EX-12 12 dex12.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES STATEMENT Computation of ratio of earnings to fixed charges statement

EXHIBIT 12

THE HERSHEY COMPANY

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

For the Years Ended December 31, 2007, 2006, 2005, 2004, and 2003

(in thousands of dollars except for ratios)

(Unaudited)

 

     2007     2006     2005     2004    2003  

Earnings:

            

Income from continuing operations before income taxes

    $ 340,242 (a)   $ 876,502 (b)   $ 765,637 (c)   $ 810,036    $ 703,857 (d)

Add (Deduct):

            

Interest on indebtedness

      121,066       117,738       89,485       67,919      65,265  

Portion of rents representative of the interest factor (e)

      8,147       7,647       8,244       9,711      12,742  

Amortization of debt expense

      756       574       463       446      446  

Amortization of capitalized interest

      2,392       2,850       3,068       3,544      3,880  

Adjustment to exclude minority interest and income or loss from equity investee

      (503 )     —         —         —        —    
                                       

Earnings as adjusted

    $ 472,100     $ 1,005,311     $ 866,897     $ 891,656    $ 786,190  
                                       

Fixed Charges:

            

Interest on indebtedness

    $ 121,066     $ 117,738     $ 89,485     $ 67,919    $ 65,265  

Portion of rents representative of the interest factor (e)

      8,147       7,647       8,244       9,711      12,742  

Amortization of debt expense

      756       574       463       446      446  

Capitalized interest

      2,770       77       3       2,597      1,953  
                                       

Total fixed charges

    $ 132,739     $ 126,036     $ 98,195     $ 80,673    $ 80,406  
                                       

Ratio of earnings to fixed charges

      3.56       7.98       8.83       11.05      9.78  
                                       

 

NOTES:

 

(a)

Includes total charges for business realignment initiatives of $412.6 million before tax.

(b)

Includes total charges for business realignment initiatives of $11.6 million before tax.

(c)

Includes total charges for business realignment initiatives of $119.0 million before tax.

(d)

Includes total charges for business realignment initiatives of $25.5 million and a gain on sale of business of $8.3 million.

(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.