Reportable Segments

6 Months Ended

Oct. 31, 2019

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

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

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,
	2019			2018			2019			2018
Net sales:
U.S. Retail Pet Foods	$	709.9		$	728.1		$	1,379.8		$	1,399.3
U.S. Retail Coffee	543.4			544.9			1,009.1			1,034.4
U.S. Retail Consumer Foods	426.1			461.9			828.3			945.2
International and Away From Home	278.4			286.6			519.5			545.1
Total net sales	$	1,957.8		$	2,021.5		$	3,736.7		$	3,924.0
Segment profit:
U.S. Retail Pet Foods	$	137.0		$	123.9		$	257.1		$	224.3
U.S. Retail Coffee	182.5			174.3			311.4			322.1
U.S. Retail Consumer Foods	91.4			134.3			172.4			231.6
International and Away From Home	50.4			56.7			82.7			100.1
Total segment profit	$	461.3		$	489.2		$	823.6		$	878.1
Amortization	(58.8		)	(59.7		)	(117.6		)	(120.2		)
Interest expense – net	(49.1		)	(53.6		)	(98.5		)	(107.2		)
Unallocated derivative gains (losses)	0.9			(0.1		)	29.9			(22.1		)
Other special project costs ^(A)	(3.3		)	(25.4		)	(6.6		)	(33.1		)
Corporate administrative expenses	(70.3		)	(73.5		)	(141.9		)	(145.3		)
Other income (expense) – net	(1.6		)	(7.5		)	(3.1		)	(7.7		)
Income before income taxes	$	279.1		$	269.4		$	485.8		$	442.5


(A)	Other special project costs includes integration and restructuring costs. For more information, see Note 4: Integration and Restructuring Costs.

The following table presents certain geographical information.



	Three Months Ended October 31,				Six Months Ended October 31,
	2019		2018		2019		2018
Net sales:
United States	$	1,815.9	$	1,873.2	$	3,473.5	$	3,645.5
International:
Canada	$	113.4	$	114.3	$	210.2	$	212.5
All other international	28.5		34.0		53.0		66.0
Total international	$	141.9	$	148.3	$	263.2	$	278.5
Total net sales	$	1,957.8	$	2,021.5	$	3,736.7	$	3,924.0

The following table presents product category information.



	Three Months Ended October 31,				Six Months Ended October 31,
	2019		2018		2019		2018		Primary Reportable Segment ^(A)
Coffee	$	627.1	$	635.5	$	1,173.8	$	1,213.8	U.S. Retail Coffee
Dog food	302.6		334.9		598.2		643.4		U.S. Retail Pet Foods
Cat food	213.8		207.3		409.7		396.3		U.S. Retail Pet Foods
Pet snacks	210.0		201.9		403.2		389.7		U.S. Retail Pet Foods
Peanut butter	175.4		186.9		353.3		386.1		U.S. Retail Consumer Foods
Fruit spreads	86.5		83.0		175.7		168.6		U.S. Retail Consumer Foods
Frozen handheld	93.4		78.7		164.9		143.2		U.S. Retail Consumer Foods
Shortening and oils	71.8		79.3		123.3		132.2		U.S. Retail Consumer Foods
Portion control	42.5		41.6		81.9		82.5		International and Away From Home
Juices and beverages	32.4		33.9		63.6		66.1		U.S. Retail Consumer Foods
Baking mixes and ingredients	26.0		58.4		39.7		142.7		International and Away From Home ^(B)
Other	76.3		80.1		149.4		159.4		International and Away From Home
Total net sales	$	1,957.8	$	2,021.5	$	3,736.7	$	3,924.0


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

(B)

During the three and six months ended October 31, 2018, the primary reportable segment was U.S. Retail Consumer Foods, as the majority of the net sales within this category were related to the divested U.S. baking business. For more information, see Note 5: Divestiture.