In fiscal 2015, the Company will benefit from a full year of CytoSport sales while leveraging operational efficiencies and purchasing synergies to maximize the potential of this business. 

International & Other: International & Other net sales increased 12.9 percent for the fiscal 2014 fourth quarter and 19.2 percent for the year compared to fiscal 2013. Continued strong sales for the Company’s China operations and pork exports, along with the addition of the China based SKIPPY ® peanut butter sales were the primary drivers of the top- line results for the fourth quarter. The combined SKIPPY ® business, including the U.S. based business acquired at the beginning of the second quarter of fiscal 2013, contributed an incremental $40.8 million of net sales and 25.0 million lbs. for the fiscal year comparison. 

International & Other segment profit increased 2.5 percent and 18.5 percent for the fiscal 2014 fourth quarter and year, respectively, compared to fiscal 2013. Additional margins from China based SKIPPY ®  peanut butter sales and higher royalty income offset lower sales and margins on exports of the SPAM ®  family of products, as higher meat input costs pressured margins during the fourth quarter. Segment profit gains for the fiscal year were largely driven by robust margins for the Company’s China operations along with export sales of fresh pork items and improved royalty income. 

After achieving another record segment profit year in fiscal 2014, the Company’s international business is entering 2015 with strong momentum. The Company expects solid export sales of the SPAM ®  family of products and SKIPPY ®  peanut butter sales, coupled with continued positive results from the Company’s China operations. To further expand our presence in China, the Company recently announced the construction of a new refrigerated foods plant slated to open in the back half of fiscal 2016. This facility will produce pepperoni, bacon, ham, and other refrigerated meat items sold in both foodser- vice and retail channels within China. The Company is also considering a potential exit from its business in Vietnam early in fiscal 2015, which has been part of a larger joint venture in the region and has not delivered the results expected from our international investments. 

Unallocated Income and Expenses: The Company does not allocate investment income, interest expense, and interest income to its segments when measuring performance. The Company also retains various other income and unallocated expenses at corporate. Equity in earnings of affiliates is included in segment operating profit; however, earnings attributable to the Company’s noncontrolling interests are excluded. These items are included in the segment table for the purpose of reconciling segment results to earnings before income taxes. 

Net interest and investment expense (income) for the fourth quarter and fiscal year was a net expense of $2.6 million and $9.5 million, respectively, compared to a net expense of $0.6 million and $7.5 million for the comparable periods of 

fiscal 2013. The increased expense for the fourth quarter and fiscal year is primarily due to lower returns on the Company’s rabbi trust. Interest expense was $12.7 million for fiscal 2014, increasing slightly from $12.5 million in fiscal 2013, as the Company utilized its revolving line of credit to fund the CytoSport acquisition in the fourth quarter. The Company expects interest expense to be approximately $12.0 million to $14.0 million for fiscal 2015. 

General corporate expense for the fourth quarter and year was $6.2 million and $33.4 million, respectively, compared to $7.5 million and $26.7 million for the comparable periods of the prior year. The lower expense for the fourth quarter reflects lower salary and pension related expenses compared to the prior year. General corporate expense for the fiscal year was higher compared to last year, primarily the result of a bad debt incurred in the third quarter. 

Net earnings attributable to the Company’s noncontrolling interests were $0.6 million and $3.3 million for the 2014 fourth quarter and fiscal year, respectively, compared to $1.1 million and $3.9 million for the comparable periods of fiscal 2013. The Company’s Precept Foods business generated lower results for both the fourth quarter and full year compared to fiscal 2013. This joint venture was dissolved at the end of the fiscal year. For the fiscal year, these declines were partially offset by improved results from the Company’s China operations. 

## FISCAL YEARS 2013 AND 2012: 

## Consolidated Results 

Net Earnings: Net earnings attributable to the Company for the fourth quarter of fiscal 2013 were $157.3 million, an increase of 18.7 percent compared to earnings of $132.6 million for the same quarter in fiscal 2012. Diluted earnings per share were $0.58 compared to $0.49 for the same quarter in fiscal 2012. Net earnings attributable to the Company for fiscal 2013 increased 5.2 percent to $526.2 million, from $500.1 million in fiscal 2012. Diluted earnings per share for fiscal 2013 increased 4.8 percent to $1.95 compared to $1.86 per share in fiscal 2012. 

Net Sales: Net sales for the fourth quarter of fiscal 2013 increased to $2.32 billion from $2.17 billion in fiscal 2012, an increase of 7.1 percent. Net sales for fiscal 2013 increased 6.3 percent to $8.75 billion compared to $8.23 billion in fiscal 2012. Tonnage for the fourth quarter increased 3.0 percent to 1.30 billion lbs. compared to 1.26 billion lbs. for the same period in fiscal 2012. Tonnage for the fiscal year increased 2.8 percent to 4.97 billion lbs. from 4.83 billion lbs. in fiscal 2012. Four of the Company’s five reporting segments delivered sales growth in the fourth quarter of fiscal 2013, and all five seg- ments improved on a full year basis compared to fiscal 2012. 

Net sales for fiscal 2013 were enhanced by the addition of the SKIPPY ®  peanut butter business acquired at the beginning of the second quarter. These sales contributed an incremental $94.8 million of net sales and 58.1 million lbs. for the fourth quarter, and $272.8 million of net sales and 163.4 million lbs. 

