The 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: | | | |