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he financial statements ofThe Hershey CompanyandTootsie Rollare presented below. THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2011 2010 2009
he financial statements ofThe Hershey CompanyandTootsie Rollare presented below.
THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME | ||||
For the years ended December 31, | 2011 | 2010 | 2009 | |
In thousands of dollars except per share amounts | ||||
Net Sales | $6,080,788 | $5,671,009 | $5,298,668 | |
Costs and Expenses: | ||||
Cost of sales | 3,548,896 | 3,255,801 | 3,245,531 | |
Selling, marketing and administrative | 1,477,750 | 1,426,477 | 1,208,672 | |
Business realignment and impairment (credits) charges, net | (886 | ) | 83,433 | 82,875 |
Total costs and expenses | 5,025,760 | 4,765,711 | 4,537,078 | |
Income before Interest and Income Taxes | 1,055,028 | 905,298 | 761,590 | |
Interest expense, net | 92,183 | 96,434 | 90,459 | |
Income before Income Taxes | 962,845 | 808,864 | 671,131 | |
Provision for income taxes | 333,883 | 299,065 | 235,137 | |
Net Income | $628,962 | $509,799 | $435,994 | |
Net Income Per ShareBasicClass B Common Stock | $2.58 | $2.08 | $1.77 | |
Net Income Per ShareDilutedClass B Common Stock | $2.56 | $2.07 | $1.77 | |
Net Income Per ShareBasicCommon Stock | $2.85 | $2.29 | $1.97 | |
Net Income Per ShareDilutedCommon Stock | $2.74 | $2.21 | $1.90 | |
Cash Dividends Paid Per Share: | ||||
Common Stock | $1.3800 | $1.2800 | $1.1900 | |
Class B Common Stock | 1.2500 | 1.1600 | 1.0712 | |
The notes to consolidated financial statements are an integral part of these statements and are included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com. |
THE HERSHEY COMPANY CONSOLIDATED BALANCE SHEETS | ||||
December 31, | 2011 | 2010 | ||
In thousands of dollars | ||||
ASSETS | ||||
Current Assets: | ||||
Cash and cash equivalents | $693,686 | $884,642 | ||
Accounts receivabletrade | 399,499 | 390,061 | ||
Inventories | 648,953 | 533,622 | ||
Deferred income taxes | 136,861 | 55,760 | ||
Prepaid expenses and other | 167,559 | 141,132 | ||
Total current assets | 2,046,558 | 2,005,217 | ||
Property, Plant and Equipment, Net | 1,559,717 | 1,437,702 | ||
Goodwill | 516,745 | 524,134 | ||
Other Intangibles | 111,913 | 123,080 | ||
Deferred Income Taxes | 38,544 | 21,387 | ||
Other Assets | 138,722 | 161,212 | ||
Total assets | $4,412,199 | $4,272,732 | ||
LIABILITIES AND STOCKHOLDERS EQUITY | ||||
Current Liabilities: | ||||
Accounts payable | $420,017 | $410,655 | ||
Accrued liabilities | 612,186 | 593,308 | ||
Accrued income taxes | 1,899 | 9,402 | ||
Short-term debt | 42,080 | 24,088 | ||
Current portion of long-term debt | 97,593 | 261,392 | ||
Total current liabilities | 1,173,775 | 1,298,845 | ||
Long-term Debt | 1,748,500 | 1,541,825 | ||
Other Long-term Liabilities | 617,276 | 494,461 | ||
Total liabilities | 3,539,551 | 3,335,131 | ||
Commitments and Contingencies | ||||
Stockholders Equity: | ||||
The Hershey Company Stockholders Equity | ||||
Preferred Stock, shares issued: none in 2011 and 2010 | ||||
Common Stock, shares issued: 299,269,702 in 2011 and 299,195,325 in 2010 | 299,269 | 299,195 | ||
Class B Common Stock, shares issued: 60,632,042 in 2011 and 60,706,419 in 2010 | 60,632 | 60,706 | ||
Additional paid-in capital | 490,817 | 434,865 | ||
Retained earnings | 4,699,597 | 4,374,718 | ||
TreasuryCommon Stock shares, at cost: 134,695,826 in 2011 and 132,871,512 in 2010 | (4,258,962 | ) | (4,052,101 | ) |
Accumulated other comprehensive loss | (442,331 | ) | (215,067 | ) |
The Hershey Company stockholders equity | 849,022 | 902,316 | ||
Noncontrolling interests in subsidiaries | 23,626 | 35,285 | ||
Total stockholders equity | 872,648 | 937,601 | ||
Total liabilities and stockholdersequity | $4,412,199 | $4,272,732 |
THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
For the years ended December 31, | 2011 | 2010 | 2009 | |||
In thousands of dollars | ||||||
Cash Flows Provided from (Used by) Operating Activities | ||||||
Net income | $628,962 | $509,799 | $435,994 | |||
Adjustments to reconcile net income to net cash provided from operations: | ||||||
Depreciation and amortization | 215,763 | 197,116 | 182,411 | |||
Stock-based compensation expense, net of tax of $15,127, $17,413 and $19,223, respectively | 28,341 | 32,055 | 34,927 | |||
Excess tax benefits from stock-based compensation | (13,997 | ) | (1,385 | ) | (4,455 | ) |
Deferred income taxes | 33,611 | (18,654 | ) | (40,578 | ) | |
Gain on sale of trademark licensing rights, net of tax of $5,962 | (11,072 | ) | ||||
Business realignment and impairment charges, net of tax of $18,333, $20,635 and $38,308, respectively | 30,838 | 77,935 | 60,823 | |||
Contributions to pension plans | (8,861 | ) | (6,073 | ) | (54,457 | ) |
Changes in assets and liabilities, net of effects from business acquisitions and divestitures: | ||||||
Accounts receivabletrade | (9,438 | ) | 20,329 | 46,584 | ||
Inventories | (115,331 | ) | (13,910 | ) | 74,000 | |
Accounts payable | 7,860 | 90,434 | 37,228 | |||
Other assets and liabilities | (205,809 | ) | 13,777 | 293,272 | ||
Net Cash Provided from Operating Activities | 580,867 | 901,423 | 1,065,749 | |||
Cash Flows Provided from (Used by) Investing Activities | ||||||
Capital additions | (323,961 | ) | (179,538 | ) | (126,324 | ) |
Capitalized software additions | (23,606 | ) | (21,949 | ) | (19,146 | ) |
Proceeds from sales of property, plant and equipment | 312 | 2,201 | 10,364 | |||
Proceeds from sales of trademark licensing rights | 20,000 | |||||
Business acquisitions | (5,750 | ) | (15,220 | ) | ||
Net Cash (Used by) Investing Activities | (333,005 | ) | (199,286 | ) | (150,326 | ) |
Cash Flows Provided from (Used by) Financing Activities | ||||||
Net change in short-term borrowings | 10,834 | 1,156 | (458,047 | ) | ||
Long-term borrowings | 249,126 | 348,208 | ||||
Repayment of long-term debt | (256,189 | ) | (71,548 | ) | (8,252 | ) |
Proceeds from lease financing agreement | 47,601 | |||||
Cash dividends paid | (304,083 | ) | (283,434 | ) | (263,403 | ) |
Exercise of stock options | 184,411 | 92,033 | 28,318 | |||
Excess tax benefits from stock-based compensation | 13,997 | 1,385 | 4,455 | |||
Contributions from noncontrolling interests in subsidiaries | 10,199 | 7,322 | ||||
Repurchase of Common Stock | (384,515 | ) | (169,099 | ) | (9,314 | ) |
Net Cash (Used by) Financing Activities | (438,818 | ) | (71,100 | ) | (698,921 | ) |
(Decrease) Increase in Cash and Cash Equivalents | (190,956 | ) | 631,037 | 216,502 | ||
Cash and Cash Equivalents as of January 1 | 884,642 | 253,605 | 37,103 | |||
Cash and Cash Equivalents as of December 31 | $693,686 | $884,642 | $253,605 | |||
Interest Paid | $97,892 | $97,932 | $91,623 | |||
Income Taxes Paid | 292,315 | 350,948 | 252,230 |
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) | ||||||
For the year ended December 31, | ||||||
2011 | 2010 | 2009 | ||||
Net product sales | $528,369 | $517,149 | $495,592 | |||
Rental and royalty revenue | 4,136 | 4,299 | 3,739 | |||
Total revenue | 532,505 | 521,448 | 499,331 | |||
Product cost of goods sold | 365,225 | 349,334 | 319,775 | |||
Rental and royalty cost | 1,038 | 1,088 | 852 | |||
Total costs | 366,263 | 350,422 | 320,627 | |||
Product gross margin | 163,144 | 167,815 | 175,817 | |||
Rental and royalty gross margin | 3,098 | 3,211 | 2,887 | |||
Total gross margin | 166,242 | 171,026 | 178,704 | |||
Selling, marketing and administrative expenses | 108,276 | 106,316 | 103,755 | |||
Impairment charges | 14,000 | |||||
Earnings from operations | 57,966 | 64,710 | 60,949 | |||
Other income (expense), net | 2,946 | 8,358 | 2,100 | |||
Earnings before income taxes | 60,912 | 73,068 | 63,049 | |||
Provision for income taxes | 16,974 | 20,005 | 9,892 | |||
Net earnings | $43,938 | $53,063 | $53,157 | |||
Net earnings | $43,938 | $53,063 | $53,157 | |||
Other comprehensive earnings (loss) | (8,740 | ) | 1,183 | 2,845 | ||
Comprehensive earnings | $35,198 | $54,246 | $56,002 | |||
Retained earnings at beginning of year. | $135,866 | $147,687 | $144,949 | |||
Net earnings | 43,938 | 53,063 | 53,157 | |||
Cash dividends | (18,360 | ) | (18,078 | ) | (17,790 | ) |
Stock dividends | (47,175 | ) | (46,806 | ) | (32,629 | ) |
Retained earnings at end of year | $114,269 | $135,866 | $147,687 | |||
Earnings per share | $0.76 | $0.90 | $0.89 | |||
Average Common and Class B Common shares outstanding | 57,892 | 58,685 | 59,425 | |||
(The accompanying notes are an integral part of these statements.) |
CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) | ||||
Assets | December 31, | |||
2011 | 2010 | |||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $78,612 | $115,976 | ||
Investments | 10,895 | 7,996 | ||
Accounts receivable trade, less allowances of $1,731 and $1,531 | 41,895 | 37,394 | ||
Other receivables | 3,391 | 9,961 | ||
Inventories: | ||||
Finished goods and work-in-process | 42,676 | 35,416 | ||
Raw materials and supplies | 29,084 | 21,236 | ||
Prepaid expenses | 5,070 | 6,499 | ||
Deferred income taxes | 578 | 689 | ||
Total current assets | 212,201 | 235,167 | ||
PROPERTY, PLANT AND EQUIPMENT, at cost: | ||||
Land | 21,939 | 21,696 | ||
Buildings | 107,567 | 102,934 | ||
Machinery and equipment | 322,993 | 307,178 | ||
Construction in progress | 2,598 | 9,243 | ||
455,097 | 440,974 | |||
LessAccumulated depreciation | 242,935 | 225,482 | ||
Net property, plant and equipment | 212,162 | 215,492 | ||
OTHER ASSETS: | ||||
Goodwill | 73,237 | 73,237 | ||
Trademarks | 175,024 | 175,024 | ||
Investments | 96,161 | 64,461 | ||
Split dollar officer life insurance | 74,209 | 74,441 | ||
Prepaid expenses | 3,212 | 6,680 | ||
Equity method investment | 3,935 | 4,254 | ||
Deferred income taxes | 7,715 | 9,203 | ||
Total other assets | 433,493 | 407,300 | ||
Total assets | $857,856 | $857,959 | ||
Liabilities and Shareholders Equity | December 31, | |||
2011 | 2010 | |||
CURRENT LIABILITIES: | ||||
Accounts payable | $10,683 | $9,791 | ||
Dividends payable | 4,603 | 4,529 | ||
Accrued liabilities | 43,069 | 44,185 | ||
Total current liabilities | 58,355 | 58,505 | ||
NONCURRENT LIABILITES: | ||||
Deferred income taxes | 43,521 | 47,865 | ||
Postretirement health care and life insurance benefits | 26,108 | 20,689 | ||
Industrial development bonds | 7,500 | 7,500 | ||
Liability for uncertain tax positions | 8,345 | 9,835 | ||
Deferred compensation and other liabilities | 48,092 | 46,157 | ||
Total noncurrent liabilities | 133,566 | 132,046 | ||
SHAREHOLDERS EQUITY: | ||||
Common stock, $.69-4/9 par value120,000 shares authorized36,479 and 36,057 respectively, issued | 25,333 | 25,040 | ||
Class B common stock, $.69-4/9 par value40,000 shares authorized21,025 and 20,466 respectively, issued | 14,601 | 14,212 | ||
Capital in excess of par value | 533,677 | 505,495 | ||
Retained earnings, per accompanying statement | 114,269 | 135,866 | ||
Accumulated other comprehensive loss | (19,953 | ) | (11,213 | ) |
Treasury stock (at cost)71 shares and 69 shares, respectively | (1,992 | ) | (1,992 | ) |
Total shareholders equity | 665,935 | 667,408 | ||
Total liabilities and shareholders equity | $857,856 | $857,959 |
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) | ||||||
For the year ended December 31, | ||||||
2011 | 2010 | 2009 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net earnings | $43,938 | $53,063 | $53,157 | |||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||
Depreciation | 19,229 | 18,279 | 17,862 | |||
Impairment charges | 14,000 | |||||
Impairment of equity method investment | 4,400 | |||||
Loss from equity method investment | 194 | 342 | 233 | |||
Amortization of marketable security premiums | 1,267 | 522 | 320 | |||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (5,448 | ) | 717 | (5,899 | ) | |
Other receivables | 3,963 | (2,373 | ) | (2,088 | ) | |
Inventories | (15,631 | ) | (1,447 | ) | 455 | |
Prepaid expenses and other assets | 5,106 | 4,936 | 5,203 | |||
Accounts payable and accrued liabilities | 84 | 2,180 | (2,755 | ) | ||
Income taxes payable and deferred | (5,772 | ) | 2,322 | (12,543 | ) | |
Postretirement health care and life insurance benefits | 2,022 | 1,429 | 1,384 | |||
Deferred compensation and other liabilities | 2,146 | 2,525 | 2,960 | |||
Others | (708 | ) | 310 | 305 | ||
Net cash provided by operating activities | 50,390 | 82,805 | 76,994 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Capital expenditures | (16,351 | ) | (12,813 | ) | (20,831 | ) |
Net purchase of trading securities | (3,234 | ) | (2,902 | ) | (1,713 | ) |
Purchase of available for sale securities | (39,252 | ) | (9,301 | ) | (11,331 | ) |
Sale and maturity of available for sale securities | 7,680 | 8,208 | 17,511 | |||
Net cash used in investing activities | (51,157 | ) | (16,808 | ) | (16,364 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Shares repurchased and retired | (18,190 | ) | (22,881 | ) | (20,723 | ) |
Dividends paid in cash | (18,407 | ) | (18,130 | ) | (17,825 | ) |
Net cash used in financing activities | (36,597 | ) | (41,011 | ) | (38,548 | ) |
Increase (decrease) in cash and cash equivalents | (37,364 | ) | 24,986 | 22,082 | ||
Cash and cash equivalents at beginning of year | 115,976 | 90,990 | 68,908 | |||
Cash and cash equivalents at end of year | $78,612 | $115,976 | $90,990 | |||
Supplemental cash flow information | ||||||
Income taxes paid | $16,906 | $20,586 | $22,364 | |||
Interest paid | $38 | $49 | $182 | |||
Stock dividend issued | $47,053 | $46,683 | $32,538 | |||
(The accompanying notes are an integral part of these statements.) |
Based on the information in the financial statements, compute these 2011 values for each company. (Do not adjust for the LIFO reserve.)(Round answers to 1 decimal place, e.g. 15.2.)
(1) | Inventory turnover. (Use product cost of goods sold and total inventory.) |
(2) | Days in inventory. |
Tootsie RollHershey Company Inventory turnover ratio times times Days in inventorydaysdays
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