, India and Mexico. Products are marketed in each respective country to food retailers, foodservice distributors, restaurant operators, hotel chains, noncommercial foodservice establishments and live markets, as well as to other international export markets.
On July 28, 2014, we announced our plan to sell our Brazil and Mexico operations, part of our International segment, to JBS for $575 million in cash. We expect to complete the sale of our Brazil operation in the first quarter of fiscal 2015. The sale of our Mexico operation is pending the necessary government approvals and is expected to close in the first half of fiscal 2015.
The results from Dynamic Fuels are included in Other. We allocate expenses related to corporate activities to the segments, except for acquisition and integration related fees of $59 million which are included in Other. Assets and additions to property, plant and equipment relating to corporate activities remain in Other. At September 27, 2014, we included $4.8 billion of goodwill associated with our acquisition of Hillshire Brands in Other. The allocation of goodwill to our reportable segments is pending finalization of the expected synergies and the impact of the synergies to our reporting units.
Information on segments and a reconciliation to income from continuing operations before income taxes are follows:
 
in millions
 
 
Chicken

 
Beef

 
Pork

 
Prepared
Foods

 
International

 
Other

 
Intersegment
Sales

 
Consolidated

Fiscal 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
11,116

 
$
16,177

 
$
6,304

 
$
3,927

 
$
1,381

 
$
—

 
$
(1,325
)
 
$
37,580

Operating Income (Loss)
883

 
347

 
455

 
(60
)
 
(121
)
 
(74
)
 
 
 
1,430

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
178

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,252

Depreciation
251

 
87

 
32

 
78

 
40

 
6

 
 
 
494

Total Assets
4,807

 
3,103

 
965

 
8,608

 
871

 
5,602

 
 
 
23,956

Additions to property, plant and equipment
307

 
115

 
36

 
77

 
46

 
51

 
 
 
632

Fiscal 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
10,988

 
$
14,400

 
$
5,408

 
$
3,322

 
$
1,324

 
$
46

 
$
(1,114
)
 
$
34,374

Operating Income (Loss)
683

 
296

 
332

 
101

 
(37
)
 
—

 
 
 
1,375

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
118

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,257

Depreciation
251

 
87

 
30

 
61

 
40

 
5

 
 
 
474

Total Assets
4,944

 
2,798

 
931

 
1,176

 
876

 
1,452

 
 
 
12,177

Additions to property, plant and equipment
253

 
105

 
22

 
87

 
58

 
33

 
 
 
558

Fiscal 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
10,270

 
$
13,755

 
$
5,510

 
$
3,237

 
$
1,104

 
$
167

 
$
(988
)
 
$
33,055

Operating Income (Loss)
554

 
218

 
417

 
181

 
(70
)
 
(14
)
 
 
 
1,286

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
321

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
965

Depreciation
228

 
86

 
30

 
54

 
40

 
5

 
 
 
443

Total Assets
4,934

 
2,634

 
895

 
960

 
968

 
1,505

 
 
 
11,896

Additions to property, plant and equipment
354

 
100

 
32

 
99

 
97

 
8

 
 
 
690


The Chicken segment had sales of $7 million, $16 million and $6 million for fiscal 2014, 2013 and 2012, respectively, from transactions with other operating segments. The Pork segment had sales of $1.0 billion, $872 million and $771 million for fiscal 2014, 2013 and 2012, respectively, from transactions with other operating segments. The Beef segment had sales of $307 million, $226 million and $211 million for fiscal 2014, 2013 and 2012, respectively, from transactions with other operating segments. The aforementioned sales from intersegment transactions, which were at market prices, were included in the segment sales in the above table.
Our largest customer, Wal-Mart Stores, Inc., accounted for 14.6%, 13.0% and 13.8% of consolidated sales in fiscal 2014, 2013 and 2012, respectively. Sales to Wal-Mart Stores, Inc. were included in the all segments. Any extended discontinuance of sales to this customer could, if not replaced, have a material impact on our operations.
The majority of our operations are domiciled in the United States. Approximately 96%, 96% and 95% of sales to external customers for fiscal 2014, 2013 and 2012, respectively, were sourced from the United States. Approximately $17.4 billion and $6.1 billion of long-lived assets were located in the United States at September 27, 2014, and September 28, 2013, respectively. Approximately $324 million and $485 million of long-lived assets were located in foreign countries, primarily Brazil, China and India, at September 27, 2014, and September 28, 2013, respectively.
We sell certain products in foreign markets, primarily Brazil, Canada, Central America, China, the European Union, Japan, Mexico, the Middle East, South Korea, Taiwan, and Vietnam. Our export sales from the United States totaled $4.7 billion, $4.2 billion and $4.0 billion for fiscal 2014, 2013 and 2012, respectively. Substantially all of our export sales are facilitated through unaffiliated brokers, marketing associations and foreign sales staffs. Sales of products produced in a country other than the United States were less than 10% of consolidated sales for each of fiscal 2014, 2013 and 2012.