Reportable Segments

We operate in one industry: the manufacturing and marketing of food and beverage products. We have four reportable segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Away From Home.

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

Effective May 1, 2018, the convenience store channel, which was previously included in the U.S. retail segments, is now included in the International and Away From Home segment. Segment performance for the three and six months ended October 31, 2017, has been reclassified for this realignment.

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 October 31,						Six Months Ended October 31,
	2018			2017			2018			2017
Net sales:
U.S. Retail Coffee	$	544.9		$	551.4		$	1,034.4		$	1,030.8
U.S. Retail Consumer Foods	461.9			527.8			945.2			1,015.7
U.S. Retail Pet Foods	728.1			551.1			1,399.3			1,071.8
International and Away From Home	286.6			293.3			545.1			554.2
Total net sales	$	2,021.5		$	1,923.6		$	3,924.0		$	3,672.5
Segment profit:
U.S. Retail Coffee	$	174.3		$	152.1		$	322.1		$	275.3
U.S. Retail Consumer Foods	134.3			130.2			231.6			240.3
U.S. Retail Pet Foods	123.9			122.4			224.3			220.2
International and Away From Home	56.7			55.4			100.1			95.6
Total segment profit	$	489.2		$	460.1		$	878.1		$	831.4
Amortization	(59.7		)	(51.6		)	(120.2		)	(103.1		)
Interest expense – net	(53.6		)	(41.6		)	(107.2		)	(83.6		)
Unallocated derivative gains (losses)	(0.1		)	9.7			(22.1		)	22.3
Cost of products sold – special project costs ^(A)	—			(0.9		)	—			(1.6		)
Other special project costs ^(A)	(25.4		)	(9.7		)	(33.1		)	(36.8		)
Corporate administrative expenses	(73.5		)	(75.5		)	(145.3		)	(144.9		)
Other income (expense) – net	(7.5		)	1.3			(7.7		)	(2.9		)
Income before income taxes	$	269.4		$	291.8		$	442.5		$	480.8


(A)	Special project costs includes integration and restructuring costs. For more information, see Note 5: Integration and Restructuring Costs.

The following table presents certain geographical information.



	Three Months Ended October 31,				Six Months Ended October 31,
	2018		2017		2018		2017
Net sales:
United States	$	1,873.2	$	1,771.8	$	3,645.5	$	3,389.1
International:
Canada	$	114.3	$	116.0	$	212.5	$	212.9
All other international	34.0		35.8		66.0		70.5
Total international	$	148.3	$	151.8	$	278.5	$	283.4
Total net sales	$	2,021.5	$	1,923.6	$	3,924.0	$	3,672.5

The following table presents product category information.



	Three Months Ended October 31,				Six Months Ended October 31,
	2018		2017		2018		2017		Primary Reportable Segment ^(A)
Coffee	$	635.5	$	649.3	$	1,213.8	$	1,221.6	U.S. Retail Coffee
Dog food	334.9		195.7		643.4		384.4		U.S. Retail Pet Foods
Cat food	207.3		177.8		396.3		343.6		U.S. Retail Pet Foods
Pet snacks	201.9		192.6		389.7		373.3		U.S. Retail Pet Foods
Peanut butter	186.9		184.4		386.1		384.9		U.S. Retail Consumer Foods
Fruit spreads	83.0		90.5		168.6		178.1		U.S. Retail Consumer Foods
Frozen handheld	78.7		69.0		143.2		119.0		U.S. Retail Consumer Foods
Baking mixes and ingredients	58.4		128.4		142.7		220.2		U.S. Retail Consumer Foods
Shortening and oils	79.3		77.7		132.2		134.0		U.S. Retail Consumer Foods
Portion control	41.6		42.0		82.5		81.7		International and Away From Home
Juices and beverages	33.9		37.3		66.1		74.4		U.S. Retail Consumer Foods
Other	80.1		78.9		159.4		157.3		International and Away From Home
Total net sales	$	2,021.5	$	1,923.6	$	3,924.0	$	3,672.5


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