EX-12 4 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

EXHIBIT 12

THE HERSHEY COMPANY

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

For the Years Ended December 31, 2006, 2005, 2004, 2003, and 2002

(in thousands of dollars except for ratios)

(Unaudited)

 

     2006     2005     2004    2003     2002  

Earnings:

            

Income from continuing operations before income taxes*

    $ 876,502 (a)   $ 765,637 (b)   $ 810,036    $ 703,857 (c)   $ 622,308 (d)

Add (Deduct):

            

Interest on indebtedness

      117,738       89,485       67,919      65,265       64,398  

Portion of rents representative of the interest factor (e)

      7,647       8,244       9,711      12,742       15,467  

Amortization of debt expense

      574       463       446      446       457  

Amortization of capitalized interest

      2,850       3,068       3,544      3,880       4,018  
                                       

Earnings as adjusted

    $ 1,005,311     $ 866,897     $ 891,656    $ 786,190     $ 706,648  
                                       

Fixed Charges:

            

Interest on indebtedness

    $ 117,738     $ 89,485     $ 67,919    $ 65,265     $ 64,398  

Portion of rents representative of the interest factor (e)

      7,647       8,244       9,711      12,742       15,467  

Amortization of debt expense

      574       463       446      446       457  

Capitalized interest

      77       3       2,597      1,953       1,144  
                                       

Total fixed charges

    $ 126,036     $ 98,195     $ 80,673    $ 80,406     $ 81,466  
                                       

Ratio of earnings to fixed charges

      7.98       8.83       11.05      9.78       8.67  
                                       

NOTES:

* Amounts for all periods presented were adjusted for the impact of certain immaterial adjustments relating to the timing of the recognition of revenue, as permitted by Securities and Exchange Commission Staff Accounting Bulletin No. 108, Considering the Effects of Prior Misstatements When Quantifying Misstatements in Current Year Financial Statements.
(a) Includes total charges for business realignment initiatives of $11.6 million before tax.
(b) Includes total charges for business realignment initiatives of $119.0 million before tax.
(c) Includes total charges for business realignment initiatives of $25.5 million and a gain on sale of business of $8.3 million.
(d) Includes total charges for business realignment initiatives of $34.0 million before tax and costs related to the potential sale of the Company of $17.2 million before tax.
(e) Portion of rents representative of the interest factor consists of all rental expense pertaining to off-balance sheet operating lease arrangements and one-third of rental expense for other operating leases.