Hormel Foods 2014 Annual Report Download - page 61

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The Company’s financial assets and liabilities also include
accounts receivable, accounts payable, and other liabili-
ties, for which carrying value approximates fair value. The
Company does not carry its long-term debt at fair value in its
Consolidated Statements of Financial Position. Based on bor-
rowing rates available to the Company for long-term financing
with similar terms and average maturities, the fair value of
long-term debt, utilizing discounted cash flows (Level 2), was
$273.8 million as of October 26, 2014, and $261.7 million as of
October 27, 2013.
In accordance with the provisions of ASC 820, the Company
also measures certain nonfinancial assets and liabilities at
fair value that are recognized or disclosed on a nonrecurring
basis (e.g. goodwill, intangible assets, and property, plant
and equipment). During fiscal years 2014, 2013, and 2012,
there were no material remeasurements of assets or liabili-
ties at fair value on a nonrecurring basis subsequent to their
initial recognition.
Note O
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 five segments: Grocery
Products, Refrigerated Foods, Jennie-O Turkey Store,
Specialty Foods, and International & Other.
The Grocery Products 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 joint venture.
The Refrigerated Foods segment includes the Hormel
Refrigerated operating segment and the Affiliated Business
Units. This segment consists primarily of the processing,
marketing, and sale of branded and unbranded pork and beef
products for retail, foodservice, and fresh product custom-
ers. The Affiliated Business Units include the Farmer John,
Burke Corporation, Dan’s Prize, and Saag’s Products, Inc.
businesses. Through fiscal 2014, this segment also included
Precept Foods, LLC, a 50.01 percent owned joint venture that
was dissolved at the end of the fiscal year.
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 Specialty Foods segment includes the Diamond Crystal
Brands, CytoSport/Century Foods International, and Hormel
Specialty Products operating segments. This segment con-
sists of the packaging and sale of private label shelf stable
products, nutritional products, sugar, and condiments to
industrial, retail, and foodservice customers. This segment
also includes the processing, marketing, and sale of nutri-
tional food products and supplements to hospitals, nursing
homes, and other marketers of nutritional products.
The International & Other 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 inter-
national joint ventures and miscellaneous corporate sales.
This segment was previously the All Other segment, and was
renamed in the second quarter of fiscal 2013, with no change
in the composition of the segment.
Intersegment sales are recorded at prices that 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 non-
controlling interests are excluded. These items are included
in the following table as net interest and investment expense
(income), general corporate expense, and noncontrolling inter-
est when reconciling to earnings before income taxes.