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portable, immediate, protein-rich foods. To further support growth, the Company will continue to build brand awareness with increased advertising support focusing on the Jennie-O ® Make The Switch ®  advertising campaign, Hormel ®  Natural Choice ®  deli meats, Hormel ®  REV ®  wraps, the SPAM ®  family of products, SKIPPY ®  peanut butter, and Muscle Milk ®  pro- tein-rich products. 

Gross Profit: Gross profit was $423.6 million and $1.56 billion for the 2014 fourth quarter and fiscal year, respectively, com- pared to $385.5 million and $1.41 billion last year. As a per- centage of net sales, gross profit increased to 16.7 percent for the fourth quarter compared to 16.6 percent in fiscal 2013, and increased to 16.8 percent for the year compared to 16.1 per- cent in fiscal 2013. Strong performances from the Refrigerated Foods, Jennie-O Turkey Store, and International & Other segments offset lower margins in the Grocery Products and Specialty Foods segments for both the fourth quarter and fis- cal year. Beneficial turkey commodity prices for the Jennie-O Turkey Store segment and strong pork operating margins for the Refrigerated Foods segment drove overall profit gains. In addition, continued growth of retail and foodservice val- ue-added products benefited margins. Strong margins from the Company’s China operations and higher pork export sales and royalty income boosted margins for the International & Other segment. High meat input costs and related pricing actions negatively impacted margins and drove lower results in the Grocery Products segment. The Specialty Foods seg- ment delivered lower margins in the fourth quarter due to a fair value inventory adjustment of $4.5 million relating to the CytoSport acquisition. The fourth quarter 2013 expiration of the agreement allowing DCB to sell certain sugar substitutes into foodservice trade channels also impacted fiscal year com- parisons. Additionally, shipping and handling expenses rose in all five of the Company’s segments for the fiscal year. 

Moving into fiscal 2015, the Company anticipates pork commodity prices and pork operating margins to normalize as the year progresses, providing input cost relief for the Grocery Products segment. Challenging comparisons for the Company’s pork operations will be offset by strong growth in the foodservice and retail businesses and improved live pro- duction results for the Refrigerated Foods segment. Jennie-O Turkey Store is entering the new fiscal year backed by strong sales momentum and beneficial grain markets, but will likely experience less favorable commodity meat markets. The International & Other segment will continue to deliver growth through expansion of its China business and the Specialty Foods segment will benefit from a full year of CytoSport sales. Turkey production will be modestly increased in fiscal 2015 to support the Jennie-O Turkey Store value-added product needs, following a year of slight increases to production levels in fiscal 2014. Advertising support for the Company’s core brands should also enhance margin results in fiscal 2015. 

Selling, General and Administrative: Selling, general and administrative expenses for the fourth quarter and year were $165.9 million and $650.9 million, respectively, compared to $147.4 million and $627.3 million last year. Selling, general 

and administrative expenses as a percentage of net sales for the fourth quarter increased to 6.5 percent compared to the prior year at 6.3 percent. For the fiscal year, these expenses decreased to 7.0 percent of net sales from 7.2 percent in fiscal 2013. The higher expense for the fourth quarter includes $4.8 million of transaction costs incurred related to the acquisition of CytoSport, reflected in the Specialty Foods segment. For the fiscal year, the Company incurred increased advertising and employee-related expenses, offset by transaction and transition costs related to the U.S. based SKIPPY ®  acquisition in the prior year. In 2015, the Company plans a renewed focus on advertising for many of the Company’s products including the Make The Switch ®  advertising campaign for Jennie-O ® products, SKIPPY ®  peanut butter, Hormel ®  Natural Choice ® deli meats, the SPAM ®  family of products, Hormel ®  REV ® wraps, and Muscle Milk ®  protein-rich products. As a percentage of net sales, the Company expects selling, general and adminis- trative expenses to be between 7.5 percent and 7.8 percent in fiscal 2015. 

Research and development expenses were $7.5 million and $29.9 million for the fiscal 2014 fourth quarter and year, respectively, compared to $7.2 million and $29.9 million in fis- cal 2013. Building upon the Company’s value-added portfolio through product innovation will continue to be a priority for the Company in fiscal 2015. 

Equity in Earnings of Affiliates: Equity in earnings of affiliates was $5.7 million and $17.6 million for the fiscal 2014 fourth quarter and year, respectively, compared to $2.1 million and $20.5 million last year. The increase for the fourth quarter is a result of improved results from the Company’s 50 percent owned MegaMex joint venture, reflecting the impact of a larger incentive expense on the Fresherized Foods acquisition recognized in the prior year. In addition, overall improved results for the Company’s international joint ventures were noted for the fourth quarter of fiscal 2014, while the full year generated an overall decline for those operations as well as the MegaMex joint venture compared to the prior year. 

The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company owns a minority interest, and for which there are no other indicators of control, are accounted for under the equity or cost method. These investments, along with receiv- ables from other affiliates, are included in the Consolidated Statements of Financial Position as investments in and receiv- ables from affiliates. The composition of this line item at October 26, 2014, was as follows: 

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