Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||
Sep. 28, 2014 | Oct. 17, 2014 | Oct. 17, 2014 | |
Common Class A | Common Class B | ||
Document And Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'HERSHEY CO | ' | ' |
Entity Central Index Key | '0000047111 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 28-Sep-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q3 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Statement [Line Items] | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 160,249,732 | 60,619,777 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Net Sales | $1,961,578 | $1,853,886 | $5,411,741 | $5,189,826 |
Costs and Expenses | ' | ' | ' | ' |
Cost of sales | 1,101,441 | 998,335 | 2,962,640 | 2,766,364 |
Selling, marketing and administrative | 477,569 | 481,986 | 1,381,291 | 1,378,725 |
Business realignment and impairment charges, net | 16,372 | 2,929 | 20,544 | 13,367 |
Total costs and expenses | 1,595,382 | 1,483,250 | 4,364,475 | 4,158,456 |
Income before Interest and Income Taxes | 366,196 | 370,636 | 1,047,266 | 1,031,370 |
Interest expense, net | 20,773 | 21,759 | 62,792 | 66,486 |
Income before Income Taxes | 345,423 | 348,877 | 984,474 | 964,884 |
Provision for income taxes | 121,682 | 115,892 | 340,070 | 330,489 |
Net Income | $223,741 | $232,985 | $644,404 | $634,395 |
Common Stock | ' | ' | ' | ' |
Earnings Per Share | ' | ' | ' | ' |
Earnings Per Share - Basic | $1.03 | $1.07 | $2.97 | $2.91 |
Earnings Per Share - Diluted | $1 | $1.03 | $2.86 | $2.79 |
Cash Dividends Paid Per Share | ' | ' | ' | ' |
Common Stock | $0.54 | $0.49 | $1.50 | $1.32 |
Common Class B | ' | ' | ' | ' |
Earnings Per Share | ' | ' | ' | ' |
Earnings Per Share - Basic | $0.94 | $0.96 | $2.68 | $2.63 |
Earnings Per Share - Diluted | $0.94 | $0.95 | $2.67 | $2.61 |
Cash Dividends Paid Per Share | ' | ' | ' | ' |
Common Stock | $0.49 | $0.44 | $1.36 | $1.20 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Net Income | $223,741 | $232,985 | $644,404 | $634,395 |
Other comprehensive (Loss) Income, Net of Tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | -17,321 | 1,053 | -12,016 | -17,928 |
Pension and post-retirement benefit plans | 3,624 | 6,160 | 10,784 | 19,781 |
Cash flow hedges: | ' | ' | ' | ' |
(Losses) gains on cash flow hedging derivatives | -932 | 57,345 | 26,849 | 61,355 |
Reclassification adjustments | -15,544 | -2,687 | -35,566 | 3,081 |
Total Other Comprehensive (Loss) Income, Net of Tax | -30,173 | 61,871 | -9,949 | 66,289 |
Comprehensive Income | $193,568 | $294,856 | $634,455 | $700,684 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $477,088 | $1,118,508 |
Short-term investments | 98,309 | 0 |
Accounts receivable - trade, net | 786,366 | 477,912 |
Inventories | 900,743 | 659,541 |
Deferred income taxes | 56,871 | 52,511 |
Prepaid expenses and other | 213,195 | 178,862 |
Total current assets | 2,532,572 | 2,487,334 |
Property, plant and equipment, net | 2,078,713 | 1,805,345 |
Goodwill | 778,374 | 576,561 |
Other Intangibles | 331,647 | 195,244 |
Other Long-term Assets | 195,247 | 293,004 |
Total assets | 5,916,553 | 5,357,488 |
Liabilities | ' | ' |
Accounts payable | 522,787 | 461,514 |
Accrued liabilities | 737,788 | 699,722 |
Accrued income taxes | 31,568 | 79,911 |
Short-term debt | 649,195 | 165,961 |
Current portion of long-term debt | 250,881 | 914 |
Total current liabilities | 2,192,219 | 1,408,022 |
Long-term Debt | 1,559,770 | 1,795,142 |
Other Long-term Liabilities | 410,857 | 434,068 |
Deferred Income Taxes | 145,847 | 104,204 |
Total liabilities | 4,308,693 | 3,741,436 |
Stockholders' Equity | ' | ' |
Preferred Stock, shares issued: none at September 28, 2014 and December 31, 2013, respectively | 0 | 0 |
Common Stock, shares issued: 299,281,967 and 299,281,527 at September 28, 2014 and December 31, 2013, respectively | 299,281 | 299,281 |
Class B Common Stock, shares issued: 60,619,777 and 60,620,217 at September 28, 2014 and December 31, 2013, respectively | 60,620 | 60,620 |
Additional paid-in capital | 734,267 | 664,944 |
Retained earnings | 5,773,534 | 5,454,286 |
Treasury-Common Stock shares at cost: 138,987,173 and 136,007,023 at September 28, 2014 and December 31, 2013, respectively | -5,147,232 | -4,707,730 |
Accumulated other comprehensive loss | -176,516 | -166,567 |
The Hershey Company stockholders' equity | 1,543,954 | 1,604,834 |
Noncontrolling interests in subsidiaries | 63,906 | 11,218 |
Total stockholders' equity | 1,607,860 | 1,616,052 |
Total liabilities and stockholders' equity | $5,916,553 | $5,357,488 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Sep. 28, 2014 | Dec. 31, 2013 |
STOCKHOLDERS' EQUITY | ' | ' |
Treasury - Common Stock, shares at cost | 138,987,173 | 136,007,023 |
Preferred Stock | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Preferred Stock, shares issued | 0 | 0 |
Common Stock | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Common Stock, shares issued | 299,281,967 | 299,281,527 |
Common Class B | ' | ' |
STOCKHOLDERS' EQUITY | ' | ' |
Common Stock, shares issued | 60,619,777 | 60,620,217 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 |
Cash Flows Provided by Operating Activities | ' | ' |
Net Income | $644,404 | $634,395 |
Adjustments to Reconcile Net Income to Net Cash Flows | ' | ' |
Depreciation and amortization | 153,006 | 150,557 |
Stock-based compensation expense | 41,759 | 39,582 |
Excess tax benefits from stock-based compensation | -46,222 | -42,899 |
Deferred income taxes | -10,031 | -13,007 |
Noncash trademark impairment charge | 13,340 | 0 |
Contributions to pension and other benefit plans | -41,446 | -48,150 |
Changes in assets and liabilities, net of effects from business acquisitions | ' | ' |
Accounts receivable - trade | -217,114 | -198,357 |
Inventories | -165,205 | -132,773 |
Accounts payable and accrued liabilities | -23,053 | 75,989 |
Other assets and liabilities | 37,995 | 158,377 |
Net Cash Flows Provided by Operating Activities | 387,433 | 623,714 |
Cash Flows Used in Investing Activities | ' | ' |
Capital additions | -214,259 | -215,257 |
Capitalized software additions | -18,007 | -13,063 |
Proceeds from sales of property, plant and equipment | 655 | 15,149 |
Loan to affiliate | 0 | -16,000 |
Business acquisitions, net of cash and cash equivalents acquired | -362,447 | 0 |
Purchase of short-term investments | -98,309 | 0 |
Net Cash Flows Used in Investing Activities | -692,367 | -229,171 |
Cash Flows Used in Financing Activities | ' | ' |
Net increase (decrease) in short-term debt | 381,352 | -7,086 |
Long-term borrowings | 1,348 | 250,767 |
Repayment of long-term debt | -1,075 | -250,422 |
Cash dividends paid | -325,156 | -288,269 |
Exercise of stock options | 100,526 | 133,248 |
Excess tax benefits from stock-based compensation | 46,222 | 42,899 |
Contributions from noncontrolling interests | 2,940 | 2,940 |
Repurchase of common stock | -542,643 | -305,564 |
Net Cash Flows Used in Financing Activities | -336,486 | -421,487 |
Decrease in Cash and Cash Equivalents | -641,420 | -26,944 |
Cash and Cash Equivalents, beginning of period | 1,118,508 | 728,272 |
Cash and Cash Equivalents, end of period | 477,088 | 701,328 |
Interest Paid | 73,002 | 77,190 |
Income Taxes Paid | $278,775 | $240,305 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Subsidiaries | Total Stockholders' Equity |
In Thousands | ||||||||||
Balance at Dec. 31, 2013 | $1,616,052 | $0 | $299,281 | $60,620 | $664,944 | $5,454,286 | ($4,707,730) | ($166,567) | $11,218 | $1,616,052 |
Net income | 644,404 | ' | ' | ' | ' | 644,404 | ' | ' | ' | 644,404 |
Other comprehensive income | -9,949 | ' | ' | ' | ' | ' | ' | -9,949 | ' | -9,949 |
Common Stock, $1.505 per share | ' | ' | ' | ' | ' | -242,956 | ' | ' | ' | -242,956 |
Class B Common Stock, $1.356 per share | ' | ' | ' | ' | ' | -82,200 | ' | ' | ' | -82,200 |
Stock-based compensation | ' | ' | ' | ' | 40,845 | ' | ' | ' | ' | 40,845 |
Exercise of stock options and incentive-based transactions | ' | ' | ' | ' | 28,478 | ' | 103,141 | ' | ' | 131,619 |
Repurchase of Common Stock | 542,643 | ' | ' | ' | ' | ' | -542,643 | ' | ' | 542,643 |
Acquisition of Lotte Shanghai Food Company | ' | ' | ' | ' | ' | ' | ' | ' | 49,724 | 49,724 |
Earnings of and contributions from noncontrolling interests, net | ' | ' | ' | ' | ' | ' | ' | ' | 2,964 | 2,964 |
Balance at Sep. 28, 2014 | $1,607,860 | $0 | $299,281 | $60,620 | $734,267 | $5,773,534 | ($5,147,232) | ($176,516) | $63,906 | $1,607,860 |
CONSOLIDATED_STATEMENT_OF_STOC1
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Common Stock | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Cash Paid | $0.54 | $0.49 | $1.50 | $1.32 |
Common Class B | ' | ' | ' | ' |
Common Stock, Dividends, Per Share, Cash Paid | $0.49 | $0.44 | $1.36 | $1.20 |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 28, 2014 | |
Significant Accounting Policies [Abstract] | ' |
SIGNIFICANT ACCOUNTING POLICIES | ' |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The unaudited consolidated financial statements provided in this report include the accounts of The Hershey Company (the “Company,” “Hershey,” “we” or “us”) and our majority-owned subsidiaries and entities in which we have a controlling financial interest after the elimination of intercompany accounts and transactions. We have a controlling financial interest if we own a majority of the outstanding voting common stock and the noncontrolling shareholders do not have substantive participating rights, or we have significant control over an entity through contractual or economic interests in which we are the primary beneficiary. | |
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not contain certain information and disclosures required by GAAP for comprehensive financial statements. Our significant interim accounting policies include the recognition of a pro-rata share of certain estimated annual amounts primarily for raw material purchase price variances, advertising expense, incentive compensation expenses and the effective income tax rate. We have included all adjustments (consisting only of normal recurring accruals) that we believe are considered necessary for a fair presentation. | |
Operating results for the quarter ended September 28, 2014 may not be indicative of the results that may be expected for the year ending December 31, 2014 because of seasonal effects on our business. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013 (our “2013 Annual Report on Form 10-K”), which provides a more complete understanding of our accounting policies, financial position, operating results and other matters. | |
Short-Term Investments | |
Short-term investments consist of bank term deposits that have original maturity dates ranging from greater than three months to twelve months. Short-term investments are carried at cost, which approximates fair value. |
BUSINESS_ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended | |||||||
Sep. 28, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
BUSINESS ACQUISITIONS | ' | |||||||
BUSINESS ACQUISITIONS | ||||||||
Acquisitions of businesses are accounted for as purchases and, accordingly, their results of operations are included in the consolidated financial statements from the respective dates of the acquisitions. The purchase price for business acquisitions is allocated to the assets acquired and liabilities assumed. | ||||||||
Shanghai Golden Monkey | ||||||||
On September 26, 2014 (the “Initial Acquisition”), our wholly-owned subsidiary, Hershey Netherlands B.V., completed the acquisition of 80% of the total outstanding shares of Shanghai Golden Monkey Food Joint Stock Co., Ltd. (“SGM”) for cash consideration of $393,238, subject to working capital and net debt adjustments. SGM is a privately held confectionery company based in Shanghai, China operating through six production facilities located in China. The Golden Monkey product line is primarily sold in China's traditional trade channels. Annual net sales of the business are approximately $200 million. The business complements our position in China, and we expect to take advantage of Golden Monkey's distribution and manufacturing capabilities to expand sales of our Hershey products in the China marketplace. | ||||||||
Hershey Netherlands B.V. has contractually agreed to purchase the remaining 20% of the outstanding shares of SGM on the one-year anniversary of the Initial Acquisition, subject to the parties obtaining government and regulatory approvals and satisfaction of other closing conditions. As such, we have recorded a liability of $100,067, reflecting the fair value of the future payment to be made to the SGM shareholders. This liability is included within accrued liabilities in the consolidated balance sheet at September 28, 2014. | ||||||||
The purchase consideration, net of cash and cash equivalents acquired totaling $20,756, was allocated to the net assets acquired based on their respective fair values at September 26, 2014, as follows: | ||||||||
In millions of dollars | Purchase Price Allocation | Estimated Useful Life | ||||||
Goodwill | $ | 208 | Indefinite | |||||
Distribution channel relationships | 94 | 16 years | ||||||
Trademarks | 67 | 22 years | ||||||
Property, plant and equipment | 110 | 3 | to | 40 years | ||||
Other assets, net of liabilities assumed | 41 | |||||||
Deferred taxes, primarily non-current deferred tax liabilities | (48 | ) | ||||||
Net assets acquired | $ | 472 | ||||||
Since the acquisition was completed at the end of the quarter, the purchase price allocation presented above is preliminary. We are in the process of refining the valuations of acquired assets and liabilities and expect to finalize the purchase price allocation in 2015. | ||||||||
Goodwill is calculated as the excess of the purchase price over the fair value of the net assets acquired. The goodwill resulting from the acquisition is attributable primarily to the value of providing an established platform to leverage our brands in the China market, as well as expected synergies and other benefits from the combined brand portfolios. The recorded goodwill is not expected to be deductible for tax purposes. | ||||||||
Lotte Shanghai Food Company | ||||||||
In March 2014, we acquired an additional 5.9% interest in Lotte Shanghai Food Company (“LSFC”), a joint venture established in 2007 in China for the purpose of manufacturing and selling product to the venture partners. For this additional interest, we paid $5,580 in cash, increasing our ownership from 44.1% to 50%. At the same time, we also amended the LSFC shareholders' agreement resulting in our operational control over the venture. With the additional operational control, we reassessed our involvement with LSFC and concluded that we now have a controlling financial interest. Therefore, we have consolidated the venture as of the March 2014 acquisition date. We had previously accounted for our investment in LSFC using the equity method. | ||||||||
Total consideration transferred was approximately $99,161, including the $5,580 cash consideration paid, the estimated fair value of our previously held equity interest of $43,857 and the estimated fair value of the remaining noncontrolling interest in LSFC of $49,724, which fair values were determined using a market-based approach. The preliminary estimate of the fair value of the LSFC assets acquired and liabilities assumed on the acquisition date was $99,449, including fixed assets of $106,253, short-term debt obligations of $13,292 and other net assets of $6,488. We expect to finalize the purchase price allocation by the end of 2014. | ||||||||
We recognized a gain of approximately $4,627 in connection with this transaction, primarily related to the remeasurement of the fair value of our equity interest immediately before the business combination. The gain is included in selling, marketing and administrative within our consolidated statement of income. Additionally, cash acquired in the transaction exceeded the $5,580 paid for the controlling interest by $10,035, resulting in a positive cash impact from the acquisition as presented in the consolidated statement of cash flows. | ||||||||
Pro forma results of operations have not been presented for these acquisitions, as the impact on our consolidated financial statements is not material. In the nine-month period ended September 28, 2014 we incurred $14,097 in acquisition-related costs for the SGM acquisition. These costs are recorded within selling, marketing and administrative costs in the consolidated statement of income and include third-party advisory fees as well as net foreign currency exchange losses relating to our strategy to cap the acquisition price as denominated in U.S. dollars. | ||||||||
The Allan Candy Company Limited | ||||||||
In October 2014, our wholly-owned subsidiary, Hershey Canada Inc., entered into an agreement to acquire all of the outstanding shares of The Allan Candy Company Limited (“Allan”) for cash consideration of approximately $28 million, subject to customary regulatory approvals and a working capital adjustment. Allan is headquartered in Ontario, Canada and currently manufactures certain non-chocolate products on behalf of Hershey, in addition to manufacturing and distributing its own branded products, principally in Canada. The acquisition is expected to close by year-end 2014. |
NONCONTROLLING_INTERESTS_IN_SU
NONCONTROLLING INTERESTS IN SUBSIDIARIES | 9 Months Ended |
Sep. 28, 2014 | |
Noncontrolling Interest [Abstract] | ' |
NONCONTROLLING INTERESTS IN SUBSIDIARIES | ' |
NONCONTROLLING INTERESTS IN SUBSIDIARIES | |
Noncontrolling interests in subsidiaries totaled $63,906 as of September 28, 2014 and $11,218 as of December 31, 2013, with the increase primarily reflecting the 50% noncontrolling interest resulting from our March 2014 acquisition of LSFC, as discussed in Note 2. | |
We also own a 51% controlling interest in Hershey do Brasil under a cooperative agreement with Pandurata Netherlands B.V. (“Bauducco”), a leading manufacturer of baked goods in Brazil whose primary brand is Bauducco. During each of the first nine months of 2014 and 2013, we contributed cash of $3,060 to Hershey do Brasil and Bauducco contributed $2,940 in each of these time periods. | |
The share of losses pertaining to the noncontrolling interests in subsidiaries was $202 for the quarter ended September 28, 2014 and the share of gains pertaining to noncontrolling interests in subsidiaries was $275 for the quarter ended September 29, 2013. The share of losses pertaining to the noncontrolling interests in subsidiaries was $511 for the nine months ended September 28, 2014 and $1,888 for the nine months ended September 29, 2013. These amounts are reflected in selling, marketing and administrative expenses. |
STOCK_COMPENSATION_PLAN
STOCK COMPENSATION PLAN | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
STOCK COMPENSATION PLANS | ' | |||||||||||||||
STOCK COMPENSATION PLANS | ||||||||||||||||
The Hershey Company Equity and Incentive Compensation Plan (“EICP”) is the plan under which grants using shares for compensation and incentive purposes are made. The following table summarizes our stock compensation costs: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total compensation amount charged against income for stock options, performance stock units (“PSUs”) and restricted stock units (“RSUs”) | $ | 14,062 | $ | 13,594 | $ | 41,759 | $ | 39,582 | ||||||||
Total income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation | $ | 4,907 | $ | 4,507 | $ | 14,407 | $ | 13,577 | ||||||||
Stock Options | ||||||||||||||||
A summary of the status of our stock options as of September 28, 2014 and the change during 2014 is presented below: | ||||||||||||||||
Nine Months Ended September 28, 2014 | ||||||||||||||||
Stock Options | Shares | Weighted-Average | Weighted-Average Remaining | |||||||||||||
Exercise Price (per share) | Contractual Term | |||||||||||||||
Outstanding at beginning of the period | 8,660,336 | $55.47 | 6.3 years | |||||||||||||
Granted | 1,371,610 | $105.88 | ||||||||||||||
Exercised | (2,076,476 | ) | $48.88 | |||||||||||||
Forfeited | (151,676 | ) | $83.04 | |||||||||||||
Outstanding as of September 28, 2014 | 7,803,794 | $65.57 | 6.5 years | |||||||||||||
Options exercisable as of September 28, 2014 | 4,114,106 | $50.51 | 4.9 years | |||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted-average fair value of options granted (per share) | $21.54 | $14.48 | ||||||||||||||
Intrinsic value of options exercised | $110,329 | $117,520 | ||||||||||||||
We estimated the fair value of each stock option grant on the date of the grant using a Black-Scholes option-pricing model and the weighted-average assumptions set forth in the following table: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Dividend yields | 2 | % | 2.2 | % | ||||||||||||
Expected volatility | 22.3 | % | 22.2 | % | ||||||||||||
Risk-free interest rates | 2.1 | % | 1.4 | % | ||||||||||||
Expected lives in years | 6.7 | 6.6 | ||||||||||||||
As of September 28, 2014, the aggregate intrinsic value of options outstanding was $226,306 and the aggregate intrinsic value of options exercisable was $171,913. | ||||||||||||||||
As of September 28, 2014, unrecognized compensation cost related to non-vested stock option compensation arrangements totaled $29,634, which is expected to be recognized over a weighted-average period of 2.3 years. | ||||||||||||||||
Performance Stock Units and Restricted Stock Units | ||||||||||||||||
A summary of the status of our PSUs and RSUs as of September 28, 2014 and the change during 2014 is presented below: | ||||||||||||||||
Performance Stock Units and Restricted Stock Units | Nine Months Ended | Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) | ||||||||||||||
28-Sep-14 | ||||||||||||||||
Outstanding at beginning of year | 1,411,399 | $72.43 | ||||||||||||||
Granted | 308,980 | $116.90 | ||||||||||||||
Performance assumption change | (191,588 | ) | $84.55 | |||||||||||||
Vested | (541,848 | ) | $63.36 | |||||||||||||
Forfeited | (36,933 | ) | $88.20 | |||||||||||||
Outstanding as of September 28, 2014 | 950,010 | $93.86 | ||||||||||||||
The table above excludes PSU awards for 29,596 units as of December 31, 2013 and 26,396 units as of September 28, 2014 for which the measurement date has not yet occurred for accounting purposes. | ||||||||||||||||
The following table sets forth information about the fair value of the PSUs and RSUs granted during the periods indicated for potential future distribution to employees and directors. In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component of the PSU grants using a Monte Carlo simulation model on the date of grant: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Units granted | 308,980 | 371,695 | ||||||||||||||
Weighted-average fair value at date of grant (per unit) | $116.90 | $88.11 | ||||||||||||||
Monte Carlo simulation assumptions: | ||||||||||||||||
Estimated values (per unit) | $80.95 | $55.49 | ||||||||||||||
Dividend yields | 1.8 | % | 2 | % | ||||||||||||
Expected volatility | 15.5 | % | 17.1 | % | ||||||||||||
As of September 28, 2014, there was $46,628 of total unrecognized compensation cost related to non-vested PSUs and RSUs. We expect to recognize that cost over a weighted-average period of 2.1 years. | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested | $ | 57,001 | $ | 60,507 | ||||||||||||
Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 534,637 units as of September 28, 2014. Each unit is equivalent to one share of the Company’s Common Stock. |
BUSINESS_REALIGNMENT_AND_IMPAI
BUSINESS REALIGNMENT AND IMPAIRMENT CHARGES | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||
BUSINESS REALIGNMENT AND IMPAIRMENT CHARGES | ' | |||||||||||||||
BUSINESS REALIGNMENT AND IMPAIRMENT CHARGES | ||||||||||||||||
In June 2010, we announced Project Next Century (the “Next Century program”) as part of our ongoing efforts to create an advantaged supply chain and competitive cost structure. As part of the Next Century program, production transitioned from the Company's century-old facility at 19 East Chocolate Avenue in Hershey, Pennsylvania, to an expanded West Hershey facility, which was built in 1992. | ||||||||||||||||
Project-to-date costs for the Next Century program totaled $197.6 million through September 28, 2014, in line with our estimates of total pre-tax charges and non-recurring project implementation costs of $190 million to $200 million. | ||||||||||||||||
Business realignment and impairment charges recorded during the three-month and nine-month periods ended September 28, 2014 and September 29, 2013 were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of sales – Next Century program | $ | — | $ | 62 | $ | 93 | $ | 209 | ||||||||
Selling, marketing and administrative – Next Century program | — | 1 | — | 18 | ||||||||||||
Business realignment and impairment charges, net | ||||||||||||||||
Impairment of trademark | 13,340 | — | 13,340 | — | ||||||||||||
Next Century program - plant closure expenses | 3,032 | 2,929 | 7,204 | 13,367 | ||||||||||||
Total business realignment and impairment charges, net | 16,372 | 2,929 | 20,544 | 13,367 | ||||||||||||
Total business realignment and impairment charges | $ | 16,372 | $ | 2,992 | $ | 20,637 | $ | 13,594 | ||||||||
The majority of the Next Century program charges incurred in both the quarter and year-to-date periods ending September 28, 2014 and September 29, 2013 related to ongoing costs associated with the demolition of a former manufacturing facility. | ||||||||||||||||
During the third quarter of 2014, we obtained information indicating that the fair value of one of our indefinite-lived intangibles may be impaired. We therefore conducted an impairment assessment, using a relief from royalty methodology, on this indefinite-lived trademark related to a non-chocolate brand. As a result of this assessment, we recorded a $13,340 impairment charge during the quarter. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
EARNINGS PER SHARE | ' | |||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
We compute Basic and Diluted Earnings Per Share based on the weighted-average number of shares of Common Stock and Class B Common Stock outstanding as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
In thousands except per share data | ||||||||||||||||
Net income | $ | 223,741 | $ | 232,985 | $ | 644,404 | $ | 634,395 | ||||||||
Weighted-average shares - Basic | ||||||||||||||||
Common Stock | 161,253 | 163,364 | 162,330 | 163,483 | ||||||||||||
Class B Common Stock | 60,620 | 60,629 | 60,620 | 60,629 | ||||||||||||
Total weighted-average shares - Basic | 221,873 | 223,993 | 222,950 | 224,112 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Employee stock options | 1,705 | 2,431 | 1,985 | 2,488 | ||||||||||||
Performance and restricted stock units | 299 | 463 | 358 | 549 | ||||||||||||
Weighted-average shares - Diluted | 223,877 | 226,887 | 225,293 | 227,149 | ||||||||||||
Earnings Per Share - Basic | ||||||||||||||||
Common Stock | $ | 1.03 | $ | 1.07 | $ | 2.97 | $ | 2.91 | ||||||||
Class B Common Stock | $ | 0.94 | $ | 0.96 | $ | 2.68 | $ | 2.63 | ||||||||
Earnings Per Share - Diluted | ||||||||||||||||
Common Stock | $ | 1 | $ | 1.03 | $ | 2.86 | $ | 2.79 | ||||||||
Class B Common Stock | $ | 0.94 | $ | 0.95 | $ | 2.67 | $ | 2.61 | ||||||||
The Class B Common Stock is convertible into Common Stock on a share for share basis at any time. The calculation of earnings per share-diluted for the Class B Common Stock was performed using the two-class method and the calculation of earnings per share-diluted for the Common Stock was performed using the if-converted method. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
In thousands | ||||||||||||||||
Stock options excluded from diluted earnings per share calculations because the effect would have been antidilutive | 1,510 | 1,011 | 1,510 | 1,759 | ||||||||||||
FINANCIAL_INSTRUMENTS_AND_FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS AND FAIR VALUE | ' | ||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS AND FAIR VALUE | |||||||||||||||||||||||||||||||||
We are exposed to market risks arising principally from changes in foreign currency exchange rates, interest rates and commodity prices. We use certain derivative instruments to manage these risks. These include interest rate swaps to manage interest rate risk, foreign currency forward exchange contracts and options to manage foreign currency exchange rate risk, and commodities futures and options contracts to manage commodity market price risk exposures. | |||||||||||||||||||||||||||||||||
We also use derivatives that do not qualify for hedge accounting treatment. We account for such derivatives at market value with the resulting gains and losses reflected in the income statement. We do not hold or issue derivative instruments for trading or speculative purposes and are not a party to any instruments with leverage or prepayment features. | |||||||||||||||||||||||||||||||||
In entering into these contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. We mitigate this risk by entering into exchanged-traded contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. We do not expect any significant losses from counterparty defaults. | |||||||||||||||||||||||||||||||||
Commodity Price Risk | |||||||||||||||||||||||||||||||||
We enter into commodities futures and options contracts and other commodity derivative instruments to reduce the effect of future price fluctuations associated with the purchase of raw materials, energy requirements and transportation services. We generally hedge commodity price risks for 3 to 24 month periods. The majority of our commodity derivative instruments meet hedge accounting requirements and are designated as cash flow hedges. We account for the effective portion of mark-to-market gains and losses in other comprehensive income, to be recognized in cost of sales in the same period that we record the hedged raw material requirements in cost of sales. The ineffective portion of gains and losses is recorded currently in cost of sales. | |||||||||||||||||||||||||||||||||
Foreign Exchange Price Risk | |||||||||||||||||||||||||||||||||
We are exposed to foreign currency exchange rate risk related to our international operations, including non-functional currency intercompany debt and other non-functional currency transactions of certain subsidiaries. Principal currencies hedged include the euro, Canadian dollar, Malaysian ringgit, Swiss franc, Chinese renminbi, Japanese yen, and Brazilian real. We typically utilize foreign currency forward exchange contracts and options to hedge these exposures for periods ranging from 3 to 24 months. The contracts are either designated as cash flow hedges or are undesignated. The net notional amount of foreign exchange contracts accounted for as cash flow hedges was $506 at September 28, 2014 and $158,375 at December 31, 2013. The effective portion of the changes in fair value on these contracts is recorded in other comprehensive income and reclassified into earnings in the same period in which the hedged transactions affect earnings. The net notional amount of foreign exchange contracts that are not designated as accounting hedges was $5,354 at September 28, 2014 and $2,823 at December 31, 2013. The change in fair value on these instruments is recorded directly in cost of sales or selling, marketing and administrative expense, depending on the nature of the underlying exposure. | |||||||||||||||||||||||||||||||||
Interest Rate Risk | |||||||||||||||||||||||||||||||||
In order to manage interest rate exposure, from time to time we enter into interest rate swap agreements, which are designated as cash flow hedges, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The notional amount of interest rate derivative instruments outstanding was $700,000 at September 28, 2014 and $250,000 at December 31, 2013. | |||||||||||||||||||||||||||||||||
Equity Price Risk | |||||||||||||||||||||||||||||||||
We are exposed to market price changes in certain broad market indices related to our deferred compensation obligations to our employees. In the first quarter of 2014, we entered into equity swap contracts to hedge the portion of the exposure that is linked to market-level equity returns. These contracts are not designated as hedges for accounting purposes and are entered into for periods of 3 to 12 months. The change in fair value of these derivatives is recorded in selling, marketing and administrative expense, together with the change in the related liabilities. The notional amount of the contracts outstanding at September 28, 2014 was $25,306. | |||||||||||||||||||||||||||||||||
Fair Value of Derivative Instruments | |||||||||||||||||||||||||||||||||
The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below: | |||||||||||||||||||||||||||||||||
Balance Sheet Caption | September 28, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||||||||||||
Commodities futures and options (1) | Prepaid expenses and other current assets | $ | 6,313 | $ | 4,306 | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Prepaid expenses and other current assets | 497 | 2,227 | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Prepaid expenses and other current assets | 5,083 | — | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term assets | 244 | 586 | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Other long-term assets | — | 22,745 | ||||||||||||||||||||||||||||||
Cross-currency swap agreement (4) | Other long-term assets | 1,559 | — | ||||||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 13,696 | $ | 29,864 | |||||||||||||||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||||||||||
Deferred compensation derivatives (5) | Prepaid expenses and other current assets | $ | 371 | $ | — | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Prepaid expenses and other current assets | 3,328 | 445 | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term assets | 170 | 166 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 3,869 | $ | 611 | |||||||||||||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||||||||||||
Commodities futures and options (1) | Accrued liabilities | $ | 2,622 | $ | 129 | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Accrued liabilities | 1,408 | — | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term liabilities | 422 | — | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Other long-term liabilities | 2,336 | — | ||||||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 6,788 | $ | 129 | |||||||||||||||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Accrued liabilities | $ | 698 | $ | — | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term liabilities | 115 | 198 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 813 | $ | 198 | |||||||||||||||||||||||||||||
-1 | The fair value of commodities futures and options contracts is based on quoted market prices and is, therefore, categorized as Level 1 within the fair value hierarchy. As of September 28, 2014, accrued liabilities reflects the net of assets of $44,675 and accrued liabilities of $47,195 associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period. The comparable amounts reflected on a net basis in accrued liabilities at December 31, 2013 were assets of $23,780 and accrued liabilities of $23,909. At September 28, 2014 and December 31, 2013, the amount reflected in prepaid expenses and other current assets related to the fair value of options contracts. | ||||||||||||||||||||||||||||||||
-2 | The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. These contracts are classified as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
-3 | The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Such contracts are categorized as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
-4 | The fair value of the cross-currency swap agreement is categorized as Level 2 within the fair value hierarchy and is estimated based on the difference between the contract and current market foreign currency exchange rates at the end of the period. | ||||||||||||||||||||||||||||||||
-5 | The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index and is, therefore, categorized as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Fair Value of Other Financial Instruments | |||||||||||||||||||||||||||||||||
The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and short-term debt approximated fair value as of September 28, 2014 and December 31, 2013 because of the relatively short maturity of these instruments. | |||||||||||||||||||||||||||||||||
The carrying value of long-term debt, including the current portion, was $1,810,651 as of September 28, 2014, compared with a fair value of $1,973,308. The estimated fair value of long-term debt is based on quoted market prices for similar debt issues and is, therefore, classified as Level 2 within the valuation hierarchy. | |||||||||||||||||||||||||||||||||
Income Statement Impact of Derivative Instruments | |||||||||||||||||||||||||||||||||
The effect of derivative instruments on the Consolidated Statements of Income for the three months ended September 28, 2014 and September 29, 2013 was as follows: | |||||||||||||||||||||||||||||||||
Non-designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||||||||||||
Gains recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) | Gains recognized in income (ineffective portion) (c) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Commodities futures and options | $ | 393 | $ | — | $ | 3,256 | $ | 84,170 | $ | 27,000 | $ | 4,000 | $ | 2,553 | $ | 2,728 | |||||||||||||||||
Foreign exchange contracts | 7,033 | — | (612 | ) | 6,286 | (361 | ) | 1,456 | — | — | |||||||||||||||||||||||
Interest rate swap agreements | — | — | (4,661 | ) | 1,200 | (1,114 | ) | (1,114 | ) | — | 428 | ||||||||||||||||||||||
Deferred compensation derivatives | 371 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 7,797 | $ | — | $ | (2,017 | ) | $ | 91,656 | $ | 25,525 | $ | 4,342 | $ | 2,553 | $ | 3,156 | ||||||||||||||||
(a) | Gains recognized in income for non-designated commodities futures and options contracts were included in cost of sales. Gains recognized in income for non-designated foreign currency forward exchange contracts and deferred compensation derivatives were included in selling, marketing and administrative expenses. | ||||||||||||||||||||||||||||||||
(b) | Gains (losses) reclassified from accumulated OCI into income were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains and losses for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. Losses reclassified from accumulated OCI into income for interest rate swap agreements were included in interest expense. | ||||||||||||||||||||||||||||||||
(c) | Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts and in interest expense for interest rate swap agreements. | ||||||||||||||||||||||||||||||||
The effect of derivative instruments on the Consolidated Statements of Income for the nine months ended September 28, 2014 and September 29, 2013 was as follows: | |||||||||||||||||||||||||||||||||
Non-designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in OCI (effective portion) | Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) | Gains recognized in income (ineffective portion) (c) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Commodities futures and options | $ | 2,732 | $ | — | $ | 62,523 | $ | 69,670 | $ | 55,300 | $ | (5,500 | ) | $ | 2,461 | $ | 3,271 | ||||||||||||||||
Foreign exchange contracts | (1,759 | ) | — | (301 | ) | 6,501 | 3,536 | 3,382 | — | — | |||||||||||||||||||||||
Interest rate swap agreements | — | — | (19,998 | ) | 21,515 | (3,351 | ) | (2,858 | ) | — | — | ||||||||||||||||||||||
Deferred compensation derivatives | 1,909 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,882 | $ | — | $ | 42,224 | $ | 97,686 | $ | 55,485 | $ | (4,976 | ) | $ | 2,461 | $ | 3,271 | ||||||||||||||||
(a) | Gains recognized in income for non-designated commodities futures and options contracts were included in cost of sales. Gains (losses) recognized in income for non-designated foreign currency forward exchange contracts and deferred compensation derivatives were included in selling, marketing and administrative expenses. | ||||||||||||||||||||||||||||||||
(b) | Gains (losses) reclassified from accumulated OCI into income were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. For the nine months ended September 28, 2014, this included $3,801 relating to unrealized gains on foreign currency forward exchange contracts that were reclassified from accumulated OCI to selling, marketing and administrative expenses as a result of the discontinuance of cash flow hedge accounting because it was determined to be probable that the original forecasted transactions would not occur within the time period originally designated or the subsequent two months thereafter. Losses reclassified from accumulated OCI into income for interest rate swap agreements were included in interest expense. | ||||||||||||||||||||||||||||||||
(c) | Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts. | ||||||||||||||||||||||||||||||||
The amount of net gains on cash flow hedging derivatives, including interest rate swap agreements, foreign currency forward exchange contracts, and commodities futures and options contracts, expected to be reclassified into income in the next twelve months was approximately $28,781 after tax as of September 28, 2014. This amount was primarily associated with commodities futures and options contracts. |
COMPREHENSIVE_INCOME
COMPREHENSIVE INCOME | 9 Months Ended | |||||||||||
Sep. 28, 2014 | ||||||||||||
Comprehensive Income Disclosure [Abstract] | ' | |||||||||||
COMPREHENSIVE INCOME | ' | |||||||||||
COMPREHENSIVE INCOME | ||||||||||||
A summary of the components of comprehensive income is as follows: | ||||||||||||
Three Months Ended | ||||||||||||
28-Sep-14 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 223,741 | ||||||||||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments | $ | (17,321 | ) | $ | — | (17,321 | ) | |||||
Pension and post-retirement benefit plans (a) | 5,851 | (2,227 | ) | 3,624 | ||||||||
Cash flow hedges: | ||||||||||||
Losses on cash flow hedging derivatives | (2,017 | ) | 1,085 | (932 | ) | |||||||
Reclassification adjustments (b) | (25,525 | ) | 9,981 | (15,544 | ) | |||||||
Total other comprehensive loss | $ | (39,012 | ) | $ | 8,839 | (30,173 | ) | |||||
Comprehensive income | $ | 193,568 | ||||||||||
Three Months Ended | ||||||||||||
29-Sep-13 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 232,985 | ||||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | $ | 1,053 | $ | — | 1,053 | |||||||
Pension and post-retirement benefit plans (a) | 9,930 | (3,770 | ) | 6,160 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 91,656 | (34,311 | ) | 57,345 | ||||||||
Reclassification adjustments (b) | (4,342 | ) | 1,655 | (2,687 | ) | |||||||
Total other comprehensive income | $ | 98,297 | $ | (36,426 | ) | 61,871 | ||||||
Comprehensive income | $ | 294,856 | ||||||||||
Nine Months Ended | ||||||||||||
28-Sep-14 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 644,404 | ||||||||||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments | $ | (12,016 | ) | $ | — | (12,016 | ) | |||||
Pension and post-retirement benefit plans (a) | 17,386 | (6,602 | ) | 10,784 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 42,224 | (15,375 | ) | 26,849 | ||||||||
Reclassification adjustments (b) | (55,485 | ) | 19,919 | (35,566 | ) | |||||||
Total other comprehensive loss | $ | (7,891 | ) | $ | (2,058 | ) | (9,949 | ) | ||||
Comprehensive income | $ | 634,455 | ||||||||||
Nine Months Ended | ||||||||||||
29-Sep-13 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 634,395 | ||||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | $ | (17,928 | ) | $ | — | (17,928 | ) | |||||
Pension and post-retirement benefit plans (a) | 32,231 | (12,450 | ) | 19,781 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 97,686 | (36,331 | ) | 61,355 | ||||||||
Reclassification adjustments (b) | 4,976 | (1,895 | ) | 3,081 | ||||||||
Total other comprehensive income | $ | 116,965 | $ | (50,676 | ) | 66,289 | ||||||
Comprehensive income | $ | 700,684 | ||||||||||
(a) | These amounts are included in the computation of net periodic benefit costs. For more information, see Note 13. Pension and Other Post-Retirement Benefit Plans. | |||||||||||
(b) | For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 7. Financial Instruments and Fair Value. | |||||||||||
The components of accumulated other comprehensive loss as shown on the Consolidated Balance Sheets are as follows: | ||||||||||||
September 28, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Foreign currency translation adjustments | $ | (28,846 | ) | $ | (16,830 | ) | ||||||
Pension and post-retirement benefit plans, net of tax | (188,850 | ) | (199,634 | ) | ||||||||
Cash flow hedges, net of tax | 41,180 | 49,897 | ||||||||||
Total accumulated other comprehensive loss | $ | (176,516 | ) | $ | (166,567 | ) |
INVENTORIES
INVENTORIES | 9 Months Ended | |||||||
Sep. 28, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
INVENTORIES | ' | |||||||
INVENTORIES | ||||||||
We value the majority of our inventories under the last-in, first-out (“LIFO”) method and the remaining inventories at the lower of first-in, first-out (“FIFO”) cost or market. Inventories were as follows: | ||||||||
September 28, | December 31, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 303,338 | $ | 226,978 | ||||
Goods in process | 93,788 | 79,861 | ||||||
Finished goods | 668,083 | 517,968 | ||||||
Inventories at FIFO | 1,065,209 | 824,807 | ||||||
Adjustment to LIFO | (164,466 | ) | (165,266 | ) | ||||
Total inventories | $ | 900,743 | $ | 659,541 | ||||
Total inventories at September 28, 2014 included $85,772 relating to SGM and LSFC, the two businesses we acquired during the first nine months of 2014. In addition, raw materials at September 28, 2014 increased in part due to bulk purchases of certain ingredients at favorable pricing. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||||
Major classes of property, plant and equipment were as follows: | |||||||||
September 28, 2014 | December 31, 2013 | ||||||||
Land | $ | 96,396 | $ | 96,334 | |||||
Buildings | 1,130,397 | 956,890 | |||||||
Machinery and equipment | 3,006,583 | 2,726,170 | |||||||
Property, plant and equipment, gross | 4,233,376 | 3,779,394 | |||||||
Accumulated depreciation | (2,154,663 | ) | (1,974,049 | ) | |||||
Property, plant and equipment, net | $ | 2,078,713 | $ | 1,805,345 | |||||
DEBT_AND_FINANCING_ARRANGEMENT
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Long-term Debt, Unclassified [Abstract] | ' | |||||||||||||||
DEBT AND FINANCING ARRANGEMENTS | ' | |||||||||||||||
DEBT AND FINANCING ARRANGEMENTS | ||||||||||||||||
As a source of short-term financing, we utilize cash on hand and commercial paper or bank loans with an original maturity of three months or less. We maintain a $1.0 billion unsecured revolving credit facility, which expires in November 2018. At September 28, 2014, we had outstanding commercial paper totaling $329,987, at a weighted average interest rate of 0.09%. We had no commercial paper borrowings at December 31, 2013. | ||||||||||||||||
The credit agreement contains certain financial and other covenants, customary representations, warranties and events of default. As of September 28, 2014, we were in compliance with all covenants pertaining to the credit agreement, and we had no significant compensating balance agreements that legally restricted these funds. For more information, refer to the consolidated financial statements and notes included in our 2013 Annual Report on Form 10-K. | ||||||||||||||||
At September 28, 2014, we reclassified to current liabilities $250,000 in outstanding principal amount relating to our 4.85% Notes which come due in August 2015. | ||||||||||||||||
Our short-term and long-term debt balances at September 28, 2014 include $96,868 and $16,253, respectively, related to debt assumed in the SGM acquisition. | ||||||||||||||||
In May 2012, we filed a Registration Statement on Form S-3 with the U.S. Securities and Exchange Commission that registered an indeterminate amount of debt securities. In April 2013, we repaid $250.0 million of 5.0% Notes due in 2013. In May 2013, we issued $250.0 million of 2.625% Notes due in 2023 under this Registration Statement. | ||||||||||||||||
Interest Expense | ||||||||||||||||
Net interest expense consisted of the following: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest expense | $ | 23,441 | $ | 22,838 | $ | 69,839 | $ | 69,619 | ||||||||
Interest income | (1,125 | ) | (696 | ) | (3,209 | ) | (2,109 | ) | ||||||||
Capitalized interest | (1,543 | ) | (383 | ) | (3,838 | ) | (1,024 | ) | ||||||||
Interest expense, net | $ | 20,773 | $ | 21,759 | $ | 62,792 | $ | 66,486 | ||||||||
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 28, 2014 | |
Income Tax Disclosure [Abstract] | ' |
INCOME TAXES | ' |
INCOME TAXES | |
The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions include the United States (federal and state), Canada and Mexico. U.S., Canadian and Mexican federal audit issues typically involve the timing of deductions and transfer pricing adjustments. During the first quarter of 2013, the U.S. Internal Revenue Service (“IRS”) commenced its audit of our U.S. income tax returns for 2009 through 2011. The audit was concluded in the second quarter of 2014. Tax examinations by various state taxing authorities could be conducted for years beginning in 2010. | |
We are no longer subject to Canadian federal income tax examinations by the Canada Revenue Agency (“CRA”) for years before 2007. The CRA commenced its audit of our Canadian income tax returns for 2010 through 2012 in the second quarter of 2014. During the fourth quarter of 2013, the CRA concluded its audit for 2007 through 2009 and issued a letter to us indicating proposed adjustments primarily associated with business realignment charges and transfer pricing. During the third quarter of 2014, the CRA withdrew the proposed adjustments related to business realignment charges and transfer pricing of inventory, and we paid a $2.2 million assessment related to other cross-border adjustments. We provided notice to the U.S. Competent Authority and the CRA provided notice to the Canada Competent Authority of the likely need for their assistance to resolve the adjustments. Accordingly, as of September 28, 2014, we recorded a non-current receivable of approximately $1.5 million associated with the anticipated resolution of the adjustments by the Competent Authority of each country. | |
We are no longer subject to Mexican federal income tax examinations by the Servicio de Administracion Tributaria (“SAT”) for years before 2009. We work with the IRS, the CRA, and the SAT to resolve proposed audit adjustments and to minimize the amount of adjustments. We do not anticipate that any potential tax adjustments will have a significant impact on our financial position or results of operations. | |
We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $6.2 million within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. |
PENSION_AND_OTHER_POSTRETIREME
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | ' | |||||||||||||||
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | ||||||||||||||||
Components of net periodic benefit cost consisted of the following: | ||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 6,670 | $ | 7,830 | $ | 177 | $ | 274 | ||||||||
Interest cost | 12,218 | 10,984 | 2,927 | 2,686 | ||||||||||||
Expected return on plan assets | (18,519 | ) | (18,277 | ) | — | — | ||||||||||
Amortization of prior service cost | (167 | ) | 106 | 154 | 209 | |||||||||||
Recognized net actuarial loss (gains) | 5,838 | 10,106 | (36 | ) | (73 | ) | ||||||||||
Administrative expenses | 193 | 270 | 23 | 24 | ||||||||||||
Net periodic benefit cost | $ | 6,233 | $ | 11,019 | $ | 3,245 | $ | 3,120 | ||||||||
We made contributions of $24,696 and $4,105 to the pension plans and other benefits plans, respectively, during the third quarter of 2014. In the third quarter of 2013, we made contributions of $28,647 and $6,254 to our pension plans and other benefits plans, respectively. The contributions in 2014 and 2013 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans. | ||||||||||||||||
Components of net periodic benefit cost consisted of the following: | ||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 20,003 | $ | 23,528 | $ | 530 | $ | 821 | ||||||||
Interest cost | 36,643 | 32,986 | 8,778 | 8,063 | ||||||||||||
Expected return on plan assets | (55,537 | ) | (54,862 | ) | — | — | ||||||||||
Amortization of prior service cost | (501 | ) | 317 | 462 | 463 | |||||||||||
Recognized net actuarial loss (gains) | 17,511 | 30,324 | (107 | ) | (55 | ) | ||||||||||
Administrative expenses | 586 | 537 | 78 | 74 | ||||||||||||
Net periodic benefit cost | $ | 18,705 | $ | 32,830 | $ | 9,741 | $ | 9,366 | ||||||||
We made contributions of $26,669 and $14,777 to the pension plans and other benefits plans, respectively, during the first nine months of 2014. In the first nine months of 2013, we made contributions of $29,875 and $18,275 to our pension plans and other benefits plans, respectively. The contributions in 2014 and 2013 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans. |
TREASURY_STOCK_ACTIVITY
TREASURY STOCK ACTIVITY | 9 Months Ended | ||||||
Sep. 28, 2014 | |||||||
Stockholders' Equity Note [Abstract] | ' | ||||||
TREASURY STOCK ACTIVITY | ' | ||||||
TREASURY STOCK ACTIVITY | |||||||
A summary of our treasury stock activity is as follows: | |||||||
Nine Months Ended September 28, 2014 | |||||||
Shares | Dollars | ||||||
In thousands | |||||||
Shares repurchased in the open market under pre-approved | 2,112,408 | $ | 200,067 | ||||
share repurchase programs | |||||||
Shares repurchased to replace Treasury Stock issued for stock options | 3,346,513 | 342,576 | |||||
and incentive compensation | |||||||
Total share repurchases | 5,458,921 | 542,643 | |||||
Shares issued for stock options and incentive compensation | (2,478,771 | ) | (103,141 | ) | |||
Net change | 2,980,150 | $ | 439,502 | ||||
The $250 million share repurchase program approved by our Board of Directors in April 2011 was completed in the second quarter of 2014. | |||||||
In February 2014, our Board of Directors approved an additional $250 million authorization to repurchase shares of our Common Stock. As of September 28, 2014, we had repurchased $75 million of our Common Stock under this program and $175 million remained available for repurchases. We are authorized to purchase our outstanding shares in open market and privately negotiated transactions. The program has no expiration date and acquired shares of Common Stock will be held as treasury shares. Similar to prior programs, approved share repurchase authorizations are in addition to our practice of buying back shares sufficient to offset those issued under incentive compensation plans. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 28, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
CONTINGENCIES | ' |
CONTINGENCIES | |
In 2007, the Competition Bureau of Canada began an inquiry into alleged violations of the Canadian Competition Act in the sale and supply of chocolate products sold in Canada between 2002 and 2008 by members of the confectionery industry, including Hershey Canada, Inc. The U.S. Department of Justice also notified the Company in 2007 that it had opened an inquiry, but has not requested any information or documents. | |
Subsequently, 13 civil lawsuits were filed in Canada and 91 civil lawsuits were filed in the United States against | |
the Company. The lawsuits were instituted on behalf of direct purchasers of our products as well as indirect purchasers that purchase our products for use or for resale. Several other chocolate and confectionery companies were named as defendants in these lawsuits as they also were the subject of investigations and/or inquiries by the government entities referenced above. The cases sought recovery for losses suffered as a result of alleged conspiracies in restraint of trade in connection with the pricing practices of the defendants. | |
The Canadian civil cases were settled in 2012. Hershey Canada, Inc. reached a settlement agreement with the Competition Bureau of Canada through their Leniency Program with regard to an inquiry into alleged violations of the Canadian Competition Act in the sale and supply of chocolate products sold in Canada by members of the confectionery industry. On June 21, 2013, Hershey Canada, Inc. pleaded guilty to one count of price fixing related to communications with competitors in Canada in 2007 and paid a fine of approximately $4.0 million. Hershey Canada, Inc. had promptly reported the conduct to the Competition Bureau, cooperated fully with its investigation and did not implement the planned price increase that was the subject of the 2007 communications. | |
With regard to the U.S. lawsuits, the Judicial Panel on Multidistrict Litigation assigned the cases to the U.S. District Court for the Middle District of Pennsylvania (the “District Court”). Plaintiffs sought actual and treble damages against the Company and other defendants based on an alleged overcharge for certain, or in some cases all, chocolate products sold in the U.S. between December 2002 and December 2007, and certain plaintiff groups alleged damages that extended beyond the alleged conspiracy period. The lawsuits had been proceeding on different scheduling tracks for different groups of plaintiffs. | |
On February 26, 2014, the District Court granted summary judgment to the Company in the cases brought by the direct purchaser plaintiffs that had not sought class certification as well as those that had been certified as a class. The direct purchaser plaintiffs appealed the District Court's decision to the United States Court of Appeals for the Third Circuit (“Third Circuit”) in May 2014. | |
The remaining plaintiff groups - the putative class plaintiffs that purchased product indirectly for resale, the putative class plaintiffs that purchased product indirectly for use, and direct purchaser Associated Wholesale Grocers, Inc. - dismissed their cases with prejudice, subject to reinstatement if the Third Circuit were to reverse the District Court’s summary judgment decision. The District Court entered judgment closing the case on April 17, 2014. | |
Competition and antitrust law investigations can be lengthy and violations are subject to civil and/or criminal fines and other sanctions. Class action civil antitrust lawsuits are expensive to defend and could result in significant judgments, including in some cases, payment of treble damages and/or attorneys' fees to the successful plaintiff. Additionally, negative publicity involving these proceedings could affect our Company's brands and reputation, possibly resulting in decreased demand for our products. These possible consequences, in our opinion, are currently not expected to materially impact our financial position or liquidity, but could materially impact our results of operations and cash flows in the period in which any fines, settlements or judgments are accrued or paid, respectively. | |
We have no other material pending legal proceedings, other than ordinary routine litigation incidental to our | |
business. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 28, 2014 | |
Recent Accounting Pronouncements [Abstract] | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | ' |
RECENT ACCOUNTING PRONOUNCEMENTS | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for us on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the effect that ASU No. 2014-09 will have on our consolidated financial statements and related disclosures. |
BUSINESS_ACQUISITIONS_Tables
BUSINESS ACQUISITIONS (Tables) | 9 Months Ended | |||||||
Sep. 28, 2014 | ||||||||
Business Acquisition [Line Items] | ' | |||||||
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | ' | |||||||
The purchase consideration, net of cash and cash equivalents acquired totaling $20,756, was allocated to the net assets acquired based on their respective fair values at September 26, 2014, as follows: | ||||||||
In millions of dollars | Purchase Price Allocation | Estimated Useful Life | ||||||
Goodwill | $ | 208 | Indefinite | |||||
Distribution channel relationships | 94 | 16 years | ||||||
Trademarks | 67 | 22 years | ||||||
Property, plant and equipment | 110 | 3 | to | 40 years | ||||
Other assets, net of liabilities assumed | 41 | |||||||
Deferred taxes, primarily non-current deferred tax liabilities | (48 | ) | ||||||
Net assets acquired | $ | 472 | ||||||
STOCK_COMPENSATION_PLAN_Tables
STOCK COMPENSATION PLAN (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock Compensation Costs | ' | |||||||||||||||
The following table summarizes our stock compensation costs: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total compensation amount charged against income for stock options, performance stock units (“PSUs”) and restricted stock units (“RSUs”) | $ | 14,062 | $ | 13,594 | $ | 41,759 | $ | 39,582 | ||||||||
Total income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation | $ | 4,907 | $ | 4,507 | $ | 14,407 | $ | 13,577 | ||||||||
Schedule of Share-based Compensation, Stock Options, Activity | ' | |||||||||||||||
A summary of the status of our stock options as of September 28, 2014 and the change during 2014 is presented below: | ||||||||||||||||
Nine Months Ended September 28, 2014 | ||||||||||||||||
Stock Options | Shares | Weighted-Average | Weighted-Average Remaining | |||||||||||||
Exercise Price (per share) | Contractual Term | |||||||||||||||
Outstanding at beginning of the period | 8,660,336 | $55.47 | 6.3 years | |||||||||||||
Granted | 1,371,610 | $105.88 | ||||||||||||||
Exercised | (2,076,476 | ) | $48.88 | |||||||||||||
Forfeited | (151,676 | ) | $83.04 | |||||||||||||
Outstanding as of September 28, 2014 | 7,803,794 | $65.57 | 6.5 years | |||||||||||||
Options exercisable as of September 28, 2014 | 4,114,106 | $50.51 | 4.9 years | |||||||||||||
Fair Value and Intrinsic Value of Options | ' | |||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Weighted-average fair value of options granted (per share) | $21.54 | $14.48 | ||||||||||||||
Intrinsic value of options exercised | $110,329 | $117,520 | ||||||||||||||
Fair Value of Each Stock Option Grant | ' | |||||||||||||||
We estimated the fair value of each stock option grant on the date of the grant using a Black-Scholes option-pricing model and the weighted-average assumptions set forth in the following table: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Dividend yields | 2 | % | 2.2 | % | ||||||||||||
Expected volatility | 22.3 | % | 22.2 | % | ||||||||||||
Risk-free interest rates | 2.1 | % | 1.4 | % | ||||||||||||
Expected lives in years | 6.7 | 6.6 | ||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | ' | |||||||||||||||
A summary of the status of our PSUs and RSUs as of September 28, 2014 and the change during 2014 is presented below: | ||||||||||||||||
Performance Stock Units and Restricted Stock Units | Nine Months Ended | Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) | ||||||||||||||
28-Sep-14 | ||||||||||||||||
Outstanding at beginning of year | 1,411,399 | $72.43 | ||||||||||||||
Granted | 308,980 | $116.90 | ||||||||||||||
Performance assumption change | (191,588 | ) | $84.55 | |||||||||||||
Vested | (541,848 | ) | $63.36 | |||||||||||||
Forfeited | (36,933 | ) | $88.20 | |||||||||||||
Outstanding as of September 28, 2014 | 950,010 | $93.86 | ||||||||||||||
Schedule Of Share Based Payment Award Market Based Total Shareholder Return Valuation Assumptions | ' | |||||||||||||||
The following table sets forth information about the fair value of the PSUs and RSUs granted during the periods indicated for potential future distribution to employees and directors. In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component of the PSU grants using a Monte Carlo simulation model on the date of grant: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Units granted | 308,980 | 371,695 | ||||||||||||||
Weighted-average fair value at date of grant (per unit) | $116.90 | $88.11 | ||||||||||||||
Monte Carlo simulation assumptions: | ||||||||||||||||
Estimated values (per unit) | $80.95 | $55.49 | ||||||||||||||
Dividend yields | 1.8 | % | 2 | % | ||||||||||||
Expected volatility | 15.5 | % | 17.1 | % | ||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Intrinsic Value Of Share Based Liabilities Paid Combined With Fair Value Of Shares Vested | ' | |||||||||||||||
Nine Months Ended | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2014 | 2013 | |||||||||||||||
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested | $ | 57,001 | $ | 60,507 | ||||||||||||
BUSINESS_REALIGNMENT_AND_IMPAI1
BUSINESS REALIGNMENT AND IMPAIRMENT CHARGES (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||||||
Business Realignment | ' | |||||||||||||||
Business realignment and impairment charges recorded during the three-month and nine-month periods ended September 28, 2014 and September 29, 2013 were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of sales – Next Century program | $ | — | $ | 62 | $ | 93 | $ | 209 | ||||||||
Selling, marketing and administrative – Next Century program | — | 1 | — | 18 | ||||||||||||
Business realignment and impairment charges, net | ||||||||||||||||
Impairment of trademark | 13,340 | — | 13,340 | — | ||||||||||||
Next Century program - plant closure expenses | 3,032 | 2,929 | 7,204 | 13,367 | ||||||||||||
Total business realignment and impairment charges, net | 16,372 | 2,929 | 20,544 | 13,367 | ||||||||||||
Total business realignment and impairment charges | $ | 16,372 | $ | 2,992 | $ | 20,637 | $ | 13,594 | ||||||||
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||||
We compute Basic and Diluted Earnings Per Share based on the weighted-average number of shares of Common Stock and Class B Common Stock outstanding as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
In thousands except per share data | ||||||||||||||||
Net income | $ | 223,741 | $ | 232,985 | $ | 644,404 | $ | 634,395 | ||||||||
Weighted-average shares - Basic | ||||||||||||||||
Common Stock | 161,253 | 163,364 | 162,330 | 163,483 | ||||||||||||
Class B Common Stock | 60,620 | 60,629 | 60,620 | 60,629 | ||||||||||||
Total weighted-average shares - Basic | 221,873 | 223,993 | 222,950 | 224,112 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Employee stock options | 1,705 | 2,431 | 1,985 | 2,488 | ||||||||||||
Performance and restricted stock units | 299 | 463 | 358 | 549 | ||||||||||||
Weighted-average shares - Diluted | 223,877 | 226,887 | 225,293 | 227,149 | ||||||||||||
Earnings Per Share - Basic | ||||||||||||||||
Common Stock | $ | 1.03 | $ | 1.07 | $ | 2.97 | $ | 2.91 | ||||||||
Class B Common Stock | $ | 0.94 | $ | 0.96 | $ | 2.68 | $ | 2.63 | ||||||||
Earnings Per Share - Diluted | ||||||||||||||||
Common Stock | $ | 1 | $ | 1.03 | $ | 2.86 | $ | 2.79 | ||||||||
Class B Common Stock | $ | 0.94 | $ | 0.95 | $ | 2.67 | $ | 2.61 | ||||||||
Antidilutive stock options | ' | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
In thousands | ||||||||||||||||
Stock options excluded from diluted earnings per share calculations because the effect would have been antidilutive | 1,510 | 1,011 | 1,510 | 1,759 | ||||||||||||
FINANCIAL_INSTRUMENTS_AND_FAIR1
FINANCIAL INSTRUMENTS AND FAIR VALUE (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||||||||||
The fair value of derivative instruments | ' | ||||||||||||||||||||||||||||||||
The following table summarizes the fair value of the derivative instruments as recorded in the Consolidated Balance Sheets as of the dates below: | |||||||||||||||||||||||||||||||||
Balance Sheet Caption | September 28, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Derivative Assets | |||||||||||||||||||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||||||||||||
Commodities futures and options (1) | Prepaid expenses and other current assets | $ | 6,313 | $ | 4,306 | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Prepaid expenses and other current assets | 497 | 2,227 | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Prepaid expenses and other current assets | 5,083 | — | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term assets | 244 | 586 | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Other long-term assets | — | 22,745 | ||||||||||||||||||||||||||||||
Cross-currency swap agreement (4) | Other long-term assets | 1,559 | — | ||||||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 13,696 | $ | 29,864 | |||||||||||||||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||||||||||
Deferred compensation derivatives (5) | Prepaid expenses and other current assets | $ | 371 | $ | — | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Prepaid expenses and other current assets | 3,328 | 445 | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term assets | 170 | 166 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 3,869 | $ | 611 | |||||||||||||||||||||||||||||
Derivative Liabilities | |||||||||||||||||||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||||||||||||
Commodities futures and options (1) | Accrued liabilities | $ | 2,622 | $ | 129 | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Accrued liabilities | 1,408 | — | ||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term liabilities | 422 | — | ||||||||||||||||||||||||||||||
Interest rate swap agreements (3) | Other long-term liabilities | 2,336 | — | ||||||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | 6,788 | $ | 129 | |||||||||||||||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Accrued liabilities | $ | 698 | $ | — | ||||||||||||||||||||||||||||
Foreign exchange contracts (2) | Other long-term liabilities | 115 | 198 | ||||||||||||||||||||||||||||||
Total derivatives not designated as hedges | $ | 813 | $ | 198 | |||||||||||||||||||||||||||||
-1 | The fair value of commodities futures and options contracts is based on quoted market prices and is, therefore, categorized as Level 1 within the fair value hierarchy. As of September 28, 2014, accrued liabilities reflects the net of assets of $44,675 and accrued liabilities of $47,195 associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period. The comparable amounts reflected on a net basis in accrued liabilities at December 31, 2013 were assets of $23,780 and accrued liabilities of $23,909. At September 28, 2014 and December 31, 2013, the amount reflected in prepaid expenses and other current assets related to the fair value of options contracts. | ||||||||||||||||||||||||||||||||
-2 | The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. These contracts are classified as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
-3 | The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Such contracts are categorized as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
-4 | The fair value of the cross-currency swap agreement is categorized as Level 2 within the fair value hierarchy and is estimated based on the difference between the contract and current market foreign currency exchange rates at the end of the period. | ||||||||||||||||||||||||||||||||
-5 | The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index and is, therefore, categorized as Level 2 within the fair value hierarchy. | ||||||||||||||||||||||||||||||||
Gain (Loss) in Consolidates Statements of Income | ' | ||||||||||||||||||||||||||||||||
The effect of derivative instruments on the Consolidated Statements of Income for the three months ended September 28, 2014 and September 29, 2013 was as follows: | |||||||||||||||||||||||||||||||||
Non-designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||||||||||||
Gains recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) | Gains recognized in income (ineffective portion) (c) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Commodities futures and options | $ | 393 | $ | — | $ | 3,256 | $ | 84,170 | $ | 27,000 | $ | 4,000 | $ | 2,553 | $ | 2,728 | |||||||||||||||||
Foreign exchange contracts | 7,033 | — | (612 | ) | 6,286 | (361 | ) | 1,456 | — | — | |||||||||||||||||||||||
Interest rate swap agreements | — | — | (4,661 | ) | 1,200 | (1,114 | ) | (1,114 | ) | — | 428 | ||||||||||||||||||||||
Deferred compensation derivatives | 371 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 7,797 | $ | — | $ | (2,017 | ) | $ | 91,656 | $ | 25,525 | $ | 4,342 | $ | 2,553 | $ | 3,156 | ||||||||||||||||
(a) | Gains recognized in income for non-designated commodities futures and options contracts were included in cost of sales. Gains recognized in income for non-designated foreign currency forward exchange contracts and deferred compensation derivatives were included in selling, marketing and administrative expenses. | ||||||||||||||||||||||||||||||||
(b) | Gains (losses) reclassified from accumulated OCI into income were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains and losses for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. Losses reclassified from accumulated OCI into income for interest rate swap agreements were included in interest expense. | ||||||||||||||||||||||||||||||||
(c) | Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts and in interest expense for interest rate swap agreements. | ||||||||||||||||||||||||||||||||
The effect of derivative instruments on the Consolidated Statements of Income for the nine months ended September 28, 2014 and September 29, 2013 was as follows: | |||||||||||||||||||||||||||||||||
Non-designated Hedges | Cash Flow Hedges | ||||||||||||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in OCI (effective portion) | Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) | Gains recognized in income (ineffective portion) (c) | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||
Commodities futures and options | $ | 2,732 | $ | — | $ | 62,523 | $ | 69,670 | $ | 55,300 | $ | (5,500 | ) | $ | 2,461 | $ | 3,271 | ||||||||||||||||
Foreign exchange contracts | (1,759 | ) | — | (301 | ) | 6,501 | 3,536 | 3,382 | — | — | |||||||||||||||||||||||
Interest rate swap agreements | — | — | (19,998 | ) | 21,515 | (3,351 | ) | (2,858 | ) | — | — | ||||||||||||||||||||||
Deferred compensation derivatives | 1,909 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,882 | $ | — | $ | 42,224 | $ | 97,686 | $ | 55,485 | $ | (4,976 | ) | $ | 2,461 | $ | 3,271 | ||||||||||||||||
(a) | Gains recognized in income for non-designated commodities futures and options contracts were included in cost of sales. Gains (losses) recognized in income for non-designated foreign currency forward exchange contracts and deferred compensation derivatives were included in selling, marketing and administrative expenses. | ||||||||||||||||||||||||||||||||
(b) | Gains (losses) reclassified from accumulated OCI into income were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. For the nine months ended September 28, 2014, this included $3,801 relating to unrealized gains on foreign currency forward exchange contracts that were reclassified from accumulated OCI to selling, marketing and administrative expenses as a result of the discontinuance of cash flow hedge accounting because it was determined to be probable that the original forecasted transactions would not occur within the time period originally designated or the subsequent two months thereafter. Losses reclassified from accumulated OCI into income for interest rate swap agreements were included in interest expense. | ||||||||||||||||||||||||||||||||
(c) | Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts. |
COMPREHENSIVE_INCOME_Tables
COMPREHENSIVE INCOME (Tables) | 9 Months Ended | |||||||||||
Sep. 28, 2014 | ||||||||||||
Comprehensive Income Disclosure [Abstract] | ' | |||||||||||
Schedule of Comprehensive Income (Loss) | ' | |||||||||||
A summary of the components of comprehensive income is as follows: | ||||||||||||
Three Months Ended | ||||||||||||
28-Sep-14 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 223,741 | ||||||||||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments | $ | (17,321 | ) | $ | — | (17,321 | ) | |||||
Pension and post-retirement benefit plans (a) | 5,851 | (2,227 | ) | 3,624 | ||||||||
Cash flow hedges: | ||||||||||||
Losses on cash flow hedging derivatives | (2,017 | ) | 1,085 | (932 | ) | |||||||
Reclassification adjustments (b) | (25,525 | ) | 9,981 | (15,544 | ) | |||||||
Total other comprehensive loss | $ | (39,012 | ) | $ | 8,839 | (30,173 | ) | |||||
Comprehensive income | $ | 193,568 | ||||||||||
Three Months Ended | ||||||||||||
29-Sep-13 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 232,985 | ||||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | $ | 1,053 | $ | — | 1,053 | |||||||
Pension and post-retirement benefit plans (a) | 9,930 | (3,770 | ) | 6,160 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 91,656 | (34,311 | ) | 57,345 | ||||||||
Reclassification adjustments (b) | (4,342 | ) | 1,655 | (2,687 | ) | |||||||
Total other comprehensive income | $ | 98,297 | $ | (36,426 | ) | 61,871 | ||||||
Comprehensive income | $ | 294,856 | ||||||||||
Nine Months Ended | ||||||||||||
28-Sep-14 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 644,404 | ||||||||||
Other comprehensive (loss) income: | ||||||||||||
Foreign currency translation adjustments | $ | (12,016 | ) | $ | — | (12,016 | ) | |||||
Pension and post-retirement benefit plans (a) | 17,386 | (6,602 | ) | 10,784 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 42,224 | (15,375 | ) | 26,849 | ||||||||
Reclassification adjustments (b) | (55,485 | ) | 19,919 | (35,566 | ) | |||||||
Total other comprehensive loss | $ | (7,891 | ) | $ | (2,058 | ) | (9,949 | ) | ||||
Comprehensive income | $ | 634,455 | ||||||||||
Nine Months Ended | ||||||||||||
29-Sep-13 | ||||||||||||
Pre-Tax | Tax (Expense) | After-Tax | ||||||||||
Amount | Benefit | Amount | ||||||||||
Net income | $ | 634,395 | ||||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustments | $ | (17,928 | ) | $ | — | (17,928 | ) | |||||
Pension and post-retirement benefit plans (a) | 32,231 | (12,450 | ) | 19,781 | ||||||||
Cash flow hedges: | ||||||||||||
Gains on cash flow hedging derivatives | 97,686 | (36,331 | ) | 61,355 | ||||||||
Reclassification adjustments (b) | 4,976 | (1,895 | ) | 3,081 | ||||||||
Total other comprehensive income | $ | 116,965 | $ | (50,676 | ) | 66,289 | ||||||
Comprehensive income | $ | 700,684 | ||||||||||
(a) | These amounts are included in the computation of net periodic benefit costs. For more information, see Note 13. Pension and Other Post-Retirement Benefit Plans. | |||||||||||
(b) | For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 7. Financial Instruments and Fair Value. | |||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||
The components of accumulated other comprehensive loss as shown on the Consolidated Balance Sheets are as follows: | ||||||||||||
September 28, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Foreign currency translation adjustments | $ | (28,846 | ) | $ | (16,830 | ) | ||||||
Pension and post-retirement benefit plans, net of tax | (188,850 | ) | (199,634 | ) | ||||||||
Cash flow hedges, net of tax | 41,180 | 49,897 | ||||||||||
Total accumulated other comprehensive loss | $ | (176,516 | ) | $ | (166,567 | ) |
INVENTORIES_Tables
INVENTORIES (Tables) | 9 Months Ended | |||||||
Sep. 28, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule Of Inventory | ' | |||||||
Inventories were as follows: | ||||||||
September 28, | December 31, | |||||||
2014 | 2013 | |||||||
Raw materials | $ | 303,338 | $ | 226,978 | ||||
Goods in process | 93,788 | 79,861 | ||||||
Finished goods | 668,083 | 517,968 | ||||||
Inventories at FIFO | 1,065,209 | 824,807 | ||||||
Adjustment to LIFO | (164,466 | ) | (165,266 | ) | ||||
Total inventories | $ | 900,743 | $ | 659,541 | ||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property, Plant and Equipment | ' | ||||||||
Major classes of property, plant and equipment were as follows: | |||||||||
September 28, 2014 | December 31, 2013 | ||||||||
Land | $ | 96,396 | $ | 96,334 | |||||
Buildings | 1,130,397 | 956,890 | |||||||
Machinery and equipment | 3,006,583 | 2,726,170 | |||||||
Property, plant and equipment, gross | 4,233,376 | 3,779,394 | |||||||
Accumulated depreciation | (2,154,663 | ) | (1,974,049 | ) | |||||
Property, plant and equipment, net | $ | 2,078,713 | $ | 1,805,345 | |||||
DEBT_AND_FINANCING_ARRANGEMENT1
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Long-term Debt, Unclassified [Abstract] | ' | |||||||||||||||
Schedule Of Net Interest Expense [Table Text Block] | ' | |||||||||||||||
Net interest expense consisted of the following: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest expense | $ | 23,441 | $ | 22,838 | $ | 69,839 | $ | 69,619 | ||||||||
Interest income | (1,125 | ) | (696 | ) | (3,209 | ) | (2,109 | ) | ||||||||
Capitalized interest | (1,543 | ) | (383 | ) | (3,838 | ) | (1,024 | ) | ||||||||
Interest expense, net | $ | 20,773 | $ | 21,759 | $ | 62,792 | $ | 66,486 | ||||||||
PENSION_AND_OTHER_POSTRETIREME1
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended | |||||||||||||||
Sep. 28, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
Schedule of Defined Benefit Plans Disclosures | ' | |||||||||||||||
Components of net periodic benefit cost consisted of the following: | ||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 20,003 | $ | 23,528 | $ | 530 | $ | 821 | ||||||||
Interest cost | 36,643 | 32,986 | 8,778 | 8,063 | ||||||||||||
Expected return on plan assets | (55,537 | ) | (54,862 | ) | — | — | ||||||||||
Amortization of prior service cost | (501 | ) | 317 | 462 | 463 | |||||||||||
Recognized net actuarial loss (gains) | 17,511 | 30,324 | (107 | ) | (55 | ) | ||||||||||
Administrative expenses | 586 | 537 | 78 | 74 | ||||||||||||
Net periodic benefit cost | $ | 18,705 | $ | 32,830 | $ | 9,741 | $ | 9,366 | ||||||||
Components of net periodic benefit cost consisted of the following: | ||||||||||||||||
Pension Benefits | Other Benefits | |||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 28, | September 29, | September 28, | September 29, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 6,670 | $ | 7,830 | $ | 177 | $ | 274 | ||||||||
Interest cost | 12,218 | 10,984 | 2,927 | 2,686 | ||||||||||||
Expected return on plan assets | (18,519 | ) | (18,277 | ) | — | — | ||||||||||
Amortization of prior service cost | (167 | ) | 106 | 154 | 209 | |||||||||||
Recognized net actuarial loss (gains) | 5,838 | 10,106 | (36 | ) | (73 | ) | ||||||||||
Administrative expenses | 193 | 270 | 23 | 24 | ||||||||||||
Net periodic benefit cost | $ | 6,233 | $ | 11,019 | $ | 3,245 | $ | 3,120 | ||||||||
TREASURY_STOCK_ACTIVITY_Tables
TREASURY STOCK ACTIVITY (Tables) | 9 Months Ended | ||||||
Sep. 28, 2014 | |||||||
Stockholders' Equity Note [Abstract] | ' | ||||||
Cumulative Share Repurchases And Issuances | ' | ||||||
A summary of our treasury stock activity is as follows: | |||||||
Nine Months Ended September 28, 2014 | |||||||
Shares | Dollars | ||||||
In thousands | |||||||
Shares repurchased in the open market under pre-approved | 2,112,408 | $ | 200,067 | ||||
share repurchase programs | |||||||
Shares repurchased to replace Treasury Stock issued for stock options | 3,346,513 | 342,576 | |||||
and incentive compensation | |||||||
Total share repurchases | 5,458,921 | 542,643 | |||||
Shares issued for stock options and incentive compensation | (2,478,771 | ) | (103,141 | ) | |||
Net change | 2,980,150 | $ | 439,502 | ||||
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Sep. 28, 2014 | |
Minimum [Member] | ' |
Summary of Significant Accounting Policies [Line Items] | ' |
Maturity of Time Deposits | '3 months |
Maximum [Member] | ' |
Summary of Significant Accounting Policies [Line Items] | ' |
Maturity of Time Deposits | '12 months |
BUSINESS_ACQUISITIONS_Details
BUSINESS ACQUISITIONS (Details) (USD $) | 9 Months Ended | 0 Months Ended | 9 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||
Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 | Sep. 26, 2014 | Sep. 28, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Mar. 30, 2014 | Sep. 26, 2014 | Sep. 26, 2014 | Oct. 26, 2014 | |
Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | Lotte Shanghai Food Company [Member] | Minimum [Member] | Maximum [Member] | Subsequent Event [Member] | ||||
Goodwill [Member] | Customer-Related Intangible Assets [Member] | Customer-Related Intangible Assets [Member] | Trademarks [Member] | Trademarks [Member] | Property, Plant and Equipment [Member] | Shanghai Golden Monkey [Member] | Shanghai Golden Monkey [Member] | The Allan Candy Company Limited [Member] | ||||||||
Property, Plant and Equipment [Member] | Property, Plant and Equipment [Member] | |||||||||||||||
Shanghai Golden Monkey [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Effective Date of Acquisition | ' | ' | ' | 26-Sep-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Acquisition, Percentage of Voting Interests Acquired | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred | ' | ' | ' | $393,238,000 | ' | ' | ' | ' | ' | ' | ' | ' | $99,161,000 | ' | ' | ' |
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | ' | ' | ' | 200,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | ' | ' | ' | ' | ' | 20.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash Acquired from Acquisition | ' | ' | ' | 20,756,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill, Acquired During Period | ' | ' | ' | ' | ' | ' | 208,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | ' | ' | ' | ' | ' | ' | ' | ' | 94,000,000 | ' | 67,000,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 110,000,000 | 106,253,000 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets | ' | ' | ' | ' | ' | 41,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | ' | ' | ' | ' | ' | -48,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | ' | ' | ' | ' | ' | ' | ' | '16 years 0 months | ' | '22 years 0 months | ' | ' | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years 0 months | '40 years 0 months | ' |
Business Combination, Acquisition Related Costs | ' | ' | ' | ' | 14,097,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lotte Shanghai Food Company [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Ownership Percentage Acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.90% | ' | ' | ' |
Business Acquisition, Cost of Acquired Entity, Cash Paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,580,000 | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44.10% | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Parent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' |
Equity Method Investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,857,000 | ' | ' | ' |
Noncontrolling interests in subsidiaries | 63,906,000 | ' | 11,218,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 49,724,000 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | ' | ' | ' | ' | ' | 472,000,000 | ' | ' | ' | ' | ' | ' | 99,449,000 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Long-term Debt | 96,868,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,292,000 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,488,000 | ' | ' | ' |
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,627,000 | ' | ' | ' |
Business acquisitions, net of cash and cash equivalents acquired | -362,447,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,035,000 | ' | ' | ' |
Business Combination, Consideration Transferred, Liabilities Incurred | ' | ' | ' | 100,067,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected Payment To Acquire Business, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $28,000,000 |
NONCONTROLLING_INTERESTS_IN_SU1
NONCONTROLLING INTERESTS IN SUBSIDIARIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 |
Minority Interest [Line Items] | ' | ' | ' | ' | ' |
Noncontrolling interests in subsidiaries | $63,906 | ' | $63,906 | ' | $11,218 |
Contributions from noncontrolling interests | ' | ' | 2,940 | 2,940 | ' |
Noncontrolling interests' share of losses in subsidiaries | 202 | -275 | 511 | 1,888 | ' |
Hershey Do Brasil Subsidiary [Member] | ' | ' | ' | ' | ' |
Minority Interest [Line Items] | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | ' | 51.00% | ' | ' |
Investments in and Advances to Affiliates, at Fair Value, Gross Additions | ' | ' | 3,060 | 3,060 | ' |
Contributions from noncontrolling interests | ' | ' | $2,940 | $2,940 | ' |
Lotte Shanghai Food Company [Member] | ' | ' | ' | ' | ' |
Minority Interest [Line Items] | ' | ' | ' | ' | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% | ' | 50.00% | ' | ' |
STOCK_COMPENSATION_PLAN_STOCK_
STOCK COMPENSATION PLAN STOCK COMPENSATION PLANS (Details) - Stock Compensation Costs (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Total compensation amount charged against income for stock options, performance stock units and restricted stock units | $14,062 | $13,594 | $41,759 | $39,582 |
Total income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation | $4,907 | $4,507 | $14,407 | $13,577 |
STOCK_COMPENSATION_PLAN_Detail
STOCK COMPENSATION PLAN (Details) - Stock Options (Employee Stock Option [Member], USD $) | 9 Months Ended | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 |
Employee Stock Option [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ' | ' | ' |
Outstanding at beginning of period | 8,660,336 | ' | ' |
Granted | 1,371,610 | ' | ' |
Exercised | -2,076,476 | ' | ' |
Forfeited | -151,676 | ' | ' |
Outstanding as of end of period | 7,803,794 | ' | 8,660,336 |
Options exercisable as of end of period | 4,114,106 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ' | ' | ' |
Outstanding at beginning of the period | $55.47 | ' | ' |
Granted | $105.88 | ' | ' |
Exercised | $48.88 | ' | ' |
Forfeited | $83.04 | ' | ' |
Outstanding as of end of period | $65.57 | ' | $55.47 |
Options Exercisable as of end of period | $50.51 | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ' | ' | ' |
Outstanding at beginning of the period | '6 years 6 months | ' | '6 years 4 months |
Outstanding as of end of period | '6 years 6 months | ' | '6 years 4 months |
Options Exercisable as of end of period | '4 years 11 months | ' | ' |
Weighted-average fair value of options granted (per share) | $21.54 | $14.48 | ' |
Intrinsic value of options exercised | $110,329 | $117,520 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ' | ' | ' |
Dividend yields | 2.00% | 2.20% | ' |
Expected volatility | 22.30% | 22.20% | ' |
Risk-free interest rates | 2.10% | 1.40% | ' |
Expected lives in years | '6 years 8 months | '6 years 7 months | ' |
Aggregate intrinsic value of options outstanding | 226,306 | ' | ' |
Aggregate intrinsic value of options exercisable | 171,913 | ' | ' |
Total Unrecognized Compensation Cost Related to Non-Vested Stock Option Compensation Arrangements Granted Under Our Stock Option Plans | $29,634 | ' | ' |
Weighted Average Period In Years That Total Unrecognized Compensation Cost is Expected To be Recognized | '2 years 4 months | ' | ' |
STOCK_COMPENSATION_PLAN_STOCK_1
STOCK COMPENSATION PLAN STOCK COMPENSATION PLAN (Details) - Performance Stock Units and Restricted Stock Units (Performance Stock Units and Restricted Stock Units [Member], USD $) | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 | |
Performance Stock Units and Restricted Stock Units [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award | ' | ' | ' |
Outstanding at beginning of year | 1,411,399 | ' | ' |
Granted | 308,980 | 371,695 | ' |
Performance assumption change | -191,588 | ' | ' |
Vested | -541,848 | ' | ' |
Forfeited | -36,933 | ' | ' |
Outstanding as of end of period | 950,010 | ' | ' |
Outstanding as of beginning of year | $72.43 | ' | ' |
Granted | $116.90 | $88.11 | ' |
Performance assumption change | $84.55 | ' | ' |
Vested | $63.36 | ' | ' |
Forfeited | $88.20 | ' | ' |
Outstanding as of end of period | $93.86 | ' | ' |
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number Excluded | 26,396 | ' | 29,596 |
Fair Value of Performance Stock Units and Restricted Stock Units [Abstract] | ' | ' | ' |
PSU Fair Value Monte Carlo Simulation Estimated Value (per unit) | $80.95 | $55.49 | ' |
PSU Fair Value Monte Carlo Simulation Dividend Yields | 1.80% | 2.00% | ' |
PSU Fair Value Monte Carlo Simulation Expected Volatility | 15.50% | 17.10% | ' |
Total Unrecognized Compensation Cost Related to Non-Vested PSUs and RSUs | 46,628,000 | ' | ' |
Weighted-average period (in years) that total unrecognized compensation cost related to non-vested performance stock units and restricted stock units is expected to be recognized | '2 years 1 month | ' | ' |
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested | $57,001,000 | $60,507,000 | ' |
Deferred performance stock units, deferred restricted stock units representing directors' fees (units) | 534,637 | ' | ' |
Number of shares of common stock into which another unit of deferred performance stock and restricted stock is converted | 'one | ' | ' |
BUSINESS_REALIGNMENT_AND_IMPAI2
BUSINESS REALIGNMENT AND IMPAIRMENT CHARGES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Asset Impairment Charges | $13,340,000 | $0 | $13,340,000 | $0 |
Business realignment and impairment charges, net | 16,372,000 | 2,929,000 | 20,544,000 | 13,367,000 |
Total business realignment charges | 16,372,000 | 2,992,000 | 20,637,000 | 13,594,000 |
Next Century Program | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Costs Incurred to Date | 197,600,000 | ' | 197,600,000 | ' |
Next Century Program - plant closure expenses | 3,032,000 | 2,929,000 | 7,204,000 | 13,367,000 |
Next Century Program | Minimum [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Next Century Pretax Charges And Nonrecurring Project Implementation Costs Range Minimum | ' | ' | 190,000,000 | ' |
Next Century Program | Maximum [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Next Century Pretax Charges And Nonrecurring Project Implementation Costs Range Maximum | ' | ' | 200,000,000 | ' |
Next Century Program | Cost of Sales [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Costs | 0 | 62,000 | 93,000 | 209,000 |
Next Century Program | Selling, General and Administrative Expenses [Member] | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring Costs | $0 | $1,000 | $0 | $18,000 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ' | ' | ' | ' |
Net Income | $223,741 | $232,985 | $644,404 | $634,395 |
Weighted-average shares - Basic | 221,873 | 223,993 | 222,950 | 224,112 |
Weighted-average number of shares outstanding, diluted | 223,877 | 226,887 | 225,293 | 227,149 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,510 | 1,011 | 1,510 | 1,759 |
Common Stock | ' | ' | ' | ' |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ' | ' | ' | ' |
Weighted-average shares - Basic | 161,253 | 163,364 | 162,330 | 163,483 |
Earnings Per Share - Basic | $1.03 | $1.07 | $2.97 | $2.91 |
Earnings Per Share - Diluted | $1 | $1.03 | $2.86 | $2.79 |
Common Class B | ' | ' | ' | ' |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ' | ' | ' | ' |
Weighted-average shares - Basic | 60,620 | 60,629 | 60,620 | 60,629 |
Earnings Per Share - Basic | $0.94 | $0.96 | $2.68 | $2.63 |
Earnings Per Share - Diluted | $0.94 | $0.95 | $2.67 | $2.61 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ' | ' | ' | ' |
Weighted-Average Number Diluted Shares Outstanding Adjustment | 1,705 | 2,431 | 1,985 | 2,488 |
Performance and restricted stock units | ' | ' | ' | ' |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ' | ' | ' | ' |
Weighted-Average Number Diluted Shares Outstanding Adjustment | 299 | 463 | 358 | 549 |
FINANCIAL_INSTRUMENTS_AND_FAIR2
FINANCIAL INSTRUMENTS AND FAIR VALUE (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 | |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Cash Flow Hedge Derivative Instrument Assets at Fair Value | $13,696,000 | ' | $13,696,000 | ' | $29,864,000 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 3,869,000 | ' | 3,869,000 | ' | 611,000 |
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 6,788,000 | ' | 6,788,000 | ' | 129,000 |
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 813,000 | ' | 813,000 | ' | 198,000 |
Derivative Asset Current Commodity Last Day Activity | 44,675,000 | ' | 44,675,000 | ' | 23,780,000 |
Derivative Liability Current Commodity Last Day Activity | 47,195,000 | ' | 47,195,000 | ' | 23,909,000 |
Long-term Debt | 1,810,651,000 | ' | 1,810,651,000 | ' | ' |
Long-term Debt, Fair Value | 1,973,308,000 | ' | 1,973,308,000 | ' | ' |
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 7,797,000 | 0 | 2,882,000 | 0 | ' |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | -2,017,000 | 91,656,000 | 42,224,000 | 97,686,000 | ' |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 25,525,000 | 4,342,000 | 55,485,000 | -4,976,000 | ' |
Gains (losses) recognized in income (ineffective portion) | 2,553,000 | 3,156,000 | 2,461,000 | 3,271,000 | ' |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months (after tax) | ' | ' | 28,781,000 | ' | ' |
Commodities Futures and Options Contracts | ' | ' | ' | ' | ' |
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 393,000 | 0 | 2,732,000 | 0 | ' |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | 3,256,000 | 84,170,000 | 62,523,000 | 69,670,000 | ' |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 27,000,000 | 4,000,000 | 55,300,000 | -5,500,000 | ' |
Gains (losses) recognized in income (ineffective portion) | 2,553,000 | 2,728,000 | 2,461,000 | 3,271,000 | ' |
Foreign Exchange Forward Contracts | ' | ' | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' |
Net notional amount of foreign exchange contracts accounted for as cash flow hedges | 506,000 | ' | 506,000 | ' | 158,375,000 |
Net notional amount of foreign exchange contracts that are not designated as accounting hedges | 5,354,000 | ' | 5,354,000 | ' | 2,823,000 |
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 7,033,000 | 0 | -1,759,000 | 0 | ' |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | -612,000 | 6,286,000 | -301,000 | 6,501,000 | ' |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | -361,000 | 1,456,000 | 3,536,000 | 3,382,000 | ' |
Gains (losses) recognized in income (ineffective portion) | 0 | 0 | 0 | 0 | ' |
Gain on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring | ' | ' | 3,801,000 | ' | ' |
Interest Rate Swap Agreements | ' | ' | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' |
Notional amount of interest rate derivative instruments | 700,000,000 | ' | 700,000,000 | ' | 250,000,000 |
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | 0 | 0 | ' |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | -4,661,000 | 1,200,000 | -19,998,000 | 21,515,000 | ' |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | -1,114,000 | -1,114,000 | -3,351,000 | -2,858,000 | ' |
Gains (losses) recognized in income (ineffective portion) | 0 | 428,000 | 0 | 0 | ' |
Equity Swap | ' | ' | ' | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' | ' | ' | ' |
Notional amount of the equity swap contracts outstanding | ' | ' | 25,306,000 | ' | ' |
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 371,000 | 0 | 1,909,000 | 0 | ' |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | 0 | 0 | 0 | 0 | ' |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 0 | 0 | 0 | 0 | ' |
Gains (losses) recognized in income (ineffective portion) | 0 | 0 | 0 | 0 | ' |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 1 | Commodities Futures and Options Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative assets current | 6,313,000 | ' | 6,313,000 | ' | 4,306,000 |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative assets current | 497,000 | ' | 497,000 | ' | 2,227,000 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 3,328,000 | ' | 3,328,000 | ' | 445,000 |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 2 | Interest Rate Swap Agreements | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative assets current | 5,083,000 | ' | 5,083,000 | ' | 0 |
Prepaid expenses and other current assets | Fair Value, Inputs, Level 2 | Equity Swap | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 371,000 | ' | 371,000 | ' | 0 |
Other long-term assets | Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Assets, Noncurrent | 244,000 | ' | 244,000 | ' | 586,000 |
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 170,000 | ' | 170,000 | ' | 166,000 |
Other long-term assets | Fair Value, Inputs, Level 2 | Interest Rate Swap Agreements | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Assets, Noncurrent | 0 | ' | 0 | ' | 22,745,000 |
Other long-term assets | Fair Value, Inputs, Level 2 | Cross Currency Swap | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Assets, Noncurrent | 1,559,000 | ' | 1,559,000 | ' | 0 |
Accrued liabilities | Fair Value, Inputs, Level 1 | Commodities Futures and Options Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative liabilities current | 2,622,000 | ' | 2,622,000 | ' | 129,000 |
Accrued liabilities | Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative liabilities current | 1,408,000 | ' | 1,408,000 | ' | 0 |
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 698,000 | ' | 698,000 | ' | 0 |
Other long-term liabilities | Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Liability, Noncurrent | 422,000 | ' | 422,000 | ' | 0 |
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 115,000 | ' | 115,000 | ' | 198,000 |
Other long-term liabilities | Fair Value, Inputs, Level 2 | Interest Rate Swap Agreements | ' | ' | ' | ' | ' |
Balance Sheet Caption | ' | ' | ' | ' | ' |
Derivative Liability, Noncurrent | $2,336,000 | ' | $2,336,000 | ' | $0 |
COMPREHENSIVE_INCOME_Details
COMPREHENSIVE INCOME (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 |
Other comprehensive income (loss) Pre-Tax Amount: | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | ($17,321) | $1,053 | ($12,016) | ($17,928) | ' |
Pension and post-retirement benefit plans | 5,851 | 9,930 | 17,386 | 32,231 | ' |
Gains (losses) on cash flow hedging derivatives | -2,017 | 91,656 | 42,224 | 97,686 | ' |
Reclassification adjustments | -25,525 | -4,342 | -55,485 | 4,976 | ' |
Total other comprehensive income | -39,012 | 98,297 | -7,891 | 116,965 | ' |
Other comprehensive income Tax (Expense) Benefit: | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ' |
Pension and post-retirement benefit plans | -2,227 | -3,770 | -6,602 | -12,450 | ' |
Gains on cash flow hedging derivatives | 1,085 | -34,311 | -15,375 | -36,331 | ' |
Reclassification adjustments | 9,981 | 1,655 | 19,919 | -1,895 | ' |
Total Other Comprehensive Income | 8,839 | -36,426 | -2,058 | -50,676 | ' |
Comprehensive income (loss) After-Tax Amount: | ' | ' | ' | ' | ' |
Net income | 223,741 | 232,985 | 644,404 | 634,395 | ' |
Other Comprehensive Income (Loss) After-Tax Amount: | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | -17,321 | 1,053 | -12,016 | -17,928 | ' |
Pension and postretirement benefit plans | 3,624 | 6,160 | 10,784 | 19,781 | ' |
Gains on cash flow hedging derivatives | -932 | 57,345 | 26,849 | 61,355 | ' |
Reclassification adjustments | -15,544 | -2,687 | -35,566 | 3,081 | ' |
Total other comprehensive income (loss) | -30,173 | 61,871 | -9,949 | 66,289 | ' |
Comprehensive Income | 193,568 | 294,856 | 634,455 | 700,684 | ' |
Components of Accumulated Other Comprehensive (Loss) Abstract | ' | ' | ' | ' | ' |
Foreign currency translation adjustments | -28,846 | ' | -28,846 | ' | -16,830 |
Pension and post-retirement benefit plans, net of tax | -188,850 | ' | -188,850 | ' | -199,634 |
Cash flow hedges, net of tax | 41,180 | ' | 41,180 | ' | 49,897 |
Total accumulated other comprehensive loss | ($176,516) | ' | ($176,516) | ' | ($166,567) |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | $85,772 | ' |
Inventories Table | ' | ' |
Raw materials | 303,338 | 226,978 |
Goods in process | 93,788 | 79,861 |
Finished goods | 668,083 | 517,968 |
Inventories at FIFO | 1,065,209 | 824,807 |
Adjustment to LIFO | -164,466 | -165,266 |
Total inventories | $900,743 | $659,541 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Abstract] | ' | ' |
Land | $96,396 | $96,334 |
Buildings | 1,130,397 | 956,890 |
Machinery and Equipment | 3,006,583 | 2,726,170 |
Property, Plant and Equipment, Gross | 4,233,376 | 3,779,394 |
Accumulated Depreciation | -2,154,663 | -1,974,049 |
Property, Plant and Equipment, Net | $2,078,713 | $1,805,345 |
DEBT_AND_FINANCING_ARRANGEMENT2
DEBT AND FINANCING ARRANGEMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | |||||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Dec. 31, 2013 | Sep. 28, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | |
Notes Due 2015 [Member] | Notes Due 2013 [Member] | Notes Due 2023 [Member] | ||||||
Debt [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | $1,000,000,000 | ' | $1,000,000,000 | ' | ' | ' | ' | ' |
Commercial Paper | 329,987,000 | ' | 329,987,000 | ' | 0 | ' | ' | ' |
Short-term Debt, Weighted Average Interest Rate | 0.09% | ' | 0.09% | ' | ' | ' | ' | ' |
Long-term Debt, Current Maturities | 250,881,000 | ' | 250,881,000 | ' | 914,000 | 250,000,000 | ' | ' |
Repayments of Long-term Debt | ' | ' | ' | ' | ' | ' | 250,000,000 | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | 4.85% | 5.00% | 2.63% |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Long-term Debt | 96,868,000 | ' | 96,868,000 | ' | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | 16,253,000 | ' | 16,253,000 | ' | ' | ' | ' | ' |
Long-term borrowings | ' | ' | 1,348,000 | 250,767,000 | ' | ' | ' | 250,000,000 |
Interest expense | 23,441,000 | 22,838,000 | 69,839,000 | 69,619,000 | ' | ' | ' | ' |
Interest income | -1,125,000 | -696,000 | -3,209,000 | -2,109,000 | ' | ' | ' | ' |
Capitalized interest | -1,543,000 | -383,000 | -3,838,000 | -1,024,000 | ' | ' | ' | ' |
Interest expense, net | $20,773,000 | $21,759,000 | $62,792,000 | $66,486,000 | ' | ' | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 28, 2014 |
Income Tax Disclosure [Abstract] | ' |
Tax Adjustments, Settlements, and Unusual Provisions | $2.20 |
Income Taxes Receivable, Noncurrent | 1.5 |
Reduction in liability for unrecognized tax benefits | $6.20 |
PENSION_AND_OTHER_POSTRETIREME2
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Pension Benefits | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Service cost | $6,670 | $7,830 | $20,003 | $23,528 |
Interest cost | 12,218 | 10,984 | 36,643 | 32,986 |
Expected return on plan assets | -18,519 | -18,277 | -55,537 | -54,862 |
Amortization of prior service cost | -167 | 106 | -501 | 317 |
Recognized net actuarial loss (gains) | 5,838 | 10,106 | 17,511 | 30,324 |
Administrative expenses | 193 | 270 | 586 | 537 |
Net periodic benefit cost | 6,233 | 11,019 | 18,705 | 32,830 |
Pension Contributions | 24,696 | 28,647 | 26,669 | 29,875 |
Other Benefits | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Service cost | 177 | 274 | 530 | 821 |
Interest cost | 2,927 | 2,686 | 8,778 | 8,063 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 154 | 209 | 462 | 463 |
Recognized net actuarial loss (gains) | -36 | -73 | -107 | -55 |
Administrative expenses | 23 | 24 | 78 | 74 |
Net periodic benefit cost | 3,245 | 3,120 | 9,741 | 9,366 |
Pension Contributions | $4,105 | $6,254 | $14,777 | $18,275 |
TREASURY_STOCK_ACTIVITY_Detail
TREASURY STOCK ACTIVITY (Details) (USD $) | 9 Months Ended |
Sep. 28, 2014 | |
Cumulative Share Repurchases and Issuances Abstract | ' |
Shares repurchased in the open market under pre-approved share repurchase programs | 2,112,408 |
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 3,346,513 |
Total share repurchases | 5,458,921 |
Shares issued for stock options and incentive compensation | -2,478,771 |
Net Change | 2,980,150 |
Value of shares repurchased in the open market under pre-approved share repurchase programs | $200,067,000 |
Value of shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 342,576,000 |
Total Share Repurchases | 542,643,000 |
Value of shares issued for stock options and incentive compensation | -103,141,000 |
Net Change In Value | 439,502,000 |
2011 Share Repurchase Program [Member] | ' |
Accelerated Share Repurchases [Line Items] | ' |
Approved share repurchase program | 250,000,000 |
2014 Share Repurchase Program [Member] | ' |
Accelerated Share Repurchases [Line Items] | ' |
Available for repurchase under approved share repurchase program | 175,000,000 |
Approved share repurchase program | 250,000,000 |
Stock Repurchased During Period, Value | $75,000,000 |
CONTINGENCIES_Details
CONTINGENCIES (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2013 | Sep. 28, 2014 |
Canada [Member] | ' | ' |
Loss Contingencies [Line Items] | ' | ' |
Loss Contingency, Pending Claims, Number | ' | 13 |
Litigation Settlement, Amount | $4 | ' |
US [Member] | ' | ' |
Loss Contingencies [Line Items] | ' | ' |
Loss Contingency, Pending Claims, Number | ' | 91 |