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Income Taxes: The Company’s effective tax rate for the fiscal 2014 fourth quarter and year was 34.1 percent and 34.3 percent, respectively, compared to 33.9 percent and 33.6 percent, respectively, for the fourth quarter and year in fiscal 2013. The higher rate for fiscal 2014 is due to the impact of net favorable adjustments and settlements with various state jurisdictions in fiscal 2013. The Company expects the effective tax rate in fiscal 2015 to be between 34.0 percent and 34.5 percent. 

## Segment Results 

Net sales and operating profits for each of the Company’s reportable segments are set forth below. The Company is an inte- grated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the operating profit and other finan- cial information shown below. (Additional segment financial information can be found in Note O “Segment Reporting.”) 

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Grocery Products: Grocery Products net sales decreased 3.4 percent for the fiscal 2014 fourth quarter and increased 2.7 percent for the year compared to fiscal 2013. Tonnage decreased 4.8 percent for the quarter and increased 3.3 percent for the year compared to prior year results. The com- parative results for the fiscal year reflect the addition of the SKIPPY ®  peanut butter business beginning in the second quar- ter of fiscal 2013. This business contributed an incremental $73.3 million of net sales and 49.1 million lbs. to the results for the fiscal year. 

Net sales for Grocery Products in the fourth quarter were neg- atively impacted by lower tonnage in the canned meat portfo- lio due to pricing actions taken earlier in the year to partially offset higher commodity cost inputs. Softer sales of Hormel ® chili and the Hormel ®  Compleats ® line of microwave meals led to the fourth quarter decline. For the fiscal year, sales gains for Hormel ® bacon toppings and the Herdez ® line of salsas and sauces within the MegaMex joint venture offset lower sales of the Hormel ®  Compleats ® line of microwave meals and the SPAM ®  family of products. 

Segment profit for Grocery Products decreased 21.1 percent for the fourth quarter and 8.7 percent for the year compared to fiscal 2013. Profit results for the fourth quarter were ham- pered by high meat input costs and reduced volumes following related pricing actions. Partially offsetting the decrease were higher equity in earnings results from the MegaMex joint venture in the fourth quarter, as the prior year included higher incentive expense on the Fresherized Foods acquisition. For the fiscal year, improved margins of Hormel ®  bacon toppings and the Herdez ®  line of salsas and sauces within our MegaMex joint venture were unable to offset the margin declines in products such as the SPAM ®  family of products, Hormel ® chili, Hormel ®  Compleats ® microwave meals, and Dinty Moore ®  stew. 

Looking ahead, the Company expects pork commodity prices to normalize as the year progresses, providing input cost relief in fiscal 2015 for Grocery Products. Growth for SKIPPY ® peanut butter products is anticipated following the September kick-off of a national advertising campaign after many years off air. Effective at the beginning of fiscal 2015, Fresherized Foods, the makers of Wholly Guacamole ® , will be integrated into the Grocery Products sales and distribution systems giving this brand the full benefit of the Company’s sales force 

