☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 23-0691590 | |||||||
(State or other jurisdiction of incorporation | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, one dollar par value | HSY | New York Stock Exchange |
Large accelerated filer | x | Accelerated filer | ¨ | Non-accelerated filer | ¨ | Smaller reporting company | ☐ | |||||||||||||||||||||||||||||||
Emerging growth company | ☐ |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
Item 6. Exhibits | ||||||||
Three Months Ended | Nine Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 2,134,422 | $ | 2,079,593 | $ | 5,918,127 | $ | 5,803,167 | Net sales | $ | 1,707,329 | $ | 1,767,217 | $ | 3,744,646 | $ | 3,783,705 | |||||||||||||||||||||||||||||||||||||
Cost of sales | 1,191,104 | 1,216,100 | 3,207,561 | 3,172,194 | Cost of sales | 914,777 | 892,473 | 2,085,472 | 2,016,457 | |||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 943,318 | 863,493 | 2,710,566 | 2,630,973 | Gross profit | 792,552 | 874,744 | 1,659,174 | 1,767,248 | |||||||||||||||||||||||||||||||||||||||||||||
Selling, marketing and administrative expense | 481,363 | 453,921 | 1,388,729 | 1,388,793 | Selling, marketing and administrative expense | 408,949 | 453,793 | 884,333 | 907,366 | |||||||||||||||||||||||||||||||||||||||||||||
Long-lived asset impairment charges | — | 1,649 | 4,741 | 28,817 | Long-lived asset impairment charges | 1,600 | 4,741 | 9,143 | 4,741 | |||||||||||||||||||||||||||||||||||||||||||||
Business realignment costs | 1,140 | 1,660 | 7,342 | 10,864 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Business realignment (benefits) costs | Business realignment (benefits) costs | (1,370) | 6,140 | (475) | 6,202 | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating profit | 460,815 | 406,263 | 1,309,754 | 1,202,499 | Operating profit | 383,373 | 410,070 | 766,173 | 848,939 | |||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 35,456 | 36,916 | 106,690 | 101,207 | Interest expense, net | 38,079 | 33,776 | 74,334 | 71,234 | |||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense, net | 17,999 | 12,493 | 36,601 | 35,201 | Other (income) expense, net | 11,217 | 13,125 | 22,750 | 18,602 | |||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 407,360 | 356,854 | 1,166,463 | 1,066,091 | Income before income taxes | 334,077 | 363,169 | 669,089 | 759,103 | |||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 82,178 | 91,441 | 224,129 | 226,640 | Provision for income taxes | 66,035 | 49,898 | 132,264 | 141,951 | |||||||||||||||||||||||||||||||||||||||||||||
Net income including noncontrolling interest | 325,182 | 265,413 | 942,334 | 839,451 | Net income including noncontrolling interest | 268,042 | 313,271 | 536,825 | 617,152 | |||||||||||||||||||||||||||||||||||||||||||||
Less: Net (loss) income attributable to noncontrolling interest | (125 | ) | 1,700 | (171 | ) | (1,320 | ) | Less: Net (loss) income attributable to noncontrolling interest | (859) | 431 | (3,213) | (46) | ||||||||||||||||||||||||||||||||||||||||||
Net income attributable to The Hershey Company | $ | 325,307 | $ | 263,713 | $ | 942,505 | $ | 840,771 | Net income attributable to The Hershey Company | $ | 268,901 | $ | 312,840 | $ | 540,038 | $ | 617,198 | |||||||||||||||||||||||||||||||||||||
Net income per share—basic: | Net income per share—basic: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | $ | 1.59 | $ | 1.29 | $ | 4.62 | $ | 4.11 | Common stock | $ | 1.33 | $ | 1.54 | $ | 2.66 | $ | 3.03 | |||||||||||||||||||||||||||||||||||||
Class B common stock | $ | 1.45 | $ | 1.17 | $ | 4.19 | $ | 3.74 | Class B common stock | $ | 1.21 | $ | 1.39 | $ | 2.41 | $ | 2.75 | |||||||||||||||||||||||||||||||||||||
Net income per share—diluted: | Net income per share—diluted: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | $ | 1.54 | $ | 1.25 | $ | 4.47 | $ | 3.99 | Common stock | $ | 1.29 | $ | 1.48 | $ | 2.58 | $ | 2.93 | |||||||||||||||||||||||||||||||||||||
Class B common stock | $ | 1.44 | $ | 1.17 | $ | 4.18 | $ | 3.73 | Class B common stock | $ | 1.20 | $ | 1.38 | $ | 2.41 | $ | 2.74 | |||||||||||||||||||||||||||||||||||||
Dividends paid per share: | Dividends paid per share: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock | $ | 0.773 | $ | 0.722 | $ | 2.217 | $ | 2.034 | Common stock | $ | 0.773 | $ | 0.722 | $ | 1.546 | $ | 1.444 | |||||||||||||||||||||||||||||||||||||
Class B common stock | $ | 0.702 | $ | 0.656 | $ | 2.014 | $ | 1.848 | Class B common stock | $ | 0.702 | $ | 0.656 | $ | 1.404 | $ | 1.312 |
For the three months ended | For the six months ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income including noncontrolling interest | $ | 268,042 | $ | 313,271 | $ | 536,825 | $ | 617,152 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gains (losses) during period | $ | 3,052 | $ | — | 3,052 | $ | 7,651 | $ | — | 7,651 | $ | (48,292) | $ | — | (48,292) | $ | 11,079 | $ | — | 11,079 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and post-retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net actuarial (loss) gain and prior service cost | (16,685) | 3,954 | (12,731) | — | — | — | (16,685) | 3,954 | (12,731) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to earnings | 8,542 | (2,183) | 6,359 | 6,720 | (1,773) | 4,947 | 13,297 | (2,731) | 10,566 | 13,438 | (3,580) | 9,858 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains (losses) on cash flow hedging derivatives | 675 | 838 | 1,513 | (2,547) | 1,130 | (1,417) | 6,056 | (268) | 5,788 | (3,336) | 1,848 | (1,488) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to earnings | 1,205 | (817) | 388 | 1,395 | (885) | 510 | 3,297 | (1,930) | 1,367 | 2,833 | (1,776) | 1,057 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | $ | (3,211) | $ | 1,792 | (1,419) | $ | 13,219 | $ | (1,528) | 11,691 | $ | (42,327) | $ | (975) | (43,302) | $ | 24,014 | $ | (3,508) | 20,506 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income including noncontrolling interest | $ | 266,623 | $ | 324,962 | $ | 493,523 | $ | 637,658 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to noncontrolling interest | (826) | 338 | (3,288) | 416 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to The Hershey Company | $ | 267,449 | $ | 324,624 | $ | 496,811 | $ | 637,242 |
For the three months ended | For the nine months ended | |||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||
Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | |||||||||||||||||||||||||||||||||||||
Net income including noncontrolling interest | $ | 325,182 | $ | 265,413 | $ | 942,334 | $ | 839,451 | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation gains (losses) during period | $ | (7,604 | ) | $ | — | (7,604 | ) | $ | 5,365 | $ | — | 5,365 | $ | 3,475 | $ | — | 3,475 | $ | (18,314 | ) | $ | — | (18,314 | ) | ||||||||||||||||||||||||
Reclassification to earnings due to the sale of businesses | — | — | — | 25,131 | — | 25,131 | — | — | — | 25,131 | — | 25,131 | ||||||||||||||||||||||||||||||||||||
Pension and post-retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net actuarial gain (loss) and prior service cost | 10,020 | (2,465 | ) | 7,555 | (7,574 | ) | 1,871 | (5,703 | ) | 10,020 | (2,465 | ) | 7,555 | (7,574 | ) | 1,871 | (5,703 | ) | ||||||||||||||||||||||||||||||
Reclassification of tax effects relating to U.S. tax reform | — | — | — | — | — | — | — | — | — | — | (36,535 | ) | (36,535 | ) | ||||||||||||||||||||||||||||||||||
Reclassification to earnings | 11,537 | (2,755 | ) | 8,782 | 12,082 | (3,170 | ) | 8,912 | 24,975 | (6,335 | ) | 18,640 | 22,273 | (5,302 | ) | 16,971 | ||||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||
Gains (losses) on cash flow hedging derivatives | 1,045 | (521 | ) | 524 | (1,484 | ) | 1,207 | (277 | ) | (2,291 | ) | 1,327 | (964 | ) | 6,320 | (256 | ) | 6,064 | ||||||||||||||||||||||||||||||
Reclassification of tax effects relating to U.S. tax reform | — | — | — | — | — | — | — | — | — | — | (11,121 | ) | (11,121 | ) | ||||||||||||||||||||||||||||||||||
Reclassification to earnings | 3,331 | (400 | ) | 2,931 | (2,261 | ) | (479 | ) | (2,740 | ) | 6,164 | (2,176 | ) | 3,988 | 2,462 | (1,674 | ) | 788 | ||||||||||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | $ | 18,329 | $ | (6,141 | ) | 12,188 | $ | 31,259 | $ | (571 | ) | 30,688 | $ | 42,343 | $ | (9,649 | ) | 32,694 | $ | 30,298 | $ | (53,017 | ) | (22,719 | ) | |||||||||||||||||||||||
Total comprehensive income including noncontrolling interest | $ | 337,370 | $ | 296,101 | $ | 975,028 | $ | 816,732 | ||||||||||||||||||||||||||||||||||||||||
Comprehensive (loss) income attributable to noncontrolling interest | (532 | ) | 497 | (116 | ) | (1,857 | ) | |||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to The Hershey Company | $ | 337,902 | $ | 295,604 | $ | 975,144 | $ | 818,589 | ||||||||||||||||||||||||||||||||||||||||
June 28, 2020 | December 31, 2019 | |||||||||||||
(unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,165,331 | $ | 493,262 | ||||||||||
Accounts receivable—trade, net | 540,398 | 568,509 | ||||||||||||
Inventories | 999,380 | 815,251 | ||||||||||||
Prepaid expenses and other | 197,835 | 240,080 | ||||||||||||
Total current assets | 2,902,944 | 2,117,102 | ||||||||||||
Property, plant and equipment, net | 2,165,346 | 2,153,139 | ||||||||||||
Goodwill | 1,979,002 | 1,985,955 | ||||||||||||
Other intangibles | 1,314,332 | 1,341,166 | ||||||||||||
Other assets | 524,687 | 512,000 | ||||||||||||
Deferred income taxes | 24,760 | 31,033 | ||||||||||||
Total assets | $ | 8,911,071 | $ | 8,140,395 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 530,042 | $ | 550,828 | ||||||||||
Accrued liabilities | 643,938 | 702,372 | ||||||||||||
Accrued income taxes | 54,091 | 19,921 | ||||||||||||
Short-term debt | 198,299 | 32,282 | ||||||||||||
Current portion of long-term debt | 788,448 | 703,390 | ||||||||||||
Total current liabilities | 2,214,818 | 2,008,793 | ||||||||||||
Long-term debt | 4,091,211 | 3,530,813 | ||||||||||||
Other long-term liabilities | 643,847 | 655,777 | ||||||||||||
Deferred income taxes | 205,106 | 200,018 | ||||||||||||
Total liabilities | 7,154,982 | 6,395,401 | ||||||||||||
Stockholders’ equity: | ||||||||||||||
The Hershey Company stockholders’ equity | ||||||||||||||
Preferred stock, shares issued: NaN in 2020 and 2019 | — | — | ||||||||||||
Common stock, shares issued: 160,939,248 at June 28, 2020 and December 31, 2019 | 160,939 | 160,939 | ||||||||||||
Class B common stock, shares issued: 60,613,777 at June 28, 2020 and December 31, 2019 | 60,614 | 60,614 | ||||||||||||
Additional paid-in capital | 1,161,878 | 1,142,210 | ||||||||||||
Retained earnings | 1,516,543 | 1,290,461 | ||||||||||||
Treasury—common stock shares, at cost: 13,570,656 at June 28, 2020 and 12,723,592 at December 31, 2019 | (779,176) | (591,036) | ||||||||||||
Accumulated other comprehensive loss | (367,193) | (323,966) | ||||||||||||
Total—The Hershey Company stockholders’ equity | 1,753,605 | 1,739,222 | ||||||||||||
Noncontrolling interest in subsidiary | 2,484 | 5,772 | ||||||||||||
Total stockholders’ equity | 1,756,089 | 1,744,994 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 8,911,071 | $ | 8,140,395 |
September 29, 2019 | December 31, 2018 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 302,636 | $ | 587,998 | ||||
Accounts receivable—trade, net | 849,218 | 594,145 | ||||||
Inventories | 969,071 | 784,879 | ||||||
Prepaid expenses and other | 254,130 | 272,159 | ||||||
Total current assets | 2,375,055 | 2,239,181 | ||||||
Property, plant and equipment, net | 2,099,985 | 2,130,294 | ||||||
Goodwill | 1,982,362 | 1,801,103 | ||||||
Other intangibles | 1,452,726 | 1,278,292 | ||||||
Other assets | 524,323 | 252,984 | ||||||
Deferred income taxes | 29,809 | 1,166 | ||||||
Total assets | $ | 8,464,260 | $ | 7,703,020 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 553,561 | $ | 502,314 | ||||
Accrued liabilities | 726,344 | 679,163 | ||||||
Accrued income taxes | 74,085 | 33,773 | ||||||
Short-term debt | 1,275,430 | 1,197,929 | ||||||
Current portion of long-term debt | 352,954 | 5,387 | ||||||
Total current liabilities | 2,982,374 | 2,418,566 | ||||||
Long-term debt | 2,892,296 | 3,254,280 | ||||||
Other long-term liabilities | 627,842 | 446,048 | ||||||
Deferred income taxes | 200,157 | 176,860 | ||||||
Total liabilities | 6,702,669 | 6,295,754 | ||||||
Stockholders’ equity: | ||||||||
The Hershey Company stockholders’ equity | ||||||||
Preferred stock, shares issued: none in 2019 and 2018 | — | — | ||||||
Common stock, shares issued: 299,287,967 at September 29, 2019 and December 31, 2018 | 299,287 | 299,287 | ||||||
Class B common stock, shares issued: 60,613,777 at September 29, 2019 and December 31, 2018 | 60,614 | 60,614 | ||||||
Additional paid-in capital | 1,130,493 | 982,205 | ||||||
Retained earnings | 7,525,653 | 7,032,020 | ||||||
Treasury—common stock shares, at cost: 150,681,543 at September 29, 2019 and 150,172,840 at December 31, 2018 | (6,938,744 | ) | (6,618,625 | ) | ||||
Accumulated other comprehensive loss | (324,141 | ) | (356,780 | ) | ||||
Total—The Hershey Company stockholders’ equity | 1,753,162 | 1,398,721 | ||||||
Noncontrolling interest in subsidiary | 8,429 | 8,545 | ||||||
Total stockholders’ equity | 1,761,591 | 1,407,266 | ||||||
Total liabilities and stockholders’ equity | $ | 8,464,260 | $ | 7,703,020 |
Six Months Ended | |||||||||||||||||
June 28, 2020 | June 30, 2019 | ||||||||||||||||
Operating Activities | |||||||||||||||||
Net income including noncontrolling interest | $ | 536,825 | $ | 617,152 | |||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 142,524 | 144,346 | |||||||||||||||
Stock-based compensation expense | 25,490 | 23,712 | |||||||||||||||
Deferred income taxes | 3,309 | 8,783 | |||||||||||||||
9,143 | 4,741 | ||||||||||||||||
Write-down of equity investments | 18,550 | 9,785 | |||||||||||||||
Other | 27,311 | 24,117 | |||||||||||||||
Changes in assets and liabilities, net of business acquisitions and divestitures: | |||||||||||||||||
Accounts receivable—trade, net | 11,794 | 55,399 | |||||||||||||||
Inventories | (194,396) | (173,074) | |||||||||||||||
Prepaid expenses and other current assets | 15,730 | 18,175 | |||||||||||||||
Accounts payable and accrued liabilities | (19,304) | (33,797) | |||||||||||||||
Accrued income taxes | 65,169 | (15,499) | |||||||||||||||
Contributions to pension and other benefit plans | (8,333) | (8,919) | |||||||||||||||
Other assets and liabilities | (19,765) | 4,407 | |||||||||||||||
Net cash provided by operating activities | 614,047 | 679,328 | |||||||||||||||
Investing Activities | |||||||||||||||||
Capital additions (including software) | (185,784) | (176,270) | |||||||||||||||
Equity investments in tax credit qualifying partnerships | (26,392) | (30,270) | |||||||||||||||
Other investing activities | 2,374 | 154 | |||||||||||||||
Net cash used in investing activities | (209,802) | (206,386) | |||||||||||||||
Financing Activities | |||||||||||||||||
Net increase (decrease) in short-term debt | 166,017 | (311,183) | |||||||||||||||
Long-term borrowings, net of debt issuance costs | 989,876 | 5,020 | |||||||||||||||
Repayment of long-term debt and finance leases | (352,104) | (4,054) | |||||||||||||||
Cash dividends paid | (314,279) | (295,483) | |||||||||||||||
Repurchase of common stock | (211,196) | (254,429) | |||||||||||||||
Exercise of stock options | 17,544 | 161,399 | |||||||||||||||
Net cash provided by (used in) financing activities | 295,858 | (698,730) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (17,351) | 3,753 | |||||||||||||||
Increase (decrease) in cash and cash equivalents, including cash classified as held for sale | 682,752 | (222,035) | |||||||||||||||
(10,683) | — | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 672,069 | (222,035) | |||||||||||||||
Cash and cash equivalents, beginning of period | 493,262 | 587,998 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 1,165,331 | $ | 365,963 | |||||||||||||
Supplemental Disclosure | |||||||||||||||||
Interest paid | $ | 74,944 | $ | 72,167 | |||||||||||||
Income taxes paid | 71,633 | 136,922 |
Nine Months Ended | |||||||
September 29, 2019 | September 30, 2018 | ||||||
Operating Activities | |||||||
Net income including noncontrolling interest | $ | 942,334 | $ | 839,451 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 218,841 | 225,803 | |||||
Stock-based compensation expense | 39,579 | 35,668 | |||||
Deferred income taxes | 6,451 | 1,343 | |||||
Impairment of long-lived assets (see Notes 6 and 8) | 4,741 | 28,817 | |||||
Write-down of equity investments | 18,564 | 23,067 | |||||
Other | 34,386 | 22,433 | |||||
Changes in assets and liabilities, net of business acquisitions and divestitures: | |||||||
Accounts receivable—trade, net | (240,457 | ) | (212,193 | ) | |||
Inventories | (174,514 | ) | (111,901 | ) | |||
Prepaid expenses and other current assets | (3,545 | ) | (59,182 | ) | |||
Accounts payable and accrued liabilities | 108,169 | (1,665 | ) | ||||
Accrued income taxes | 39,871 | 125,698 | |||||
Contributions to pension and other benefit plans | (13,859 | ) | (26,705 | ) | |||
Other assets and liabilities | 12,826 | 2,227 | |||||
Net cash provided by operating activities | 993,387 | 892,861 | |||||
Investing Activities | |||||||
Capital additions (including software) | (236,599 | ) | (241,214 | ) | |||
Proceeds from sales of property, plant and equipment and other long-lived assets | 228 | 46,652 | |||||
Proceeds from sales of businesses, net of cash and cash equivalents divested | — | 171,950 | |||||
Equity investments in tax credit qualifying partnerships | (52,658 | ) | (34,170 | ) | |||
Business acquisitions, net of cash and cash equivalents acquired | (401,461 | ) | (915,457 | ) | |||
Other investing activities | (7,151 | ) | — | ||||
Net cash used in investing activities | (697,641 | ) | (972,239 | ) | |||
Financing Activities | |||||||
Increase in short-term debt | 80,707 | 893,365 | |||||
Long-term borrowings | 5,116 | 1,199,891 | |||||
Repayment of long-term debt and finance leases | (4,895 | ) | (910,851 | ) | |||
Repayment of tax receivable obligation | — | (72,000 | ) | ||||
Cash dividends paid | (453,210 | ) | (415,178 | ) | |||
Repurchase of common stock | (445,870 | ) | (199,665 | ) | |||
Exercise of stock options | 235,328 | 33,454 | |||||
Net cash (used in) provided by financing activities | (582,824 | ) | 529,016 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,716 | (6,030 | ) | ||||
(Decrease) Increase in cash and cash equivalents | (285,362 | ) | 443,608 | ||||
Cash and cash equivalents, beginning of period | 587,998 | 380,179 | |||||
Cash and cash equivalents, end of period | $ | 302,636 | $ | 823,787 | |||
Supplemental Disclosure | |||||||
Interest paid | $ | 105,164 | $ | 99,886 | |||
Income taxes paid | 162,757 | 94,969 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, July 1, 2019 | $ | — | $ | 299,287 | $ | 60,614 | $ | 1,075,187 | $ | 7,358,277 | $ | (6,781,509 | ) | $ | (336,736 | ) | $ | 8,961 | $ | 1,684,081 | ||||||||||||||||
Net income (loss) | 325,307 | (125 | ) | 325,182 | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 12,595 | (407 | ) | 12,188 | ||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||
Common Stock, $0.773 per share | (115,380 | ) | (115,380 | ) | ||||||||||||||||||||||||||||||||
Class B Common Stock, $0.702 per share | (42,551 | ) | (42,551 | ) | ||||||||||||||||||||||||||||||||
Stock-based compensation | 15,583 | 15,583 | ||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | 39,723 | 34,206 | 73,929 | |||||||||||||||||||||||||||||||||
Repurchase of common stock | (191,441 | ) | (191,441 | ) | ||||||||||||||||||||||||||||||||
Balance, September 29, 2019 | $ | — | $ | 299,287 | $ | 60,614 | $ | 1,130,493 | $ | 7,525,653 | $ | (6,938,744 | ) | $ | (324,141 | ) | $ | 8,429 | $ | 1,761,591 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, July 2, 2018 | $ | — | $ | 299,281 | $ | 60,620 | $ | 940,046 | $ | 6,727,127 | $ | (6,609,312 | ) | $ | (367,818 | ) | $ | 13,873 | $ | 1,063,817 | ||||||||||||||||
Net income | 263,713 | 1,700 | 265,413 | |||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 31,864 | (1,203 | ) | 30,661 | ||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||
Common Stock, $0.722 per share | (108,016 | ) | (108,016 | ) | ||||||||||||||||||||||||||||||||
Class B Common Stock, $0.656 per share | (39,767 | ) | (39,767 | ) | ||||||||||||||||||||||||||||||||
Stock-based compensation | 11,932 | 11,932 | ||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | 5,781 | 19,451 | 25,232 | |||||||||||||||||||||||||||||||||
Balance, September 30, 2018 | $ | — | $ | 299,281 | $ | 60,620 | $ | 957,759 | $ | 6,843,057 | $ | (6,589,861 | ) | $ | (335,954 | ) | $ | 14,370 | $ | 1,249,272 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2018 | $ | — | $ | 299,287 | $ | 60,614 | $ | 982,205 | $ | 7,032,020 | $ | (6,618,625 | ) | $ | (356,780 | ) | $ | 8,545 | $ | 1,407,266 | ||||||||||||||||
Net income (loss) | 942,505 | (171 | ) | 942,334 | ||||||||||||||||||||||||||||||||
Other comprehensive income | 32,639 | 55 | 32,694 | |||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||
Common Stock, $2.217 per share | (330,709 | ) | (330,709 | ) | ||||||||||||||||||||||||||||||||
Class B Common Stock, $2.014 per share | (122,076 | ) | (122,076 | ) | ||||||||||||||||||||||||||||||||
Stock-based compensation | 38,711 | 38,711 | ||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | 109,577 | 125,751 | 235,328 | |||||||||||||||||||||||||||||||||
Repurchase of common stock | (445,870 | ) | (445,870 | ) | ||||||||||||||||||||||||||||||||
Impact of ASU 2016-02 related to leases | 3,913 | 3,913 | ||||||||||||||||||||||||||||||||||
Balance, September 29, 2019 | $ | — | $ | 299,287 | $ | 60,614 | $ | 1,130,493 | $ | 7,525,653 | $ | (6,938,744 | ) | $ | (324,141 | ) | $ | 8,429 | $ | 1,761,591 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 29, 2020 | — | 160,939 | 60,614 | 1,153,130 | 1,404,453 | (742,164) | (365,741) | 3,310 | 1,674,541 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 268,901 | (859) | 268,042 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | (1,452) | 33 | (1,419) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $0.773 per share | (114,260) | (114,260) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $0.702 per share | (42,551) | (42,551) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 12,612 | 12,612 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | (3,864) | 5,008 | 1,144 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (42,020) | (42,020) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 28, 2020 | $ | — | $ | 160,939 | $ | 60,614 | $ | 1,161,878 | $ | 1,516,543 | $ | (779,176) | $ | (367,193) | $ | 2,484 | $ | 1,756,089 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||
Balance, December 31, 2017 | $ | — | $ | 299,281 | $ | 60,620 | $ | 924,978 | $ | 6,371,082 | $ | (6,426,877 | ) | $ | (313,746 | ) | $ | 16,227 | $ | 931,565 | ||||||||||||||||
Net income (loss) | 840,771 | (1,320 | ) | 839,451 | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 25,448 | (537 | ) | 24,911 | ||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||
Common Stock, $2.034 per share | (304,426 | ) | (304,426 | ) | ||||||||||||||||||||||||||||||||
Class B Common Stock, $1.848 per share | (112,026 | ) | (112,026 | ) | ||||||||||||||||||||||||||||||||
Stock-based compensation | 36,008 | 36,008 | ||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | (3,227 | ) | 36,681 | 33,454 | ||||||||||||||||||||||||||||||||
Repurchase of common stock | (199,665 | ) | (199,665 | ) | ||||||||||||||||||||||||||||||||
Reclassification of tax effects relating to U.S. tax reform | 47,656 | (47,656 | ) | — | ||||||||||||||||||||||||||||||||
Balance, September 30, 2018 | $ | — | $ | 299,281 | $ | 60,620 | $ | 957,759 | $ | 6,843,057 | $ | (6,589,861 | ) | $ | (335,954 | ) | $ | 14,370 | $ | 1,249,272 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2019 | — | 299,287 | 60,614 | 996,181 | 7,193,240 | (6,786,065) | (348,520) | 8,623 | 1,423,360 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income | 312,840 | 431 | 313,271 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 11,784 | (93) | 11,691 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $0.722 per share | (108,041) | (108,041) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $0.656 per share | (39,762) | (39,762) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 12,665 | 12,665 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | 66,341 | 60,485 | 126,826 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (55,929) | (55,929) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | — | $ | 299,287 | $ | 60,614 | $ | 1,075,187 | $ | 7,358,277 | $ | (6,781,509) | $ | (336,736) | $ | 8,961 | $ | 1,684,081 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | — | 160,939 | 60,614 | 1,142,210 | 1,290,461 | (591,036) | (323,966) | 5,772 | 1,744,994 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 540,038 | (3,213) | 536,825 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | (43,227) | (75) | (43,302) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $1.546 per share | (228,854) | (228,854) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $1.404 per share | (85,102) | (85,102) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 25,180 | 25,180 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | (5,512) | 23,056 | 17,544 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (211,196) | (211,196) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 28, 2020 | $ | — | $ | 160,939 | $ | 60,614 | $ | 1,161,878 | $ | 1,516,543 | $ | (779,176) | $ | (367,193) | $ | 2,484 | $ | 1,756,089 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | — | 299,287 | 60,614 | 982,205 | 7,032,020 | (6,618,625) | (356,780) | 8,545 | 1,407,266 | |||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | 617,198 | (46) | 617,152 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 20,044 | 462 | 20,506 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $1.444 per share | (215,329) | (215,329) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $1.312 per share | (79,525) | (79,525) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 23,128 | 23,128 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | 69,854 | 91,545 | 161,399 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | (254,429) | (254,429) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of ASU 2016-02 related to leases | 3,913 | 3,913 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | — | $ | 299,287 | $ | 60,614 | $ | 1,075,187 | $ | 7,358,277 | $ | (6,781,509) | $ | (336,736) | $ | 8,961 | $ | 1,684,081 |
Initial Allocation (1) | Adjustments | Final Allocation | |||||||||||||||
Goodwill | $ | 179,240 | $ | 825 | $ | 180,065 | |||||||||||
Other intangible assets | 206,800 | — | 206,800 | ||||||||||||||
Other assets acquired, primarily current assets | 25,926 | (491) | 25,435 | ||||||||||||||
Other liabilities assumed, primarily current liabilities | (9,806) | (334) | (10,140) | ||||||||||||||
Net assets acquired | $ | 402,160 | $ | — | $ | 402,160 |
Goodwill | $ | 178,179 | |
Other intangible assets | 206,800 | ||
Other assets acquired, primarily current assets | 25,760 | ||
Other liabilities assumed, primarily current liabilities | (9,278 | ) | |
Net assets acquired | $ | 401,461 |
Inventories | $ | 4,663 | |
Property, plant and equipment, net | 48 | ||
Goodwill | 129,991 | ||
Other intangible assets | 289,300 | ||
Accrued liabilities | (1,000 | ) | |
Net assets acquired | $ | 423,002 |
Accounts receivable | $ | 40,763 | |
Other current assets | 34,593 | ||
Property, plant and equipment, net | 67,989 | ||
Goodwill | 966,389 | ||
Other intangible assets | 682,000 | ||
Other non-current assets | 1,049 | ||
Accounts payable | (32,394 | ) | |
Accrued liabilities | (132,519 | ) | |
Current debt | (610,844 | ) | |
Other current liabilities | (2,931 | ) | |
Non-current deferred income taxes | (93,489 | ) | |
Other long-term liabilities | (5,149 | ) | |
Net assets acquired | $ | 915,457 |
North America | International and Other | Total | ||||||||||||||||||
Balance at December 31, 2019 | $ | 1,967,466 | $ | 18,489 | $ | 1,985,955 | ||||||||||||||
825 | — | 825 | ||||||||||||||||||
Foreign currency translation | (5,496) | (2,282) | (7,778) | |||||||||||||||||
Balance at June 28, 2020 | $ | 1,962,795 | $ | 16,207 | $ | 1,979,002 |
North America | International and Other | Total | ||||||||||
Balance at December 31, 2018 | $ | 1,782,845 | $ | 18,258 | $ | 1,801,103 | ||||||
Acquired during the period (see Note 2) | 178,179 | — | 178,179 | |||||||||
Foreign currency translation | 3,186 | (106 | ) | 3,080 | ||||||||
Balance at September 29, 2019 | $ | 1,964,210 | $ | 18,152 | $ | 1,982,362 |
September 29, 2019 | December 31, 2018 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||
Trademarks | $ | 1,323,225 | $ | (87,329 | ) | $ | 1,173,770 | $ | (60,995 | ) | ||||||
Customer-related | 223,610 | (41,682 | ) | 163,860 | (33,516 | ) | ||||||||||
Patents | 16,545 | (16,273 | ) | 16,306 | (15,772 | ) | ||||||||||
Total | 1,563,380 | (145,284 | ) | 1,353,936 | (110,283 | ) | ||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||
Trademarks | 34,630 | 34,639 | ||||||||||||||
Total other intangible assets | $ | 1,452,726 | $ | 1,278,292 |
June 28, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||||||||||||||
Trademarks | $ | 1,207,594 | $ | (86,910) | $ | 1,212,172 | $ | (73,262) | ||||||||||||||||||||||||||||||
Customer-related | 202,371 | (42,670) | 207,749 | (40,544) | ||||||||||||||||||||||||||||||||||
Patents | 7,980 | (7,885) | 16,711 | (16,525) | ||||||||||||||||||||||||||||||||||
Total | 1,417,945 | (137,465) | 1,436,632 | (130,331) | ||||||||||||||||||||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||||||||||||||
Trademarks | 33,852 | 34,865 | ||||||||||||||||||||||||||||||||||||
Total other intangible assets | $ | 1,314,332 | $ | 1,341,166 |
June 28, 2020 | December 31, 2019 | ||||||||||
Short-term foreign bank borrowings against lines of credit | $ | 48,421 | $ | 32,282 | |||||||
U.S. commercial paper | 149,878 | — | |||||||||
Total short-term debt | $ | 198,299 | $ | 32,282 | |||||||
Weighted average interest rate on outstanding commercial paper | 0.4 | % | N/A |
September 29, 2019 | December 31, 2018 | |||||||
2.90% Notes due 2020 | $ | 350,000 | $ | 350,000 | ||||
4.125% Notes due 2020 | 350,000 | 350,000 | ||||||
3.10% Notes due 2021 | 350,000 | 350,000 | ||||||
8.8% Debentures due 2021 | 84,715 | 84,715 | ||||||
3.375% Notes due 2023 | 500,000 | 500,000 | ||||||
2.625% Notes due 2023 | 250,000 | 250,000 | ||||||
3.20% Notes due 2025 | 300,000 | 300,000 | ||||||
2.30% Notes due 2026 | 500,000 | 500,000 | ||||||
7.2% Debentures due 2027 | 193,639 | 193,639 | ||||||
3.375% Notes due 2046 | 300,000 | 300,000 | ||||||
Finance lease liabilities | 78,253 | 101,980 | ||||||
Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts | (11,357 | ) | (20,667 | ) | ||||
Total long-term debt | 3,245,250 | 3,259,667 | ||||||
Less—current portion | 352,954 | 5,387 | ||||||
Long-term portion | $ | 2,892,296 | $ | 3,254,280 |
Debt Type and Rate | Maturity Date | June 28, 2020 | December 31, 2019 | |||||||||||||||||
2.900% Notes (1) | May 15, 2020 | $ | — | $ | 350,000 | |||||||||||||||
4.125% Notes | December 1, 2020 | 350,000 | 350,000 | |||||||||||||||||
8.800% Debentures | February 15, 2021 | 84,715 | 84,715 | |||||||||||||||||
3.100% Notes | May 15, 2021 | 350,000 | 350,000 | |||||||||||||||||
2.625% Notes | May 1, 2023 | 250,000 | 250,000 | |||||||||||||||||
3.375% Notes | May 15, 2023 | 500,000 | 500,000 | |||||||||||||||||
2.050% Notes | November 15, 2024 | 300,000 | 300,000 | |||||||||||||||||
0.900% Notes (2) | June 1, 2025 | 300,000 | — | |||||||||||||||||
3.200% Notes | August 21, 2025 | 300,000 | 300,000 | |||||||||||||||||
2.300% Notes | August 15, 2026 | 500,000 | 500,000 | |||||||||||||||||
7.200% Debentures | August 15, 2027 | 193,639 | 193,639 | |||||||||||||||||
2.450% Notes | November 15, 2029 | 300,000 | 300,000 | |||||||||||||||||
1.700% Notes (2) | June 1, 2030 | 350,000 | — | |||||||||||||||||
3.375% Notes | August 15, 2046 | 300,000 | 300,000 | |||||||||||||||||
3.125% Notes | November 15, 2049 | 400,000 | 400,000 | |||||||||||||||||
2.650% Notes (2) | June 1, 2050 | 350,000 | — | |||||||||||||||||
80,447 | 79,643 | |||||||||||||||||||
Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts | (29,142) | (23,794) | ||||||||||||||||||
Total long-term debt | 4,879,659 | 4,234,203 | ||||||||||||||||||
Less—current portion | 788,448 | 703,390 | ||||||||||||||||||
Long-term portion | $ | 4,091,211 | $ | 3,530,813 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Interest expense | $ | 40,520 | $ | 39,192 | $ | 79,776 | $ | 79,855 | ||||||||||||||||||||||||||||||
Capitalized interest | (1,664) | (1,391) | (3,081) | (2,648) | ||||||||||||||||||||||||||||||||||
Interest expense | 38,856 | 37,801 | 76,695 | 77,207 | ||||||||||||||||||||||||||||||||||
Interest income | (777) | (4,025) | (2,361) | (5,973) | ||||||||||||||||||||||||||||||||||
Interest expense, net | $ | 38,079 | $ | 33,776 | $ | 74,334 | $ | 71,234 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Interest expense | $ | 37,845 | $ | 39,978 | $ | 117,700 | $ | 110,929 | ||||||||
Capitalized interest | (1,510 | ) | (1,243 | ) | (4,158 | ) | (3,876 | ) | ||||||||
Interest expense | 36,335 | 38,735 | 113,542 | 107,053 | ||||||||||||
Interest income | (879 | ) | (1,819 | ) | (6,852 | ) | (5,846 | ) | ||||||||
Interest expense, net | $ | 35,456 | $ | 36,916 | $ | 106,690 | $ | 101,207 |
June 28, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||||
Assets (1) | Liabilities (1) | Assets (1) | Liabilities (1) | |||||||||||||||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | 4,492 | $ | 370 | $ | 1,235 | $ | 1,779 | ||||||||||||||||||||||||||||||
Derivatives designated as fair value hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Interest rate swap agreements | 2,829 | — | 555 | — | ||||||||||||||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||||||||||||||
Commodities futures and options (2) | — | 23,840 | 9,080 | 626 | ||||||||||||||||||||||||||||||||||
Deferred compensation derivatives | 4,626 | — | 2,557 | — | ||||||||||||||||||||||||||||||||||
Foreign exchange contracts | — | 2,111 | 1,496 | — | ||||||||||||||||||||||||||||||||||
4,626 | 25,951 | 13,133 | 626 | |||||||||||||||||||||||||||||||||||
Total | $ | 11,947 | $ | 26,321 | $ | 14,923 | $ | 2,405 |
September 29, 2019 | December 31, 2018 | |||||||||||||||
Assets (1) | Liabilities (1) | Assets (1) | Liabilities (1) | |||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||
Foreign exchange contracts | $ | 700 | $ | 1,001 | $ | 3,394 | $ | 485 | ||||||||
Derivatives designated as fair value hedging instruments: | ||||||||||||||||
Interest rate swap agreements | 4,243 | — | — | 4,832 | ||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||
Commodities futures and options (2) | — | 4,220 | 7,230 | 262 | ||||||||||||
Deferred compensation derivatives | 165 | — | — | 4,736 | ||||||||||||
Foreign exchange contracts | 11 | 928 | 70 | 484 | ||||||||||||
176 | 5,148 | 7,300 | 5,482 | |||||||||||||
Total | $ | 5,119 | $ | 6,149 | $ | 10,694 | $ | 10,799 |
Non-designated Hedges | Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) | Gains (losses) reclassified from accumulated OCI into income (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodities futures and options | $ | 2,624 | $ | 55,531 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | (554) | (526) | 675 | (2,547) | 1,138 | 975 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap agreements | — | — | — | — | (2,343) | (2,370) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation derivatives | 4,626 | (2,070) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 6,696 | $ | 52,935 | $ | 675 | $ | (2,547) | $ | (1,205) | $ | (1,395) |
Non-designated Hedges | Cash Flow Hedges | |||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) | Gains (losses) reclassified from accumulated OCI into income (b) | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Commodities futures and options | $ | (9,043 | ) | $ | (71,088 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||
Foreign exchange contracts | (1,224 | ) | 1,595 | 1,045 | (1,484 | ) | (987 | ) | 4,605 | |||||||||||||||
Interest rate swap agreements | — | — | — | — | (2,344 | ) | (2,344 | ) | ||||||||||||||||
Deferred compensation derivatives | 165 | 1,345 | — | — | — | — | ||||||||||||||||||
Total | $ | (10,102 | ) | $ | (68,148 | ) | $ | 1,045 | $ | (1,484 | ) | $ | (3,331 | ) | $ | 2,261 |
Non-designated Hedges | Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in OCI | Gains (losses) reclassified from accumulated OCI into income (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodities futures and options | $ | (74,468) | $ | 28,890 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts | (3,876) | (311) | 6,056 | (3,336) | 1,390 | 1,906 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap agreements | — | — | — | — | (4,687) | (4,739) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred compensation derivatives | (1,133) | 973 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | (79,477) | $ | 29,552 | $ | 6,056 | $ | (3,336) | $ | (3,297) | $ | (2,833) |
Non-designated Hedges | Cash Flow Hedges | |||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) | Gains (losses) reclassified from accumulated OCI into income (b) | ||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Commodities futures and options | $ | 19,847 | $ | (4,315 | ) | $ | — | $ | — | $ | — | $ | — | |||||||||||
Foreign exchange contracts | (1,535 | ) | 1,580 | (2,291 | ) | 6,320 | 919 | 4,648 | ||||||||||||||||
Interest rate swap agreements | — | — | — | — | (7,083 | ) | (7,110 | ) | ||||||||||||||||
Deferred compensation derivatives | 4,181 | 2,151 | — | — | — | — | ||||||||||||||||||
Total | $ | 22,493 | $ | (584 | ) | $ | (2,291 | ) | $ | 6,320 | $ | (6,164 | ) | $ | (2,462 | ) |
Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included | Carrying Amount of the Hedged Asset/(Liability) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) | ||||||||||||||
September 29, 2019 | December 31, 2018 | September 29, 2019 | December 31, 2018 | |||||||||||||
Long-term debt | $ | (345,757 | ) | $ | (354,832 | ) | $ | 4,243 | $ | (4,832 | ) |
Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included | Carrying Amount of the Hedged Asset/(Liability) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) | ||||||||||||||||||||||||||||||||||||
June 28, 2020 | December 31, 2019 | June 28, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||
Long-term debt | $ | (347,171) | $ | (349,445) | $ | 2,829 | $ | 555 |
Level 1 – Based on unadjusted quoted prices for identical assets or liabilities in an active market. | ||
Level 2 – Based on observable market-based inputs or unobservable inputs that are corroborated by market data. | ||
Level 3 – Based on unobservable inputs that reflect the entity's own assumptions about the assumptions that a market participant would use in pricing the asset or liability. |
Assets (Liabilities) | ||||||||||||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||||||||||||||
June 28, 2020: | ||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments: | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts (1) | $ | — | $ | 4,492 | $ | — | $ | 4,492 | ||||||||||||||||||||||||||||||||||||
Interest rate swap agreements (2) | — | 2,829 | — | 2,829 | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation derivatives (3) | — | 4,626 | — | 4,626 | ||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts (1) | — | 2,481 | — | 2,481 | ||||||||||||||||||||||||||||||||||||||||
Commodities futures and options (4) | 23,840 | — | — | 23,840 | ||||||||||||||||||||||||||||||||||||||||
December 31, 2019: | ||||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts (1) | $ | — | $ | 2,731 | $ | — | $ | 2,731 | ||||||||||||||||||||||||||||||||||||
Interest rate swap agreements (2) | — | 555 | — | 555 | ||||||||||||||||||||||||||||||||||||||||
Deferred compensation derivatives (3) | — | 2,557 | — | 2,557 | ||||||||||||||||||||||||||||||||||||||||
Commodities futures and options (4) | 9,080 | — | — | 9,080 | ||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
Foreign exchange contracts (1) | — | 1,779 | — | 1,779 | ||||||||||||||||||||||||||||||||||||||||
Commodities futures and options (4) | 626 | — | — | 626 |
Assets (Liabilities) | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
September 29, 2019: | ||||||||||||||||
Derivative Instruments: | ||||||||||||||||
Assets: | ||||||||||||||||
Foreign exchange contracts (1) | $ | — | $ | 711 | $ | — | $ | 711 | ||||||||
Interest rate swap agreements (2) | — | 4,243 | — | 4,243 | ||||||||||||
Deferred compensation derivatives (3) | — | 165 | — | 165 | ||||||||||||
Commodities futures and options (4) | — | — | — | — | ||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts (1) | — | 1,929 | — | 1,929 | ||||||||||||
Commodities futures and options (4) | 4,220 | — | — | 4,220 | ||||||||||||
December 31, 2018: | ||||||||||||||||
Assets: | ||||||||||||||||
Foreign exchange contracts (1) | $ | — | $ | 3,464 | $ | — | $ | 3,464 | ||||||||
Commodities futures and options (4) | 7,230 | — | — | 7,230 | ||||||||||||
Liabilities: | ||||||||||||||||
Foreign exchange contracts (1) | — | 969 | — | 969 | ||||||||||||
Interest rate swap agreements (2) | — | 4,832 | — | 4,832 | ||||||||||||
Deferred compensation derivatives (3) | — | 4,736 | — | 4,736 | ||||||||||||
Commodities futures and options (4) | 262 | — | — | 262 |
Fair Value | Carrying Value | |||||||||||||||
September 29, 2019 | December 31, 2018 | September 29, 2019 | December 31, 2018 | |||||||||||||
Current portion of long-term debt | $ | 354,661 | $ | 5,387 | $ | 352,954 | $ | 5,387 | ||||||||
Long-term debt | 3,041,644 | 3,228,877 | 2,892,296 | 3,254,280 | ||||||||||||
Total | $ | 3,396,305 | $ | 3,234,264 | $ | 3,245,250 | $ | 3,259,667 |
Fair Value | Carrying Value | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | December 31, 2019 | June 28, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||
Current portion of long-term debt | $ | 806,276 | $ | 712,863 | $ | 788,448 | $ | 703,390 | ||||||||||||||||||||||||||||||
Long-term debt | 4,402,998 | 3,656,540 | 4,091,211 | 3,530,813 | ||||||||||||||||||||||||||||||||||
Total | $ | 5,209,274 | $ | 4,369,403 | $ | 4,879,659 | $ | 4,234,203 |
2020 | ||||||||
Adjustment to disposal group (1) | $ | 6,200 | ||||||
Other asset write-down (2) | 2,943 | |||||||
Long-lived asset impairment charges | $ | 9,143 |
Three Months Ended | ||||||||||||||||||||||||||
Lease expense | Classification | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||
Operating lease cost | Cost of sales or SM&A (1) | $ | 10,673 | $ | 10,273 | |||||||||||||||||||||
Finance lease cost: | ||||||||||||||||||||||||||
Amortization of ROU assets | Depreciation and amortization (1) | 1,949 | 1,884 | |||||||||||||||||||||||
Interest on lease liabilities | Interest expense, net | 1,112 | 1,112 | |||||||||||||||||||||||
Net lease cost (2) | $ | 13,734 | $ | 13,269 |
Three Months Ended | Nine Months Ended | |||||||||
Lease expense | Classification | September 29, 2019 | September 29, 2019 | |||||||
Operating lease cost | Cost of sales or SM&A (1) | $ | 10,623 | $ | 31,110 | |||||
Finance lease cost: | ||||||||||
Amortization of ROU assets | Depreciation and amortization (1) | 1,799 | 5,617 | |||||||
Interest on lease liabilities | Interest expense, net | 1,106 | 3,319 | |||||||
Net lease cost (2) | $ | 13,528 | $ | 40,046 |
Six Months Ended | ||||||||||||||||||||||||||
Lease expense | Classification | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||
Operating lease cost | Cost of sales or SM&A (1) | $ | 21,217 | $ | 20,487 | |||||||||||||||||||||
Finance lease cost: | ||||||||||||||||||||||||||
Amortization of ROU assets | Depreciation and amortization (1) | 3,979 | 3,818 | |||||||||||||||||||||||
Interest on lease liabilities | Interest expense, net | 2,234 | 2,213 | |||||||||||||||||||||||
Net lease cost (2) | $ | 27,430 | $ | 26,518 |
June 28, 2020 | December 31, 2019 | |||||||||||||
Weighted-average remaining lease term (years) | ||||||||||||||
Operating leases | 13.2 | 14.3 | ||||||||||||
Finance leases | 30.3 | 31.4 | ||||||||||||
Weighted-average discount rate | ||||||||||||||
Operating leases | 3.9 | % | 3.8 | % | ||||||||||
Finance leases | 5.9 | % | 6.0 | % |
Leases | Classification | June 28, 2020 | December 31, 2019 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating lease ROU assets | Other assets (non-current) | $ | 222,854 | $ | 220,678 | |||||||||||||||
Finance lease ROU assets, at cost | Property, plant and equipment, gross | 100,841 | 101,142 | |||||||||||||||||
Accumulated amortization | Accumulated depreciation | (6,570) | (7,225) | |||||||||||||||||
Finance lease ROU assets, net | Property, plant and equipment, net | 94,271 | 93,917 | |||||||||||||||||
Total leased assets | $ | 317,125 | $ | 314,595 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Current | ||||||||||||||||||||
Operating | Accrued liabilities | $ | 31,234 | $ | 29,209 | |||||||||||||||
Finance | Current portion of long-term debt | 4,575 | 4,079 | |||||||||||||||||
Non-current | ||||||||||||||||||||
Operating | Other long-term liabilities | 184,626 | 184,163 | |||||||||||||||||
Finance | Long-term debt | 75,872 | 75,564 | |||||||||||||||||
Total lease liabilities | $ | 296,307 | $ | 293,015 |
Leases | Classification | September 29, 2019 | ||||
Assets | ||||||
Operating lease ROU assets | Other assets (non-current) | $ | 225,959 | |||
Finance lease ROU assets, at cost | Property, plant and equipment, gross | 99,614 | ||||
Accumulated amortization | Accumulated depreciation | (5,188 | ) | |||
Finance lease ROU assets, net | Property, plant and equipment, net | $ | 94,426 | |||
Total leased assets | $ | 320,385 | ||||
Liabilities | ||||||
Current | ||||||
Operating | Accrued liabilities | $ | 28,967 | |||
Finance | Current portion of long-term debt | 3,566 | ||||
Non-current | ||||||
Operating | Other long-term liabilities | 188,961 | ||||
Finance | Long-term debt | 74,687 | ||||
Total lease liabilities | $ | 296,181 |
Operating leases | Finance leases | Total | |||||||||||||||
2020 (rest of year) | $ | 19,802 | $ | 4,260 | $ | 24,062 | |||||||||||
2021 | 37,074 | 7,925 | 44,999 | ||||||||||||||
2022 | 23,244 | 6,307 | 29,551 | ||||||||||||||
2023 | 15,446 | 4,620 | 20,066 | ||||||||||||||
2024 | 14,118 | 4,579 | 18,697 | ||||||||||||||
Thereafter | 172,979 | 165,115 | 338,094 | ||||||||||||||
Total lease payments | 282,663 | 192,806 | 475,469 | ||||||||||||||
Less: Imputed interest | 66,803 | 112,359 | 179,162 | ||||||||||||||
Total lease liabilities | $ | 215,860 | $ | 80,447 | $ | 296,307 |
Operating leases | Finance leases | Total | |||||||||
2019 (rest of year) | $ | 9,939 | $ | 1,943 | $ | 11,882 | |||||
2020 | 34,895 | 6,970 | 41,865 | ||||||||
2021 | 29,143 | 5,741 | 34,884 | ||||||||
2022 | 15,758 | 4,632 | 20,390 | ||||||||
2023 | 13,789 | 4,602 | 18,391 | ||||||||
Thereafter | 185,805 | 170,041 | 355,846 | ||||||||
Total lease payments | 289,329 | 193,929 | 483,258 | ||||||||
Less: Imputed interest | 71,401 | 115,676 | 187,077 | ||||||||
Total lease liabilities | $ | 217,928 | $ | 78,253 | $ | 296,181 |
Nine Months Ended | ||||
September 29, 2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | $ | 29,054 | ||
Operating cash flows from finance leases | 3,319 | |||
Financing cash flows from finance leases | 2,761 | |||
ROU assets obtained in exchange for lease liabilities: | ||||
Operating leases | 21,998 | |||
Finance leases | 3,498 |
Six Months Ended | ||||||||||||||||||||
June 28, 2020 | June 30, 2019 | |||||||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
Operating cash flows from operating leases | 21,335 | 19,142 | ||||||||||||||||||
Operating cash flows from finance leases | 2,234 | 2,213 | ||||||||||||||||||
Financing cash flows from finance leases | 2,105 | 1,920 | ||||||||||||||||||
ROU assets obtained in exchange for lease liabilities: | ||||||||||||||||||||
Operating leases | 20,814 | 21,838 | ||||||||||||||||||
Finance leases | 2,076 | 3,498 |
Assets held for sale, included in prepaid expenses and other assets | ||||
Property, plant and equipment, net | $ | 20,905 | ||
Other assets | 2,434 | |||
$ | 23,339 | |||
Liabilities held for sale, included in accrued liabilities | ||||
Accounts payable and accrued liabilities | $ | 376 | ||
$ | 376 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Selling, marketing and administrative expense | $ | 2,645 | $ | 238 | $ | 2,645 | $ | 660 | ||||||||||||||||||||||||||||||
Business realignment (benefits) costs | (1,370) | 6,140 | (475) | 6,202 | ||||||||||||||||||||||||||||||||||
Costs associated with business realignment activities | $ | 1,275 | $ | 6,378 | $ | 2,170 | $ | 6,862 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Margin for Growth Program: | ||||||||||||||||||||||||||||||||||||||
Severance | $ | (1,410) | $ | 5,823 | $ | (653) | $ | 5,823 | ||||||||||||||||||||||||||||||
Other program costs | 2,685 | 555 | 2,823 | 1,039 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,275 | $ | 6,378 | $ | 2,170 | $ | 6,862 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Cost of sales | $ | — | $ | 4,565 | $ | — | $ | 14,101 | ||||||||
Selling, marketing and administrative expense | 466 | 5,198 | 1,126 | 17,705 | ||||||||||||
Business realignment costs | 1,140 | 1,660 | 7,342 | 10,864 | ||||||||||||
Costs associated with business realignment activities | $ | 1,606 | $ | 11,423 | $ | 8,468 | $ | 42,670 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Margin for Growth Program: | ||||||||||||||||
Severance | $ | — | $ | 5,573 | $ | 5,823 | $ | 12,635 | ||||||||
Accelerated depreciation | — | 4,786 | — | 12,030 | ||||||||||||
Other program costs | 1,606 | 6,549 | 2,645 | 21,754 | ||||||||||||
Operational Optimization Program: | ||||||||||||||||
Gain on sale of facilities | — | (6,562 | ) | — | (6,562 | ) | ||||||||||
Other program costs | — | 1,077 | — | 2,813 | ||||||||||||
Total | $ | 1,606 | $ | 11,423 | $ | 8,468 | $ | 42,670 |
Total | |||
Liability balance at December 31, 2018 | $ | 14,605 | |
2019 business realignment charges (1) | 8,468 | ||
Cash payments | (12,012 | ) | |
Liability balance at September 30, 2019 (reported within accrued liabilities) | $ | 11,061 |
Total | |||||
Liability balance at December 31, 2019 | $ | 9,118 | |||
2020 business realignment charges (1) | 2,170 | ||||
Cash payments | (8,192) | ||||
3,096 |
Pension Benefits | Other Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Service cost | $ | 5,209 | $ | 5,272 | $ | 39 | $ | 56 | ||||||||
Interest cost | 9,153 | 7,487 | 1,958 | 1,730 | ||||||||||||
Expected return on plan assets | (13,494 | ) | (14,455 | ) | — | — | ||||||||||
Amortization of prior service (credit) cost | (1,808 | ) | (1,804 | ) | 203 | 209 | ||||||||||
Amortization of net loss (gain) | 8,421 | 6,784 | (96 | ) | — | |||||||||||
Settlement loss | 4,817 | 6,893 | — | — | ||||||||||||
Total net periodic benefit cost | $ | 12,298 | $ | 10,177 | $ | 2,104 | $ | 1,995 |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Service cost | $ | 5,411 | $ | 5,210 | $ | 41 | $ | 37 | ||||||||||||||||||||||||||||||
Interest cost | 6,966 | 9,150 | 1,505 | 1,959 | ||||||||||||||||||||||||||||||||||
Expected return on plan assets | (13,142) | (13,493) | — | — | ||||||||||||||||||||||||||||||||||
Amortization of prior service (credit) cost | (1,824) | (1,808) | 75 | 203 | ||||||||||||||||||||||||||||||||||
Amortization of net loss (gain) | 6,582 | 8,421 | (10) | (96) | ||||||||||||||||||||||||||||||||||
Settlement loss | 3,653 | — | — | — | ||||||||||||||||||||||||||||||||||
Total net periodic benefit cost | $ | 7,646 | $ | 7,480 | $ | 1,611 | $ | 2,103 |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Service cost | $ | 10,843 | $ | 10,417 | $ | 80 | $ | 75 | ||||||||||||||||||||||||||||||
Interest cost | 13,956 | 18,306 | 3,012 | 3,918 | ||||||||||||||||||||||||||||||||||
Expected return on plan assets | (26,310) | (26,989) | — | — | ||||||||||||||||||||||||||||||||||
Amortization of prior service (credit) cost | (3,651) | (3,617) | 150 | 406 | ||||||||||||||||||||||||||||||||||
Amortization of net loss (gain) | 13,164 | 16,841 | (19) | (192) | ||||||||||||||||||||||||||||||||||
Settlement loss | 3,653 | — | — | — | ||||||||||||||||||||||||||||||||||
Total net periodic benefit cost | $ | 11,655 | $ | 14,958 | $ | 3,223 | $ | 4,207 |
Pension Benefits | Other Benefits | |||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Service cost | $ | 15,626 | $ | 15,931 | $ | 114 | $ | 172 | ||||||||
Interest cost | 27,459 | 23,153 | 5,876 | 5,194 | ||||||||||||
Expected return on plan assets | (40,483 | ) | (43,973 | ) | — | — | ||||||||||
Amortization of prior service (credit) cost | (5,425 | ) | (5,402 | ) | 609 | 627 | ||||||||||
Amortization of net loss (gain) | 25,262 | 20,155 | (288 | ) | — | |||||||||||
Settlement loss | 4,817 | 6,893 | — | — | ||||||||||||
Total net periodic benefit cost | $ | 27,256 | $ | 16,757 | $ | 6,311 | $ | 5,993 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Pre-tax compensation expense | $ | 15,867 | $ | 12,122 | $ | 39,579 | $ | 35,668 | ||||||||
Related income tax benefit | 5,317 | 2,808 | 7,639 | 7,776 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Pre-tax compensation expense | $ | 12,915 | $ | 13,156 | $ | 25,490 | $ | 23,712 | ||||||||||||||||||||||||||||||
Related income tax benefit | 2,492 | 2,160 | 4,894 | 4,482 |
Stock Options | Shares | Weighted-Average Exercise Price (per share) | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | |||
Outstanding at beginning of year | 5,394,382 | $94.28 | 5.6 years | ||||
Granted | 1,640 | $109.74 | |||||
Exercised | (2,774,973 | ) | $90.78 | ||||
Forfeited | (67,876 | ) | $101.58 | ||||
Outstanding as of September 29, 2019 | 2,553,173 | $97.89 | 6.0 years | $ | 142,704 | ||
Options exercisable as of September 29, 2019 | 1,492,037 | $95.65 | 4.7 years | $ | 86,731 |
Nine Months Ended | ||||||
September 29, 2019 | September 30, 2018 | |||||
Dividend yields | 2.7 | % | 2.3 | % | ||
Expected volatility | 17.0 | % | 16.6 | % | ||
Risk-free interest rates | 2.5 | % | 2.8 | % | ||
Expected term in years | 6.5 | 6.6 |
Stock Options | Shares | Weighted-Average Exercise Price (per share) | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Outstanding at beginning of the period | 2,420,461 | $97.80 | 5.7 years | |||||||||||
Granted | 15,260 | $157.32 | ||||||||||||
Exercised | (406,121) | $93.17 | ||||||||||||
Forfeited | (39,181) | $102.36 | ||||||||||||
Outstanding as of June 28, 2020 | 1,990,419 | $99.11 | 5.3 years | $ | 53,705 | |||||||||
Options exercisable as of June 28, 2020 | 1,533,325 | $97.56 | 4.6 years | $ | 43,378 |
Six Months Ended | ||||||||||||||||||||
June 28, 2020 | June 30, 2019 | |||||||||||||||||||
Dividend yields | 2.1 | % | 2.7 | % | ||||||||||||||||
Expected volatility | 17.5 | % | 17.0 | % | ||||||||||||||||
Risk-free interest rates | 1.3 | % | 2.5 | % | ||||||||||||||||
Expected term in years | 6.7 | 6.5 |
Performance Stock Units and Restricted Stock Units | Number of units | Weighted-average grant date fair value for equity awards (per unit) | ||||||||||||
Outstanding at beginning of year | 1,089,916 | $112.52 | ||||||||||||
Granted | 326,283 | $163.30 | ||||||||||||
Performance assumption change (1) | (13,443) | $110.27 | ||||||||||||
Vested | (276,924) | $109.32 | ||||||||||||
Forfeited | (106,304) | $119.00 | ||||||||||||
Outstanding as of June 28, 2020 | 1,019,528 | $131.88 |
Performance Stock Units and Restricted Stock Units | Number of units | Weighted-average grant date fair value for equity awards (per unit) | |||
Outstanding at beginning of year | 999,018 | $101.57 | |||
Granted | 478,145 | $115.29 | |||
Performance assumption change (1) | 182,774 | $125.20 | |||
Vested | (428,229 | ) | $98.85 | ||
Forfeited | (74,453 | ) | $107.98 | ||
Outstanding as of September 29, 2019 | 1,157,255 | $112.06 |
Six Months Ended | ||||||||||||||||||||
June 28, 2020 | June 30, 2019 | |||||||||||||||||||
Units granted | 326,283 | 442,672 | ||||||||||||||||||
Weighted-average fair value at date of grant | $ | 163.30 | $ | 113.71 | ||||||||||||||||
Monte Carlo simulation assumptions: | ||||||||||||||||||||
Estimated values | $ | 80.08 | $ | 48.40 | ||||||||||||||||
Dividend yields | 2.0 | % | 2.6 | % | ||||||||||||||||
Expected volatility | 17.3 | % | 20.3 | % |
Nine Months Ended | ||||||||
September 29, 2019 | September 30, 2018 | |||||||
Units granted | 478,145 | 435,096 | ||||||
Weighted-average fair value at date of grant | $ | 115.29 | $ | 97.74 | ||||
Monte Carlo simulation assumptions: | ||||||||
Estimated values | $ | 48.40 | $ | 29.17 | ||||
Dividend yields | 2.6 | % | 2.6 | % | ||||
Expected volatility | 20.3 | % | 20.4 | % |
•North America - This segment is responsible for our traditional chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. •International and Other - International and Other is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Net sales: | ||||||||||||||||
North America | $ | 1,894,033 | $ | 1,843,511 | $ | 5,269,031 | $ | 5,155,151 | ||||||||
International and Other | 240,389 | 236,082 | 649,096 | 648,016 | ||||||||||||
Total | $ | 2,134,422 | $ | 2,079,593 | $ | 5,918,127 | $ | 5,803,167 | ||||||||
Segment income: | ||||||||||||||||
North America | $ | 570,388 | $ | 556,060 | $ | 1,606,047 | $ | 1,534,345 | ||||||||
International and Other | 39,444 | 31,072 | 81,631 | 65,379 | ||||||||||||
Total segment income | 609,832 | 587,132 | 1,687,678 | 1,599,724 | ||||||||||||
Unallocated corporate expense (1) | 132,828 | 116,474 | 370,211 | 361,447 | ||||||||||||
Unallocated mark-to-market losses (gains) on commodity derivatives | 12,138 | 47,617 | (13,447 | ) | (69,464 | ) | ||||||||||
Long-lived asset impairment charges (see Note 6) | — | 1,649 | 4,741 | 28,817 | ||||||||||||
Costs associated with business realignment activities (see Note 9) | 1,606 | 11,423 | 8,468 | 42,670 | ||||||||||||
Acquisition-related costs | 2,445 | 3,706 | 7,951 | 36,413 | ||||||||||||
Gain on sale of licensing rights | — | — | — | (2,658 | ) | |||||||||||
Operating profit | 460,815 | 406,263 | 1,309,754 | 1,202,499 | ||||||||||||
Interest expense, net | 35,456 | 36,916 | 106,690 | 101,207 | ||||||||||||
Other (income) expense, net | 17,999 | 12,493 | 36,601 | 35,201 | ||||||||||||
Income before income taxes | $ | 407,360 | $ | 356,854 | $ | 1,166,463 | $ | 1,066,091 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 1,583,787 | $ | 1,568,040 | $ | 3,428,608 | $ | 3,374,998 | ||||||||||||||||||||||||||||||
International and Other | 123,542 | 199,177 | 316,038 | 408,707 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,707,329 | $ | 1,767,217 | $ | 3,744,646 | $ | 3,783,705 | ||||||||||||||||||||||||||||||
Segment income (loss): | ||||||||||||||||||||||||||||||||||||||
North America | $ | 497,587 | $ | 470,898 | $ | 1,079,142 | $ | 1,035,659 | ||||||||||||||||||||||||||||||
International and Other | (3,969) | 21,944 | 12,035 | 42,187 | ||||||||||||||||||||||||||||||||||
Total segment income | 493,618 | 492,842 | 1,091,177 | 1,077,846 | ||||||||||||||||||||||||||||||||||
Unallocated corporate expense (1) | 106,883 | 125,205 | 231,450 | 242,889 | ||||||||||||||||||||||||||||||||||
Unallocated mark-to-market losses (gains) on commodity derivatives | 487 | (53,552) | 82,241 | (25,585) | ||||||||||||||||||||||||||||||||||
1,600 | 4,741 | 9,143 | 4,741 | |||||||||||||||||||||||||||||||||||
1,275 | 6,378 | 2,170 | 6,862 | |||||||||||||||||||||||||||||||||||
Operating profit | 383,373 | 410,070 | 766,173 | 848,939 | ||||||||||||||||||||||||||||||||||
38,079 | 33,776 | 74,334 | 71,234 | |||||||||||||||||||||||||||||||||||
11,217 | 13,125 | 22,750 | 18,602 | |||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 334,077 | $ | 363,169 | $ | 669,089 | $ | 759,103 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in income | $ | 9,043 | $ | 71,088 | $ | (19,847 | ) | $ | 4,315 | |||||||
Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income | 3,095 | (23,471 | ) | 6,400 | (73,779 | ) | ||||||||||
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses | $ | 12,138 | $ | 47,617 | $ | (13,447 | ) | $ | (69,464 | ) |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income | $ | (2,624) | $ | (55,531) | $ | 74,468 | $ | (28,890) | ||||||||||||||||||||||||||||||
Net gains on commodity derivative positions reclassified from unallocated to segment income | 3,111 | 1,979 | 7,773 | 3,305 | ||||||||||||||||||||||||||||||||||
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains) | $ | 487 | $ | (53,552) | $ | 82,241 | $ | (25,585) |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
North America | $ | 54,379 | $ | 55,137 | $ | 108,081 | $ | 109,082 | ||||||||||||||||||||||||||||||
International and Other | 7,037 | 7,314 | 14,246 | 14,664 | ||||||||||||||||||||||||||||||||||
Corporate | 10,484 | 9,566 | 20,197 | 20,600 | ||||||||||||||||||||||||||||||||||
Total | $ | 71,900 | $ | 72,017 | $ | 142,524 | $ | 144,346 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||
North America | $ | 56,895 | $ | 52,066 | $ | 165,977 | $ | 152,237 | |||||||
International and Other | 7,202 | 7,260 | 21,866 | 28,090 | |||||||||||
Corporate (1) | 10,398 | 15,481 | 30,998 | 45,476 | |||||||||||
Total | $ | 74,495 | $ | 74,807 | $ | 218,841 | $ | 225,803 |
Nine Months Ended September 29, 2019 | ||||||
Shares | Dollars | |||||
In thousands | ||||||
Shares repurchased in the open market under pre-approved share repurchase programs | 1,386,193 | $ | 150,000 | |||
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 2,144,638 | 295,870 | ||||
Total share repurchases | 3,530,831 | 445,870 | ||||
Shares issued for stock options and incentive compensation | (3,022,128 | ) | (125,751 | ) | ||
Net change | 508,703 | $ | 320,119 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||||||||||||
United States | $ | 1,504,266 | $ | 1,493,283 | $ | 3,271,542 | $ | 3,221,543 | ||||||||||||||||||||||||||||||
All other countries | 203,063 | 273,934 | 473,104 | 562,162 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,707,329 | $ | 1,767,217 | $ | 3,744,646 | $ | 3,783,705 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||||||||||||
Confectionery and confectionery-based portfolio | $ | 1,592,181 | $ | 1,663,225 | $ | 3,500,415 | $ | 3,587,155 | ||||||||||||||||||||||||||||||
Snacks portfolio | 115,148 | 103,992 | 244,231 | 196,550 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,707,329 | $ | 1,767,217 | $ | 3,744,646 | $ | 3,783,705 |
Six Months Ended June 28, 2020 | |||||||||||||||||
Shares | Dollars | ||||||||||||||||
In thousands | |||||||||||||||||
Shares repurchased in the open market under pre-approved share repurchase programs | 951,138 | $ | 150,000 | ||||||||||||||
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 450,000 | 61,196 | |||||||||||||||
Total share repurchases | 1,401,138 | 211,196 | |||||||||||||||
Shares issued for stock options and incentive compensation | (554,074) | (23,056) | |||||||||||||||
Net change | 847,064 | $ | 188,140 |
Noncontrolling Interest | |||||
Balance, December 31, 2019 | $ | 5,772 | |||
Net loss attributable to noncontrolling interest | (3,213) | ||||
Other comprehensive loss - foreign currency translation adjustments | (75) | ||||
Balance, June 28, 2020 | $ | 2,484 |
Noncontrolling Interest | |||
Balance, December 31, 2018 | $ | 8,545 | |
Net loss attributable to noncontrolling interest | (171 | ) | |
Other comprehensive income - foreign currency translation adjustments | 55 | ||
Balance, September 29, 2019 | $ | 8,429 |
Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic earnings per share: | Basic earnings per share: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numerator: | Numerator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of distributed earnings (cash dividends paid) | $ | 115,176 | $ | 42,551 | $ | 107,532 | $ | 39,767 | Allocation of distributed earnings (cash dividends paid) | $ | 113,925 | $ | 42,551 | $ | 109,258 | $ | 39,762 | |||||||||||||||||||||||||||||||||||||||||||
Allocation of undistributed earnings | 122,424 | 45,156 | 85,019 | 31,395 | Allocation of undistributed earnings | 81,891 | 30,534 | 119,616 | 44,204 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total earnings—basic | $ | 237,600 | $ | 87,707 | $ | 192,551 | $ | 71,162 | Total earnings—basic | $ | 195,816 | $ | 73,085 | $ | 228,874 | $ | 83,966 | |||||||||||||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | Denominator (shares in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—basic | 149,239 | 60,614 | 149,155 | 60,620 | Total weighted-average shares—basic | 147,635 | 60,614 | 149,025 | 60,614 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share—basic | $ | 1.59 | $ | 1.45 | $ | 1.29 | $ | 1.17 | Earnings Per Share—basic | $ | 1.33 | $ | 1.21 | $ | 1.54 | $ | 1.39 | |||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per share: | Diluted earnings per share: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Numerator: | Numerator: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocation of total earnings used in basic computation | $ | 237,600 | $ | 87,707 | $ | 192,551 | $ | 71,162 | Allocation of total earnings used in basic computation | $ | 195,816 | $ | 73,085 | $ | 228,874 | $ | 83,966 | |||||||||||||||||||||||||||||||||||||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 87,707 | — | 71,162 | — | Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 73,085 | — | 83,966 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Reallocation of undistributed earnings | — | (320 | ) | — | (139 | ) | Reallocation of undistributed earnings | — | (123) | — | (254) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total earnings—diluted | $ | 325,307 | $ | 87,387 | $ | 263,713 | $ | 71,023 | Total earnings—diluted | $ | 268,901 | $ | 72,962 | $ | 312,840 | $ | 83,712 | |||||||||||||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | Denominator (shares in thousands): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of shares used in basic computation | 149,239 | 60,614 | 149,155 | 60,620 | Number of shares used in basic computation | 147,635 | 60,614 | 149,025 | 60,614 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted-average effect of dilutive securities: | Weighted-average effect of dilutive securities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B common stock to Common shares outstanding | 60,614 | — | 60,620 | — | Conversion of Class B common stock to Common shares outstanding | 60,614 | — | 60,614 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Employee stock options | 949 | — | 589 | — | Employee stock options | 521 | — | 817 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Performance and restricted stock units | 510 | — | 317 | — | Performance and restricted stock units | 300 | — | 361 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—diluted | 211,312 | 60,614 | 210,681 | 60,620 | Total weighted-average shares—diluted | 209,070 | 60,614 | 210,817 | 60,614 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share—diluted | $ | 1.54 | $ | 1.44 | $ | 1.25 | $ | 1.17 | Earnings Per Share—diluted | $ | 1.29 | $ | 1.20 | $ | 1.48 | $ | 1.38 |
Nine Months Ended | ||||||||||||||||
September 29, 2019 | September 30, 2018 | |||||||||||||||
Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | |||||||||||||
Basic earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of distributed earnings (cash dividends paid) | $ | 331,134 | $ | 122,076 | $ | 303,152 | $ | 112,026 | ||||||||
Allocation of undistributed earnings | 357,259 | 132,036 | 310,942 | 114,651 | ||||||||||||
Total earnings—basic | $ | 688,393 | $ | 254,112 | $ | 614,094 | $ | 226,677 | ||||||||
Denominator (shares in thousands): | ||||||||||||||||
Total weighted-average shares—basic | 148,989 | 60,614 | 149,371 | 60,620 | ||||||||||||
Earnings Per Share—basic | $ | 4.62 | $ | 4.19 | $ | 4.11 | $ | 3.74 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of total earnings used in basic computation | $ | 688,393 | $ | 254,112 | $ | 614,094 | $ | 226,677 | ||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 254,112 | — | 226,677 | — | ||||||||||||
Reallocation of undistributed earnings | — | (781 | ) | — | (547 | ) | ||||||||||
Total earnings—diluted | $ | 942,505 | $ | 253,331 | $ | 840,771 | $ | 226,130 | ||||||||
Denominator (shares in thousands): | ||||||||||||||||
Number of shares used in basic computation | 148,989 | 60,614 | 149,371 | 60,620 | ||||||||||||
Weighted-average effect of dilutive securities: | ||||||||||||||||
Conversion of Class B common stock to Common shares outstanding | 60,614 | — | 60,620 | — | ||||||||||||
Employee stock options | 783 | — | 664 | — | ||||||||||||
Performance and restricted stock units | 431 | — | 315 | — | ||||||||||||
Total weighted-average shares—diluted | 210,817 | 60,614 | 210,970 | 60,620 | ||||||||||||
Earnings Per Share—diluted | $ | 4.47 | $ | 4.18 | $ | 3.99 | $ | 3.73 |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||
Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | |||||||||||||||||||||||||||||||||||||||||
Basic earnings per share: | ||||||||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||||||||
Allocation of distributed earnings (cash dividends paid) | $ | 229,177 | $ | 85,102 | $ | 215,958 | $ | 79,525 | ||||||||||||||||||||||||||||||||||||
Allocation of undistributed earnings | 164,541 | 61,218 | 234,836 | 86,879 | ||||||||||||||||||||||||||||||||||||||||
Total earnings—basic | $ | 393,718 | $ | 146,320 | $ | 450,794 | $ | 166,404 | ||||||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | ||||||||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—basic | 147,954 | 60,614 | 148,864 | 60,614 | ||||||||||||||||||||||||||||||||||||||||
Earnings Per Share—basic | $ | 2.66 | $ | 2.41 | $ | 3.03 | $ | 2.75 | ||||||||||||||||||||||||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||||||||
Allocation of total earnings used in basic computation | $ | 393,718 | $ | 146,320 | $ | 450,794 | $ | 166,404 | ||||||||||||||||||||||||||||||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 146,320 | — | 166,404 | — | ||||||||||||||||||||||||||||||||||||||||
Reallocation of undistributed earnings | — | (309) | — | (462) | ||||||||||||||||||||||||||||||||||||||||
Total earnings—diluted | $ | 540,038 | $ | 146,011 | $ | 617,198 | $ | 165,942 | ||||||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | ||||||||||||||||||||||||||||||||||||||||||||
Number of shares used in basic computation | 147,954 | 60,614 | 148,864 | 60,614 | ||||||||||||||||||||||||||||||||||||||||
Weighted-average effect of dilutive securities: | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of Class B common stock to Common shares outstanding | 60,614 | — | 60,614 | — | ||||||||||||||||||||||||||||||||||||||||
Employee stock options | 620 | — | 699 | — | ||||||||||||||||||||||||||||||||||||||||
Performance and restricted stock units | 408 | — | 391 | — | ||||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—diluted | 209,596 | 60,614 | 210,568 | 60,614 | ||||||||||||||||||||||||||||||||||||||||
Earnings Per Share—diluted | $ | 2.58 | $ | 2.41 | $ | 2.93 | $ | 2.74 |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
Write-down of equity investments in partnerships qualifying for tax credits | $ | 8,779 | $ | 3,303 | $ | 18,564 | $ | 23,067 | ||||||||
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans | 9,154 | 6,843 | 17,827 | 6,647 | ||||||||||||
Other (income) expense, net | 66 | 2,347 | 210 | 5,487 | ||||||||||||
Total | $ | 17,999 | $ | 12,493 | $ | 36,601 | $ | 35,201 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | ||||||||||||||||||||||||||||||||
$ | 7,447 | $ | 8,633 | $ | 18,550 | $ | 9,785 | ||||||||||||||||||||||||||||
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans (see Note 11) | 3,806 | 4,336 | 3,955 | 8,673 | |||||||||||||||||||||||||||||||
Other (income) expense, net | (36) | 156 | 245 | 144 | |||||||||||||||||||||||||||||||
Total | $ | 11,217 | $ | 13,125 | $ | 22,750 | $ | 18,602 |
June 28, 2020 | December 31, 2019 | |||||||||||||
Inventories: | ||||||||||||||
Raw materials | $ | 347,999 | $ | 271,125 | ||||||||||
Goods in process | 132,235 | 98,842 | ||||||||||||
Finished goods | 694,351 | 614,698 | ||||||||||||
Inventories at FIFO | 1,174,585 | 984,665 | ||||||||||||
Adjustment to LIFO | (175,205) | (169,414) | ||||||||||||
Total inventories | $ | 999,380 | $ | 815,251 | ||||||||||
Prepaid expenses and other: | ||||||||||||||
Prepaid expenses | $ | 40,816 | $ | 84,058 | ||||||||||
Other current assets | 157,019 | 156,022 | ||||||||||||
Total prepaid expenses and other | $ | 197,835 | $ | 240,080 | ||||||||||
Property, plant and equipment: | ||||||||||||||
Land | $ | 106,745 | $ | 105,627 | ||||||||||
Buildings | 1,300,667 | 1,298,985 | ||||||||||||
Machinery and equipment | 3,143,217 | 3,120,003 | ||||||||||||
Construction in progress | 254,041 | 209,788 | ||||||||||||
Property, plant and equipment, gross | 4,804,670 | 4,734,403 | ||||||||||||
Accumulated depreciation | (2,639,324) | (2,581,264) | ||||||||||||
Property, plant and equipment, net | $ | 2,165,346 | $ | 2,153,139 | ||||||||||
Other assets: | ||||||||||||||
Capitalized software, net | $ | 168,187 | $ | 153,842 | ||||||||||
Operating lease ROU assets | 222,854 | 220,678 | ||||||||||||
Other non-current assets | 133,646 | 137,480 | ||||||||||||
Total other assets | $ | 524,687 | $ | 512,000 | ||||||||||
Accrued liabilities: | ||||||||||||||
Payroll, compensation and benefits | $ | 160,864 | $ | 230,518 | ||||||||||
Advertising, promotion and product allowances | 272,984 | 279,440 | ||||||||||||
Operating lease liabilities | 31,234 | 29,209 | ||||||||||||
Other | 178,856 | 163,205 | ||||||||||||
Total accrued liabilities | $ | 643,938 | $ | 702,372 | ||||||||||
Other long-term liabilities: | ||||||||||||||
Post-retirement benefits liabilities | $ | 206,382 | $ | 211,206 | ||||||||||
Pension benefits liabilities | 60,579 | 58,773 | ||||||||||||
Operating lease liabilities | 184,626 | 184,163 | ||||||||||||
Other | 192,260 | 201,635 | ||||||||||||
Total other long-term liabilities | $ | 643,847 | $ | 655,777 | ||||||||||
Accumulated other comprehensive loss: | ||||||||||||||
Foreign currency translation adjustments | $ | (131,922) | $ | (83,704) | ||||||||||
Pension and post-retirement benefit plans, net of tax | (191,352) | (189,187) | ||||||||||||
Cash flow hedges, net of tax | (43,919) | (51,075) | ||||||||||||
Total accumulated other comprehensive loss | $ | (367,193) | $ | (323,966) |
September 29, 2019 | December 31, 2018 | |||||||
Inventories: | ||||||||
Raw materials | $ | 280,865 | $ | 237,086 | ||||
Goods in process | 121,335 | 107,139 | ||||||
Finished goods | 738,798 | 618,798 | ||||||
Inventories at FIFO | 1,140,998 | 963,023 | ||||||
Adjustment to LIFO | (171,927 | ) | (178,144 | ) | ||||
Total inventories | $ | 969,071 | $ | 784,879 | ||||
Prepaid expenses and other: | ||||||||
Prepaid expenses | $ | 62,964 | $ | 68,490 | ||||
Assets held for sale | 23,339 | 23,421 | ||||||
Other current assets | 167,827 | 180,248 | ||||||
Total prepaid expenses and other | $ | 254,130 | $ | 272,159 | ||||
Property, plant and equipment: | ||||||||
Land | $ | 104,266 | $ | 102,074 | ||||
Buildings | 1,256,046 | 1,211,011 | ||||||
Machinery and equipment | 3,094,087 | 2,988,027 | ||||||
Construction in progress | 197,899 | 280,559 | ||||||
Property, plant and equipment, gross | 4,652,298 | 4,581,671 | ||||||
Accumulated depreciation | (2,552,313 | ) | (2,451,377 | ) | ||||
Property, plant and equipment, net | $ | 2,099,985 | $ | 2,130,294 | ||||
Other assets: | ||||||||
Capitalized software, net | $ | 143,890 | $ | 126,379 | ||||
Operating lease ROU assets | 225,959 | — | ||||||
Other non-current assets | 154,474 | 126,605 | ||||||
Total other assets | $ | 524,323 | $ | 252,984 | ||||
Accrued liabilities: | ||||||||
Payroll, compensation and benefits | $ | 178,678 | $ | 180,546 | ||||
Advertising, promotion and product allowances | 321,826 | 286,028 | ||||||
Operating lease liabilities | 28,967 | — | ||||||
Liabilities held for sale | 376 | 596 | ||||||
Other | 196,497 | 211,993 | ||||||
Total accrued liabilities | $ | 726,344 | $ | 679,163 | ||||
Other long-term liabilities: | ||||||||
Post-retirement benefits liabilities | $ | 189,712 | $ | 195,166 | ||||
Pension benefits liabilities | 61,702 | 66,379 | ||||||
Operating lease liabilities | 188,961 | — | ||||||
Other | 187,467 | 184,503 | ||||||
Total other long-term liabilities | $ | 627,842 | $ | 446,048 | ||||
Accumulated other comprehensive loss: | ||||||||
Foreign currency translation adjustments | $ | (93,258 | ) | $ | (96,678 | ) | ||
Pension and post-retirement benefit plans, net of tax | (179,034 | ) | (205,230 | ) | ||||
Cash flow hedges, net of tax | (51,849 | ) | (54,872 | ) | ||||
Total accumulated other comprehensive loss | $ | (324,141 | ) | $ | (356,780 | ) |
Three Months Ended | Percent | Nine Months Ended | Percent | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | Change | September 29, 2019 | September 30, 2018 | Change | June 28, 2020 | June 30, 2019 | Percent Change | June 28, 2020 | June 30, 2019 | Percent Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In millions of dollars except per share amounts | In millions of dollars except per share amounts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | $ | 2,134.4 | $ | 2,079.6 | 2.6 | % | $ | 5,918.1 | $ | 5,803.2 | 2.0 | % | Net Sales | $ | 1,707.3 | $ | 1,767.2 | (3.4) | % | $ | 3,744.6 | $ | 3,783.7 | (1.0) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of Sales | 1,191.1 | 1,216.1 | (2.1 | )% | 3,207.6 | 3,172.2 | 1.1 | % | Cost of Sales | 914.8 | 892.5 | 2.5 | % | 2,085.5 | 2,016.5 | 3.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Profit | 943.3 | 863.5 | 9.2 | % | 2,710.5 | 2,631.0 | 3.0 | % | Gross Profit | 792.5 | 874.7 | (9.4) | % | 1,659.1 | 1,767.2 | (6.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross Margin | 44.2 | % | 41.5 | % | 45.8 | % | 45.3 | % | Gross Margin | 46.4 | % | 49.5 | % | 44.3 | % | 46.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SM&A Expense | 481.4 | 453.9 | 6.0 | % | 1,388.7 | 1,388.8 | — | % | SM&A Expense | 408.9 | 453.8 | (9.9) | % | 884.3 | 907.4 | (2.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SM&A Expense as a percent of net sales | 22.6 | % | 21.8 | % | 23.5 | % | 23.9 | % | SM&A Expense as a percent of net sales | 24.0 | % | 25.7 | % | 23.6 | % | 24.0 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Lived Asset Impairment Charges | — | 1.6 | NM | 4.7 | 28.8 | (83.5 | )% | Long-Lived Asset Impairment Charges | 1.6 | 4.7 | (66.3) | % | 9.1 | 4.7 | 92.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Realignment Costs | 1.1 | 1.7 | (31.3 | )% | 7.3 | 10.9 | (32.4 | )% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Realignment (Benefits) Costs | Business Realignment (Benefits) Costs | (1.4) | 6.1 | (122.3) | % | (0.5) | 6.2 | (107.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Profit | 460.8 | 406.3 | 13.4 | % | 1,309.8 | 1,202.5 | 8.9 | % | Operating Profit | 383.4 | 410.1 | (6.5) | % | 766.2 | 848.9 | (9.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Profit Margin | 21.6 | % | 19.5 | % | 22.1 | % | 20.7 | % | Operating Profit Margin | 22.5 | % | 23.2 | % | 20.5 | % | 22.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense, Net | 35.5 | 37.0 | (4.0 | )% | 106.7 | 101.2 | 5.4 | % | Interest Expense, Net | 38.1 | 33.8 | 12.7 | % | 74.3 | 71.2 | 4.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (Income) Expense, Net | 18.0 | 12.5 | 44.1 | % | 36.6 | 35.2 | 4.0 | % | Other (Income) Expense, Net | 11.2 | 13.1 | (14.5) | % | 22.8 | 18.6 | 22.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | 82.1 | 91.4 | (10.1 | )% | 224.2 | 226.6 | (1.1 | )% | Provision for Income Taxes | 66.1 | 50.0 | 32.3 | % | 132.3 | 141.9 | (6.8) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Income Tax Rate | 20.2 | % | 25.6 | % | 19.2 | % | 21.3 | % | Effective Income Tax Rate | 19.8 | % | 13.7 | % | 19.8 | % | 18.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Including Noncontrolling Interest | 325.2 | 265.4 | 22.5 | % | 942.3 | 839.5 | 12.3 | % | Net Income Including Noncontrolling Interest | 268.0 | 313.2 | (14.4) | % | 536.8 | 617.2 | (13.0) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: Net (Loss) Income Attributable to Noncontrolling Interest | (0.1 | ) | 1.7 | (107.4 | )% | (0.2 | ) | (1.3 | ) | (87.0 | )% | Less: Net (Loss) Income Attributable to Noncontrolling Interest | (0.9) | 0.4 | (299.3) | % | (3.2) | — | NM | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to The Hershey Company | $ | 325.3 | $ | 263.7 | 23.4 | % | $ | 942.5 | $ | 840.8 | 12.1 | % | Net Income Attributable to The Hershey Company | $ | 268.9 | $ | 312.8 | (14.0) | % | $ | 540.0 | $ | 617.2 | (12.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share—Diluted | $ | 1.54 | $ | 1.25 | 23.2 | % | $ | 4.47 | $ | 3.99 | 12.0 | % | Net Income Per Share—Diluted | $ | 1.29 | $ | 1.48 | (12.8) | % | $ | 2.58 | $ | 2.93 | (11.9) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note: Percentage changes may not compute directly as shown due to rounding of amounts presented above. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NM = not meaningful. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. | NOTE: Percentage changes may not compute directly as shown due to rounding of amounts presented above. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NM = not meaningful | NM = not meaningful |
In millions of dollars | ||||||||
Adjustment to disposal group (1) | $ | 6.2 | ||||||
Other asset write-down (2) | 2.9 | |||||||
Long-lived asset impairment charges | $ | 9.1 |
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
June 28, 2020 | June 30, 2019 | June 28, 2020 | June 30, 2019 | |||||||||||||||||||||||||||||||||||
In millions of dollars | ||||||||||||||||||||||||||||||||||||||
Net Sales: | ||||||||||||||||||||||||||||||||||||||
North America | $ | 1,583.8 | $ | 1,568.0 | $ | 3,428.6 | $ | 3,375.0 | ||||||||||||||||||||||||||||||
International and Other | 123.5 | 199.2 | 316.0 | 408.7 | ||||||||||||||||||||||||||||||||||
Total | $ | 1,707.3 | $ | 1,767.2 | $ | 3,744.6 | $ | 3,783.7 | ||||||||||||||||||||||||||||||
Segment Income (Loss): | ||||||||||||||||||||||||||||||||||||||
North America | $ | 497.6 | $ | 470.9 | $ | 1,079.1 | $ | 1,035.7 | ||||||||||||||||||||||||||||||
International and Other | (4.0) | 21.9 | 12.0 | 42.2 | ||||||||||||||||||||||||||||||||||
Total segment income | 493.6 | 492.8 | 1,091.1 | 1,077.9 | ||||||||||||||||||||||||||||||||||
Unallocated corporate expense (1) | 106.9 | 125.2 | 231.4 | 242.9 | ||||||||||||||||||||||||||||||||||
Unallocated mark-to-market losses (gains) on commodity derivatives (2) | 0.5 | (53.6) | 82.2 | (25.6) | ||||||||||||||||||||||||||||||||||
Long-lived asset impairment charges | 1.6 | 4.7 | 9.1 | 4.7 | ||||||||||||||||||||||||||||||||||
Costs associated with business realignment activities | 1.3 | 6.4 | 2.2 | 6.9 | ||||||||||||||||||||||||||||||||||
Operating profit | 383.3 | 410.1 | 766.2 | 849.0 | ||||||||||||||||||||||||||||||||||
Interest expense, net | 38.1 | 33.8 | 74.3 | 71.2 | ||||||||||||||||||||||||||||||||||
Other (income) expense, net | 11.2 | 13.1 | 22.8 | 18.6 | ||||||||||||||||||||||||||||||||||
Income before income taxes | $ | 334.0 | $ | 363.2 | $ | 669.1 | $ | 759.2 |
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||||
In millions of dollars | |||||||||||||||||
Net Sales: | |||||||||||||||||
North America | $ | 1,894.0 | $ | 1,843.5 | $ | 5,269.0 | $ | 5,155.2 | |||||||||
International and Other | 240.4 | 236.1 | 649.1 | 648.0 | |||||||||||||
Total | $ | 2,134.4 | $ | 2,079.6 | $ | 5,918.1 | $ | 5,803.2 | |||||||||
Segment Income: | |||||||||||||||||
North America | $ | 570.4 | $ | 556.1 | $ | 1,606.0 | $ | 1,534.3 | |||||||||
International and Other | 39.4 | 31.1 | 81.6 | 65.4 | |||||||||||||
Total segment income | 609.8 | 587.2 | 1,687.6 | 1,599.7 | |||||||||||||
Unallocated corporate expense (1) | 132.8 | 116.5 | 370.2 | 361.4 | |||||||||||||
Unallocated mark-to-market losses (gains) on commodity derivatives (2) | 12.1 | 47.6 | (13.4 | ) | (69.5 | ) | |||||||||||
Long-lived asset impairment charges | — | 1.6 | 4.7 | 28.8 | |||||||||||||
Costs associated with business realignment activities | 1.6 | 11.4 | 8.4 | 42.7 | |||||||||||||
Acquisition-related costs | 2.4 | 3.7 | 7.9 | 36.5 | |||||||||||||
Gain on sale of licensing rights | — | — | — | (2.7 | ) | ||||||||||||
Operating profit | 460.9 | 406.4 | 1,309.8 | 1,202.5 | |||||||||||||
Interest expense, net | 35.5 | 37.0 | 106.7 | 101.2 | |||||||||||||
Other (income) expense, net | 18.0 | 12.5 | 36.6 | 35.2 | |||||||||||||
Income before income taxes | $ | 407.4 | $ | 356.9 | $ | 1,166.5 | $ | 1,066.1 |
Three Months Ended | Percent | Nine Months Ended | Percent | Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | Change | September 29, 2019 | September 30, 2018 | Change | June 28, 2020 | June 30, 2019 | Change | June 28, 2020 | June 30, 2019 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In millions of dollars | In millions of dollars | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 1,894.0 | $ | 1,843.5 | 2.7 | % | $ | 5,269.0 | $ | 5,155.2 | 2.2 | % | Net sales | $ | 1,583.8 | $ | 1,568.0 | 1.0 | % | $ | 3,428.6 | $ | 3,375.0 | 1.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Segment income | 570.4 | 556.1 | 2.6 | % | 1,606.0 | 1,534.3 | 4.7 | % | Segment income | 497.6 | 470.9 | 5.7 | % | 1,079.1 | 1,035.7 | 4.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment margin | 30.1 | % | 30.2 | % | 30.5 | % | 29.8 | % | Segment margin | 31.4 | % | 30.0 | % | 31.5 | % | 30.7 | % |
Three Months Ended | Percent | Nine Months Ended | Percent | Three Months Ended | Percent | Six Months Ended | Percent | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | Change | September 29, 2019 | September 30, 2018 | Change | June 28, 2020 | June 30, 2019 | Change | June 28, 2020 | June 30, 2019 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In millions of dollars | In millions of dollars | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 240.4 | $ | 236.1 | 1.8 | % | $ | 649.1 | $ | 648.0 | 0.2 | % | Net sales | $ | 123.5 | $ | 199.2 | (38.0) | % | $ | 316.0 | $ | 408.7 | (22.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||
Segment income | 39.4 | 31.1 | 26.7 | % | 81.6 | 65.4 | 24.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment (loss) income | Segment (loss) income | (4.0) | 21.9 | (118.3) | % | 12.0 | 42.2 | (71.6) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment margin | 16.4 | % | 13.2 | % | 12.6 | % | 10.1 | % | Segment margin | (3.2) | % | 11.0 | % | 3.8 | % | 10.3 | % |
Nine Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||||
In millions of dollars | September 29, 2019 | September 30, 2018 | In millions of dollars | June 28, 2020 | June 30, 2019 | ||||||||||||||||||||||||||||||||
Net cash provided by (used in): | Net cash provided by (used in): | ||||||||||||||||||||||||||||||||||||
Operating activities | $ | 993.3 | $ | 892.8 | Operating activities | $ | 614.0 | $ | 679.3 | ||||||||||||||||||||||||||||
Investing activities | (697.6 | ) | (972.2 | ) | Investing activities | (209.8) | (206.4) | ||||||||||||||||||||||||||||||
Financing activities | (582.8 | ) | 529.0 | Financing activities | 295.9 | (698.7) | |||||||||||||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1.7 | (6.0 | ) | Effect of exchange rate changes on cash and cash equivalents | (17.3) | 3.8 | |||||||||||||||||||||||||||||||
(Decrease) increase in cash and cash equivalents | $ | (285.4 | ) | $ | 443.6 | ||||||||||||||||||||||||||||||||
(10.7) | — | ||||||||||||||||||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | Increase (decrease) in cash and cash equivalents | $ | 672.1 | $ | (222.0) |
◦$43.6 million decrease in cash provided |
•Short-term borrowings, net. In addition to utilizing cash on hand, we use short-term borrowings (commercial paper and bank borrowings) to fund seasonal working capital requirements and ongoing business needs. During the first six months of 2020, we generated cash flow of $166.0 million predominantly through the issuance of short-term commercial paper, as well as an increase in short-term foreign bank borrowings. During the first six months of 2019, we had a net reduction in short-term borrowings of $311.2 million primarily due to repayments on commercial paper, partially offset by increases in short-term foreign borrowings. •Long-term debt borrowings and repayments. During the first six months of 2020, we issued $300 million of 0.900% Notes due in 2025, $350 million of 1.700% Notes due in 2030 and $350 million of 2.650% Notes due in 2050 (the "2020 Notes"). Proceeds from the issuance of the 2020 Notes, net of discounts and issuance costs, totaled $989.9 million. Additionally, in May 2020, we repaid $350 million of 2.900% Notes due upon their maturity. During the first six months of 2019, our long-term debt borrowings and repayments activity was minimal. •Dividend payments. Total dividend payments to holders of our Common Stock and Class B Common Stock were $314.3 million during the first six months of 2020, an increase of $18.8 million compared to $295.5 million in the same period of 2019. Details regarding our 2020 cash dividends paid to stockholders are as follows:
The Hershey Company | Q2 2020 Form 10-Q | Page 45 •Share repurchases. We used cash for total share repurchases of $211.2 million and $254.4 million during the first six months of 2020 and 2019, respectively, pursuant to our practice of replenishing shares issued for stock options and incentive compensation, as well as shares repurchased in the open market under pre-approved share repurchase programs. •Proceeds from the exercise of stock options, including tax benefits. We received $17.5 million from employee exercises of stock options, net of employee taxes withheld from share-based awards, during the first six months of 2020, a decrease of $143.9 million compared to $161.4 million in the same period of 2019. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||
(in thousands of dollars) | ||||||||||||||
July 1 through July 28 | 256,333 | $ | 139.28 | — | $ | 410,000 | ||||||||
July 29 through August 25 | 430,000 | $ | 154.03 | — | $ | 410,000 | ||||||||
August 26 through September 29 | 575,000 | $ | 155.66 | — | $ | 410,000 | ||||||||
Total | 1,261,333 | $ | 151.78 | — |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||||
(in thousands of dollars) | ||||||||||||||||||||||||||
March 30 through April 26 | 285,000 | $ | 140.15 | — | $ | 260,000 | ||||||||||||||||||||
April 27 through May 24 | 15,000 | $ | 138.38 | — | $ | 260,000 | ||||||||||||||||||||
May 25 through June 28 | — | $ | — | — | $ | 260,000 | ||||||||||||||||||||
Total | 300,000 | $ | 140.07 | — |
Exhibit Number | Description | |||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
104 | The cover page from the Company's Quarterly Report on Form 10-Q for the quarterly period ended | |||||||
* | Filed herewith | |||||||
** | Furnished herewith | |||||||
THE HERSHEY COMPANY | ||||||||||||||
(Registrant) | ||||||||||||||
Date: | July 23, 2020 | |||||||||||||
/s/ Steven E. Voskuil | ||||||||||||||
Steven E. Voskuil | ||||||||||||||
(Principal Financial | ||||||||||||||