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## Results of Operations 

## OVERVIEW 

The Company is a processor of branded and unbranded food products for retail, foodservice, and fresh product customers. The Company operates in the following five reportable segments: 

<img src='content_image/159056.jpg'>

The Company’s fiscal year consisted of 52 weeks in 2014, 2013, and 2012. 

## FISCAL YEARS 2014 AND 2013: 

## Consolidated Results 

Net Earnings: Net earnings attributable to the Company for the fourth quarter of fiscal 2014 were $171.3 million, an increase of 8.8 percent compared to earnings of $157.3 million for the same quarter last year. Diluted earnings per share were $0.63 compared to $0.58 for the same quarter last year. Net earnings attributable to the Company for fiscal 2014 increased 14.5 percent to $602.7 million, from $526.2 million in fiscal 2013. Diluted earnings per share for fiscal 2014 increased 14.4 percent to $2.23 compared to $1.95 per share last year. 

Net Sales: Net sales for the fourth quarter of fiscal 2014 increased to $2.54 billion from $2.32 billion in the same quarter of fiscal 2013, an increase of 9.5 percent. Net sales for fiscal 2014 increased 6.5 percent to $9.32 billion compared to $8.75 billion in the prior year. The Company’s Specialty Foods, International & Other, Jennie-O Turkey Store, and Refrigerated Foods reporting segments delivered sales growth in the fourth quarter compared to fiscal 2013. For the full year in fiscal 2014, growth was enjoyed by the International & Other, Refrigerated Foods, Jennie-O Turkey Store, and Grocery Products segments compared to the prior year. Tonnage for the fourth quarter increased 2.8 percent to 1.34 billion lbs. compared to 1.30 billion lbs. for the same period last year. Tonnage for the fiscal year increased 0.7 per- cent to 5.00 billion lbs. from 4.97 billion lbs. in the prior year. 

Net sales for fiscal 2014 were enhanced by the addition of the CytoSport business acquired on August 11, 2014, and the China based SKIPPY ®  peanut butter business acquired on November 26, 2013. On a combined basis, these acquisitions contributed an incremental $84.3 million of net sales and 39.6 million lbs. for the fourth quarter, and $102.5 million of net sales and 50.3 million lbs. for the fiscal year. Additionally, top-line comparative results for the year were impacted by the addition of the U.S. based SKIPPY ®  peanut butter business acquired on January 31, 2013. These sales contributed an incremental $86.5 million of net sales and 57.1 million lbs. to the top-line results for the fiscal year. Increased value-added sales within the Refrigerated Foods and Jennie-O Turkey Store segments also contributed to the top-line results for both the fourth quarter and fiscal year. Robust sales from the Company’s China business and pork export sales by the Company’s international business also provided notable growth throughout fiscal 2014. Tonnage increased for the year, as the Company successfully managed reduced volume through its harvest facilities in the third quarter, reflecting tight raw material supplies due to Porcine Epidemic Diarrhea Virus (PEDv) in the industry. 

The Company expects continued strong sales momentum entering 2015. The addition of the CytoSport business further diversifies the Company’s portfolio and represents a signif- icant opportunity for the Company to expand its offerings of 

