Reportable Segments

9 Months Ended

Jan. 31, 2020

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 the domestic sales of Rachael Ray^TM Nutrish^®, Meow Mix^®, Milk-Bone^®, Natural Balance^®, Kibbles ’n Bits^®, 9Lives^®, Nature’s Recipe^®, and Pup-Peroni^®branded products; the U.S. Retail Coffee segment primarily includes the domestic sales of Folgers^®, Dunkin’ Donuts^®, and Café Bustelo^®branded coffee; and the U.S. Retail Consumer Foods segment primarily includes the 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., 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, 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.


	Three Months Ended January 31,						Nine Months Ended January 31,
	2020		2019		2020		2019
Net sales:
U.S. Retail Pet Foods	$	721.9	$	759.0	$	2,101.7	$	2,158.3
U.S. Retail Coffee	558.8		561.6		1,567.9		1,596.0
U.S. Retail Consumer Foods	422.9		422.7		1,251.2		1,367.9
International and Away From Home	268.7		268.6		788.2		813.7
Total net sales	$	1,972.3	$	2,011.9	$	5,709.0	$	5,935.9
Segment profit:
U.S. Retail Pet Foods	$	146.0	$	147.9	$	403.1	$	372.2
U.S. Retail Coffee	189.5		183.7		500.9		505.8
U.S. Retail Consumer Foods	84.2		95.9		256.6		327.5
International and Away From Home	49.0		52.5		131.7		152.6
Total segment profit	$	468.7	$	480.0	$	1,292.3	$	1,358.1
Amortization	(58.8)		(59.7)		(176.4)		(179.9)

Other intangible assets impairment charges	(52.4)		(107.2)		(52.4)		(107.2)
Interest expense – net	(45.1)		(51.6)		(143.6)		(158.8)
Unallocated derivative gains (losses)	7.7		(2.9)		37.6		(25.0)
Other special project costs ^(A)	(3.3)		(18.8)		(9.9)		(51.9)
Corporate administrative expenses	(72.9)		(73.8)		(214.8)		(219.1)
Other income (expense) – net	(1.4)		(8.8)		(4.5)		(16.5)
Income before income taxes	$	242.5	$	157.2	$	728.3	$	599.7

(A)Other special project costs includes integration and restructuring costs. For more information, see Note 4: Integration and Restructuring Costs.

The following table presents certain geographical information.


	Three Months Ended January 31,						Nine Months Ended January 31,
	2020		2019		2020		2019
Net sales:
United States	$	1,837.6	$	1,880.6	$	5,311.1	$	5,526.1
International:
Canada	$	108.7	$	106.7	$	318.9	$	319.2
All other international	26.0		24.6		79.0		90.6
Total international	$	134.7	$	131.3	$	397.9	$	409.8
Total net sales	$	1,972.3	$	2,011.9	$	5,709.0	$	5,935.9

The following table presents product category information.


	Three Months Ended January 31,						Nine Months Ended January 31,
	2020		2019		2020		2019		Primary Reportable Segment ^(A)
Coffee	$	650.7	$	653.5	$	1,824.5	$	1,867.3	U.S. Retail Coffee
Dog food	300.8		337.5		899.0		980.9		U.S. Retail Pet Foods
Cat food	223.9		218.9		633.6		615.2		U.S. Retail Pet Foods
Pet snacks	214.6		217.9		617.8		607.6		U.S. Retail Pet Foods
Peanut butter	180.0		188.5		533.3		574.6		U.S. Retail Consumer Foods
Fruit spreads	88.3		86.0		264.0		254.6		U.S. Retail Consumer Foods
Frozen handheld	82.6		67.3		247.5		210.5		U.S. Retail Consumer Foods
Shortening and oils	68.9		74.8		192.2		207.0		U.S. Retail Consumer Foods
Portion control	42.0		40.1		123.9		122.6		International and Away From Home
Juices and beverages	30.4		30.6		94.0		96.7		U.S. Retail Consumer Foods
Baking mixes and ingredients	19.6		21.9		59.3		164.6		International and Away From Home ^(B)
Other	70.5		74.9		219.9		234.3		International and Away From Home
Total net sales	$	1,972.3	$	2,011.9	$	5,709.0	$	5,935.9

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

(B)During the three and nine months ended January 31, 2019, 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 5: Divestiture.