ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
PART I | ||||||||||||||
PART II | ||||||||||||||
PART III | ||||||||||||||
PART IV | ||||||||||||||
The Hershey Company | 2021 Form 10-K | Page 1 |
The Hershey Company | 2021 Form 10-K | Page 2 |
The Hershey Company | 2021 Form 10-K | Page 3 |
The Hershey Company | 2021 Form 10-K | Page 4 |
Company | Brand | Location | Requirements | |||||||||||||||||
Kraft Foods Ireland Intellectual Property Limited/Cadbury UK Limited | York Peter Paul Almond Joy Peter Paul Mounds | Worldwide | None | |||||||||||||||||
Cadbury UK Limited | Cadbury Caramello | United States | Minimum sales requirement exceeded in 2021 | |||||||||||||||||
Société des Produits Nestlé SA | Kit Kat® Rolo® | United States | Minimum unit volume sales exceeded in 2021 | |||||||||||||||||
Iconic IP Interests, LLC | Good & Plenty Heath Jolly Rancher Milk Duds Payday Whoppers | Worldwide | None |
The Hershey Company | 2021 Form 10-K | Page 5 |
The Hershey Company | 2021 Form 10-K | Page 6 |
The Hershey Company | 2021 Form 10-K | Page 7 |
The Hershey Company | 2021 Form 10-K | Page 8 |
The Hershey Company | 2021 Form 10-K | Page 9 |
The Hershey Company | 2021 Form 10-K | Page 10 |
The Hershey Company | 2021 Form 10-K | Page 11 |
The Hershey Company | 2021 Form 10-K | Page 12 |
The Hershey Company | 2021 Form 10-K | Page 13 |
The Hershey Company | 2021 Form 10-K | Page 14 |
The Hershey Company | 2021 Form 10-K | Page 15 |
The Hershey Company | 2021 Form 10-K | Page 16 |
Country | Location | Type | Status (Own/Lease) | |||||||||||||||||
United States | Hershey, Pennsylvania (2 principal plants) | Manufacturing—confectionery products and pantry items | Own | |||||||||||||||||
Lancaster, Pennsylvania | Manufacturing—confectionery products | Own | ||||||||||||||||||
Hazleton, Pennsylvania | Manufacturing—confectionery products | Own | ||||||||||||||||||
Robinson, Illinois | Manufacturing—confectionery products and pantry items | Own | ||||||||||||||||||
Stuarts Draft, Virginia | Manufacturing—confectionery products and pantry items | Own | ||||||||||||||||||
Edgerton, Kansas | Manufacturing—salty snack products | Own | ||||||||||||||||||
Bluffton, Indiana | Manufacturing—salty snack products | Lease | ||||||||||||||||||
Plymouth, Indiana | Manufacturing—salty snack products | Lease | ||||||||||||||||||
Lawrence, Kansas | Manufacturing—salty snack products | Lease | ||||||||||||||||||
Annville, Pennsylvania | Distribution | Own | ||||||||||||||||||
Palmyra, Pennsylvania | Distribution | Own | ||||||||||||||||||
Edwardsville, Illinois | Distribution | Own | ||||||||||||||||||
Ogden, Utah | Distribution | Own | ||||||||||||||||||
Kennesaw, Georgia | Distribution | Lease | ||||||||||||||||||
Whitestown, Indiana | Distribution | Lease | ||||||||||||||||||
Hershey, Pennsylvania | Corporate administrative | Lease | ||||||||||||||||||
New York, New York | Retail | Lease | ||||||||||||||||||
Canada | Brantford, Ontario | Distribution | Own | |||||||||||||||||
Mexico | Monterrey, Mexico | Manufacturing—confectionery products | Own | |||||||||||||||||
El Salto, Mexico | Manufacturing—confectionery products and pantry items | Own | ||||||||||||||||||
Malaysia | Johor, Malaysia | Manufacturing—confectionery products | Own |
The Hershey Company | 2021 Form 10-K | Page 17 |
Name | Age | Positions Held During the Last Five Years | ||||||||||||
Michele G. Buck | 60 | Chairman of the Board, President and Chief Executive Officer (October 2019); President and Chief Executive Officer (March 2017); Executive Vice President, Chief Operating Officer (June 2016) | ||||||||||||
Jennifer L. McCalman (1) | 44 | Vice President, Chief Accounting Officer (February 2021); Senior Director, Global Controller (March 2019) | ||||||||||||
Charles R. Raup | 54 | President, U.S. (January 2020); Vice President, U.S. CMG (June 2018); Vice President and General Manager, Chocolate (August 2017); Vice President and General Manager, Mexico (October 2015) | ||||||||||||
Jason R. Reiman | 50 | Senior Vice President, Chief Supply Chain Officer (June 2019); Vice President, Supply Chain Operations (August 2018); Vice President, US Supply Chain Operations (July 2017); Vice President, International Operations (May 2017); Vice President, AEMA Supply Chain Operations (October 2015) | ||||||||||||
Kristen J. Riggs | 43 | Senior Vice President, Chief Growth Officer (January 2020); Vice President, Innovation and Strategic Growth Platforms (September 2019); Vice President, Commercial Planning (June 2018); Vice President, Brand Commercialization (July 2017); Senior Director, Reese’s (October 2015) | ||||||||||||
Christopher M. Scalia | 46 | Senior Vice President, Chief Human Resources Officer (January 2020); Vice President, Global Human Resources (March 2018); Vice President, Talent, HR Operations and Analytics (December 2014) | ||||||||||||
James Turoff | 45 | Senior Vice President, General Counsel and Secretary (May 2021); Acting General Counsel (December 2020); Vice President, Deputy General Counsel (March 2019); Vice President, SEC, Corporate Governance & Compliance (March 2018); Associate General Counsel, Securities & Governance and Business Transformation (May 2017); Associate General Counsel, AEMEA and Securities & Governance (October 2015) | ||||||||||||
Steven E. Voskuil (2) | 53 | Senior Vice President, Chief Financial Officer (February 2021); Senior Vice President, Chief Financial Officer and Chief Accounting Officer (November 2019); Senior Vice President, Chief Financial Officer (May 2019) |
The Hershey Company | 2021 Form 10-K | Page 18 |
The Hershey Company | 2021 Form 10-K | Page 19 |
December 31, | ||||||||||||||||||||||||||||||||||||||
Company/Index | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||||||||||||
The Hershey Company | $ | 100 | $ | 112 | $ | 109 | $ | 153 | $ | 162 | $ | 210 | ||||||||||||||||||||||||||
S&P 500 Index | $ | 100 | $ | 122 | $ | 116 | $ | 153 | $ | 181 | $ | 233 | ||||||||||||||||||||||||||
S&P 500 Packaged Foods Index | $ | 100 | $ | 101 | $ | 82 | $ | 108 | $ | 113 | $ | 127 |
The Hershey Company | 2021 Form 10-K | Page 20 |
The Hershey Company | 2021 Form 10-K | Page 21 |
The Hershey Company | 2021 Form 10-K | Page 22 |
The Hershey Company | 2021 Form 10-K | Page 23 |
Percent Change | ||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 vs 2020 | 2020 vs 2019 | |||||||||||||||||||||||||||
In millions of dollars except per share amounts | ||||||||||||||||||||||||||||||||
Net sales | $ | 8,971.3 | $ | 8,149.7 | $ | 7,986.3 | 10.1 | % | 2.0 | % | ||||||||||||||||||||||
Cost of sales | 4,922.7 | 4,448.5 | 4,363.8 | 10.7 | % | 1.9 | % | |||||||||||||||||||||||||
Gross profit | 4,048.6 | 3,701.2 | 3,622.5 | 9.4 | % | 2.2 | % | |||||||||||||||||||||||||
Gross margin | 45.1 | % | 45.4 | % | 45.4 | % | ||||||||||||||||||||||||||
SM&A expense | 2,001.4 | 1,890.9 | 1,905.9 | 5.8 | % | (0.8) | % | |||||||||||||||||||||||||
SM&A expense as a percent of net sales | 22.3 | % | 23.2% | 23.9% | ||||||||||||||||||||||||||||
Long-lived and intangible asset impairment charges | — | 9.1 | 112.5 | NM | (91.9) | % | ||||||||||||||||||||||||||
Business realignment costs | 3.5 | 18.5 | 8.1 | (80.9) | % | 128.1 | % | |||||||||||||||||||||||||
Operating profit | 2,043.7 | 1,782.7 | 1,596.0 | 14.6 | % | 11.7 | % | |||||||||||||||||||||||||
Operating profit margin | 22.8 | % | 21.9 | % | 20.0 | % | ||||||||||||||||||||||||||
Interest expense, net | 127.4 | 149.4 | 144.1 | (14.7) | % | 3.6 | % | |||||||||||||||||||||||||
Other (income) expense, net | 119.1 | 138.3 | 71.1 | (13.9) | % | 94.7 | % | |||||||||||||||||||||||||
Provision for income taxes | 314.4 | 219.6 | 234.0 | 43.2 | % | (6.2) | % | |||||||||||||||||||||||||
Effective income tax rate | 17.5 | % | 14.7 | % | 16.9 | % | ||||||||||||||||||||||||||
Net income including noncontrolling interest | 1,482.8 | 1,275.4 | 1,146.8 | 16.3 | % | 11.2 | % | |||||||||||||||||||||||||
Less: Net gain (loss) attributable to noncontrolling interest | 5.3 | (3.3) | (2.9) | NM | 12.1 | % | ||||||||||||||||||||||||||
Net income attributable to The Hershey Company | $ | 1,477.5 | $ | 1,278.7 | $ | 1,149.7 | 15.5 | % | 11.2 | % | ||||||||||||||||||||||
Net income per share—diluted | $ | 7.11 | $ | 6.11 | $ | 5.46 | 16.4 | % | 11.9 | % | ||||||||||||||||||||||
Note: Percentage changes may not compute directly as shown due to rounding of amounts presented above. | ||||||||||||||||||||||||||||||||
NM = not meaningful |
The Hershey Company | 2021 Form 10-K | Page 24 |
The Hershey Company | 2021 Form 10-K | Page 25 |
For the year ended December 31, | 2020 | 2019 | ||||||||||||
In millions of dollars | ||||||||||||||
Adjustment to disposal group (1) | $ | 6.2 | $ | 2.7 | ||||||||||
Other asset write-down (2) | 2.9 | — | ||||||||||||
Customer relationship and trademark intangible assets (3) | — | 100.1 | ||||||||||||
Other long-lived assets not held for sale (4) | — | 9.7 | ||||||||||||
Long-lived and intangible asset impairment charges | $ | 9.1 | $ | 112.5 |
The Hershey Company | 2021 Form 10-K | Page 26 |
The Hershey Company | 2021 Form 10-K | Page 27 |
The Hershey Company | 2021 Form 10-K | Page 28 |
For the years ended December 31, | 2021 | 2020 | 2019 | ||||||||||||||||||||
In millions of dollars | |||||||||||||||||||||||
Net Sales: | |||||||||||||||||||||||
North America Confectionery | $ | 7,682.4 | $ | 7,084.9 | $ | 6,815.1 | |||||||||||||||||
North America Salty Snacks | 555.4 | 438.2 | 410.0 | ||||||||||||||||||||
International | 733.5 | 626.6 | 761.2 | ||||||||||||||||||||
Total | $ | 8,971.3 | $ | 8,149.7 | $ | 7,986.3 | |||||||||||||||||
Segment Income: | |||||||||||||||||||||||
North America Confectionery | $ | 2,475.9 | $ | 2,274.6 | $ | 2,120.2 | |||||||||||||||||
North America Salty Snacks | 100.7 | 75.8 | 50.8 | ||||||||||||||||||||
International | 74.2 | — | 50.6 | ||||||||||||||||||||
Total segment income | 2,650.8 | 2,350.4 | 2,221.6 | ||||||||||||||||||||
Unallocated corporate expense (1) | 614.9 | 520.7 | 532.6 | ||||||||||||||||||||
Unallocated mark-to-market (gains) losses on commodity derivatives (2) | (24.4) | 6.4 | (28.6) | ||||||||||||||||||||
Long-lived and intangible asset impairment charges | — | 9.1 | 112.5 | ||||||||||||||||||||
Costs associated with business realignment activities | 16.6 | 31.5 | 9.2 | ||||||||||||||||||||
Operating profit | 2,043.7 | 1,782.7 | 1,595.9 | ||||||||||||||||||||
Interest expense, net | 127.4 | 149.4 | 144.1 | ||||||||||||||||||||
Other (income) expense, net | 119.1 | 138.3 | 71.0 | ||||||||||||||||||||
Income before income taxes | $ | 1,797.2 | $ | 1,495.0 | $ | 1,380.8 |
The Hershey Company | 2021 Form 10-K | Page 29 |
Percent Change | ||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 vs 2020 | 2020 vs 2019 | |||||||||||||||||||||||||||
In millions of dollars | ||||||||||||||||||||||||||||||||
Net sales | $ | 7,682.4 | $ | 7,084.9 | $ | 6,815.1 | 8.4 | % | 4.0 | % | ||||||||||||||||||||||
Segment income | 2,475.9 | 2,274.6 | 2,120.2 | 8.8 | % | 7.3 | % | |||||||||||||||||||||||||
Segment margin | 32.2 | % | 32.1 | % | 31.1 | % |
The Hershey Company | 2021 Form 10-K | Page 30 |
Percent Change | ||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 vs 2020 | 2020 vs 2019 | |||||||||||||||||||||||||||
In millions of dollars | ||||||||||||||||||||||||||||||||
Net sales | $ | 555.4 | $ | 438.2 | $ | 410.0 | 26.7 | % | 6.9 | % | ||||||||||||||||||||||
Segment income | 100.7 | 75.8 | 50.8 | 32.8 | % | 49.2 | % | |||||||||||||||||||||||||
Segment margin | 18.1 | % | 17.3 | % | 12.4 | % |
The Hershey Company | 2021 Form 10-K | Page 31 |
Percent Change | ||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 vs 2020 | 2020 vs 2019 | |||||||||||||||||||||||||||
In millions of dollars | ||||||||||||||||||||||||||||||||
Net sales | $ | 733.5 | $ | 626.6 | $ | 761.2 | 17.1 | % | (17.7) | % | ||||||||||||||||||||||
Segment income | 74.2 | — | 50.6 | NM | NM | |||||||||||||||||||||||||||
Segment margin | 10.1 | % | — | % | 6.6 | % |
The Hershey Company | 2021 Form 10-K | Page 32 |
In millions of dollars | 2021 | 2020 | 2019 | |||||||||||||||||
Net cash provided by (used in): | ||||||||||||||||||||
Operating activities | $ | 2,082.9 | $ | 1,699.6 | $ | 1,763.9 | ||||||||||||||
Investing activities | (2,222.8) | (531.3) | (780.5) | |||||||||||||||||
Financing activities | (681.1) | (499.2) | (1,081.4) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (5.1) | (7.0) | 3.3 | |||||||||||||||||
Less: Cash classified as assets held for sale | 11.4 | (11.4) | — | |||||||||||||||||
(Decrease) increase in cash and cash equivalents | $ | (814.7) | $ | 650.7 | $ | (94.7) |
The Hershey Company | 2021 Form 10-K | Page 33 |
The Hershey Company | 2021 Form 10-K | Page 34 |
Quarter Ended | ||||||||||||||||||||||||||
In millions of dollars except per share amounts | April 4, 2021 | July 4, 2021 | October 3, 2021 | December 31, 2021 | ||||||||||||||||||||||
Dividends paid per share – Common stock | $ | 0.804 | $ | 0.804 | $ | 0.901 | $ | 0.901 | ||||||||||||||||||
Dividends paid per share – Class B common stock | $ | 0.731 | $ | 0.731 | $ | 0.819 | $ | 0.819 | ||||||||||||||||||
Total cash dividends paid | $ | 162.7 | $ | 161.6 | $ | 180.9 | $ | 180.8 | ||||||||||||||||||
Declaration date | February 2, 2021 | April 27, 2021 | July 23, 2021 | October 27, 2021 | ||||||||||||||||||||||
Record date | February 19, 2021 | May 21, 2021 | August 20, 2021 | November 19, 2021 | ||||||||||||||||||||||
Payment date | March 15, 2021 | June 15, 2021 | September 15, 2021 | December 15, 2021 |
The Hershey Company | 2021 Form 10-K | Page 35 |
In millions | 2021 | 2020 | 2019 | |||||||||||||||||
Shares repurchased in the open market under pre-approved share repurchase programs | $ | 150.0 | $ | 150.0 | $ | 150.0 | ||||||||||||||
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | 308.0 | 61.2 | 377.2 | |||||||||||||||||
Cash used for total share repurchases | $ | 458.0 | $ | 211.2 | $ | 527.2 | ||||||||||||||
Total shares repurchased under pre-approved share repurchase programs | 0.9 | 1.0 | 1.4 |
The Hershey Company | 2021 Form 10-K | Page 36 |
Payments due by Period | ||||||||||||||||||||||||||||||||
In millions of dollars | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||||||||||||
Short-term debt (primarily U.S. commercial paper) | $ | 939.4 | $ | 939.4 | $ | — | $ | — | $ | — | ||||||||||||||||||||||
Long-term notes (excluding finance lease obligations) | 4,043.6 | — | 1,050.0 | 1,100.0 | 1,893.6 | |||||||||||||||||||||||||||
Interest expense (1) | 1,193.4 | 112.5 | 186.3 | 143.4 | 751.2 | |||||||||||||||||||||||||||
Operating lease obligations (2) | 448.0 | 46.3 | 72.6 | 44.7 | 284.4 | |||||||||||||||||||||||||||
Finance lease obligations (3) | 170.8 | 7.3 | 9.4 | 8.0 | 146.1 | |||||||||||||||||||||||||||
Unconditional purchase obligations (4) | 2,205.4 | 1,742.1 | 438.3 | 25.0 | — | |||||||||||||||||||||||||||
Total obligations | $ | 9,000.6 | $ | 2,847.6 | $ | 1,756.6 | $ | 1,321.1 | $ | 3,075.3 |
The Hershey Company | 2021 Form 10-K | Page 37 |
The Hershey Company | 2021 Form 10-K | Page 38 |
The Hershey Company | 2021 Form 10-K | Page 39 |
The Hershey Company | 2021 Form 10-K | Page 40 |
The Hershey Company | 2021 Form 10-K | Page 41 |
The Hershey Company | 2021 Form 10-K | Page 42 |
The Hershey Company | 2021 Form 10-K | Page 43 |
December 31, | 2021 | 2020 | ||||||||||||||||||||||||
Contract Amount | Primary Currencies | Contract Amount | Primary Currencies | |||||||||||||||||||||||
In millions of dollars | ||||||||||||||||||||||||||
Foreign currency forward exchange contracts to purchase foreign currencies | $ | 53.1 | Euros Malaysian ringgit British pound | $ | 45.4 | Euros Malaysian ringgit Swiss Franc | ||||||||||||||||||||
Foreign currency forward exchange contracts to sell foreign currencies | $ | 144.7 | Canadian dollars Brazilian reals Japanese yen | $ | 178.0 | Canadian dollars Brazilian reals Mexican peso Japanese yen British pound |
The Hershey Company | 2021 Form 10-K | Page 44 |
Cocoa Futures Contract Prices (dollars per pound) | ||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||
Annual Average | $ | 1.14 | $ | 1.11 | $ | 1.03 | $ | 1.06 | $ | 0.91 | ||||||||||||||||||||||
High | 1.27 | 1.29 | 1.14 | 1.23 | 0.99 | |||||||||||||||||||||||||||
Low | 1.04 | 1.00 | 0.90 | 0.88 | 0.87 |
The Hershey Company | 2021 Form 10-K | Page 45 |
The Hershey Company | 2021 Form 10-K | Page 46 |
The Hershey Company | 2021 Form 10-K | Page 47 |
The Hershey Company | 2021 Form 10-K | Page 48 |
Valuation of Accrued Liabilities for Trade Promotion Activities | ||||||||
Description of the Matter | The unsettled portion of the Company’s obligation for trade promotion activities at December 31, 2021 was $174.0 million. As discussed in Note 1 of the consolidated financial statements, the Company promotes its products through programs such as, but not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The Company recognizes the estimated costs of these trade promotion activities as a component of variable consideration when determining the transaction price. The unsettled portion of the Company’s obligation for trade promotion activities is included in accrued liabilities in the consolidated balance sheet. Auditing management’s calculation of the unsettled portion of the Company’s obligation for trade promotion activities was highly subjective and required significant judgment as a result of the nature of the required estimates and assumptions. In particular, the estimates required an analysis of the programs offered, expectations regarding customer and consumer participation, historical sales and payment trends, and experience with payment patterns associated with similar programs offered in the past. The estimated cost of these programs is sensitive to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. | |||||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls related to the Company’s calculation of the accrued liabilities for trade promotion activities. For example, we tested controls over management’s review of the completeness of the promotional activities as well as the significant assumptions and the data inputs utilized in the calculations. To test the unsettled portion of the Company’s obligation for trade promotion activities, we performed audit procedures that included, among others, assessing (1) the expected value estimation methodology used by management, (2) whether all material trade promotion activities were properly included in management’s estimate, and (3) the significant assumptions discussed above and the underlying data used in its analyses. Specifically, when evaluating the significant assumptions, we compared them to historical trends, third party data, and assumptions used in prior periods, and inspected management’s retrospective review of actual trade promotion activities compared to previous estimates. We also performed sensitivity analyses of significant assumptions to evaluate the changes in the estimate that would result from changes in the assumptions. |
The Hershey Company | 2021 Form 10-K | Page 49 |
Valuation of Identifiable Intangible Assets in Business Acquisitions | ||||||||
Description of the Matter | As discussed in Note 2 of the consolidated financial statements, the Company completed the acquisitions of Lily’s Sweets, LLC on June 25, 2021 for net consideration of $427.2 million, Dot’s Pretzels, LLC on December 13, 2021 for net consideration of $894.2 million, and Pretzels Inc. on December 14, 2021 for net consideration of $304.5 million in transactions that were accounted for as business combinations (collectively, “the Business Acquisitions”). Auditing the Company’s accounting for the Business Acquisitions was complex due to the significant estimation uncertainty in the Company’s determination of the fair value of acquired identifiable intangible assets, which principally consisted of trademarks with an estimated fair value of $493.9 million in aggregate and customer relationships with an estimated fair value of $300.3 million in aggregate. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair values to underlying assumptions about the future performance of the Business Acquisitions and due to the limited historical data on which those assumptions were based. The Company used a discounted cash flow model to measure these acquired identifiable intangible assets. The significant assumptions used to estimate the fair value of the trademarks and customer relationships included discount rates, royalty rates, customer attrition rates, and certain significant assumptions that formed the basis of projected cash flows, including forecasted revenue growth rates and operating margins. These significant assumptions are forward-looking and could be affected by future economic and market conditions. | |||||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s valuation of the acquired identifiable intangible assets. For example, we tested controls over the recognition and measurement of these intangible assets, including management’s review of the significant assumptions and methods discussed above. To test the estimated fair value of the acquired trademarks and customer relationships, we performed audit procedures that included, among others, evaluating the Company’s selection of valuation methods and testing the models and significant assumptions discussed above, including the completeness and accuracy of the underlying data. For example, we compared the significant assumptions to current industry, market, and economic trends and to the historical results of the Business Acquisitions. We also performed sensitivity analyses of these significant assumptions to evaluate the changes in the fair value of the acquired identifiable intangible assets that would result from changes in the assumptions. We involved our valuation specialists to assist in evaluating the significant assumptions and methodologies used by the Company. |
/s/ | ||
We have served as the Company’s auditor since 2016. | ||
February 18, 2022 |
The Hershey Company | 2021 Form 10-K | Page 50 |
The Hershey Company | 2021 Form 10-K | Page 51 |
/s/ | ||
February 18, 2022 |
The Hershey Company | 2021 Form 10-K | Page 52 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Net sales | $ | $ | $ | |||||||||||||||||
Cost of sales | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Selling, marketing and administrative expense | ||||||||||||||||||||
Long-lived and intangible asset impairment charges | ||||||||||||||||||||
Business realignment costs | ||||||||||||||||||||
Operating profit | ||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||
Other (income) expense, net | ||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||
Net income including noncontrolling interest | ||||||||||||||||||||
Less: Net gain (loss) attributable to noncontrolling interest | ( | ( | ||||||||||||||||||
Net income attributable to The Hershey Company | $ | $ | $ | |||||||||||||||||
Net income per share—basic: | ||||||||||||||||||||
Common stock | $ | $ | $ | |||||||||||||||||
Class B common stock | $ | $ | $ | |||||||||||||||||
Net income per share—diluted: | ||||||||||||||||||||
Common stock | $ | $ | $ | |||||||||||||||||
Class B common stock | $ | $ | $ | |||||||||||||||||
Dividends paid per share: | ||||||||||||||||||||
Common stock | $ | $ | $ | |||||||||||||||||
Class B common stock | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 53 |
For the years ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | Pre-Tax Amount | Tax (Expense) Benefit | After-Tax Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income including noncontrolling interest | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation (losses) gains during period | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to earnings due to the sale of businesses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and post-retirement benefit plans: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net actuarial gain (loss) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to earnings | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash flow hedges: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) gains on cash flow hedging derivatives | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification to earnings | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss), net of tax | $ | $ | ( | $ | ( | $ | ( | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income including noncontrolling interest | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive gain (loss) attributable to noncontrolling interest | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to The Hershey Company | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 54 |
December 31, | 2021 | 2020 | ||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable—trade, net | ||||||||||||||
Inventories | ||||||||||||||
Prepaid expenses and other | ||||||||||||||
Total current assets | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Goodwill | ||||||||||||||
Other intangibles | ||||||||||||||
Other non-current assets | ||||||||||||||
Deferred income taxes | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued liabilities | ||||||||||||||
Accrued income taxes | ||||||||||||||
Short-term debt | ||||||||||||||
Current portion of long-term debt | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt | ||||||||||||||
Other long-term liabilities | ||||||||||||||
Deferred income taxes | ||||||||||||||
Total liabilities | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
The Hershey Company stockholders’ equity | ||||||||||||||
Preferred stock, shares issued: | ||||||||||||||
Common stock, shares issued: | ||||||||||||||
Class B common stock, shares issued: | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Treasury—common stock shares, at cost: | ( | ( | ||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total—The Hershey Company stockholders’ equity | ||||||||||||||
Noncontrolling interest in subsidiary | ||||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 55 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income including noncontrolling interest | $ | $ | $ | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Stock-based compensation expense | ||||||||||||||||||||
Deferred income taxes | ( | |||||||||||||||||||
Write-down of equity investments | ||||||||||||||||||||
Other | ||||||||||||||||||||
Changes in assets and liabilities, net of business acquisitions and divestitures: | ||||||||||||||||||||
Accounts receivable—trade, net | ( | ( | ||||||||||||||||||
Inventories | ( | ( | ||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||
Accounts payable and accrued liabilities | ||||||||||||||||||||
Accrued income taxes | ( | ( | ( | |||||||||||||||||
Contributions to pension and other benefit plans | ( | ( | ( | |||||||||||||||||
Other assets and liabilities | ( | |||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||
Investing Activities | ||||||||||||||||||||
Capital additions (including software) | ( | ( | ( | |||||||||||||||||
Equity investments in tax credit qualifying partnerships | ( | ( | ( | |||||||||||||||||
Business acquisitions, net of cash and cash equivalents acquired | ( | ( | ||||||||||||||||||
Other investing activities | ( | |||||||||||||||||||
Net cash used in investing activities | ( | ( | ( | |||||||||||||||||
Financing Activities | ||||||||||||||||||||
Net increase (decrease) in short-term debt | ( | |||||||||||||||||||
Long-term borrowings, net of debt issuance costs | ||||||||||||||||||||
Repayment of long-term debt and finance leases | ( | ( | ( | |||||||||||||||||
Cash dividends paid | ( | ( | ( | |||||||||||||||||
Repurchase of common stock | ( | ( | ( | |||||||||||||||||
Exercise of stock options | ||||||||||||||||||||
Net cash used in financing activities | ( | ( | ( | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||||||||||||||||
(Decrease) increase in cash and cash equivalents, including cash classified as held for sale | ( | ( | ||||||||||||||||||
Less: Decrease (increase) in cash and cash equivalents classified as held for sale | ( | |||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | ( | ( | ||||||||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||||||||
Cash and cash equivalents, end of period | $ | $ | $ | |||||||||||||||||
Supplemental Disclosure | ||||||||||||||||||||
Interest paid | $ | $ | $ | |||||||||||||||||
Income taxes paid |
The Hershey Company | 2021 Form 10-K | Page 56 |
Preferred Stock | Common Stock | Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement of treasury common stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of ASU 2016-02 related to leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends (including dividend equivalents): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Class B Common Stock, $ | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options and incentive-based transactions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestiture of noncontrolling interest | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to joint venture partner | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 57 |
The Hershey Company | 2021 Form 10-K | Page 58 |
The Hershey Company | 2021 Form 10-K | Page 59 |
The Hershey Company | 2021 Form 10-K | Page 60 |
The Hershey Company | 2021 Form 10-K | Page 61 |
The Hershey Company | 2021 Form 10-K | Page 62 |
The Hershey Company | 2021 Form 10-K | Page 63 |
Initial Allocation | |||||
Goodwill | $ | ||||
Other intangible assets | |||||
Current assets acquired | |||||
Property, plant and equipment, net | |||||
Other non-current assets, primarily operating lease ROU assets | |||||
Deferred income taxes | |||||
Current liabilities acquired | ( | ||||
Other long-term liabilities, primarily operating lease liabilities | ( | ||||
Net assets acquired | $ |
The Hershey Company | 2021 Form 10-K | Page 64 |
Initial Allocation | |||||
Goodwill | $ | ||||
Other intangible assets | |||||
Current assets acquired | |||||
Property, plant and equipment, net | |||||
Other non-current assets | |||||
Other liabilities assumed, primarily current liabilities | ( | ||||
Net assets acquired | $ |
The Hershey Company | 2021 Form 10-K | Page 65 |
Goodwill | $ | ||||
Other intangible assets | |||||
Other assets acquired, primarily current assets | |||||
Other liabilities assumed, primarily current liabilities | ( | ||||
Deferred income taxes | ( | ||||
Net assets acquired | $ |
The Hershey Company | 2021 Form 10-K | Page 66 |
Goodwill | $ | ||||
Other intangible assets | |||||
Other assets acquired, primarily current assets | |||||
Other liabilities assumed, primarily current liabilities | ( | ||||
Net assets acquired | $ |
The Hershey Company | 2021 Form 10-K | Page 67 |
North America Confectionery | North America Salty Snacks | International | Total | |||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | ||||||||||||||||||||||
Accumulated impairment loss | ( | ( | ( | |||||||||||||||||||||||
Balance at January 1, 2020 | ||||||||||||||||||||||||||
Measurement period adjustments | ||||||||||||||||||||||||||
Foreign currency translation | ( | |||||||||||||||||||||||||
Balance at December 31, 2020 | ||||||||||||||||||||||||||
Foreign currency translation | ( | |||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ |
December 31, | 2021 | 2020 | ||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||||||||||||
Intangible assets subject to amortization: | ||||||||||||||||||||||||||
Trademarks | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Customer-related | ( | ( | ||||||||||||||||||||||||
Patents | ( | ( | ||||||||||||||||||||||||
Total | ( | ( | ||||||||||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Trademarks | ||||||||||||||||||||||||||
Total other intangible assets | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 68 |
Year ending December 31, | 2022 | 2023 | 2024 | 2025 | 2026 | |||||||||||||||||||||||||||
Amortization expense | $ | $ | $ | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Short-term foreign bank borrowings against lines of credit | $ | $ | |||||||||
U.S. commercial paper | |||||||||||
Total short-term debt | $ | $ | |||||||||
Weighted average interest rate on outstanding commercial paper | % | N/A |
The Hershey Company | 2021 Form 10-K | Page 69 |
December 31, | Maturity Date | 2021 | 2020 | |||||||||||||||||
February 15, 2021 | $ | $ | ||||||||||||||||||
May 15, 2021 | ||||||||||||||||||||
May 1, 2023 | ||||||||||||||||||||
May 15, 2023 | ||||||||||||||||||||
November 15, 2024 | ||||||||||||||||||||
June 1, 2025 | ||||||||||||||||||||
August 21, 2025 | ||||||||||||||||||||
August 15, 2026 | ||||||||||||||||||||
August 15, 2027 | ||||||||||||||||||||
November 15, 2029 | ||||||||||||||||||||
June 1, 2030 | ||||||||||||||||||||
August 15, 2046 | ||||||||||||||||||||
November 15, 2049 | ||||||||||||||||||||
June 1, 2050 | ||||||||||||||||||||
Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts | ( | ( | ||||||||||||||||||
Less—current portion | ||||||||||||||||||||
Long-term portion | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter |
The Hershey Company | 2021 Form 10-K | Page 70 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Interest expense | $ | $ | $ | |||||||||||||||||
Capitalized interest | ( | ( | ( | |||||||||||||||||
Interest expense | ||||||||||||||||||||
Interest income | ( | ( | ( | |||||||||||||||||
Interest expense, net | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 71 |
December 31, | 2021 | 2020 | ||||||||||||||||||||||||
Assets (1) | Liabilities (1) | Assets (1) | Liabilities (1) | |||||||||||||||||||||||
Derivatives designated as cash flow hedging instruments: | ||||||||||||||||||||||||||
Foreign exchange contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Derivatives not designated as hedging instruments: | ||||||||||||||||||||||||||
Commodities futures and options (2) | ||||||||||||||||||||||||||
Deferred compensation derivatives | ||||||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 72 |
Non-designated Hedges | Cash Flow Hedges | |||||||||||||||||||||||||||||||||||||
Gains (losses) recognized in income (a) | Gains (losses) recognized in other comprehensive income (“OCI”) | Gains (losses) reclassified from AOCI into income (b) | ||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
Commodities futures and options | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Foreign exchange contracts | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Interest rate swap agreements | ( | ( | ||||||||||||||||||||||||||||||||||||
Deferred compensation derivatives | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ( | $ | ( | $ | ( |
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. |
The Hershey Company | 2021 Form 10-K | Page 73 |
Assets (Liabilities) | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
December 31, 2021: | ||||||||||||||||||||||||||
Derivative Instruments: | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Foreign exchange contracts (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation derivatives (2) | ||||||||||||||||||||||||||
Commodities futures and options (3) | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Foreign exchange contracts (1) | ||||||||||||||||||||||||||
Commodities futures and options (3) | ||||||||||||||||||||||||||
December 31, 2020: | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Foreign exchange contracts (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation derivatives (2) | ||||||||||||||||||||||||||
Commodities futures and options (3) | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Foreign exchange contracts (1) | ||||||||||||||||||||||||||
Commodities futures and options (3) |
Fair Value | Carrying Value | |||||||||||||||||||||||||
At December 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Current portion of long-term debt | $ | $ | $ | $ | ||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 74 |
2020 | ||||||||
Adjustment to disposal group (1) | $ | |||||||
Other asset write-down (2) | ||||||||
Long-lived asset impairment charges | $ |
2019 | ||||||||
Customer relationship and trademark intangible assets (1) | $ | |||||||
Other long-lived assets not held for sale (2) | ||||||||
Adjustment to disposal group (3) | ||||||||
Long-lived and intangible asset impairment charges | $ |
The Hershey Company | 2021 Form 10-K | Page 75 |
Lease expense | Classification | 2021 | 2020 | |||||||||||||||||
Operating lease cost | Cost of sales or SM&A (1) | $ | $ | |||||||||||||||||
Finance lease cost: | ||||||||||||||||||||
Amortization of ROU assets | Depreciation and amortization (1) | |||||||||||||||||||
Interest on lease liabilities | Interest expense, net | |||||||||||||||||||
Net lease cost (2) | $ | $ |
2021 | 2020 | |||||||||||||
Weighted-average remaining lease term (years) | ||||||||||||||
Operating leases | ||||||||||||||
Finance leases | ||||||||||||||
Weighted-average discount rate | ||||||||||||||
Operating leases | % | % | ||||||||||||
Finance leases | % | % |
The Hershey Company | 2021 Form 10-K | Page 76 |
Leases | Classification | 2021 | 2020 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating lease ROU assets | $ | $ | ||||||||||||||||||
Finance lease ROU assets, at cost | Property, plant and equipment, gross | |||||||||||||||||||
Accumulated amortization | Accumulated depreciation | ( | ( | |||||||||||||||||
Finance lease ROU assets, net | ||||||||||||||||||||
Total leased assets | $ | $ | ||||||||||||||||||
Liabilities | ||||||||||||||||||||
Current | ||||||||||||||||||||
Operating | $ | $ | ||||||||||||||||||
Finance | ||||||||||||||||||||
Non-current | ||||||||||||||||||||
Operating | ||||||||||||||||||||
Finance | ||||||||||||||||||||
Total lease liabilities | $ | $ |
Operating leases | Finance leases | Total | |||||||||||||||
2022 | $ | $ | $ | ||||||||||||||
2023 | |||||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 | |||||||||||||||||
Thereafter | |||||||||||||||||
Total lease payments | |||||||||||||||||
Less: Imputed interest | |||||||||||||||||
Total lease liabilities | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 77 |
2021 | 2020 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
Operating cash flows from operating leases | $ | $ | ||||||||||||
Operating cash flows from finance leases | $ | $ | ||||||||||||
Financing cash flows from finance leases | $ | $ | ||||||||||||
ROU assets obtained in exchange for lease liabilities: | ||||||||||||||
Operating leases | $ | $ | ||||||||||||
Finance leases | $ | ( | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Cost of sales | $ | $ | $ | |||||||||||||||||
Selling, marketing and administrative expense | ||||||||||||||||||||
Business realignment costs | ||||||||||||||||||||
Costs associated with business realignment activities | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 78 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
International Optimization Program: | ||||||||||||||||||||
Severance | $ | $ | $ | |||||||||||||||||
Other program costs | ||||||||||||||||||||
Margin for Growth Program: | ||||||||||||||||||||
Severance | ( | |||||||||||||||||||
Other program costs | ||||||||||||||||||||
Total | $ | $ | $ |
Total | |||||
Liability balance at December 31, 2020 (1) | $ | ||||
2021 business realignment charges (2) | |||||
Cash payments | ( | ||||
Liability balance at December 31, 2021 (1) | $ |
The Hershey Company | 2021 Form 10-K | Page 79 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Domestic | $ | $ | $ | |||||||||||||||||
Foreign | ||||||||||||||||||||
Income before income taxes | $ | $ | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Current: | ||||||||||||||||||||
Federal | $ | $ | $ | |||||||||||||||||
State | ||||||||||||||||||||
Foreign | ||||||||||||||||||||
Deferred: | ||||||||||||||||||||
Federal | ||||||||||||||||||||
State | ||||||||||||||||||||
Foreign | ( | ( | ( | |||||||||||||||||
( | ||||||||||||||||||||
Total provision for income taxes | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 80 |
December 31, | 2021 | 2020 | ||||||||||||
Deferred tax assets: | ||||||||||||||
Post-retirement benefit obligations | $ | $ | ||||||||||||
Accrued expenses and other reserves | ||||||||||||||
Stock-based compensation | ||||||||||||||
Derivative instruments | ||||||||||||||
Pension | ||||||||||||||
Lease liabilities | ||||||||||||||
Accrued trade promotion reserves | ||||||||||||||
Net operating loss carryforwards | ||||||||||||||
Capital loss carryforwards | ||||||||||||||
Other | ||||||||||||||
Gross deferred tax assets | ||||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Total deferred tax assets | ||||||||||||||
Deferred tax liabilities: | ||||||||||||||
Property, plant and equipment, net | ||||||||||||||
Acquired intangibles | ||||||||||||||
Lease ROU assets | ||||||||||||||
Inventories | ||||||||||||||
Derivative instruments | ||||||||||||||
Pension | ||||||||||||||
Other | ||||||||||||||
Total deferred tax liabilities | ||||||||||||||
Net deferred tax liabilities | $ | ( | $ | ( | ||||||||||
Included in: | ||||||||||||||
Non-current deferred tax assets, net | $ | $ | ||||||||||||
Non-current deferred tax liabilities, net | ( | ( | ||||||||||||
Net deferred tax liabilities | $ | ( | $ | ( |
The Hershey Company | 2021 Form 10-K | Page 81 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Federal statutory income tax rate | % | % | % | |||||||||||||||||
Increase (reduction) resulting from: | ||||||||||||||||||||
State income taxes, net of Federal income tax benefits | ||||||||||||||||||||
Foreign rate differences | ( | ( | ( | |||||||||||||||||
Historic and solar tax credits | ( | ( | ( | |||||||||||||||||
Tax contingencies | ||||||||||||||||||||
Stock compensation | ( | ( | ( | |||||||||||||||||
Valuation allowance release | ( | |||||||||||||||||||
Other, net | ( | ( | ||||||||||||||||||
Effective income tax rate | % | % | % |
December 31, | 2021 | 2020 | ||||||||||||
Balance at beginning of year | $ | $ | ||||||||||||
Additions for tax positions taken during prior years | ||||||||||||||
Reductions for tax positions taken during prior years | ( | ( | ||||||||||||
Additions for tax positions taken during the current year | ||||||||||||||
Settlements | ( | |||||||||||||
Expiration of statutes of limitations | ( | ( | ||||||||||||
Balance at end of year | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 82 |
The Hershey Company | 2021 Form 10-K | Page 83 |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||
December 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Change in benefit obligation | ||||||||||||||||||||||||||
Projected benefit obligation at beginning of year | $ | $ | $ | $ | ||||||||||||||||||||||
Service cost | ||||||||||||||||||||||||||
Interest cost | ||||||||||||||||||||||||||
Actuarial (gain) loss | ( | ( | ||||||||||||||||||||||||
Settlement | ( | ( | ||||||||||||||||||||||||
Currency translation and other | ||||||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | ||||||||||||||||||||||
Projected benefit obligation at end of year | ||||||||||||||||||||||||||
Change in plan assets | ||||||||||||||||||||||||||
Fair value of plan assets at beginning of year | ||||||||||||||||||||||||||
Actual return on plan assets | ||||||||||||||||||||||||||
Employer contributions | ||||||||||||||||||||||||||
Settlement | ( | ( | ||||||||||||||||||||||||
Currency translation and other | ||||||||||||||||||||||||||
Benefits paid | ( | ( | ( | ( | ||||||||||||||||||||||
Fair value of plan assets at end of year | ||||||||||||||||||||||||||
Funded status at end of year | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Amounts recognized in the Consolidated Balance Sheets: | ||||||||||||||||||||||||||
Other assets | $ | $ | $ | $ | ||||||||||||||||||||||
Accrued liabilities | ( | ( | ( | ( | ||||||||||||||||||||||
Other long-term liabilities | ( | ( | ( | ( | ||||||||||||||||||||||
Total | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | ||||||||||||||||||||||||||
Actuarial net (loss) gain | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||
Net prior service credit | ||||||||||||||||||||||||||
Net amounts recognized in AOCI | $ | ( | $ | ( | $ | $ | ( |
The Hershey Company | 2021 Form 10-K | Page 84 |
December 31, | 2021 | 2020 | ||||||||||||
Projected benefit obligation | $ | $ | ||||||||||||
Accumulated benefit obligation | ||||||||||||||
Fair value of plan assets |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Amounts recognized in net periodic benefit cost | ||||||||||||||||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Interest cost | ||||||||||||||||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Amortization of prior service (credit) cost | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Amortization of net loss | ( | ( | ||||||||||||||||||||||||||||||||||||
Settlement loss | ||||||||||||||||||||||||||||||||||||||
Total net periodic benefit cost | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Change in plan assets and benefit obligations recognized in AOCI, pre-tax | ||||||||||||||||||||||||||||||||||||||
Actuarial net (gain) loss | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Prior service cost (credit) | ( | ( | ||||||||||||||||||||||||||||||||||||
Total recognized in other comprehensive (income) loss, pre-tax | $ | ( | $ | ( | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||
Net amounts recognized in periodic benefit cost and AOCI | $ | ( | $ | $ | ( | $ | ( | $ | $ |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||
December 31, | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Discount rate | % | % | % | % | ||||||||||||||||||||||
Rate of increase in compensation levels | % | % | N/A | N/A | ||||||||||||||||||||||
Interest crediting rate | % | % | N/A | N/A |
The Hershey Company | 2021 Form 10-K | Page 85 |
Pension Benefits | Other Benefits | |||||||||||||||||||||||||||||||||||||
For the years ended December 31, | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||
Discount rate | % | % | % | % | % | % | ||||||||||||||||||||||||||||||||
Expected long-term return on plan assets | % | % | % | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
Rate of compensation increase | % | % | % | N/A | N/A | N/A |
Asset Class | Target Asset Allocation | |||||||
Cash | ||||||||
Equity securities | ||||||||
Fixed income securities | ||||||||
Alternative investments, including real estate, listed infrastructure and other |
The Hershey Company | 2021 Form 10-K | Page 86 |
Quoted prices in active markets of identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant other unobservable inputs (Level 3) | Investments Using NAV as a Practical Expedient (1) | Total | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Global all-cap (a) | ||||||||||||||||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||||||||
U.S. government/agency | ||||||||||||||||||||||||||||||||
Corporate bonds (b) | ||||||||||||||||||||||||||||||||
International government/corporate bonds (c) | ||||||||||||||||||||||||||||||||
Diversified credit (d) | ||||||||||||||||||||||||||||||||
Alternative investments: | ||||||||||||||||||||||||||||||||
Global diversified assets (e) | ||||||||||||||||||||||||||||||||
Real assets fund (f) | ||||||||||||||||||||||||||||||||
Total pension plan assets | $ | $ | $ | $ | $ |
Quoted prices in active markets of identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant other unobservable inputs (Level 3) | Investments Using NAV as a Practical Expedient (1) | Total | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Global all-cap (a) | ||||||||||||||||||||||||||||||||
Fixed income securities: | ||||||||||||||||||||||||||||||||
U.S. government/agency | ||||||||||||||||||||||||||||||||
Corporate bonds (b) | ||||||||||||||||||||||||||||||||
International government/corporate bonds (c) | ||||||||||||||||||||||||||||||||
Diversified credit (d) | ||||||||||||||||||||||||||||||||
Alternative investments: | ||||||||||||||||||||||||||||||||
Global diversified assets (e) | ||||||||||||||||||||||||||||||||
Global real estate investment trusts (g) | ||||||||||||||||||||||||||||||||
Global infrastructure (h) | ||||||||||||||||||||||||||||||||
Total pension plan assets | $ | $ | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 87 |
(a) | This category comprises equity funds that primarily track the MSCI World Index or MSCI All Country World Index. | ||||
(b) | This category comprises fixed income funds primarily invested in investment grade and high yield bonds. | ||||
(c) | This category comprises fixed income funds primarily invested in Canadian and other international bonds. | ||||
(d) | This category comprises fixed income funds primarily invested in high yield bonds, loans, securitized debt and emerging market debt. | ||||
(e) | This category comprises diversified funds invested across alternative asset classes. | ||||
(f) | This category comprises funds primarily invested in publicly traded real estate securities, publicly listed infrastructure securities and real estate debt. | ||||
(g) | This category comprises equity funds primarily invested in publicly traded real estate securities. | ||||
(h) | This category comprises equity funds primarily invested in publicly traded listed infrastructure securities. |
Expected Benefit Payments | |||||||||||||||||||||||||||||||||||
2022 | 2023 | 2024 | 2025 | 2026 | 2027-2030 | ||||||||||||||||||||||||||||||
Pension Benefits | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Other Benefits |
The Hershey Company | 2021 Form 10-K | Page 88 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Pre-tax compensation expense | $ | $ | $ | |||||||||||||||||
Related income tax benefit |
The Hershey Company | 2021 Form 10-K | Page 89 |
Stock Options | Shares | Weighted-Average Exercise Price (per share) | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||
Outstanding at beginning of the period | $ | |||||||||||||
Granted | $ | |||||||||||||
Exercised | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Outstanding as of December 31, 2021 | $ | $ | ||||||||||||
Options exercisable as of December 31, 2021 | $ | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Dividend yields | % | % | % | |||||||||||||||||
Expected volatility | % | % | % | |||||||||||||||||
Risk-free interest rates | % | % | % | |||||||||||||||||
Expected term in years |
Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||
Range of Exercise Prices | Number Outstanding as of 12/31/21 | Weighted-Average Remaining Contractual Life in Years | Weighted-Average Exercise Price | Number Exercisable as of 12/31/21 | Weighted-Average Exercise Price | |||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||
$ | $ | $ | ||||||||||||||||||||||||||||||
$ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 90 |
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 | $ | |||||||||||||
Granted | $ | |||||||||||||
Performance assumption change (1) | $ | |||||||||||||
Vested | ( | $ | ||||||||||||
Forfeited | ( | $ | ||||||||||||
Outstanding at end of year | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Units granted | ||||||||||||||||||||
Weighted-average fair value at date of grant | $ | $ | $ | |||||||||||||||||
Monte Carlo simulation assumptions: | ||||||||||||||||||||
Estimated values | $ | $ | $ | |||||||||||||||||
Dividend yields | % | % | % | |||||||||||||||||
Expected volatility | % | % | % |
The Hershey Company | 2021 Form 10-K | Page 91 |
The Hershey Company | 2021 Form 10-K | Page 92 |
For the years ended December 31, | 2021 | 2020 | 2019 | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
North America Confectionery | $ | $ | $ | ||||||||||||||||||||
North America Salty Snacks | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Total | $ | $ | $ | ||||||||||||||||||||
Segment income (loss): | |||||||||||||||||||||||
North America Confectionery | $ | $ | $ | ||||||||||||||||||||
North America Salty Snacks | |||||||||||||||||||||||
International | ( | ||||||||||||||||||||||
Total segment income | |||||||||||||||||||||||
Unallocated corporate expense (1) | |||||||||||||||||||||||
Unallocated mark-to-market (gains) losses on commodity derivatives | ( | ( | |||||||||||||||||||||
Operating profit | |||||||||||||||||||||||
Income before income taxes | $ | $ | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Net gains on mark-to-market valuation of commodity derivative positions recognized in income | $ | ( | $ | ( | $ | ( | ||||||||||||||
Net gains on commodity derivative positions reclassified from unallocated to segment income | ||||||||||||||||||||
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains) | $ | ( | $ | $ | ( |
The Hershey Company | 2021 Form 10-K | Page 93 |
For the years ended December 31, | 2021 | 2020 | 2019 | ||||||||||||||||||||
North America Confectionery | $ | $ | $ | ||||||||||||||||||||
North America Salty Snacks | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Corporate | |||||||||||||||||||||||
Total | $ | $ | $ |
For the years ended December 31, | 2021 | 2020 | 2019 | ||||||||||||||||||||
Net sales: | |||||||||||||||||||||||
United States | $ | $ | $ | ||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | ||||||||||||||||||||
Long-lived assets: | |||||||||||||||||||||||
United States | $ | $ | $ | ||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 94 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
Shares issued | ||||||||||||||||||||
Treasury shares at beginning of year | ( | ( | ( | |||||||||||||||||
Stock repurchases: | ||||||||||||||||||||
Shares repurchased in the open market under pre-approved share repurchase programs | ( | ( | ( | |||||||||||||||||
Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation | ( | ( | ( | |||||||||||||||||
Stock issuances: | ||||||||||||||||||||
Shares issued for stock options and incentive compensation | ||||||||||||||||||||
Retirement of treasury shares | ||||||||||||||||||||
Treasury shares at end of year | ( | ( | ( | |||||||||||||||||
Change in Common Stock due to retirement of treasury shares | ( | |||||||||||||||||||
Net shares outstanding at end of year |
The Hershey Company | 2021 Form 10-K | Page 95 |
Noncontrolling Interest | |||||
Balance, December 31, 2020 | $ | ||||
Net gain attributable to noncontrolling interest | |||||
Divestiture of noncontrolling interest | ( | ||||
Distributions to joint venture partner | ( | ||||
Reclassification to accrued liabilities | ( | ||||
Other comprehensive income - foreign currency translation adjustments | |||||
Balance, December 31, 2021 | $ |
in millions | 2022 | 2023 | 2024 | 2025 | 2026 | |||||||||||||||||||||||||||
Purchase obligations | $ | $ | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 96 |
The Hershey Company | 2021 Form 10-K | Page 97 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | Common Stock | Class B Common Stock | |||||||||||||||||||||||||||||||||
Basic earnings per share: | ||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||
Allocation of distributed earnings (cash dividends paid) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Allocation of undistributed earnings | ||||||||||||||||||||||||||||||||||||||
Total earnings—basic | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | ||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—basic | ||||||||||||||||||||||||||||||||||||||
Earnings Per Share—basic | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Diluted earnings per share: | ||||||||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||||||||
Allocation of total earnings used in basic computation | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | ||||||||||||||||||||||||||||||||||||||
Reallocation of undistributed earnings | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total earnings—diluted | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Denominator (shares in thousands): | ||||||||||||||||||||||||||||||||||||||
Number of shares used in basic computation | ||||||||||||||||||||||||||||||||||||||
Weighted-average effect of dilutive securities: | ||||||||||||||||||||||||||||||||||||||
Conversion of Class B common stock to Common shares outstanding | ||||||||||||||||||||||||||||||||||||||
Employee stock options | ||||||||||||||||||||||||||||||||||||||
Performance and restricted stock units | ||||||||||||||||||||||||||||||||||||||
Total weighted-average shares—diluted | ||||||||||||||||||||||||||||||||||||||
Earnings Per Share—diluted | $ | $ | $ | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 98 |
For the years ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||
$ | $ | $ | ||||||||||||||||||
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans (see Note 11) | ||||||||||||||||||||
Other (income) expense, net | ||||||||||||||||||||
Total | $ | $ | $ |
The Hershey Company | 2021 Form 10-K | Page 99 |
December 31, | 2021 | 2020 | ||||||||||||
Inventories: | ||||||||||||||
Raw materials | $ | $ | ||||||||||||
Goods in process | ||||||||||||||
Finished goods | ||||||||||||||
Inventories at FIFO | ||||||||||||||
Adjustment to LIFO | ( | ( | ||||||||||||
Total inventories | $ | $ | ||||||||||||
Prepaid expenses and other: | ||||||||||||||
Prepaid expenses | $ | $ | ||||||||||||
Other current assets | ||||||||||||||
Total prepaid expenses and other | $ | $ | ||||||||||||
Property, plant and equipment: | ||||||||||||||
Land | $ | $ | ||||||||||||
Buildings | ||||||||||||||
Machinery and equipment | ||||||||||||||
Construction in progress | ||||||||||||||
Property, plant and equipment, gross | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
Property, plant and equipment, net | $ | $ | ||||||||||||
Other non-current assets: | ||||||||||||||
Pension | $ | $ | ||||||||||||
Capitalized software, net | ||||||||||||||
Operating lease ROU assets | ||||||||||||||
Investments in unconsolidated affiliates | ||||||||||||||
Other non-current assets | ||||||||||||||
Total other non-current assets | $ | $ | ||||||||||||
Accrued liabilities: | ||||||||||||||
Payroll, compensation and benefits | $ | $ | ||||||||||||
Advertising, promotion and product allowances | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other | ||||||||||||||
Total accrued liabilities | $ | $ | ||||||||||||
Other long-term liabilities: | ||||||||||||||
Post-retirement benefits liabilities | $ | $ | ||||||||||||
Pension benefits liabilities | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other | ||||||||||||||
Total other long-term liabilities | $ | $ | ||||||||||||
Accumulated other comprehensive loss: | ||||||||||||||
Foreign currency translation adjustments | $ | ( | $ | ( | ||||||||||
Pension and post-retirement benefit plans, net of tax | ( | ( | ||||||||||||
Cash flow hedges, net of tax | ( | ( | ||||||||||||
Total accumulated other comprehensive loss | $ | ( | $ | ( |
The Hershey Company | 2021 Form 10-K | Page 100 |
The Hershey Company | 2021 Form 10-K | Page 101 |
The Hershey Company | 2021 Form 10-K | Page 102 |
The Hershey Company | 2021 Form 10-K | Page 103 |
The Hershey Company | 2021 Form 10-K | Page 104 |
EXHIBIT INDEX | ||||||||
Exhibit Number | Description | |||||||
4.1 | The Company has issued certain long-term debt instruments, no one class of which creates indebtedness exceeding 10% of the total assets of the Company and its subsidiaries on a consolidated basis. These classes consist of the following: | |||||||
13) Other Obligations | ||||||||
The Company undertakes to furnish copies of the agreements governing these debt instruments to the Securities and Exchange Commission upon its request. | ||||||||
10.1(a) | Kit Kat® and Rolo® License Agreement (the “License Agreement”) between the Company and Rowntree Mackintosh Confectionery Limited is incorporated by reference from Exhibit 10(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1980.# |
The Hershey Company | 2021 Form 10-K | Page 105 |
10.1(b) | Amendment to the License Agreement is incorporated by reference from Exhibit 19 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 3, 1988.# | |||||||
10.1(c) | Assignment of the License Agreement by Rowntree Mackintosh Confectionery Limited to Société des Produits Nestlé SA as of January 1, 1990 is incorporated by reference from Exhibit 19 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1990.# | |||||||
10.2 | Peter Paul/York Domestic Trademark & Technology License Agreement between the Company and Cadbury Schweppes Inc. (now Kraft Foods Ireland Intellectual Property Limited) dated August 25, 1988, is incorporated by reference from Exhibit 2(a) to the Company’s Current Report on Form 8-K dated September 8, 1988.# | |||||||
10.3 | Cadbury Trademark & Technology License Agreement between the Company and Cadbury Limited (now Cadbury UK Limited) dated August 25, 1988, is incorporated by reference from Exhibit 2(a) to the Company’s Current Report on Form 8-K dated September 8, 1988.# | |||||||
The Hershey Company | 2021 Form 10-K | Page 106 |
The Hershey Company | 2021 Form 10-K | Page 107 |
The Company’ s Executive Benefits Protection Plan (Group 3), Amended and Restated as of June 27, 2012, is incorporated by reference from Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.+ | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |||||||
104 | The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, formatted in Inline XBRL and contained in Exhibit 101. | |||||||
* | Filed herewith | |||||||
** | Furnished herewith | |||||||
+ | Management contract, compensatory plan or arrangement | |||||||
# | Pursuant to Instruction 1 to Regulation S-T Rule 105(d), no hyperlink is required for any exhibit incorporated by reference that has not been filed with the SEC in electronic format |
The Hershey Company | 2021 Form 10-K | Page 108 |
THE HERSHEY COMPANY | ||||||||
(Registrant) | ||||||||
By: | /s/ STEVEN E. VOSKUIL | |||||||
Steven E. Voskuil | ||||||||
Senior Vice President, Chief Financial Officer |
Signature | Title | Date | ||||||||||||
/s/ MICHELE G. BUCK | Chairman of the Board, President and Chief Executive Officer | February 18, 2022 | ||||||||||||
Michele G. Buck | (Principal Executive Officer) | |||||||||||||
/s/ STEVEN E. VOSKUIL | Senior Vice President, Chief Financial Officer | February 18, 2022 | ||||||||||||
Steven E. Voskuil | (Principal Financial Officer) | |||||||||||||
/s/ JENNIFER L. MCCALMAN | Vice President, Chief Accounting Officer | February 18, 2022 | ||||||||||||
Jennifer L. McCalman | (Principal Accounting Officer) | |||||||||||||
/s/ ANTHONY J. PALMER | Lead Independent Director | February 18, 2022 | ||||||||||||
Anthony J. Palmer | ||||||||||||||
/s/ PAMELA M. ARWAY | Director | February 18, 2022 | ||||||||||||
Pamela M. Arway | ||||||||||||||
/s/ JAMES W. BROWN | Director | February 18, 2022 | ||||||||||||
James W. Brown | ||||||||||||||
/s/ VICTOR L. CRAWFORD | Director | February 18, 2022 | ||||||||||||
Victor L. Crawford | ||||||||||||||
/s/ ROBERT M. DUTKOWSKY | Director | February 18, 2022 | ||||||||||||
Robert M. Dutkowsky | ||||||||||||||
/s/ MARY KAY HABEN | Director | February 18, 2022 | ||||||||||||
Mary Kay Haben | ||||||||||||||
/s/ JAMES C. KATZMAN | Director | February 18, 2022 | ||||||||||||
James C. Katzman | ||||||||||||||
/s/ M. DIANE KOKEN | Director | February 18, 2022 | ||||||||||||
M. Diane Koken | ||||||||||||||
/s/ ROBERT M. MALCOLM | Director | February 18, 2022 | ||||||||||||
Robert M. Malcolm | ||||||||||||||
/s/ JUAN R. PEREZ | Director | February 18, 2022 | ||||||||||||
Juan R. Perez | ||||||||||||||
/s/ WENDY L. SCHOPPERT | Director | February 18, 2022 | ||||||||||||
Wendy L. Schoppert |
The Hershey Company | 2021 Form 10-K | Page 109 |
Additions | ||||||||||||||||||||||||||||||||
Description | Balance at Beginning of Period | Charged to Costs and Expenses | Charged to Other Accounts | Deductions from Reserves | Balance at End of Period | |||||||||||||||||||||||||||
In thousands of dollars | ||||||||||||||||||||||||||||||||
For the year ended December 31, 2021 | ||||||||||||||||||||||||||||||||
Allowances deducted from assets | ||||||||||||||||||||||||||||||||
Accounts receivable—trade, net (a) | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Valuation allowance on net deferred taxes (b) | ( | |||||||||||||||||||||||||||||||
Inventory obsolescence reserve (c) | ( | |||||||||||||||||||||||||||||||
Total allowances deducted from assets | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
For the year ended December 31, 2020 | ||||||||||||||||||||||||||||||||
Allowances deducted from assets | ||||||||||||||||||||||||||||||||
Accounts receivable—trade, net (a) | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Valuation allowance on net deferred taxes (b) | ( | |||||||||||||||||||||||||||||||
Inventory obsolescence reserve (c) | ( | |||||||||||||||||||||||||||||||
Total allowances deducted from assets | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
For the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||
Allowances deducted from assets | ||||||||||||||||||||||||||||||||
Accounts receivable—trade, net (a) | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Valuation allowance on net deferred taxes (b) | ( | ( | ||||||||||||||||||||||||||||||
Inventory obsolescence reserve (c) | ( | |||||||||||||||||||||||||||||||
Total allowances deducted from assets | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
The Hershey Company | 2021 Form 10-K | Page 110 |
Subsidiary Name | Jurisdiction of Incorporation | |||||||
Hershey Netherlands B.V. | The Netherlands | |||||||
Hershey Canada, Inc. | Canada | |||||||
Hershey Mexico S.A. de C.V. | Mexico | |||||||
Hersmex S. de R.L. de C.V. | Mexico | |||||||
Servicios de Hersmex S. de R.L. de C.V. | Mexico | |||||||
Hershey Chocolate of Virginia LLC | Delaware | |||||||
Hershey Chocolate & Confectionery LLC | Delaware | |||||||
Hershey International LLC | Delaware | |||||||
Reese Candy Corporation | Delaware | |||||||
CSH Foods, Inc. | Delaware | |||||||
The Hershey Sourcing Company | Delaware | |||||||
The Hershey Sales Company | Delaware | |||||||
The Hershey Investment Company, LLC | Delaware | |||||||
The Hershey Licensing Company | Delaware | |||||||
Ripple Brand Collective, LLC | New York | |||||||
Amplify Snack Brands, Inc. | Delaware | |||||||
ONE Brands, LLC | Delaware | |||||||
Artisan Confections Company, LLC | Delaware | |||||||
Lily's Sweets, LLC | Pennsylvania | |||||||
Dot's Pretzels, LLC | Delaware | |||||||
Pretzels Holdings, LLC | Delaware | |||||||
Hershey Caribe, Inc. | Puerto Rico | |||||||
Hershey UK Holding Limited | United Kingdom | |||||||
Hershey UK Finance Limited | United Kingdom | |||||||
Hershey Trading GmbH | Switzerland | |||||||
The Hershey Trading North America Company | Delaware | |||||||
Hershey India Private Limited | India | |||||||
Nutrine Confectionery Company Private Limited | India | |||||||
Hershey (China) Investment Management Co., Ltd. | China | |||||||
Hershey Chocolate Sales (Shanghai) Co., Ltd. | China | |||||||
Hershey Japan Co., Ltd. | Japan | |||||||
Hershey Philippines, Inc. | Philippines | |||||||
Regional Operating HQ | Philippines | |||||||
Hershey Asia Pacific Pte. Ltd. | Singapore | |||||||
Hershey Malaysia Sdn. Bhd. | Malaysia | |||||||
Hershey (Thailand) Co. Ltd. | Thailand | |||||||
Hershey do Brasil Ltda. | Brazil |
The Hershey Company | 2021 Form 10-K | Exhibit 21.1 |
/s/ ERNST & YOUNG LLP | ||
Philadelphia, Pennsylvania | ||
February 18, 2022 |
/s/ MICHELE G. BUCK | ||
Michele G. Buck Chief Executive Officer | ||
February 18, 2022 |
The Hershey Company | 2021 Form 10-K | Exhibit 31.1 |
/S/ STEVEN E. VOSKUIL | ||
Steven E. Voskuil Chief Financial Officer | ||
February 18, 2022 |
The Hershey Company | 2021 Form 10-K | Exhibit 31.2 |
Date: | February 18, 2022 | /s/ MICHELE G. BUCK | |||||||||
Michele G. Buck Chief Executive Officer | |||||||||||
Date: | February 18, 2022 | /s/ STEVEN E. VOSKUIL | |||||||||
Steven E. Voskuil Chief Financial Officer |
The Hershey Company | 2021 Form 10-K | Exhibit 32.1 |
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AUDIT INFORMATION |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | ERNST & YOUNG LLP |
Auditor Firm ID | 42 |
Auditor Location | Philadelphia, Pennsylvania |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, shares issued (shares) | 221,553,025 | 221,553,025 |
Treasury stock, shares (shares) | 15,444,011 | 13,325,898 |
Common stock | ||
Common stock, shares issued (shares) | 160,939,248 | 160,939,248 |
Class B common stock | ||
Common stock, shares issued (shares) | 60,613,777 | 60,613,777 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Cumulative effect of new accounting principle in period of adoption |
Common stock |
Class B common stock |
Preferred Stock |
Common stock
Common stock
|
Common stock
Class B common stock
|
Additional Paid-in Capital |
Retained Earnings |
Retained Earnings
Cumulative effect of new accounting principle in period of adoption
|
Retained Earnings
Common stock
|
Retained Earnings
Class B common stock
|
Treasury Common Stock |
Accumulated Other Comprehensive Income (Loss) |
Noncontrolling Interests in Subsidiaries |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 including noncontrolling interest | 1,146,752 | 1,149,692 | (2,940) | ||||||||||||
Other comprehensive income (loss) | 32,981 | 32,814 | 167 | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | $ (445,618) | $ (164,627) | $ (445,618) | $ (164,627) | |||||||||||
Stock-based compensation | 50,732 | 50,732 | |||||||||||||
Exercise of stock options and incentive-based transactions | 240,806 | 109,273 | 131,533 | ||||||||||||
Repurchase of common stock | (527,211) | (527,211) | |||||||||||||
Retirement of treasury common stock | 0 | (138,348) | (6,284,919) | 6,423,267 | |||||||||||
Ending balance, stockholders' equity at Dec. 31, 2019 | 1,744,994 | $ 3,913 | 0 | 160,939 | 60,614 | 1,142,210 | 1,290,461 | $ 3,913 | (591,036) | (323,966) | 5,772 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income including noncontrolling interest | 1,275,413 | 1,278,708 | (3,295) | ||||||||||||
Other comprehensive income (loss) | (13,062) | (14,116) | 1,054 | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | (466,777) | (173,719) | (466,777) | (173,719) | |||||||||||
Stock-based compensation | 56,698 | 56,698 | |||||||||||||
Exercise of stock options and incentive-based transactions | 25,532 | (7,708) | 33,240 | ||||||||||||
Repurchase of common stock | (211,196) | (211,196) | |||||||||||||
Ending balance, stockholders' equity at Dec. 31, 2020 | 2,237,883 | 0 | 160,939 | 60,614 | 1,191,200 | 1,928,673 | (768,992) | (338,082) | 3,531 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income including noncontrolling interest | 1,482,819 | 1,477,512 | 5,307 | ||||||||||||
Other comprehensive income (loss) | 94,116 | 88,867 | 5,249 | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | $ (498,346) | $ (187,903) | $ (498,346) | $ (187,903) | |||||||||||
Stock-based compensation | 67,482 | 67,482 | |||||||||||||
Exercise of stock options and incentive-based transactions | 33,211 | 1,649 | 31,562 | ||||||||||||
Repurchase of common stock | (457,946) | (457,946) | |||||||||||||
Divestiture of noncontrolling interest | (1,436) | (1,436) | |||||||||||||
Distributions to joint venture partner | (8,750) | (8,750) | |||||||||||||
Other | (3,901) | (3,901) | |||||||||||||
Ending balance, stockholders' equity at Dec. 31, 2021 | $ 2,757,229 | $ 0 | $ 160,939 | $ 60,614 | $ 1,260,331 | $ 2,719,936 | $ (1,195,376) | $ (249,215) | $ 0 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Common stock | |||
Dividends paid per share (USD per share) | $ 3.410 | $ 3.154 | $ 2.990 |
Class B common stock | |||
Dividends paid per share (USD per share) | $ 3.100 | $ 2.866 | $ 2.716 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business The Hershey Company together with its wholly-owned subsidiaries and entities in which it has a controlling interest, (the “Company,” “Hershey,” “we” or “us”) is a global confectionery leader known for its branded portfolio of chocolate, sweets, mints and other great tasting snacks. The Company has more than 100 brands worldwide including such iconic brand names as Hershey’s, Reese’s, Kisses, Jolly Rancher and Ice Breakers, which are marketed, sold and distributed in approximately 80 countries worldwide. Hershey’s structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. Since December 31, 2014, the Company has reported its operations through two segments: (i) North America and (ii) International and Other. After the completion of the Company’s acquisitions of Dot’s Pretzels, LLC (“Dot’s”) and Pretzels Inc.(“Pretzels”) in December 2021, management of the Company has elected to begin reporting its operations through three reportable segments. Therefore, effective in the fourth quarter of 2021, the Company realigned its former two reportable segments into three reportable segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. For additional information on our segment presentation, see Note 13. Basis of Presentation Our consolidated financial statements include the accounts of The Hershey Company and its majority-owned or controlled subsidiaries. Intercompany transactions and balances have been eliminated. We have a controlling financial interest if we own a majority of the outstanding voting common stock and minority shareholders do not have substantive participating rights, we have significant control through contractual or economic interests in which we are the primary beneficiary or we have the power to direct the activities that most significantly impact the entity's economic performance. We use the equity method of accounting when we have a 20% to 50% interest in other companies and exercise significant influence. See Note 14 for information on our noncontrolling interest, which was divested in January 2021. In addition, we use the equity method of accounting for our investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits. See Note 10 for additional information on our equity investments in partnership entities qualifying for tax credits. Other investments that are not controlled, and over which we do not have the ability to exercise significant influence, are accounted for under the cost method. Both equity and cost method investments are included as Other non-current assets in the Consolidated Balance Sheets. For additional information on our investments in unconsolidated affiliates, see Note 8. COVID-19 On March 11, 2020, the World Health Organization designated coronavirus disease 2019 (“COVID-19”) as a global pandemic. We continue to actively monitor COVID-19 and its potential impact on our operations and financial results. Employee health and safety remains our first priority while we continue our efforts to support community food supplies. Since the onset of COVID-19, there has been minimal disruption to our supply chain network, and all our manufacturing plants are currently open. However, during 2021, continued strong demand for consumer goods and the effects of COVID-19 mitigation strategies have led to broad-based supply chain disruptions across the U.S. and globally, including inflation on many consumer products, labor shortages and demand outpacing supply. We are working closely with our business units, contract manufacturers, distributors, contractors and other external business partners to minimize the potential impact on our business. The ultimate impact that COVID-19 will have on our consolidated financial statements remains uncertain and ultimately will be dictated by the length and severity of the pandemic, including broad-based supply chain disruptions, rising levels of inflation, the spread of COVID-19 variants or resurgences, as well as the economic recovery and actions taken in response by local, state and national governments around the world, including the distribution of vaccinations. We will continue to evaluate the nature and extent of these potential and evolving impacts to our business and consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Our significant estimates and assumptions include, among others, pension and other post-retirement benefit plan assumptions, valuation assumptions of goodwill and other intangible assets, useful lives of long-lived assets, marketing and trade promotion accruals and income taxes. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and the effects of any revisions are reflected in the consolidated financial statements in the period that they are determined. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Revenue Recognition The majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of our products, including chocolate, sweets, mints and other grocery and snack offerings. Net sales reflect the transaction prices for these contracts based on our selling list price which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts associated with aged or potentially unsaleable products. We recognize revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon delivery to the customer or other customer-designated delivery point. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Our trade promotional programs and consumer incentives are used to promote our products and include, but are not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The estimated costs associated with these programs and incentives are based upon our analysis of the programs offered, expectations regarding customer and consumer participation, historical sales and payment trends, and our experience with payment patterns associated with similar programs offered in the past. The estimated costs of these programs are reasonably likely to change in future periods due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. Differences between estimated expense and actual program performance are recognized as a change in estimate in a subsequent period and are normally not significant. During 2021, 2020 and 2019, actual promotional costs have not deviated from the estimated amount by more than 3%. The Company’s unsettled portion remaining in accrued liabilities at year-end for these activities was $174,046 and $195,563 at December 31, 2021 and 2020, respectively. We also recognize a minor amount of royalty income (less than 1% of our consolidated net sales) from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Shipping and handling costs incurred to deliver product to the customer are recorded within cost of sales. Sales, value add and other taxes we collect concurrent with revenue producing activities are excluded from revenue. The majority of our products are confectionery or confectionery-based and, therefore, exhibit similar economic characteristics, as they are based on similar ingredients and are marketed and sold through the same channels to the same customers. In connection with our recent acquisitions, we have expanded our portfolio of salty snacking products, which also exhibit similar economic characteristics to our confectionery products and are sold through the same channels to the same customers. See Note 13 for revenues reported by geographic segment, which is consistent with how we organize and manage our operations, as well as product line net sales information. In 2021, 2020 and 2019, approximately 30%, 31% and 30%, respectively, of our consolidated net sales were made to McLane Company, Inc., one of the largest wholesale distributors in the United States to convenience stores, drug stores, wholesale clubs and mass merchandisers and the primary distributor of our products to Wal-Mart Stores, Inc. Cost of Sales Cost of sales represents costs directly related to the manufacture and distribution of our products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Selling, Marketing and Administrative Expense Selling, marketing and administrative expense (“SM&A”) represents costs incurred in generating revenues and in managing our business. Such costs include advertising and other marketing expenses, selling expenses, research and development costs, administrative and other indirect overhead costs, amortization of capitalized software and intangible assets and depreciation of administrative facilities. Research and development costs, charged to expense as incurred, totaled $40,107 in 2021, $37,577 in 2020 and $37,146 in 2019. Advertising expense is also charged to expense as incurred and totaled $511,798 in 2021, $516,936 in 2020 and $513,302 in 2019. There was no prepaid advertising expense as of December 31, 2021 and $705 as of December 31, 2020. Cash Equivalents Cash equivalents consist of highly liquid debt instruments, time deposits and money market funds with original maturities of three months or less. The fair value of cash and cash equivalents approximates the carrying amount. Accounts Receivable—Trade In the normal course of business, we extend credit to customers that satisfy pre-defined credit criteria, based upon the results of our recurring financial account reviews and our evaluation of current and projected economic conditions. Our primary concentration of credit risk is associated with McLane Company, Inc., one customer served principally by our North America Confectionery segment. As of December 31, 2021, McLane Company, Inc. accounted for approximately 27% of our total accounts receivable. No other customer accounted for more than 10% of our year-end accounts receivable. We believe that we have little concentration of credit risk associated with the remainder of our customer base. Accounts receivable-trade in the Consolidated Balance Sheets is presented net of allowances for bad debts and anticipated discounts of $28,837 and $24,975 at December 31, 2021 and 2020, respectively. Inventories Inventories are valued at the lower of cost or market value, adjusted for the value of inventory that is estimated to be excess, obsolete or otherwise unsaleable. As of December 31, 2021, approximately 60% of our inventories, representing the majority of our United States (“U.S.”) inventories, were valued under the last-in, first-out (“LIFO”) method. The remainder of our inventories in the U.S. and inventories for our international businesses were valued at the lower of first-in, first-out (“FIFO”) cost or net realizable value. LIFO cost of inventories valued using the LIFO method was $589,850 as of December 31, 2021 and $606,282 as of December 31, 2020. The adjustment to LIFO, as shown in Note 18, approximates the excess of replacement cost over the stated LIFO inventory value. The net impact of LIFO acquisitions and liquidations was not material to 2021, 2020 or 2019. Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for machinery and equipment; and 25 to 40 years for buildings and related improvements. At December 31, 2021 and December 31, 2020, property, plant and equipment included assets under finance lease arrangements with net book values totaling $72,496 and $88,065, respectively. Total depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $230,638, $219,021 and $218,096, respectively, and included depreciation on assets recorded under finance lease arrangements. Maintenance and repairs are expensed as incurred. We capitalize applicable interest charges incurred during the construction of new facilities and production lines and amortize these costs over the assets’ estimated useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated. If these assets are considered to be impaired, we measure impairment as the amount by which the carrying amount of the assets exceeds the fair value of the assets. We report assets held for sale or disposal at the lower of the carrying amount or fair value less cost to sell. We assess asset retirement obligations on a periodic basis and recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. We capitalize associated asset retirement costs as part of the carrying amount of the long-lived asset. Computer Software We capitalize costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and it is probable the software being developed will be completed and placed in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project and (iii) interest costs incurred, when material, while developing internal-use software. We cease capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. The unamortized amount of capitalized software totaled $260,656 and $187,673 at December 31, 2021 and 2020, respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 7 years. Accumulated amortization of capitalized software was $321,939 and $360,579 as of 2021 and 2020, respectively. Such amounts are recorded within other assets in the Consolidated Balance Sheets. We review the carrying value of software and development costs for impairment in accordance with our policy pertaining to the impairment of long-lived assets. Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment tests are conducted at the beginning of the fourth quarter. We test goodwill for impairment by performing either a qualitative or quantitative assessment. If we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors in assessing the fair value of the related reporting unit. If we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge for the differential (up to the carrying value of goodwill). We test individual indefinite-lived intangible assets by comparing the estimated fair values with the book values of each asset. We determine the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we calculate the fair value of our reporting units and indefinite-lived intangible assets based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to measure fair value. Our estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans which incorporate estimates for sales growth and profitability, and cash flows associated with taxes and capital spending. Additional assumptions include forecasted growth rates, estimated discount rates, which may be risk-adjusted for the operating market of the reporting unit, and estimated royalty rates that would be charged for comparable branded licenses. We believe such assumptions also reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. The cost of intangible assets with finite useful lives is amortized on a straight-line basis. Our finite-lived intangible assets consist primarily of certain trademarks, customer-related intangible assets and patents obtained through business acquisitions. The weighted-average amortization period for our finite-lived intangible assets is approximately 30 years, which is primarily driven by recently acquired trademarks. If certain events or changes in operating conditions indicate that the carrying value of these assets, or related asset groups, may not be recoverable, we perform an impairment assessment and may adjust the remaining useful lives. See Note 3 for additional information regarding the results of impairment tests. Currency Translation The financial statements of our foreign entities with functional currencies other than the U.S. dollar are translated into U.S. dollars, with the resulting translation adjustments recorded as a component of other comprehensive income (loss). Assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expense items are translated using the average exchange rates during the period. Derivative Instruments We use derivative instruments principally to offset exposure to market risks arising from changes in commodity prices, foreign currency exchange rates and interest rates. See Note 5 for additional information on our risk management strategy and the types of instruments we use. Derivative instruments are recognized on the Consolidated Balance Sheets at their fair values. When we become party to a derivative instrument and intend to apply hedge accounting, we designate the instrument for financial reporting purposes as a cash flow or fair value hedge. The accounting for changes in fair value (gains or losses) of a derivative instrument depends on whether we have designated it and it qualified as part of a hedging relationship, as noted below: •Changes in the fair value of a derivative that is designated as a cash flow hedge are recorded in accumulated other comprehensive income (“AOCI”) to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. •Changes in the fair value of a derivative that is designated as a fair value hedge, along with the offsetting loss or gain on the hedged asset or liability that is attributable to the risk being hedged, are recorded in earnings, thereby reflecting in earnings the net extent to which the hedge is not effective in achieving offsetting changes in fair value. •Changes in the fair value of a derivative not designated as a hedging instrument are recognized in earnings in cost of sales or SM&A, consistent with the related exposure. For derivatives designated as hedges, we assess, both at the hedge’s inception and on an ongoing basis, whether they are highly effective in offsetting changes in fair values or cash flows of hedged items. The ineffective portion, if any, is recorded directly in earnings. In addition, if we determine that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively. We do not hold or issue derivative instruments for trading or speculative purposes and are not a party to any instruments with leverage or prepayment features. Cash flows related to the derivative instruments we use to manage interest, commodity or other currency exposures are classified as operating activities. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 elected to early adopt the provisions of this ASU in the fourth quarter of 2019. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020 on a prospective basis. Adoption of the new standard did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted the provisions of this ASU in the fourth quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. Entities may apply this ASU upon issuance through December 31, 2022 on a prospective basis. We intend to early adopt the provisions of this ASU in the first quarter of 2022. Adoption of the new standard is not expected to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) rather than adjust them to fair value at the acquisition date. ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods within those annual periods. This ASU should be applied prospectively to business combinations occurring on or after the date of adoption. Evaluation of this new standard is dependent on multiple circumstances including the timing and complexity of completed business combinations. As a result, we intend to adopt the provisions of this ASU in the first quarter of 2023. 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.
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BUSINESS ACQUISITIONS AND DIVESTITURES |
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BUSINESS ACQUISITIONS AND DIVESTITURES | BUSINESS ACQUISITIONS AND DIVESTITURES Acquisitions of businesses are accounted for as business combinations and, accordingly, the results of operations of the businesses acquired have been included in the consolidated financial statements since the respective dates of the acquisitions. The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed. In conjunction with acquisitions noted below, we used various valuation techniques to determine fair value of the assets acquired, with the primary techniques being discounted cash flow analysis, relief-from-royalty, a form of the multi-period excess earnings and the with-and-without valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Inputs to these valuation approaches require significant judgment including: (i) forecasted sales, growth rates and customer attrition rates, (ii) forecasted operating margins, (iii) royalty rates and discount rates used to present value future cash flows, (iv) the amount of synergies expected from the acquisition, (v) the economic useful life of assets and (vi) the evaluation of historical tax positions. In certain acquisitions, historical data is limited, therefore, we base our estimates and assumptions on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. 2021 Activity Pretzels Inc. On December 14, 2021, we completed the acquisition of Pretzels Inc. (“Pretzels”), previously a privately held company that manufactures and sells pretzels and other salty snacks for other branded products and private labels in the United States. Pretzels is an industry leader in the pretzel category with a product portfolio that includes filled, gluten free and seasoned pretzels, as well as extruded snacks that complements Hershey’s snacks portfolio. Based in Bluffton, Indiana, Pretzels operates three manufacturing locations in Indiana and Kansas. Pretzels provides Hershey deep pretzel category and product expertise and the manufacturing capabilities to support brand growth and future pretzel innovation. The initial cash consideration paid for Pretzels totaled $304,477 and consisted of cash on hand and short-term borrowings. Acquisition-related costs for the Pretzels acquisition were immaterial. The acquisition has been accounted for as a business combination and, accordingly, Pretzels has been included within the North America Salty Snacks segments from the date of acquisition. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:
The purchase price allocation presented above is preliminary. We are in the process of evaluating additional information necessary to finalize the valuation of assets acquired and liabilities assumed as of the acquisition date including, but not limited to, post-closing adjustments to the working capital acquired including certain holdbacks, as well as the valuation and step-up on property, plant and equipment. The final fair value determination could result in material adjustments to the values presented in the preliminary purchase price allocation, including other intangible assets, goodwill and the related tax impact of such adjustments. We expect to finalize the purchase price allocation by mid-2022. Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets). A portion of goodwill derived from this acquisition is expected to be deductible for tax purposes and reflects the value of leveraging our brand building expertise, supply chain capabilities and retail relationships to accelerate growth and access to the portfolio of Pretzels’ products. Other intangible assets include trademarks valued at $5,700 and customer relationships valued at $26,400. Trademarks were assigned an estimated useful life of five years and customer relationships were assigned an estimated useful life of 18 years. Dot's Pretzels, LLC On December 13, 2021, we completed the acquisition of Dot’s Pretzels, LLC (“Dot’s”), previously a privately held company that produces and sells pretzels and other snack food products to retailers and distributors in the United States, with Dot’s Homestyle Pretzels snacks as its primary product. Dot’s is the fastest-growing scale brand in the pretzel category and complements Hershey’s snacks portfolio. The initial cash consideration paid for Dot’s totaled $894,166 and consisted of cash on hand and short-term borrowings. Acquisition-related costs for the Dot’s acquisition were immaterial. The acquisition has been accounted for as a business combination and, accordingly, Dot’s has been included within the North America Salty Snacks segment from the date of acquisition. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:
The purchase price allocation presented above is preliminary. We are in the process of evaluating additional information necessary to finalize the valuation of assets acquired and liabilities assumed as of the acquisition date including, but not limited to, post-closing adjustments to the working capital acquired including certain holdbacks, as well as the valuation and step-up on property, plant and equipment. The final fair value determination could result in material adjustments to the values presented in the preliminary purchase price allocation, including other intangible assets and goodwill. We expect to finalize the purchase price allocation by mid-2022. 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 our brand building expertise, supply chain capabilities and retail relationships to accelerate growth and access to the portfolio of Dot’s products. Other intangible assets include trademarks valued at $336,600 and customer relationships valued at $189,700. Trademarks were assigned an estimated useful life of 33 years and customer relationships were assigned estimated useful lives ranging from 16 to 18 years. Lily's Sweets, LLC On June 25, 2021, we completed the acquisition of Lily’s Sweets, LLC (“Lily’s”), previously a privately held company that sells a line of sugar-free and low-sugar confectionery foods to retailers and distributors in the United States and Canada. Lily’s products include dark and milk chocolate style bars, baking chips, peanut butter cups and other confection products that complement Hershey’s confectionery and confectionery-based portfolio. The cash consideration paid for Lily’s totaled $422,210 and the Company may be required to pay additional cash consideration if certain defined targets related to net sales and gross margin are exceeded during the period from the closing date through December 31, 2021. As of the acquisition date, the estimated fair value of the contingent consideration obligation was classified as a liability of $5,000 and was determined using a scenario-based analysis on forecasted future results. Based on financial results through December 31, 2021, the fair value was reduced during the fourth quarter of 2021 to $1,250, with the adjustment to fair value recorded in the selling, marketing and administrative (“SM&A”) expense caption within the Consolidated Statements of Income. Acquisition-related costs for the Lily’s acquisition were immaterial. The acquisition has been accounted for as a business combination and, accordingly, Lily’s has been included within the North America Confectionery segment from the date of acquisition. The purchase consideration, inclusive of the acquisition date fair value of the contingent consideration, was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:
The purchase price allocation presented above has been finalized as of the fourth quarter of 2021 and includes an immaterial amount of measurement period adjustments. The measurement period adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities assumed. 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 majority of goodwill derived from this acquisition is expected to be deductible for tax purposes and reflects the value of leveraging our brand building expertise, supply chain capabilities and retail relationships to accelerate growth and access to the portfolio of Lily’s products. Other intangible assets include trademarks valued at $151,600 and customer relationships valued at $84,200. Trademarks were assigned an estimated useful life of 33 years and customer relationships were assigned estimated useful lives ranging from 17 to 18 years. Lotte Shanghai Foods Co., Ltd. In January 2021, we completed the divestiture of Lotte Shanghai Foods Co., Ltd. (“LSFC”), which was previously included within the International segment results in our consolidated financial statements. Total proceeds from the divestiture and the impact on our consolidated financial statements were immaterial and were recorded in the SM&A expense caption within the Consolidated Statements of Income. 2020 Activity During the second quarter of 2020, we completed the divestitures of KRAVE Pure Foods, Inc. (“Krave”), which was previously included within the North America Salty Snacks segment, and the Scharffen Berger and Dagoba brands, both of which were previously included within the North America Confectionery segment results in our consolidated financial statements. Total proceeds from the divestitures and the impact on our Consolidated Statements of Income, both individually and on an aggregate basis, were immaterial. 2019 Activity ONE Brands, LLC On September 23, 2019, we completed the acquisition of ONE Brands, LLC (“ONE Brands”), previously a privately held company that sells a line of low-sugar, high-protein nutrition bars to retailers and distributors in the United States, with the ONE bar as its primary product. The purchase consideration for ONE Brands totaled $402,160 and consisted of cash on hand and short-term borrowings. Acquisition-related costs for the ONE Brands acquisition were immaterial. The acquisition has been accounted for as a business combination and, accordingly, ONE Brands has been included within the North America Confectionery segment from the date of acquisition. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:
The purchase price allocation presented above has been finalized as of the first quarter of 2020 and includes an immaterial amount of measurement period adjustments. The measurement period adjustments to the initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities assumed. 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 our brand building expertise, supply chain capabilities and retail relationships to accelerate growth and access to the portfolio of ONE Brands products. Other intangible assets include trademarks valued at $144,900, customer relationships valued at $58,800 and covenants not to compete valued at $3,100. Trademarks were assigned an estimated useful life of 33 years, customer relationships were assigned estimated useful lives ranging from 17 to 19 years and covenants not to compete were assigned an estimated useful life of 4 years.
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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 years ended December 31, 2021 and 2020 are as follows:
We had no goodwill impairment charges in 2021, 2020 or 2019. The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset:
In 2019, sales and operating performance associated with our Krave business were below expectations. In the fourth quarter of 2019, as part of a strategic review initiated by our leadership team, we updated our strategic forecast which projected under performance related to the Krave business primarily due to mainstream brands driving category volume and an increase in the overall competitive landscape. We deemed this to be a triggering event requiring us to test our Krave long-lived asset group for impairment. Based on our assessment, we determined that the carrying value was not recoverable and calculated an impairment loss as the excess of the asset group’s carrying value over its fair value. Therefore, as a result of this testing, during the fourth quarter of 2019, we recorded an impairment charge totaling $100,131 to write down the long-lived asset group, which predominantly consisted of customer relationship and trademark intangible assets. Total amortization expense for the years ended December 31, 2021, 2020 and 2019 was $52,124, $46,472 and $46,690, respectively. Amortization expense for the next five years, based on current intangible asset balances, is estimated to be as follows:
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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. We maintain a $1.5 billion unsecured revolving credit facility 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 unsecured committed revolving credit agreement contains a financial covenant whereby the ratio of (a) pre-tax income from operations from the most recent four fiscal quarters to (b) consolidated interest expense for the most recent four fiscal quarters may not be less than 2.0 to 1.0 at the end of each fiscal quarter. The credit agreement also contains customary representations, warranties and events of default. Payment of outstanding advances may be accelerated, at the option of the lenders, should we default in our obligation under the credit agreement. As of December 31, 2021, we are in compliance with all affirmative and negative covenants and the financial covenant pertaining to our credit agreement. There were no significant compensating balance agreements that legally restricted these funds. In addition to the revolving credit facility, we maintain lines of credit with domestic and international commercial banks. Our credit limit in various currencies was $280,650 at December 31, 2021 and $266,935 at December 31, 2020. These lines permit us to borrow at the respective banks’ prime commercial interest rates, or lower. Commitment fees relating to our revolving credit facility and lines of credit are not material. Short-term debt consisted of the following:
The maximum amount of short-term borrowings outstanding during 2021 and 2020 was $939,423 and $944,944, respectively. The weighted-average interest rate on short-term borrowings outstanding was 0.2% as of December 31, 2021 and 1.2% as of December 31, 2020. Long-term Debt Long-term debt consisted of the following:
(1)In February 2021, we repaid $84,715 of 8.800% Debentures due upon their maturity. In May 2021, we repaid $350,000 of 3.100% Notes due upon their maturity. (2)During the second quarter of 2020, we issued $300,000 of 0.900% Notes due in 2025, $350,000 of 1.700% Notes due in 2030 and $350,000 of 2.650% Notes due in 2050 (the “2020 Notes”). Proceeds from the issuance of the 2020 Notes, net of discounts and issuance costs, totaled $989,876. The 2020 Notes were issued under a shelf registration statement on Form S-3 filed in May 2018 that registered an indeterminate amount of debt securities. Additionally, in May 2020, we repaid $350,000 of 2.900% Notes due upon their maturity, and in December 2020, we repaid $350,000 of 4.125% Notes due upon their maturity. Aggregate annual maturities of our long-term Notes (excluding finance lease obligations and net impact of interest rate swaps, debt issuance costs and unamortized debt discounts) are as follows for the years ending December 31:
Our debt is principally unsecured and of equal priority. None of our debt is convertible into our Common Stock. Interest Expense Net interest expense consists of the following:
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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 $313,200 as of December 31, 2021 and $279,843 as of December 31, 2020. 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, Mexican peso and Swiss franc. 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 $94,623 at December 31, 2021 and $130,131 at December 31, 2020. The effective portion of the changes in fair value on these contracts is recorded in other comprehensive income and reclassified into earnings in the same period in which the hedged transactions affect earnings. The net notional amount of foreign exchange contracts that are not designated as accounting hedges was $2,993 at December 31, 2021 and $2,519 at December 31, 2020. 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. In December 2020, our fixed-to-floating interest rate swap matured in connection with the repayment of certain long-term debt upon its maturity (see Note 4). Therefore, as of December 31, 2021 and December 31, 2020, we had no interest rate swap derivative instruments in a fair value hedging relationship. 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 December 31, 2021 and 2020 was $24,975 and $30,194, respectively. The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of December 31, 2021 and 2020:
(1)Derivatives assets are classified on our Consolidated Balance Sheets within prepaid expenses and other as well as other non-current assets. Derivative liabilities are classified on our Consolidated Balance Sheets within accrued liabilities and other long-term liabilities. (2)As of December 31, 2021, amounts reflected on a net basis in liabilities were assets of $31,774 and liabilities of $32,701, 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, 2020 were assets of $32,674 and liabilities of $29,376. At December 31, 2021 and 2020, 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 years ended December 31, 2021 and 2020 was as follows:
(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 $8,734 as of December 31, 2021. This amount is primarily associated with interest rate swap agreements. Fair Value Hedging Relationships For the years ended December 31, 2021 and 2020, we had no interest rate swap derivative instruments in a fair value hedging relationship. For the year ended December 31, 2020, we recognized a net pretax benefit to interest expense of $3,186 relating to our fixed-to-floating interest rate swap arrangements.
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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS |
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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:
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 Sheets on a recurring basis as of December 31, 2021 and 2020:
(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 deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (3)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 December 31, 2021 and December 31, 2020 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 issuuances 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:
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. 2021 Activity In connection with the acquisitions of Lily’s, Dot’s and Pretzels during 2021, as discussed in Note 2, we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and the relief-from-royalty, a form of the multi-period excess earnings, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. 2020 Activity During 2020, we recorded the following impairment charges, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy:
(1)In connection with the sale of the LSFC joint venture (disposal group previously classified as held for sale), we recorded impairment charges to adjust long-lived asset values. The fair value of the disposal group was supported by potential sales prices with third-party buyers. The sale of the LSFC joint venture was completed in January 2021. (2)In connection with a previous sale, the Company wrote-down certain receivables deemed uncollectible. 2019 Activity During 2019, we recorded the following impairment charges, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy:
(1)During the fourth quarter of 2019, as discussed in Note 3, we recorded impairment charges to write down customer relationship and trademark intangible assets associated with Krave. These charges were determined by comparing the fair value of the asset group to its carrying value. We used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and relief-from-royalty valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. (2)During 2019, we recorded impairment charges predominantly comprised of select long-lived assets that had not yet met the held for sale criteria. The fair value of these assets was supported by potential sales prices with third-party buyers and market analysis. (3)In connection with disposal groups previously classified as held for sale, we recorded impairment charges to adjust long-lived asset values. The fair value of the disposal group was supported by potential sales prices with third-party buyers. In connection with the acquisition of ONE Brands in the third quarter of 2019, 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, a form of the multi-period excess earnings and the with-and-without valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.
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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. 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:
(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:
Supplemental balance sheet information related to leases were as follows:
In 2021, our operating lease ROU assets and corresponding lease liabilities increased due to lease agreements assumed as a result of our 2021 business combination activity (see Note 2). The maturity of our lease liabilities as of December 31, 2021 were as follows:
Supplemental cash flow and other information related to leases were as follows:
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Business Combinations and Asset Acquisitions |
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Business Combination and Asset Acquisition [Abstract] | |
Investments in Unconsolidated Affiliates | INVESTMENTS IN UNCONSOLIDATED AFFILIATES We invest in partnerships that make equity investments in projects eligible to receive federal historic and renewable energy tax credits. The tax credits, when realized, are recognized as a reduction of tax expense under the flow-through method, at which time the corresponding equity investment is written-down to reflect the remaining value of the future benefits to be realized. The equity investment write-down is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17). Additionally, we acquire ownership interests in emerging snacking businesses and startup companies, which vary in method of accounting based on our percentage of ownership and ability to exercise significant influence over decisions relating to operating and financial affairs. These investments afford the Company the rights to distribute brands that the Company does not own to third-party customers primarily in the United States. Net sales and expenses of our equity method investees are not consolidated into our financial statements; rather, our proportionate share of earnings or losses are recorded on a net basis within other (income) expense, net in the Consolidated Statements of Income. Both equity and cost method investments are reported within other non-current assets in our Consolidated Balance Sheets. We regularly review our investments and adjust accordingly for capital contributions, dividends received and other-than-temporary impairments. Total investments in unconsolidated affiliates was $93,089 and $52,351 as of December 31, 2021 and December 31, 2020, respectively.
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BUSINESS REALIGNMENT ACTIVITIES |
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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 associated with business realignment activities are classified in our Consolidated Statements of Income as follows:
Costs recorded by program in 2021, 2020 and 2019 related to these activities were as follows:
The following table presents the liability activity for costs qualifying as exit and disposal costs for the year ended December 31, 2021:
(1)The liability balances reflected above are reported within accrued liabilities and other long-term liabilities. (2)The costs reflected in the liability roll-forward represent employee-related and certain third-party service provider charges. 2020 International Optimization Program In the fourth quarter of 2020, we commenced a program (“International Optimization Program”) to streamline resources and investments in select international markets, including the optimization of our China operating model that will improve our operational efficiency and provide for a strong, sustainable and simplified base going forward. The International Optimization Program is expected to be completed in early 2023, with total pre-tax costs anticipated to be $50,000 to $75,000. Cash costs are expected to be $40,000 to $65,000, primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities. The costs and related benefits of the International Optimization Program relate to the International segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs. For the year ended December 31, 2021 and 2020, we recognized total costs associated with the International Optimization Program of $16,599 and $29,343. These charges predominantly included third-party charges in support of our initiative to transform our China operating model, as well as severance and employee benefit costs. Since inception, we have incurred pre-tax charges to execute the program totaling $45,942. Margin for Growth Program In the first quarter of 2017, the Company’s Board of Directors (“Board”) unanimously approved several initiatives under a single program 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. For the years ended December 31, 2020 and 2019, we recognized total costs associated with the Margin for Growth Program of $2,170, and $9,238 respectively. These charges included employee severance, largely relating to initiatives to improve the cost structure of our corporate operating model as part of optimizing our global supply chain. In addition, we incurred other program costs, which related primarily to third-party charges in support of our initiative to improve global efficiency and effectiveness. This project was completed in mid-2020. The costs and related benefits of the Margin for Growth Program relate approximately 63% to the North America Confectionery segment and 37% to the International segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs.
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES The components of income before income taxes were as follows:
The components of our provision for income taxes were as follows:
Deferred taxes reflect temporary differences between the tax basis and financial statement carrying value of assets and liabilities. The significant temporary differences that comprised the deferred tax assets and liabilities are as follows:
Changes in deferred taxes were primarily due to accelerated tax depreciation on property, plant and equipment and increases in pension and unrealized value of derivatives. The valuation allowances as of December 31, 2021 and 2020 were primarily related to various foreign jurisdictions' net operating loss carryforwards and other deferred tax assets that we do not expect to realize. The following table reconciles the federal statutory income tax rate with our effective income tax rate:
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $117,552 as of December 31, 2021 and $103,213 as of December 31, 2020. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net tax expense of $8,924, $1,564 and $3,824 in 2021, 2020 and 2019 , respectively, for interest and penalties. Accrued net interest and penalties were $20,466 as of December 31, 2021 and $11,542 as of December 31, 2020. The Company and its subsidiaries file tax returns in the United States, including various state and local returns, and in other foreign jurisdictions. We are routinely audited by taxing authorities in our filing jurisdictions, and a number of these disputes are currently underway, including multi-year controversies at various stages of review, negotiation and litigation in Malaysia, Mexico, China, and the United States. The outcome of tax audits cannot be predicted with certainty, including the timing of resolution or potential settlements. If any issues addressed in our tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs. Based on our current assessments, we believe adequate provision has been made for all income tax uncertainties. We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $18,496 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. As of December 31, 2021, we had approximately $679,725 of undistributed earnings of our international subsidiaries. During 2020, previously undistributed earnings of certain international subsidiaries were no longer considered indefinitely reinvested; however, the Company had previously recognized a one-time U.S. repatriation tax due under U.S. tax reform, and as a result, only an immaterial amount of withholding tax was recognized. We intend to continue to reinvest the remainder of the earnings outside of the United States for which there would be a material tax implication to distributing, such as withholding tax, for the foreseeable future and, therefore, have not recognized additional tax expense on these earnings beyond the one-time U.S. repatriation tax due under the 2017 Tax Cuts and Jobs Act. Investments in Partnerships Qualifying for Tax Credits We invest in partnerships which make equity investments in projects eligible to receive federal historic and energy tax credits. The investments are accounted for under the equity method and reported within other non-current assets in our Consolidated Balance Sheets. The tax credits, when realized, are recognized as a reduction of tax expense under the flow-through method, at which time the corresponding equity investment is written-down to reflect the remaining value of the future benefits to be realized. For the years ended December 31, 2021, 2020 and 2019 we recognized investment tax credits and related outside basis difference benefits totaling $136,243, $146,021 and $58,798, respectively, and we wrote-down the equity investment by $113,756, $125,579 and $50,457, respectively, to reflect the realization of these benefits. The equity investment write-down is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17). American Rescue Plan Act On March 11, 2021, the American Rescue Plan Act (“ARPA”) was signed into law. The ARPA strengthens and extends certain federal programs enacted through the Coronavirus Aid, Relief, and Economic Security Act and other COVID-19 relief measures, and establishes new federal programs, including provisions on taxes, healthcare and unemployment benefits. The ARPA did not have a material impact on our consolidated financial statements for the year ended December 31, 2021 Coronavirus Aid, Relief, and Economic Security Act On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act did not have a material impact on our consolidated financial statements for the year ended December 31, 2021.
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Post-Retirement Benefit Plans | PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS We sponsor a number of defined benefit pension plans. The primary plans are The Hershey Company Retirement Plan and The Hershey Company Retirement Plan for Hourly Employees. These are cash balance plans that provide pension benefits for most domestic employees hired prior to January 1, 2007. We also sponsor two post-retirement benefit plans: health care and life insurance. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan is non-contributory. Obligations and Funded Status A summary of the changes in benefit obligations, plan assets and funded status of these plans is as follows:
The project benefit obligation during 2021 was impacted by actuarial gain of $33,984 which was the result of the discount rate assumption increasing from 2.3% at December 31, 2020 to 2.7% at December 31, 2021. The accumulated benefit obligation for all defined benefit pension plans was $1,031,197 as of December 31, 2021 and $1,123,102 as of December 31, 2020. Plans with accumulated benefit obligations in excess of plan assets were as follows:
Net Periodic Benefit Cost The components of net periodic benefit cost were as follows:
The non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17). Assumptions The weighted-average assumptions used in computing the year end benefit obligations were as follows:
The weighted-average assumptions used in computing net periodic benefit cost were as follows:
The Company’s discount rate assumption is determined by developing a yield curve based on high quality corporate bonds with maturities matching the plans’ expected benefit payment streams. The plans’ expected cash flows are then discounted by the resulting year-by-year spot rates. We base the asset return assumption on current and expected asset allocations, as well as historical and expected returns on the plan asset categories. We utilize a full yield curve approach in the estimation of service and interest costs by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. This approach provides a more precise measurement of service and interest costs by improving the correlation between the projected cash flows to the corresponding spot rates along the yield curve. This approach does not affect the measurement of our pension and other post-retirement benefit liabilities but generally results in lower benefit expense in periods when the yield curve is upward sloping. For purposes of measuring our post-retirement benefit obligation at December 31, 2021, we assumed a 6.2% annual rate of increase in the per capita cost of covered health care benefits for 2022, grading down to 5.0% by 2025. For purposes of measuring our post-retirement benefit obligation at December 31, 2020, we assumed a 6.1% annual rate of increase in the per capita cost of covered health care benefits for 2021, grading down to 5.0% by 2025. The valuations and assumptions reflect adoption of the Society of Actuaries updated Pri-2012 mortality tables with MP-2021 and MP-2020 generational projection scales, which we adopted as of December 31, 2021 and 2020, respectively. Adoption of the updated scales did not have a significant impact on our current pension obligations or net period benefit cost since our primary plans are cash balance plans and most participants take lump-sum settlements upon retirement. Plan Assets We broadly diversify our pension plan assets across public equity, fixed income, diversified credit strategies and diversified alternative strategies asset classes. Our target asset allocation for our major domestic pension plans as of December 31, 2021 was as follows:
As of December 31, 2021, actual allocations were consistent with the targets and within our allowable ranges. We expect the level of volatility in pension plan asset returns to be in line with the overall volatility of the markets within each asset class. The following table sets forth by level, within the fair value hierarchy (as defined in Note 6), pension plan assets at their fair values as of December 31, 2021:
The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2020:
(1)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in our Obligations and Funded Status table.
The fair value of the Level 1 assets was based on quoted prices in active markets for the identical assets. The fair value of the Level 2 assets was determined by management based on an assessment of valuations provided by asset management entities and was calculated by aggregating market prices for all underlying securities. Investment objectives for our domestic plan assets are: •To ensure high correlation between the value of plan assets and liabilities; •To maintain careful control of the risk level within each asset class; and •To focus on a long-term return objective. We believe that there are no significant concentrations of risk within our plan assets as of December 31, 2021. We comply with the rules and regulations promulgated under the Employee Retirement Income Security Act of 1974 (“ERISA”) and we prohibit investments and investment strategies not allowed by ERISA. We do not permit direct purchases of our Company’s securities or the use of derivatives for the purpose of speculation. We invest the assets of non-domestic plans in compliance with laws and regulations applicable to those plans. Cash Flows and Plan Termination Our policy is to fund domestic pension liabilities in accordance with the limits imposed by the ERISA, federal income tax laws and the funding requirements of the Pension Protection Act of 2006. We fund non-domestic pension liabilities in accordance with laws and regulations applicable to those plans. We made total contributions to the pension plans of $28,220 during 2021. In 2020, we made total contributions of $2,862 to the pension plans. For 2022, minimum funding requirements for our pension plans are approximately $1,934. Total benefit payments expected to be paid to plan participants, including pension benefits funded from the plans and other benefits funded from Company assets, are as follows:
Savings Plans The Company sponsors several defined contribution plans to provide retirement benefits to employees. Contributions to The Hershey Company 401(k) Plan and similar plans for non-domestic employees are based on a portion of eligible pay up to a defined maximum. All matching contributions were made in cash. Expense associated with the defined contribution plans was $58,883 in 2021, $52,793 in 2020 and $47,651 in 2019.
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STOCK COMPENSATION PLANS |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Plans | STOCK COMPENSATION PLANS Share-based grants for compensation and incentive purposes are made pursuant to the Equity and Incentive Compensation Plan (“EICP”). The EICP provides for grants of one or more of the following stock-based compensation awards to employees, non-employee directors and certain service providers upon whom the successful conduct of our business is dependent: •Non-qualified stock options (“stock options”); •Performance stock units (“PSUs”) and performance stock; •Stock appreciation rights; •Restricted stock units (“RSUs”) and restricted stock; and •Other stock-based awards. As of December 31, 2021, 65.8 million shares were authorized and approved by our stockholders for grants under the EICP. The EICP also provides for the deferral of stock-based compensation awards by participants if approved by the Compensation and Human Capital Committee of our Board and if in accordance with an applicable deferred compensation plan of the Company. Currently, the Compensation and Human Capital Committee has authorized the deferral of PSU and RSU awards by certain eligible employees under the Company’s Deferred Compensation Plan. Our Board has authorized our non-employee directors to defer any portion of their cash retainer, committee chair fees and RSUs awarded that they elect to convert into deferred stock units under our Directors’ Compensation Plan. At the time stock options are exercised or PSUs and RSUs become payable, Common Stock is issued from our accumulated treasury shares. Dividend equivalents are credited on RSUs on the same date and at the same rate as dividends paid on our Common Stock. Dividend equivalents are charged to retained earnings and included in accrued liabilities until paid. Awards to employees eligible for retirement prior to the award becoming fully vested are amortized to expense over the period through the date that the employee first becomes eligible to retire and is no longer required to provide service to earn the award. In addition, historical data is used to estimate forfeiture rates and record share-based compensation expense only for those awards that are expected to vest. For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows:
Compensation expenses for stock compensation plans are primarily included in SM&A expense. As of December 31, 2021, total stock-based compensation expense related to non-vested awards not yet recognized was $82,114 and the weighted-average period over which this amount is expected to be recognized was approximately 1.9 years. Stock Options The exercise price of each stock option awarded under the EICP equals the closing price of our Common Stock on the New York Stock Exchange on the date of grant. Each stock option has a maximum term of 10 years. Grants of stock options provide for pro-rated vesting, typically over a four-year period. Expense for stock options is based on grant date fair value and recognized on a straight-line method over the vesting period, net of estimated forfeitures. A summary of activity relating to grants of stock options for the year ended December 31, 2021 is as follows:
The weighted-average fair value of options granted was $24.12, $21.31 and $15.25 per share in 2021, 2020 and 2019, respectively. The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions:
•“Dividend yields” means the sum of dividends declared for the four most recent quarterly periods, divided by the average price of our Common Stock for the comparable periods; •“Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant; •“Risk-free interest rates” means the U.S. Treasury yield curve rate in effect at the time of grant for periods within the contractual life of the stock option; and •“Expected term” means the period of time that stock options granted are expected to be outstanding based on historical data. The total intrinsic value of options exercised was $38,645, $32,121 and $115,786 in 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $792 of total unrecognized compensation expense related to non-vested stock option awards granted under the EICP, which we expect to recognize over a weighted-average period of 2.1 years. The following table summarizes information about stock options outstanding as of December 31, 2021:
Performance Stock Units and Restricted Stock Units Under the EICP, we grant PSUs to selected executives and other key employees. Vesting is contingent upon the achievement of certain performance objectives. We grant PSUs over 3-year performance cycles. If we meet targets for financial measures at the end of the applicable 3-year performance cycle, we award a resulting number of shares of our Common Stock to the participants. The number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with the terms established at the time of the award. For PSUs granted, the target award is a combination of a market-based total shareholder return and performance-based components. For market-based condition components, market volatility and other factors are taken into consideration in determining the grant date fair value and the related compensation expense is recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. For performance-based condition components, we estimate the probability that the performance conditions will be achieved each quarter and adjust compensation expenses accordingly. The performance scores of PSUs granted in 2021, 2020, and 2019 can range from 0% to 250% of the targeted amounts. We recognize the compensation expense associated with PSUs ratably over the 3-year term. Compensation expense is based on the grant date fair value because the grants can only be settled in shares of our Common Stock. The grant date fair value of PSUs is determined based on the Monte Carlo simulation model for the market-based total shareholder return component and the closing market price of the Company’s Common Stock on the date of grant for performance-based components. In 2021, 2020 and 2019, we awarded RSUs to certain executive officers and other key employees under the EICP. We also awarded RSUs quarterly to non-employee directors. We recognize the compensation expense associated with employee RSUs over a specified award vesting period based on the grant date fair value of our Common Stock. We recognize expense for employee RSUs based on the straight-line method. The compensation expense associated with non-employee director RSUs is recognized ratably over the vesting period, net of estimated forfeitures. A summary of activity relating to grants of PSUs and RSUs for the period ended December 31, 2021 is as follows:
(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.
•“Estimated values” means the fair value for the market-based total shareholder return component of each PSU at the date of grant using a Monte Carlo simulation model; •“Dividend yields” means the sum of dividends declared for the four most recently quarterly periods, divided by the average price of our Common Stock for the comparable periods; •“Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant. The fair value of shares vested totaled $52,008, $56,294 and $51,739 in 2021, 2020 and 2019, respectively. Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 264,226 units as of December 31, 2021. Each unit is equivalent to one share of the Company’s Common Stock.
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION Since December 31, 2014, the Company has reported its operations through two segments: (i) North America and (ii) International and Other. After the completion of the Company’s acquisitions of Dot’s and Pretzels in December 2021, as described in Note 2, management of the Company has elected to begin reporting its operations through three reportable segments. Therefore, effective in the fourth quarter of 2021, the Company realigned its former two reportable segments into three reportable segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. This new organizational structure aligns with how our Chief Operating Decision Maker (“CODM”) manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve. We have retroactively reflected these changes in all historical periods presented. •North America Confectionery – This segment is responsible for our traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes our 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. •North America Salty Snacks – This segment is responsible for our salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks. •International – International 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 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. 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. Accounting policies associated with our operating segments are generally the same as those described in Note 1. 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:
(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, (d) acquisition-related costs and (e) 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:
As of December 31, 2021, 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 $86,914. 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 $76,322 to segment operating results in the next twelve months. Depreciation and amortization expense included within segment income presented above is as follows:
Additional information regarding our net sales and long-lived assets disaggregated by geographical region is as follows:
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EQUITY AND NONCONTROLLING INTEREST |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Noncontrolling Interest | EQUITY AND NONCONTROLLING INTEREST We had 1,055,000,000 authorized shares of capital stock as of December 31, 2021. Of this total, 900,000,000 shares were designated as Common Stock, 150,000,000 shares were designated as Class B Common Stock (“Class B Stock”) and 5,000,000 shares were designated as Preferred Stock. Each class has a par value of one dollar per share. Holders of the Common Stock and the Class B Stock generally vote together without regard to class on matters submitted to stockholders, including the election of directors. The holders of Common Stock have 1 vote per share and the holders of Class B Common Stock have 10 votes per share. However, the Common Stock holders, voting separately as a class, are entitled to elect one-sixth of the Board. With respect to dividend rights, the Common Stock holders are entitled to cash dividends 10% higher than those declared and paid on the Class B Common Stock. Class B Stock can be converted into Common Stock on a share-for-share basis at any time. During 2021, 2020 and 2019 no shares of Class B Stock were converted into Common Stock. Changes in the outstanding shares of Common Stock for the past three years were as follows:
In July 2018, our Board of Directors approved a $500,000 share repurchase authorization to repurchase shares of our Common Stock. As of December 31, 2021, $109,983 remained available for repurchases of our Common Stock under this program. In May 2021, our Board of Directors approved an additional $500,000 share repurchase authorization. This program is to commence after the existing 2018 authorization is completed and is to be utilized at management’s discretion. 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. Retirement of Treasury Shares During 2019, we retired 138,348,719 shares or $6,423,267 of the Company’s treasury shares previously repurchased. Under the applicable state law, these shares resume the status of authorized and unissued shares upon retirement. In accordance with our accounting policy, we record any excess of repurchase price over par value to retained earnings. As a result, our retained earnings were reduced by $6,284,919 during 2019. This transaction was approved by the Board on October 11, 2019. Hershey Trust Company Hershey Trust Company, as trustee for the Milton Hershey School Trust (the “Trust”) and as direct owner of investment shares, held 95,400 shares of our Common Stock as of December 31, 2021. As trustee for the Trust, Hershey Trust Company held 60,612,012 shares of the Class B Common Stock as of December 31, 2021, and was entitled to cast approximately 81% of all of the votes entitled to be cast on matters requiring the vote of both classes of our common stock voting together. Hershey Trust Company, as trustee for the Trust, or any successor trustee, or Milton Hershey School, as appropriate, must approve any issuance of shares of Common Stock or other action that would result in it not continuing to have voting control of our Company. In February 2022, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Trust, pursuant to which the Company purchased 1,000,000 shares of the Company’s Common Stock from the Trust at a price equal to $203.35 per share, for a total purchase price of $203,350. Noncontrolling Interest in Subsidiary As discussed in Note 2, in January 2021 we completed the divestiture of LSFC, a joint venture originally established in 2007 in China for the purpose of manufacturing and selling product to the joint venture partners. Prior to the sale, we owned a 50% controlling interest in LSFC. A roll-forward showing the 2021 activity relating to the noncontrolling interest follows:
During the fourth quarter of 2021, we obtained certain approvals and satisfied other conditions necessary to commence the distribution of sales proceeds attributable to the joint venture partner. A portion of the distribution was completed in 2021, and we expect the remaining distribution to be completed during 2022.
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COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase obligations We enter into certain obligations for the purchase of raw materials. These obligations are primarily in the form of forward contracts for the purchase of raw materials from third-party brokers and dealers. These contracts minimize the effect of future price fluctuations by fixing the price of part or all of these purchase obligations. Total obligations consisted of fixed price contracts for the purchase of commodities and unpriced contracts that were valued using market prices as of December 31, 2021. The cost of commodities associated with the unpriced contracts is variable as market prices change over future periods. We mitigate the variability of these costs to the extent that we have entered into commodities futures contracts or other commodity derivative instruments to hedge our costs for those periods. Increases or decreases in market prices are offset by gains or losses on commodities futures contracts or other commodity derivative instruments. Taking delivery of and making payments for the specific commodities for use in the manufacture of finished goods satisfies our obligations under the forward purchase contracts. For each of the three years in the period ended December 31, 2021, we satisfied these obligations by taking delivery of and making payment for the specific commodities. As of December 31, 2021, we had entered into agreements for the purchase of raw materials with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2021:
Environmental contingencies We have a number of facilities that contain varying amounts of asbestos in certain locations within the facilities. Our asbestos management program is compliant with current applicable regulations, which require that we handle or dispose of asbestos in a special manner if such facilities undergo major renovations or are demolished. We do not have sufficient information to estimate the fair value of any asset retirement obligations related to these facilities. We cannot specify the settlement date or range of potential settlement dates and, therefore, sufficient information is not available to apply an expected present value technique. We expect to maintain the facilities with repairs and maintenance activities that would not involve or require the removal of significant quantities of asbestos. Legal contingencies On February 12, 2021, Issouf Coubaly, individually and on behalf of proposed class members, filed a complaint (Coubaly v. Nestlé U.S.A. et al., 1:21-cv-00386-DLF (D.D.C. Feb. 12, 2021)) in the District Court of the District of Columbia, seeking injunctive relief and unspecified damages for alleged violations of child labor and human trafficking laws under the Trafficking Victims Protection Reauthorization Act. The Company is among several defendants named in the suit. The Company believes that the suit is without merit and is defending vigorously against the suit. In addition to the above-referenced matter, the Company is subject to certain legal proceedings and claims arising out of the ordinary course of our business, which cover a wide range of matters including trade regulation, product liability, advertising, contracts, environmental issues, patent and trademark matters, labor and employment matters, human and workplace rights matters and tax. 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. Collective Bargaining As of December 31, 2021, the Company employed approximately 16,620 full-time and 2,370 part-time employees worldwide. Collective bargaining agreements covered approximately 6,235 employees, or approximately 33% of the Company’s employees worldwide. During 2022, agreements will be negotiated for certain employees at four facilities outside of the United States, comprising approximately 62% of total employees under collective bargaining agreements. We currently expect that we will be able to renegotiate such agreements on satisfactory terms when they expire.
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EARNINGS PER SHARE |
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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:
The earnings per share calculations for the years ended December 31, 2021, 2020 and 2019 excluded 43, 15 and 1,476 stock options (in thousands), respectively, that would have been antidilutive.
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OTHER (INCOME) EXPENSE, NET OTHER (INCOME) EXPENSE, NET |
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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:
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SUPPLEMENTAL BALANCE SHEET INFORMATION |
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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:
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2021, 2020 and 2019
(a) Includes allowances for doubtful accounts, anticipated discounts and write-offs of uncollectible accounts receivable. (b) Includes adjustments to the valuation allowance for deferred tax assets that we do not expect to realize, as well as the release of valuation allowances. (c) Includes adjustments to the inventory reserve, transfers, disposals and write-offs of obsolete inventory.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business The Hershey Company together with its wholly-owned subsidiaries and entities in which it has a controlling interest, (the “Company,” “Hershey,” “we” or “us”) is a global confectionery leader known for its branded portfolio of chocolate, sweets, mints and other great tasting snacks. The Company has more than 100 brands worldwide including such iconic brand names as Hershey’s, Reese’s, Kisses, Jolly Rancher and Ice Breakers, which are marketed, sold and distributed in approximately 80 countries worldwide. Hershey’s structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. Since December 31, 2014, the Company has reported its operations through two segments: (i) North America and (ii) International and Other. After the completion of the Company’s acquisitions of Dot’s Pretzels, LLC (“Dot’s”) and Pretzels Inc.(“Pretzels”) in December 2021, management of the Company has elected to begin reporting its operations through three reportable segments. Therefore, effective in the fourth quarter of 2021, the Company realigned its former two reportable segments into three reportable segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. For additional information on our segment presentation, see Note 13. Basis of Presentation Our consolidated financial statements include the accounts of The Hershey Company and its majority-owned or controlled subsidiaries. Intercompany transactions and balances have been eliminated. We have a controlling financial interest if we own a majority of the outstanding voting common stock and minority shareholders do not have substantive participating rights, we have significant control through contractual or economic interests in which we are the primary beneficiary or we have the power to direct the activities that most significantly impact the entity's economic performance. We use the equity method of accounting when we have a 20% to 50% interest in other companies and exercise significant influence. See Note 14 for information on our noncontrolling interest, which was divested in January 2021. In addition, we use the equity method of accounting for our investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits. See Note 10 for additional information on our equity investments in partnership entities qualifying for tax credits. Other investments that are not controlled, and over which we do not have the ability to exercise significant influence, are accounted for under the cost method. Both equity and cost method investments are included as Other non-current assets in the Consolidated Balance Sheets. For additional information on our investments in unconsolidated affiliates, see Note 8.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Our significant estimates and assumptions include, among others, pension and other post-retirement benefit plan assumptions, valuation assumptions of goodwill and other intangible assets, useful lives of long-lived assets, marketing and trade promotion accruals and income taxes. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and the effects of any revisions are reflected in the consolidated financial statements in the period that they are determined. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.
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Revenue Recognition | Revenue Recognition The majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of our products, including chocolate, sweets, mints and other grocery and snack offerings. Net sales reflect the transaction prices for these contracts based on our selling list price which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts associated with aged or potentially unsaleable products. We recognize revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon delivery to the customer or other customer-designated delivery point. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Our trade promotional programs and consumer incentives are used to promote our products and include, but are not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The estimated costs associated with these programs and incentives are based upon our analysis of the programs offered, expectations regarding customer and consumer participation, historical sales and payment trends, and our experience with payment patterns associated with similar programs offered in the past. The estimated costs of these programs are reasonably likely to change in future periods due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. Differences between estimated expense and actual program performance are recognized as a change in estimate in a subsequent period and are normally not significant. During 2021, 2020 and 2019, actual promotional costs have not deviated from the estimated amount by more than 3%. The Company’s unsettled portion remaining in accrued liabilities at year-end for these activities was $174,046 and $195,563 at December 31, 2021 and 2020, respectively. We also recognize a minor amount of royalty income (less than 1% of our consolidated net sales) from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Shipping and handling costs incurred to deliver product to the customer are recorded within cost of sales. Sales, value add and other taxes we collect concurrent with revenue producing activities are excluded from revenue. The majority of our products are confectionery or confectionery-based and, therefore, exhibit similar economic characteristics, as they are based on similar ingredients and are marketed and sold through the same channels to the same customers. In connection with our recent acquisitions, we have expanded our portfolio of salty snacking products, which also exhibit similar economic characteristics to our confectionery products and are sold through the same channels to the same customers. See Note 13 for revenues reported by geographic segment, which is consistent with how we organize and manage our operations, as well as product line net sales information. In 2021, 2020 and 2019, approximately 30%, 31% and 30%, respectively, of our consolidated net sales were made to McLane Company, Inc., one of the largest wholesale distributors in the United States to convenience stores, drug stores, wholesale clubs and mass merchandisers and the primary distributor of our products to Wal-Mart Stores, Inc.
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Cost of Sales | Cost of Sales Cost of sales represents costs directly related to the manufacture and distribution of our products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. |
Selling, Marketing and Administrative Expense | Selling, Marketing and Administrative ExpenseSelling, marketing and administrative expense (“SM&A”) represents costs incurred in generating revenues and in managing our business. Such costs include advertising and other marketing expenses, selling expenses, research and development costs, administrative and other indirect overhead costs, amortization of capitalized software and intangible assets and depreciation of administrative facilities. Research and development costs, charged to expense as incurred, totaled $40,107 in 2021, $37,577 in 2020 and $37,146 in 2019. Advertising expense is also charged to expense as incurred and totaled $511,798 in 2021, $516,936 in 2020 and $513,302 in 2019. There was no prepaid advertising expense as of December 31, 2021 and $705 as of December 31, 2020. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of highly liquid debt instruments, time deposits and money market funds with original maturities of three months or less. The fair value of cash and cash equivalents approximates the carrying amount.
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Accounts Receivable - Trade | Accounts Receivable—Trade In the normal course of business, we extend credit to customers that satisfy pre-defined credit criteria, based upon the results of our recurring financial account reviews and our evaluation of current and projected economic conditions. Our primary concentration of credit risk is associated with McLane Company, Inc., one customer served principally by our North America Confectionery segment. As of December 31, 2021, McLane Company, Inc. accounted for approximately 27% of our total accounts receivable. No other customer accounted for more than 10% of our year-end accounts receivable. We believe that we have little concentration of credit risk associated with the remainder of our customer base. Accounts receivable-trade in the Consolidated Balance Sheets is presented net of allowances for bad debts and anticipated discounts of $28,837 and $24,975 at December 31, 2021 and 2020, respectively. |
Inventories | Inventories Inventories are valued at the lower of cost or market value, adjusted for the value of inventory that is estimated to be excess, obsolete or otherwise unsaleable. As of December 31, 2021, approximately 60% of our inventories, representing the majority of our United States (“U.S.”) inventories, were valued under the last-in, first-out (“LIFO”) method. The remainder of our inventories in the U.S. and inventories for our international businesses were valued at the lower of first-in, first-out (“FIFO”) cost or net realizable value. LIFO cost of inventories valued using the LIFO method was $589,850 as of December 31, 2021 and $606,282 as of December 31, 2020. The adjustment to LIFO, as shown in Note 18, approximates the excess of replacement cost over the stated LIFO inventory value. The net impact of LIFO acquisitions and liquidations was not material to 2021, 2020 or 2019. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for machinery and equipment; and 25 to 40 years for buildings and related improvements. At December 31, 2021 and December 31, 2020, property, plant and equipment included assets under finance lease arrangements with net book values totaling $72,496 and $88,065, respectively. Total depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $230,638, $219,021 and $218,096, respectively, and included depreciation on assets recorded under finance lease arrangements. Maintenance and repairs are expensed as incurred. We capitalize applicable interest charges incurred during the construction of new facilities and production lines and amortize these costs over the assets’ estimated useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated. If these assets are considered to be impaired, we measure impairment as the amount by which the carrying amount of the assets exceeds the fair value of the assets. We report assets held for sale or disposal at the lower of the carrying amount or fair value less cost to sell. We assess asset retirement obligations on a periodic basis and recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. We capitalize associated asset retirement costs as part of the carrying amount of the long-lived asset.
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Computer Software | Computer Software We capitalize costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and it is probable the software being developed will be completed and placed in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project and (iii) interest costs incurred, when material, while developing internal-use software. We cease capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. The unamortized amount of capitalized software totaled $260,656 and $187,673 at December 31, 2021 and 2020, respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 7 years. Accumulated amortization of capitalized software was $321,939 and $360,579 as of 2021 and 2020, respectively. Such amounts are recorded within other assets in the Consolidated Balance Sheets. We review the carrying value of software and development costs for impairment in accordance with our policy pertaining to the impairment of long-lived assets.
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Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment tests are conducted at the beginning of the fourth quarter. We test goodwill for impairment by performing either a qualitative or quantitative assessment. If we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors in assessing the fair value of the related reporting unit. If we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge for the differential (up to the carrying value of goodwill). We test individual indefinite-lived intangible assets by comparing the estimated fair values with the book values of each asset. We determine the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we calculate the fair value of our reporting units and indefinite-lived intangible assets based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to measure fair value. Our estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans which incorporate estimates for sales growth and profitability, and cash flows associated with taxes and capital spending. Additional assumptions include forecasted growth rates, estimated discount rates, which may be risk-adjusted for the operating market of the reporting unit, and estimated royalty rates that would be charged for comparable branded licenses. We believe such assumptions also reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. The cost of intangible assets with finite useful lives is amortized on a straight-line basis. Our finite-lived intangible assets consist primarily of certain trademarks, customer-related intangible assets and patents obtained through business acquisitions. The weighted-average amortization period for our finite-lived intangible assets is approximately 30 years, which is primarily driven by recently acquired trademarks. If certain events or changes in operating conditions indicate that the carrying value of these assets, or related asset groups, may not be recoverable, we perform an impairment assessment and may adjust the remaining useful lives. See Note 3 for additional information regarding the results of impairment tests.
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Currency Translation | Currency TranslationThe financial statements of our foreign entities with functional currencies other than the U.S. dollar are translated into U.S. dollars, with the resulting translation adjustments recorded as a component of other comprehensive income (loss). Assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expense items are translated using the average exchange rates during the period. |
Derivative Instruments | Derivative Instruments We use derivative instruments principally to offset exposure to market risks arising from changes in commodity prices, foreign currency exchange rates and interest rates. See Note 5 for additional information on our risk management strategy and the types of instruments we use. Derivative instruments are recognized on the Consolidated Balance Sheets at their fair values. When we become party to a derivative instrument and intend to apply hedge accounting, we designate the instrument for financial reporting purposes as a cash flow or fair value hedge. The accounting for changes in fair value (gains or losses) of a derivative instrument depends on whether we have designated it and it qualified as part of a hedging relationship, as noted below: •Changes in the fair value of a derivative that is designated as a cash flow hedge are recorded in accumulated other comprehensive income (“AOCI”) to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. •Changes in the fair value of a derivative that is designated as a fair value hedge, along with the offsetting loss or gain on the hedged asset or liability that is attributable to the risk being hedged, are recorded in earnings, thereby reflecting in earnings the net extent to which the hedge is not effective in achieving offsetting changes in fair value. •Changes in the fair value of a derivative not designated as a hedging instrument are recognized in earnings in cost of sales or SM&A, consistent with the related exposure. For derivatives designated as hedges, we assess, both at the hedge’s inception and on an ongoing basis, whether they are highly effective in offsetting changes in fair values or cash flows of hedged items. The ineffective portion, if any, is recorded directly in earnings. In addition, if we determine that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively. We do not hold or issue derivative instruments for trading or speculative purposes and are not a party to any instruments with leverage or prepayment features. Cash flows related to the derivative instruments we use to manage interest, commodity or other currency exposures are classified as operating activities.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 elected to early adopt the provisions of this ASU in the fourth quarter of 2019. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. 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 adopted the provisions of this ASU in the first quarter of 2020 on a prospective basis. Adoption of the new standard did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU is intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. We adopted the provisions of this ASU in the fourth quarter of 2020. Adoption of the new standard did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. Entities may apply this ASU upon issuance through December 31, 2022 on a prospective basis. We intend to early adopt the provisions of this ASU in the first quarter of 2022. Adoption of the new standard is not expected to have a material impact on our consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Revenue from Contracts with Customers (Topic 606) rather than adjust them to fair value at the acquisition date. ASU 2021-08 is effective for annual periods beginning after December 15, 2022 and interim periods within those annual periods. This ASU should be applied prospectively to business combinations occurring on or after the date of adoption. Evaluation of this new standard is dependent on multiple circumstances including the timing and complexity of completed business combinations. As a result, we intend to adopt the provisions of this ASU in the first quarter of 2023. 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.
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BUSINESS ACQUISITIONS AND DIVESTITURES (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 years ended December 31, 2021 and 2020 are as follows:
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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:
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Schedule of Amortization Expense, for the Next Five Years | Amortization expense for the next five years, based on current intangible asset balances, is estimated to be as follows:
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SHORT AND LONG-TERM DEBT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt | Short-term debt consisted of the following:
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Schedule of Long-term Debt Instruments | Long-term debt consisted of the following:
(1)In February 2021, we repaid $84,715 of 8.800% Debentures due upon their maturity. In May 2021, we repaid $350,000 of 3.100% Notes due upon their maturity. (2)During the second quarter of 2020, we issued $300,000 of 0.900% Notes due in 2025, $350,000 of 1.700% Notes due in 2030 and $350,000 of 2.650% Notes due in 2050 (the “2020 Notes”). Proceeds from the issuance of the 2020 Notes, net of discounts and issuance costs, totaled $989,876. The 2020 Notes were issued under a shelf registration statement on Form S-3 filed in May 2018 that registered an indeterminate amount of debt securities. Additionally, in May 2020, we repaid $350,000 of 2.900% Notes due upon their maturity, and in December 2020, we repaid $350,000 of 4.125% Notes due upon their maturity.
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Schedule of Maturities of Long-term Debt | Aggregate annual maturities of our long-term Notes (excluding finance lease obligations and net impact of interest rate swaps, debt issuance costs and unamortized debt discounts) are as follows for the years ending December 31:
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Schedule of Net Interest Expense | Net interest expense consists of the following:
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DERIVATIVE INSTRUMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of December 31, 2021 and 2020:
(1)Derivatives assets are classified on our Consolidated Balance Sheets within prepaid expenses and other as well as other non-current assets. Derivative liabilities are classified on our Consolidated Balance Sheets within accrued liabilities and other long-term liabilities. (2)As of December 31, 2021, amounts reflected on a net basis in liabilities were assets of $31,774 and liabilities of $32,701, 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, 2020 were assets of $32,674 and liabilities of $29,376. At December 31, 2021 and 2020, the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively. For the years ended December 31, 2021 and 2020, we had no interest rate swap derivative instruments in a fair value hedging relationship.
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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 years ended December 31, 2021 and 2020 was as follows:
(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.
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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 Sheets on a recurring basis as of December 31, 2021 and 2020:
(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 deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (3)The fair value of commodities futures and options contracts is based on quoted market prices.
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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:
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Schedule of Other Fair Value Measurements | 2020 Activity During 2020, we recorded the following impairment charges, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy:
(1)In connection with the sale of the LSFC joint venture (disposal group previously classified as held for sale), we recorded impairment charges to adjust long-lived asset values. The fair value of the disposal group was supported by potential sales prices with third-party buyers. The sale of the LSFC joint venture was completed in January 2021. (2)In connection with a previous sale, the Company wrote-down certain receivables deemed uncollectible. 2019 Activity During 2019, we recorded the following impairment charges, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy:
(1)During the fourth quarter of 2019, as discussed in Note 3, we recorded impairment charges to write down customer relationship and trademark intangible assets associated with Krave. These charges were determined by comparing the fair value of the asset group to its carrying value. We used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and relief-from-royalty valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. (2)During 2019, we recorded impairment charges predominantly comprised of select long-lived assets that had not yet met the held for sale criteria. The fair value of these assets was supported by potential sales prices with third-party buyers and market analysis. (3)In connection with disposal groups previously classified as held for sale, we recorded impairment charges to adjust long-lived asset values. The fair value of the disposal group was supported by potential sales prices with third-party buyers.
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease expense were as follows:
(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:
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Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases were as follows:
The components of certain Consolidated Balance Sheet accounts are as follows:
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Schedule of Maturity of Operating Lease Liabilities | The maturity of our lease liabilities as of December 31, 2021 were as follows:
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Schedule of Maturity of Finance Lease Liabilities | The maturity of our lease liabilities as of December 31, 2021 were as follows:
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Schedule of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow and other information related to leases were as follows:
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BUSINESS REALIGNMENT ACTIVITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Realignment Activity | Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows:
Costs recorded by program in 2021, 2020 and 2019 related to these activities were as follows:
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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 year ended December 31, 2021:
(1)The liability balances reflected above are reported within accrued liabilities and other long-term liabilities. (2)The costs reflected in the liability roll-forward represent employee-related and certain third-party service provider charges.
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income (Loss) Before Income Taxes | The components of income before income taxes were as follows:
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Schedule of Components of Income Tax Expense (Benefit) | The components of our provision for income taxes were as follows:
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Schedule of Deferred Tax Asset and Liabilities | The significant temporary differences that comprised the deferred tax assets and liabilities are as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the federal statutory income tax rate with our effective income tax rate:
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Obligations, Plan Assets, and Funded Status | A summary of the changes in benefit obligations, plan assets and funded status of these plans is as follows:
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Schedule of Accumulated Benefit Obligations in Excess of Plan Assets | Plans with accumulated benefit obligations in excess of plan assets were as follows:
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Schedule of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows:
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Schedule of Weighted-Average Assumptions Used in Computing the Benefit Obligation | The weighted-average assumptions used in computing the year end benefit obligations were as follows:
The weighted-average assumptions used in computing net periodic benefit cost were as follows:
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Schedule of Allocation of Plan Assets | Our target asset allocation for our major domestic pension plans as of December 31, 2021 was as follows:
The following table sets forth by level, within the fair value hierarchy (as defined in Note 6), pension plan assets at their fair values as of December 31, 2021:
The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2020:
(1)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in our Obligations and Funded Status table.
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Schedule of Expected Benefit Payments | Total benefit payments expected to be paid to plan participants, including pension benefits funded from the plans and other benefits funded from Company assets, are as follows:
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STOCK COMPENSATION PLANS (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Schedule of Activity Relating to the Grants of Stock Options | A summary of activity relating to grants of stock options for the year ended December 31, 2021 is as follows:
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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:
•“Dividend yields” means the sum of dividends declared for the four most recent quarterly periods, divided by the average price of our Common Stock for the comparable periods; •“Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant; •“Risk-free interest rates” means the U.S. Treasury yield curve rate in effect at the time of grant for periods within the contractual life of the stock option; and •“Expected term” means the period of time that stock options granted are expected to be outstanding based on historical data.
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Schedule of Outstanding Stock Options | The following table summarizes information about stock options outstanding as of December 31, 2021:
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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 December 31, 2021 is as follows:
(1)Reflects the net number of PSUs above and below target levels based on the performance metrics.
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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.
•“Estimated values” means the fair value for the market-based total shareholder return component of each PSU at the date of grant using a Monte Carlo simulation model; •“Dividend yields” means the sum of dividends declared for the four most recently quarterly periods, divided by the average price of our Common Stock for the comparable periods; •“Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant.
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SEGMENT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Sales and Earnings by Segment | Our segment net sales and earnings were as follows:
(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, (d) acquisition-related costs and (e) other gains or losses that are not integral to segment performance.
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Schedule of Unallocated Mark-to-Market Losses (Gains) on Commodity Derivatives | Activity within the unallocated mark-to-market losses (gains) on commodity derivatives is as follows:
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Schedule of Depreciation and Amortization Expense Included within Segment Income | Depreciation and amortization expense included within segment income presented above is as follows:
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Schedule of Segment Information by Geography | Additional information regarding our net sales and long-lived assets disaggregated by geographical region is as follows:
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EQUITY AND NONCONTROLLING INTEREST (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Changes in the Outstanding Shares of Common Stock | Changes in the outstanding shares of Common Stock for the past three years were as follows:
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Schedule of Activity Relating to the Noncontrolling Interest | A roll-forward showing the 2021 activity relating to the noncontrolling interest follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Obligations Covered by Purchase Agreements with Various Suppliers Future Maturity Schedule | As of December 31, 2021, we had entered into agreements for the purchase of raw materials with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2021:
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EARNINGS PER SHARE (Tables) |
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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:
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OTHER (INCOME) EXPENSE, NET OTHER (INCOME) EXPENSE, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other (Income) Expense, Net | A summary of the components of other (income) expense, net is as follows:
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SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases were as follows:
The components of certain Consolidated Balance Sheet accounts are as follows:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021
segment
brand_name
country
| |
Accounting Policies [Abstract] | |
Number of brand names | brand_name | 100 |
Number of countries in which products are marketed, sold and distributed (country) | country | 80 |
Number of reportable segments (segment) | segment | 3 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Promotional Costs, Estimate Deviation, Percentage (Less Than) | 3.00% | 3.00% | 3.00% |
Unsettled Accrued Liabilities | $ 174,046 | $ 195,563 | |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | McLane Company, Inc. | |||
Concentration Risk, Percentage | 30.00% | 31.00% | 30.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SELLING, MARKETING AND ADMINISTRATIVE EXPENSE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Accounting Policies [Abstract] | |||
Research and development costs | $ 40,107 | $ 37,577 | $ 37,146 |
Advertising expense | 511,798 | 516,936 | $ 513,302 |
Prepaid advertising expense | $ 0 | $ 705 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ACCOUNTS RECEIVABLE - TRADE (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue, Major Customer [Line Items] | ||
Allowance for doubtful accounts | $ 28,837 | $ 24,975 |
McLane Company, Inc. | Customer Concentration Risk | Accounts Receivable | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 27.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Percentage of LIFO inventory | 60.00% | |
LIFO inventory amount | $ 589,850 | $ 606,282 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Line Items] | |||
Finance Lease, Right-of-Use Asset | $ 72,496 | $ 88,065 | |
Depreciation | $ 230,638 | $ 219,021 | $ 218,096 |
Machinery and Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Machinery and Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 15 years | ||
Building and Building Improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 25 years | ||
Building and Building Improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 40 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - COMPUTER SOFTWARE (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Capitalized Software [Line Items] | ||
Capitalized software, net | $ 260,656 | $ 187,673 |
Computer Software | ||
Capitalized Software [Line Items] | ||
Capitalized software, net | 260,656 | 187,673 |
Capitalized computer software, accumulated amortization | $ 321,939 | $ 360,579 |
Computer Software | Minimum | ||
Capitalized Software [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Computer Software | Maximum | ||
Capitalized Software [Line Items] | ||
Property, plant and equipment, useful life | 7 years |
BUSINESS ACQUISITIONS AND DIVESTITURES - PRETZELS, INC NARRATIVE (Details) - Pretzels, Inc. $ in Thousands |
Dec. 14, 2021
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Consideration transferred | $ 304,477 |
Trademarks | 5,700 |
Customer relationships | $ 26,400 |
Trademarks | |
Business Acquisition [Line Items] | |
Useful life | 5 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 18 years |
BUSINESS ACQUISITIONS AND DIVESTITURES - PRETZELS, INC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 14, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,633,174 | $ 1,988,215 | $ 1,985,955 | |
Pretzels, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 165,301 | |||
Other intangible assets | 32,100 | |||
Current assets acquired | 30,717 | |||
Property, plant and equipment, net | 96,099 | |||
Other non-current assets, primarily operating lease ROU assets | 111,787 | |||
Deferred income taxes | 541 | |||
Current liabilities acquired | (22,713) | |||
Other long-term liabilities, primarily operating lease liabilities | (109,355) | |||
Net assets acquired | $ 304,477 |
BUSINESS ACQUISITIONS AND DIVESTITURES - DOT'S PRETZELS, LLC NARRATIVE (Details) - Dot's Pretzels, LLC $ in Thousands |
Dec. 13, 2021
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Consideration transferred | $ 894,166 |
Trademarks | 336,600 |
Customer relationships | $ 189,700 |
Trademarks | |
Business Acquisition [Line Items] | |
Useful life | 33 years |
Minimum | Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 16 years |
Maximum | Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 18 years |
BUSINESS ACQUISITIONS AND DIVESTITURES - DOT'S PRETZELS, INC. ASSETS ACQUIRED AN LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 13, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,633,174 | $ 1,988,215 | $ 1,985,955 | |
Dot's Pretzels, LLC | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 303,345 | |||
Other intangible assets | 526,300 | |||
Current assets acquired | 51,121 | |||
Property, plant and equipment, net | 39,256 | |||
Other non-current assets | 2,201 | |||
Other liabilities assumed, primarily current liabilities | (28,057) | |||
Net assets acquired | $ 894,166 |
BUSINESS ACQUISITIONS AND DIVESTITURES - LILY'S SWEETS, LLC NARRATIVE (Details) - Lily's Sweets, LLC - USD ($) $ in Thousands |
Jun. 25, 2021 |
Dec. 31, 2021 |
---|---|---|
Business Acquisition [Line Items] | ||
Consideration transferred | $ 422,210 | |
Contingent consideration, liability | 5,000 | $ 1,250 |
Trademarks | 151,600 | |
Customer relationships | $ 84,200 | |
Trademarks | ||
Business Acquisition [Line Items] | ||
Useful life | 33 years | |
Customer Relationships | Minimum | ||
Business Acquisition [Line Items] | ||
Useful life | 17 years | |
Customer Relationships | Maximum | ||
Business Acquisition [Line Items] | ||
Useful life | 18 years |
BUSINESS ACQUISITIONS AND DIVESTITURES - LILY'S SWEETS, LLC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,633,174 | $ 1,988,215 | $ 1,985,955 |
Lily's Sweets, LLC | |||
Business Acquisition [Line Items] | |||
Goodwill | 175,826 | ||
Other intangible assets | 235,800 | ||
Other assets acquired, primarily current assets | 33,092 | ||
Other liabilities assumed, primarily current liabilities | (9,620) | ||
Deferred income taxes | (7,888) | ||
Net assets acquired | $ 427,210 |
BUSINESS ACQUISITIONS - ONE BRANDS, LLC NARRATIVE (Details) - ONE Brands, LLC $ in Thousands |
Sep. 23, 2019
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Consideration transferred | $ 402,160 |
Trademarks | 144,900 |
Customer relationships | 58,800 |
Noncompete agreements | $ 3,100 |
Trademarks | |
Business Acquisition [Line Items] | |
Useful life | 33 years |
Noncompete Agreements | |
Business Acquisition [Line Items] | |
Useful life | 4 years |
Minimum | Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 17 years |
Maximum | Customer Relationships | |
Business Acquisition [Line Items] | |
Useful life | 19 years |
BUSINESS ACQUISITIONS - ONE BRANDS, LLC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Mar. 29, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 2,633,174 | $ 1,988,215 | $ 1,985,955 | |
ONE Brands, LLC | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 180,065 | |||
Other intangible assets | 206,800 | |||
Other assets acquired, primarily current assets | 25,435 | |||
Other liabilities assumed, primarily current liabilities | (10,140) | |||
Net assets acquired | $ 402,160 |
GOODWILL AND INTANGIBLE ASSETS - GOODWILL AND INTANGIBLE ASSETS NARRATIVE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Long-lived and intangible asset impairment charges | 0 | 9,143 | 112,485 |
Amortization of Intangible Assets | $ 52,124 | $ 46,472 | 46,690 |
KRAVE Pure Foods, Inc. [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Long-lived and intangible asset impairment charges | $ 100,131 |
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF AMORTIZATION EXPENSE, FOR THE NEXT FIVE YEARS (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 79,298 |
2023 | 79,105 |
2024 | 78,523 |
2025 | 78,523 |
2026 | $ 78,523 |
SHORT AND LONG-TERM DEBT - SCHEDULE OF MATURITIES OF LONG-TERM DEBT (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2022 | $ 0 |
2023 | 750,000 |
2024 | 300,000 |
2025 | 600,000 |
2026 | 500,000 |
Thereafter | $ 1,893,639 |
SHORT AND LONG-TERM DEBT - SCHEDULE OF NET INTEREST EXPENSE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Disclosure [Abstract] | |||
Interest expense | $ 139,156 | $ 160,204 | $ 157,707 |
Capitalized interest | (9,310) | (6,733) | (5,585) |
Interest expense | 129,846 | 153,471 | 152,122 |
Interest income | (2,429) | (4,097) | (7,997) |
Interest expense, net | $ 127,417 | $ 149,374 | $ 144,125 |
FAIR VALUE MEASUREMENTS - FAIR VALUE MEASUREMENTS NARRATIVE (Details) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Significant other unobservable inputs (Level 3) | ||
Derivative [Line Items] | ||
Fair Value, Net Asset (Liability) | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - SCHEDULE OF FAIR VALUES AND CARRYING VALUES OF LONG-TERM DEBT (Details) - Significant other observable inputs (Level 2) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt, fair value | $ 2,844 | $ 443,215 |
Long-term debt, fair value | 4,274,304 | 4,479,499 |
Total long-term debt, fair value | 4,277,148 | 4,922,714 |
Current portion of long-term debt | 2,844 | 438,829 |
Long-term portion | 4,086,627 | 4,089,755 |
Long-term Debt | $ 4,089,471 | $ 4,528,584 |
FAIR VALUE MEASUREMENTS - SCHEDULE OF IMPAIRMENT CHARGES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Impairment charge on reclassified assets | $ 6,200 | $ 2,725 | |
Long-lived and intangible asset impairment charges | $ 0 | 9,143 | 112,485 |
Customer relationship and trademark | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived and intangible asset impairment charges | 100,131 | ||
Other long-lived assets, not held for sale | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived and intangible asset impairment charges | $ 9,629 | ||
Other assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Long-lived and intangible asset impairment charges | $ 2,943 |
LEASES - SCHEDULE OF COMPONENETS OF LEASE EXPENSE (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Leases [Abstract] | ||
Operating lease cost | $ 44,444 | $ 44,547 |
Amortization of ROU assets, Finance lease cost | 8,098 | 8,202 |
Interest on lease liabilities, Finance lease cost | 4,358 | 4,475 |
Net lease cost | $ 56,900 | $ 57,224 |
LEASES - SCHEDULE OF INFORMATION REGARDING OUR LEASE TERMS AND DISCOUNT RATES (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Operating leases, Weighted-average remaining lease term | 15 years 4 months 24 days | 12 years 6 months |
Finance leases, Weighted-average remaining lease term | 30 years | 30 years 1 month 6 days |
Operating leases, Weighted-average remaining discount rate | 3.10% | 3.80% |
Finance leases, Weighted-average remaining discount rate | 6.10% | 5.90% |
LEASES - SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
2022 | $ 53,592 | |
2023 | 43,940 | |
2024 | 38,093 | |
2025 | 26,989 | |
2026 | 25,695 | |
Thereafter | 430,452 | |
Total lease payments | 618,761 | |
Less: Imputed interest | 202,424 | |
Total lease liabilities | 416,337 | |
Operating leases | ||
2022 | 46,282 | |
2023 | 38,709 | |
2024 | 33,884 | |
2025 | 23,021 | |
2026 | 21,710 | |
Thereafter | 284,367 | |
Total lease payments | 447,973 | |
Less: Imputed interest | 100,782 | |
Total operating lease liabilities | 347,191 | |
Finance leases | ||
2022 | 7,310 | |
2023 | 5,231 | |
2024 | 4,209 | |
2025 | 3,968 | |
2026 | 3,985 | |
Thereafter | 146,085 | |
Total lease payments | 170,788 | |
Less: Imputed interest | 101,642 | |
Total finance lease liabilities | $ 69,146 | $ 80,755 |
LEASES - SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 42,584 | $ 42,568 |
Operating cash flows from finance leases | 4,730 | 4,475 |
Financing cash flows from finance leases | 4,358 | 4,468 |
Operating leases | 164,951 | 38,464 |
Finance leases | $ (6,424) | $ 3,992 |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Business Acquisition [Line Items] | ||
Investments in unconsolidated affiliates | $ 93,089 | $ 52,351 |
Other Noncurrent Assets | ||
Business Acquisition [Line Items] | ||
Investments in unconsolidated affiliates | $ 93,089 | $ 52,351 |
BUSINESS REALIGNMENT ACTIVITIES - SCHEDULE OF LIABILITY ACTIVITY FOR COSTS QUALIFYING AS EXIT AND DISPOSAL COSTS (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2020 | $ 12,748 |
2021 business realignment charges | 8,327 |
Cash payments | (20,369) |
Liability balance at December 31, 2021 | $ 706 |
INCOME TAXES - SCHEDULE OF INCOME (LOSS) BEFORE TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 1,775,361 | $ 1,405,254 | $ 1,211,051 |
Foreign | 21,863 | 89,743 | 169,733 |
Income before income taxes | $ 1,797,224 | $ 1,494,997 | $ 1,380,784 |
INCOME TAXES - SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current: | |||
Federal | $ 161,402 | $ 117,348 | $ 179,358 |
State | 60,979 | 46,198 | 38,232 |
Foreign | 78,650 | 29,158 | 31,514 |
Current Income Tax Expense (Benefit), Total | 301,031 | 192,704 | 249,104 |
Deferred: | |||
Federal | 26,726 | 24,486 | 14,958 |
State | 8,253 | 3,746 | 1,865 |
Foreign | (21,605) | (1,352) | (31,895) |
Deferred Income Tax Expense (Benefit), Total | 13,374 | 26,880 | (15,072) |
Total provision for income taxes | $ 314,405 | $ 219,584 | $ 234,032 |
INCOME TAXES - SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of Federal income tax benefits | 2.80% | 2.70% | 1.80% |
Foreign rate differences | (0.20%) | (0.50%) | (1.50%) |
Historic and solar tax credits | (6.20%) | (7.70%) | (3.40%) |
Tax contingencies | 1.70% | 0.10% | 0.90% |
Stock compensation | (0.50%) | (0.60%) | (1.30%) |
Valuation allowance release | 0.00% | 0.00% | (1.50%) |
Other, net | (1.10%) | (0.30%) | 0.90% |
Effective income tax rate | 17.50% | 14.70% | 16.90% |
INCOME TAXES - SCHEDULE OF UNRECOGNIZED TAX BENEFITS ROLL FORWARD (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 108,543 | $ 108,383 |
Additions for tax positions taken during prior years | 40,145 | 10,641 |
Reductions for tax positions taken during prior years | (3,601) | (2,496) |
Additions for tax positions taken during the current year | 14,329 | 3,354 |
Settlements | (9,858) | 0 |
Expiration of statutes of limitations | (6,253) | (11,339) |
Balance at end of year | $ 143,305 | $ 108,543 |
INCOME TAXES - INCOME TAXES NARRATIVE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Contingency [Line Items] | |||
Amount of unrecognized tax benefits that if recognized would affect the effective tax rate | $ 117,552 | $ 103,213 | |
Net tax expense (benefit) for interest and penalties | 8,924 | 1,564 | $ 3,824 |
Accrued net interest and penalties | 20,466 | 11,542 | |
Expected reduction in the liability for unrecognized tax benefits within the next 12 months | 18,496 | ||
Undistributed earnings of foreign subsidiaries | 679,725 | ||
Investment tax credits and related tax depreciation benefits | 136,243 | 146,021 | 58,798 |
Write-down of equity investments | 113,756 | 125,579 | 50,457 |
Other Nonoperating Income (Expense) | Partnerships Qualifying For Tax Credits | |||
Income Tax Contingency [Line Items] | |||
Write-down of equity investments | $ 113,756 | $ 125,579 | $ 50,457 |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF ACCUMULATED BENEFIT OBLIGATIONS IN EXCESS OF PLAN ASSETS (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 108,034 | $ 759,200 |
Accumulated benefit obligation | 92,462 | 718,335 |
Fair value of plan assets | $ 58,427 | $ 682,299 |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING BENEFIT OBLIGATIONS (Details) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Defined Benefit Plan Disclosure [Line Items] | ||
Interest crediting rate | 4.60% | 4.70% |
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.70% | 2.30% |
Rate of increase in compensation levels | 3.50% | 3.50% |
Other Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.90% | 2.50% |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING NET PERIODIC BENEFIT COST (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.30% | 3.10% | 4.10% |
Expected long-term return on plan assets | 4.80% | 5.30% | 5.90% |
Rate of compensation increase | 3.50% | 3.60% | 3.60% |
Other Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.50% | 3.20% | 4.20% |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF PLAN ASSETS ACROSS ASSET CLASSES (Details) - Domestic Plans |
Dec. 31, 2021 |
---|---|
Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 1.00% |
Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 27.00% |
Fixed income securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 48.00% |
Alternative investments, including real estate, listed infrastructure and other | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 24.00% |
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF EXPECTED BENEFIT PAYMENTS TO BE PAID (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2022 | $ 121,976 |
2023 | 98,120 |
2024 | 91,557 |
2025 | 90,301 |
2026 | 90,898 |
2027-2030 | 341,696 |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2022 | 17,894 |
2023 | 16,626 |
2024 | 15,717 |
2025 | 14,619 |
2026 | 13,600 |
2027-2030 | $ 57,799 |
STOCK COMPENSATION PLANS - SCHEDULE OF COMPENSATION EXPENSE AND INCOME TAX BENEFITS FOR STOCK-BASED COMPENSATION PROGRAMS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Payment Arrangement [Abstract] | |||
Pre-tax compensation expense | $ 66,711 | $ 57,584 | $ 51,899 |
Related income tax benefit | $ 11,608 | $ 8,580 | $ 9,030 |
STOCK COMPENSATION PLANS - SCHEDULE OF FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Payment Arrangement [Abstract] | |||
Dividend yields | 2.20% | 2.10% | 2.70% |
Expected volatility | 21.80% | 17.50% | 17.00% |
Risk-free interest rates | 1.00% | 1.30% | 2.50% |
Expected term in years | 6 years 3 months 18 days | 6 years 8 months 12 days | 6 years 6 months |
STOCK COMPENSATION PLANS - SCHEDULE OF PSUs AND RSUS FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) - $ / shares |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Jul. 02, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Estimated values (USD per share) | $ 174.00 | |||
Dividend yields | 2.20% | 2.10% | 2.70% | |
Performance and restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Units granted (shares) | 404,517 | 353,037 | 493,828 | |
Weighted-average fair value at date of grant (USD per share) | $ 154.83 | $ 161.30 | $ 115.94 | |
Estimated values (USD per share) | $ 66.44 | $ 80.08 | $ 48.40 | |
Dividend yields | 2.20% | 2.00% | 2.60% | |
Expected volatility | 26.40% | 17.30% | 20.30% |
SEGMENT INFORMATION - SCHEDULE OF UNALLOCATED MARK-TO-MARKET (GAINS) LOSSES ON COMMODITY DERIVATIVES (Details) - Commodities futures and options - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Segment Reporting Information [Line Items] | |||
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains) | $ (24,376) | $ 6,429 | $ (28,651) |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net gains on commodity derivative positions reclassified from unallocated to segment income | 61,026 | 13,022 | 6,837 |
Non-designated Hedges | |||
Segment Reporting Information [Line Items] | |||
Net gains on mark-to-market valuation of commodity derivative positions recognized in income | $ (85,402) | $ (6,593) | $ (35,488) |
SEGMENT INFORMATION - NARRATIVE (Details) - Commodities futures and options - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating Segments | ||||
Revenue, Major Customer [Line Items] | ||||
Net gains on commodity derivative positions reclassified from unallocated to segment income | $ 61,026 | $ 13,022 | $ 6,837 | |
Scenario, Forecast | Operating Segments | ||||
Revenue, Major Customer [Line Items] | ||||
Net gains on commodity derivative positions reclassified from unallocated to segment income | $ 76,322 | |||
Cost of Sales | ||||
Revenue, Major Customer [Line Items] | ||||
Cumulative Amount of Mark-to-Market Gaines (Losses) on Commodity Derivatives | $ 86,914 |
SEGMENT INFORMATION - SCHEDULE OF DEPRECIATION AND AMORTIZATION EXPENSE INCLUDED WITHIN SEGMENT INCOME (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 315,002 | $ 294,907 | $ 291,544 |
Operating Segments | North America Confectionery | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 213,113 | 198,951 | 195,431 |
Operating Segments | North America Salty Snacks | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 29,744 | 27,362 | 29,544 |
Operating Segments | International | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 22,754 | 24,533 | 24,827 |
Corporate, Non-Segment | Corporate | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 49,391 | $ 44,061 | $ 41,742 |
SEGMENT INFORMATION - SCHEDULE OF SEGMENT INFORMATION BY GEOGRAPHY (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 8,971,337 | $ 8,149,719 | $ 7,986,252 |
Long-lived assets | 2,586,187 | 2,285,255 | 2,153,139 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 7,807,606 | 7,042,804 | 6,722,617 |
Long-lived assets | 2,099,786 | 1,836,114 | 1,717,606 |
Other | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 1,163,731 | 1,106,915 | 1,263,635 |
Long-lived assets | $ 486,401 | $ 449,141 | $ 435,533 |
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF PURCHASE OBLIGATIONS COVERED BY PUTCHASE AGREEMENTS WITH VARIOUS SUPPLIERS FUTURE MATURTY SCHEDULE (Details) - Inventories $ in Millions |
Dec. 31, 2021
USD ($)
|
---|---|
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2022 | $ 1,742.1 |
2023 | 405.5 |
2024 | 32.8 |
2025 | 12.5 |
2026 | $ 12.5 |
COMMITMENTS AND CONTINGENCIES - COMMITMENTS AND CONTINGENCIES NARRATIVE (Details) - employee |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Concentration Risk [Line Items] | ||
Entity number of employees | 16,620 | |
Entity number of part-time employees | 2,370 | |
Workforce Subject to Collective Bargaining Arrangements | Unionized Employees Concentration Risk | ||
Concentration Risk [Line Items] | ||
Entity number of employees | 6,235 | |
Percentage of employees | 33.00% | |
Workforce Subject to Collective Bargaining Arrangements | Unionized Employees Concentration Risk | Scenario, Forecast | ||
Concentration Risk [Line Items] | ||
Percentage of employees | 62.00% |
EARNINGS PER SHARE - EARNINGS PER SHARE NARRATIVE (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Employee stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 43 | 15 | 1,476 |
OTHER (INCOME) EXPENSE, NET - SCHEDULE OF OTHER (INCOME) AND EXPENSE, NET (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |||
Write-down of equity investments | $ 113,756 | $ 125,579 | $ 50,457 |
Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans | 5,177 | 12,560 | 20,415 |
Other (income) expense, net | 148 | 188 | 171 |
Total | $ 119,081 | $ 138,327 | $ 71,043 |
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