XML 40 R23.htm IDEA: XBRL DOCUMENT v3.5.0.2
Segment Reporting
 12 Months Ended
Oct. 01, 2016
Segment Reporting [Abstract]  
Segment Reporting
SEGMENT REPORTING
We operate in four reportable segments: Chicken, Beef, Pork and Prepared Foods. We measure segment profit as operating income (loss). Other primarily includes our foreign chicken production operations in China and India and third-party merger and integration costs.
Chicken: Chicken includes our domestic operations related to raising and processing live chickens into, and purchasing raw materials for, 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. This segment includes brands such as Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, State Fair®, Van's®, Sara Lee® and Chef Pierre®, as well as artisanal brands Aidells®, Gallo Salame®, and Golden Island®. Products primarily include pepperoni, bacon, breakfast sausage, turkey, lunchmeat, hot dogs, pizza crusts and toppings, flour and corn tortilla products, desserts, appetizers, snacks, 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.
We allocate expenses related to corporate activities to the segments, except for third-party merger and integration costs of $37 million, $47 million and $59 million in fiscal 2016, 2015 and 2014, respectively, which are included in Other. Assets and additions to property, plant and equipment relating to corporate activities remain in Other. In addition, at September 27, 2014, we included $4.8 billion of goodwill associated with our acquisition of Hillshire Brands in Other and we completed the allocation of goodwill to our segments in fiscal 2015. See Note 5: Goodwill and Intangible Assets for further description regarding the allocation of goodwill. The results from Dynamic Fuels are also included in Other in fiscal 2014.
Information on segments and a reconciliation to income from continuing operations before income taxes are follows:
 
in millions
 
 
Chicken

 
Beef

 
Pork

 
Prepared
Foods

 
Other

 
Intersegment
Sales

 
Consolidated

Fiscal 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
10,927

 
$
14,513

 
$
4,909

 
$
7,346

 
$
380

 
$
(1,194
)
 
$
36,881

Operating Income (Loss)
1,305

 
347

 
528

 
734

 
(81
)
 
 
 
2,833

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
235

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
2,598

Depreciation and amortization
274

 
94

 
33

 
286

 
10

 
 
 
697

Total Assets
5,836

 
2,764

 
1,039

 
11,814

 
920

 
 
 
22,373

Additions to property, plant and equipment
281

 
99

 
68

 
178

 
69

 
 
 
695

Fiscal 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
11,390

 
$
17,236

 
$
5,262

 
$
7,822

 
$
879

 
$
(1,216
)
 
$
41,373

Operating Income (Loss)
1,366

 
(66
)
 
380

 
588

 
(99
)
 
 
 
2,169

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
248

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
1,921

Depreciation and amortization
272

 
97

 
31

 
280

 
21

 
 
 
701

Total Assets
5,731

 
3,009

 
927

 
12,006

 
1,296

 
 
 
22,969

Additions to property, plant and equipment
405

 
113

 
50

 
167

 
119

 
 
 
854

Fiscal 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales
$
11,116

 
$
16,177

 
$
6,304

 
$
3,927

 
$
1,381

 
$
(1,325
)
 
$
37,580

Operating Income (Loss)
883

 
347

 
455

 
(60
)
 
(195
)
 
 
 
1,430

Total Other (Income) Expense
 
 
 
 
 
 
 
 
 
 
 
 
178

Income from Continuing Operations before Income Taxes
 
 
 
 
 
 
 
 
 
 
 
 
1,252

Depreciation and amortization
253

 
91

 
33

 
95

 
48

 
 
 
520

Total Assets
4,807

 
3,103

 
965

 
8,608

 
6,423

 
 
 
23,906

Additions to property, plant and equipment
307

 
115

 
36

 
77

 
97

 
 
 
632


The Chicken segment had sales of $27 million, $18 million and $7 million for fiscal 2016, 2015 and 2014, respectively, from transactions with other operating segments. The Pork segment had sales of $840 million, $847 million and $1.0 billion for fiscal 2016, 2015 and 2014, respectively, from transactions with other operating segments. The Beef segment had sales of $327 million, $351 million and $307 million for fiscal 2016, 2015 and 2014, 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 17.5%, 16.8% and 14.6% of consolidated sales in fiscal 2016, 2015 and 2014, respectively. Sales to Wal-Mart Stores, Inc. were included in all the 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 98%, 97% and 96% of sales to external customers for fiscal 2016, 2015 and 2014, respectively, were sourced from the United States. Approximately $17.3 billion and $17.4 billion of long-lived assets were located in the United States at October 1, 2016, and October 3, 2015. Excluding goodwill and intangible assets, long-lived assets located in the United States totaled approximately $5.6 billion at October 1, 2016, and October 3, 2015. Approximately $204 million and $191 million of long-lived assets were located in foreign countries, primarily Brazil, China and India, at October 1, 2016, and October 3, 2015, respectively. Excluding goodwill and intangible assets, long-lived assets in foreign countries totaled approximately $180 million and $165 million at October 1, 2016, and October 3, 2015, respectively.
We sell certain products in foreign markets, primarily Canada, Central America, China, the European Union, Japan, Mexico, the Middle East, South Korea, and Taiwan. Our export sales from the United States totaled $3.5 billion, $4.1 billion and $4.7 billion for fiscal 2016, 2015 and 2014, 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 2016, 2015 and 2014.