DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION Document - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 19, 2019 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 1-183 | |
Entity Registrant Name | HERSHEY CO | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-0691590 | |
Entity Address, Address Line One | 19 East Chocolate Avenue | |
Entity Address, City or Town | Hershey | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 17033 | |
City Area Code | 717 | |
Local Phone Number | 531-4200 | |
Title of 12(b) Security | Common Stock, one dollar par value | |
Trading Symbol | HSY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0000047111 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 148,965,141 | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 60,613,777 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Net sales | $ 1,767,217,000 | $ 1,751,615,000 | $ 3,783,705,000 | $ 3,723,574,000 |
Cost of sales | 892,473,000 | 958,195,000 | 2,016,457,000 | 1,956,094,000 |
Gross profit | 874,744,000 | 793,420,000 | 1,767,248,000 | 1,767,480,000 |
Selling, marketing and administrative expense | 453,793,000 | 449,548,000 | 907,366,000 | 934,872,000 |
Long-lived asset impairment charges | 4,741,000 | 27,168,000 | 4,741,000 | 27,168,000 |
Business realignment costs | 6,140,000 | 980,000 | 6,202,000 | 9,204,000 |
Operating profit | 410,070,000 | 315,724,000 | 848,939,000 | 796,236,000 |
Interest expense, net | 33,776,000 | 34,952,000 | 71,234,000 | 64,291,000 |
Other (income) expense, net | 13,125,000 | 20,766,000 | 18,602,000 | 22,708,000 |
Income before income taxes | 363,169,000 | 260,006,000 | 759,103,000 | 709,237,000 |
Provision for income taxes | 49,898,000 | 36,687,000 | 141,951,000 | 135,199,000 |
Net income including noncontrolling interest | 313,271,000 | 223,319,000 | 617,152,000 | 574,038,000 |
Net (loss) income attributable to noncontrolling interest | 431,000 | (3,536,000) | (46,000) | (3,020,000) |
Net income attributable to The Hershey Company | $ 312,840,000 | $ 226,855,000 | $ 617,198,000 | $ 577,058,000 |
Common Stock | ||||
Net income per share—basic: | ||||
Net income per share - basic (USD per share) | $ 1.54 | $ 1.11 | $ 3.03 | $ 2.82 |
Net income per share—diluted: | ||||
Net income per share - diluted (USD per share) | 1.48 | 1.08 | 2.93 | 2.73 |
Dividends paid per share: | ||||
Dividends paid per share (USD per share) | 0.722 | 0.656 | 1.444 | 1.312 |
Class B common stock | ||||
Net income per share—basic: | ||||
Net income per share - basic (USD per share) | 1.39 | 1.01 | 2.75 | 2.56 |
Net income per share—diluted: | ||||
Net income per share - diluted (USD per share) | 1.38 | 1.01 | 2.74 | 2.56 |
Dividends paid per share: | ||||
Dividends paid per share (USD per share) | $ 0.656 | $ 0.596 | $ 1.312 | $ 1.192 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income including noncontrolling interest | $ 313,271 | $ 223,319 | $ 617,152 | $ 574,038 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments, pre-tax amount | 7,651 | (22,412) | 11,079 | (23,679) |
Foreign currency translation adjustments, tax (expense) benefit | 0 | 0 | 0 | 0 |
Foreign currency translation adjustments, after-tax amount | 7,651 | (22,412) | 11,079 | (23,679) |
Pension and post-retirement benefit plans: | ||||
Tax cuts and jobs act, reclassification from aoci to retained earnings, pre tax effect, pension and post-retirement benefit plans | 0 | 0 | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, tax effect, pension and post-retirement benefit plans | 0 | 0 | 0 | (36,535) |
Tax cuts and jobs act, reclassification from aoci to retained earnings, after tax pension and post-retirement benefit plans | 0 | 0 | 0 | (36,535) |
Reclassification to earnings, pre-tax amount | 6,720 | 5,094 | 13,438 | 10,191 |
Reclassification to earnings, tax (expense) benefit | (1,773) | (1,107) | (3,580) | (2,132) |
Reclassification to earnings, after-tax amount | 4,947 | 3,987 | 9,858 | 8,059 |
Cash flow hedges: | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | (2,547) | 3,559 | (3,336) | 7,804 |
Gains (losses) on cash flow hedging derivatives, tax (expense) benefit | 1,130 | (473) | 1,848 | (1,463) |
Gains (losses) on cash flow hedging derivatives, after-tax amount | (1,417) | 3,086 | (1,488) | 6,341 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, pre tax effect, cash flow hedges | 0 | 0 | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, tax effect, cash flow hedges | 0 | 0 | 0 | (11,121) |
Tax cuts and jobs act, reclassification from aoci to retained earnings, after tax, cash flow hedges | 0 | 0 | 0 | (11,121) |
Reclassification to earnings, pre-tax amount | 1,395 | 2,463 | 2,833 | 4,723 |
Reclassification to earnings, tax (expense) benefit | (885) | (585) | (1,776) | (1,195) |
Reclassification to earnings, after-tax amount | 510 | 1,878 | 1,057 | 3,528 |
Total other comprehensive income (loss), pre-tax amount | 13,219 | (11,296) | 24,014 | (961) |
Total other comprehensive income (loss), tax (expense) benefit | (1,528) | (2,165) | (3,508) | (52,446) |
Total other comprehensive income (loss), after-tax amount | 11,691 | (13,461) | 20,506 | (53,407) |
Total comprehensive income including noncontrolling interest | 324,962 | 209,858 | 637,658 | 520,631 |
Comprehensive income attributable to noncontrolling interest | 338 | (3,654) | 416 | (2,354) |
Comprehensive income attributable to The Hershey Company | $ 324,624 | $ 213,512 | $ 637,242 | $ 522,985 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 365,963 | $ 587,998 |
Accounts receivable—trade, net | 538,746 | 594,145 |
Inventories | 957,953 | 784,879 |
Prepaid expenses and other | 230,896 | 272,159 |
Total current assets | 2,093,558 | 2,239,181 |
Property, plant and equipment, net | 2,107,185 | 2,130,294 |
Goodwill | 1,805,955 | 1,801,103 |
Other intangibles | 1,257,868 | 1,278,292 |
Other assets | 499,303 | 252,984 |
Deferred income taxes | 29,691 | 1,166 |
Total assets | 7,793,560 | 7,703,020 |
Current liabilities: | ||
Accounts payable | 479,792 | 502,314 |
Accrued liabilities | 650,922 | 679,163 |
Accrued income taxes | 16,748 | 33,773 |
Short-term debt | 886,779 | 1,197,929 |
Current portion of long-term debt | 353,186 | 5,387 |
Total current liabilities | 2,387,427 | 2,418,566 |
Long-term debt | 2,888,043 | 3,254,280 |
Other long-term liabilities | 636,913 | 446,048 |
Deferred income taxes | 197,096 | 176,860 |
Total liabilities | 6,109,479 | 6,295,754 |
Stockholders’ equity: | ||
Preferred stock, shares issued: none in 2019 and 2018 | 0 | 0 |
Additional paid-in capital | 1,075,187 | 982,205 |
Retained earnings | 7,358,277 | 7,032,020 |
Treasury—common stock shares, at cost: 150,242,266 at June 30, 2019 and 150,172,840 at December 31, 2018 | (6,781,509) | (6,618,625) |
Accumulated other comprehensive loss | (336,736) | (356,780) |
Total—The Hershey Company stockholders’ equity | 1,675,120 | 1,398,721 |
Noncontrolling interest in subsidiary | 8,961 | 8,545 |
Total stockholders’ equity | 1,684,081 | 1,407,266 |
Total liabilities and stockholders’ equity | 7,793,560 | 7,703,020 |
Common Stock | ||
Stockholders’ equity: | ||
Common stock | 299,287 | 299,287 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 60,614 | $ 60,614 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred stock, shares issued (shares) | 0 | 0 |
Treasury stock, shares (shares) | 150,242,266 | 150,172,840 |
Common Stock | ||
Common stock, shares issued (shares) | 299,287,967 | 299,287,967 |
Class B common stock | ||
Common stock, shares issued (shares) | 60,613,777 | 60,613,777 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Statement of Cash Flows [Abstract] | ||
Net income including noncontrolling interest | $ 617,152 | $ 574,038 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 144,346 | 150,996 |
Stock-based compensation expense | 23,712 | 23,546 |
Deferred income taxes | 8,783 | 1,080 |
Impairment of long-lived assets | 4,741 | 27,168 |
Write-down of equity investments | 9,785 | 19,764 |
Other | 24,117 | 14,212 |
Changes in assets and liabilities, net of business acquisitions and divestitures: | ||
Accounts receivable—trade, net | 55,399 | 100,864 |
Inventories | (173,074) | (147,090) |
Prepaid expenses and other current assets | 18,175 | (25,966) |
Accounts payable and accrued liabilities | (33,797) | (162,054) |
Accrued income taxes | (15,499) | 54,079 |
Contributions to pension and other benefit plans | (8,919) | (14,079) |
Other assets and liabilities | 4,407 | (13,676) |
Net cash provided by operating activities | 679,328 | 602,882 |
Investing Activities | ||
Capital additions (including software) | (176,270) | (135,919) |
Proceeds from sales of property, plant and equipment and other long-lived assets | 154 | 16,123 |
Equity investments in tax credit qualifying partnerships | (30,270) | (29,027) |
Business acquisitions, net of cash and cash equivalents acquired | 0 | (915,457) |
Net cash used in investing activities | (206,386) | (1,064,280) |
Financing Activities | ||
Net (decrease) increase in short-term debt | (311,183) | 491,100 |
Long-term borrowings | 5,020 | 1,199,921 |
Repayment of long-term debt and finance leases | (4,054) | (606,540) |
Repayment of tax receivable obligation | 0 | (72,000) |
Cash dividends paid | (295,483) | (267,879) |
Repurchase of common stock | (254,429) | (199,665) |
Exercise of stock options | 161,399 | 8,222 |
Net cash (used in) provided by financing activities | (698,730) | 553,159 |
Effect of exchange rate changes on cash and cash equivalents | 3,753 | (4,588) |
(Decrease) Increase in cash and cash equivalents | (222,035) | 87,173 |
Cash and cash equivalents, beginning of period | 587,998 | 380,179 |
Cash and cash equivalents, end of period | 365,963 | 467,352 |
Supplemental Disclosure | ||
Interest paid | 72,167 | 61,452 |
Income taxes paid | $ 136,922 | $ 70,398 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Class B common stock | Preferred Stock | Common StockCommon Stock | Common StockClass B common stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCommon Stock | Retained EarningsClass B common stock | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries |
Beginning balance, stockholders' equity at Dec. 31, 2017 | $ 931,565 | $ 0 | $ 299,281 | $ 60,620 | $ 924,978 | $ 6,371,082 | $ (6,426,877) | $ (313,746) | $ 16,227 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income attributable to The Hershey Company | 577,058 | 577,058 | |||||||||||
Net (loss) income attributable to noncontrolling interest | (3,020) | (3,020) | |||||||||||
Net income including noncontrolling interest | 574,038 | ||||||||||||
Other comprehensive income (loss) | (5,750) | (6,416) | 666 | ||||||||||
Dividends (including dividend equivalents): | |||||||||||||
Common Stock | $ (196,410) | $ (72,259) | $ (196,410) | $ (72,259) | |||||||||
Stock-based compensation | 24,076 | 24,076 | |||||||||||
Exercise of stock options and incentive-based transactions | 8,222 | (9,008) | 17,230 | ||||||||||
Repurchase of common stock | (199,665) | (199,665) | |||||||||||
Tax Cuts and Jobs Act, Reclassification From AOCI To Retained Earnings, Tax Effect | 47,656 | (47,656) | |||||||||||
Ending balance, stockholders' equity at Jul. 01, 2018 | 1,063,817 | 0 | 299,281 | 60,620 | 940,046 | 6,727,127 | (6,609,312) | (367,818) | 13,873 | ||||
Beginning balance, stockholders' equity at Apr. 01, 2018 | 989,655 | 0 | 299,281 | 60,620 | 925,965 | 6,634,316 | (6,593,579) | (354,475) | 17,527 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income attributable to The Hershey Company | 226,855 | 226,855 | |||||||||||
Net (loss) income attributable to noncontrolling interest | (3,536) | (3,536) | |||||||||||
Net income including noncontrolling interest | 223,319 | ||||||||||||
Other comprehensive income (loss) | (13,461) | (13,343) | (118) | ||||||||||
Dividends (including dividend equivalents): | |||||||||||||
Common Stock | (97,915) | (36,129) | (97,915) | (36,129) | |||||||||
Stock-based compensation | 13,602 | 13,602 | |||||||||||
Exercise of stock options and incentive-based transactions | 6,338 | 479 | 5,859 | ||||||||||
Repurchase of common stock | (21,592) | (21,592) | |||||||||||
Ending balance, stockholders' equity at Jul. 01, 2018 | 1,063,817 | 0 | 299,281 | 60,620 | 940,046 | 6,727,127 | (6,609,312) | (367,818) | 13,873 | ||||
Beginning balance, stockholders' equity at Dec. 31, 2018 | 1,407,266 | 0 | 299,287 | 60,614 | 982,205 | 7,032,020 | (6,618,625) | (356,780) | 8,545 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income attributable to The Hershey Company | 617,198 | 617,198 | |||||||||||
Net (loss) income attributable to noncontrolling interest | (46) | (46) | |||||||||||
Net income including noncontrolling interest | 617,152 | ||||||||||||
Other comprehensive income (loss) | 20,506 | 20,044 | 462 | ||||||||||
Dividends (including dividend equivalents): | |||||||||||||
Common Stock | (215,329) | (79,525) | (215,329) | (79,525) | |||||||||
Stock-based compensation | 23,128 | 23,128 | |||||||||||
Exercise of stock options and incentive-based transactions | 161,399 | 69,854 | 91,545 | ||||||||||
Repurchase of common stock | (254,429) | (254,429) | |||||||||||
Ending balance, stockholders' equity at Jun. 30, 2019 | 1,684,081 | 0 | 299,287 | 60,614 | 1,075,187 | 7,358,277 | (6,781,509) | (336,736) | 8,961 | ||||
Beginning balance, stockholders' equity at Mar. 31, 2019 | 1,423,360 | 0 | 299,287 | 60,614 | 996,181 | 7,193,240 | (6,786,065) | (348,520) | 8,623 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income attributable to The Hershey Company | 312,840 | 312,840 | |||||||||||
Net (loss) income attributable to noncontrolling interest | 431 | 431 | |||||||||||
Net income including noncontrolling interest | 313,271 | ||||||||||||
Other comprehensive income (loss) | 11,691 | 11,784 | (93) | ||||||||||
Dividends (including dividend equivalents): | |||||||||||||
Common Stock | $ (108,041) | $ (39,762) | $ (108,041) | $ (39,762) | |||||||||
Stock-based compensation | 12,665 | 12,665 | |||||||||||
Exercise of stock options and incentive-based transactions | 126,826 | 66,341 | 60,485 | ||||||||||
Repurchase of common stock | (55,929) | (55,929) | |||||||||||
Ending balance, stockholders' equity at Jun. 30, 2019 | 1,684,081 | $ 0 | $ 299,287 | $ 60,614 | $ 1,075,187 | 7,358,277 | $ (6,781,509) | $ (336,736) | $ 8,961 | ||||
Dividends (including dividend equivalents): | |||||||||||||
Cumulative effect of new accounting principle in period of adoption | Accounting Standards Update 2016-02 | $ 3,913 | $ 3,913 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Common Stock | ||||
Dividends paid per share (USD per share) | $ 0.722 | $ 0.656 | $ 1.444 | $ 1.312 |
Class B common stock | ||||
Dividends paid per share (USD per share) | $ 0.656 | $ 0.596 | $ 1.312 | $ 1.192 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF 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. The financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, financial position, and cash flows for the indicated periods. Operating results for the quarter ended June 30, 2019 may not be indicative of the results that may be expected for the year ending December 31, 2019 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, 2018 (our “ 2018 Annual Report on Form 10-K”), which provides a more complete understanding of our accounting policies, financial position, operating results and other matters. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) . This ASU requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use ("ROU") assets. The Company adopted the standard as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification. In addition, we made accounting policy elections to combine the lease and non-lease components for asset categories that support selling, marketing and general administrative activities. These asset categories comprise the majority of our leases. Finally, we made elections to exclude from balance sheet reporting those leases with initial terms of 12 months or less. Adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities of $227,258 and $216,966 , respectively, with the difference largely due to prepaid and deferred rent that were reclassified to the ROU asset value. In addition, we derecognized a build-to-suit arrangement in accordance with the transition requirements, which resulted in an adjustment to retained earnings of $3,913 . The standard did not materially affect our consolidated net income or cash flows. See Note 7 for further details. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends ASC 815. The purpose of this ASU is to better align accounting rules with a company’s risk management activities and financial reporting for hedging relationships, better reflect economic results of hedging in financial statements, simplify hedge accounting requirements and improve the disclosures of hedging arrangements. We adopted the provisions of this ASU in the first quarter of 2019 using a modified retrospective approach. Adoption of the new standard did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. We adopted the provisions of this ASU in the first quarter of 2019. Adoption of the new standard did not have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a company to reclassify the income tax effects of the 2017 Tax Cuts and Jobs Act (“U.S. tax reform”) on items within AOCI to retained earnings. We adopted the provisions of this ASU in the first quarter of 2018. We elected to reclassify the income tax effects of U.S. tax reform from items in AOCI as of January 1, 2018 so that the tax effects of items within AOCI are reflected at the appropriate tax rate. The impact of the reclassification resulted in a $47,656 decrease to AOCI and a corresponding increase to retained earnings. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We are currently evaluating the effect that ASU 2018-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2018-14 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract . This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the effect that ASU 2018-15 will have on our consolidated financial statements and 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 disclosures. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | BUSINESS ACQUISITIONS 2018 Activity Pirate Brands On October 17, 2018, we completed the acquisition of Pirate Brands, which includes the Pirate's Booty , Smart Puffs and Original Tings brands, from B&G Foods, Inc. Pirate Brands offers baked, trans fat free and gluten free snacks and is available in a wide range of food distribution channels in the United States. The purchase consideration for Pirate Brands totaled $423,002 and consisted of short-term borrowings and cash on hand. Acquisition-related costs for the Pirate Brands acquisition were immaterial. The acquisition has been accounted for as a purchase and, accordingly, Pirate Brands' results of operations have been included within the North America segment results in our consolidated financial statements since the date of acquisition. The purchase price allocation presented below has been finalized as of the end of the fourth quarter of 2018. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Inventories $ 4,663 Plant, property and equipment, net 48 Goodwill 129,991 Other intangible assets 289,300 Accrued liabilities (1,000 ) Net assets acquired $ 423,002 Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets). The goodwill derived from this acquisition is expected to be deductible for tax purposes and reflects the value of leveraging the Company's resources to expand the distribution locations and customer base for the Pirate Brands' products. Other intangible assets includes trademarks valued at $272,000 and customer relationships valued at $17,300 . Trademarks were assigned estimated useful lives of 45 years and customer relationships were assigned estimated useful lives ranging from 16 to 18 years. Amplify Snack Brands, Inc. On January 31, 2018, we completed the acquisition of all of the outstanding shares of Amplify Snack Brands, Inc. (“Amplify”), previously a publicly traded company based in Austin, Texas that owns several popular better-for-you snack brands such as SkinnyPop , Oatmega and Paqui . Amplify's anchor brand, SkinnyPop , is a market-leading ready-to-eat popcorn brand and is available in a wide range of food distribution channels in the United States. Total consideration of $968,781 included payment of $12.00 per share for Amplify's outstanding common stock (for a total of $907,766 ), as well as payment of Amplify's transaction related expenses, including accelerated equity compensation, consultant fees and other deal costs. The business enables us to capture more consumer snacking occasions by contributing a new portfolio of brands. The acquisition has been accounted for as a purchase and, accordingly, Amplify's results of operations have been included within the North America segment results in our consolidated financial statements since the date of acquisition. The purchase price allocation presented below has been finalized as of the end of the fourth quarter of 2018. The purchase consideration, net of cash acquired totaling $53,324 , was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Accounts receivable $ 40,763 Other current assets 34,593 Plant, property and equipment, net 67,989 Goodwill 966,389 Other intangible assets 682,000 Other non-current assets 1,049 Accounts payable (32,394 ) Accrued liabilities (132,519 ) Current debt (610,844 ) Other current liabilities (2,931 ) Non-current deferred income taxes (93,489 ) Non-current liabilities (5,149 ) Net assets acquired $ 915,457 In connection with the acquisition, the Company agreed to pay in full all outstanding debt owed by Amplify under its existing credit agreement as of January 31, 2018, as well as the amount due under Amplify's existing tax receivable obligation. The Company funded the acquisition and repayment of the acquired debt utilizing proceeds from the issuance of commercial paper. Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets) and is not expected to be deductible for tax purposes. The goodwill that resulted from the acquisition is attributable primarily to cost-reduction synergies as Amplify leverages Hershey's resources, expertise and capability-building. Other intangible assets includes trademarks valued at $648,000 and customer relationships valued at $34,000 . Trademarks were assigned estimated useful lives ranging from 28 to 38 years and customer relationships were assigned estimated useful lives ranging from 14 to 18 years. The Company incurred acquisition-related costs of $20,577 related to the acquisition of Amplify, the majority of which were incurred during the first quarter of 2018. Acquisition-related costs consisted primarily of legal fees, consultant fees, valuation fees and other deal costs and are recorded in the selling, marketing and administrative expense caption within the Consolidated Statements of Operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2019 are as follows: North America International and Other Total Balance at December 31, 2018 $ 1,782,845 $ 18,258 $ 1,801,103 Foreign currency translation 4,535 317 4,852 Balance at June 30, 2019 $ 1,787,380 $ 18,575 $ 1,805,955 The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: June 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 1,175,847 $ (79,057 ) $ 1,173,770 $ (60,995 ) Customer-related 165,319 (39,371 ) 163,860 (33,516 ) Patents 16,647 (16,281 ) 16,306 (15,772 ) Total 1,357,813 (134,709 ) 1,353,936 (110,283 ) Intangible assets not subject to amortization: Trademarks 34,764 34,639 Total other intangible assets $ 1,257,868 $ 1,278,292 Total amortization expense for the three months ended June 30, 2019 and July 1, 2018 was $12,672 and $9,834 , respectively. Total amortization expense for the six months ended June 30, 2019 and July 1, 2018 was $24,910 and $18,285 |
SHORT AND LONG-TERM DEBT
SHORT AND LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short and Long-Term Debt | SHORT AND LONG-TERM DEBT 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. As of June 30, 2019 , we maintained a $1.4 billion unsecured revolving credit facility. On July 2, 2019, we terminated this facility, which was scheduled to expire in November 2020, and entered into a new unsecured revolving credit facility. The new facility allows the Company to borrow up to $1.5 billion with the option to increase borrowings by an additional $500 million with the consent of the lenders. This facility is scheduled to expire on July 2, 2024, however, we may extend the termination date for up to two additional one-year periods upon notice to the administrative agent under the facility. The credit agreement contains certain financial and other covenants, customary representations, warranties and events of default. As of June 30, 2019 , 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 2018 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 $135,778 at June 30, 2019 and $113,189 at December 31, 2018 . Commitment fees relating to our revolving credit facility and lines of credit are not material. At June 30, 2019 , we had outstanding commercial paper totaling $751,001 , at a weighted average interest rate of 2.4% . At December 31, 2018 , we had outstanding commercial paper totaling $1,084,740 , at a weighted average interest rate of 2.4% . Long-term Debt Long-term debt consisted of the following: June 30, 2019 December 31, 2018 2.90% Notes due 2020 $ 350,000 $ 350,000 4.125% Notes due 2020 350,000 350,000 3.10% Notes due 2021 350,000 350,000 8.8% Debentures due 2021 84,715 84,715 3.375% Notes due 2023 500,000 500,000 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 300,000 2.30% Notes due 2026 500,000 500,000 7.2% Debentures due 2027 193,639 193,639 3.375% Notes due 2046 300,000 300,000 Finance lease liabilities 79,218 101,980 Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts (16,343 ) (20,667 ) Total long-term debt 3,241,229 3,259,667 Less—current portion 353,186 5,387 Long-term portion $ 2,888,043 $ 3,254,280 Interest Expense Net interest expense consists of the following: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Interest expense $ 39,192 $ 38,098 $ 79,855 $ 70,951 Capitalized interest (1,391 ) (1,334 ) (2,648 ) (2,633 ) Interest expense 37,801 36,764 77,207 68,318 Interest income (4,025 ) (1,812 ) (5,973 ) (4,027 ) Interest expense, net $ 33,776 $ 34,952 $ 71,234 $ 64,291 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS 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 to manage foreign currency exchange rate risk, and commodities futures and options contracts to manage commodity market price risk exposures. In entering into these contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. We mitigate this risk by entering into exchanged-traded contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. We do not expect any significant losses from counterparty defaults. Commodity Price Risk We enter into commodities futures and options contracts and other commodity derivative instruments to reduce the effect of future price fluctuations associated with the purchase of raw materials, energy requirements and transportation services. We generally hedge commodity price risks for 3 - to 24 -month periods. Our open commodity derivative contracts had a notional value of $734,733 as of June 30, 2019 and $693,463 as of December 31, 2018 . Derivatives used to manage commodity price risk are not designated for hedge accounting treatment. Therefore, the changes in fair value of these derivatives are recorded as incurred within cost of sales. As discussed in Note 13, we define our segment income to exclude gains and losses on commodity derivatives until the related inventory is sold, at which time the related gains and losses are reflected within segment income. This enables us to continue to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income. 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, Japanese yen, British pound, Brazilian real, Malaysian ringgit and Mexican Peso. We typically utilize foreign currency forward exchange contracts to hedge these exposures for periods ranging from 3 to 12 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 $99,496 at June 30, 2019 and $29,458 at December 31, 2018 . 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 $32,938 at June 30, 2019 and $11,072 at December 31, 2018 . 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 We 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. We had one interest rate derivative instrument in a fair value hedging relationship with a notional amount of $350,000 at June 30, 2019 and December 31, 2018 . In order to manage interest rate exposure, in previous years we utilized interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These swaps, which were settled upon issuance of the related debt, were designated as cash flow hedges and the gains and losses that were deferred in other comprehensive income are being recognized as an adjustment to interest expense over the same period that the hedged interest payments affect earnings. Equity Price Risk We are exposed to market price changes in certain broad market indices related to our deferred compensation obligations to our employees. To mitigate this risk, 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 the contracts outstanding at June 30, 2019 and December 31, 2018 was $26,708 and $33,168 , respectively. The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Foreign exchange contracts $ 66 $ 2,397 $ 3,394 $ 485 Derivatives designated as fair value hedging instruments: Interest rate swap agreements 26 — — 4,832 Derivatives not designated as hedging instruments: Commodities futures and options (2) 674 6,509 7,230 262 Deferred compensation derivatives 973 — — 4,736 Foreign exchange contracts — 651 70 484 1,647 7,160 7,300 5,482 Total $ 1,739 $ 9,557 $ 10,694 $ 10,799 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) As of June 30, 2019 , amounts reflected on a net basis in liabilities were assets of $49,752 and liabilities of $56,261 , which are 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 assets at December 31, 2018 were assets of $63,978 and liabilities of $57,351 . At June 30, 2019 and December 31, 2018 , the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively. Income Statement Impact of Derivative Instruments The effect of derivative instruments on the Consolidated Statements of Income for the three months ended June 30, 2019 and July 1, 2018 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) Gains (losses) reclassified from accumulated OCI into income (b) 2019 2018 2019 2018 2019 2018 Commodities futures and options $ 55,531 $ 183 $ — $ — $ — $ — Foreign exchange contracts (526 ) 137 (2,547 ) 3,559 975 (93 ) Interest rate swap agreements — — — — (2,370 ) (2,370 ) Deferred compensation derivatives (2,070 ) 1,199 — — — — Total $ 52,935 $ 1,519 $ (2,547 ) $ 3,559 $ (1,395 ) $ (2,463 ) The effect of derivative instruments on the Consolidated Statements of Income for the six months ended June 30, 2019 and July 1, 2018 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) Gains (losses) reclassified from accumulated OCI into income (b) 2019 2018 2019 2018 2019 2018 Commodities futures and options $ 28,890 $ 66,773 $ — $ — $ — $ — Foreign exchange contracts (311 ) (15 ) (3,336 ) 7,804 1,906 43 Interest rate swap agreements — — — — (4,739 ) (4,766 ) Deferred compensation derivatives 973 806 — — — — Total $ 29,552 $ 67,564 $ (3,336 ) $ 7,804 $ (2,833 ) $ (4,723 ) (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 AOCI into income for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. The amount of pretax net losses on derivative instruments, including interest rate swap agreements and foreign currency forward exchange contracts expected to be reclassified into earnings in the next 12 months was approximately $11,810 as of June 30, 2019 . This amount is primarily associated with interest rate swap agreements. Fair Value Hedging Relationships The following table presents amounts that were recorded on the balance sheet related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of June 30, 2019 and December 31, 2018 . Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included Carrying Amount of the Hedged Asset/(Liability) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Long-term debt $ (349,974 ) $ (354,832 ) $ 26 $ (4,832 ) For the three months ended June 30, 2019 and July 1, 2018 , we recognized net incremental interest expense of $584 and $153 , respectively, relating to our fixed-to-floating interest swap arrangements. For the six months ended June 30, 2019 and July 1, 2018 , we recognized net incremental interest expense of $1,214 and a net benefit to interest expense of $125 relating to our fixed-to-floating interest swap arrangements. |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Accounting guidance on fair value measurements requires that financial assets and liabilities be classified and disclosed in one of the following categories of the fair value hierarchy: Level 1 – Based on unadjusted quoted prices for identical assets or liabilities in an active market. Level 2 – Based on observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 – Based on unobservable inputs that reflect the entity's own assumptions about the assumptions that a market participant would use in pricing the asset or liability. We did not have any level 3 financial assets or liabilities, nor were there any transfers between levels during the periods presented. The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of June 30, 2019 and December 31, 2018 : Assets (Liabilities) Level 1 Level 2 Level 3 Total June 30, 2019: Derivative Instruments: Assets: Foreign exchange contracts (1) $ — $ 66 $ — $ 66 Interest rate swap agreements (2) — 26 — 26 Deferred compensation derivatives (3) — 973 — 973 Commodities futures and options (4) 674 — — 674 Liabilities: Foreign exchange contracts (1) — 3,048 — 3,048 Commodities futures and options (4) 6,509 — — 6,509 December 31, 2018: Assets: Foreign exchange contracts (1) $ — $ 3,464 $ — $ 3,464 Commodities futures and options (4) 7,230 — — 7,230 Liabilities: Foreign exchange contracts (1) — 969 — 969 Interest rate swap agreements (2) — 4,832 — 4,832 Deferred compensation derivatives (3) — 4,736 — 4,736 Commodities futures and options (4) 262 — — 262 (1) 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. (2) 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. (3) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (4) The fair value of commodities futures and options contracts is based on quoted market prices. Other Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair values as of June 30, 2019 and December 31, 2018 because of the relatively short maturity of these instruments. The estimated fair value of our long-term debt is based on quoted market prices for similar debt issues and is, therefore, classified as Level 2 within the valuation hierarchy. The fair values and carrying values of long-term debt, including the current portion, were as follows: Fair Value Carrying Value June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Current portion of long-term debt $ 354,634 $ 5,387 $ 353,186 $ 5,387 Long-term debt 3,000,018 3,228,877 2,888,043 3,254,280 Total $ 3,354,652 $ 3,234,264 $ 3,241,229 $ 3,259,667 Other Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, GAAP requires that, under certain circumstances, we also record assets and liabilities at fair value on a nonrecurring basis. During the second quarter of 2019, we recorded impairment charges totaling $4,741 . These charges are predominantly comprised of select land that has not yet met the held for sale criteria. Additionally, included within our impairment charges is a contingency, that arose after the divestiture of Tyrrells in July 2018. We have recorded a liability for the settlement payment, which we expect to pay in 2019. In connection with the acquisitions of Amplify in the first quarter of 2018 and Pirate Brands in the fourth quarter of 2018, as discussed in Note 2, we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis, relief-from-royalty, and a form of the multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. In connection with disposal groups previously classified as held for sale, during the second quarter of 2018, we recorded impairment charges totaling $27,168 to adjust the long-lived asset values within the Shanghai Golden Monkey ("SGM") and Tyrrells disposal groups. These charges represented the excess of the disposal groups' carrying values, including the related currency translation adjustment amounts to be realized upon completion of the sales, over the estimated fair values less costs to sell for the respective businesses. The fair values of the disposal groups were supported by the sales prices agreed with the third-party buyers. In July 2018, we sold the SGM and Tyrrells businesses. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | LEASES We lease office and retail space, warehouse and distribution facilities, land, vehicles, and equipment. We determine if an agreement is or contains a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date. As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate in determining the present value of lease payments. The estimated incremental borrowing rate is derived from information available at the lease commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. A limited number of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants. For real estate, equipment and vehicles that support selling, marketing and general administrative activities the Company accounts for the lease and non-lease components as a single lease component. These asset categories comprise the majority of our leases. The lease and non-lease components of real estate and equipment leases supporting production activities are not accounted for as a single lease component. Consideration for such contracts are allocated to the lease component and non-lease components based upon relative standalone prices either observable or estimated if observable prices are not readily available. The components of lease expense were as follows: Three Months Ended Six Months Ended Lease expense Classification June 30, 2019 June 30, 2019 Operating lease cost Cost of sales or SM&A (1) $ 10,273 $ 20,487 Finance lease cost: Amortization of ROU assets Depreciation and amortization (1) 1,884 3,818 Interest on lease liabilities Interest expense, net 1,112 2,213 Net lease cost (2) $ 13,269 $ 26,518 (1) Supply chain-related amounts were included in cost of sales. (2) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial. Information regarding our lease terms and discount rates were as follows: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 13.9 Finance leases 31.6 Weighted-average discount rate Operating leases 3.8 % Finance leases 5.9 % Supplemental balance sheet information related to leases were as follows: Leases Classification June 30, 2019 Assets Operating lease ROU assets Other assets (non-current) $ 232,034 Finance lease ROU assets, at cost Property, plant and equipment, gross 100,501 Accumulated amortization Accumulated depreciation (3,502 ) Finance lease ROU assets, net Property, plant and equipment, net $ 96,999 Total leased assets $ 329,033 Liabilities Current Operating Accrued liabilities $ 28,603 Finance Current portion of long-term debt 3,820 Non-current Operating Other long-term liabilities 194,665 Finance Long-term debt 75,398 Total lease liabilities $ 302,486 The maturity of our lease liabilities as of June 30, 2019 were as follows: Operating leases Finance leases Total 2019 (remaining of year) $ 19,036 $ 3,895 $ 22,931 2020 33,087 6,980 40,067 2021 29,094 5,746 34,840 2022 15,795 4,642 20,437 2023 13,807 4,613 18,420 Thereafter 185,742 170,193 355,935 Total lease payments 296,561 196,069 492,630 Less: Imputed interest 73,293 116,851 190,144 Total lease liabilities $ 223,268 $ 79,218 $ 302,486 Supplemental cash flow and other information related to leases were as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 19,142 Operating cash flows from finance leases 2,213 Financing cash flows from finance leases 1,920 ROU assets obtained in exchange for lease liabilities: Operating leases 21,838 Finance leases 3,498 |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | ASSETS AND LIABILITIES HELD FOR SALE As of June 30, 2019 , the following disposal groups have been classified as held for sale, in each case stated at the lower of net book value or estimated sales value less costs to sell: • The Lotte Shanghai Foods Co., Ltd. joint venture, which was taken out of operation and classified as held for sale during the second quarter of 2018. We sold a portion of the joint venture's equipment in the third and fourth quarters of 2018, as well as the second quarter of 2019 and expect the sale of the remaining business to be completed during 2019. • Other assets, which are predominantly comprised of select Pennsylvania facilities and land that met the held for sale criteria in the third quarter of 2018. We expect these long-lived assets to be sold during 2019. The amounts classified as assets and liabilities held for sale at June 30, 2019 include the following: Assets held for sale, included in prepaid expenses and other assets Property, plant and equipment, net $ 20,905 Other assets 2,434 $ 23,339 Liabilities held for sale, included in accrued liabilities Accounts payable and accrued liabilities $ 376 $ 376 |
BUSINESS REALIGNMENT ACTIVITIES
BUSINESS REALIGNMENT ACTIVITIES | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Business Realignment Activities | BUSINESS REALIGNMENT ACTIVITIES We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Costs recorded during the three and six months ended June 30, 2019 and July 1, 2018 related to these activities were as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Margin for Growth Program: Severance $ 5,823 $ 3,014 $ 5,823 $ 7,062 Accelerated depreciation — 6,527 — 7,244 Other program costs 555 5,117 1,039 15,205 Operational Optimization Program: Other program costs — 638 — 1,736 Total $ 6,378 $ 15,296 $ 6,862 $ 31,247 Margin for Growth Program In the first quarter 2017, the Company's Board of Directors ("Board") unanimously approved several initiatives under a single program designed to drive continued net sales, operating income and earnings per-share diluted growth over the next several years. This program is focused on improving global efficiency and effectiveness, optimizing the Company’s supply chain, streamlining the Company’s operating model and reducing administrative expenses to generate long-term savings. We originally estimated that the Margin for Growth Program would result in total pre-tax charges of $375,000 to $425,000 , to be incurred from 2017 to 2019. The majority of the initiatives relating to the program have been executed, with the final initiatives to be completed over the next several months. To date, we have incurred pre-tax charges to execute the program totaling $343,157 . This includes long-lived asset impairment charges of $208,712 related to the operations supporting our China business in 2017, as well as the $16,300 incremental impairment charge resulting from the sale of Shanghai Golden Monkey Food Joint Stock Co., Ltd. ("SGM"). In addition to the impairment charges, we have incurred employee separation costs of $53,755 and other business realignment costs of $64,390 . We expect the remaining spending on this program to be minimal in 2019. The cash portion of the total program charges is estimated to be $101,000 . The Company reduced its global workforce by approximately 15% as a result of this program, with a majority of the reductions coming from hourly headcount positions outside of the United States. For the three and six months ended June 30, 2019, we recognized total costs associated with the Margin for Growth Program of $6,378 and $6,862 , respectively. During 2018, we recognized total costs associated with the Margin for Growth Program of $14,658 and $29,511 for the three and six months ended July 1, 2018, respectively. These charges include employee severance, largely relating to initiatives to improve the cost structure of our China business and to further streamline our corporate operating model, as well as non-cash, asset-related incremental depreciation expense as part of optimizing the global supply chain. In addition, we incurred other program costs, which relate primarily to third-party charges in support of our initiative to improve global efficiency and effectiveness. 2016 Operational Optimization Program In the second quarter of 2016, we commenced a program (the “Operational Optimization Program”) to optimize our production and supply chain network, which included select facility consolidations. The program encompassed the transition of our China chocolate and SGM operations into a united Golden Hershey platform, including the integration of the China sales force, as well as workforce planning efforts and the consolidation of production within certain facilities in China and North America. For the three and six months ended July 1, 2018, we incurred pre-tax costs totaling $638 and $1,736 , respectively, relating primarily to third-party charges in support of our initiative to optimize our production and supply chain network. This program was completed in 2018. Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Cost of sales $ — $ 7,322 $ — $ 9,536 Selling, marketing and administrative expense 238 6,994 660 12,507 Business realignment costs 6,140 980 6,202 9,204 Costs associated with business realignment activities $ 6,378 $ 15,296 $ 6,862 $ 31,247 The costs and related benefits of the Margin for Growth Program relate approximately 63% to the North America segment and 37% to the International and Other segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs. The following table presents the liability activity for costs qualifying as exit and disposal costs for the six months ended June 30, 2019 : Total Liability balance at December 31, 2018 $ 14,605 2019 business realignment charges (1) 6,862 Cash payments (8,489 ) Liability balance at June 30, 2019 (reported within accrued liabilities) $ 12,978 (1) |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
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 21% . The effective tax rates for the six months ended June 30, 2019 and July 1, 2018 were 18.7% and 19.1% , respectively. Relative to the statutory rate, the 2019 effective tax rate was impacted by a change to foreign valuation allowances, the benefit of ASU 2016-09 for accounting of employee share-based payment, and investment tax credits, which were partially offset by state taxes. 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 $11,267 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. U.S. Tax Cuts and Jobs Act of 2017 The U.S. Tax Cuts and Jobs Act, enacted in December 2017 (“U.S. tax reform”), significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Under GAAP (specifically, ASC Topic 740), the effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the new legislation is enacted. During the fourth quarter of 2017, we recorded a net provisional charge of $32.5 million , which included the estimated impact of the one-time mandatory tax on previously deferred earnings of non-U.S. subsidiaries offset in part by the benefit from revaluation of net deferred tax liabilities based on the new lower corporate income tax rate. During 2018, we recorded net benefits totaling $19.5 million as measurement period adjustments to the net provisional charge. The accounting for income tax effects of U.S. tax reform is complete based on additional tax regulations available as of December 31, 2018. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Other Post-Retirement Benefit Plans | PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS Net Periodic Benefit Cost The components of net periodic benefit cost for the three months ended June 30, 2019 and July 1, 2018 were as follows: Pension Benefits Other Benefits Three Months Ended Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 5,210 $ 5,324 $ 37 $ 58 Interest cost 9,150 7,827 1,959 1,732 Expected return on plan assets (13,493 ) (14,752 ) — — Amortization of prior service (credit) cost (1,808 ) (1,799 ) 203 209 Amortization of net loss (gain) 8,421 6,884 (96 ) — Total net periodic benefit cost $ 7,480 $ 3,484 $ 2,103 $ 1,999 We made contributions of $272 and $3,986 to the pension plans and other benefits plans, respectively, during the second quarter of 2019 . In the second quarter of 2018 , we made contributions of $296 and $6,334 to our pension plans and other benefit plans, respectively. The contributions in 2019 and 2018 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans. The components of net periodic benefit cost for the six months ended June 30, 2019 and July 1, 2018 were as follows: Pension Benefits Other Benefits Six Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 10,417 $ 10,659 $ 75 $ 116 Interest cost 18,306 15,666 3,918 3,464 Expected return on plan assets (26,989 ) (29,518 ) — — Amortization of prior service (credit) cost (3,617 ) (3,598 ) 406 418 Amortization of net loss (gain) 16,841 13,371 (192 ) — Total net periodic benefit cost $ 14,958 $ 6,580 $ 4,207 $ 3,998 We made contributions of $1,170 and $7,749 to the pension plans and other benefits plans, respectively, during the first six months of 2019 . In the first six months of 2018 , we made contributions of $1,301 and $12,778 to our pension plans and other benefit plans, respectively. The contributions in 2019 and 2018 also included benefit payments from our non-qualified pension plans and post-retirement benefit plans. |
STOCK COMPENSATION PLANS
STOCK COMPENSATION PLANS | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [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 2018 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 Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Pre-tax compensation expense $ 13,156 $ 13,088 $ 23,712 $ 23,546 Related income tax benefit 2,160 2,364 4,482 4,968 Compensation costs for stock compensation plans are primarily included in selling, marketing and administrative expense. As of June 30, 2019 , total stock-based compensation cost related to non-vested awards not yet recognized was $76,244 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 June 30, 2019 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of year 5,394,382 $94.28 5.6 years Granted 1,640 $109.74 Exercised (2,001,947 ) $88.01 Forfeited (63,264 ) $101.62 Outstanding as of June 30, 2019 3,330,811 $97.91 5.7 years $ 120,304 Options exercisable as of June 30, 2019 2,244,965 $96.41 4.6 years $ 84,449 The weighted-average fair value of options granted was $15.25 and $15.57 per share for the periods ended June 30, 2019 and July 1, 2018 , respectively. The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: Six Months Ended June 30, 2019 July 1, 2018 Dividend yields 2.7 % 2.3 % Expected volatility 17.0 % 16.6 % Risk-free interest rates 2.5 % 2.8 % Expected term in years 6.5 6.6 The total intrinsic value of options exercised was $67,117 and $12,386 for the periods ended June 30, 2019 and July 1, 2018 , respectively. Performance Stock Units and Restricted Stock Units A summary of activity relating to grants of PSUs and RSUs for the period ended June 30, 2019 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards (per unit) Outstanding at beginning of year 999,018 $101.57 Granted 442,672 $113.71 Performance assumption change (1) 53,544 $138.83 Vested (372,037 ) $99.00 Forfeited (55,481 ) $108.73 Outstanding as of June 30, 2019 1,067,716 $109.19 (1) Reflects the net number of PSUs above and below target levels based on the performance metrics. The following table sets forth information about the fair value of the PSUs and RSUs granted for potential future distribution to employees and non-employee directors. In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant. Six Months Ended June 30, 2019 July 1, 2018 Units granted 442,672 361,068 Weighted-average fair value at date of grant $ 113.71 $ 97.92 Monte Carlo simulation assumptions: Estimated values $ 48.40 $ 29.17 Dividend yields 2.6 % 2.6 % Expected volatility 20.3 % 20.4 % The fair value of shares vested totaled $40,163 and $19,740 for the periods ended June 30, 2019 and July 1, 2018 , respectively. Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 338,651 units as of June 30, 2019 . Each unit is equivalent to one share of the Company’s Common Stock. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our organizational structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. Our business is organized around geographic regions, which enables us to build processes for repeatable success in our global markets. As a result, we have defined our operating segments on a geographic basis, as this aligns with how our Chief Operating Decision Maker (“CODM”) manages our business, including resource allocation and performance assessment. Our North America business, which generates approximately 89% of our consolidated revenue, is our only reportable segment. None of our other operating segments meet the quantitative thresholds to qualify as reportable segments; therefore, these operating segments are combined and disclosed below as International and Other. • North America - This segment is responsible for our traditional chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. • International and Other - International and Other is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. We currently have operations and manufacture product in China, Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa and other regions. This segment also includes our global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania, New York City, Las Vegas, Niagara Falls (Ontario) 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, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs 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 as well the measure of segment performance used for incentive compensation purposes. As discussed in Note 5, derivatives used to manage commodity price risk are not designated for hedge accounting treatment. These derivatives are recognized at fair market value with the resulting realized and unrealized (gains) losses recognized in unallocated derivative (gains) losses outside of the reporting segment results until the related inventory is sold, at which time the related gains and losses are reallocated to segment income. This enables us to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income. 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 Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Net sales: North America $ 1,568,040 $ 1,559,952 $ 3,374,998 $ 3,311,640 International and Other 199,177 191,663 408,707 411,934 Total $ 1,767,217 $ 1,751,615 $ 3,783,705 $ 3,723,574 Segment income: North America $ 470,898 $ 443,859 $ 1,035,659 $ 978,285 International and Other 21,944 16,627 42,187 34,307 Total segment income 492,842 460,486 1,077,846 1,012,592 Unallocated corporate expense (1) 122,879 121,006 237,383 244,973 Unallocated mark-to-market gains on commodity derivatives (53,552 ) (20,831 ) (25,585 ) (117,081 ) Long-lived asset impairment charges 4,741 27,168 4,741 27,168 Costs associated with business realignment activities 6,378 15,296 6,862 31,247 Acquisition-related costs 2,326 4,781 5,506 32,707 Gain on sale of licensing rights — (2,658 ) — (2,658 ) Operating profit 410,070 315,724 848,939 796,236 Interest expense, net 33,776 34,952 71,234 64,291 Other (income) expense, net 13,125 20,766 18,602 22,708 Income before income taxes $ 363,169 $ 260,006 $ 759,103 $ 709,237 (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. Activity within the unallocated mark-to-market losses (gains) on commodity derivatives is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Net gains on mark-to-market valuation of commodity derivative positions recognized in income $ (55,531 ) $ (183 ) $ (28,890 ) $ (66,773 ) Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income 1,979 (20,648 ) 3,305 (50,308 ) Net gains on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses $ (53,552 ) $ (20,831 ) $ (25,585 ) $ (117,081 ) As of June 30, 2019 , the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $65,903 . Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax gains on commodity derivatives of $21,714 to segment operating results in the next twelve months. Depreciation and amortization expense included within segment income presented above is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 North America $ 55,137 $ 52,186 $ 109,082 $ 100,171 International and Other 7,314 6,542 14,664 20,830 Corporate (1) 9,566 17,852 20,600 29,995 Total $ 72,017 $ 76,580 $ 144,346 $ 150,996 (1) |
TREASURY STOCK ACTIVITY
TREASURY STOCK ACTIVITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Treasury Stock Activity | TREASURY STOCK ACTIVITY A summary of our treasury stock activity is as follows: Six Months Ended June 30, 2019 Shares Dollars In thousands Shares repurchased in the open market under pre-approved share repurchase programs 1,386,193 $ 150,000 Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation 883,305 104,429 Total share repurchases 2,269,498 254,429 Shares issued for stock options and incentive compensation (2,200,072 ) (91,545 ) Net change 69,426 $ 162,884 The $100,000 share repurchase program approved by our Board of Directors in October 2017 was completed in the first quarter of 2019. In July 2018, our Board of Directors approved an additional $500,000 share repurchase authorization, to commence after the existing 2017 authorization was completed. As of June 30, 2019 , $410,000 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. |
NONCONTROLLING INTEREST
NONCONTROLLING INTEREST | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Line Items] | |
Noncontrolling Interest | NONCONTROLLING INTEREST Noncontrolling Interest in Subsidiary We currently own a 50% controlling interest in Lotte Shanghai Foods Co., Ltd. (“LSFC”), a joint venture established in 2007 in China for the purpose of manufacturing and selling product to the joint venture partners. A roll-forward showing the 2019 activity relating to the noncontrolling interest follows: Noncontrolling Interest Balance, December 31, 2018 $ 8,545 Net loss attributable to noncontrolling interest (46 ) Other comprehensive income - foreign currency translation adjustments 462 Balance, June 30, 2019 $ 8,961 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES We are subject to various pending or threatened legal proceedings and claims that arise in the ordinary course of our business. While it is not feasible to predict or determine the outcome of such proceedings and claims with certainty, in our opinion these matters, both individually and in the aggregate, are not expected to have a material effect on our financial condition, results of operations or cash flows. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE We compute basic earnings per share for Common Stock and Class B common stock using the two-class method. The Class B common stock is convertible into Common Stock on a share-for-share basis at any time. The computation of diluted earnings per share for Common Stock assumes the conversion of Class B common stock using the if-converted method, while the diluted earnings per share of Class B common stock does not assume the conversion of those shares. 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 June 30, 2019 July 1, 2018 Common Stock Class B Common Stock Common Stock Class B Common Stock Basic earnings per share: Numerator: Allocation of distributed earnings (cash dividends paid) $ 109,258 $ 39,762 $ 97,450 $ 36,129 Allocation of undistributed earnings 119,616 44,204 68,097 25,179 Total earnings—basic $ 228,874 $ 83,966 $ 165,547 $ 61,308 Denominator (shares in thousands): Total weighted-average shares—basic 149,025 60,614 148,948 60,620 Earnings Per Share—basic $ 1.54 $ 1.39 $ 1.11 $ 1.01 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 228,874 $ 83,966 $ 165,547 $ 61,308 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 83,966 — 61,308 — Reallocation of undistributed earnings — (254 ) — (100 ) Total earnings—diluted $ 312,840 $ 83,712 $ 226,855 $ 61,208 Denominator (shares in thousands): Number of shares used in basic computation 149,025 60,614 148,948 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — Employee stock options 817 — 559 — Performance and restricted stock units 361 — 251 — Total weighted-average shares—diluted 210,817 60,614 210,378 60,620 Earnings Per Share—diluted $ 1.48 $ 1.38 $ 1.08 $ 1.01 The earnings per share calculations for the three months ended June 30, 2019 and July 1, 2018 excluded 47 and 4,196 stock options (in thousands), respectively, that would have been antidilutive. 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: Six Months Ended June 30, 2019 July 1, 2018 Common Stock Class B Common Stock Common Stock Class B Common Stock Basic earnings per share: Numerator: Allocation of distributed earnings (cash dividends paid) $ 215,958 $ 79,525 $ 195,620 $ 72,259 Allocation of undistributed earnings 234,836 86,879 225,956 83,223 Total earnings—basic $ 450,794 $ 166,404 $ 421,576 $ 155,482 Denominator (shares in thousands): Total weighted-average shares—basic 148,864 60,614 149,534 60,620 Earnings Per Share—basic $ 3.03 $ 2.75 $ 2.82 $ 2.56 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 450,794 $ 166,404 $ 421,576 $ 155,482 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 166,404 — 155,482 — Reallocation of undistributed earnings — (462 ) — (411 ) Total earnings—diluted $ 617,198 $ 165,942 $ 577,058 $ 155,071 Denominator (shares in thousands): Number of shares used in basic computation 148,864 60,614 149,534 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — Employee stock options 699 — 702 — Performance and restricted stock units 391 — 314 — Total weighted-average shares—diluted 210,568 60,614 211,170 60,620 Earnings Per Share—diluted $ 2.93 $ 2.74 $ 2.73 $ 2.56 The earnings per share calculations for the six months ended June 30, 2019 and July 1, 2018 excluded 1,476 and 4,196 stock options (in thousands), respectively, that would have been antidilutive. |
OTHER (INCOME) EXPENSE, NET
OTHER (INCOME) EXPENSE, NET | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense, Net | OTHER (INCOME) EXPENSE, NET Other (income) expense, net reports certain gains and losses associated with activities not directly related to our core operations. A summary of the components of other (income) expense, net is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Write-down of equity investments in partnerships qualifying for tax credits $ 8,633 $ 19,330 $ 9,785 $ 19,764 Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans 4,336 (98 ) 8,673 (196 ) Other (income) expense, net 156 1,534 144 3,140 Total $ 13,125 $ 20,766 $ 18,602 $ 22,708 |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Information | SUPPLEMENTAL BALANCE SHEET INFORMATION The components of certain Consolidated Balance Sheet accounts are as follows: June 30, 2019 December 31, 2018 Inventories: Raw materials $ 264,526 $ 237,086 Goods in process 155,142 107,139 Finished goods 710,211 618,798 Inventories at FIFO 1,129,879 963,023 Adjustment to LIFO (171,926 ) (178,144 ) Total inventories $ 957,953 $ 784,879 Prepaid expenses and other: Prepaid expenses $ 52,940 $ 68,490 Assets held for sale 23,339 23,421 Other current assets 154,617 180,248 Total prepaid expenses and other $ 230,896 $ 272,159 Property, plant and equipment: Land $ 103,232 $ 102,074 Buildings 1,224,227 1,211,011 Machinery and equipment 3,044,187 2,988,027 Construction in progress 247,668 280,559 Property, plant and equipment, gross 4,619,314 4,581,671 Accumulated depreciation (2,512,129 ) (2,451,377 ) Property, plant and equipment, net $ 2,107,185 $ 2,130,294 Other assets: Capitalized software, net $ 137,193 $ 126,379 Operating lease ROU assets 232,034 — Other non-current assets 130,076 126,605 Total other assets $ 499,303 $ 252,984 Accrued liabilities: Payroll, compensation and benefits $ 156,329 $ 180,546 Advertising, promotion and product allowances 275,082 286,028 Operating lease liabilities 28,603 — Liabilities held for sale 376 596 Other 190,532 211,993 Total accrued liabilities $ 650,922 $ 679,163 Other long-term liabilities: Post-retirement benefits liabilities $ 191,900 $ 195,166 Pension benefits liabilities 66,312 66,379 Operating lease liabilities 194,665 — Other 184,036 184,503 Total other long-term liabilities $ 636,913 $ 446,048 Accumulated other comprehensive loss: Foreign currency translation adjustments $ (86,061 ) $ (96,678 ) Pension and post-retirement benefit plans, net of tax (195,372 ) (205,230 ) Cash flow hedges, net of tax (55,303 ) (54,872 ) Total accumulated other comprehensive loss $ (336,736 ) $ (356,780 ) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. The financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, financial position, and cash flows for the indicated periods. Operating results for the quarter ended June 30, 2019 may not be indicative of the results that may be expected for the year ending December 31, 2019 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, 2018 (our “ 2018 Annual Report on Form 10-K”), which provides a more complete understanding of our accounting policies, financial position, operating results and other matters. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) . This ASU requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use ("ROU") assets. The Company adopted the standard as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification. In addition, we made accounting policy elections to combine the lease and non-lease components for asset categories that support selling, marketing and general administrative activities. These asset categories comprise the majority of our leases. Finally, we made elections to exclude from balance sheet reporting those leases with initial terms of 12 months or less. Adoption of the new standard resulted in the recording of operating lease ROU assets and lease liabilities of $227,258 and $216,966 , respectively, with the difference largely due to prepaid and deferred rent that were reclassified to the ROU asset value. In addition, we derecognized a build-to-suit arrangement in accordance with the transition requirements, which resulted in an adjustment to retained earnings of $3,913 . The standard did not materially affect our consolidated net income or cash flows. See Note 7 for further details. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends ASC 815. The purpose of this ASU is to better align accounting rules with a company’s risk management activities and financial reporting for hedging relationships, better reflect economic results of hedging in financial statements, simplify hedge accounting requirements and improve the disclosures of hedging arrangements. We adopted the provisions of this ASU in the first quarter of 2019 using a modified retrospective approach. Adoption of the new standard did not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. We adopted the provisions of this ASU in the first quarter of 2019. Adoption of the new standard did not have a material impact on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a company to reclassify the income tax effects of the 2017 Tax Cuts and Jobs Act (“U.S. tax reform”) on items within AOCI to retained earnings. We adopted the provisions of this ASU in the first quarter of 2018. We elected to reclassify the income tax effects of U.S. tax reform from items in AOCI as of January 1, 2018 so that the tax effects of items within AOCI are reflected at the appropriate tax rate. The impact of the reclassification resulted in a $47,656 decrease to AOCI and a corresponding increase to retained earnings. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This ASU modifies the measurement of expected credit losses of certain financial instruments. ASU 2016-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The amendments in this ASU should be applied on a modified retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We are currently evaluating the effect that ASU 2018-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2018-14 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract . This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the effect that ASU 2018-15 will have on our consolidated financial statements and 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 disclosures. |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Pirate Brands | |
Business Acquisition and Divestitures [Line Items] | |
Schedule of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Inventories $ 4,663 Plant, property and equipment, net 48 Goodwill 129,991 Other intangible assets 289,300 Accrued liabilities (1,000 ) Net assets acquired $ 423,002 |
Amplify Snack Brands, Inc. | |
Business Acquisition and Divestitures [Line Items] | |
Schedule of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | The purchase consideration, net of cash acquired totaling $53,324 , was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Accounts receivable $ 40,763 Other current assets 34,593 Plant, property and equipment, net 67,989 Goodwill 966,389 Other intangible assets 682,000 Other non-current assets 1,049 Accounts payable (32,394 ) Accrued liabilities (132,519 ) Current debt (610,844 ) Other current liabilities (2,931 ) Non-current deferred income taxes (93,489 ) Non-current liabilities (5,149 ) Net assets acquired $ 915,457 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Changes in the Carrying Value of Goodwill by Reportable Segment | The changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2019 are as follows: North America International and Other Total Balance at December 31, 2018 $ 1,782,845 $ 18,258 $ 1,801,103 Foreign currency translation 4,535 317 4,852 Balance at June 30, 2019 $ 1,787,380 $ 18,575 $ 1,805,955 |
Schedule of Gross Carrying Amount and Accumulated Amortization for Each Major Class of Intangible Asset | The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: June 30, 2019 December 31, 2018 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 1,175,847 $ (79,057 ) $ 1,173,770 $ (60,995 ) Customer-related 165,319 (39,371 ) 163,860 (33,516 ) Patents 16,647 (16,281 ) 16,306 (15,772 ) Total 1,357,813 (134,709 ) 1,353,936 (110,283 ) Intangible assets not subject to amortization: Trademarks 34,764 34,639 Total other intangible assets $ 1,257,868 $ 1,278,292 |
SHORT AND LONG-TERM DEBT (Table
SHORT AND LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | Long-term debt consisted of the following: June 30, 2019 December 31, 2018 2.90% Notes due 2020 $ 350,000 $ 350,000 4.125% Notes due 2020 350,000 350,000 3.10% Notes due 2021 350,000 350,000 8.8% Debentures due 2021 84,715 84,715 3.375% Notes due 2023 500,000 500,000 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 300,000 2.30% Notes due 2026 500,000 500,000 7.2% Debentures due 2027 193,639 193,639 3.375% Notes due 2046 300,000 300,000 Finance lease liabilities 79,218 101,980 Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts (16,343 ) (20,667 ) Total long-term debt 3,241,229 3,259,667 Less—current portion 353,186 5,387 Long-term portion $ 2,888,043 $ 3,254,280 |
Schedule of Net Interest Expense | Net interest expense consists of the following: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Interest expense $ 39,192 $ 38,098 $ 79,855 $ 70,951 Capitalized interest (1,391 ) (1,334 ) (2,648 ) (2,633 ) Interest expense 37,801 36,764 77,207 68,318 Interest income (4,025 ) (1,812 ) (5,973 ) (4,027 ) Interest expense, net $ 33,776 $ 34,952 $ 71,234 $ 64,291 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the Classification of Derivative Assets and Liabilities within the Consolidated Balance Sheets | The following table presents amounts that were recorded on the balance sheet related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of June 30, 2019 and December 31, 2018 . Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included Carrying Amount of the Hedged Asset/(Liability) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount Assets/(Liabilities) June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Long-term debt $ (349,974 ) $ (354,832 ) $ 26 $ (4,832 ) The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018 : June 30, 2019 December 31, 2018 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Foreign exchange contracts $ 66 $ 2,397 $ 3,394 $ 485 Derivatives designated as fair value hedging instruments: Interest rate swap agreements 26 — — 4,832 Derivatives not designated as hedging instruments: Commodities futures and options (2) 674 6,509 7,230 262 Deferred compensation derivatives 973 — — 4,736 Foreign exchange contracts — 651 70 484 1,647 7,160 7,300 5,482 Total $ 1,739 $ 9,557 $ 10,694 $ 10,799 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) As of June 30, 2019 , amounts reflected on a net basis in liabilities were assets of $49,752 and liabilities of $56,261 , which are 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 assets at December 31, 2018 were assets of $63,978 and liabilities of $57,351 . At June 30, 2019 and December 31, 2018 , the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively. |
Schedule of the Effect of Derivative Instruments on the Consolidated Statements of Income | The effect of derivative instruments on the Consolidated Statements of Income for the three months ended June 30, 2019 and July 1, 2018 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) Gains (losses) reclassified from accumulated OCI into income (b) 2019 2018 2019 2018 2019 2018 Commodities futures and options $ 55,531 $ 183 $ — $ — $ — $ — Foreign exchange contracts (526 ) 137 (2,547 ) 3,559 975 (93 ) Interest rate swap agreements — — — — (2,370 ) (2,370 ) Deferred compensation derivatives (2,070 ) 1,199 — — — — Total $ 52,935 $ 1,519 $ (2,547 ) $ 3,559 $ (1,395 ) $ (2,463 ) The effect of derivative instruments on the Consolidated Statements of Income for the six months ended June 30, 2019 and July 1, 2018 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) Gains (losses) reclassified from accumulated OCI into income (b) 2019 2018 2019 2018 2019 2018 Commodities futures and options $ 28,890 $ 66,773 $ — $ — $ — $ — Foreign exchange contracts (311 ) (15 ) (3,336 ) 7,804 1,906 43 Interest rate swap agreements — — — — (4,739 ) (4,766 ) Deferred compensation derivatives 973 806 — — — — Total $ 29,552 $ 67,564 $ (3,336 ) $ 7,804 $ (2,833 ) $ (4,723 ) (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 AOCI into income for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of June 30, 2019 and December 31, 2018 : Assets (Liabilities) Level 1 Level 2 Level 3 Total June 30, 2019: Derivative Instruments: Assets: Foreign exchange contracts (1) $ — $ 66 $ — $ 66 Interest rate swap agreements (2) — 26 — 26 Deferred compensation derivatives (3) — 973 — 973 Commodities futures and options (4) 674 — — 674 Liabilities: Foreign exchange contracts (1) — 3,048 — 3,048 Commodities futures and options (4) 6,509 — — 6,509 December 31, 2018: Assets: Foreign exchange contracts (1) $ — $ 3,464 $ — $ 3,464 Commodities futures and options (4) 7,230 — — 7,230 Liabilities: Foreign exchange contracts (1) — 969 — 969 Interest rate swap agreements (2) — 4,832 — 4,832 Deferred compensation derivatives (3) — 4,736 — 4,736 Commodities futures and options (4) 262 — — 262 (1) 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. (2) 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. (3) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (4) The fair value of commodities futures and options contracts is based on quoted market prices. |
Schedule of Fair Values and Carrying Values of Long-Term Debt | The fair values and carrying values of long-term debt, including the current portion, were as follows: Fair Value Carrying Value June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Current portion of long-term debt $ 354,634 $ 5,387 $ 353,186 $ 5,387 Long-term debt 3,000,018 3,228,877 2,888,043 3,254,280 Total $ 3,354,652 $ 3,234,264 $ 3,241,229 $ 3,259,667 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: Three Months Ended Six Months Ended Lease expense Classification June 30, 2019 June 30, 2019 Operating lease cost Cost of sales or SM&A (1) $ 10,273 $ 20,487 Finance lease cost: Amortization of ROU assets Depreciation and amortization (1) 1,884 3,818 Interest on lease liabilities Interest expense, net 1,112 2,213 Net lease cost (2) $ 13,269 $ 26,518 (1) Supply chain-related amounts were included in cost of sales. (2) Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial. Information regarding our lease terms and discount rates were as follows: June 30, 2019 Weighted-average remaining lease term (years) Operating leases 13.9 Finance leases 31.6 Weighted-average discount rate Operating leases 3.8 % Finance leases 5.9 % |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases were as follows: Leases Classification June 30, 2019 Assets Operating lease ROU assets Other assets (non-current) $ 232,034 Finance lease ROU assets, at cost Property, plant and equipment, gross 100,501 Accumulated amortization Accumulated depreciation (3,502 ) Finance lease ROU assets, net Property, plant and equipment, net $ 96,999 Total leased assets $ 329,033 Liabilities Current Operating Accrued liabilities $ 28,603 Finance Current portion of long-term debt 3,820 Non-current Operating Other long-term liabilities 194,665 Finance Long-term debt 75,398 Total lease liabilities $ 302,486 The components of certain Consolidated Balance Sheet accounts are as follows: June 30, 2019 December 31, 2018 Inventories: Raw materials $ 264,526 $ 237,086 Goods in process 155,142 107,139 Finished goods 710,211 618,798 Inventories at FIFO 1,129,879 963,023 Adjustment to LIFO (171,926 ) (178,144 ) Total inventories $ 957,953 $ 784,879 Prepaid expenses and other: Prepaid expenses $ 52,940 $ 68,490 Assets held for sale 23,339 23,421 Other current assets 154,617 180,248 Total prepaid expenses and other $ 230,896 $ 272,159 Property, plant and equipment: Land $ 103,232 $ 102,074 Buildings 1,224,227 1,211,011 Machinery and equipment 3,044,187 2,988,027 Construction in progress 247,668 280,559 Property, plant and equipment, gross 4,619,314 4,581,671 Accumulated depreciation (2,512,129 ) (2,451,377 ) Property, plant and equipment, net $ 2,107,185 $ 2,130,294 Other assets: Capitalized software, net $ 137,193 $ 126,379 Operating lease ROU assets 232,034 — Other non-current assets 130,076 126,605 Total other assets $ 499,303 $ 252,984 Accrued liabilities: Payroll, compensation and benefits $ 156,329 $ 180,546 Advertising, promotion and product allowances 275,082 286,028 Operating lease liabilities 28,603 — Liabilities held for sale 376 596 Other 190,532 211,993 Total accrued liabilities $ 650,922 $ 679,163 Other long-term liabilities: Post-retirement benefits liabilities $ 191,900 $ 195,166 Pension benefits liabilities 66,312 66,379 Operating lease liabilities 194,665 — Other 184,036 184,503 Total other long-term liabilities $ 636,913 $ 446,048 Accumulated other comprehensive loss: Foreign currency translation adjustments $ (86,061 ) $ (96,678 ) Pension and post-retirement benefit plans, net of tax (195,372 ) (205,230 ) Cash flow hedges, net of tax (55,303 ) (54,872 ) Total accumulated other comprehensive loss $ (336,736 ) $ (356,780 ) |
Schedule of Maturity of Operating Lease Liabilities | The maturity of our lease liabilities as of June 30, 2019 were as follows: Operating leases Finance leases Total 2019 (remaining of year) $ 19,036 $ 3,895 $ 22,931 2020 33,087 6,980 40,067 2021 29,094 5,746 34,840 2022 15,795 4,642 20,437 2023 13,807 4,613 18,420 Thereafter 185,742 170,193 355,935 Total lease payments 296,561 196,069 492,630 Less: Imputed interest 73,293 116,851 190,144 Total lease liabilities $ 223,268 $ 79,218 $ 302,486 |
Schedule of Maturity of Finance Lease Liabilities | The maturity of our lease liabilities as of June 30, 2019 were as follows: Operating leases Finance leases Total 2019 (remaining of year) $ 19,036 $ 3,895 $ 22,931 2020 33,087 6,980 40,067 2021 29,094 5,746 34,840 2022 15,795 4,642 20,437 2023 13,807 4,613 18,420 Thereafter 185,742 170,193 355,935 Total lease payments 296,561 196,069 492,630 Less: Imputed interest 73,293 116,851 190,144 Total lease liabilities $ 223,268 $ 79,218 $ 302,486 |
Schedule of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow and other information related to leases were as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 19,142 Operating cash flows from finance leases 2,213 Financing cash flows from finance leases 1,920 ROU assets obtained in exchange for lease liabilities: Operating leases 21,838 Finance leases 3,498 |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Assets and Liabilities Held for Sale | The amounts classified as assets and liabilities held for sale at June 30, 2019 include the following: Assets held for sale, included in prepaid expenses and other assets Property, plant and equipment, net $ 20,905 Other assets 2,434 $ 23,339 Liabilities held for sale, included in accrued liabilities Accounts payable and accrued liabilities $ 376 $ 376 |
BUSINESS REALIGNMENT ACTIVITI_2
BUSINESS REALIGNMENT ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Business Realignment Activity | Costs recorded during the three and six months ended June 30, 2019 and July 1, 2018 related to these activities were as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Margin for Growth Program: Severance $ 5,823 $ 3,014 $ 5,823 $ 7,062 Accelerated depreciation — 6,527 — 7,244 Other program costs 555 5,117 1,039 15,205 Operational Optimization Program: Other program costs — 638 — 1,736 Total $ 6,378 $ 15,296 $ 6,862 $ 31,247 Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Cost of sales $ — $ 7,322 $ — $ 9,536 Selling, marketing and administrative expense 238 6,994 660 12,507 Business realignment costs 6,140 980 6,202 9,204 Costs associated with business realignment activities $ 6,378 $ 15,296 $ 6,862 $ 31,247 |
Schedule of Liability Activity for Costs Qualifying as Exit and Disposal Costs | The following table presents the liability activity for costs qualifying as exit and disposal costs for the six months ended June 30, 2019 : Total Liability balance at December 31, 2018 $ 14,605 2019 business realignment charges (1) 6,862 Cash payments (8,489 ) Liability balance at June 30, 2019 (reported within accrued liabilities) $ 12,978 (1) |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost for the six months ended June 30, 2019 and July 1, 2018 were as follows: Pension Benefits Other Benefits Six Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 10,417 $ 10,659 $ 75 $ 116 Interest cost 18,306 15,666 3,918 3,464 Expected return on plan assets (26,989 ) (29,518 ) — — Amortization of prior service (credit) cost (3,617 ) (3,598 ) 406 418 Amortization of net loss (gain) 16,841 13,371 (192 ) — Total net periodic benefit cost $ 14,958 $ 6,580 $ 4,207 $ 3,998 The components of net periodic benefit cost for the three months ended June 30, 2019 and July 1, 2018 were as follows: Pension Benefits Other Benefits Three Months Ended Three Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Service cost $ 5,210 $ 5,324 $ 37 $ 58 Interest cost 9,150 7,827 1,959 1,732 Expected return on plan assets (13,493 ) (14,752 ) — — Amortization of prior service (credit) cost (1,808 ) (1,799 ) 203 209 Amortization of net loss (gain) 8,421 6,884 (96 ) — Total net periodic benefit cost $ 7,480 $ 3,484 $ 2,103 $ 1,999 |
STOCK COMPENSATION PLANS (Table
STOCK COMPENSATION PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of 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 Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Pre-tax compensation expense $ 13,156 $ 13,088 $ 23,712 $ 23,546 Related income tax benefit 2,160 2,364 4,482 4,968 |
Schedule of Activity Relating to the Grants of Stock Options | A summary of activity relating to grants of stock options for the period ended June 30, 2019 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of year 5,394,382 $94.28 5.6 years Granted 1,640 $109.74 Exercised (2,001,947 ) $88.01 Forfeited (63,264 ) $101.62 Outstanding as of June 30, 2019 3,330,811 $97.91 5.7 years $ 120,304 Options exercisable as of June 30, 2019 2,244,965 $96.41 4.6 years $ 84,449 |
Schedule of Fair Value Estimated on the Grant Date and the Weighted Average Assumptions | The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: Six Months Ended June 30, 2019 July 1, 2018 Dividend yields 2.7 % 2.3 % Expected volatility 17.0 % 16.6 % Risk-free interest rates 2.5 % 2.8 % Expected term in years 6.5 6.6 |
Schedule of Activity Relating to Grants of PSUs and RSUs | A summary of activity relating to grants of PSUs and RSUs for the period ended June 30, 2019 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards (per unit) Outstanding at beginning of year 999,018 $101.57 Granted 442,672 $113.71 Performance assumption change (1) 53,544 $138.83 Vested (372,037 ) $99.00 Forfeited (55,481 ) $108.73 Outstanding as of June 30, 2019 1,067,716 $109.19 |
Schedule of Information Pertaining to Fair Value of PSUs and RSUs Granted for Potential Future Distribution | The following table sets forth information about the fair value of the PSUs and RSUs granted for potential future distribution to employees and non-employee directors. In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant. Six Months Ended June 30, 2019 July 1, 2018 Units granted 442,672 361,068 Weighted-average fair value at date of grant $ 113.71 $ 97.92 Monte Carlo simulation assumptions: Estimated values $ 48.40 $ 29.17 Dividend yields 2.6 % 2.6 % Expected volatility 20.3 % 20.4 % |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Earnings by Segment | Our segment net sales and earnings were as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Net sales: North America $ 1,568,040 $ 1,559,952 $ 3,374,998 $ 3,311,640 International and Other 199,177 191,663 408,707 411,934 Total $ 1,767,217 $ 1,751,615 $ 3,783,705 $ 3,723,574 Segment income: North America $ 470,898 $ 443,859 $ 1,035,659 $ 978,285 International and Other 21,944 16,627 42,187 34,307 Total segment income 492,842 460,486 1,077,846 1,012,592 Unallocated corporate expense (1) 122,879 121,006 237,383 244,973 Unallocated mark-to-market gains on commodity derivatives (53,552 ) (20,831 ) (25,585 ) (117,081 ) Long-lived asset impairment charges 4,741 27,168 4,741 27,168 Costs associated with business realignment activities 6,378 15,296 6,862 31,247 Acquisition-related costs 2,326 4,781 5,506 32,707 Gain on sale of licensing rights — (2,658 ) — (2,658 ) Operating profit 410,070 315,724 848,939 796,236 Interest expense, net 33,776 34,952 71,234 64,291 Other (income) expense, net 13,125 20,766 18,602 22,708 Income before income taxes $ 363,169 $ 260,006 $ 759,103 $ 709,237 (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. |
Schedule of Unallocated Mark-to-Market (Gains) Losses on Commodity Derivatives | Activity within the unallocated mark-to-market losses (gains) on commodity derivatives is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Net gains on mark-to-market valuation of commodity derivative positions recognized in income $ (55,531 ) $ (183 ) $ (28,890 ) $ (66,773 ) Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income 1,979 (20,648 ) 3,305 (50,308 ) Net gains on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses $ (53,552 ) $ (20,831 ) $ (25,585 ) $ (117,081 ) |
Schedule of Depreciation and Amortization Expense Included within Segment Income | Depreciation and amortization expense included within segment income presented above is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 North America $ 55,137 $ 52,186 $ 109,082 $ 100,171 International and Other 7,314 6,542 14,664 20,830 Corporate (1) 9,566 17,852 20,600 29,995 Total $ 72,017 $ 76,580 $ 144,346 $ 150,996 (1) Corporate includes non-cash asset-related accelerated depreciation and amortization related to business realignment activities, as discussed in Note 9. Such amounts are not included within our measure of segment income. |
TREASURY STOCK ACTIVITY (Tables
TREASURY STOCK ACTIVITY (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Treasury Stock Activity | A summary of our treasury stock activity is as follows: Six Months Ended June 30, 2019 Shares Dollars In thousands Shares repurchased in the open market under pre-approved share repurchase programs 1,386,193 $ 150,000 Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation 883,305 104,429 Total share repurchases 2,269,498 254,429 Shares issued for stock options and incentive compensation (2,200,072 ) (91,545 ) Net change 69,426 $ 162,884 |
NONCONTROLLING INTEREST (Tables
NONCONTROLLING INTEREST (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Noncontrolling Interest [Line Items] | |
Schedule of Activity Relating to the Noncontrolling Interest | A roll-forward showing the 2019 activity relating to the noncontrolling interest follows: Noncontrolling Interest Balance, December 31, 2018 $ 8,545 Net loss attributable to noncontrolling interest (46 ) Other comprehensive income - foreign currency translation adjustments 462 Balance, June 30, 2019 $ 8,961 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted 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: Six Months Ended June 30, 2019 July 1, 2018 Common Stock Class B Common Stock Common Stock Class B Common Stock Basic earnings per share: Numerator: Allocation of distributed earnings (cash dividends paid) $ 215,958 $ 79,525 $ 195,620 $ 72,259 Allocation of undistributed earnings 234,836 86,879 225,956 83,223 Total earnings—basic $ 450,794 $ 166,404 $ 421,576 $ 155,482 Denominator (shares in thousands): Total weighted-average shares—basic 148,864 60,614 149,534 60,620 Earnings Per Share—basic $ 3.03 $ 2.75 $ 2.82 $ 2.56 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 450,794 $ 166,404 $ 421,576 $ 155,482 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 166,404 — 155,482 — Reallocation of undistributed earnings — (462 ) — (411 ) Total earnings—diluted $ 617,198 $ 165,942 $ 577,058 $ 155,071 Denominator (shares in thousands): Number of shares used in basic computation 148,864 60,614 149,534 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — Employee stock options 699 — 702 — Performance and restricted stock units 391 — 314 — Total weighted-average shares—diluted 210,568 60,614 211,170 60,620 Earnings Per Share—diluted $ 2.93 $ 2.74 $ 2.73 $ 2.56 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 June 30, 2019 July 1, 2018 Common Stock Class B Common Stock Common Stock Class B Common Stock Basic earnings per share: Numerator: Allocation of distributed earnings (cash dividends paid) $ 109,258 $ 39,762 $ 97,450 $ 36,129 Allocation of undistributed earnings 119,616 44,204 68,097 25,179 Total earnings—basic $ 228,874 $ 83,966 $ 165,547 $ 61,308 Denominator (shares in thousands): Total weighted-average shares—basic 149,025 60,614 148,948 60,620 Earnings Per Share—basic $ 1.54 $ 1.39 $ 1.11 $ 1.01 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 228,874 $ 83,966 $ 165,547 $ 61,308 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 83,966 — 61,308 — Reallocation of undistributed earnings — (254 ) — (100 ) Total earnings—diluted $ 312,840 $ 83,712 $ 226,855 $ 61,208 Denominator (shares in thousands): Number of shares used in basic computation 149,025 60,614 148,948 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — Employee stock options 817 — 559 — Performance and restricted stock units 361 — 251 — Total weighted-average shares—diluted 210,817 60,614 210,378 60,620 Earnings Per Share—diluted $ 1.48 $ 1.38 $ 1.08 $ 1.01 |
OTHER (INCOME) EXPENSE, NET (Ta
OTHER (INCOME) EXPENSE, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Other (Income) Expense, Net | A summary of the components of other (income) expense, net is as follows: Three Months Ended Six Months Ended June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018 Write-down of equity investments in partnerships qualifying for tax credits $ 8,633 $ 19,330 $ 9,785 $ 19,764 Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans 4,336 (98 ) 8,673 (196 ) Other (income) expense, net 156 1,534 144 3,140 Total $ 13,125 $ 20,766 $ 18,602 $ 22,708 |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases were as follows: Leases Classification June 30, 2019 Assets Operating lease ROU assets Other assets (non-current) $ 232,034 Finance lease ROU assets, at cost Property, plant and equipment, gross 100,501 Accumulated amortization Accumulated depreciation (3,502 ) Finance lease ROU assets, net Property, plant and equipment, net $ 96,999 Total leased assets $ 329,033 Liabilities Current Operating Accrued liabilities $ 28,603 Finance Current portion of long-term debt 3,820 Non-current Operating Other long-term liabilities 194,665 Finance Long-term debt 75,398 Total lease liabilities $ 302,486 The components of certain Consolidated Balance Sheet accounts are as follows: June 30, 2019 December 31, 2018 Inventories: Raw materials $ 264,526 $ 237,086 Goods in process 155,142 107,139 Finished goods 710,211 618,798 Inventories at FIFO 1,129,879 963,023 Adjustment to LIFO (171,926 ) (178,144 ) Total inventories $ 957,953 $ 784,879 Prepaid expenses and other: Prepaid expenses $ 52,940 $ 68,490 Assets held for sale 23,339 23,421 Other current assets 154,617 180,248 Total prepaid expenses and other $ 230,896 $ 272,159 Property, plant and equipment: Land $ 103,232 $ 102,074 Buildings 1,224,227 1,211,011 Machinery and equipment 3,044,187 2,988,027 Construction in progress 247,668 280,559 Property, plant and equipment, gross 4,619,314 4,581,671 Accumulated depreciation (2,512,129 ) (2,451,377 ) Property, plant and equipment, net $ 2,107,185 $ 2,130,294 Other assets: Capitalized software, net $ 137,193 $ 126,379 Operating lease ROU assets 232,034 — Other non-current assets 130,076 126,605 Total other assets $ 499,303 $ 252,984 Accrued liabilities: Payroll, compensation and benefits $ 156,329 $ 180,546 Advertising, promotion and product allowances 275,082 286,028 Operating lease liabilities 28,603 — Liabilities held for sale 376 596 Other 190,532 211,993 Total accrued liabilities $ 650,922 $ 679,163 Other long-term liabilities: Post-retirement benefits liabilities $ 191,900 $ 195,166 Pension benefits liabilities 66,312 66,379 Operating lease liabilities 194,665 — Other 184,036 184,503 Total other long-term liabilities $ 636,913 $ 446,048 Accumulated other comprehensive loss: Foreign currency translation adjustments $ (86,061 ) $ (96,678 ) Pension and post-retirement benefit plans, net of tax (195,372 ) (205,230 ) Cash flow hedges, net of tax (55,303 ) (54,872 ) Total accumulated other comprehensive loss $ (336,736 ) $ (356,780 ) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) | 6 Months Ended | |||
Jul. 01, 2018 | Jun. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease ROU assets | $ 232,034,000 | $ 0 | ||
Total operating lease liabilities | 223,268,000 | |||
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings | $ 47,656,000 | |||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease ROU assets | $ 227,258,000 | |||
Total operating lease liabilities | 216,966,000 | |||
Cumulative effect of new accounting principle in period of adoption | 3,913,000 | |||
Accounting Standards Update 2016-02 | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle in period of adoption | $ 3,913,000 | $ 3,913,000 |
BUSINESS ACQUISITIONS - PIRATE
BUSINESS ACQUISITIONS - PIRATE BRANDS NARRATIVE (Details) - Pirate Brands $ in Thousands | Oct. 17, 2018USD ($) |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred | $ 423,002 |
Finite-Lived Trademarks, Gross | 272,000 |
Finite-Lived Customer Relationships, Gross | $ 17,300 |
Trademarks | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 45 years |
Minimum | Customer Relationships | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 16 years |
Maximum | Customer Relationships | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 18 years |
BUSINESS ACQUISITIONS - PIRAT_2
BUSINESS ACQUISITIONS - PIRATE BRANDS ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Oct. 17, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,805,955 | $ 1,801,103 | |
Pirate Brands | |||
Business Acquisition [Line Items] | |||
Inventories | $ 4,663 | ||
Plant, property and equipment, net | 48 | ||
Goodwill | 129,991 | ||
Other intangible assets | 289,300 | ||
Accrued liabilities | 1,000 | ||
Net assets acquired | $ 423,002 |
BUSINESS ACQUISITIONS - AMPLIFY
BUSINESS ACQUISITIONS - AMPLIFY SNACK BRANDS, INC NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2018 | Jul. 01, 2018 |
Business Acquisition [Line Items] | ||
Business Acquisition, Equity Interests Received, Common Stock, Value | $ 907,766 | |
Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 968,781 | |
Business Acquisition, Share Price | $ 12 | |
Finite-Lived Trademarks, Gross | $ 648,000 | |
Finite-Lived Customer Relationships, Gross | $ 34,000 | |
Business Combination, Acquisition Related Costs | $ 20,577 | |
Minimum | Trademarks | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 28 years | |
Minimum | Customer Relationships | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Maximum | Trademarks | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 38 years | |
Maximum | Customer Relationships | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 18 years |
BUSINESS ACQUISITIONS - AMPLI_2
BUSINESS ACQUISITIONS - AMPLIFY SNACK BRANDS, INC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jan. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 1,805,955 | $ 1,801,103 | |
Amplify Snack Brands, Inc. | |||
Business Acquisition [Line Items] | |||
Cash acquired | $ 53,324 | ||
Accounts receivable | 40,763 | ||
Other current assets | 34,593 | ||
Plant, property and equipment, net | 67,989 | ||
Goodwill | 966,389 | ||
Other intangible assets | 682,000 | ||
Other non-current assets | 1,049 | ||
Accounts payable | (32,394) | ||
Accrued liabilities | (132,519) | ||
Current debt | (610,844) | ||
Other current liabilities | (2,931) | ||
Non-current deferred income taxes | (93,489) | ||
Non-current liabilities | (5,149) | ||
Net assets acquired | $ 915,457 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF CHANGES IN CARRYING VALUE OF GOODWILL BY REPORTABLE SEGMENT (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 1,801,103 |
Foreign Currency Translation | 4,852 |
Goodwill, ending balance | 1,805,955 |
Operating Segments | North America | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 1,782,845 |
Foreign Currency Translation | 4,535 |
Goodwill, ending balance | 1,787,380 |
Operating Segments | International and Other | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 18,258 |
Foreign Currency Translation | 317 |
Goodwill, ending balance | $ 18,575 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF GROSS CARRYING AMOUNT AND ACCUMULATED AMORTIZATION FOR EACH MAJOR CLASS OF INTANGIBLE ASSET (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 1,357,813 | $ 1,353,936 |
Finite-lived intangible assets, accumulated amortization | (134,709) | (110,283) |
Total other intangible assets | 1,257,868 | 1,278,292 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, excluding goodwill | 34,764 | 34,639 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,175,847 | 1,173,770 |
Finite-lived intangible assets, accumulated amortization | (79,057) | (60,995) |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 165,319 | 163,860 |
Finite-lived intangible assets, accumulated amortization | (39,371) | (33,516) |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 16,647 | 16,306 |
Finite-lived intangible assets, accumulated amortization | $ (16,281) | $ (15,772) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of Intangible Assets | $ 12,672 | $ 9,834 | $ 24,910 | $ 18,285 |
SHORT AND LONG-TERM DEBT - NARR
SHORT AND LONG-TERM DEBT - NARRATIVE (Details) - USD ($) | Jul. 02, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||
Short-term debt | $ 886,779,000 | $ 1,197,929,000 | |
Commercial Paper | |||
Line of Credit Facility [Line Items] | |||
Short-term debt | $ 751,001,000 | $ 1,084,740,000 | |
Short-term debt, weighted average interest rate | 2.40% | 2.40% | |
Revolving Credit Facility | Foreign Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Short-term foreign bank loans against the lines of credit | $ 135,778,000 | $ 113,189,000 | |
Line of Credit | Revolving Credit Facility | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,400,000,000 | ||
Subsequent Event | Line of Credit | Revolving Credit Facility | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 | ||
Line of credit facility, accordion feature increase limit | $ 500,000,000 |
SHORT AND LONG-TERM DEBT - SCHE
SHORT AND LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 3,241,229 | $ 3,259,667 |
Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts | (16,343) | (20,667) |
Less—current portion | 353,186 | 5,387 |
Long-term portion | 2,888,043 | 3,254,280 |
Corporate Debt Securities | 2.90% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 350,000 | 350,000 |
Corporate Debt Securities | 4.125% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 350,000 | 350,000 |
Corporate Debt Securities | 3.10% Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 350,000 | 350,000 |
Corporate Debt Securities | 8.8% Debentures due 2021 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 84,715 | 84,715 |
Corporate Debt Securities | 3.375% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 500,000 | 500,000 |
Corporate Debt Securities | 2.625% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 250,000 | 250,000 |
Corporate Debt Securities | 3.20% Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 300,000 | 300,000 |
Corporate Debt Securities | 2.30% Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 500,000 | 500,000 |
Corporate Debt Securities | 7.2% Debentures due 2027 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 193,639 | 193,639 |
Corporate Debt Securities | 3.375% Notes due 2046 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 300,000 | 300,000 |
Lease Obligations | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 79,218 | $ 101,980 |
SHORT AND LONG-TERM DEBT - LONG
SHORT AND LONG-TERM DEBT - LONG TERM DEBT INTEREST RATES (Details) - Corporate Debt Securities | Jun. 30, 2019 | Dec. 31, 2018 |
2.90% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.90% | 2.90% |
4.125% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 4.125% | 4.125% |
3.10% Notes due 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.10% | 3.10% |
8.8% Debentures due 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 8.80% | 8.80% |
3.375% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.375% | 3.375% |
2.625% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.625% | 2.625% |
3.20% Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.20% | 3.20% |
2.30% Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.30% | 2.30% |
7.2% Debentures due 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 7.20% | 7.20% |
3.375% Notes due 2046 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.375% | 3.375% |
SHORT AND LONG-TERM DEBT - SC_2
SHORT AND LONG-TERM DEBT - SCHEDULE OF NET INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Debt Disclosure [Abstract] | ||||
Interest expense | $ 39,192 | $ 38,098 | $ 79,855 | $ 70,951 |
Capitalized interest | (1,391) | (1,334) | (2,648) | (2,633) |
Interest expense | 37,801 | 36,764 | 77,207 | 68,318 |
Interest income | (4,025) | (1,812) | (5,973) | (4,027) |
Interest expense, net | $ 33,776 | $ 34,952 | $ 71,234 | $ 64,291 |
DERIVATIVE INSTRUMENTS - NARRAT
DERIVATIVE INSTRUMENTS - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | Dec. 31, 2018 | |
Derivative [Line Items] | |||||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ (11,810) | ||||
Commodities futures and options | Non-designated Hedges | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 734,733 | $ 734,733 | $ 693,463 | ||
Commodities futures and options | Non-designated Hedges | Minimum | |||||
Derivative [Line Items] | |||||
Derivative, term of contract | 3 months | ||||
Commodities futures and options | Non-designated Hedges | Maximum | |||||
Derivative [Line Items] | |||||
Derivative, term of contract | 24 months | ||||
Foreign exchange contracts | |||||
Derivative [Line Items] | |||||
Minimum length of time, hedged in cash flow hedge | 3 months | ||||
Maximum length of time, hedged in cash flow hedge | 12 months | ||||
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedges | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 99,496 | $ 99,496 | 29,458 | ||
Foreign exchange contracts | Non-designated Hedges | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 32,938 | 32,938 | 11,072 | ||
Interest rate swap agreements | Designated as Hedging Instrument | Fair Value Hedging | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 350,000 | 350,000 | 350,000 | ||
Deferred compensation derivatives | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 26,708 | $ 26,708 | $ 33,168 | ||
Deferred compensation derivatives | Non-designated Hedges | Minimum | |||||
Derivative [Line Items] | |||||
Derivative, term of contract | 3 months | ||||
Deferred compensation derivatives | Non-designated Hedges | Maximum | |||||
Derivative [Line Items] | |||||
Derivative, term of contract | 12 months | ||||
Interest rate swap | Designated as Hedging Instrument | Fair Value Hedging | Interest Expense | |||||
Derivative [Line Items] | |||||
Fair value hedges, pre-tax (expense) benefit | $ (584) | $ (153) | $ (1,214) | $ 125 |
DERIVATIVE INSTRUMENTS - SCHEDU
DERIVATIVE INSTRUMENTS - SCHEDULE OF THE CLASSIFICATION OF DERIVATIVE ASSETS AND LIABILITIES WITHIN THE CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 1,739 | $ 10,694 |
Derivative liability | 9,557 | 10,799 |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 66 | 3,394 |
Derivative liability | 2,397 | 485 |
Designated as Hedging Instrument | Fair Value Hedging | Interest rate swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 26 | |
Derivative liability | (4,832) | |
Designated as Hedging Instrument | Fair Value Hedging | Interest rate swap agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 26 | 0 |
Derivative liability | 0 | 4,832 |
Non-designated Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 1,647 | 7,300 |
Derivative liability | 7,160 | 5,482 |
Non-designated Hedges | Commodities futures and options | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 674 | 7,230 |
Derivative liability | 6,509 | 262 |
Gross derivative assets, included within derivative liabilities | 49,752 | 63,978 |
Derivative liability, gross liabilities | 56,261 | 57,351 |
Non-designated Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 70 |
Derivative liability | 651 | 484 |
Non-designated Hedges | Deferred compensation derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 973 | 0 |
Derivative liability | $ 0 | $ 4,736 |
DERIVATIVE INSTRUMENTS - SCHE_2
DERIVATIVE INSTRUMENTS - SCHEDULE OF THE EFFECT OF DERIVATIVE INSTRUMENTS ON THE CONSOLIDATED STATEMENTS OF INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Derivative [Line Items] | ||||
Gains (losses) recognized in income | $ 52,935 | $ 1,519 | $ 29,552 | $ 67,564 |
Gains (losses) recognized in other comprehensive income (“OCI”) | (2,547) | 3,559 | (3,336) | 7,804 |
Commodities futures and options | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in income | 55,531 | 183 | 28,890 | 66,773 |
Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in income | (526) | 137 | (311) | (15) |
Interest rate swap agreements | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in income | 0 | 0 | 0 | 0 |
Deferred compensation derivatives | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in income | (2,070) | 1,199 | 973 | 806 |
Designated as Hedging Instrument | Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | (2,547) | 3,559 | (3,336) | 7,804 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | (1,395) | (2,463) | (2,833) | (4,723) |
Designated as Hedging Instrument | Cash Flow Hedges | Commodities futures and options | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | 0 | 0 | 0 | 0 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 0 | 0 | 0 | 0 |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | (2,547) | 3,559 | (3,336) | 7,804 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 975 | (93) | 1,906 | 43 |
Designated as Hedging Instrument | Cash Flow Hedges | Interest rate swap agreements | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | 0 | 0 | 0 | 0 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | (2,370) | (2,370) | (4,739) | (4,766) |
Designated as Hedging Instrument | Cash Flow Hedges | Deferred compensation derivatives | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in other comprehensive income (“OCI”) | 0 | 0 | 0 | 0 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | $ 0 | $ 0 | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS - SCHE_3
DERIVATIVE INSTRUMENTS - SCHEDULE OF CUMULATIVE BASIS ADJUSTMENTS FOR INTEREST RATE SWAP DERIVATIVES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 1,739 | $ 10,694 |
Derivative liability | 9,557 | 10,799 |
Fair Value Hedging | Interest rate swap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | (349,974) | (354,832) |
Derivative asset | $ 26 | |
Derivative liability | $ (4,832) |
FAIR VALUE MEASUREMENTS - SCHED
FAIR VALUE MEASUREMENTS - SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | $ 1,739 | $ 10,694 |
Derivative liability | 9,557 | 10,799 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 66 | 3,464 |
Derivative liability | 3,048 | 969 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 66 | 3,464 |
Derivative liability | 3,048 | 969 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Interest rate swap agreements | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 26 | |
Derivative liability | 4,832 | |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 26 | |
Derivative liability | 4,832 | |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 973 | |
Derivative liability | 4,736 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 973 | |
Derivative liability | 4,736 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Commodities futures and options | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 674 | 7,230 |
Derivative liability | 6,509 | 262 |
Fair Value, Measurements, Recurring | Commodities futures and options | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 674 | 7,230 |
Derivative liability | 6,509 | 262 |
Fair Value, Measurements, Recurring | Commodities futures and options | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Commodities futures and options | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - SCH_2
FAIR VALUE MEASUREMENTS - SCHEDULE OF FAIR VALUES AND CARRYING VALUES OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt | $ 353,186 | $ 5,387 |
Long-term portion | 2,888,043 | 3,254,280 |
Long-term debt | 3,241,229 | 3,259,667 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt, Fair value | 354,634 | 5,387 |
Long-term debt, Fair value | 3,000,018 | 3,228,877 |
Total long-term debt, Fair Value | 3,354,652 | 3,234,264 |
Current portion of long-term debt | 353,186 | 5,387 |
Long-term portion | 2,888,043 | 3,254,280 |
Long-term debt | $ 3,241,229 | $ 3,259,667 |
FAIR VALUE MEASUREMENTS - NARRA
FAIR VALUE MEASUREMENTS - NARRATIVE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||||||
Long-lived asset impairment charges | $ 4,741,000 | $ 27,168,000 | $ 4,741,000 | $ 27,168,000 | ||
Margin for Growth Program | ||||||
Derivative [Line Items] | ||||||
Long-lived asset impairment charges | $ 16,300,000 | $ 208,712,000 | ||||
Significant other unobservable inputs (Level 3) | ||||||
Derivative [Line Items] | ||||||
Fair Value, Net Asset (Liability) | $ 0 | $ 0 | $ 0 |
LEASES - SCHEDULE OF COMPONENTS
LEASES - SCHEDULE OF COMPONENTS OF LEASE EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 10,273 | $ 20,487 |
Amortization of ROU assets, Finance lease cost | 1,884 | 3,818 |
Interest on lease liabilities, Finance lease cost | 1,112 | 2,213 |
Net lease cost | $ 13,269 | $ 26,518 |
LEASES - SCHEDULE OF INFORMATIO
LEASES - SCHEDULE OF INFORMATION REGARDING OUR LEASE TERMS AND DISCOUNT RATES (Details) | Jun. 30, 2019 |
Leases [Abstract] | |
Operating leases, Weighted-average remaining lease term | 13 years 10 months 24 days |
Finance leases, Weighted-average remaining lease term | 31 years 7 months 6 days |
Operating leases, Weighted-average discount rate | 3.80% |
Finance leases, Weighted-average discount rate | 5.90% |
LEASES - SUPPLEMENTAL BALANCE S
LEASES - SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease ROU assets | $ 232,034,000 | $ 0 |
Finance lease ROU assets, at cost | 100,501,000 | |
Accumulated amortization | (3,502,000) | |
Finance lease ROU assets, net | 96,999,000 | |
Total leased assets | 329,033,000 | |
Operating lease liabilities, current | 28,603,000 | 0 |
Finance lease liabilities, current | 3,820,000 | |
Operating lease liabilities, non-current | 194,665,000 | $ 0 |
Finance lease liabilities, non-current | 75,398,000 | |
Total leased assets | $ 302,486,000 |
LEASES - SCHEDULE OF MATURITIES
LEASES - SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Operating leases | |
2019 (remaining of year) | $ 19,036 |
2020 | 33,087 |
2021 | 29,094 |
2022 | 15,795 |
2023 | 13,807 |
Thereafter | 185,742 |
Total lease payments | 296,561 |
Less: Imputed interest | 73,293 |
Total operating lease liabilities | 223,268 |
Finance leases | |
2019 (remaining of year) | 3,895 |
2020 | 6,980 |
2021 | 5,746 |
2022 | 4,642 |
2023 | 4,613 |
Thereafter | 170,193 |
Total lease payments | 196,069 |
Less: Imputed interest | 116,851 |
Total finance lease liabilities | 79,218 |
2019 (remaining of year) | 22,931 |
2020 | 40,067 |
2021 | 34,840 |
2022 | 20,437 |
2023 | 18,420 |
Thereafter | 355,935 |
Total lease payments | 492,630 |
Less: Imputed interest | 190,144 |
Total lease liabilities | $ 302,486 |
LEASES - SCHEDULE OF SUPPLEMENT
LEASES - SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 19,142 |
Operating cash flows from finance leases | 2,213 |
Financing cash flows from finance leases | 1,920 |
Operating leases | 21,838 |
Finance leases | $ 3,498 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Property, plant and equipment, net | $ 20,905 | |
Other assets | 2,434 | |
Assets | 23,339 | $ 23,421 |
Accounts payable and accrued liabilities | 376 | |
Liabilities | $ 376 | $ 596 |
BUSINESS REALIGNMENT ACTIVITI_3
BUSINESS REALIGNMENT ACTIVITIES - SCHEDULE OF BUSINESS REALIGNMENT ACTIVITY (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | $ 6,378 | $ 15,296 | $ 6,862 | $ 31,247 |
Margin for Growth Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 6,378 | 14,658 | 6,862 | 29,511 |
Operational Optimization Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 638 | 1,736 | ||
Severance | Margin for Growth Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 5,823 | 3,014 | 5,823 | 7,062 |
Accelerated depreciation and amortization | Margin for Growth Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 0 | 6,527 | 0 | 7,244 |
Other program costs | Margin for Growth Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 555 | 5,117 | 1,039 | 15,205 |
Other program costs | Operational Optimization Program | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 0 | 638 | 0 | 1,736 |
Cost of Sales | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 0 | 7,322 | 0 | 9,536 |
Selling, marketing and administrative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | 238 | 6,994 | 660 | 12,507 |
Business realignment charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment costs | $ 6,140 | $ 980 | $ 6,202 | $ 9,204 |
BUSINESS REALIGNMENT ACTIVITI_4
BUSINESS REALIGNMENT ACTIVITIES - NARRATIVE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Feb. 28, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||||
Long-lived asset impairment charges | $ 4,741,000 | $ 27,168,000 | $ 4,741,000 | $ 27,168,000 | |||
Business realignment costs | 6,378,000 | 15,296,000 | 6,862,000 | 31,247,000 | |||
Margin for Growth Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and Related Cost, Cost Incurred to Date | $ 343,157,000 | $ 343,157,000 | |||||
Long-lived asset impairment charges | $ 16,300,000 | $ 208,712,000 | |||||
Restructuring and Related Cost, Number of Positions Eliminated, Inception to Date Percent | 15.00% | 15.00% | |||||
Business realignment costs | $ 6,378,000 | 14,658,000 | $ 6,862,000 | 29,511,000 | |||
Margin for Growth Program | Severance | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 53,755,000 | 53,755,000 | |||||
Business realignment costs | 5,823,000 | 3,014,000 | 5,823,000 | 7,062,000 | |||
Margin for Growth Program | Other program costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and Related Cost, Cost Incurred to Date | 64,390,000 | 64,390,000 | |||||
Business realignment costs | 555,000 | 5,117,000 | 1,039,000 | 15,205,000 | |||
Operational Optimization Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business realignment costs | 638,000 | 1,736,000 | |||||
Operational Optimization Program | Other program costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Business realignment costs | 0 | $ 638,000 | $ 0 | $ 1,736,000 | |||
Business realignment charges | Geographic Concentration Risk | North America | Margin for Growth Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Concentration Risk, Percentage | 63.00% | ||||||
Business realignment charges | Geographic Concentration Risk | International and Other | Margin for Growth Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Concentration Risk, Percentage | 37.00% | ||||||
Minimum | Margin for Growth Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related cost, expected cost | $ 375,000,000 | ||||||
Maximum | Margin for Growth Program | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring and related cost, expected cost | $ 425,000,000 | ||||||
Restructuring and Related Cost, Expected Cost, Cash Portion | $ 101,000,000 | $ 101,000,000 |
BUSINESS REALIGNMENT ACTIVITI_5
BUSINESS REALIGNMENT ACTIVITIES - SCHEDULE OF LIABILITY ACTIVITY FOR COSTS QUALIFYING AS EXIT AND DISPOSAL COSTS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2018 | $ 14,605 |
2019 business realignment charges | 6,862 |
Cash payments | (8,489) |
Liability balance at June 30, 2019 | $ 12,978 |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||
Effective Income Tax Rate Reconciliation, Percent | 18.70% | 19.10% | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 11,267 | |||
Tax Cuts and Jobs Act of 2017, change in tax rate, income tax expense | $ 32,500 | |||
Tax Cuts and Jobs Act of 2017, measurement period adjustment, income tax expense (benefit) | $ 19,500 |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Pension Benefits | ||||
Amounts recognized in net periodic benefit cost | ||||
Service cost | $ 5,210 | $ 5,324 | $ 10,417 | $ 10,659 |
Interest cost | 9,150 | 7,827 | 18,306 | 15,666 |
Expected return on plan assets | (13,493) | (14,752) | (26,989) | (29,518) |
Amortization of prior service (credit) cost | (1,808) | (1,799) | (3,617) | (3,598) |
Amortization of net loss (gain) | 8,421 | 6,884 | 16,841 | 13,371 |
Total net periodic benefit cost | 7,480 | 3,484 | 14,958 | 6,580 |
Other Benefits | ||||
Amounts recognized in net periodic benefit cost | ||||
Service cost | 37 | 58 | 75 | 116 |
Interest cost | 1,959 | 1,732 | 3,918 | 3,464 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 203 | 209 | 406 | 418 |
Amortization of net loss (gain) | (96) | 0 | (192) | 0 |
Total net periodic benefit cost | $ 2,103 | $ 1,999 | $ 4,207 | $ 3,998 |
PENSION AND OTHER POST-RETIRE_4
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - NARRATIVE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 272 | $ 296 | $ 1,170 | $ 1,301 |
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Plan Assets, Contributions by Employer | $ 3,986 | $ 6,334 | $ 7,749 | $ 12,778 |
STOCK COMPENSATION PLANS - SCHE
STOCK COMPENSATION PLANS - SCHEDULE OF COMPENSATION EXPENSE AND INCOME TAX BENEFITS FOR STOCK-BASED COMPENSATION PROGRAMS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Payment Arrangement [Abstract] | ||||
Pre-tax compensation expense | $ 13,156 | $ 13,088 | $ 23,712 | $ 23,546 |
Related income tax benefit | $ 2,160 | $ 2,364 | $ 4,482 | $ 4,968 |
STOCK COMPENSATION PLANS - NARR
STOCK COMPENSATION PLANS - NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 76,244 | |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 2 months 12 days | |
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested (in millions of dollars) | $ 40,163 | $ 19,740 |
Deferred performance stock units, deferred restricted stock units, and directors' fees and accumulated dividend amounts representing deferred stock units outstanding | 338,651 | |
Employee stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 15.25 | $ 15.57 |
Intrinsic value of options exercised (in millions of dollars) | $ 67,117 | $ 12,386 |
Performance stock units and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, conversion basis (shares) | 1 |
STOCK COMPENSATION PLANS - SC_2
STOCK COMPENSATION PLANS - SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding shares at beginning of year (shares) | 5,394,382 | |
Granted (shares) | 1,640 | |
Exercised (shares) | (2,001,947) | |
Forfeited (shares) | (63,264) | |
Outstanding as of June 30, 2019 (shares) | 3,330,811 | |
Options exercisable as of June 30, 2019 (shares) | 2,244,965 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding at beginning of year (USD per share) | $ 94.28 | |
Granted (USD per share) | 109.74 | |
Exercises (USD per share) | 88.01 | |
Forfeited (USD per share) | 101.62 | |
Outstanding as of June 30, 2019 (USD per share) | 97.91 | |
Options exercisable as of June 30, 2019 (USD per share) | $ 96.41 | |
Options outstanding, weighted-average remaining contractual term | 5 years 8 months 12 days | 5 years 7 months 6 days |
Options exercisable, weighted aver remaining contractual term | 4 years 7 months 6 days | |
Aggregate intrinsic value of options outstanding | $ 120,304 | |
Aggregate intrinsic value of options exercisable | $ 84,449 |
STOCK COMPENSATION PLANS - SC_3
STOCK COMPENSATION PLANS - SCHEDULE OF FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Dividend yields | 2.70% | 2.30% |
Expected volatility | 17.00% | 16.60% |
Risk-free interest rates | 2.50% | 2.80% |
Expected term in years | 6 years 6 months | 6 years 7 months 6 days |
STOCK COMPENSATION PLANS - SC_4
STOCK COMPENSATION PLANS - SCHEDULE OF PSUS AND RSUS ACTIVITY (Details) - Performance and restricted stock units - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Outstanding at beginning of year (shares) | 999,018 | |
Granted (shares) | 442,672 | 361,068 |
Performance assumption change (shares) | 53,544 | |
Vested (shares) | (372,037) | |
Forfeited (shares) | (55,481) | |
Outstanding at June 30, 2019 (shares) | 1,067,716 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of year (USD per share) | $ 101.57 | |
Weighted-average fair value at date of grant (USD per share) | 113.71 | $ 97.92 |
Performance assumption change | 138.83 | |
Vested (USD per share) | 99 | |
Forfeited (USD per share) | 108.73 | |
Outstanding at June 30, 2019 (USD per share) | $ 109.19 |
STOCK COMPENSATION PLANS - SC_5
STOCK COMPENSATION PLANS - SCHEDULE OF PSUS AND RSUS FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 01, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yields | 2.70% | 2.30% |
Performance and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Units granted (shares) | 442,672 | 361,068 |
Weighted-average fair value at date of grant (USD per share) | $ 113.71 | $ 97.92 |
Estimated values (USD per share) | $ 48.40 | $ 29.17 |
Dividend yields | 2.60% | 2.60% |
Expected volatility | 20.30% | 20.40% |
SEGMENT INFORMATION - NARRATIVE
SEGMENT INFORMATION - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | Dec. 31, 2019 | |
North America | Geographic Concentration Risk | Sales Revenue, Goods, Net | |||||
Revenue, Major Customer [Line Items] | |||||
Concentration Risk, Percentage | 89.00% | ||||
Operating Segments | Commodities futures and options | |||||
Revenue, Major Customer [Line Items] | |||||
Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income | $ 1,979 | $ (20,648) | $ 3,305 | $ (50,308) | |
Scenario, Forecast | Operating Segments | Commodities futures and options | |||||
Revenue, Major Customer [Line Items] | |||||
Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income | $ 21,714 | ||||
Cost of Sales | Commodities futures and options | |||||
Revenue, Major Customer [Line Items] | |||||
Derivative, Gain (Loss) on Derivative, Net | $ 65,903 |
SEGMENT INFORMATION - SCHEDULE
SEGMENT INFORMATION - SCHEDULE OF NET SALES AND EARNINGS BY SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 1,767,217 | $ 1,751,615 | $ 3,783,705 | $ 3,723,574 |
Operating Income (Loss) | 410,070 | 315,724 | 848,939 | 796,236 |
Costs associated with business realignment activities | 6,378 | 15,296 | 6,862 | 31,247 |
Interest expense, net | 33,776 | 34,952 | 71,234 | 64,291 |
Other (income) expense, net | 13,125 | 20,766 | 18,602 | 22,708 |
Income before income taxes | 363,169 | 260,006 | 759,103 | 709,237 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 492,842 | 460,486 | 1,077,846 | 1,012,592 |
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,568,040 | 1,559,952 | 3,374,998 | 3,311,640 |
Operating Income (Loss) | 470,898 | 443,859 | 1,035,659 | 978,285 |
Operating Segments | International and Other | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 199,177 | 191,663 | 408,707 | 411,934 |
Operating Income (Loss) | 21,944 | 16,627 | 42,187 | 34,307 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating Income (Loss) | 122,879 | 121,006 | 237,383 | 244,973 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | 53,552 | 20,831 | 25,585 | 117,081 |
Long-lived asset impairment charges | 4,741 | 27,168 | 4,741 | 27,168 |
Costs associated with business realignment activities | 6,378 | 15,296 | 6,862 | 31,247 |
Acquisition-related costs | 2,326 | 4,781 | 5,506 | 32,707 |
Gain on sale of licensing rights | $ 0 | $ (2,658) | $ 0 | $ 2,658 |
SEGMENT INFORMATION - SCHEDUL_2
SEGMENT INFORMATION - SCHEDULE OF UNALLOCATED MARK-TO-MARKET (GAINS) LOSSES ON COMMODITY DERIVATIVES (Details) - Commodities futures and options - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses | $ (53,552) | $ (20,831) | $ (25,585) | $ (117,081) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Net gains (losses) on commodity derivative positions reclassified from unallocated to segment income | 1,979 | (20,648) | 3,305 | (50,308) |
Non-designated Hedges | ||||
Segment Reporting Information [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 55,531 | $ 183 | $ 28,890 | $ 66,773 |
SEGMENT INFORMATION - SCHEDUL_3
SEGMENT INFORMATION - SCHEDULE OF DEPRECIATION AND AMORTIZATION EXPENSE INCLUDED WITHIN SEGMENT INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | $ 72,017 | $ 76,580 | $ 144,346 | $ 150,996 |
Operating Segments | North America | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 55,137 | 52,186 | 109,082 | 100,171 |
Operating Segments | International and Other | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 7,314 | 6,542 | 14,664 | 20,830 |
Corporate, Non-Segment | Corporate (1) | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | $ 9,566 | $ 17,852 | $ 20,600 | $ 29,995 |
TREASURY STOCK ACTIVITY - SCHED
TREASURY STOCK ACTIVITY - SCHEDULE OF TREASURY STOCK ACTIVITY (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)shares | |
Class of Stock [Line Items] | |
Treasury Stock, Shares, Acquired | shares | 2,269,498 |
Shares Issued, Shares, Share-based Payment Arrangement, before Forfeiture | shares | (2,200,072) |
Treasury Stock Change in Shares | $ 69,426 |
Stock Repurchased During Period, Value | 254,429,000 |
Shares Issued, Value, Share-based Payment Arrangement, before Forfeiture | (91,545,000) |
Treasury Stock Change in Value | $ 162,884,000 |
Common stock | |
Class of Stock [Line Items] | |
Treasury Stock, Shares, Acquired | shares | 1,386,193 |
Stock Repurchased During Period, Value | $ 150,000,000 |
Employee stock options | |
Class of Stock [Line Items] | |
Treasury Stock, Shares, Acquired | shares | 883,305 |
Stock Repurchased During Period, Value | $ 104,429,000 |
TREASURY STOCK ACTIVITY - NARRA
TREASURY STOCK ACTIVITY - NARRATIVE (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jul. 24, 2018 | Oct. 26, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 410,000 | ||
2017 Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 100,000 | ||
2018 Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 500,000 |
NONCONTROLLING INTEREST - NARRA
NONCONTROLLING INTEREST - NARRATIVE (Details) | Jun. 30, 2019 |
Lotte Shanghai Food Company [Member] | Noncontrolling Interest in Subsidiary | |
Noncontrolling Interest, Ownership Percentage by Parent | 50.00% |
NONCONTROLLING INTEREST - SCHED
NONCONTROLLING INTEREST - SCHEDULE OF ACTIVITY RELATING TO THE NONCONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Noncontrolling Interest [Line Items] | ||||
Balance, December 31, 2018 | $ 8,545 | |||
Net (loss) income attributable to noncontrolling interest | $ 431 | $ (3,536) | (46) | $ (3,020) |
Balance, June 30, 2019 | 8,961 | 8,961 | ||
Noncontrolling Interest in Subsidiary | ||||
Noncontrolling Interest [Line Items] | ||||
Balance, December 31, 2018 | 8,545 | |||
Net (loss) income attributable to noncontrolling interest | 431 | $ (3,536) | (46) | $ (3,020) |
Other comprehensive loss - foreign currency translation adjustments | 462 | |||
Balance, June 30, 2019 | $ 8,961 | $ 8,961 |
EARNINGS PER SHARE - SCHEDULE O
EARNINGS PER SHARE - SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Common Stock | ||||
Basic earnings per share: | ||||
Allocation of distributed earnings (cash dividends paid) | $ 109,258 | $ 97,450 | $ 215,958 | $ 195,620 |
Allocation of undistributed earnings | 119,616 | 68,097 | 234,836 | 225,956 |
Total earnings—basic | $ 228,874 | $ 165,547 | $ 450,794 | $ 421,576 |
Total weighted-average shares—basic (shares) | 149,025 | 148,948 | 148,864 | 149,534 |
Earnings Per Share—basic (USD per share) | $ 1.54 | $ 1.11 | $ 3.03 | $ 2.82 |
Diluted earnings per share: | ||||
Allocation of total earnings used in basic computation | $ 228,874 | $ 165,547 | $ 450,794 | $ 421,576 |
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 83,966 | 61,308 | 166,404 | 155,482 |
Reallocation of undistributed earnings | 0 | 0 | 0 | 0 |
Total earnings—diluted | $ 312,840 | $ 226,855 | $ 617,198 | $ 577,058 |
Conversion of Class B common stock to Common shares outstanding | 60,614 | 60,620 | 60,614 | 60,620 |
Total weighted-average shares—diluted (shares) | 210,817 | 210,378 | 210,568 | 211,170 |
Earnings Per Share—diluted (USD per share) | $ 1.48 | $ 1.08 | $ 2.93 | $ 2.73 |
Common Stock | Employee stock options | ||||
Diluted earnings per share: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 817 | 559 | 699 | 702 |
Common Stock | Performance and restricted stock units | ||||
Diluted earnings per share: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 361 | 251 | 391 | 314 |
Class B common stock | ||||
Basic earnings per share: | ||||
Allocation of distributed earnings (cash dividends paid) | $ 39,762 | $ 36,129 | $ 79,525 | $ 72,259 |
Allocation of undistributed earnings | 44,204 | 25,179 | 86,879 | 83,223 |
Total earnings—basic | $ 83,966 | $ 61,308 | $ 166,404 | $ 155,482 |
Total weighted-average shares—basic (shares) | 60,614 | 60,620 | 60,614 | 60,620 |
Earnings Per Share—basic (USD per share) | $ 1.39 | $ 1.01 | $ 2.75 | $ 2.56 |
Diluted earnings per share: | ||||
Allocation of total earnings used in basic computation | $ 83,966 | $ 61,308 | $ 166,404 | $ 155,482 |
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 0 | 0 | 0 | 0 |
Reallocation of undistributed earnings | (254) | (100) | (462) | (411) |
Total earnings—diluted | $ 83,712 | $ 61,208 | $ 165,942 | $ 155,071 |
Conversion of Class B common stock to Common shares outstanding | 0 | 0 | 0 | 0 |
Total weighted-average shares—diluted (shares) | 60,614 | 60,620 | 60,614 | 60,620 |
Earnings Per Share—diluted (USD per share) | $ 1.38 | $ 1.01 | $ 2.74 | $ 2.56 |
Class B common stock | Employee stock options | ||||
Diluted earnings per share: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0 | 0 | 0 | 0 |
Class B common stock | Performance and restricted stock units | ||||
Diluted earnings per share: | ||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0 | 0 | 0 | 0 |
EARNINGS PER SHARE - NARRATIVE
EARNINGS PER SHARE - NARRATIVE (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Employee stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (shares) | 47 | 4,196 | 1,476 | 4,196 |
OTHER (INCOME) EXPENSE, NET - S
OTHER (INCOME) EXPENSE, NET - SCHEDULE OF OTHER (INCOME) AND EXPENSE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Jul. 01, 2018 | |
Other Income and Expenses [Abstract] | ||||
Write-down of equity investments in partnerships qualifying for tax credits | $ 8,633 | $ 19,330 | $ 9,785 | $ 19,764 |
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans | 4,336 | (98) | 8,673 | (196) |
Other (income) expense, net | 156 | 1,534 | 144 | 3,140 |
Total | $ 13,125 | $ 20,766 | $ 18,602 | $ 22,708 |
SUPPLEMENTAL BALANCE SHEET IN_3
SUPPLEMENTAL BALANCE SHEET INFORMATION - SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory, Net [Abstract] | ||
Raw materials | $ 264,526,000 | $ 237,086,000 |
Goods in process | 155,142,000 | 107,139,000 |
Finished goods | 710,211,000 | 618,798,000 |
Inventories at FIFO | 1,129,879,000 | 963,023,000 |
Adjustment to LIFO | (171,926,000) | (178,144,000) |
Total inventories | 957,953,000 | 784,879,000 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid Expense | 52,940,000 | 68,490,000 |
Assets | 23,339,000 | 23,421,000 |
Other Assets, Current | 154,617,000 | 180,248,000 |
Prepaid Expenses and Other | 230,896,000 | 272,159,000 |
Property, Plant and Equipment [Abstract] | ||
Land | 103,232,000 | 102,074,000 |
Buildings | 1,224,227,000 | 1,211,011,000 |
Machinery and equipment | 3,044,187,000 | 2,988,027,000 |
Construction in progress | 247,668,000 | 280,559,000 |
Property, plant and equipment, gross | 4,619,314,000 | 4,581,671,000 |
Accumulated depreciation | (2,512,129,000) | (2,451,377,000) |
Property, plant and equipment, net | 2,107,185,000 | 2,130,294,000 |
Other Assets, Noncurrent [Abstract] | ||
Capitalized software, net | 137,193,000 | 126,379,000 |
Operating lease ROU assets | 232,034,000 | 0 |
Other non-current assets | 130,076,000 | 126,605,000 |
Total other assets | 499,303,000 | 252,984,000 |
Accrued Liabilities, Current [Abstract] | ||
Payroll, compensation and benefits | 156,329,000 | 180,546,000 |
Advertising, promotion and product allowances | 275,082,000 | 286,028,000 |
Operating lease liabilities, current | 28,603,000 | 0 |
Liabilities | 376,000 | 596,000 |
Other | 190,532,000 | 211,993,000 |
Total accrued liabilities | 650,922,000 | 679,163,000 |
Other Liabilities, Noncurrent [Abstract] | ||
Post-retirement benefits liabilities | 191,900,000 | 195,166,000 |
Pension benefits liabilities | 66,312,000 | 66,379,000 |
Operating lease liabilities, non-current | 194,665,000 | 0 |
Other | 184,036,000 | 184,503,000 |
Total other long-term liabilities | 636,913,000 | 446,048,000 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | (86,061,000) | (96,678,000) |
Pension and post-retirement benefit plans, net of tax | (195,372,000) | (205,230,000) |
Cash flow hedges, net of tax | (55,303,000) | (54,872,000) |
Total accumulated other comprehensive loss | $ (336,736,000) | $ (356,780,000) |