Hershey Reports Fourth-Quarter and Full-Year 2022 Financial Results; Provides 2023 Outlook
"In 2022,
Fourth -Quarter 2022 Financial Results Summary 1
- Consolidated net sales of
$2,652.3 million , an increase of 14.0%. - Organic, constant currency net sales increased 10.7%.
- The impact of acquisitions on net sales was a 3.6-point benefit2 while foreign currency exchange was a 0.3-point headwind.
- Reported net income of
$396.3 million , or$1.92 per share-diluted, an increase of 18.5%. - Adjusted earnings per share-diluted of
$2.02 , an increase of 19.5%.
|
1
All comparisons for the fourth quarter of 2022 are with respect to the fourth quarter ended |
2
Reflects the impact from the 2021 acquisitions of |
2022 Full-Year Financial Results Summary 3
- Consolidated net sales of
$10,419.3 million , an increase of 16.1%. - Organic, constant currency net sales increased 12.0%.
- The net impact of acquisitions on net sales was a 4.3-point benefit4 while foreign currency exchange was a 0.2-point headwind.
- Reported net income of
$1,644.8 million , or$7.96 per share-diluted, an increase of 12.0%. - Adjusted earnings per share-diluted of
$8.52 , an increase of 18.5%.
|
3
All comparisons for full-year 2022 are with respect to the full-year ended |
4
Reflects the impact from the 2021 acquisitions of Pretzels, Dot's and Lily's |
2023 Full-Year Financial Outlook Summary
The company expects net sales growth of 6% to 8% driven primarily by net price realization as consumer demand remains steady behind higher advertising levels and increased capacity. Sales growth and gross margin expansion are expected to more than offset increased brand, capability and technology investments, as well as higher pension and interest expenses, to drive projected reported earnings per share growth of 11% to 15% and adjusted earnings per share growth of 9% to 11%.
2023 Full-Year Outlook |
|
|
Net sales growth |
|
6% - 8% |
Reported earnings per share growth |
|
11% - 15% |
Adjusted earnings per share growth |
|
9% - 11% |
The company also expects:
- A reported and adjusted effective tax rate in the range of 15% to 16%;
- Other expense, which primarily reflects the write-down of equity investments that qualify for a tax credit, of approximately
$190 million to$210 million ; - Interest expense of approximately
$145 million to$155 million , reflecting a higher interest rate environment; and - Capital expenditures of approximately
$800 million to$900 million , driven by core confection capacity expansion and continued investments in a digital infrastructure including the build and upgrade of a new ERP system across the enterprise.
Below is a reconciliation of projected 2023 and full-year 2022 and 2021 earnings per share-diluted calculated in accordance with
|
2023 (Projected) |
|
2022 |
|
2021 |
Reported EPS – Diluted |
|
|
|
|
|
Derivative Mark-to-Market Losses (Gains) |
— |
|
0.38 |
|
(0.12) |
Business Realignment Activities |
0.01 |
|
0.02 |
|
0.09 |
Acquisition and Integration-Related Activities |
0.45 - 0.53 |
|
0.24 |
|
0.16 |
Noncontrolling Interest Share of Business Realignment Charges |
— |
|
— |
|
0.03 |
Other Miscellaneous Losses (Benefits) |
— |
|
0.07 |
|
(0.07) |
Tax Effect of All Adjustments Reflected Above |
(0.12) |
|
(0.15) |
|
(0.01) |
Adjusted EPS – Diluted |
|
|
|
|
|
2023 projected earnings per share-diluted, as presented above, does not include the impact of mark-to-market gains and losses on our commodity derivative contracts that are reflected within corporate unallocated expense in segment results until the related inventory is sold since we are not able to forecast the impact of the market changes.
Fourth Quarter 2022 Components of Net Sales Growth
A reconciliation between reported net sales growth rates and organic constant currency net sales growth rates, along with the contribution from net price realization and volume, is provided below:
|
Three Months Ended |
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|
Percentage |
|
Impact of |
|
Percentage |
|
Impact of |
|
Percentage |
|
Organic |
|
Organic |
North America Confectionery |
9.7 % |
|
(0.5) % |
|
10.2 % |
|
— % |
|
10.2 % |
|
9.1 % |
|
1.1 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Salty Snacks |
71.4 % |
|
— % |
|
71.4 % |
|
52.7 % |
|
18.7 % |
|
9.7 % |
|
9.0 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
11.1 % |
|
1.8 % |
|
9.3 % |
|
— % |
|
9.3 % |
|
0.4 % |
|
8.9 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.0 % |
|
(0.3) % |
|
14.3 % |
|
3.6 % |
|
10.7 % |
|
8.5 % |
|
2.2 % |
|
|||||||||||||
|
|||||||||||||
|
Twelve Months Ended |
||||||||||||
|
Percentage |
|
Impact of |
|
Percentage |
|
Impact of |
|
Percentage |
|
Organic |
|
Organic |
North America Confectionery |
11.1 % |
|
(0.2) % |
|
11.3 % |
|
0.4 % |
|
10.9 % |
|
8.1 % |
|
2.8 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Salty Snacks |
85.3 % |
|
— % |
|
85.3 % |
|
64.0 % |
|
21.3 % |
|
12.0 % |
|
9.3 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
16.3 % |
|
0.3 % |
|
16.0 % |
|
— % |
|
16.0 % |
|
4.1 % |
|
11.9 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16.1 % |
|
(0.2) % |
|
16.3 % |
|
4.3 % |
|
12.0 % |
|
8.0 % |
|
4.0 |
The company presents certain percentage changes in net sales on a constant currency basis, which excludes the impact of foreign currency exchange. To present this information for historical periods, current period net sales for entities reporting in currencies other than the
Fourth -Quarter 2022 Results
Consolidated net sales increased 14.0% to
Reported gross margin decreased 30 basis points to 43.2% in the fourth quarter of 2022. This decrease was driven by broad-based cost of goods inflation, including commodity mark-to-market losses, higher manufacturing costs and labor investments, and unfavorable portfolio mix, which was partially offset by higher organic net sales growth. Adjusted gross margin increased 20 basis points to 43.7% in the fourth quarter of 2022. Net price realization and volume gains drove gross margin expansion, which was partially offset by raw material and packaging inflation, higher labor costs, increased manufacturing costs related to higher-than-anticipated demand, and unfavorable portfolio mix.
Selling, marketing and administrative expenses increased 11.5% in the fourth quarter of 2022 versus the prior-year period, primarily driven by higher corporate expenses. Advertising and related consumer marketing expenses increased by 3.3% in the fourth quarter of 2022 versus the same period last year. Higher levels of advertising were driven by Reese's and Jolly Rancher brands in response to incremental capacity, which was partially offset by cost efficiencies related to new media partners. Selling, marketing and administrative expenses, excluding advertising and related consumer marketing, increased 15.4% versus the fourth quarter of 2021. This increase was driven by incremental capability and technology investments, increased non-income tax reserves and favorable benefit accrual in the prior-year period.
Fourth-quarter 2022 reported operating profit of
The reported effective tax rate in the fourth quarter of 2022 was (9.1)% compared to 0.9% in the fourth quarter of 2021, a decrease of 1,000 basis points. The adjusted effective tax rate in the fourth quarter of 2022 was (6.5)% compared to 2.2% in the fourth quarter of 2021, a decrease of 870 basis points. Both the reported and adjusted effective tax rate decreases were driven by higher renewable energy tax credits versus the prior-year period.
The company's fourth-quarter 2022 results, as prepared in accordance with GAAP, included items positively impacting comparability of
The following table presents a summary of items impacting comparability in each period (see Appendix I for additional information):
|
Pre-Tax (millions) |
|
Earnings Per Share-Diluted |
||||
|
Three Months Ended |
|
Three Months Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Mark-to-Market Losses (Gains) |
$ 14.7 |
|
$ (0.2) |
|
$ 0.07 |
|
$ — |
Business Realignment Activities |
2.0 |
|
2.8 |
|
0.01 |
|
— |
Acquisition and Integration-Related Activities |
12.0 |
|
22.4 |
|
0.06 |
|
0.10 |
Noncontrolling Interest Share of Business Realignment Charges |
— |
|
4.2 |
|
— |
|
0.02 |
Other Miscellaneous Benefits |
— |
|
(8.4) |
|
— |
|
(0.04) |
Tax Effect of All Adjustments Reflected Above |
— |
|
— |
|
(0.04) |
|
(0.01) |
|
$ 28.7 |
|
$ 20.8 |
|
$ 0.10 |
|
$ 0.07 |
|
|||||||
|
|||||||
|
Pre-Tax (millions) |
|
Earnings Per Share-Diluted |
||||
|
Twelve Months Ended |
|
Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Mark-to-Market Losses (Gains) |
$ 78.2 |
|
$ (24.4) |
|
$ 0.38 |
|
$ (0.12) |
Business Realignment Activities |
4.4 |
|
16.6 |
|
0.02 |
|
0.09 |
Acquisition and Integration-Related Activities |
48.5 |
|
33.1 |
|
0.24 |
|
0.16 |
Noncontrolling Interest Share of Business Realignment Charges |
— |
|
5.3 |
|
— |
|
0.03 |
Other Miscellaneous Losses (Benefits) |
13.6 |
|
(15.1) |
|
0.07 |
|
(0.07) |
Tax Effect of All Adjustments Reflected Above |
— |
|
— |
|
(0.15) |
|
(0.01) |
|
$ 144.6 |
|
$ 15.5 |
|
$ 0.56 |
|
$ 0.08 |
The following are comments about segment performance for the fourth quarter of 2022 versus the prior-year period. See the schedule of supplementary information within this press release for additional information on segment net sales and profit.
North America Confectionery
North America Confectionery segment income was
North America Salty Snacks
The North America Salty Snacks segment income was
International
Fourth-quarter 2022 net sales for
The International segment reported a
Unallocated Corporate Expense
Live Webcast
At approximately
Note: In this release, for the fourth-quarter of and full-year 2022,
Reconciliation of Certain Non-GAAP Financial Measures |
|||||||
Consolidated results |
Three Months Ended |
|
Twelve Months Ended |
||||
In thousands except per share data |
|
|
|
|
|
|
|
Reported gross profit |
$ 1,144,806 |
|
$ 1,012,867 |
|
$ 4,498,785 |
|
$ 4,048,598 |
Derivative mark-to-market losses (gains) |
15,258 |
|
(239) |
|
78,782 |
|
(24,376) |
Business realignment activities |
— |
|
(30) |
|
3 |
|
5,220 |
Acquisition and integration-related activities |
— |
|
— |
|
4,041 |
|
2,678 |
Non-GAAP gross profit |
$ 1,160,064 |
|
$ 1,012,598 |
|
$ 4,581,611 |
|
$ 4,032,120 |
|
|
|
|
|
|
|
|
Reported operating profit |
$ 526,646 |
|
$ 459,172 |
|
$ 2,260,787 |
|
$ 2,043,722 |
Derivative mark-to-market losses (gains) |
14,658 |
|
(239) |
|
78,182 |
|
(24,376) |
Business realignment activities |
2,044 |
|
2,806 |
|
4,417 |
|
16,599 |
Acquisition and integration-related activities |
12,001 |
|
22,444 |
|
48,482 |
|
33,142 |
Other miscellaneous losses (benefits) |
— |
|
(8,469) |
|
13,568 |
|
(15,209) |
Non-GAAP operating profit |
$ 555,349 |
|
$ 475,714 |
|
$ 2,405,436 |
|
$ 2,053,878 |
|
|
|
|
|
|
|
|
Reported provision (benefit) for income taxes |
$ (33,174) |
|
$ 3,150 |
|
$ 272,254 |
|
$ 314,405 |
Derivative mark-to-market losses (gains)* |
4,521 |
|
(1,018) |
|
13,508 |
|
(9,176) |
Business realignment activities* |
567 |
|
650 |
|
1,119 |
|
3,138 |
Acquisition and integration-related activities* |
2,804 |
|
5,136 |
|
11,525 |
|
7,683 |
Other miscellaneous losses (benefits)* |
— |
|
— |
|
3,256 |
|
(1,474) |
Non-GAAP provision (benefit) for income taxes |
$ (25,282) |
|
$ 7,918 |
|
$ 301,662 |
|
$ 314,576 |
|
|
|
|
|
|
|
|
Reported net income |
$ 396,296 |
|
$ 335,556 |
|
$ 1,644,817 |
|
$ 1,477,512 |
Derivative mark-to-market losses (gains) |
10,137 |
|
779 |
|
64,674 |
|
(15,200) |
Business realignment activities |
1,477 |
|
2,156 |
|
3,298 |
|
13,461 |
Acquisition and integration-related activities |
9,197 |
|
17,308 |
|
36,957 |
|
25,459 |
Noncontrolling interest share of business realignment and impairment charges |
— |
|
4,235 |
|
— |
|
5,313 |
Other miscellaneous losses (benefits) |
— |
|
(8,469) |
|
10,312 |
|
(13,735) |
Non-GAAP net income |
$ 417,107 |
|
$ 351,565 |
|
$ 1,760,058 |
|
$ 1,492,810 |
|
|||||||
Reconciliation of Certain Non-GAAP Financial Measures |
|||||||
Consolidated results |
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
Reported EPS - Diluted |
$ 1.92 |
|
$ 1.62 |
|
$ 7.96 |
|
$ 7.11 |
Derivative mark-to-market losses (gains) |
0.07 |
|
— |
|
0.38 |
|
(0.12) |
Business realignment activities |
0.01 |
|
— |
|
0.02 |
|
0.09 |
Acquisition and integration-related activities |
0.06 |
|
0.10 |
|
0.24 |
|
0.16 |
Noncontrolling interest share of business realignment and impairment charges |
— |
|
0.02 |
|
— |
|
0.03 |
Other miscellaneous losses (benefits) |
— |
|
(0.04) |
|
0.07 |
|
(0.07) |
Tax effect of all adjustments reflected above** |
(0.04) |
|
(0.01) |
|
(0.15) |
|
(0.01) |
Non-GAAP EPS - Diluted |
$ 2.02 |
|
$ 1.69 |
|
$ 8.52 |
|
$ 7.19 |
|
|
|
|
|
|
|
|
* The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the company's quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment. |
** Adjustments reported above are reported on a pre-tax basis before the tax effect described in the reconciliation above for Non-GAAP provision for income taxes. |
In the assessment of our results, we review and discuss the following financial metrics that are derived from the reported and non-GAAP financial measures presented above:
|
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
As reported gross margin |
43.2 % |
|
43.5 % |
|
43.2 % |
|
45.1 % |
Non-GAAP gross margin (1) |
43.7 % |
|
43.5 % |
|
44.0 % |
|
44.9 % |
|
|
|
|
|
|
|
|
As reported operating profit margin |
19.9 % |
|
19.7 % |
|
21.7 % |
|
22.8 % |
Non-GAAP operating profit margin (2) |
20.9 % |
|
20.5 % |
|
23.1 % |
|
22.9 % |
|
|
|
|
|
|
|
|
As reported effective tax rate |
(9.1) % |
|
0.9 % |
|
14.2 % |
|
17.5 % |
Non-GAAP effective tax rate (3) |
(6.5) % |
|
2.2 % |
|
14.6 % |
|
17.4 % |
|
|
(1) |
Calculated as non-GAAP gross profit as a percentage of net sales for each period presented. |
(2) |
Calculated as non-GAAP operating profit as a percentage of net sales for each period presented. |
(3) |
Calculated as non-GAAP provision for income taxes as a percentage of non-GAAP income before taxes (calculated as non-GAAP operating profit minus non-GAAP interest expense, net plus or minus non-GAAP other (income) expense, net). |
Appendix I
Details of the charges included in GAAP results, as summarized in the press release (above), are as follows:
Derivative Mark-to-Market Losses (Gains): The mark-to-market losses (gains) on commodity derivatives are recorded as unallocated and excluded from adjusted results until such time as the related inventory is sold, at which time the corresponding losses (gains) are reclassified from unallocated to segment income. Since we often purchase commodity contracts to price inventory requirements in future years, we make this adjustment to facilitate the year-over-year comparison of cost of sales on a basis that matches the derivative gains and losses with the underlying economic exposure being hedged for the period.
Business Realignment Activities: We periodically undertake restructuring and cost reduction activities as part of ongoing efforts to enhance long-term profitability. During the fourth quarter of 2020, we commenced the International Optimization Program to streamline resources and investments in select international markets, including the optimization of our
Acquisition and Integration-Related Activities: During the three- and 12-month periods of 2022, we incurred costs related to the integration of the 2021 acquisitions of Lily's, Dot's and Pretzels. During the three- and 12-month periods of 2021, we incurred costs to effectuate the acquisitions of Lily's, Dot's and Pretzels, as well as costs related to the integration of Lily's.
Noncontrolling Interest Share of Business Realignment and Impairment Charges: Certain of the business realignment and impairment charges recorded related to the divestiture of
Other Miscellaneous Losses (Benefits): In 2022, we recorded a loss on the sale of non-operating assets located in Pennsylvania. In 2021, we recorded a gain on the divestiture of LSFC, as well as a gain on a receivable previously deemed uncollectible.
Tax Effect of All Adjustments: This line item reflects the aggregate tax effect of all pre-tax adjustments reflected in the preceding line items of the applicable table. The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the company's quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
Safe Harbor Statement
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Many of these forward-looking statements can be identified by the use of words such as "anticipate," "assume," "believe," "continue," "estimate," "expect," "forecast," "future," "intend," "plan," "potential," "predict," "project," "strategy," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will" and "would," among others. These statements are made based upon current expectations that are subject to risk and uncertainty. Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the company's securities. Factors that could cause results to differ materially include, but are not limited to: disruptions or inefficiencies in our supply chain due to the loss or disruption of essential manufacturing or supply elements or other factors; issues or concerns related to the quality and safety of our products, ingredients or packaging, human and workplace rights, and other environmental, social or governance matters; changes in raw material and other costs, along with the availability of adequate supplies of raw materials; the company's ability to successfully execute business continuity plans to address changes in consumer preferences and the broader economic and operating environment; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws and regulations, including taxes; political, economic, and/or financial market conditions, including with respect to inflation, rising interest rates, slower growth or recession, and other events beyond our control such as the impacts on the business arising from the conflict between
|
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Consolidated Statements of Income |
||||||||||
for the periods ended |
||||||||||
(unaudited) (in thousands except percentages and per share amounts) |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
|
$ 2,652,338 |
|
$ 2,326,128 |
|
$ 10,419,294 |
|
$ 8,971,337 |
|
Cost of sales |
|
1,507,532 |
|
1,313,261 |
|
5,920,509 |
|
4,922,739 |
||
Gross profit |
|
|
1,144,806 |
|
1,012,867 |
|
4,498,785 |
|
4,048,598 |
|
|
|
|
|
|
|
|
|
|||
Selling, marketing and administrative expense |
616,445 |
|
552,918 |
|
2,236,009 |
|
2,001,351 |
|||
Business realignment costs |
1,715 |
|
777 |
|
1,989 |
|
3,525 |
|||
|
|
|
|
|
|
|
|
|
||
Operating profit |
526,646 |
|
459,172 |
|
2,260,787 |
|
2,043,722 |
|||
Interest expense, net |
|
35,587 |
|
29,762 |
|
137,557 |
|
127,417 |
||
Other (income) expense, net |
|
127,937 |
|
86,469 |
|
206,159 |
|
119,081 |
||
|
|
|
|
|
|
|
|
|
||
Income before income taxes |
|
363,122 |
|
342,941 |
|
1,917,071 |
|
1,797,224 |
||
(Benefit) provision for income taxes |
|
(33,174) |
|
3,150 |
|
272,254 |
|
314,405 |
||
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interest |
396,296 |
|
339,791 |
|
1,644,817 |
|
1,482,819 |
|||
|
|
|
|
|
|
|
|
|
|
|
Less: Net gain (loss) attributable to noncontrolling interest |
— |
|
4,235 |
|
— |
|
5,307 |
|||
Net income attributable to |
$ 396,296 |
|
$ 335,556 |
|
$ 1,644,817 |
|
$ 1,477,512 |
|||
|
|
|
|
|
|
|
|
|
|
|
Net income per share |
- Basic |
- Common |
$ 1.98 |
|
$ 1.67 |
|
$ 8.22 |
|
$ 7.34 |
|
|
- Diluted |
- Common |
$ 1.92 |
|
$ 1.62 |
|
$ 7.96 |
|
$ 7.11 |
|
|
- Basic |
- Class B |
$ 1.80 |
|
$ 1.52 |
|
$ 7.47 |
|
$ 6.68 |
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding |
- Basic |
- Common |
147,173 |
|
145,687 |
|
146,713 |
|
146,120 |
|
|
- Diluted |
- Common |
206,291 |
|
207,447 |
|
206,575 |
|
207,758 |
|
|
- Basic |
- Class B |
58,114 |
|
60,614 |
|
58,822 |
|
60,614 |
|
|
|
|
|
|
|
|
|
|||
Key margins: |
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
43.2 % |
|
43.5 % |
|
43.2 % |
|
45.1 % |
||
Operating profit margin |
|
19.9 % |
|
19.7 % |
|
21.7 % |
|
22.8 % |
||
Net margin |
|
14.9 % |
|
14.4 % |
|
15.8 % |
|
16.5 % |
|
|||||||||||||
Supplementary Information – Segment Results |
|||||||||||||
for the periods ended |
|||||||||||||
(unaudited) (in thousands except percentages) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||
|
|
|
|
|
|
|
% Change |
|
|
|
|
|
% Change |
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Confectionery |
|
$ 2,174,785 |
|
$ 1,982,385 |
|
9.7 % |
|
$ 8,536,480 |
|
$ 7,682,416 |
|
11.1 % |
|
North America Salty Snacks |
|
271,962 |
|
158,695 |
|
71.4 % |
|
1,029,405 |
|
555,424 |
|
85.3 % |
|
International |
|
205,591 |
|
185,048 |
|
11.1 % |
|
853,409 |
|
733,497 |
|
16.3 % |
|
Total |
|
$ 2,652,338 |
|
$ 2,326,128 |
|
14.0 % |
|
$ 10,419,294 |
|
$ 8,971,337 |
|
16.1 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Confectionery |
|
$ 703,502 |
|
$ 623,181 |
|
12.9 % |
|
$ 2,811,066 |
|
$ 2,475,873 |
|
13.5 % |
|
North America Salty Snacks |
|
56,685 |
|
19,719 |
|
187.5 % |
|
159,935 |
|
100,777 |
|
58.7 % |
|
International |
|
(131) |
|
(356) |
|
(63.2) % |
|
107,927 |
|
74,170 |
|
45.5 % |
|
Total segment income |
|
760,056 |
|
642,544 |
|
18.3 % |
|
3,078,928 |
|
2,650,820 |
|
16.2 % |
|
Unallocated corporate expense (1) |
|
204,707 |
|
166,830 |
|
22.7 % |
|
673,492 |
|
596,942 |
|
12.8 % |
|
Mark-to-market adjustment for commodity derivatives (2) |
|
14,658 |
|
(239) |
|
NM |
|
78,182 |
|
(24,376) |
|
NM |
|
Costs associated with business realignment initiatives |
|
2,044 |
|
2,806 |
|
(27.2) % |
|
4,417 |
|
16,599 |
|
(73.4) % |
|
Acquisition and integration-related activities |
|
12,001 |
|
22,444 |
|
(46.5) % |
|
48,482 |
|
33,142 |
|
46.3 % |
|
Other miscellaneous benefits |
|
— |
|
(8,469) |
|
(100.0) % |
|
13,568 |
|
(15,209) |
|
(189.2) % |
|
Operating profit |
|
526,646 |
|
459,172 |
|
14.7 % |
|
2,260,787 |
|
2,043,722 |
|
10.6 % |
|
Interest expense, net |
|
35,587 |
|
29,762 |
|
19.6 % |
|
137,557 |
|
127,417 |
|
8.0 % |
|
Other (income) expense, net |
|
127,937 |
|
86,469 |
|
48.0 % |
|
206,159 |
|
119,081 |
|
73.1 % |
|
Income before income taxes |
|
$ 363,122 |
|
$ 342,941 |
|
5.9 % |
|
$ 1,917,071 |
|
$ 1,797,224 |
|
6.7 % |
|
|
(1) |
Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. |
(2) |
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains). |
NM - not meaningful |
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||
|
|
|
|
|
|
|
|
|
|
Segment income (loss) as a percent of net sales: |
|
|
|
|
|
|
|
|
|
North America Confectionery |
|
32.3 % |
|
31.4 % |
|
32.9 % |
|
32.2 % |
|
North America Salty Snacks |
|
20.8 % |
|
12.4 % |
|
15.5 % |
|
18.1 % |
|
International |
|
(0.1) % |
|
(0.2) % |
|
12.6 % |
|
10.1 % |
|
|||
Consolidated Balance Sheets |
|||
as of |
|||
(in thousands of dollars) |
|||
|
|
|
|
Assets |
|
|
|
|
(unaudited) |
|
|
Cash and cash equivalents |
$ 463,889 |
|
$ 329,266 |
Accounts receivable - trade, net |
711,203 |
|
671,464 |
Inventories |
1,173,119 |
|
988,511 |
Prepaid expenses and other |
272,195 |
|
256,965 |
|
|
|
|
Total current assets |
2,620,406 |
|
2,246,206 |
|
|
|
|
Property, plant and equipment, net |
2,769,702 |
|
2,586,187 |
|
2,606,956 |
|
2,633,174 |
Other intangibles |
1,966,269 |
|
2,037,588 |
Other non-current assets |
944,989 |
|
868,203 |
Deferred income taxes |
40,498 |
|
40,873 |
|
|
|
|
Total assets |
$ 10,948,820 |
|
$ 10,412,231 |
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
Accounts payable |
$ 970,558 |
|
$ 692,338 |
Accrued liabilities |
832,518 |
|
855,638 |
Accrued income taxes |
6,710 |
|
3,070 |
Short-term debt |
693,790 |
|
939,423 |
Current portion of long-term debt |
753,578 |
|
2,844 |
|
|
|
|
Total current liabilities |
3,257,154 |
|
2,493,313 |
|
|
|
|
Long-term debt |
3,343,977 |
|
4,086,627 |
Other long-term liabilities |
719,742 |
|
787,058 |
Deferred income taxes |
328,403 |
|
288,004 |
|
|
|
|
Total liabilities |
7,649,276 |
|
7,655,002 |
|
|
|
|
Total stockholders' equity |
3,299,544 |
|
2,757,229 |
|
|
|
|
Total liabilities and stockholders' equity |
$ 10,948,820 |
|
$ 10,412,231 |
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