Hormel Foods 2010 Annual Report Download - page 17

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15
FISCAL YEARS 2010 AND 2009:
Consolidated Results
Net Earnings: Net earnings attributable to the Company
for the fourth quarter of fiscal 2010 were $121.1 million, an
increase of 16.6 percent compared to earnings of $103.9
million for the same quarter last year. Diluted earnings per
share were $0.90 compared to $0.77 for the same quarter
last year. On a U.S. GAAP basis, net earnings attributable to
the Company for fiscal 2010 increased 15.4 percent to $395.6
million, from $342.8 million in fiscal 2009. U.S. GAAP diluted
earnings per share for fiscal 2010 increased 15.4 percent to
$2.92 compared to $2.53 last fiscal year. Adjusted net earn-
ings attributable to the Company for fiscal 2010 increased
19.3 percent to $409.0 million, from $342.8 million in fiscal
2009. Adjusted diluted earnings per share for fiscal 2010
increased 19.4 percent to $3.02 compared to $2.53 last year.
The non-GAAP adjusted net earnings financial measurements
are provided to assist investors and other readers of the
Company’s financial statements in better understanding the
Company’s operating performance by excluding the impact of
certain non-recurring items affecting comparability. Non-GAAP
measurements are not intended to be a substitute for U.S.
GAAP measurements in analyzing financial performance. These
non-GAAP measurements are not in accordance with any gen-
erally accepted accounting principles and may be different from
non-GAAP measurements used by other companies.
Adjusted net earnings for fiscal 2010 exclude charges of $6.3
million ($0.05 per diluted share) related to the closing of the
Company’s Valley Fresh plant in Turlock, California, and an
income tax charge of $7.1 million ($0.05 per diluted share)
primarily from the change in tax treatment of Medicare Part
D subsidies by new health care laws enacted in 2010. Both
charges were incurred in the second quarter of fiscal 2010.
Results of Operations
OVERVIEW
The Company is a processor of branded and unbranded food
products for retail, foodservice, and fresh product customers.
The Company operates in the following five reportable segments:
Segment Business Conducted
Grocery
Products
This segment consists primarily of the pro-
cessing, marketing, and sale of shelf-stable
food products sold predominantly in the
retail market. This segment also includes the
results from the Company’s MegaMex Foods,
LLC (MegaMex) joint venture.
Refrigerated
Foods
This segment includes the Hormel
Refrigerated operating segment and the
Affiliated Business Units. This segment con-
sists primarily of the processing, marketing,
and sale of branded and unbranded pork and
beef products for retail, foodservice, and fresh
product customers. The Affiliated Business
Units include the Farmer John, Burke
Corporation, Dan’s Prize, Saag’s Products,
Inc., and Precept Foods businesses. Precept
Foods, LLC, is a 50.01 percent owned joint ven-
ture between Hormel Foods Corporation and
Cargill Meat Solutions Corporation, a wholly-
owned subsidiary of Cargill, Incorporated.
Jennie-O
Turkey Store
This segment consists primarily of the pro-
cessing, marketing, and sale of branded and
unbranded turkey products for retail, food-
service, and fresh product customers.
Specialty
Foods
This segment includes the Diamond Crystal
Brands (DCB), Century Foods International
(CFI), and Hormel Specialty Products (HSP)
operating segments. This segment consists of
the packaging and sale of various sugar and
sugar substitute products, salt and pepper
products, liquid portion products, dessert
mixes, ready-to-drink products, sports nutri-
tion products, gelatin products, and private
label canned meats to retail and foodservice
customers. This segment also includes the
processing, marketing, and sale of nutritional
food products and supplements to hospitals,
nursing homes, and other marketers of nutri-
tional products.
All Other This segment includes the Hormel Foods
International operating segment, which
manufactures, markets, and sells Company
products internationally. This segment also
includes the results from the Company’s
international joint ventures and miscella-
neous corporate sales.