much of the increases from the prior year. Research and develop- ment is an integral part of the company’s strategy to extend exist- ing brands and expand its offering of new branded items for the consumer market. Hormel Foods, LLC, has responsibility for a majority of the company’s intangible assets.  investments, such as Campofrio, Purefoods-Hormel, and Hormel Alimentos, in which the company owns a minority interest, are accounted for under the equity or cost method. These international investments, along with investments in and receivables from other affiliates, are included in the balance sheet line item “investments in and receivables from affiliates.” The composition of this line item at October 25, 2003, was as follows: Previous years’ poor stock market results have lowered the his- torical returns on the company’s pension plan assets. As a result,  the company reduced its discount rate from 7.0 to 6.5 percent and the expected rate of return from 8.6 to 7.9 percent in its fiscal 2004 pension plan expense calculation.  Equity in Earnings of Affiliates: Equity in earnings of affiliates was $2,174 and $5,886 for the fourth quarter and year, respectively, compared to $1,967 and $7,741 in fiscal 2002. The twelve month decrease is due to the third quarter 2002 discontinuation of equity- method accounting for the company’s 15.2 percent owned invest- ment in Campofrio Alimentacion, S.A. (Campofrio).  In conformity with U. S. generally accepted accounting principles, the company accounts for its majority-owned China and Australian operations under the consolidation method. Other international The December 2002 acquisition of Diamond Crystal Brands prompted Hormel Foods management to adjust how it evaluates its businesses and, as a result, established a new segment for Specialty Foods. The Specialty Foods segment includes the newly acquired Diamond Crystal Brands and Century Foods International operating segments along with the existing operating segments of Hormel HealthLabs (formerly in the Refrigerated Foods segment) and Specialty Products (formerly in the Grocery Products segment). The fiscal 2002 segment results presented below have been restated to reflect this change. Net sales and operating profits for each of the company’s segments is set forth below. The company is an integrated enterprise, char- acterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, we do not represent that these  segments, if operated independently, would report the operating profit and other financial information shown below. (Additional segment financial information can be found in Note K of the Notes to Consolidated Financial Statements.) Segment Results Income Taxes: The company’s effective tax rate for the quarter and year was 37.0 and 35.8 percent compared to 34.9 and  35.6 percent in fiscal 2002. The higher fourth quarter rate in fiscal 2003 reflects an increase in foreign taxes.  24 Hormel Foods Corporation Country Investments/Receivables United States $ 23,951 Spain 76,600 Philippines 32,110 Mexico 5,413 Costa Rica 283 Total $138,357 Fourth Quarter Ended Year Ended October 25, 2003 October 26, 2002 % Change October 25, 2003 October 26, 2002 % Change Net Sales Grocery Products $ 208,791 $ 216,928 (3.8) $ 754,331 $ 735,802 2.5 Refrigerated Foods 539,457 498,802 8.2 2,019,753 1,982,137 1.9 Jennie-O Turkey Store 268,152 253,055 6.0 924,430 881,935 4.8 Specialty Foods 108,370 31,343 245.8 315,177 128,826 144.7 All Other 45,111 38,767 16.4 186,637 181,614 2.8 Total $1,169,881 $1,038,895 12.6 $4,200,328 $3,910,314 7.4 Segment Operating Profit Grocery Products $ 46,417 $ 62,603 (25.9) $ 152,808 $ 150,372 1.6 Refrigerated Foods 51,888 18,318 183.3 103,167 71,245 44.8 Jennie-O Turkey Store 17,015 19,915 (14.6) 41,069 68,517 (40.1) Specialty Foods 4,869 952 411.4 17,986 9,574 87.9 All Other 8,388 6,529 28.5 25,743 24,816 3.7 Total Segment Operating Profit 128,577 108,317 18.7 340,773 324,524 5.0 Net interest and investment income (6,645) (5,560) (19.5) (21,079) (24,280) 13.2 General corporate (expense) income (10,315) 1,611 (740.3) (30,363) (6,274) (383.9) Earnings Before Income Taxes $ 111,617 $ 104,368 6.9 $ 289,331 $ 293,970 (1.6)