company pdf report

The Hershey Company Profile

100 Crystal A Dr.Hershey, PA 17033 United StatesPhone : 717-534-4200800-539-0261http://www.thehersheycompany.com

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HIDDEN TEXT TO MARK THE BEGINNING OF THE TOC

PAGE iJul 06, 2011• •866-541-3770 HOOVERS.COM

Table of Contents1Company Overview

Key Information 1

Key Financials 1

Company Rankings 1

Key People 2

3Company Description

4Company History

6Industry Information

7People

People 8

Board Members 10

10Biographies

James E. Nevels 11

John P. (J.P.) Bilbrey 11

Humberto P. (Bert) Alfonso 12

Michele G. Buck 13

C. Daniel Azzara 13

14Historical Events

14Company Financials

Financial Summary 14

Annual Income Statement 16

Quarterly Income Statement 17

Annual Balance Sheet 18

Quarterly Balance Sheet 19

Annual Cash Flow 20

Quarterly Cash Flow 21

Earnings Estimates 22

Financial Market Data 23

Historical Financials 24

25Competition

Competitors List 25

Competitive Landscape 27

PAGE iiJul 06, 2011• •866-541-3770 HOOVERS.COM

Company Overview100 Crystal A Dr.Hershey, PA 17033 United StatesPhone : 717-534-4200800-539-0261http://www.thehersheycompany.com

The Hershey Company will cover you in Kisses and bring you Almond Joy. The company makes such well-knownchocolate and candy brands as Hershey's Kisses, Reese's peanut butter cups, Twizzlers licorice, Mounds candybars, York Peppermint Patty, and Kit Kat (licensed from Nestlé). Hershey also makes grocery goods,including baking chocolate, ice-cream toppings, chocolate syrup, cocoa mix, cookies, snack nuts, hard candies, andlollipops. Products from the chocolate purveyor are sold throughout North America and exported overseas. TheHershey Trust -- which benefits the Milton Hershey School for disadvantaged children -- controls approximately80% of Hershey's voting power.

Key InformationDUNS Number 003002052

Location Type HeadquartersSubsidiary Status NoManufacturer YesCompany Type PublicPlant/Facility Size (sq. ft.) 210,000.00Owns/Rents RentsForeign Trade Imports / ExportsAccountant KPMG LLPTotal Employees 13,5001-Year Employee Growth (1.46%)Employees At This Location 500Year of Founding or Change in Control 1894Primary Industry 1351:Candy & ConfectionsPrimary SIC Code 20660000:Chocolate and cocoa productsPrimary NAICS Code 311320:Chocolate and Confectionery ManufacturingTradestyle HersheyLatitude/Longitude 40.302605 / -76.649246

Key FinancialsFiscal Year-End DecemberSales ($ M) $5,671.01M1-Year Sales Growth 7.03%Net Income $509.80M1-Year Net Income Growth 16.93%Total Assets $4,272.73MMarket Value $12,946.24M

Prescreen Score Low Risk

Company Rankings395 in FORTUNE 500S&P 500

PAGE 1Jul 06, 2011• •866-541-3770 HOOVERS.COM

Key People

Name Title

Mr. James E. Nevels Chairman

Mr. John P. (J.P.) Bilbrey President, CEO and Director

Mr. Humberto P. (Bert) Alfonso SVP and CFO

Mr. George F. Davis SVP and CIO

Ms. Michele G. Buck SVP and Global Chief Marketing Officer

Mr. David W. Tacka VP and Chief Accounting Officer

Dr. C. Daniel Azzara SVP Global Research and Development

Mr. Javier H. Idrovo SVP Strategy and Business Development

Mr. Terence L. O'Day SVP Global Operations

Mr. Burton H. (Burt) Snyder SVP, General Counsel, and Secretary


Company Description

With Hershey since 2003, John P. Bilbrey took over as the candy behemoth's president and CEO in mid-2011. Known as J.P., he ascended from his role of EVP and COO when the company's top executive announced hisplans to move on. Hershey lost its CEO David West, who kissed Hershey goodbye to join Del Monte Foods as chiefexecutive. Seasoned replacement Bilbrey has led the chocolate company's international division and its NorthAmerican unit; he will be focused on expanding Hershey's global presence and jockeying for market sharealongside rivals Mars and Kraft, which owns Cadbury. Prior to joining Hershey, the new CEO logged experienceat Danone Waters of North America and at consumer products giant Procter & Gamble.Hershey had its chance to purchase Cadbury. While it was rumored during 2009 that the company might havebeen interested in acquiring UK confectioner Cadbury, it remained mum about any deal until it was clearthat Kraft was intent upon purchasing Cadbury. Hershey issued a statement in early 2010, saying it did not intendto make an offer for Cadbury and Kraft ultimately succeeded in taking over the Dairy Milk maker. While it may havebeen a good fit to merge the two giant chocolate candy makers, Hershey, as always, was answerable to the trust,which -- as it was generally believed -- opposed buying Cadbury. (Cadbury became part of Kraft in February 2010.)Hershey did, however, make an acquisition. It purchased Van Houten Singapore from Switzerland-based producerof cocoa, chocolate, and confectionery products Barry Callebaut in 2009. Part of Barry Callebaut's divestiture plan,the acquisition gave Hershey a stronger presence in the growing Asian confectionery market. Under the terms ofthe deal, Barry retained ownership of the Van Houten brand and granted Hershey a perpetual license for VanHouten consumer products > in the Asia-Pacific, the Middle East, and Australia, and New Zealand.Exhibiting some sour behavior among its board, in early 2009 the trust forced the resignation of the company'snon-executive board chairman, Kenneth L. Wolf, and indicated that it wanted one of its members to serve asHershey's chairman. The board then announced the unanimous election of trust member (and board member)James E. Nevels as chairman.As a result of the rising costs of sugar and cocoa, the company announced price increases in 2008; due to sluggishsales, it revamped some of its packaging to reflect a more updated look. In addition, it introduced a new premiumchocolate brand, Bliss.Chocolate may be the name of the game at Hershey but the company is also a growing presence in the hard- andnon-chocolate candy markets, offering such brands as Good & Plenty and Jolly Rancher. The company hasbeen expanding its products with new versions of old favorites, such as Jolly Rancher lollipops and bite-sized bitsof its popular chocolate bars. It introduced sugar-free chocolate, catering to the growing number of diabetics, andexpanded the snack-food and Hispanic markets. It also began producing packaged cookies whose flavors are basedon the flavors of its Almond Joy, Reese's, and York products.Hershey has been attempting to join the quickly expanding premium chocolate market. It has introduced its ownSpecial Dark, Extra Dark, and Cacao Reserve brands. It has also acquired such top-of-the-line chocolatemanufacturers as Artisan Confections Company (Scharffen Berger brand) and the now discontinued JosephSchmidt (Dagoba brand).Moving from the confectionery market to the snack market, Hershey has been busy introducing such items ascookies (Kisses Mini Cookies), 100-calorie treats (Snacksters), and granola bars (Hershey's SnackBarz).Hershey markets its products under more than 80 brand names in more than 50 countries worldwide. Thewholesale distributor, McLane Company, accounted for 22% of Hershey's sales in 2010. McLane is the maindistributor of Hershey's products to Wal-Mart.


Company History

The Hershey Company is the legacy of Milton Hershey, of Pennsylvania Dutch origin. Apprenticed in 1872 at age 15to a candy maker, Hershey started Lancaster Caramel Company at age 30. In 1893, at the Chicago Exposition, hesaw a new chocolate-making machine, and in 1900 he sold the caramel operations for $1 million to start a chocolatefactory.The factory was completed in 1905 in Derry Church, Pennsylvania, and renamed Hershey Foods the next year.Chocolate Kisses, individually hand-wrapped in silver foil, were introduced in 1907. Two years later the candy manfounded the Milton Hershey School, an orphanage; the company was donated to a trust in 1918 and for years existedsolely to fund the school. Although Hershey went public in 1927, the school still controls the majority of shareholdervotes.The candy company pioneered mass-production techniques for chocolates and developed much of the machinery formaking and packaging its own products. At one time Hershey supplied its own sugar cane from Cuba and enlargedthe world's almond supply six fold through nut farm ownership. The Hershey bar became so universally familiar thatit was used overseas during WWII as currency. Milton refused to advertise, believing that quality would speak foritself. Even after his death in 1945, the company continued his policy. Then, in 1970, facing a sluggish candy marketand a diet-conscious public, the company lost share to Mars and management relented.During the 1960s and 1970s, Hershey diversified in order to stabilize the effects of changing commodity prices. Thecompany got into the pasta business with its 1966 purchase of San Giorgio Macaroni, and it bought the Friendly IceCream chain in 1979 (sold 1988). The company expanded candy operations by bringing out large-sized bars (1980)and buying Cadbury's US candy business (Peter Paul, Cadbury, Caramello; 1988).In 1990 Hershey formed a joint venture with Fujiya to distribute Hershey products in Japan and bought Ronzoni'spasta, cheese, and sauce operations. Kenneth Wolfe was named chairman and CEO in 1994.Hershey boosted its presence in the non-chocolate candy market with acquisitions of Henry Heide (1995) and theNorth American operations of Leaf (Good & Plenty, Jolly Rancher) from Finnish candy maker Huhtamäki Oyj (1996).In return, it sold Huhtamäki Oyj its struggling European confectionery interests.In 1999 the company sold its pasta business to New World Pasta for $450 million and a 6% interest in thatcompany. Also that year the Hershey Trust, wanting to diversify its holdings, sold $100 million of its stock toHershey. Business melted during the fall of 1999 when a new company-wide computer system delayed orders duringthe critical Halloween season. The glitches cost the company more than $100 million in lost sales.Hershey bought Nabisco Holdings' breath freshener mints and gum businesses (including the Breath Savers,Care*Free, and Fruit Stripe brands) for about $135 million in 2000.In 2001 Nabisco veteran Rick Lenny replaced Wolfe as CEO. Hershey established a manufacturing presence in SouthAmerica that year by acquiring the chocolate and confectionery business of Brazilian company Visagis. It also cutabout 400 salaried positions and closing three plants and a distribution facility.In 2002 Wolfe retired as chairman and Lenny was selected to replace him. Also that year Hershey settled a bittersix-week factory-worker strike, the longest in company history. It subsequently sold its non-chocolate Heide brands(Heide, Jujyfruits, Wunderbeans, Amazin' Fruit) to Farley's & Sathers Candy Company.Also in 2002 the Hershey Trust said that to diversify its holdings, it wanted to sell its 77% interest in Hershey.However, the sale was temporarily blocked while the state of Pennsylvania reviewed the impact it would have on thecommunity. Despite the injunction against the sale, the trust continued to look for a buyer and was considering a$12.5 billion offer from chewing gum giant, Wm. Wrigley Jr. and a $10.5 billion joint offer from Nestlé and CadburySchweppes.Amid the community outcry and legal wrangling, the sale was finally called off later in 2002, after 10 of the trust's17 members changed their minds. Due to the uproar surrounding the proposed sale, the trust board promised torestructure itself. Among the outgoing board members was William Lepley, president and chief executive of theMilton Hershey School.Due to sharply rising cocoa prices, in 2003 Hershey implemented an approximate 3% price increase across itsentire domestic product line. It also sold some of its gum brands (Fruit Stripe, Rain-Blo, and Super Bubble) to Farley& Sathers that year.The company began marketing sugar-free chocolates (sweetened with lactitol) in its Hershey and Reese's lines in2003. The company also introduced the first permanent addition to its Kisses brand in 10 years -- a dark chocolateversion of the familiar treat, named Rich Dark Chocolates and wrapped in purple foil. Later that year, it introduced aline of sugar-free chocolates; and (the unsuccessful and now discontinued) Swoops, chocolate "potato chips" shapedlike Pringles and packaged in a canister reminiscent of the Pringles can.In order to expand its sales in the Hispanic market, in 2004 Hershey announced a new line of Latin-inspired candiesincluding those with chili-based flavors and dulce de leche fillings. The company also signed an endorsement dealwith Latin singer, Thalia. And in 2004 Hershey's Mexican subsidiary bought one of Mexico's top confectionery


The company changed its name to The Hershey Company in 2005, dropping the "Foods" from its name in order toreflect the company's move away from coffee, pasta, and restaurant businesses and its concentration onconfectionery. In addition Hershey acquired Scharffen Berger Chocolate Maker in 2005, a maker of premium darkchocolates. The deal marked Hershey's first foray into the premium chocolate market. Later that year, it acquiredits second high-end chocolate company, Joseph Schmidt Confections. Both companies are located in California.With continuuing increases in raw materials, in 2006 the company began to reduce the total number of its productsby up to 25%, eliminating limited-edition and seasonal items and streamlining underperforming brands. It put itsefforts toward the continued to expansion in its high-growth categories such as organic chocolate, dark chocolate,cookies, and nuts; in addition, it purchased organic chocolate confectioner, Dagoba,that year.President and CEO Richard Lenny left the company in 2007, having been at Hershey's helm since 2001. It isgenerally thought that Lenny's resignation was due to disagreements between him and the trust regarding thecompany's business strategies. CFO David J. West was named as Lenny's successor as president and CEO. Wolfe (aformer Hershey CEO) was tapped as chairman.The company formed a joint venture with South Korean confectioner, Lotte, in 2007 to manufacture and sellHershey's products in China. Continuing to expand its geographical reach that year, Hershey acquired a 51%interest in the food and beverage operations of the Indian conglomerate, Godrej Industries, for $54 million. Thepurchase was made for the purpose of distributing Hershey's products in India (one of Asia's fastest growingmarkets). It did not hurt that Godrej owns Nutrine, India's most popular confectionery brand.In another 2007 move, Hershey and Barry Callebaut formed an R&D and supply partnership. Under the terms of theagreement, the companies combined their research and development activities in the areas of new products,premium chocolate, health and wellness, and ingredients. In addition, Barry Callebaut supplies Hershey's Mexicanproduction plant chocolate -- at least 88,000 tons per year.In 2011, David West stepped down as CEO, replaced by John P. Bilbrey, who joined Hershey in 2003.


Industry InformationHoover's Industries

> Food

> Candy & Confections ( primary )> Grains

> Packaged Cookies & Crackers> Seasoning & Dressing Manufacturing> Snack Foods

> Beverages

> Nonalcoholic Beverages

Denotes In-depth Industry Insight by Hoover's Editorial Staff

Primary SIC Code20660000 : Chocolate and cocoa productsPrimary NAICS Code311320 : Chocolate and Confectionery Manufacturing from Cacao Beans


People

Employees

Name Age SalaryTitle Bonus

Mr. James E. Nevels -- --59ChairmanMr. John P. (J.P.) Bilbrey $625,577.00 --54President, CEO and DirectorMr. Humberto P. (Bert)Alfonso

$515,000.00 --53SVP and CFO

Mr. George F. Davis -- --62SVP and CIOMs. Michele G. Buck $430,000.00 --49SVP and Global Chief Marketing

OfficerMr. David W. Tacka -- --57VP and Chief Accounting OfficerDr. C. Daniel Azzara -- --56SVP Global Research and

DevelopmentMr. Javier H. Idrovo -- --SVP Strategy and Business

DevelopmentMr. Terence L. O'Day $468,000.00 --60SVP Global OperationsMr. Burton H. (Burt) Snyder $500,000.00 --63SVP, General Counsel, and SecretaryMs. Diane J. Lorello -- --VP Global Portfolio InnovationMr. Andy McCormick -- --VP Public AffairsMr. Mark K. Pogharian -- --VP Investor RelationsMr. Kirk D. Saville -- --VP Corporate CommunicationsMs. Anna Lingeris -- --Manager Public RelationsMs. Pamela M. Arway -- --57DirectorMr. Robert F. Cavanaugh -- --52DirectorMr. Charles A. Davis -- --62DirectorMr. James M. Mead -- --65DirectorMr. Anthony J. Palmer -- --51DirectorMr. Thomas J. (Tom) Ridge -- --65DirectorMr. David L. Shedlarz -- --62DirectorAlan Brechbill -- --Executive DirectorJoseph Dickey -- --Director/manager/department

Head/chief-safetyFrank McAneny -- --Executive DirectorMs Patrice Lemarie -- --Director; PresidentJennifer Cessna -- --Cio; Senior AssociateAndrea Foreman -- --Chief Marketing OfficerMr Thomas K Hernquist -- --Senior Vice President, Chief

Marketing OfficerBobby Agarwal -- --Business Manager India Intl Mkt;

Business Manager, India,


Name Age SalaryTitle Bonus

International Marketing; ExecutiveVice President-marketing

Scott Cole -- --Vice President Grocery CustomersAndre Gottlick -- --Vice President Of Talent

ManagementTed Jastrzebski -- --Senior Vice President And

President-hershey International;Vice President, InternationalFinance & Planning; Vp InternationalFinance

Tom Joyce -- --Vice President Customer AndIndustry Affairs

Cindy Gallant -- --Branch ManagerMr Bob Smith -- --Branch ManagerMr Joe Benjamin -- --Director, Operations ImprovementLarry Best -- --North American Final Meet DirectorMr Paul Bomba -- --DirectorGreg Buck -- --It DirectorMr Joe Carlin -- --Senior Director, Finance And Global

OperationsGary Coughlan -- --DirectorDonna Cozzens -- --Director, Global Organizational

CapabilityScott Crowell -- --Director Information Security;

Director, Information SecurityLilibeth Cruz -- --World Travel Retail DirectorMoira Cullen -- --Senior Director, Global DesignRobert Cybulski -- --Director Of Information Systems;

Director, SystemsJames Czupil -- --Director Organizational

EffectivenessChristine Dugan -- --Director Of Public AffairsLois Duquette -- --Director Of Finance; Senior Counsel


Board Members

Name AgeTitle

Mr. James E. Nevels 59Chairman

Mr. John P. (J.P.) Bilbrey 54President, CEO and Director

Ms. Pamela M. Arway 57Director

Mr. Robert F. Cavanaugh 52Director

Mr. Charles A. Davis 62Director

Mr. James M. Mead 65Director

Mr. Anthony J. Palmer 51Director

Mr. Thomas J. (Tom) Ridge 65Director

Mr. David L. Shedlarz 62Director


BiographiesJames E. Nevels, Age 59

Title held since 2009 : Chairman

Current Company Titles2009 - Present : Chairman

2007 - 2009 : Director

Other Company AffiliationsDirector, Tasty Baking Company

Director, Milton Hershey School

Biography

Source : Proxy, March 15, 2011

James E. Nevels has been a Hershey director since 2007 and the non-executive Chairman ofthe Board of Directors since February 16, 2009. He also chairs the Governance Committee andthe Executive Committee and is a member of the Compensation and Executive OrganizationCommittee. Mr. Nevels is a director of Hershey Trust Company and the board of managers ofMilton Hershey School. He is one of three representatives of the Milton Hershey School Trustcurrently serving on our Board. In addition to bringing to our Board the perspectives of theMilton Hershey School Trust, Mr. Nevels has extensive finance and leadership experience. He isChairman of The Swarthmore Group, Philadelphia, Pennsylvania, a minority-owned investment-advisory firm, which he founded in 1991. In 2004, he was appointed by the President of theUnited States to the Advisory Committee to the Pension Benefit Guaranty Corporation, wherehe served a three-year term. In 2001, he was appointed by the Governor of Pennsylvania asChairman of the Philadelphia School Reform Commission overseeing the turnaround of thePhiladelphia School System, the seventh largest school district in the United States. He wasappointed by the Federal Reserve Board of Governors to a two-year term on the board ofdirectors of the Federal Reserve Bank of Philadelphia, beginning January 1, 2010. Mr. Nevelshas been a director of Tasty Baking Company since May 2005. He holds a bachelors degree,cum laude and Phi Beta Kappa, in political science and philosophy from Bucknell University, aMasters of Business Administration degree from the Wharton School of the University ofPennsylvania and a Juris Doctor degree from University of Pennsylvania Law School.

John P. (J.P.) Bilbrey, Age 54

Title held since 2011 : President, CEO and Director

Current Company Titles2011 - Present : President, CEO and Director

2011 - 2011 : Interim President and CEO

2010 - 2011 : EVP and COO

2007 - 2010 : SVP; President, Hershey North America

2005 - 2007 : SVP; President, International Commercial Group

2003 - 2005 : SVP; President, Hershey International

Current Company Compensation HistorySalary Bonus Total


Salary Bonus Total

$625,577.00 --2010 : $4,214,807.00

$550,000.00 --2009 : $3,108,794.00

$517,366.00 --2008 : $3,005,370.00

$404,598.00 --2007 : $1,403,900.00

$370,000.00 --2006 : --

Other Company AffiliationsDirector, McCormick & Company, Incorporated

Past Company AffiliationsPresident and CEO, Danone Waters of North America, Groupe Danone Water Division

Biography

Source : Company Press Release, June 15, 2011

Bilbrey has more than 30 years of global consumer packaged goods experience. He was namedHershey's interim President and Chief Executive Officer in May 2011. Bilbrey was named ChiefOperating Officer in November 2010 with responsibility for day-to-day global operations andcommercial activities, leading the Company's supply chain as well as geographic regions,including the U.S.A., the Americas and Asia. From December 2007 to November 2010, he wasSenior Vice President, President, Hershey North America. Bilbrey played a key leadership rolein the Company's turnaround as well as in the creation and implementation of the Company'sconfectionery demand landscape and establishment of Hershey's presence in markets aroundthe world. Bilbrey joined Hershey in 2003 as Senior Vice President, President HersheyInternational. Before joining Hershey, Bilbrey held executive positions at Mission Foods andDanone Waters of North America, Inc., a division of Groupe Danone, Paris, France. He wasresponsible for all operations of Groupe Danone's North American water division. Additionally,he spent 22 years at The Procter & Gamble Company where he served in positions of increasingresponsibility in both the U.S. domestic business as well as numerous internationalassignments. He has lived abroad and worked in more than 50 countries in North America, LatinAmerica, North Africa and Asia.

Humberto P. (Bert) Alfonso, Age 53

Title held since 2007 : SVP and CFO

Current Company Titles2007 - Present : SVP and CFO

2006 - 2007 : VP, Finance and Planning, North American Commercial Group


$515,000.00 --2010 : $2,387,993.00

$500,000.00 --2009 : $2,213,636.00

$500,000.00 --2008 : $2,022,937.00

$448,180.00 --2007 : $1,782,399.00


Other Company AffiliationsDirector, Eastman Chemical Company

Past Company AffiliationsEVP, Finance, Dr Pepper Snapple Group, Inc.

Biography

Source : 10K, February 18, 2011

Senior Vice President, Chief Financial Officer (July 2007); Vice President, Finance andPlanning, North American Commercial Group (October 2006); Vice President, Finance andPlanning, U.S. Commercial Group (July 2006).

Michele G. Buck, Age 49

Title held since 2007 : SVP and Global Chief Marketing Officer

Current Company Titles2007 - Present : SVP and Global Chief Marketing Officer

2005 - 2007 : SVP and Chief Marketing Officer, U.S.


$430,000.00 --2008 : $1,430,421.00

$270,385.00 $509,083.002005 : --

Past Company AffiliationsEVP and General Manager, Confections, Kraft North America

Biography


Senior Vice President, Global Chief Marketing Officer (December 2007); Senior Vice President,Chief Marketing Officer, U.S. Commercial Group (November 2005).

C. Daniel Azzara, Age 56

Title held since 2011 : SVP Global Research and Development

Current Company Titles2011 - Present : SVP Global Research and Development

2007 - 2011 : VP Global Research and Development

2005 - 2007 : VP, Global Innovation and Quality

2004 - 2005 : VP, Global Research and Development

Unknown - 2004 : VP, Research and Development

Other Company AffiliationsTrustee, National Confectioners Association

Biography



Senior Vice President, Global Research and Development (January 2011); Vice President, GlobalResearch and Development (April 2007); Vice President, Global Innovation and Quality (October2005).


Event DetailsDate

Historical Events

Top Executive Change The company named John P. Bilbrey CEO on a permanent basis.2011-06-15Top Executive Change David J. West resigned.2011-05-18Top Executive Change The company named John P. Bilbrey Interim President and CEO.2011-05-18Top Executive Change David J. West succeeded Richard H. Lenny, who remained chairman.2007-12-01Top Executive Change The company announced that David J. West will succeed the retiring Richard H.

Lenny on 12/01/2007; Lenny will remain chairman.2007-10-02

Name Change The company changed its name from Hershey Foods Corporation to The HersheyCompany.

2005-04-19


Company Financials

Auditor

$5,671.01M

$509.80M

PublicCompany Type

1-Year Sales Growth

Prescreen Score16.93%1-Year Net Income Growth

7.03%

Low RiskKPMG LLP

Financial Summary

Fiscal Year-End December

NYSE: HSYHeadquarters

2010 Sales

2010 Net Income


Annual Income StatementAll amounts in millions of US Dollars except per share amounts.

Dec 2010

Revenue 5,671.01Cost of Goods Sold 3,255.80Gross Profit 2,415.21

Gross Profit Margin 42.59%SG&A Expense 1,426.48Depreciation and Amortization 197.12Operating Income 905.30Operating Margin 15.96%Nonoperating Income 0.00Nonoperating Expenses (96.43)Income Before Taxes 808.86Income Taxes 299.07Net Income After Taxes 509.80

Continuing Operations 509.80Discontinued Operations --Total Operations 509.80Total Net Income 509.80Net Profit Margin 8.99%

Diluted EPS from Continuing Operations 2.21Diluted EPS from Total Operations 2.21Diluted EPS from Total Net Income 2.21Dividends per Share 1.28

Dec 2009

5,298.67

3,245.532,053.14

38.75%1,208.67

182.41761.59

14.37%0.00

(90.46)671.13

235.14435.99

435.99--

435.99435.998.23%

1.901.901.901.19

Dec 2008

5,132.77

3,375.051,757.72

34.25%1,073.02

249.49589.9011.49%

0.00(97.88)492.02180.62311.41

311.41--

311.41311.41

6.07%

1.361.361.361.19

Dec 2007

4,946.72

3,315.151,631.57

32.98%895.87310.93458.839.28%

(118.59)--

340.24126.09214.15

214.15--

214.15214.15

4.33%

0.930.930.931.14

Dec 2006

4,944.23

3,076.721,867.51

37.77%860.38199.91

992.5620.08%(116.06)

876.50317.44

559.06

559.06--

559.06559.0611.31%

2.342.342.341.03


Quarterly Income StatementAll amounts in millions of US Dollars except per share amounts.

Mar 2011Quarter Ending

Revenue 1,564.22Cost of Goods Sold 908.04Gross Profit 656.19

Gross Profit Margin 41.95%SG&A Expense 377.80Depreciation and Amortization 51.05Operating Income 276.55Operating Margin 17.68%Nonoperating Income 0.00Nonoperating Expenses (24.48)Income Before Taxes 252.07Income Taxes 91.96Net Income After Taxes 160.12

Continuing Operations 160.12Discontinued Operations --Total Operations 160.12Total Net Income 160.12Net Profit Margin 10.24%

Diluted EPS from Continuing Operations 0.70Diluted EPS from Total Operations 0.70Diluted EPS from Total Net Income 0.70Dividends per Share 0.35

Dec 2010

1,482.81

863.34619.47

41.78%391.23197.12

227.8915.37%

0.00(27.65)200.25

64.73135.51

135.51--

135.51135.519.14%

0.580.580.590.32

Sep 2010

1,547.12

891.90655.22

42.35%357.62145.74299.6519.37%

0.00(22.26)277.3997.22180.17

180.17--

180.17180.17

11.65%

0.780.780.780.32

Jun 2010

1,233.24

686.70546.54

44.32%336.98

93.30124.42

10.09%0.00

(22.78)101.6454.9246.72

46.72--

46.7246.72

3.79%

0.200.200.200.32

Mar 2010

1,407.84

813.86593.98

42.19%340.65

47.33253.3317.99%

0.00(23.75)229.59

82.19147.39

147.39--

147.39147.39

10.47%

0.640.640.640.32


Annual Balance SheetAll amounts in millions of US Dollars except per share amounts.

Current Assets

Inventories

Dec 2010

CashNet Receivables

Total Current Assets

390.06

Net Fixed Assets

196.89

1,437.70

884.64

2,005.22

533.62

829.81

Other Current Assets

4,272.73Total Assets

Assets

Other Noncurrent

Preferred Stock EquityCommon Stock Equity

0.00

Dec 2010

902.32

Shares Outstanding (M) 227.03902.32Total Equity

Shareholder's Equity

Long-Term Debt

Accounts Payable

Other Current Liabilities

Dec 2010

529.75Total LiabilitiesOther Noncurrent

Current Liabilities

1,541.83

285.48

3,370.42

410.66

602.711,298.85

Short-Term Debt

Total Current Liabilities

Liabilities

Dec 2009

410.39

201.73

1,404.77

253.61

1,385.43

519.71

884.833,675.03

--

Dec 2009

720.46

228.00720.46

Dec 2009

541.211,502.73

39.31

2,954.57

287.94

583.38910.63

Dec 2008

455.15

260.16

1,458.95

37.10

1,344.95

592.53

830.833,634.72

0.00

Dec 2008

318.20

166.39318.20

Dec 2008

540.351,505.95

501.50

3,316.52

249.45

519.251,270.21

Dec 2007

487.29

209.91

1,539.72

129.20

1,426.57

600.19

1,280.824,247.11

--

Dec 2007

592.92

166.24592.92

Dec 2007

755.461,279.97

856.39

3,654.19

223.02

539.361,618.77

Dec 2006

522.67

149.18

1,651.30

97.14

1,417.81

648.82

1,088.454,157.57

--

Dec 2006

683.42

171.02683.42

Dec 2006

772.481,248.13

844.00

3,474.14

155.52

454.021,453.54


Quarterly Balance SheetAll amounts in millions of US Dollars except per share amounts.

Quarter EndingCurrent Assets

Inventories

Mar 2011

CashNet Receivables

Total Current Assets

433.52

Net Fixed Assets

233.22

1,443.82

752.27

1,954.52

535.52

836.81

Other Current Assets

4,235.16Total Assets

Assets

Other Noncurrent

Preferred Stock EquityCommon Stock Equity

0.00

Quarter Ending Mar 2011

875.42

Shares Outstanding (M) 227.30875.42Total Equity

Shareholder's Equity

Long-Term Debt

Accounts Payable

Other Current Liabilities


527.88Total LiabilitiesOther Noncurrent

Current Liabilities

1,540.92

285.51

3,359.74

381.50

623.921,290.93

Short-Term Debt

Total Current Liabilities

Liabilities

Dec 2010

390.06

196.89

1,437.70

884.64

2,005.22

533.62

829.814,272.73

0.00

Dec 2010

902.32

227.03902.32

Dec 2010

529.751,541.83

285.48

3,370.42

410.66

602.711,298.85

Sep 2010

605.74

219.55

1,378.03

244.95

1,664.81

594.57

844.103,886.94

0.00

Sep 2010

826.75

227.12826.75

Sep 2010

539.561,250.55

276.91

3,060.19

350.25

642.931,270.09

Jun 2010

321.05

241.14

1,378.51

249.07

1,414.99

603.73

826.493,619.99

0.00

Jun 2010

697.37

227.23697.37

Jun 2010

545.281,501.34

41.01

2,922.62

304.99

530.01876.01

Mar 2010

411.25

216.15

1,394.68

303.79

1,413.03

481.85

890.983,698.69

0.00

Mar 2010

752.22

227.92752.22

Mar 2010

541.991,502.18

55.95

2,946.47

294.22

552.12902.30


Annual Cash FlowAll amounts in millions of US Dollars except per share amounts.

Dec 2010

Cash and Cash Equivalents at the Beginningof Year

253.61

Net Cash Provided in Operating Activities 901.42Net Cash Provided by Investing Activities (199.29)Net Cash Provided by Financing Activities (71.10)Net Increase/Decrease in Cash and CashEquivalents

631.04

Cash and Cash Equivalents at the End ofYear

884.64

Dec 2009

37.10

1,065.75(150.33)(698.92)

216.50

253.61

Dec 2008

129.20

519.56(198.20)(413.45)

(92.10)

37.10

Dec 2007

97.14

778.84(304.35)(442.43)

32.06

129.20

Dec 2006

67.18

723.19(215.51)

(477.72)29.96

97.14


Quarterly Cash FlowAll amounts in millions of US Dollars except per share amounts.


Cash and Cash Equivalents at the Beginningof Year

884.64

Net Cash Provided in Operating Activities 159.38Net Cash Provided by Investing Activities (87.18)Net Cash Provided by Financing Activities (204.57)Net Increase/Decrease in Cash and CashEquivalents

(132.38)

Cash and Cash Equivalents at the End ofYear

752.27

Dec 2010

244.95

901.42(199.29)

(71.10)631.04

884.64

Sep 2010

249.07

388.20(121.61)

(275.25)(8.66)

244.95

Jun 2010

303.79

264.85(74.10)

(195.28)(4.54)

249.07

Mar 2010

253.61

181.19(35.38)(95.63)

50.18

303.79


Earning Estimates

High Estimate

Average Estimate

Year ago EPS

13

Growth Rate

$0.51

6.18%

$0.54

$0.51

$0.58

Low Estimate

Consensus Recommendation

Jun 11

Number of Analysts

Current Quarter

7.91%$0.79$0.80$0.90

12

$0.85

Sep 11

Next Quarter

$2.81 $3.08

Current Year Next Year

Jun 11 Jun 11

15 13$2.90 $3.20$2.76 $2.93$2.55 --

10.12% 9.61%

Hold


Financial Market DataCurrent Information

Latest Short Interest Ratio

Dividend Yield 2.27%# of Institutional Holders

2.82

0.32Market Cap

15.04

225.51M$12,946.24M

52-Week High$57.41

64.21%

$58.2025.32

Last Close (01-Jul-2011)

52-Week Low

13.17%

2.27

Price/Cash Flow Ratio

Price/Sales Ratio

Price/Earnings RatioPrice/Book Ratio

Return on Assets

% Owned by InstitutionsLatest Net Insider Transactions

Long-Term Debt/Equity

Return on Equity

2.03--

14.79$45.31

Shares Outstanding

60-Month Beta

Dividend Rate 1.38 Current Ratio 1.51

7.56%

12 MonthGrowth 36 Month 60 Month

4.09% 6.60%

7.03% 4.66% 3.24%16.32% 33.45% 2.12%

Revenue GrowthEPS GrowthDividend Growth


Historical Financials

Income Statement

Year Revenue ($ M) Net Income ($ M) Net Profit Margin Employees

Dec 2010 5,671.01 509.80 8.99% 13,500

Dec 2009 5,298.67 435.99 8.23% 13,700

Dec 2008 5,132.77 311.41 6.07% 14,400

Dec 2007 4,946.72 214.15 4.33% 12,800

Dec 2006 4,944.23 559.06 11.31% 15,000

Dec 2005 4,835.97 493.24 10.20% 13,750

Dec 2004 4,429.25 590.88 13.34% 13,700

Dec 2003 4,172.55 464.95 11.14% 14,800

Dec 2002 4,120.32 403.58 9.79% 15,400

Dec 2001 4,557.24 207.16 4.55% 16,000

2010 Year-End Financials

Debt Ratio 170.87%Return on Equity 64.21%Cash ($ M) 884.64Current Ratio 1.54Long-Term Debt ($ M) 1,541.83Shares Outstanding (M) 227.03Dividend Yield 2.27%Dividend Payout 0.58Market Cap ($ M) 10,704.48

Stock HistoryStock Price ($) P/E Per Share ($)

Year FY High FY Low FY Close High Low Earns. Div. Book Value

Dec 2010 52.10 35.76 47.15 23.57 16.18 2.21 1.28 3.97

Dec 2009 42.25 30.27 35.79 22.24 15.93 1.90 1.19 3.16

Dec 2008 44.32 32.10 34.74 32.59 23.60 1.36 1.19 1.91

Dec 2007 56.75 38.21 39.40 61.02 41.09 0.93 1.14 3.57

Dec 2006 57.65 48.20 49.80 24.64 20.60 2.34 1.03 4.00

Dec 2005 67.37 52.49 55.25 33.85 26.38 1.99 0.93 5.65

Dec 2004 56.75 37.28 55.54 24.67 16.21 2.30 0.84 5.88

Dec 2003 39.33 30.35 38.50 22.73 17.54 1.73 0.72 4.92

Dec 2002 39.75 28.23 33.72 27.13 19.27 1.47 0.63 5.04

Dec 2001 35.08 27.94 33.85 46.77 37.25 0.75 0.58 4.23


Competitors ListGross Revenue Net Profit

MarginNet Operating Cash FlowCompany

$9.60M ----Annabelle Candy

-- ----Anthony-Thomas Candy

$17.60M ----Asher's Chocolates

-- ----Betsy Ann Candies

$2.94M $0.20M(1.83%)Chase General

$25.90M ----Chocolates à la Carte

$119.23M ----Chupa Chups

$9.20M ----Endangered Species Chocolate

-- ----Enstrom

-- ----Farley's & Sathers

$11.78M --7.65%Fazer Konfektyr

$2,495.60M ----Ferrero

$2,573.77M $306.05M5.33%Flowers Foods

-- ----Ghirardelli Chocolate

-- ----Godiva Chocolatier

$11.20M ----Goetze's Candy

$41.10M ----Guittard

-- ----Harry London Candies

$2,700.00M ----Hostess Brands

$0.06M ----Jelly Belly Candy

$12,397.00M $1,008.00M9.51%Kellogg

$49,207.00M $3,748.00M6.00%Kraft Foods (Top Competitor)

$91.90M ----Laura Secord

$2,741.54M $386.58M9.38%Lindt & Sprüngli

$30,000.00M ----Mars, Incorporated (Top Competitor)

$116,623.51M $14,463.94M31.20%Nestlé (Top Competitor)

$533.79M ----Otis Spunkmeyer

$36.97M ----Perfetti Van Melle

$3.60M ----Purdy's Chocolates

$31.13M $3.80M12.56%Rocky Mountain Chocolate

-- ----Russell Stover

-- ----See's Candies

$4,825.74M $391.56M9.94%Smucker

-- ----Spangler Candy

$10.00M ----Sweet Shop USA

$521.45M $82.81M9.97%Tootsie Roll

-- ----Warrell Corporation


Gross Revenue Net ProfitMargin

Net Operating Cash FlowCompany

-- ----World's Finest Chocolate

-- ----Wrigley

$35.10M ----Zachary Confections


Competitive Landscape

Annual Sales ($ M)EmployeesMarket Cap ($ M)

The HersheyCompany

$5,671.01M13,500

$10,704.48M

Companies listed are Top Competitors.

Key Numbers

--

Mars,Incorporated

$30,000.00M65,000

$203,626.92M

Nestlé S.A.

$116,623.51M281,000 127,000

Kraft Foods Inc.

$49,207.00M

$55,081.58M

Profitability

Gross Profit MarginPre-Tax ProfitNet Profit MarginReturn on EquityReturn on Assets

The HersheyCompany

42.51%14.27%8.97%

64.21%13.17%

Return on InvestedCapital

20.85%

Mars,Incorporated

------------

Nestlé S.A.

58.21%34.69%31.20%61.80%30.76%44.38%

Kraft Foods Inc.

36.56%8.44%6.00%8.47%3.12%4.57%

Industry

36.94%15.27%

(0.29%)(1.21%)

(0.39%)(0.60%)

Market

30.57%10.96%3.29%5.28%0.88%2.43%

Valuation

Price/Sales RatioPrice/Earnings RatioPrice/Book RatioPrice/Cash Flow

The HersheyCompany

2.2725.3214.7915.04

Mars,Incorporated

--------

Nestlé S.A.

1.635.222.7813.12

Kraft Foods Inc.

1.2320.53

1.6722.52

Industry

2.0721.198.18

15.60

Market

1.51--

2.2710.29

Operations

Days of SalesOutstandingInventory TurnoverDays Cost of GoodsSold in InventoryAsset TurnoverNet ReceivablesTurnover FlowEffective Tax Rate

The HersheyCompany

26.5

6.655.4

1.513.8

37.15%

Mars,Incorporated

--

----

----

--

Nestlé S.A.

40.6

5.962.3

1.09.0

9.70%

Kraft Foods Inc.

49.6

5.763.9

0.57.4

28.45%

Industry

24.1

6.457.1

1.315.1

--

Market

43.2

7.647.9

0.38.4

--


Financial

Current RatioQuick RatioLeverage RatioTotal Debt/ EquityInterest Coverage

The HersheyCompany

1.540.984.742.039.40

Mars,Incorporated

----------

Nestlé S.A.

1.291.011.800.32

45.94

Kraft Foods Inc.

1.040.582.660.803.64

Industry

1.610.993.131.04

12.06

Market

1.461.305.801.087.61

Per Share Data

Per Share DataDividend Per ShareCash Flow Per ShareWorking Capital Per ShareLong-Term Debt Per ShareBook Value Per ShareTotal Assets Per Share

The HersheyCompany

$25.28$1.31

$3.82$3.13$6.84$3.88

$18.95

Mars,Incorporated

--------------

Nestlé S.A.

$38.23$1.26$4.74$2.72$2.30

$22.39$34.28

Kraft Foods Inc.

$28.75$1.16$1.58$0.32

$15.28$21.26$54.21

Industry

$23.47$1.03$3.12

$3.04$5.10$5.94

$18.59

Market

$20.22$0.53$2.97$2.50

$12.25$13.47$78.15

Growth

12-Month Revenue12-Month Net Income12-Month EPS Growth12-Month Dividend Growth36-Month Revenue Growth36-Month Net Income Growth36-Month EPS Growth36-Month Dividend Growth

The HersheyCompany

7.03%16.93%16.32%7.56%4.66%

33.52%33.45%4.09%

Mars,Incorporated

----------------

Nestlé S.A.

1.96%228.28%247.77%(10.55%)

0.67%47.59%

(47.27%)23.86%

Kraft Foods Inc.

21.84%36.18%

(29.06%)0.00%9.73%

16.68%(3.85%)

3.71%

Industry

13.62%49.78%50.42%

7.15%4.33%

31.33%30.43%

1.51%

Market

8.06%44.41%

--2.18%2.77%

(1.30%)----


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