Segment Information

6 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

3. Segment Information

The following is a general description of the corporation's four business segments:

• North American Retail – sells a variety of packaged meat and frozen bakery products to retail customers in North America. The business segment also includes the corporation's U.S. Senseo retail coffee business, which the company previously announced that it plans to exit by March 2012.

• North American Foodservice and Specialty Meats – sells a variety of meat and bakery products to foodservice customers and sells gourmet sausage and other meats to retail customers in North America.

• Coffee & Tea (formerly International Beverage) – sells coffee and tea products in major markets around the world, including Europe, Brazil and Australia.

• Australian Bakery (formerly International Bakery) – sells a variety of frozen bakery and other dessert items in Australia and New Zealand.

Beginning in 2012, the results for the company's Aidells gourmet sausage business and Gallo Salame business are being reported as part of the North American Foodservice and Specialty Meats segment (formerly North American Foodservice). These businesses were previously reported under the North American Retail segment. In conjunction with the North American segmentation changes, the corporation moved $39 million of goodwill from the North American Retail segment to the North American Foodservice and Specialty Meats segment and determined that no goodwill impairment was necessary.

The results of the North American foodservice beverage business (formerly reported under the North American Foodservice segment) and the results of the European bakery operations (formerly reported under the International Bakery segment) are being reported as part of the results of discontinued operations. See Note 6 – "Discontinued Operations" for additional information. Prior year results have been revised to reflect the current year's presentation.

The following is a summary of net sales and operating segment income by business segment:

	Net Sales
(In millions)	Second Quarter 2012			Second Quarter 2011			Six Months 2012			Six Months 2011
North American Retail	$	741		$	741		$	1,425		$	1,436
North American Foodservice and Specialty Meats		314			290			621			564
Coffee & Tea		998			899			1,920			1,627
Australian Bakery		35			35			73			71
Total business segments		2,088			1,965			4,039			3,698
Intersegment sales		(7	)		(7	)		(15	)		(13	)
Net sales	$	2,081		$	1,958		$	4,024		$	3,685
	Income Before Income Taxes
(In millions)	Second Quarter 2012			Second Quarter 2011			Six Months 2012			Six Months 2011
North American Retail	$	81		$	84		$	123		$	144
North American Foodservice and Specialty Meats		33			38			60			61
Coffee & Tea		140			109			254			199
Australian Bakery		3			(1	)		5			1
Total operating segment income		257			230			442			405
General corporate expenses		(168	)		(50	)		(228	)		(77	)
Mark-to-market derivative gains/(losses)		15			(2	)		4			10
Amortization of intangibles		(3	)		(3	)		(6	)		(6	)
Operating income		101			175			212			332
Net interest expense		(18	)		(21	)		(39	)		(50	)
Debt extinguishment costs		—			(25	)		—			(55	)
Income before income taxes	$	83		$	129		$	173		$	227

As previously noted, Aidells and Gallo Salame were moved from the North American Retail segment to the North American Foodservice and Specialty Meats segment. Segment assets have also been revised to reflect the assets of the North American foodservice beverage and European bakery businesses as net assets held for sale. A summary of the segment assets as of December 31, 2011 and July 2, 2011 is as follows:

(In millions)	Dec. 31, 2011		July 2, 2011
North American Retail1	$	1,263	$	1,313
North American Foodservice and Specialty Meats		475		499
Coffee & Tea		2,220		2,334
Australian Bakery		62		66
Total business segments		4,020		4,212
Net assets held for sale		155		2,405
Other2		4,011		2,916
Total Assets	$	8,186	$	9,533

¹  Certain fixed assets in the North American Retail segment also support production within the North American Foodservice and Specialty Meats segment. However, the corporation does not allocate these shared assets across segments.

²  Principally cash and cash equivalents, certain corporate fixed assets, deferred tax assets and certain other noncurrent assets.