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REPORTING SEGMENTS
 12 Months Ended
May 01, 2011
Notes to Consolidated Financial Statements [Abstract]  
REPORTING SEGMENTS
NOTE 18:    REPORTING SEGMENTS 
Our operating segments are determined on the basis of how we internally report and evaluate financial information used to make operating decisions. For external reporting purposes, we aggregate operating segments which have similar economic characteristics, products, production processes, types or classes of customers and distribution methods into reportable segments based on a combination of factors, including products produced and geographic areas of operations. Our reportable segments are: Pork, Hog Production, International Other and Corporate, each of which is comprised of a number of subsidiaries, joint ventures and other investments.
Prior to the first quarter of fiscal 2011, our hog production operations in Poland and Romania and our interest in hog production operations in Mexico were included in our Hog Production segment. In the first quarter of fiscal 2011, these operations were moved into our International segment to more appropriately align our operating segments with the way our chief operating decision maker now assesses performance of these segments and allocates resources to these segments. The fiscal 2010 and fiscal 2009 results presented below have been restated to reflect this change in our reportable segments. As discussed in Note 3—Impairment and Disposal of Long-lived Assets, we sold our Beef operations in fiscal 2009, the results of which are reported as discontinued operations. 
Pork Segment 
The Pork segment consists mainly of our three wholly-owned U.S. fresh pork and packaged meats subsidiaries. The Pork segment produces a wide variety of fresh pork and packaged meats products in the U.S. and markets them nationwide and to numerous foreign markets, including China, Japan, Mexico, Russia and Canada. Fresh pork products include loins, butts, picnics and ribs, among others. Packaged meats products include smoked and boiled hams, bacon, sausage, hot dogs (pork, beef and chicken), deli and luncheon meats, specialty products such as pepperoni, dry meat products, and ready-to-eat, prepared foods such as pre-cooked entrees and pre-cooked bacon and sausage. 
The following table shows the percentages of Pork segment revenues derived from packaged meats and fresh pork for the fiscal years indicated. 
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
Packaged meats
 
56
%
 
55
%
 
53
%
Fresh pork(1)
 
44


 
45


 
47


 
 
100
%
 
100
%
 
100
%
——————————————
(1)
Includes by-products and rendering.
Hog Production Segment 
The Hog Production segment consists of our hog production operations located in the U.S. The Hog Production segment operates numerous facilities with approximately 827,000 sows producing about 16.4 million market hogs annually. The Hog Production segment produces approximately 49% of the Pork segment’s live hog requirements. We own certain genetic lines of specialized breeding stock which are marketed using the name Smithfield Premium Genetics (SPG). All SPG hogs are processed internally. 
The following table shows the percentages of Hog Production segment revenues derived from hogs sold internally and externally, and other products for the fiscal years indicated. 
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
Internal hog sales
 
78
%
 
77
%
 
80
%
External hog sales
 
21


 
20


 
17


Other products(1)
 
1


 
3


 
3


 
 
100
%
 
100
%
 
100
%
——————————————
(1)
Consists primarily of feed.
International Segment 
The International segment includes our meat processing and distribution operations in Poland, Romania and the United Kingdom, our interests in meat processing operations, mainly in Western Europe and Mexico, our hog production operations located in Poland and Romania and our interests in hog production operations in Mexico. Our international meat processing operations produce a wide variety of fresh pork, beef, poultry and packaged meats products, including cooked hams, sausages, hot dogs, bacon and canned meats.
The following table shows the percentages of International segment revenues derived from packaged meats, fresh pork and other products for the fiscal years indicated. 
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
Packaged meats
 
45
%
 
45
%
 
46
%
Fresh pork
 
24


 
26


 
31


Other products(1)
 
31


 
29


 
23


 
 
100
%
 
100
%
 
100
%
——————————————
(1)
Includes poultry, beef, external hog sales, by-products and rendering
Other Segment 
The Other segment, contains the results of several recently disposed businesses, including our former turkey production operations and our previous 49% interest in Butterball, LLC (Butterball), which were sold in December 2010 (fiscal 2011), as well as our former live cattle operations, which were sold in the first quarter of fiscal 2010. Our live cattle operations consisted of the live cattle inventories that were excluded from the sale of Smithfield Beef, Inc. (Smithfield Beef) in October 2008 (fiscal 2009). See Note 3—Impairment and Disposal of Long-lived Assets for further discussion of these dispositions.
Corporate Segment 
The Corporate segment provides management and administrative services to support our other segments.
Segment Results 
The following tables present information about the results of operations and the assets of our reportable segments for the fiscal years presented. The information contains certain allocations of expenses that we deem reasonable and appropriate for the evaluation of results of operations. We do not allocate income taxes to segments. Segment assets exclude intersegment account balances as we believe their inclusion would be misleading or not meaningful. We believe all intersegment sales are at prices that approximate market. 
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
 
 
(in millions)
Segment Profit Information
 
 
 
 
 
 
Sales:
 
 
 
 
 
 
Segment sales—
 
 
 
 
 
 
Pork
 
$
10,263.9


 
$
9,326.3


 
$
10,450.9


Hog Production
 
2,705.1


 
2,207.8


 
2,428.2


International
 
1,340.7


 
1,277.2


 
1,377.5


Other
 
74.7


 
153.3


 
250.8


Total segment sales
 
14,384.4


 
12,964.6


 
14,507.4


Intersegment sales—
 
 
 
 
 
 
Pork
 
(30.5
)
 
(31.5
)
 
(43.9
)
Hog Production
 
(2,113.0
)
 
(1,695.0
)
 
(1,936.8
)
International
 
(38.2
)
 
(35.5
)
 
(39.0
)
Total intersegment sales
 
(2,181.7
)
 
(1,762.0
)
 
(2,019.7
)
Consolidated sales
 
$
12,202.7


 
$
11,202.6


 
$
12,487.7


 
 
 
 
 
 
 
Depreciation and amortization:
 
 


 
 


 
 


Pork
 
$
125.5


 
$
126.0


 
$
140.5


Hog Production
 
65.7


 
74.9


 
83.2


International
 
38.1


 
37.4


 
41.8


Other
 
0.1


 
0.2


 
0.4


Corporate
 
2.5


 
3.8


 
4.6


Consolidated depreciation and amortization
 
$
231.9


 
$
242.3


 
$
270.5


 
 
 
 
 
 
 
Interest expense:
 
 


 
 


 
 


Pork
 
$
42.4


 
$
48.9


 
$
76.6


Hog Production
 
124.5


 
100.5


 
39.1


International
 
28.2


 
37.7


 
64.4


Other
 
4.2


 
6.9


 
2.7


Corporate
 
46.1


 
72.4


 
39.0


Consolidated interest expense
 
$
245.4


 
$
266.4


 
$
221.8


 
 
 
 
 
 
 
Equity in (income) loss of affiliates:
 
 


 
 


 
 


Pork
 
$
(2.0
)
 
$
(3.6
)
 
$
(3.0
)
Hog Production
 
(0.4
)
 
0.7


 
0.4


International
 
(46.5
)
 
(17.2
)
 
17.8


Other
 
(1.2
)
 
(18.5
)
 
34.9


Corporate
 


 
—


 
—


Consolidated equity in (income) loss of affiliates
 
$
(50.1
)
 
$
(38.6
)
 
$
50.1


 
 
 
 
 
 
 
Operating profit (loss):
 
 


 
 


 
 


Pork
 
$
753.4


 
$
538.7


 
$
395.2


Hog Production
 
224.4


 
(539.2
)
 
(491.3
)
International
 
115.9


 
127.9


 
5.0


Other
 
(2.4
)
 
3.6


 
(46.6
)
Corporate
 
3.7


 
(68.2
)
 
(86.2
)
Consolidated operating profit (loss)
 
$
1,095.0


 
$
62.8


 
$
(223.9
)
 
 
May 1,

2011
 
May 2,

2010
 
May 3,

2009
 
 
(in millions)
Segment Asset Information
 
 
 
 
 
 
Total assets:
 
 
 
 
 
 
Pork
 
$
2,620.2


 
$
2,579.3


 
$
2,571.3


Hog Production
 
2,074.2


 
2,020.9


 
2,159.8


International
 
1,885.1


 
1,650.1


 
1,602.4


Other
 
—


 
169.4


 
186.5


Corporate
 
1,032.3


 
1,289.2


 
680.2


Consolidated total assets
 
$
7,611.8


 
$
7,708.9


 
$
7,200.2


 
 
 
 
 
 
 
Investments:
 
 


 
 


 
 


Pork
 
$
17.4


 
$
17.1


 
$
15.5


Hog Production
 
2.7


 
2.4


 
2.2


International
 
544.9


 
478.7


 
465.6


Other
 
—


 
106.7


 
87.0


Corporate
 
17.5


 
20.1


 
31.3


Consolidated investments
 
$
582.5


 
$
625.0


 
$
601.6


 
 
 
 
 
 
 
Capital expenditures:
 
 


 
 


 
 


Pork
 
$
81.3


 
$
141.7


 
$
115.1


Hog Production
 
68.6


 
10.0


 
25.8


International
 
26.8


 
22.1


 
23.6


Corporate
 
0.1


 
0.9


 
14.8


Discontinued operations
 
—


 
—


 
7.1


Consolidated capital expenditures
 
$
176.8


 
$
174.7


 
$
186.4


 
 The following table shows the change in the carrying amount of goodwill by reportable segment: 
 
 
Pork
 
International
 
Hog Production
 
Other
 
Total
 
 
(in millions)
Balance, May 3, 2009
 
$
217.6


 
$
127.8


 
$
455.1


 
$
19.5


 
$
820.0


Impairment(1)
 
(0.5
)
 
—


 
(6.0
)
 
—


 
(6.5
)
Other goodwill adjustments(2)
 
(0.6
)
 
13.6


 
(3.6
)
 
—


 
9.4


Balance, May 2, 2010
 
216.5


 
141.4


 
445.5


 
19.5


 
822.9


Disposals(1)
 
—


 
—


 
(25.5
)
 
(19.5
)
 
(45.0
)
Other goodwill adjustments(2)
 
(0.4
)
 
15.8


 
—


 
—


 
15.4


Balance, May 1, 2011
 
$
216.1


 
$
157.2


 
$
420.0


 
$
—


 
$
793.3


——————————————
(1)
See Note 3—Impairment and Disposal of Long-lived Assets for discussion of disposals and impairments.
(2)
Other goodwill adjustments primarily include the effects of foreign currency translation.
The following table presents our consolidated sales and long-lived assets attributed to operations by geographic area for the fiscal years ended May 1, 2011, May 2, 2010 and May 3, 2009:
 
 
Fiscal Years
 
 
2011
 
2010
 
2009
 
 
(in millions)
Sales:
 
 
 
 
 
 
U.S.
 
$
10,900.2


 
$
9,960.9


 
$
11,149.2


International
 
1,302.5


 
1,241.7


 
1,338.5


Total sales
 
$
12,202.7


 
$
11,202.6


 
$
12,487.7


 
 
 
 
 
 
 
 
 
May 1,

2011
 
May 2,

2010
 
May 3,

2009
 
(in millions)
Long-lived assets:
 
 


 
 


 
 


U.S.
 
$
2,923.0


 
$
3,203.0


 
$
3,237.7


International
 
1,350.9


 
1,185.6


 
1,178.0


Total long-lived assets
 
$
4,273.9


 
$
4,388.6


 
$
4,415.7