SEGMENT 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 four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. As a result of a business realignment at the beginning of fiscal 2018, the former Specialty Foods segment results are now reported as part of the Grocery Products segment. Periods presented herein have been recast to reflect this change.

The Grocery Products segment consists primarily of the processing, marketing, and sale of shelf-stable food products sold predominantly in the retail market, along with the sale of nutritional and private label shelf-stable products to retail, foodservice, and industrial customers. 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 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
(in thousands)	January 28, 2018			January 29, 2017
Sales to Unaffiliated Customers
Grocery Products	$	613,870		$	610,374
Refrigerated Foods	1,176,456			1,123,039
Jennie-O Turkey Store	390,648			420,989
International & Other	150,319			125,825
Total	$	2,331,293		$	2,280,227

Intersegment Sales
Grocery Products	$	4		$	5
Refrigerated Foods	2,164			2,139
Jennie-O Turkey Store	24,689			28,256
International & Other	—			—
Total	26,857			30,400
Intersegment elimination	(26,857		)	(30,400		)
Total	$	—		$	—

Net Sales
Grocery Products	$	613,874		$	610,379
Refrigerated Foods	1,178,620			1,125,178
Jennie-O Turkey Store	415,337			449,245
International & Other	150,319			125,825
Intersegment elimination	(26,857		)	(30,400		)
Total	$	2,331,293		$	2,280,227

Segment Operating Profit
Grocery Products	$	99,977		$	92,376
Refrigerated Foods	142,949			173,808
Jennie-O Turkey Store	49,874			68,180
International & Other	24,655			25,463
Total segment operating profit	317,455			359,827
Net interest and investment expense (income)	1,423			577
General corporate expense	10,971			4,621
Less: Noncontrolling interest	104			156
Earnings Before Income Taxes	$	305,165		$	354,785