Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | ||
Oct. 04, 2015 | Oct. 23, 2015 | Jun. 27, 2014 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | HERSHEY CO | ||
Entity Central Index Key | 47,111 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-Q | ||
Document Period End Date | Oct. 4, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 14,349,963,182 | ||
Common Class A | |||
Entity Common Stock, Shares Outstanding | 156,173,507 | ||
Common Class B | |||
Entity Common Stock, Shares Outstanding | 60,619,777 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Net sales | $ 1,960,779 | $ 1,961,578 | $ 5,477,404 | $ 5,411,741 |
Costs and Expenses | ||||
Cost of sales | 1,068,715 | 1,101,441 | 2,949,089 | 2,962,640 |
Selling, marketing and administrative | 500,306 | 485,097 | 1,469,861 | 1,379,843 |
Goodwill impairment | 30,991 | 0 | 280,802 | 0 |
Business realignment charges | 57,753 | 16,372 | 82,972 | 20,544 |
Total costs and expenses | 1,657,765 | 1,602,910 | 4,782,724 | 4,363,027 |
Operating profit | 303,014 | 358,668 | 694,680 | 1,048,714 |
Interest expense, net | 46,967 | 20,773 | 85,046 | 62,792 |
Other (income) expense, net | 9,409 | (7,528) | 4,328 | 1,448 |
Income before Income Taxes | 246,638 | 345,423 | 605,306 | 984,474 |
Provision for income taxes | 91,867 | 121,682 | 305,739 | 340,070 |
Net income | $ 154,771 | $ 223,741 | $ 299,567 | $ 644,404 |
Common Stock | ||||
Earnings Per Share | ||||
Earnings Per Share - Basic | $ 0.73 | $ 1.03 | $ 1.40 | $ 2.97 |
Earnings Per Share - Diluted | 0.70 | 1 | 1.35 | 2.86 |
Cash Dividends Paid Per Share | ||||
Common Stock | 0.583 | 0.535 | 1.653 | 1.505 |
Common Class B | ||||
Earnings Per Share | ||||
Earnings Per Share - Basic | 0.66 | 0.94 | 1.27 | 2.68 |
Earnings Per Share - Diluted | 0.66 | 0.94 | 1.28 | 2.67 |
Cash Dividends Paid Per Share | ||||
Common Stock | $ 0.530 | $ 0.486 | $ 1.502 | $ 1.356 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Net income | $ 154,771 | $ 223,741 | $ 299,567 | $ 644,404 |
Other comprehensive Income, Net of Tax: | ||||
Foreign currency translation adjustments | (26,631) | (17,321) | (51,681) | (12,016) |
Pension and post-retirement benefit plans | 9,969 | 3,624 | 20,896 | 10,784 |
Cash flow hedges: | ||||
(Losses) gains on cash flow hedging derivatives | (43,914) | (932) | 21,023 | 26,849 |
Reclassification adjustments | (6,214) | (15,544) | (17,711) | (35,566) |
Total Other Comprehensive Loss, Net of Tax | (66,790) | (30,173) | (27,473) | (9,949) |
Total comprehensive income | 87,981 | 193,568 | 272,094 | 634,455 |
Comprehensive (gain) loss attributable to noncontrolling interests | (820) | 0 | 2,111 | 0 |
Comprehensive income attributable to The Hershey Company | $ 87,161 | $ 193,568 | $ 274,205 | $ 634,455 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 04, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 343,913 | $ 374,854 |
Short-term investments | 0 | 97,131 |
Accounts receivable - trade, net | 760,789 | 596,940 |
Inventories | 813,583 | 801,036 |
Deferred income taxes | 99,628 | 100,515 |
Prepaid expenses and other | 191,417 | 276,571 |
Total current assets | 2,209,330 | 2,247,047 |
Property, plant and equipment, net | 2,187,736 | 2,151,901 |
Goodwill | 689,684 | 792,955 |
Other Intangible Assets | 388,747 | 294,841 |
Other Assets | 155,123 | 142,772 |
Total assets | 5,630,620 | 5,629,516 |
Liabilities | ||
Accounts payable | 448,599 | 482,017 |
Accrued liabilities | 807,621 | 813,513 |
Accrued income taxes | 40,619 | 4,616 |
Short-term debt | 687,981 | 384,696 |
Current portion of long-term debt | 250,421 | 250,805 |
Total current liabilities | 2,235,241 | 1,935,647 |
Long-term Debt | 1,830,186 | 1,548,963 |
Other Long-term Liabilities | 504,972 | 526,003 |
Deferred Income Taxes | 123,095 | 99,373 |
Total liabilities | 4,693,494 | 4,109,986 |
Stockholders' Equity | ||
Preferred stock, shares issued: none at October 4, 2015 and December 31, 2014, respectively | 0 | 0 |
Common stock, shares issued: 299,281,967 and 299,281,967 at October 4, 2015 and December 31, 2014, respectively | 299,281 | 299,281 |
Class B common stock, shares issued: 60,619,777 and 60,619,777 at October 4, 2015 and December 31, 2014, respectively | 60,620 | 60,620 |
Additional paid-in capital | 771,074 | 754,186 |
Retained earnings | 5,807,281 | 5,860,784 |
Treasury – common stock shares, at cost: 143,155,476 and 138,856,786 at October 4, 2015 and December 31, 2014, respectively | (5,665,708) | (5,161,236) |
Accumulated other comprehensive loss | (383,935) | (358,573) |
The Hershey Company stockholders' equity | 888,613 | 1,455,062 |
Noncontrolling interests in subsidiaries | 48,513 | 64,468 |
Total stockholders' equity | 937,126 | 1,519,530 |
Total liabilities and stockholders' equity | $ 5,630,620 | $ 5,629,516 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Oct. 04, 2015 | Dec. 31, 2014 |
STOCKHOLDERS' EQUITY | ||
Treasury - Common Stock, shares at cost | 143,155,476 | 138,856,786 |
Preferred Stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock, shares issued | 0 | 0 |
Common Stock | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, shares issued | 299,281,967 | 299,281,967 |
Common Class B | ||
STOCKHOLDERS' EQUITY | ||
Common Stock, shares issued | 60,619,777 | 60,619,777 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 04, 2015 | Sep. 28, 2014 | |
Cash Flows Provided by Operating Activities | ||
Net income | $ 299,567 | $ 644,404 |
Adjustments to Reconcile Net Income to Net Cash Flows | ||
Depreciation and amortization | 182,855 | 153,006 |
Stock-based compensation expense | 39,989 | 41,759 |
Excess tax benefits from stock-based compensation | (22,966) | (46,222) |
Deferred income taxes | (10,385) | (10,031) |
Non-cash business realignment and impairment charges | 283,469 | 13,340 |
Contributions to pension and other benefit plans | (45,187) | (41,446) |
Loss on Extinguishment of Debt | 28,326 | 0 |
Write-down of equity investments | 13,895 | 0 |
Changes in assets and liabilities, net of effects from business acquisitions | ||
Accounts receivable - trade | (186,156) | (217,114) |
Inventories | (2,064) | (165,205) |
Accounts payable and accrued liabilities | (55,890) | (23,053) |
Other assets and liabilities | 62,411 | 37,995 |
Net Cash Flows Provided by Operating Activities | 587,864 | 387,433 |
Cash Flows Used in Investing Activities | ||
Capital additions | (220,782) | (214,259) |
Capitalized software additions | (17,111) | (18,007) |
Proceeds from sales of property, plant and equipment | 1,184 | 655 |
Proceeds from sale of business | 32,408 | 0 |
Equity investments in tax credit qualifying partnerships | (3,775) | 0 |
Business acquisitions, net of cash and cash equivalents acquired | (218,654) | (362,447) |
Sale (purchase) of short-term investments | 95,316 | (98,309) |
Net Cash Flows Used in Investing Activities | (331,414) | (692,367) |
Cash Flows Used in Financing Activities | ||
Net increase in short-term debt | 336,851 | 381,352 |
Long-term borrowings | 599,031 | 1,348 |
Repayment of long-term debt | (351,042) | (1,075) |
Cash dividends paid | (353,070) | (325,156) |
Exercise of stock options | 63,623 | 100,526 |
Excess tax benefits from stock-based compensation | 22,966 | 46,222 |
Contributions from noncontrolling interest | 0 | 2,940 |
Purchase of noncontrolling interest | (38,270) | 0 |
Repurchase of common stock | (567,480) | (542,643) |
Net Cash Flows Used in Financing Activities | (287,391) | (336,486) |
Decrease in cash and cash equivalents | (30,941) | (641,420) |
Cash and Cash Equivalents, beginning of period | 374,854 | 1,118,508 |
Cash and Cash Equivalents, end of period | 343,913 | 477,088 |
Interest Paid | 71,124 | 73,002 |
Income Taxes Paid | $ 256,610 | $ 278,775 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Oct. 04, 2015 - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Subsidiaries | Total Stockholders' Equity | Common Class BCommon Stock |
Balance at Dec. 31, 2014 | $ 1,519,530 | $ 0 | $ 299,281 | $ 754,186 | $ 5,860,784 | $ (5,161,236) | $ (358,573) | $ 64,468 | $ 1,519,530 | $ 60,620 |
Net income | 299,567 | 299,567 | ||||||||
Other comprehensive income (loss) | (27,473) | (25,362) | (2,111) | (27,473) | ||||||
Common stock, $1.653 per share | (262,019) | (262,019) | ||||||||
Class B common stock, $1.502 per share | (91,051) | (91,051) | ||||||||
Stock-based compensation | 38,227 | 38,227 | ||||||||
Exercise of stock options and incentive-based transactions | 7,896 | 63,008 | 70,904 | |||||||
Repurchase of common stock | (567,480) | (567,480) | (567,480) | |||||||
Impact of reclassification to and purchase of redeemable noncontrolling interest | (33,915) | (29,235) | ||||||||
Impact of reclassification to and purchase of redeemable noncontrolling interest | (13,428) | (13,428) | (42,663) | |||||||
Income attributable to noncontrolling interest | (416) | (416) | (416) | |||||||
Balance at Oct. 04, 2015 | $ 937,126 | $ 0 | $ 299,281 | $ 771,074 | $ 5,807,281 | $ (5,665,708) | $ (383,935) | $ 48,513 | $ 937,126 | $ 60,620 |
CONSOLIDATED STATEMENT OF STOC8
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Common Stock | ||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.583 | $ 0.535 | $ 1.653 | $ 1.505 |
Common Class B | ||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.530 | $ 0.486 | $ 1.502 | $ 1.356 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Oct. 04, 2015 | |
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 October 4, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015 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, 2014 (our “2014 Annual Report on Form 10-K”), which provides a more complete understanding of our accounting policies, financial position, operating results and other matters. Other (Income) Expense, net In the second quarter of 2015, we began presenting a new non-operating "other (income) expense, net" classification to report certain gains and losses associated with activities not directly related to our core operations. For the three and nine month periods ended September 28, 2014 , we reclassified from selling, marketing and administrative expenses to other (income) expense, net total net gains of $7,528 and net losses of $1,448 , respectively, to conform to the current year presentation. After considering these reclassifications, amounts reflected in other (income) expense, net include the following: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Gain on sale of non-core trademark $ — $ — $ (9,950 ) $ — Write-down of equity investments in partnerships qualifying for tax credits (see Note 13) 9,249 — 13,893 — Foreign currency exchange (gain) loss relating to strategy to cap Shanghai Golden Monkey acquisition price as denominated in U.S. dollars — (7,565 ) — 5,544 Gain on acquisition of controlling interest in Lotte Shanghai Food Company — — — (4,628 ) Other losses, net 160 37 385 532 Total $ 9,409 $ (7,528 ) $ 4,328 $ 1,448 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) 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 was originally effective for us on January 1, 2017; however, in July 2015 the FASB decided to defer the effective date by one year. Early application is not permitted, but reporting entities may choose to adopt the standard as of the original effective date. 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, our transition date and transition method. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2015. Retrospective application is required and early adoption is permitted. The adoption of ASU No. 2015-03 is not expected to have a significant impact on our consolidated financial statements or related disclosures. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or related disclosures. |
BUSINESS ACQUISITIONS AND DIVES
BUSINESS ACQUISITIONS AND DIVESTITURES | 9 Months Ended |
Oct. 04, 2015 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS AND DIVESTITURES | BUSINESS ACQUISITIONS AND DIVESTITURES 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. 2015 Acquisition KRAVE Pure Foods In March 2015 , we completed the acquisition of all of the outstanding shares of KRAVE Pure Foods, Inc. (“Krave”), manufacturer of KRAVE jerky, a leading all-natural snack brand of premium jerky products. The transaction was undertaken to allow Hershey to tap into the rapidly growing meat snacks category and further expand into the broader snacks space. Krave is headquartered in Sonoma, California and generated 2014 annual sales of approximately $35 million . Total purchase consideration includes cash consideration paid to date of $220,016 , as well as agreement to pay additional cash consideration of up to $20,000 to the Krave shareholders if certain defined targets related to net sales and gross profit margin are met or exceeded during the twelve-month periods ending December 31, 2015 or March 31, 2016. The fair value of the contingent cash consideration, estimated to be $16,800 as of the acquisition date, was recorded in accrued liabilities in the Consolidated Balance Sheet. During the third quarter of 2015, the fair value of the contingent consideration was reduced to $12,000 , with the adjustment to fair value recorded within selling, marketing and administrative expenses. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Goodwill $ 147,089 Trademarks 112,000 Other intangible assets 17,000 Other assets, primarily current assets, net of cash acquired totaling $1,362 9,465 Current liabilities (2,756 ) Non-current deferred tax liabilities (47,344 ) Net assets acquired $ 235,454 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 leveraging our brand building expertise, consumer insights, supply chain capabilities and retail relationships to accelerate growth and access to KRAVE products. The recorded goodwill is not expected to be deductible for tax purposes. The purchase price allocation for KRAVE was concluded in the third quarter of 2015. Acquired trademarks were assigned estimated useful lives of 22 years , while other intangibles, including customer relationships and covenants not to compete, were assigned estimated useful lives ranging from 5 to 16 years . Updates to 2014 Acquisitions A more complete description of our acquisition activity for the year ended December 31, 2014 can be found in Note 2 to the Consolidated Financial Statements included in our 2014 Annual Report on Form 10-K. Shanghai Golden Monkey Food Joint Stock Co., Ltd. (“SGM”) At December 31, 2014, we had recorded a receivable of $37,860 , reflecting our best estimate of the amount due from the selling SGM shareholders for the working capital and net debt adjustments. In addition, at December 31, 2014, we had recorded a liability of $100,067 , reflecting the value of the future payment to be made to the SGM shareholders for the remaining 20% of the outstanding shares of SGM. Such amounts were recorded in the Consolidated Balance Sheets within prepaid expenses and other and accrued liabilities, respectively. During the first quarter of 2015, we came to an agreement with the selling SGM shareholders to revise the aforementioned receivable and liability balances to reflect partial settlement of the receivable. As a result, in the first quarter, the receivable was adjusted to $8,685 and the liability was adjusted to $76,815 . Additionally, during the first quarter of 2015, goodwill was increased by $6,623 to recognize revisions to the estimated value of assets and liabilities acquired in the acquisition. During the second quarter, based on our ongoing procedures to assess the quality of acquired trade accounts receivable, we recorded an additional adjustment to increase goodwill by $25,898 to reflect bad debt allowance for an additional amount of trade receivables considered to be uncollectible as of the acquisition date. During the third quarter, we continued our procedures to assess the quality of acquired trade accounts receivable. We also undertook procedures to further evaluate and quantify outstanding pre-acquisition trade promotion commitments to distributors, as well as allowances for returns and discounts related to excess and unsalable inventory held at distributors and sales branches as of the acquisition date. In addition, we concluded on our procedures to estimate the value of pre-acquisition indirect tax contingencies. As a result of these procedures, during the third quarter, we increased the value of acquired goodwill by $16,599 , with the corresponding offset principally represented by the establishment of additional opening balance sheet liabilities for the aforementioned commitments and contingencies. Based on all of the information obtained through the procedures noted previously, we updated our estimates of the acquisition-date fair values of the net assets acquired as of September 26, 2015, the conclusion of the one-year measurement period. Any subsequent revisions to the valuation of net assets will be reflected in current results. A roll-forward of the estimated acquisition-date fair values at December 31, 2014 to the final acquisition-date fair values as of September 26, 2015, the conclusion of the one-year measurement period, is as follows: Acquisition date purchase price allocation* In millions of dollars At 12/31/14 Adjustments At 9/26/15 Accounts receivable - trade $ 46 $ (26 ) $ 20 Inventories 42 (1 ) 41 Other current assets 37 6 43 Property, plant and equipment 112 2 114 Goodwill 235 49 284 Other intangible assets 145 — 145 Other non-current assets 35 (3 ) 32 Current liabilities assumed (54 ) (20 ) (74 ) Short-term debt assumed (105 ) — (105 ) Other non-current liabilities assumed, principally deferred taxes (52 ) (2 ) (54 ) Net assets acquired $ 441 $ 446 * Note that the final opening balance sheet value of goodwill presented in the schedule above differs from total write-off of $280.8 million due to changes in foreign currency exchange rates since the date of acquisition. Goodwill impairment - SGM reporting unit As discussed in the second quarter, since the initial acquisition in 2014, the SGM business has performed below expectations, with net sales and earnings levels well below pre-acquisition levels. In addition, as part of our ongoing integration process, we continued to assess the quality of SGM’s accounts receivable and existing distributor networks. Based on the declining performance levels and the results of our assessment to date, we determined that an interim impairment test of the SGM reporting unit was required by U.S. generally accepted accounting principles. We performed the first step of this test as of July 5, 2015 using an income approach based on our estimates of future performance scenarios for the business. The results of this test indicated that the fair value of the reporting unit was less than the carrying amount as of the measurement date, suggesting that a goodwill impairment was probable, which required us to perform a second step analysis to confirm that an impairment exists and to determine the amount of the impairment based on our reassessed value of the reporting unit. Although preliminary, as a result of this reassessment, in the second quarter of 2015 we recorded an estimated $249,811 non-cash goodwill impairment charge, representing a write-down of all of the goodwill related to the SGM reporting unit as of July 5, 2015. As noted above, during the third quarter, we increased the value of acquired goodwill by $16,599 , with the corresponding offset principally represented by the establishment of additional opening balance sheet liabilities for the aforementioned commitments and contingencies. We also finalized the impairment test of the goodwill relating to the SGM reporting unit, which resulted in a write-off of this additional goodwill in the third quarter, for a total impairment of $266,409 . We also tested the other long-lived assets of SGM for recoverability by comparing the sum of the undiscounted cash flows to the carrying value of the asset group, and no impairment was indicated. The timing and terms of the acquisition of the remaining 20% of SGM will be informed by the results of our ongoing negotiation, and we are evaluating all potential options to protect the Company's interests. Going forward, we continue to evaluate SGM's cost structure as well as alternative integration scenarios to improve performance to enable us to implement upon our strategy of leveraging the Golden Monkey's sales force and distributor network to expand sales of our Hershey's products in the China marketplace. Goodwill impairment - China chocolate reporting unit In connection with the SGM acquisition, we assigned approximately $15 million of goodwill to our existing China chocolate business, as this reporting unit was expected to benefit from acquisition synergies relating to the sale of Golden Monkey-branded product through its Tier 1 and hypermarket distributor networks. As the net sales and earnings of our China business continued to be adversely impacted by macroeconomic challenges and changing consumer shopping behavior through the third quarter, we determined that an interim impairment test of the goodwill in this reporting unit was also required. We performed the first step of this test in the third quarter of 2015 using an income approach based on our estimates of future performance scenarios for the business. The results of this test suggested that a goodwill impairment was probable, and the conclusions of the second step analysis resulted in a write-down of $14,393 , representing the full value of goodwill attributed to this reporting unit as of October 4, 2015. The Allan Candy Company Limited (“Allan”) During the nine months ended October 4, 2015, we increased goodwill by $1,820 to recognize revisions to the preliminary fair value of net assets acquired. The purchase price allocation for Allan was concluded in the second quarter of 2015. Pro forma results of operations have not been presented for the above-mentioned acquisitions, as the impact on our consolidated financial statements is not considered to be material. 2015 Divestiture Mauna Loa Macadamia Nut Corporation (“Mauna Loa”) In December 2014, we entered into an agreement to sell Mauna Loa. The transaction closed in the first quarter of 2015, resulting in proceeds, net of selling expenses and an estimated working capital adjustment, of approximately $32,400 . The sale of Mauna Loa resulted in the recording of an additional loss on sale of $2,667 in the first quarter of 2015, based on updates to the selling expenses and tax benefits. Mauna Loa had historically been reported within our North America segment. Its operations were not material to our annual net sales, net income or earnings per share. Amounts classified as assets and liabilities held for sale at December 31, 2014 were presented within prepaid expenses and other assets and accrued liabilities, respectively, and included the following: Assets held for sale Inventories $ 21,489 Prepaid expenses and other 173 Property, plant and equipment, net 12,691 Other intangibles 12,705 $ 47,058 Liabilities held for sale Accounts payable and accrued liabilities $ 3,726 Other long-term liabilities 9,029 $ 12,755 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Oct. 04, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying value of goodwill by reportable segment for the nine months ended October 4, 2015 are as follows: North America International and Other Total Balance at December 31, 2014 $ 533,349 $ 259,606 $ 792,955 Acquired during the period 147,334 — 147,334 Purchase price allocation adjustments 1,575 46,203 47,778 Impairment — (280,802 ) (280,802 ) Foreign currency translation (15,094 ) (2,487 ) (17,581 ) Balance at October 4, 2015 $ 667,164 $ 22,520 $ 689,684 The $280,802 impairment charge noted above resulted from our reassessment of the valuation of the SGM business, coupled with the write-down of goodwill attributed to the China chocolate business in connection with the SGM acquisition. See Note 2 for additional information. The following table provides a summary of the major categories of intangible assets: October 4, 2015 December 31, 2014 Intangible assets not subject to amortization: Trademarks $ 43,962 $ 45,000 Intangible assets subject to amortization: Trademarks, customer relationships, patents and other finite-lived intangibles 395,365 295,375 Less: accumulated amortization (50,580 ) (45,534 ) Total other intangible assets $ 388,747 $ 294,841 Total amortization expense for the nine months ended October 4, 2015 and September 28, 2014 was $16,469 and $7,586 , respectively. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Oct. 04, 2015 | |
Long-term Debt, Unclassified [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS Short-term Debt 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 2019. At October 4, 2015 , we had outstanding commercial paper totaling $345,969 , at a weighted average interest rate of 0.15% . At December 31, 2014 , we had outstanding commercial paper totaling $54,995 , at a weighted average interest rate of 0.09% . The credit agreement contains certain financial and other covenants, customary representations, warranties and events of default. As of October 4, 2015 , 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 included in our 2014 Annual Report on Form 10-K. In addition to the revolving credit facility, we maintain lines of credit with domestic and international commercial banks. We had short-term foreign bank loans against these lines of credit for $342,012 and $329,701 at October 4, 2015 and December 31, 2014 , respectively. Long-term Debt In August 2015, we repaid $250,000 of 4.85% Notes due in 2015 at maturity with commercial paper. Also in August 2015, we issued $300,000 of 1.60% Notes due in 2018 and $300,000 of 3.20% Notes due in 2025 (the “Notes”), using the proceeds from these Notes to fund the cash tender offer, noted below, and for other general corporate purposes, including the repayment of a portion of our commercial paper borrowings. The Notes were issued under a shelf registration statement on Form S-3 filed in June 2015 that registered an indeterminate amount of debt securities. In August 2015, we paid $100,165 to repurchase $71,646 of our long-term debt as part of a cash tender offer, consisting of $15,285 of our 8.80% Debentures due in 2021 and $56,361 of our 7.20% Debentures due in 2027. As a result of the repurchase, we recorded within interest expense a pre-tax loss on early extinguishment of debt of $28,326 , representing the premiums and fees paid for the tender offer. In connection with the tender offer, we terminated interest rate swaps with notional amounts totaling $100,000 , which were designated as fair value hedges for the $100,000 of 8.80% Debentures due in 2021. The portion of the gain upon termination that related to the tendered bonds, or $278 , was recognized currently as a component of the loss on early extinguishment of debt, while the remaining gain of $1,539 will be amortized to interest expense over the remaining term of the outstanding bonds. Interest Expense Net interest expense consisted of the following: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Interest expense $ 22,590 $ 23,441 $ 68,874 $ 69,839 Loss on extinguishment of debt 28,326 — 28,326 — Interest income (878 ) (1,125 ) (2,840 ) (3,209 ) Capitalized interest (3,071 ) (1,543 ) (9,314 ) (3,838 ) Interest expense, net $ 46,967 $ 20,773 $ 85,046 $ 62,792 |
FINANCIAL INSTRUMENTS AND FAIR
FINANCIAL INSTRUMENTS AND FAIR VALUE | 9 Months Ended |
Oct. 04, 2015 | |
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. 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 exchange-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 on commodity derivative instruments 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, Chinese renminbi, Japanese yen, Mexican peso 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 $14,532 at October 4, 2015 and $22,725 at December 31, 2014 . 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 $2,791 at October 4, 2015 and $4,144 at December 31, 2014 . 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 that effectively convert variable rate debt to a fixed interest rate. These swaps 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 in cash flow hedging relationships was $500,000 at October 4, 2015 and $750,000 at December 31, 2014 . We also manage our targeted mix of fixed and floating rate debt with debt issuances and by entering into fixed-to-floating interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. These swaps are designated as fair value hedges, for which the gain or loss on the derivative and the offsetting loss or gain on the hedged item are recognized in current earnings as interest expense (income), net. The notional amount, interest rate and maturity date of these swaps generally match the principal, interest payment and maturity date of the related debt, and the swaps are valued using observable benchmark rates (Level 2 valuation). The notional amount of interest rate derivative instruments in fair value hedge relationships was $350,000 at October 4, 2015 and $450,000 at December 31, 2014 . Equity Price Risk We are exposed to market price changes in certain broad market indices related to our deferred compensation obligations to our employees. We use 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 contracts outstanding was $23,277 and $26,417 at October 4, 2015 and December 31, 2014 , respectively. Fair Value of Derivative Instruments The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of October 4, 2015 and December 31, 2014 : October 4, 2015 December 31, 2014 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Commodities futures and options (2) $ — $ 767 $ — $ 9,944 Foreign exchange contracts (3) 1,792 883 2,196 2,447 Interest rate swap agreements (4) — 46,095 — 29,505 Cross-currency swap agreement (5) — — 2,016 — 1,792 47,745 4,212 41,896 Derivatives designated as fair value hedging instruments: Interest rate swap agreements (4) 13,952 — 1,746 — Derivatives not designated as hedging instruments: Deferred compensation derivatives (6) — 1,404 1,074 — Foreign exchange contracts (3) 56 — 4,049 2,334 56 1,404 5,123 2,334 Total $ 15,800 $ 49,149 $ 11,081 $ 44,230 (1) Derivative assets are classified on our balance sheet within prepaid expenses and other if current and other assets if non-current. Derivative liabilities are classified on our balance sheet within accrued liabilities if current and other long-term liabilities if non-current. (2) 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 October 4, 2015 , accrued liabilities reflects the net of assets of $63,953 and accrued liabilities of $64,720 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, 2014 were assets of $51,225 and accrued liabilities of $56,840 . At December 31, 2014 , the amount reflected in accrued liabilities also included the fair value of options contracts and other non-exchange traded derivative instruments. (3) 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. (4) 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. (5) 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. The cross-currency swap was settled in the third quarter of 2015, commensurate with our purchase of the noncontrolling interest of Hershey do Brazil. (6) 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 October 4, 2015 and December 31, 2014 because of the relatively short maturity of these instruments. The carrying value of long-term debt, including the current portion, was $2,080,607 as of October 4, 2015 , compared with a fair value of $2,231,635 . 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 October 4, 2015 and September 28, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in accumulated other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ — $ 393 $ (34,571 ) $ 3,256 $ 11,000 $ 27,000 $ 1,288 $ 2,553 Foreign exchange contracts 750 7,033 662 (612 ) 185 (361 ) — — Interest rate swap agreements — — (36,187 ) (4,661 ) (1,166 ) (1,114 ) — — Deferred compensation derivatives (1,403 ) 371 — — — — — — Total $ (653 ) $ 7,797 $ (70,096 ) $ (2,017 ) $ 10,019 $ 25,525 $ 1,288 $ 2,553 (a) 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 (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. The effect of derivative instruments on the Consolidated Statements of Income for the nine months ended October 4, 2015 and September 28, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in accumulated other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ (2,777 ) $ 2,732 $ 62,619 $ 62,523 $ 31,300 $ 55,300 $ 2,142 $ 2,461 Foreign exchange contracts 474 (1,759 ) 158 (301 ) 273 3,536 — — Interest rate swap agreements — — (28,184 ) (19,998 ) (3,479 ) (3,351 ) — — Deferred compensation derivatives (1,024 ) 1,909 — — — — — — Total $ (3,327 ) $ 2,882 $ 34,593 $ 42,224 $ 28,094 $ 55,485 $ 2,142 $ 2,461 (a) Gains (losses) 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. 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 12 months was approximately $9,506 after tax as of October 4, 2015 . This amount was primarily associated with commodities futures contracts. Fair Value Hedges For the nine months ended October 4, 2015 , we recognized a net pretax benefit to interest expense of $5,597 relating to our fixed-to-floating interest rate swap arrangements. |
NONCONTROLLING INTERESTS IN SUB
NONCONTROLLING INTERESTS IN SUBSIDIARIES | 9 Months Ended |
Oct. 04, 2015 | |
Noncontrolling Interest [Abstract] | |
NONCONTROLLING INTERESTS IN SUBSIDIARIES | NONCONTROLLING INTERESTS IN SUBSIDIARIES We currently own a 50% controlling 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. At December 31, 2014, we owned 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. At the end of 2014, per the terms of the prevailing quotaholder’s agreement, Bauducco provided notice of its intent to sell its 49% interest to us at an amount equal to fair value. Because the noncontrolling interest held by Bauducco was redeemable as a result of the put right, the balance sheet presentation of the noncontrolling interest during 2015 was revised to be reflected as a redeemable noncontrolling interest. The balance was increased in the first three quarters of 2015 by a total of $33,915 , in order to reflect the balance at its redemption value based on the internal valuation for the business. The offset of this adjustment was recorded to additional paid in capital. We purchased the remaining 49% interest in Hershey do Brasil in September. As a result, the redeemable noncontrolling interest is no longer reported on our balance sheet as of October 4, 2015. A roll-forward showing the 2015 activity relating to the noncontrolling interests and redeemable noncontrolling interest follows: Noncontrolling Interests Redeemable Noncontrolling Interest Balance, December 31, 2014 $ 64,468 $ — Reclassification from Total Equity to Redeemable Noncontrolling Interest (13,428 ) 13,428 Net loss attributable to noncontrolling interests (1) (416 ) (4,393 ) Other comprehensive loss - foreign currency translation adjustments (2,111 ) (2,334 ) Adjustment to redemption value — 33,915 Other — (2,346 ) Purchase of redeemable noncontrolling interest — (38,270 ) Balance, October 4, 2015 $ 48,513 $ — (1) Amounts are not considered significant and are presented within selling, marketing and administrative expenses. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 9 Months Ended |
Oct. 04, 2015 | |
Comprehensive Income Disclosure [Abstract] | |
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME A summary of the components of comprehensive income is as follows: Three Months Ended Three Months Ended October 4, 2015 September 28, 2014 Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Net income $ 154,771 $ 223,741 Other comprehensive income (loss): Foreign currency translation adjustments $ (26,631 ) $ — (26,631 ) $ (17,321 ) $ — (17,321 ) Pension and post-retirement benefit plans (a) 15,962 (5,993 ) 9,969 5,851 (2,227 ) 3,624 Cash flow hedges: Losses on cash flow hedging derivatives (70,096 ) 26,182 (43,914 ) (2,017 ) 1,085 (932 ) Reclassification adjustments (b) (10,019 ) 3,805 (6,214 ) (25,525 ) 9,981 (15,544 ) Total other comprehensive loss $ (90,784 ) $ 23,994 (66,790 ) $ (39,012 ) $ 8,839 (30,173 ) Total comprehensive income $ 87,981 $ 193,568 Comprehensive gain attributable to noncontrolling interests (820 ) — Comprehensive income attributable to The Hershey Company $ 87,161 $ 193,568 Nine Months Ended Nine Months Ended October 4, 2015 September 28, 2014 Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Tax (Expense) After-Tax Net income $ 299,567 $ 644,404 Other comprehensive income (loss): Foreign currency translation adjustments $ (51,681 ) $ — (51,681 ) $ (12,016 ) $ — (12,016 ) Pension and post-retirement benefit plans (a) 32,776 (11,880 ) 20,896 17,386 (6,602 ) 10,784 Cash flow hedges: Gains on cash flow hedging derivatives 34,593 (13,570 ) 21,023 42,224 (15,375 ) 26,849 Reclassification adjustments (b) (28,094 ) 10,383 (17,711 ) (55,485 ) 19,919 (35,566 ) Total other comprehensive loss $ (12,406 ) $ (15,067 ) (27,473 ) $ (7,891 ) $ (2,058 ) (9,949 ) Total comprehensive income $ 272,094 $ 634,455 Comprehensive loss attributable to noncontrolling interests 2,111 — Comprehensive income attributable to The Hershey Company $ 274,205 $ 634,455 (a) These amounts are included in the computation of net periodic benefit costs. For more information, see Note 11. (b) For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 5. The components of accumulated other comprehensive loss as shown on the Consolidated Balance Sheets are as follows: October 4, December 31, Foreign currency translation adjustments $ (93,251 ) $ (43,681 ) Pension and post-retirement benefit plans, net of tax (263,754 ) (284,650 ) Cash flow hedges, net of tax (26,930 ) (30,242 ) Total accumulated other comprehensive loss $ (383,935 ) $ (358,573 ) |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Oct. 04, 2015 | |
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 October 4, September 28, October 4, September 28, Net income $ 154,771 $ 223,741 $ 299,567 $ 644,404 Weighted-average shares – basic: Common stock 158,111 161,253 159,058 162,330 Class B common stock 60,620 60,620 60,620 60,620 Total weighted-average shares – basic: 218,731 221,873 219,678 222,950 Effect of dilutive securities: Employee stock options 1,192 1,705 1,406 1,985 Performance and restricted stock units 152 299 238 358 Weighted-average shares – diluted 220,075 223,877 221,322 225,293 Earnings per share – basic: Common stock $ 0.73 $ 1.03 $ 1.40 $ 2.97 Class B common stock $ 0.66 $ 0.94 $ 1.27 $ 2.68 Earnings per share – diluted: Common stock $ 0.70 $ 1.00 $ 1.35 $ 2.86 Class B common stock $ 0.66 $ 0.94 $ 1.28 $ 2.67 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. The earnings per share calculations for the three months ended October 4, 2015 and September 28, 2014 exclude 2,552 and 1,510 stock options, respectively, that would have been antidilutive. The earnings per share calculations for the nine months ended October 4, 2015 and September 28, 2014 exclude 2,660 and 1,510 stock options, respectively, that would have been antidilutive. |
BUSINESS REALIGNMENT ACTIVITIES
BUSINESS REALIGNMENT ACTIVITIES | 9 Months Ended |
Oct. 04, 2015 | |
Restructuring and Related Activities [Abstract] | |
BUSINESS REALIGNMENT ACTIVITIES | BUSINESS REALIGNMENT ACTIVITIES On June 19, 2015, we announced a new productivity initiative (the “2015 Initiative”) intended to move decision making closer to the customer and the consumer, to enable a more enterprise-wide approach to innovation, to more swiftly advance our knowledge agenda, and to provide for a more efficient cost structure, while ensuring that we effectively allocate resources to future growth areas. Overall, the 2015 Initiative is intended to simplify the organizational structure to enhance the Company's ability to rapidly anticipate and respond to the changing demands of the global consumer. The 2015 Initiative commenced during the third quarter and will result in a net reduction of approximately 300 positions, with the majority of the departures taking place by the end of 2015. During the three and nine months ended October 4, 2015 , we incurred charges of $64,268 and $90,322 , respectively, representing employee severance and related separation benefits as well as incremental third-party costs related to the design and implementation of the new organizational structure. Total pre-tax charges and costs for this program are expected to be approximately $120 million , the majority of which are cash. This does not include a possible pension settlement loss if substantial lump sum withdrawals by employees retiring or leaving the Company are made during the remainder of the year. Possible pension settlement losses would result in a non-cash charge for the Company. The remaining costs for the 2015 Initiative are expected to be incurred over the next three quarters. The tables below provide details for charges incurred across all restructuring and cost reduction activities during the three and nine month periods ended October 4, 2015 and September 28, 2014 . Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Employee related costs $ 57,753 $ — $ 80,305 $ 93 Asset related costs 1,329 — 5,905 — Other exit costs, including Mauna Loa divestiture — 16,372 2,667 20,544 Other implementation costs 8,381 — 12,551 — Total charges associated with business realignment initiatives $ 67,463 $ 16,372 $ 101,428 $ 20,637 Asset related charges presented in the table above represent accelerated depreciation and amortization charges relating to a program commenced in 2014 to rationalize certain non-U.S. manufacturing and distribution activities. The other exit costs in 2014 include $13,340 relating to the write-down of an indefinite-lived trademark based on the estimated sales value for Mauna Loa, which was divested in 2015, as well as costs relating to the demolition of the Company's former manufacturing facility, representing the final phase of the Project Next Century Program. This program was substantially complete as of December 31, 2014. Charges relating to our business realignment initiatives are classified in our Consolidated Statements of Income as follows: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Cost of sales $ 2,529 $ — $ 5,205 $ 93 Selling, marketing and administrative 7,181 — 13,251 — Business realignment charges: Business realignment and productivity initiatives 57,753 3,032 80,305 7,204 Divestiture of Mauna Loa (see Note 2) — 13,340 2,667 13,340 Total business realignment charges 57,753 16,372 82,972 20,544 Total charges associated with business realignment initiatives $ 67,463 $ 16,372 $ 101,428 $ 20,637 Segment operating results do not include business realignment and related charges because we evaluate segment performance excluding such charges. The following table summarizes our business realignment activity for the nine months ended October 4, 2015 : Employee related costs Other exit costs Other implementation costs Total Liability balance at December 31, 2014 $ 79 $ — $ — $ 79 2015 business realignment charges 80,305 — 6,785 87,090 Cash payments (11,106 ) — (2,985 ) (14,091 ) Other, net 710 — — 710 Liability balance at October 4, 2015 $ 69,988 $ — $ 3,800 $ 73,788 The charges reflected in the liability roll-forward above do not include items charged directly to expense, such as accelerated depreciation and amortization and the loss on the Mauna Loa divestiture and certain of the administrative charges associated with the 2015 initiative, as those items are not reflected in the business realignment liability in our Consolidated Balance Sheets. |
STOCK COMPENSATION PLAN
STOCK COMPENSATION PLAN | 9 Months Ended |
Oct. 04, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK COMPENSATION PLANS | STOCK COMPENSATION PLANS We have various stock-based compensation programs under which awards, including stock options, performance stock units (“PSUs”) and performance stock, stock appreciation rights, restricted stock units (“RSUs”) and restricted stock may be granted to employees, non-employee directors and certain service providers upon whom the successful conduct of our business is dependent. These programs and the accounting treatment related thereto are described in Note 10 to the Consolidated Financial Statements included in our 2014 Annual Report on Form 10-K. For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Pre-tax compensation expense $ 13,374 $ 14,062 $ 39,989 $ 41,759 Related income tax benefit $ 4,334 $ 4,907 $ 13,676 $ 14,407 As of October 4, 2015 , total stock-based compensation cost related to non-vested awards not yet recognized was $67,520 and the weighted-average period over which this amount is expected to be recognized was approximately 2.2 years . Stock Options A summary of activity relating to grants of stock options for the period ended October 4, 2015 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 7,319,377 $66.69 6.3 years Granted 1,315,625 $105.51 Exercised (1,275,257 ) $52.28 Forfeited (247,868 ) $89.85 Outstanding as of October 4, 2015 7,111,877 $75.66 6.1 years $ 146,443 Options exercisable as of October 4, 2015 4,135,751 $61.25 4.8 years 130,816 The weighted-average fair value of options granted was $19.18 per share and $21.54 per share for the periods ended October 4, 2015 and September 28, 2014 , respectively. The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: Nine Months Ended October 4, September 28, Dividend yields 2.0 % 2.0 % Expected volatility 20.2 % 22.3 % Risk-free interest rates 1.9 % 2.1 % Expected lives in years 6.6 6.7 The total intrinsic value of options exercised was $60,425 and $110,329 for the periods ended October 4, 2015 and September 28, 2014 , respectively. Performance Stock Units and Restricted Stock Units A summary of activity relating to grants of PSUs and RSUs for the period ended October 4, 2015 is as follows: Performance Stock Units and Restricted Stock Units Number of Units Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) Outstanding at beginning of year 904,306 $94.48 Granted 315,443 $107.53 Performance assumption change (259,577 ) $105.93 Vested (398,559 ) $73.63 Forfeited (31,328 ) $112.15 Outstanding as of October 4, 2015 530,285 $106.42 The table above excludes PSU awards for 25,462 units as of December 31, 2014 and 20,993 units as of October 4, 2015 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 October 4, September 28, Units granted 315,443 308,980 Weighted-average fair value at date of grant (per unit) $107.53 $116.90 Monte Carlo simulation assumptions: Estimated values (per unit) $61.22 $80.95 Dividend yields 2.0 % 1.8 % Expected volatility 14.9 % 15.5 % The intrinsic value of share-based liabilities paid, combined with the fair value of shares vested, totaled $40,220 and $57,001 for the periods ended October 4, 2015 and September 28, 2014 , respectively. Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 503,557 units as of October 4, 2015 . Each unit is equivalent to one share of the Company’s Common Stock. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | 9 Months Ended |
Oct. 04, 2015 | |
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 for the third quarter were as follows: Pension Benefits Other Benefits Three Months Ended Three Months Ended October 4, September 28, October 4, September 28, Service cost $ 7,068 $ 6,670 $ 135 $ 177 Interest cost 11,025 12,218 2,516 2,927 Expected return on plan assets (17,146 ) (18,519 ) — — Amortization of prior service (credit) cost (294 ) (167 ) 151 154 Amortization of net actuarial loss (gains) 7,595 5,838 (11 ) (36 ) Administrative expenses 229 193 48 23 Net periodic benefit cost 8,477 6,233 2,839 3,245 Settlement loss 2,583 — — — Total amount reflected in earnings $ 11,060 $ 6,233 $ 2,839 $ 3,245 We made contributions of $29,349 and $5,174 to the pension plans and other benefits plans, respectively, during the third quarter of 2015 . In the third quarter of 2014 , we made contributions of $24,696 and $4,105 to our pension plans and other benefits plans, respectively. These contribution amounts also include benefit payments from our unfunded, non-qualified pension plans and post-retirement benefit plans. Components of net periodic benefit cost for the year-to-date periods were as follows: Pension Benefits Other Benefits Nine Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Service cost $ 21,301 $ 20,003 $ 406 $ 530 Interest cost 33,187 36,643 7,617 8,778 Expected return on plan assets (51,685 ) (55,537 ) — — Amortization of prior service (credit) cost (881 ) (501 ) 457 462 Amortization of net actuarial loss (gains) 22,899 17,511 (40 ) (107 ) Administrative expenses 737 586 92 78 Net periodic benefit cost 25,558 18,705 8,532 9,741 Settlement loss 2,583 — — — Total amount reflected in earnings $ 28,141 $ 18,705 $ 8,532 $ 9,741 We made contributions of $30,685 and $14,502 to the pension plans and other benefits plans, respectively, during the first nine months of 2015. In the first nine months of 2014, we made contributions of $26,669 and $14,777 to our pension plans and other benefits plans, respectively. These contribution amounts also include benefit payments from our unfunded, non-qualified pension plans and post-retirement benefit plans. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Oct. 04, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our current reporting structure is designed to ensure continued focus on North America, coupled with an emphasis on accelerating growth in our international markets, as we transform into a more global company. Our business is organized around geographic regions and strategic business units. It is designed to enable us to build processes for repeatable success in our global markets. The Presidents of our geographic regions, along with the Senior Vice President responsible for our Global Retail and Licensing business, are accountable for delivering our annual financial plans and report into our Chief Executive Officer, who serves as our Chief Operating Decision Maker (“CODM”), so we have defined our operating segments on a geographic basis. Our North America business currently generates over 85% of our consolidated revenue and none of our other geographic regions are individually significant. We currently define our reportable segments as follows: • North America - This segment is responsible for our traditional chocolate and sugar confectionery market position, as well as our growing snacks and adjacencies market position, in the United States and Canada. This includes developing and growing our business in chocolate, sugar confectionery, refreshment, pantry, food service and other snacking product lines. • International and Other - This segment includes all other countries where The Hershey Company currently manufactures, imports, markets, sells or distributes chocolate, sugar confectionery and other products. Currently, this includes our operations in Mexico, Brazil and Puerto Rico, as well as Europe, Africa, the Middle East and Asia, primarily China, India, Korea, Japan and the Philippines; along with exports to these regions. While a minor component, this segment also includes our global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania, New York City, Chicago, Las Vegas, Shanghai, Niagara Falls (Ontario), Dubai, and Singapore, as well as operations associated with licensing the use of certain of the Company's trademarks and products to third parties around the world. For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources. Segment income excludes unallocated general corporate administrative expenses, as well as charges associated with business realignment activities, goodwill impairment charges, acquisition-related costs, the non-service related portion of pension expense and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating income are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM. Accounting policies associated with our operating segments are generally the same as those described in Note 1 to the Consolidated Financial Statements included in our 2014 Annual Report on Form 10-K. Certain manufacturing, warehousing, distribution and other activities supporting our global operations are integrated to maximize efficiency and productivity. As a result, assets and capital expenditures are not managed on a segment basis and are not included in the information reported to the CODM for the purpose of evaluating performance or allocating resources. We disclose depreciation and amortization that is generated by segment-specific assets, since these amounts are included within the measure of segment income reported to the CODM. Our segment net sales and earnings were as follows: Three Months Ended Nine Months Ended October 4, September 28, 2014 October 4, September 28, Net sales: North America $ 1,733,869 $ 1,693,903 $ 4,840,438 $ 4,727,479 International and Other 226,910 267,675 636,966 684,262 Total $ 1,960,779 $ 1,961,578 5,477,404 5,411,741 Segment income (loss): North America $ 546,080 $ 488,902 $ 1,561,053 $ 1,433,339 International and Other (13,509 ) 16,050 (79,754 ) 21,187 Total segment income 532,571 504,952 1,481,299 1,454,526 Unallocated corporate expense (1) 117,695 124,551 383,160 376,894 Goodwill impairment 30,991 — 280,802 — Charges associated with business realignment initiatives 67,463 16,372 101,428 20,637 Non-service related pension expense (income) 4,049 (463 ) 6,976 (1,383 ) Acquisition and integration costs 9,359 5,824 14,253 9,664 Operating profit 303,014 358,668 694,680 1,048,714 Interest expense, net 46,967 20,773 85,046 62,792 Other (income) expense, net 9,409 (7,528 ) 4,328 1,448 Income before income taxes $ 246,638 $ 345,423 $ 605,306 $ 984,474 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. Depreciation and amortization expense included within segment income presented above is as follows: Three Months Ended Nine Months Ended October 4, September 28, 2014 October 4, September 28, 2014 North America $ 38,887 $ 37,263 $ 113,837 $ 108,713 International and Other 13,993 6,653 34,136 18,286 Corporate, including business realignment 11,174 8,957 34,882 26,007 Total $ 64,054 $ 52,873 $ 182,855 $ 153,006 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 04, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The majority of our taxable income is generated in the U.S. and taxed at the U.S. statutory rate of 35% . The effective tax rates for the nine months ended October 4, 2015 and September 28, 2014 were 50.5% and 34.5% , respectively. Adjusting for the impact of the non-deductible goodwill impairment charge discussed in Note 2, the 2015 year-to-date effective income tax rate was 34.5% , comparable to 2014. The 2015 rate reflects $29,222 of income tax benefit from historic and energy tax credits, as noted below; however, this benefit was offset by the impact of an unfavorable mix of foreign to U.S. earnings during the period, as well as a $9,375 valuation allowance taken against the SGM deferred tax assets related to net operating losses. Given the current and projected pre-tax losses generated by SGM, we do not expect to be able to utilize these net operating losses within the allowed carry-forward period. Hershey and its subsidiaries file tax returns in the U.S., including various state and local returns, and in other foreign jurisdictions. We believe adequate provision has been made for all income tax uncertainties. We are routinely audited by taxing authorities in our filing jurisdictions, and a number of these audits are currently underway. We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $4,555 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. Investments in Partnerships Qualifying for Tax Credits In the second quarter of 2015, the Company began making investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits. The investments are accounted for under the equity method and reported within other assets in our Consolidated Balance Sheets. The tax credits, when realized, are recognized as a reduction of tax expense, at which time the corresponding equity investment is written-down to reflect the remaining value of the future benefits to be realized. For the nine months ended October 4, 2015 , we recognized investment tax credits and related tax depreciation benefit totaling $29,222 , and we wrote-down the equity investment by $13,893 to reflect the realization of these benefits. The equity investment write-down is reflected within other (income) expense, net in the Consolidated Statements of Income. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Oct. 04, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES We value the majority of our U.S. 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: October 4, December 31, Raw materials $ 335,054 $ 377,620 Goods in process 87,905 63,916 Finished goods 604,225 531,608 Inventories at FIFO 1,027,184 973,144 Adjustment to LIFO (213,601 ) (172,108 ) Total inventories $ 813,583 $ 801,036 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 9 Months Ended |
Oct. 04, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Major classes of property, plant and equipment were as follows: October 4, December 31, Land $ 95,847 $ 95,913 Buildings 1,073,757 1,031,050 Machinery and equipment 2,887,897 2,863,559 Construction in progress 401,778 338,085 Property, plant and equipment, gross 4,459,279 4,328,607 Accumulated depreciation (2,271,543 ) (2,176,706 ) Property, plant and equipment, net $ 2,187,736 $ 2,151,901 |
TREASURY STOCK ACTIVITY
TREASURY STOCK ACTIVITY | 9 Months Ended |
Oct. 04, 2015 | |
Stockholders' Equity Note [Abstract] | |
TREASURY STOCK ACTIVITY | TREASURY STOCK ACTIVITY A summary of our treasury stock activity is as follows: Nine Months Ended October 4, 2015 Shares Dollars In thousands Shares repurchased under pre-approved share repurchase programs 4,209,112 $ 402,548 Shares repurchased to replace Treasury Stock issued for stock options 1,603,838 164,932 Total share repurchases 5,812,950 567,480 Shares issued for stock options and incentive compensation (1,514,260 ) (63,008 ) Net change 4,298,690 $ 504,472 The $250 million share repurchase program approved by our Board of Directors in February 2014 was completed in the first quarter of 2015. In February 2015, our Board of Directors approved an additional $250 million authorization to repurchase shares of our Common Stock. As of October 4, 2015 , $20 million remained available for repurchases of our Common Stock under this program. 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. Purchases under 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 |
Oct. 04, 2015 | |
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. On September 15, 2015, the Third Circuit affirmed the District Court's summary judgment decision. 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. Given the Third Circuit's recent affirmation of the District Court's summary judgment decision, we do not anticipate these cases being reinstated. 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. |
SIGNIFICANT ACCOUNTING POLICI26
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Significant Accounting Policies [Abstract] | |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | After considering these reclassifications, amounts reflected in other (income) expense, net include the following: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Gain on sale of non-core trademark $ — $ — $ (9,950 ) $ — Write-down of equity investments in partnerships qualifying for tax credits (see Note 13) 9,249 — 13,893 — Foreign currency exchange (gain) loss relating to strategy to cap Shanghai Golden Monkey acquisition price as denominated in U.S. dollars — (7,565 ) — 5,544 Gain on acquisition of controlling interest in Lotte Shanghai Food Company — — — (4,628 ) Other losses, net 160 37 385 532 Total $ 9,409 $ (7,528 ) $ 4,328 $ 1,448 |
BUSINESS ACQUISITIONS AND DIV27
BUSINESS ACQUISITIONS AND DIVESTITURES (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Business Acquisition [Line Items] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | Amounts classified as assets and liabilities held for sale at December 31, 2014 were presented within prepaid expenses and other assets and accrued liabilities, respectively, and included the following: Assets held for sale Inventories $ 21,489 Prepaid expenses and other 173 Property, plant and equipment, net 12,691 Other intangibles 12,705 $ 47,058 Liabilities held for sale Accounts payable and accrued liabilities $ 3,726 Other long-term liabilities 9,029 $ 12,755 |
Krave Pure Foods [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Goodwill $ 147,089 Trademarks 112,000 Other intangible assets 17,000 Other assets, primarily current assets, net of cash acquired totaling $1,362 9,465 Current liabilities (2,756 ) Non-current deferred tax liabilities (47,344 ) Net assets acquired $ 235,454 |
Shanghai Golden Monkey [Member] | |
Business Acquisition [Line Items] | |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | A roll-forward of the estimated acquisition-date fair values at December 31, 2014 to the final acquisition-date fair values as of September 26, 2015, the conclusion of the one-year measurement period, is as follows: Acquisition date purchase price allocation* In millions of dollars At 12/31/14 Adjustments At 9/26/15 Accounts receivable - trade $ 46 $ (26 ) $ 20 Inventories 42 (1 ) 41 Other current assets 37 6 43 Property, plant and equipment 112 2 114 Goodwill 235 49 284 Other intangible assets 145 — 145 Other non-current assets 35 (3 ) 32 Current liabilities assumed (54 ) (20 ) (74 ) Short-term debt assumed (105 ) — (105 ) Other non-current liabilities assumed, principally deferred taxes (52 ) (2 ) (54 ) Net assets acquired $ 441 $ 446 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | The changes in the carrying value of goodwill by reportable segment for the nine months ended October 4, 2015 are as follows: North America International and Other Total Balance at December 31, 2014 $ 533,349 $ 259,606 $ 792,955 Acquired during the period 147,334 — 147,334 Purchase price allocation adjustments 1,575 46,203 47,778 Impairment — (280,802 ) (280,802 ) Foreign currency translation (15,094 ) (2,487 ) (17,581 ) Balance at October 4, 2015 $ 667,164 $ 22,520 $ 689,684 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following table provides a summary of the major categories of intangible assets: October 4, 2015 December 31, 2014 Intangible assets not subject to amortization: Trademarks $ 43,962 $ 45,000 Intangible assets subject to amortization: Trademarks, customer relationships, patents and other finite-lived intangibles 395,365 295,375 Less: accumulated amortization (50,580 ) (45,534 ) Total other intangible assets $ 388,747 $ 294,841 |
DEBT AND FINANCING ARRANGEMEN29
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
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 October 4, September 28, October 4, September 28, Interest expense $ 22,590 $ 23,441 $ 68,874 $ 69,839 Loss on extinguishment of debt 28,326 — 28,326 — Interest income (878 ) (1,125 ) (2,840 ) (3,209 ) Capitalized interest (3,071 ) (1,543 ) (9,314 ) (3,838 ) Interest expense, net $ 46,967 $ 20,773 $ 85,046 $ 62,792 |
FINANCIAL INSTRUMENTS AND FAI30
FINANCIAL INSTRUMENTS AND FAIR VALUE (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
The fair value of derivative instruments | The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of October 4, 2015 and December 31, 2014 : October 4, 2015 December 31, 2014 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Commodities futures and options (2) $ — $ 767 $ — $ 9,944 Foreign exchange contracts (3) 1,792 883 2,196 2,447 Interest rate swap agreements (4) — 46,095 — 29,505 Cross-currency swap agreement (5) — — 2,016 — 1,792 47,745 4,212 41,896 Derivatives designated as fair value hedging instruments: Interest rate swap agreements (4) 13,952 — 1,746 — Derivatives not designated as hedging instruments: Deferred compensation derivatives (6) — 1,404 1,074 — Foreign exchange contracts (3) 56 — 4,049 2,334 56 1,404 5,123 2,334 Total $ 15,800 $ 49,149 $ 11,081 $ 44,230 (1) Derivative assets are classified on our balance sheet within prepaid expenses and other if current and other assets if non-current. Derivative liabilities are classified on our balance sheet within accrued liabilities if current and other long-term liabilities if non-current. (2) 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 October 4, 2015 , accrued liabilities reflects the net of assets of $63,953 and accrued liabilities of $64,720 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, 2014 were assets of $51,225 and accrued liabilities of $56,840 . At December 31, 2014 , the amount reflected in accrued liabilities also included the fair value of options contracts and other non-exchange traded derivative instruments. (3) 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. (4) 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. (5) 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. The cross-currency swap was settled in the third quarter of 2015, commensurate with our purchase of the noncontrolling interest of Hershey do Brazil. (6) 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 October 4, 2015 and September 28, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in accumulated other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ — $ 393 $ (34,571 ) $ 3,256 $ 11,000 $ 27,000 $ 1,288 $ 2,553 Foreign exchange contracts 750 7,033 662 (612 ) 185 (361 ) — — Interest rate swap agreements — — (36,187 ) (4,661 ) (1,166 ) (1,114 ) — — Deferred compensation derivatives (1,403 ) 371 — — — — — — Total $ (653 ) $ 7,797 $ (70,096 ) $ (2,017 ) $ 10,019 $ 25,525 $ 1,288 $ 2,553 (a) 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 (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. The effect of derivative instruments on the Consolidated Statements of Income for the nine months ended October 4, 2015 and September 28, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in accumulated other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ (2,777 ) $ 2,732 $ 62,619 $ 62,523 $ 31,300 $ 55,300 $ 2,142 $ 2,461 Foreign exchange contracts 474 (1,759 ) 158 (301 ) 273 3,536 — — Interest rate swap agreements — — (28,184 ) (19,998 ) (3,479 ) (3,351 ) — — Deferred compensation derivatives (1,024 ) 1,909 — — — — — — Total $ (3,327 ) $ 2,882 $ 34,593 $ 42,224 $ 28,094 $ 55,485 $ 2,142 $ 2,461 (a) Gains (losses) 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. 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. |
NONCONTROLLING INTERESTS IN S31
NONCONTROLLING INTERESTS IN SUBSIDIARIES (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest [Table Text Block] | A roll-forward showing the 2015 activity relating to the noncontrolling interests and redeemable noncontrolling interest follows: Noncontrolling Interests Redeemable Noncontrolling Interest Balance, December 31, 2014 $ 64,468 $ — Reclassification from Total Equity to Redeemable Noncontrolling Interest (13,428 ) 13,428 Net loss attributable to noncontrolling interests (1) (416 ) (4,393 ) Other comprehensive loss - foreign currency translation adjustments (2,111 ) (2,334 ) Adjustment to redemption value — 33,915 Other — (2,346 ) Purchase of redeemable noncontrolling interest — (38,270 ) Balance, October 4, 2015 $ 48,513 $ — (1) Amounts are not considered significant and are presented within selling, marketing and administrative expenses. |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Comprehensive Income Disclosure [Abstract] | |
Schedule of Comprehensive Income (Loss) | A summary of the components of comprehensive income is as follows: Three Months Ended Three Months Ended October 4, 2015 September 28, 2014 Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Net income $ 154,771 $ 223,741 Other comprehensive income (loss): Foreign currency translation adjustments $ (26,631 ) $ — (26,631 ) $ (17,321 ) $ — (17,321 ) Pension and post-retirement benefit plans (a) 15,962 (5,993 ) 9,969 5,851 (2,227 ) 3,624 Cash flow hedges: Losses on cash flow hedging derivatives (70,096 ) 26,182 (43,914 ) (2,017 ) 1,085 (932 ) Reclassification adjustments (b) (10,019 ) 3,805 (6,214 ) (25,525 ) 9,981 (15,544 ) Total other comprehensive loss $ (90,784 ) $ 23,994 (66,790 ) $ (39,012 ) $ 8,839 (30,173 ) Total comprehensive income $ 87,981 $ 193,568 Comprehensive gain attributable to noncontrolling interests (820 ) — Comprehensive income attributable to The Hershey Company $ 87,161 $ 193,568 Nine Months Ended Nine Months Ended October 4, 2015 September 28, 2014 Pre-Tax Amount Tax (Expense) Benefit After-Tax Amount Pre-Tax Tax (Expense) After-Tax Net income $ 299,567 $ 644,404 Other comprehensive income (loss): Foreign currency translation adjustments $ (51,681 ) $ — (51,681 ) $ (12,016 ) $ — (12,016 ) Pension and post-retirement benefit plans (a) 32,776 (11,880 ) 20,896 17,386 (6,602 ) 10,784 Cash flow hedges: Gains on cash flow hedging derivatives 34,593 (13,570 ) 21,023 42,224 (15,375 ) 26,849 Reclassification adjustments (b) (28,094 ) 10,383 (17,711 ) (55,485 ) 19,919 (35,566 ) Total other comprehensive loss $ (12,406 ) $ (15,067 ) (27,473 ) $ (7,891 ) $ (2,058 ) (9,949 ) Total comprehensive income $ 272,094 $ 634,455 Comprehensive loss attributable to noncontrolling interests 2,111 — Comprehensive income attributable to The Hershey Company $ 274,205 $ 634,455 (a) These amounts are included in the computation of net periodic benefit costs. For more information, see Note 11. (b) For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 5. |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive loss as shown on the Consolidated Balance Sheets are as follows: October 4, December 31, Foreign currency translation adjustments $ (93,251 ) $ (43,681 ) Pension and post-retirement benefit plans, net of tax (263,754 ) (284,650 ) Cash flow hedges, net of tax (26,930 ) (30,242 ) Total accumulated other comprehensive loss $ (383,935 ) $ (358,573 ) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |
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 October 4, September 28, October 4, September 28, Net income $ 154,771 $ 223,741 $ 299,567 $ 644,404 Weighted-average shares – basic: Common stock 158,111 161,253 159,058 162,330 Class B common stock 60,620 60,620 60,620 60,620 Total weighted-average shares – basic: 218,731 221,873 219,678 222,950 Effect of dilutive securities: Employee stock options 1,192 1,705 1,406 1,985 Performance and restricted stock units 152 299 238 358 Weighted-average shares – diluted 220,075 223,877 221,322 225,293 Earnings per share – basic: Common stock $ 0.73 $ 1.03 $ 1.40 $ 2.97 Class B common stock $ 0.66 $ 0.94 $ 1.27 $ 2.68 Earnings per share – diluted: Common stock $ 0.70 $ 1.00 $ 1.35 $ 2.86 Class B common stock $ 0.66 $ 0.94 $ 1.28 $ 2.67 |
BUSINESS REALIGNMENT ACTIVITI34
BUSINESS REALIGNMENT ACTIVITIES (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Restructuring and Related Activities [Abstract] | |
Business Realignment | The tables below provide details for charges incurred across all restructuring and cost reduction activities during the three and nine month periods ended October 4, 2015 and September 28, 2014 . Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Employee related costs $ 57,753 $ — $ 80,305 $ 93 Asset related costs 1,329 — 5,905 — Other exit costs, including Mauna Loa divestiture — 16,372 2,667 20,544 Other implementation costs 8,381 — 12,551 — Total charges associated with business realignment initiatives $ 67,463 $ 16,372 $ 101,428 $ 20,637 Asset related charges presented in the table above represent accelerated depreciation and amortization charges relating to a program commenced in 2014 to rationalize certain non-U.S. manufacturing and distribution activities. The other exit costs in 2014 include $13,340 relating to the write-down of an indefinite-lived trademark based on the estimated sales value for Mauna Loa, which was divested in 2015, as well as costs relating to the demolition of the Company's former manufacturing facility, representing the final phase of the Project Next Century Program. This program was substantially complete as of December 31, 2014. Charges relating to our business realignment initiatives are classified in our Consolidated Statements of Income as follows: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Cost of sales $ 2,529 $ — $ 5,205 $ 93 Selling, marketing and administrative 7,181 — 13,251 — Business realignment charges: Business realignment and productivity initiatives 57,753 3,032 80,305 7,204 Divestiture of Mauna Loa (see Note 2) — 13,340 2,667 13,340 Total business realignment charges 57,753 16,372 82,972 20,544 Total charges associated with business realignment initiatives $ 67,463 $ 16,372 $ 101,428 $ 20,637 |
Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table summarizes our business realignment activity for the nine months ended October 4, 2015 : Employee related costs Other exit costs Other implementation costs Total Liability balance at December 31, 2014 $ 79 $ — $ — $ 79 2015 business realignment charges 80,305 — 6,785 87,090 Cash payments (11,106 ) — (2,985 ) (14,091 ) Other, net 710 — — 710 Liability balance at October 4, 2015 $ 69,988 $ — $ 3,800 $ 73,788 |
STOCK COMPENSATION PLAN (Tables
STOCK COMPENSATION PLAN (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Costs | For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows: Three Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Pre-tax compensation expense $ 13,374 $ 14,062 $ 39,989 $ 41,759 Related income tax benefit $ 4,334 $ 4,907 $ 13,676 $ 14,407 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of activity relating to grants of stock options for the period ended October 4, 2015 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 7,319,377 $66.69 6.3 years Granted 1,315,625 $105.51 Exercised (1,275,257 ) $52.28 Forfeited (247,868 ) $89.85 Outstanding as of October 4, 2015 7,111,877 $75.66 6.1 years $ 146,443 Options exercisable as of October 4, 2015 4,135,751 $61.25 4.8 years 130,816 |
Fair Value of Each Stock Option Grant | The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: Nine Months Ended October 4, September 28, Dividend yields 2.0 % 2.0 % Expected volatility 20.2 % 22.3 % Risk-free interest rates 1.9 % 2.1 % Expected lives in years 6.6 6.7 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of activity relating to grants of PSUs and RSUs for the period ended October 4, 2015 is as follows: Performance Stock Units and Restricted Stock Units Number of Units Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) Outstanding at beginning of year 904,306 $94.48 Granted 315,443 $107.53 Performance assumption change (259,577 ) $105.93 Vested (398,559 ) $73.63 Forfeited (31,328 ) $112.15 Outstanding as of October 4, 2015 530,285 $106.42 |
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 October 4, September 28, Units granted 315,443 308,980 Weighted-average fair value at date of grant (per unit) $107.53 $116.90 Monte Carlo simulation assumptions: Estimated values (per unit) $61.22 $80.95 Dividend yields 2.0 % 1.8 % Expected volatility 14.9 % 15.5 % |
PENSION AND OTHER POST-RETIRE36
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | Components of net periodic benefit cost for the third quarter were as follows: Pension Benefits Other Benefits Three Months Ended Three Months Ended October 4, September 28, October 4, September 28, Service cost $ 7,068 $ 6,670 $ 135 $ 177 Interest cost 11,025 12,218 2,516 2,927 Expected return on plan assets (17,146 ) (18,519 ) — — Amortization of prior service (credit) cost (294 ) (167 ) 151 154 Amortization of net actuarial loss (gains) 7,595 5,838 (11 ) (36 ) Administrative expenses 229 193 48 23 Net periodic benefit cost 8,477 6,233 2,839 3,245 Settlement loss 2,583 — — — Total amount reflected in earnings $ 11,060 $ 6,233 $ 2,839 $ 3,245 We made contributions of $29,349 and $5,174 to the pension plans and other benefits plans, respectively, during the third quarter of 2015 . In the third quarter of 2014 , we made contributions of $24,696 and $4,105 to our pension plans and other benefits plans, respectively. These contribution amounts also include benefit payments from our unfunded, non-qualified pension plans and post-retirement benefit plans. Components of net periodic benefit cost for the year-to-date periods were as follows: Pension Benefits Other Benefits Nine Months Ended Nine Months Ended October 4, September 28, October 4, September 28, Service cost $ 21,301 $ 20,003 $ 406 $ 530 Interest cost 33,187 36,643 7,617 8,778 Expected return on plan assets (51,685 ) (55,537 ) — — Amortization of prior service (credit) cost (881 ) (501 ) 457 462 Amortization of net actuarial loss (gains) 22,899 17,511 (40 ) (107 ) Administrative expenses 737 586 92 78 Net periodic benefit cost 25,558 18,705 8,532 9,741 Settlement loss 2,583 — — — Total amount reflected in earnings $ 28,141 $ 18,705 $ 8,532 $ 9,741 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Our segment net sales and earnings were as follows: Three Months Ended Nine Months Ended October 4, September 28, 2014 October 4, September 28, Net sales: North America $ 1,733,869 $ 1,693,903 $ 4,840,438 $ 4,727,479 International and Other 226,910 267,675 636,966 684,262 Total $ 1,960,779 $ 1,961,578 5,477,404 5,411,741 Segment income (loss): North America $ 546,080 $ 488,902 $ 1,561,053 $ 1,433,339 International and Other (13,509 ) 16,050 (79,754 ) 21,187 Total segment income 532,571 504,952 1,481,299 1,454,526 Unallocated corporate expense (1) 117,695 124,551 383,160 376,894 Goodwill impairment 30,991 — 280,802 — Charges associated with business realignment initiatives 67,463 16,372 101,428 20,637 Non-service related pension expense (income) 4,049 (463 ) 6,976 (1,383 ) Acquisition and integration costs 9,359 5,824 14,253 9,664 Operating profit 303,014 358,668 694,680 1,048,714 Interest expense, net 46,967 20,773 85,046 62,792 Other (income) expense, net 9,409 (7,528 ) 4,328 1,448 Income before income taxes $ 246,638 $ 345,423 $ 605,306 $ 984,474 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. Depreciation and amortization expense included within segment income presented above is as follows: Three Months Ended Nine Months Ended October 4, September 28, 2014 October 4, September 28, 2014 North America $ 38,887 $ 37,263 $ 113,837 $ 108,713 International and Other 13,993 6,653 34,136 18,286 Corporate, including business realignment 11,174 8,957 34,882 26,007 Total $ 64,054 $ 52,873 $ 182,855 $ 153,006 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule Of Inventory | Inventories were as follows: October 4, December 31, Raw materials $ 335,054 $ 377,620 Goods in process 87,905 63,916 Finished goods 604,225 531,608 Inventories at FIFO 1,027,184 973,144 Adjustment to LIFO (213,601 ) (172,108 ) Total inventories $ 813,583 $ 801,036 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Major classes of property, plant and equipment were as follows: October 4, December 31, Land $ 95,847 $ 95,913 Buildings 1,073,757 1,031,050 Machinery and equipment 2,887,897 2,863,559 Construction in progress 401,778 338,085 Property, plant and equipment, gross 4,459,279 4,328,607 Accumulated depreciation (2,271,543 ) (2,176,706 ) Property, plant and equipment, net $ 2,187,736 $ 2,151,901 |
TREASURY STOCK ACTIVITY (Tables
TREASURY STOCK ACTIVITY (Tables) | 9 Months Ended |
Oct. 04, 2015 | |
Stockholders' Equity Note [Abstract] | |
Cumulative Share Repurchases And Issuances | A summary of our treasury stock activity is as follows: Nine Months Ended October 4, 2015 Shares Dollars In thousands Shares repurchased under pre-approved share repurchase programs 4,209,112 $ 402,548 Shares repurchased to replace Treasury Stock issued for stock options 1,603,838 164,932 Total share repurchases 5,812,950 567,480 Shares issued for stock options and incentive compensation (1,514,260 ) (63,008 ) Net change 4,298,690 $ 504,472 |
SIGNIFICANT ACCOUNTING POLICI41
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Gain on sale of trademark licensing rights | $ 0 | $ 0 | $ (9,950) | $ 0 |
Equity Method Investment, Other than Temporary Impairment | 9,249 | 0 | 13,893 | 0 |
Derivative Instruments Not Designated as Hedging Instruments, Loss | 0 | (7,565) | 0 | 5,544 |
Extraordinary Item, Gain (Loss), Net of Tax, Attributable to Noncontrolling Interest | 0 | 0 | 0 | (4,628) |
Other Nonoperating Expense | 160 | 37 | 385 | 532 |
Other Nonoperating Income (Expense) | $ 9,409 | $ (7,528) | $ 4,328 | $ 1,448 |
BUSINESS ACQUISITIONS AND DIV42
BUSINESS ACQUISITIONS AND DIVESTITURES (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Apr. 05, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | Sep. 26, 2015 |
Business Acquisition [Line Items] | ||||||||||
Goodwill, Acquired During Period | $ 147,334 | |||||||||
Goodwill, Purchase Accounting Adjustments | 47,778 | |||||||||
Goodwill impairment | $ 30,991 | $ 0 | 280,802 | $ 0 | ||||||
Proceeds from sale of business | 32,408 | 0 | ||||||||
Gain (Loss) on Disposition of Business | 0 | $ 13,340 | 2,667 | $ 13,340 | ||||||
Krave Pure Foods [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Cash Acquired from Acquisition | $ 1,362 | |||||||||
Business Acquisition, Effective Date of Acquisition | Mar. 1, 2015 | |||||||||
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period | $ 35,000 | |||||||||
Business Combination, Consideration Transferred | 220,016 | |||||||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 20,000 | 20,000 | ||||||||
Business Combination, Liabilities Arising from Contingencies, Amount Recognized | $ 16,800 | 12,000 | $ 16,800 | 12,000 | ||||||
Goodwill, Acquired During Period | 147,089 | |||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 9,465 | 9,465 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (2,756) | (2,756) | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | (47,344) | (47,344) | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 235,454 | 235,454 | ||||||||
Krave Pure Foods [Member] | Other Intangible Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 17,000 | 17,000 | ||||||||
Krave Pure Foods [Member] | Trademarks [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 112,000 | 112,000 | ||||||||
Finite-Lived Intangible Asset, Useful Life | 22 years | |||||||||
Shanghai Golden Monkey [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Acquired During Period | 284,000 | 235,000 | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | $ 37,000 | 37,000 | $ 43,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (54,000) | (54,000) | (74,000) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 112,000 | 112,000 | 114,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 46,000 | 46,000 | 20,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 42,000 | 42,000 | 41,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | 35,000 | 35,000 | 32,000 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Long-term Debt | (105,000) | (105,000) | (105,000) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | (52,000) | (52,000) | (54,000) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 441,000 | 441,000 | 446,000 | |||||||
Business Combination, Acquired Receivables, Fair Value | 37,860 | $ 8,685 | 8,685 | $ 37,860 | ||||||
Business Combination, Consideration Transferred, Liabilities Incurred | $ 100,067 | 76,815 | ||||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 20.00% | 20.00% | ||||||||
Goodwill, Purchase Accounting Adjustments | $ 16,599 | $ 25,898 | $ 6,623 | |||||||
Goodwill impairment | $ 249,811 | 266,409 | ||||||||
Shanghai Golden Monkey [Member] | Other Intangible Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 145,000 | $ 145,000 | $ 145,000 | |||||||
Goodwill, Purchase Accounting Adjustments | 0 | |||||||||
The Allan Candy Company [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | 1,820 | |||||||||
Minimum [Member] | Krave Pure Foods [Member] | Customer-Related Intangible Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 5 years | |||||||||
Maximum [Member] | Krave Pure Foods [Member] | Customer-Related Intangible Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-Lived Intangible Asset, Useful Life | 16 years | |||||||||
Mauna Loa [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Proceeds from sale of business | 32,400 | |||||||||
Gain (Loss) on Disposition of Business | 2,667 | |||||||||
Disposal Group, Including Discontinued Operation, Inventory | 21,489 | 21,489 | ||||||||
Disposal Group, Including Discontinued Operation, Prepaid and Other Assets | 173 | 173 | ||||||||
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment | 12,691 | 12,691 | ||||||||
Disposal Group, Including Discontinued Operation, Intangible Assets | 12,705 | 12,705 | ||||||||
Disposal Group, Including Discontinued Operation, Assets | 47,058 | 47,058 | ||||||||
Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities | 3,726 | 3,726 | ||||||||
Disposal Group, Including Discontinued Operation, Liabilities, Noncurrent | 9,029 | 9,029 | ||||||||
Disposal Group, Including Discontinued Operation, Liabilities | $ 12,755 | $ 12,755 | ||||||||
Other Noncurrent Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | (3,000) | |||||||||
Accounts Receivable [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | (26,000) | |||||||||
Inventories [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | (1,000) | |||||||||
Other Current Assets [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | 6,000 | |||||||||
Property, Plant and Equipment [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | 2,000 | |||||||||
Goodwill [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | 49,000 | |||||||||
Other Current Liabilities [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | (20,000) | |||||||||
Short-term Debt [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | 0 | |||||||||
Other Noncurrent Liabilities [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill, Purchase Accounting Adjustments | $ (2,000) |
GOODWILL AND INTANGIBLE ASSET43
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Goodwill [Line Items] | |||||
Goodwill | $ 792,955 | ||||
Goodwill, Acquired During Period | 147,334 | ||||
Goodwill, Purchase Accounting Adjustments | 47,778 | ||||
Goodwill, Impairment Loss | $ (30,991) | $ 0 | (280,802) | $ 0 | |
Goodwill, Translation Adjustments | (17,581) | ||||
Goodwill | 689,684 | 689,684 | $ 792,955 | ||
Indefinite-Lived Trade Names | 43,962 | 43,962 | 45,000 | ||
Finite-Lived Intangible Assets, Gross | 395,365 | 395,365 | 295,375 | ||
Finite-Lived Intangible Assets, Accumulated Amortization | (50,580) | (50,580) | (45,534) | ||
Other Intangibles | 388,747 | 388,747 | 294,841 | ||
Amortization of Intangible Assets | 16,469 | $ 7,586 | |||
North America [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | 533,349 | ||||
Goodwill, Acquired During Period | 147,334 | ||||
Goodwill, Purchase Accounting Adjustments | 1,575 | ||||
Goodwill, Impairment Loss | 0 | ||||
Goodwill, Translation Adjustments | (15,094) | ||||
Goodwill | 667,164 | 667,164 | 533,349 | ||
International and Other [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill | 259,606 | ||||
Goodwill, Acquired During Period | 0 | ||||
Goodwill, Purchase Accounting Adjustments | 46,203 | ||||
Goodwill, Impairment Loss | (280,802) | ||||
Goodwill, Translation Adjustments | (2,487) | ||||
Goodwill | 22,520 | 22,520 | $ 259,606 | ||
CHINA | |||||
Goodwill [Line Items] | |||||
Goodwill, Impairment Loss | (14,393) | ||||
Goodwill | $ 15,000 | $ 15,000 |
DEBT AND FINANCING ARRANGEMEN44
DEBT AND FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Debt [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,000,000 | $ 1,000,000 | |||
Commercial Paper | 345,969 | 345,969 | $ 54,995 | ||
Debt Instrument, Repurchase Amount | 100,165 | ||||
Extinguishment of Debt, Amount | 71,646 | ||||
Long-term Debt | 2,080,607 | 2,080,607 | |||
Gain on Fair Value Hedge Ineffectiveness | 278 | ||||
Derivative Instruments Not Designated as Hedging Instruments, Gain | 1,539 | 1,539 | |||
Interest expense | 22,590 | $ 23,441 | 68,874 | $ 69,839 | |
Loss on Extinguishment of Debt | 28,326 | 0 | 28,326 | 0 | |
Interest income | (878) | (1,125) | (2,840) | (3,209) | |
Capitalized interest | (3,071) | (1,543) | (9,314) | (3,838) | |
Interest expense, net | 46,967 | $ 20,773 | $ 85,046 | $ 62,792 | |
Notes Due 2015 [Member] | |||||
Debt [Line Items] | |||||
Repayments of Debt | $ 250,000 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | 4.85% | |||
Notes Due 2018 [Member] | |||||
Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 1.60% | 1.60% | |||
Long-term Debt | $ 300,000 | $ 300,000 | |||
Notes Due 2025 [Member] | |||||
Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 3.20% | 3.20% | |||
Long-term Debt | $ 300,000 | $ 300,000 | |||
8.8 % Debentures due 2021 [Member] | |||||
Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 8.80% | 8.80% | |||
Extinguishment of Debt, Amount | $ 15,285 | ||||
Long-term Debt | $ 100,000 | $ 100,000 | |||
7.2% Debentures due 2027 [Member] | |||||
Debt [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.20% | 7.20% | |||
Extinguishment of Debt, Amount | $ 56,361 | ||||
Commercial Paper [Member] | |||||
Debt [Line Items] | |||||
Short-term Debt, Weighted Average Interest Rate | 0.15% | 0.15% | 0.09% | ||
Foreign Line of Credit [Member] | |||||
Debt [Line Items] | |||||
Line of Credit, Current | $ 342,012 | $ 342,012 | $ 329,701 | ||
Interest Rate Swap Agreements | Fair Value Hedging [Member] | |||||
Debt [Line Items] | |||||
Derivative, Notional Amount | 350,000 | 350,000 | $ 450,000 | ||
Interest Rate Swap Agreements | Fair Value Hedging [Member] | 8.8 % Debentures due 2021 [Member] | |||||
Debt [Line Items] | |||||
Derivative, Notional Amount | $ 100,000 | $ 100,000 |
FINANCIAL INSTRUMENTS AND FAI45
FINANCIAL INSTRUMENTS AND FAIR VALUE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Balance Sheet Caption | |||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | $ 1,792,000 | $ 1,792,000 | $ 4,212,000 | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 56,000 | 56,000 | 5,123,000 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 47,745,000 | 47,745,000 | 41,896,000 | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 1,404,000 | 1,404,000 | 2,334,000 | ||
Derivative Asset Current Commodity Last Day Activity | 63,953,000 | 63,953,000 | 51,225,000 | ||
Derivative Liability Current Commodity Last Day Activity | 64,720,000 | 64,720,000 | 56,840,000 | ||
Long-term Debt | 2,080,607,000 | 2,080,607,000 | |||
Long-term Debt, Fair Value | 2,231,635,000 | 2,231,635,000 | |||
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (653,000) | $ 7,797,000 | (3,327,000) | $ 2,882,000 | |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | (70,096,000) | (2,017,000) | 34,593,000 | 42,224,000 | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 10,019,000 | 25,525,000 | 28,094,000 | 55,485,000 | |
Gains (losses) recognized in income (ineffective portion) | 1,288,000 | 2,553,000 | 2,142,000 | 2,461,000 | |
Derivative, Gain (Loss) on Derivative, Net | 5,597,000 | ||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months (after tax) | $ 9,506,000 | ||||
Commodity [Member] | |||||
Derivatives, Fair Value [Line Items] | |||||
Minimum Length of Time Hedged in Cash Flow Hedge | 3 months | ||||
Maximum Length of Time Hedged in Cash Flow Hedge | 24 months | ||||
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 | 0 | 393,000 | $ (2,777,000) | 2,732,000 | |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | (34,571,000) | 3,256,000 | 62,619,000 | 62,523,000 | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 11,000,000 | 27,000,000 | 31,300,000 | 55,300,000 | |
Gains (losses) recognized in income (ineffective portion) | 1,288,000 | 2,553,000 | $ 2,142,000 | 2,461,000 | |
Foreign Exchange Forward Contracts | |||||
Derivatives, Fair Value [Line Items] | |||||
Minimum Length of Time Hedged in Cash Flow Hedge | 3 months | ||||
Maximum Length of Time Hedged in Cash Flow Hedge | 24 months | ||||
Notional amount of interest rate derivative instruments | 2,791,000 | $ 2,791,000 | 4,144,000 | ||
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 750,000 | 7,033,000 | 474,000 | (1,759,000) | |
Gains (losses) recognized in other comprehensive income (OCI)(effective portion) | 662,000 | (612,000) | 158,000 | (301,000) | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 185,000 | (361,000) | 273,000 | 3,536,000 | |
Gains (losses) recognized in income (ineffective portion) | 0 | 0 | 0 | 0 | |
Interest Rate Swap Agreements | |||||
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) | (36,187,000) | (4,661,000) | (28,184,000) | (19,998,000) | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | (1,166,000) | (1,114,000) | (3,479,000) | (3,351,000) | |
Gains (losses) recognized in income (ineffective portion) | 0 | 0 | 0 | 0 | |
Equity Swap | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount of interest rate derivative instruments | 23,277,000 | 23,277,000 | 26,417,000 | ||
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | |||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (1,403,000) | 371,000 | (1,024,000) | 1,909,000 | |
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 | |
Minimum Length of Time Hedged in Fair Value Hedge | 3 months | ||||
Maximum Length of Time Hedged in Fair Value Hedge | 12 months | ||||
Fair Value, Inputs, Level 1 | Commodity [Member] | |||||
Balance Sheet Caption | |||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 0 | $ 0 | 0 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 767,000 | 767,000 | 9,944,000 | ||
Fair Value, Inputs, Level 2 | Foreign Exchange Forward Contracts | |||||
Balance Sheet Caption | |||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 1,792,000 | 1,792,000 | 2,196,000 | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 56,000 | 56,000 | 4,049,000 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 883,000 | 883,000 | 2,447,000 | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 0 | 0 | 2,334,000 | ||
Fair Value, Inputs, Level 2 | Interest Rate Swap Agreements | |||||
Derivatives, Fair Value [Line Items] | |||||
Fair Value Hedge Assets | 13,952,000 | 13,952,000 | 1,746,000 | ||
Fair Value Hedge Liabilities | 0 | 0 | 0 | ||
Balance Sheet Caption | |||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 0 | 0 | 0 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 46,095,000 | 46,095,000 | 29,505,000 | ||
Fair Value, Inputs, Level 2 | Equity Swap | |||||
Balance Sheet Caption | |||||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 0 | 0 | 1,074,000 | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 1,404,000 | 1,404,000 | 0 | ||
Fair Value, Inputs, Level 2 | Cross Currency Swap | |||||
Balance Sheet Caption | |||||
Cash Flow Hedge Derivative Instrument Assets at Fair Value | 0 | 0 | 2,016,000 | ||
Cash Flow Hedge Derivative Instrument Liabilities at Fair Value | 0 | 0 | 0 | ||
Liability [Member] | |||||
Schedule Of Derivative Instruments Gain Loss In Statement Of Financial Performance [Abstract] | |||||
Derivative Liability, Fair Value, Gross Liability | 49,149,000 | 49,149,000 | 44,230,000 | ||
Assets [Member] | |||||
Balance Sheet Caption | |||||
Derivative Asset, Fair Value, Gross Asset | 15,800,000 | 15,800,000 | 11,081,000 | ||
Cash Flow Hedging [Member] | Foreign Exchange Forward Contracts | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount of interest rate derivative instruments | 14,532,000 | 14,532,000 | 22,725,000 | ||
Cash Flow Hedging [Member] | Interest Rate Swap Agreements | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount of interest rate derivative instruments | 500,000,000 | 500,000,000 | 750,000,000 | ||
Fair Value Hedging [Member] | Interest Rate Swap Agreements | |||||
Derivatives, Fair Value [Line Items] | |||||
Notional amount of interest rate derivative instruments | $ 350,000,000 | $ 350,000,000 | $ 450,000,000 |
NONCONTROLLING INTERESTS IN S46
NONCONTROLLING INTERESTS IN SUBSIDIARIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 04, 2015 | Sep. 28, 2014 | |
Minority Interest [Line Items] | ||
Purchase of noncontrolling interest | $ (38,270) | $ 0 |
Noncontrolling interests in subsidiaries | 64,468 | |
Impact of reclassification to and purchase of redeemable noncontrolling interest | (13,428) | |
Noncontrolling interests' share of losses in subsidiaries | (416) | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Noncontrolling Interest | (2,111) | |
Other Noncontrolling Interests | 0 | |
Noncontrolling interests in subsidiaries | 48,513 | |
Redeemable noncontrolling interest | 0 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount | 13,428 | |
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | (4,393) | |
Temporary Equity, Foreign Currency Translation Adjustments | (2,334) | |
Noncontrolling Interest, Change in Redemption Value | 33,915 | |
Temporary Equity, Other Changes | (2,346) | |
Redeemable noncontrolling interest | $ 0 | |
Hershey Do Brasil Subsidiary [Member] | ||
Minority Interest [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.00% | |
Lotte Shanghai Food Company [Member] | ||
Minority Interest [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% |
COMPREHENSIVE INCOME (Details)
COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Other comprehensive income (loss) Pre-Tax Amount: | |||||
Foreign currency translation adjustments | $ (26,631) | $ (17,321) | $ (51,681) | $ (12,016) | |
Pension and post-retirement benefit plans | 15,962 | 5,851 | 32,776 | 17,386 | |
Cash Flow Hedges: | |||||
Gains (losses) on cash flow hedging derivatives | (70,096) | (2,017) | 34,593 | 42,224 | |
Reclassification adjustments | (10,019) | (25,525) | (28,094) | (55,485) | |
Total other comprehensive income (loss) | (90,784) | (39,012) | (12,406) | (7,891) | |
Other comprehensive income Tax (Expense) Benefit: | |||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | |
Pension and post-retirement benefit plans | (5,993) | (2,227) | (11,880) | (6,602) | |
Cash Flow Hedges: | |||||
Gains (losses) on cash flow hedging derivatives | 26,182 | 1,085 | (13,570) | (15,375) | |
Reclassification adjustments | 3,805 | 9,981 | 10,383 | 19,919 | |
Total Other Comprehensive Income (loss) | 23,994 | 8,839 | (15,067) | (2,058) | |
Comprehensive income (loss) After-Tax Amount: | |||||
Net income | 154,771 | 223,741 | 299,567 | 644,404 | |
Other Comprehensive Income (Loss) After-Tax Amount: | |||||
Foreign currency translation adjustments | (26,631) | (17,321) | (51,681) | (12,016) | |
Pension and postretirement benefit plans | 9,969 | 3,624 | 20,896 | 10,784 | |
Cash Flow Hedges: | |||||
Gains (losses) on cash flow hedging derivatives | (43,914) | (932) | 21,023 | 26,849 | |
Reclassification adjustments | (6,214) | (15,544) | (17,711) | (35,566) | |
Total other comprehensive income (loss) | (66,790) | (30,173) | (27,473) | (9,949) | |
Total comprehensive income (loss) | 87,981 | 193,568 | 272,094 | 634,455 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | (820) | 0 | 2,111 | 0 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 87,161 | $ 193,568 | 274,205 | $ 634,455 | |
Components of Accumulated Other Comprehensive (Loss) Abstract | |||||
Foreign currency translation adjustments | (93,251) | (93,251) | $ (43,681) | ||
Pension and post-retirement benefit plans, net of tax | (263,754) | (263,754) | (284,650) | ||
Cash flow hedges, net of tax | (26,930) | (26,930) | (30,242) | ||
Total accumulated other comprehensive loss | $ (383,935) | $ (383,935) | $ (358,573) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Net income | $ 154,771 | $ 223,741 | $ 299,567 | $ 644,404 |
Weighted-average shares - Basic | 218,731 | 221,873 | 219,678 | 222,950 |
Weighted-average number of shares outstanding, diluted | 220,075 | 223,877 | 221,322 | 225,293 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,552 | 1,510 | 2,660 | 1,510 |
Common Stock | ||||
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Weighted-average shares - Basic | 158,111 | 161,253 | 159,058 | 162,330 |
Earnings Per Share - Basic | $ 0.73 | $ 1.03 | $ 1.40 | $ 2.97 |
Earnings Per Share - Diluted | $ 0.70 | $ 1 | $ 1.35 | $ 2.86 |
Common Class B | ||||
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Weighted-average shares - Basic | 60,620 | 60,620 | 60,620 | 60,620 |
Earnings Per Share - Basic | $ 0.66 | $ 0.94 | $ 1.27 | $ 2.68 |
Earnings Per Share - Diluted | $ 0.66 | $ 0.94 | $ 1.28 | $ 2.67 |
Employee Stock Option [Member] | ||||
Schedule of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Weighted-Average Number Diluted Shares Outstanding Adjustment | 1,192 | 1,705 | 1,406 | 1,985 |
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 | 152 | 299 | 238 | 358 |
BUSINESS REALIGNMENT ACTIVITI49
BUSINESS REALIGNMENT ACTIVITIES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015USD ($) | Sep. 28, 2014USD ($) | Oct. 04, 2015USD ($) | Sep. 28, 2014USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | $ 57,753 | $ 16,372 | $ 82,972 | $ 20,544 |
Restructuring and Related Cost, Accelerated Depreciation | 1,329 | 0 | 5,905 | 0 |
Total business realignment charges | 67,463 | 16,372 | 101,428 | 20,637 |
Gain (Loss) on Disposition of Business | 0 | 13,340 | 2,667 | 13,340 |
Restructuring Reserve | 79 | |||
Restructuring and Related Cost, Incurred Cost | 87,090 | |||
Payments for Restructuring | (14,091) | |||
Restructuring Reserve | 73,788 | 73,788 | ||
Restructuring Reserve, Accrual Adjustment | 710 | |||
Restructuring and Related Cost, Expected Cost | 120,000 | 120,000 | ||
Cost of Sales [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 2,529 | 0 | 5,205 | 93 |
Selling, General and Administrative Expenses [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 7,181 | 0 | 13,251 | 0 |
Restructuring Charges [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 57,753 | 3,032 | $ 80,305 | 7,204 |
2015 Initiative [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Number of Positions Eliminated | 300 | |||
Restructuring Charges | 64,268 | $ 90,322 | ||
Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 57,753 | 0 | 80,305 | 93 |
Restructuring Reserve | 79 | |||
Restructuring and Related Cost, Incurred Cost | 80,305 | |||
Payments for Restructuring | (11,106) | |||
Restructuring Reserve | 69,988 | 69,988 | ||
Restructuring Reserve, Accrual Adjustment | 710 | |||
Facility Closing [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 0 | 16,372 | 2,667 | 20,544 |
Restructuring Reserve | 0 | |||
Restructuring and Related Cost, Incurred Cost | 0 | |||
Payments for Restructuring | 0 | |||
Restructuring Reserve | 0 | 0 | ||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Other Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 8,381 | $ 0 | 12,551 | $ 0 |
Restructuring Reserve | 0 | |||
Restructuring and Related Cost, Incurred Cost | 6,785 | |||
Payments for Restructuring | (2,985) | |||
Restructuring Reserve | $ 3,800 | 3,800 | ||
Restructuring Reserve, Accrual Adjustment | $ 0 |
STOCK COMPENSATION PLANS (Detai
STOCK COMPENSATION PLANS (Details) - Stock Compensation Costs - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
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 | $ 13,374 | $ 14,062 | $ 39,989 | $ 41,759 |
Total income tax benefit recognized in the Consolidated Statements of Income for stock-based compensation | 4,334 | $ 4,907 | 13,676 | $ 14,407 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 67,520 | $ 67,520 | ||
Weighted Average Period In Years That Total Unrecognized Compensation Cost is Expected To be Recognized | 2 years 2 months |
STOCK COMPENSATION PLAN (Detail
STOCK COMPENSATION PLAN (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning of period | 7,319,377 | ||
Granted | 1,315,625 | ||
Exercised | (1,275,257) | ||
Forfeited | (247,868) | ||
Outstanding as of end of period | 7,111,877 | 7,319,377 | |
Options exercisable as of end of period | 4,135,751 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding at beginning of the period | $ 66.69 | ||
Granted | 105.51 | ||
Exercised | 52.28 | ||
Forfeited | 89.85 | ||
Outstanding as of end of period | 75.66 | $ 66.69 | |
Options Exercisable as of end of period | $ 61.25 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value of options outstanding | $ 146,443 | ||
Aggregate intrinsic value of options exercisable | $ 130,816 | ||
Weighted-average fair value of options granted (per share) | $ 19.18 | $ 21.54 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Dividend yields | 2.00% | 2.00% | |
Expected volatility | 20.20% | 22.30% | |
Risk-free interest rates | 1.90% | 2.10% | |
Expected lives in years | 6 years 7 months | 6 years 8 months | |
Intrinsic value of options exercised | $ 60,425 | $ 110,329 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Outstanding at beginning of the period | 6 years 1 month | 6 years 4 months | |
Outstanding as of end of period | 6 years 1 month | 6 years 4 months | |
Options Exercisable as of end of period | 4 years 9 months |
STOCK COMPENSATION PLAN (Deta52
STOCK COMPENSATION PLAN (Details) - Performance Stock Units and Restricted Stock Units - USD ($) | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Outstanding at beginning of year | 904,306 | ||
Granted | 315,443 | 308,980 | |
Performance assumption change | (259,577) | ||
Vested | (398,559) | ||
Forfeited | (31,328) | ||
Outstanding as of end of period | 530,285 | ||
Outstanding as of beginning of year | $ 94.48 | ||
Granted | 107.53 | $ 116.90 | |
Performance assumption change | 105.93 | ||
Vested | 73.63 | ||
Forfeited | 112.15 | ||
Outstanding as of end of period | $ 106.42 | ||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Number Excluded | 20,993 | 25,462 | |
Fair Value of Performance Stock Units and Restricted Stock Units [Abstract] | |||
PSU Fair Value Monte Carlo Simulation Estimated Value (per unit) | $ 61.22 | $ 80.95 | |
PSU Fair Value Monte Carlo Simulation Dividend Yields | 2.00% | 1.80% | |
PSU Fair Value Monte Carlo Simulation Expected Volatility | 14.90% | 15.50% | |
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested | $ 40,220,000 | $ 57,001,000 | |
Deferred performance stock units, deferred restricted stock units representing directors' fees (units) | 503,557 | ||
Performance Stock Units and Restricted Stock Units [Member] | |||
Fair Value of Performance Stock Units and Restricted Stock Units [Abstract] | |||
Number of shares of common stock into which another unit of deferred performance stock and restricted stock is converted | one |
PENSION AND OTHER POST-RETIRE53
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 7,068 | $ 6,670 | $ 21,301 | $ 20,003 |
Interest cost | 11,025 | 12,218 | 33,187 | 36,643 |
Expected return on plan assets | (17,146) | (18,519) | (51,685) | (55,537) |
Amortization of prior service (credit) cost | (294) | (167) | (881) | (501) |
Amortization of net actuarial loss (gains) | 7,595 | 5,838 | 22,899 | 17,511 |
Administrative expenses | 229 | 193 | 737 | 586 |
Defined Benefit Plan, Net Periodic Benefit Cost Before Settlement | 8,477 | 6,233 | 25,558 | 18,705 |
Net periodic benefit cost | 11,060 | 6,233 | 28,141 | 18,705 |
Pension Contributions | 29,349 | 24,696 | 30,685 | 26,669 |
Defined Benefit Plan, Settlements, Benefit Obligation | 2,583 | 0 | 2,583 | 0 |
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 135 | 177 | 406 | 530 |
Interest cost | 2,516 | 2,927 | 7,617 | 8,778 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 151 | 154 | 457 | 462 |
Amortization of net actuarial loss (gains) | (11) | (36) | (40) | (107) |
Administrative expenses | 48 | 23 | 92 | 78 |
Defined Benefit Plan, Net Periodic Benefit Cost Before Settlement | 2,839 | 3,245 | 8,532 | 9,741 |
Net periodic benefit cost | 2,839 | 3,245 | 8,532 | 9,741 |
Pension Contributions | 5,174 | 4,105 | 14,502 | 14,777 |
Defined Benefit Plan, Settlements, Benefit Obligation | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,960,779 | $ 1,961,578 | $ 5,477,404 | $ 5,411,741 |
Operating Income (Loss) | 303,014 | 358,668 | 694,680 | 1,048,714 |
Goodwill impairment | 30,991 | 0 | 280,802 | 0 |
Total Business Realignment And Impairment Charges | 67,463 | 16,372 | 101,428 | 20,637 |
Interest Income (Expense), Nonoperating, Net | 46,967 | 20,773 | 85,046 | 62,792 |
Other (income) expense, net | 9,409 | (7,528) | 4,328 | 1,448 |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | 246,638 | 345,423 | 605,306 | 984,474 |
Depreciation, Depletion and Amortization | 64,054 | 52,873 | $ 182,855 | 153,006 |
North America [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, Net | 85.00% | |||
Net sales | 1,733,869 | 1,693,903 | $ 4,840,438 | 4,727,479 |
Operating Income (Loss) | 546,080 | 488,902 | 1,561,053 | 1,433,339 |
Goodwill impairment | 0 | |||
Depreciation, Depletion and Amortization | 38,887 | 37,263 | 113,837 | 108,713 |
International and Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 226,910 | 267,675 | 636,966 | 684,262 |
Operating Income (Loss) | (13,509) | 16,050 | (79,754) | 21,187 |
Goodwill impairment | 280,802 | |||
Depreciation, Depletion and Amortization | 13,993 | 6,653 | 34,136 | 18,286 |
Corporate Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation, Depletion and Amortization | 11,174 | 8,957 | 34,882 | 26,007 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 532,571 | 504,952 | 1,481,299 | 1,454,526 |
Unallocated Corporate Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | (117,695) | (124,551) | (383,160) | (376,894) |
Segment Reconciling Items [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Goodwill impairment | 30,991 | 0 | 280,802 | 0 |
Total Business Realignment And Impairment Charges | 67,463 | 16,372 | 101,428 | 20,637 |
Non-service related pension expense (income) | 4,049 | (463) | 6,976 | (1,383) |
Business Combination, Integration Related Costs | $ 9,359 | $ 5,824 | $ 14,253 | $ 9,664 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 04, 2015 | Sep. 28, 2014 | Oct. 04, 2015 | Sep. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||
Effective Income Tax Rate Reconciliation, Percent | 50.50% | 34.50% | ||
Adjusted Effective Income Tax Rate Reconciliation, Percent | 34.50% | |||
Valuation Allowances and Reserves, Adjustments | $ 9,375 | $ 9,375 | ||
Reduction in liability for unrecognized tax benefits | 4,555 | 4,555 | ||
Income Tax Credits and Adjustments | 29,222 | |||
Equity Method Investment, Other than Temporary Impairment | $ 9,249 | $ 0 | $ 13,893 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Oct. 04, 2015 | Dec. 31, 2014 |
Inventories Table | ||
Raw materials | $ 335,054 | $ 377,620 |
Goods in process | 87,905 | 63,916 |
Finished goods | 604,225 | 531,608 |
Inventories at FIFO | 1,027,184 | 973,144 |
Adjustment to LIFO | (213,601) | (172,108) |
Total inventories | $ 813,583 | $ 801,036 |
PROPERTY, PLANT AND EQUIPMENT57
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Oct. 04, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 95,847 | $ 95,913 |
Buildings | 1,073,757 | 1,031,050 |
Machinery and Equipment | 2,887,897 | 2,863,559 |
Construction in Progress, Gross | 401,778 | 338,085 |
Property, Plant and Equipment, Gross | 4,459,279 | 4,328,607 |
Accumulated Depreciation | (2,271,543) | (2,176,706) |
Property, Plant and Equipment, Net | $ 2,187,736 | $ 2,151,901 |
TREASURY STOCK ACTIVITY (Detail
TREASURY STOCK ACTIVITY (Details) $ in Thousands | 9 Months Ended |
Oct. 04, 2015USD ($)shares | |
Cumulative Share Repurchases and Issuances Abstract | |
Shares repurchased in the open market under pre-approved share repurchase programs | shares | 4,209,112 |
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | shares | 1,603,838 |
Total share repurchases | shares | 5,812,950 |
Shares issued for stock options and incentive compensation | shares | (1,514,260) |
Net change | shares | 4,298,690 |
Value of shares repurchased in the open market under pre-approved share repurchase programs | $ 402,548 |
Value of shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 164,932 |
Total share repurchases | 567,480 |
Value of shares issued for stock options and incentive compensation | (63,008) |
Net change In value | 504,472 |
2014 Share Repurchase Program [Member] | |
Accelerated Share Repurchases [Line Items] | |
Approved share repurchase program | 250,000 |
2015 Share Repurchase Program [Member] | |
Accelerated Share Repurchases [Line Items] | |
Available for repurchase under approved share repurchase program | 20,000 |
Approved share repurchase program | $ 250,000 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Millions | Jun. 21, 2013USD ($) | Oct. 04, 2015 |
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 |