DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 05, 2016 | Jul. 02, 2015 | |
Document Information [Line Items] | |||
Entity registrant name | HERSHEY CO | ||
Entity central index key | 47,111 | ||
Current fiscal year end date | --12-31 | ||
Entity filer category | Large Accelerated Filer | ||
Document type | 10-K | ||
Document period end date | Dec. 31, 2015 | ||
Document fiscal year focus | 2,015 | ||
Document fiscal period focus | FY | ||
Amendment flag | false | ||
Entity well-known seasoned issuer | Yes | ||
Entity voluntary filers | No | ||
Entity current reporting status | Yes | ||
Entity public float | $ 13,110,173,681 | ||
Common stock | |||
Document Information [Line Items] | |||
Entity common stock, shares outstanding (shares) | 155,899,924 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity common stock, shares outstanding (shares) | 60,619,777 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales | $ 7,386,626 | $ 7,421,768 | $ 7,146,079 |
Costs and expenses: | |||
Cost of sales | 4,003,951 | 4,085,602 | 3,865,231 |
Selling, marketing and administrative | 1,969,308 | 1,898,284 | 1,924,132 |
Goodwill and other intangible asset impairment charges | 280,802 | 15,900 | 0 |
Business realignment charges | 94,806 | 29,721 | 18,665 |
Total costs and expenses | 6,348,867 | 6,029,507 | 5,808,028 |
Operating profit | 1,037,759 | 1,392,261 | 1,338,051 |
Interest expense, net | 105,773 | 83,532 | 88,356 |
Other (income) expense, net | 30,139 | 2,686 | (1,624) |
Income before income taxes | 901,847 | 1,306,043 | 1,251,319 |
Provision for income taxes | 388,896 | 459,131 | 430,849 |
Net income | $ 512,951 | $ 846,912 | $ 820,470 |
Common stock | |||
Net income per share—basic: | |||
Net income per share - basic (USD per share) | $ 2.40 | $ 3.91 | $ 3.76 |
Net income per share—diluted: | |||
Net income per share - diluted (USD per share) | 2.32 | 3.77 | 3.61 |
Dividends paid per share: | |||
Dividends paid per share (USD per share) | 2.236 | 2.04 | 1.81 |
Class B common stock | |||
Net income per share—basic: | |||
Net income per share - basic (USD per share) | 2.19 | 3.54 | 3.39 |
Net income per share—diluted: | |||
Net income per share - diluted (USD per share) | 2.19 | 3.52 | 3.37 |
Dividends paid per share: | |||
Dividends paid per share (USD per share) | $ 2.032 | $ 1.842 | $ 1.63 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 512,951 | $ 846,912 | $ 820,470 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (59,707) | (26,851) | (26,003) |
Pension and post-retirement benefit plans | 30,002 | (85,016) | 166,403 |
Cash flow hedges: | |||
Gains (losses) on cash flow hedging derivatives | 38,319 | (37,077) | 72,334 |
Reclassification adjustments | (23,218) | (43,062) | 5,775 |
Total other comprehensive (loss) income, net of tax | (14,604) | (192,006) | 218,509 |
Total comprehensive income | 498,347 | 654,906 | 1,038,979 |
Comprehensive loss attributable to noncontrolling interests | 2,152 | 0 | 0 |
Comprehensive income attributable to The Hershey Company | $ 500,499 | $ 654,906 | $ 1,038,979 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 346,529 | $ 374,854 |
Short-term investments | 0 | 97,131 |
Accounts receivable—trade, net | 599,073 | 596,940 |
Inventories | 750,970 | 801,036 |
Deferred income taxes | 0 | 100,515 |
Prepaid expenses and other | 152,026 | 276,571 |
Total current assets | 1,848,598 | 2,247,047 |
Property, plant and equipment, net | 2,240,460 | 2,151,901 |
Goodwill | 684,252 | 792,955 |
Other intangibles | 379,305 | 294,841 |
Other assets | 155,366 | 136,126 |
Deferred income taxes | 36,390 | 0 |
Total assets | 5,344,371 | 5,622,870 |
Current liabilities: | ||
Accounts payable | 474,266 | 482,017 |
Accrued liabilities | 856,967 | 813,513 |
Accrued income taxes | 23,243 | 4,616 |
Short-term debt | 363,513 | 384,696 |
Current portion of long-term debt | 499,923 | 250,805 |
Total current liabilities | 2,217,912 | 1,935,647 |
Long-term debt | 1,557,091 | 1,542,317 |
Other long-term liabilities | 468,718 | 526,003 |
Deferred income taxes | 53,188 | 99,373 |
Total liabilities | 4,296,909 | 4,103,340 |
Stockholders’ equity: | ||
Preferred stock, shares issued: none in 2015 and 2014 | 0 | 0 |
Additional paid-in capital | 783,877 | 754,186 |
Retained earnings | 5,897,603 | 5,860,784 |
Treasury—common stock shares, at cost: 143,124,384 in 2015 and 138,856,786 in 2014 | (5,672,359) | (5,161,236) |
Accumulated other comprehensive loss | (371,025) | (358,573) |
The Hershey Company stockholders’ equity | 997,997 | 1,455,062 |
Noncontrolling interests in subsidiaries | 49,465 | 64,468 |
Total stockholders’ equity | 1,047,462 | 1,519,530 |
Total liabilities and stockholders’ equity | 5,344,371 | 5,622,870 |
Common stock | ||
Stockholders’ equity: | ||
Common stock | 299,281 | 299,281 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 60,620 | $ 60,620 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2015 | Dec. 31, 2014 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, shares issued (shares) | 359,901,744 | 359,901,744 |
Treasury stock, shares (shares) | 143,124,384 | 138,856,786 |
Common stock | ||
Common stock, shares issued (shares) | 299,281,967 | 299,281,967 |
Class B common stock | ||
Common stock, shares issued (shares) | 60,619,777 | 60,619,777 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Activities | |||
Net income | $ 512,951 | $ 846,912 | $ 820,470 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 244,928 | 211,532 | 201,033 |
Stock-based compensation expense | 51,533 | 54,068 | 53,967 |
Excess tax benefits from stock-based compensation | (24,839) | (53,497) | (48,396) |
Deferred income taxes | (38,537) | 18,796 | 7,457 |
Non-cash business realignment and impairment charges | 283,469 | 39,988 | 0 |
Contributions to pension and other benefits plans | (53,273) | (53,110) | (57,213) |
Loss on early extinguishment of debt | 28,326 | 0 | 0 |
Write-down of equity investments | 39,489 | 0 | 0 |
Changes in assets and liabilities, net of effects from business acquisitions and divestitures: | |||
Accounts receivable—trade, net | (24,440) | (67,464) | (16,529) |
Inventories | 52,049 | (88,497) | (26,279) |
Accounts payable and accrued liabilities | (1,017) | (13,847) | 102,411 |
Other assets and liabilities | 143,817 | (50,504) | 154,478 |
Net cash provided by operating activities | 1,214,456 | 844,377 | 1,191,399 |
Investing Activities | |||
Capital additions | (329,707) | (345,947) | (323,551) |
Capitalized software additions | (27,103) | (24,842) | (27,360) |
Proceeds from sales of property, plant and equipment | 1,205 | 1,612 | 15,331 |
Proceeds from sale of business | 32,408 | 0 | 0 |
Loan to affiliate | 0 | 0 | (16,000) |
Equity investments in tax credit qualifying partnerships | (30,720) | 0 | 0 |
Business acquisitions, net of cash and cash equivalents acquired | (218,654) | (396,265) | 0 |
Sale (purchase) of short-term investments | 95,316 | (97,131) | 0 |
Net cash used in investing activities | (477,255) | (862,573) | (351,580) |
Financing Activities | |||
Net increase in short-term debt | 10,720 | 117,515 | 54,351 |
Long-term borrowings | 599,031 | 3,051 | 250,595 |
Repayment of long-term debt | (355,446) | (1,442) | (250,761) |
Cash dividends paid | (476,132) | (440,414) | (393,801) |
Exercise of stock options | 72,719 | 122,306 | 147,255 |
Excess tax benefits from stock-based compensation | 24,839 | 53,497 | 48,396 |
Contributions from noncontrolling interest | 0 | 2,940 | 2,940 |
Payment of contingent consideration | (10,000) | 0 | 0 |
Purchase of noncontrolling interest | (38,270) | 0 | 0 |
Repurchase of common stock | (582,623) | (576,755) | (305,564) |
Net cash used in financing activities | (755,162) | (719,302) | (446,589) |
Effect of exchange rate changes on cash and cash equivalents | (10,364) | (6,156) | (2,994) |
(Decrease) increase in cash and cash equivalents | (28,325) | (743,654) | 390,236 |
Cash and cash equivalents, beginning of period | 374,854 | 1,118,508 | 728,272 |
Cash and cash equivalents, end of period | 346,529 | 374,854 | 1,118,508 |
Supplemental Disclosure | |||
Interest paid (excluding loss on early extinguishment of debt in 2015) | 88,448 | 87,801 | 92,551 |
Income taxes paid | $ 368,926 | $ 384,318 | $ 373,902 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Class B common stock | Preferred Stock | Common StockCommon stock | Common StockClass B common stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCommon stock | Retained EarningsClass B common stock | Treasury Common Stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests in Subsidiaries |
Beginning balance, stockholders' equity at Dec. 31, 2012 | $ 1,048,373 | $ 0 | $ 299,272 | $ 60,629 | $ 592,975 | $ 5,027,617 | $ (4,558,668) | $ (385,076) | $ 11,624 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 820,470 | 820,470 | |||||||||||
Other comprehensive income (loss) | 218,509 | 218,509 | |||||||||||
Dividends: | |||||||||||||
Common Stock | $ (294,979) | $ (98,822) | $ (294,979) | $ (98,822) | |||||||||
Conversion of Class B Common Stock into Common Stock | 0 | 9 | (9) | ||||||||||
Stock-based compensation | 52,465 | 52,465 | |||||||||||
Exercise of stock options and incentive-based transactions | 176,006 | 19,504 | 156,502 | ||||||||||
Repurchase of common stock | (305,564) | (305,564) | |||||||||||
Earnings of and contributions from noncontrolling interests, net | (406) | (406) | |||||||||||
Ending balance, stockholders' equity at Dec. 31, 2013 | 1,616,052 | 0 | 299,281 | 60,620 | 664,944 | 5,454,286 | (4,707,730) | (166,567) | 11,218 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 846,912 | 846,912 | |||||||||||
Other comprehensive income (loss) | (192,006) | (192,006) | |||||||||||
Dividends: | |||||||||||||
Common Stock | (328,752) | (111,662) | (328,752) | (111,662) | |||||||||
Stock-based compensation | 52,870 | 52,870 | |||||||||||
Exercise of stock options and incentive-based transactions | 159,621 | 36,372 | 123,249 | ||||||||||
Repurchase of common stock | (576,755) | (576,755) | |||||||||||
Earnings of and contributions from noncontrolling interests, net | 3,526 | 3,526 | |||||||||||
Acquisition of Lotte Shanghai Food Company | 49,724 | 49,724 | |||||||||||
Ending balance, stockholders' equity at Dec. 31, 2014 | 1,519,530 | 0 | 299,281 | 60,620 | 754,186 | 5,860,784 | (5,161,236) | (358,573) | 64,468 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 512,951 | 512,951 | |||||||||||
Other comprehensive income (loss) | (14,604) | (12,452) | (2,152) | ||||||||||
Dividends: | |||||||||||||
Common Stock | $ (352,953) | $ (123,179) | $ (352,953) | $ (123,179) | |||||||||
Stock-based compensation | 50,722 | 50,722 | |||||||||||
Exercise of stock options and incentive-based transactions | 79,704 | 8,204 | 71,500 | ||||||||||
Repurchase of common stock | (582,623) | (582,623) | |||||||||||
Earnings of and contributions from noncontrolling interests, net | 577 | 577 | |||||||||||
Impact of reclassification to and purchase of redeemable noncontrolling interest | (42,663) | (29,235) | (13,428) | ||||||||||
Ending balance, stockholders' equity at Dec. 31, 2015 | $ 1,047,462 | $ 0 | $ 299,281 | $ 60,620 | $ 783,877 | $ 5,897,603 | $ (5,672,359) | $ (371,025) | $ 49,465 |
CONSOLIDATED STATEMENTS OF STO8
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common stock | |||||||||||
Dividends paid per share (USD per share) | $ 0.583 | $ 0.583 | $ 0.535 | $ 0.535 | $ 0.535 | $ 0.535 | $ 0.485 | $ 0.485 | $ 2.236 | $ 2.04 | $ 1.81 |
Class B common stock | |||||||||||
Dividends paid per share (USD per share) | $ 0.53 | $ 0.53 | $ 0.486 | $ 0.486 | $ 0.486 | $ 0.486 | $ 0.435 | $ 0.435 | $ 2.032 | $ 1.842 | $ 1.63 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
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 80 brands worldwide including such iconic brand names as Hershey’s, Reese’s, Hershey’s Kisses, Jolly Rancher and Ice Breakers, which are marketed, sold and distributed in approximately 70 countries worldwide. Hershey is focused on growing its presence in key international markets while continuing to build its competitive advantage in North America. The Company currently operates through two reportable segments that are aligned with its management structure and the key markets it serves: North America and International and Other. For additional information on our segment presentation, see Note 11. 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. Net income (loss) attributable to noncontrolling interests is not significant and is recorded within selling, marketing and administrative expense in the Consolidated Statements of Income. See Note 12 for additional information on our noncontrolling interests. We use the equity method of accounting when we have a 20% to 50% interest in other companies and exercise significant influence. Additionally, in 2015 we began making investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits which are accounted for using the equity method. See Note 7 for additional information on our equity investments in partnership entities qualifying for tax credits. We held no equity investments at December 31, 2014. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 We record sales when all of the following criteria have been met: l A valid customer order with a fixed price has been received; l The product has been delivered to the customer; l There is no further significant obligation to assist in the resale of the product; and l Collectability is reasonably assured. Net sales include revenue from the sale of finished goods and royalty income, net of allowances for trade promotions, consumer coupon programs and other sales incentives, and allowances and discounts associated with aged or potentially unsaleable products. Trade promotions and sales incentives primarily include reduced price features, merchandising displays, sales growth incentives, new item allowances and cooperative advertising. Sales, use, value-added and other excise taxes are not recognized in revenue. In 2015 , 2014 and 2013, approximately 26% , 25% and 26% , 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, administrative and other indirect overhead costs, amortization of capitalized software and depreciation of administrative facilities. Research and development costs, charged to expense as incurred, totaled $49,281 in 2015 , $47,554 in 2014 and $47,636 in 2013 . Advertising expense is also charged to expense as incurred and totaled $561,644 in 2015 , $570,223 in 2014 and $582,354 in 2013 . Prepaid advertising expense was $3,924 and $8,193 as of December 31, 2015 and 2014 , respectively. 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. Short-term Investments Short-term investments consist of bank term deposits that have original maturity dates ranging from greater than three months to twelve months. Short-term investments are carried at cost, which approximates fair value. 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 concentrations of credit risk are associated with Wal-Mart Stores, Inc. and McLane Company, Inc., two customers served principally by our North America segment. As of December 31, 2015 , McLane Company, Inc. accounted for approximately 19% of our total accounts receivable. Wal-Mart Stores, Inc. accounted for approximately 14% of our total accounts receivable as of December 31, 2015 . 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 and anticipated discounts of $32,638 and $15,885 at December 31, 2015 and 2014 , 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, 2015 , approximately 55% of our inventories, representing the majority of our 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 are valued at the lower of first-in, first-out (“FIFO”) cost or market. LIFO cost of inventories valued using the LIFO method was $410,865 as of December 31, 2015 and $430,094 as of December 31, 2014 . The adjustment to LIFO, as shown in Note 15, approximates the excess of replacement cost over the stated LIFO inventory value. The net impact of LIFO acquisitions and liquidations was not material to 2015 , 2014 or 2013 . Property, Plant and Equipment Property, plant and equipment are 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. 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 $68,004 and $63,252 at December 31, 2015 and 2014 , respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 5 years . Accumulated amortization of capitalized software was $304,057 and $300,698 as of December 31, 2015 and 2014 , 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. Generally, we measure impairment under the following circumstances: l When internal-use computer software is not expected to provide substantive service potential; l When a significant change occurs in the extent or manner in which the software is used or is expected to be used; l When a significant change is made or will be made to the software program; and l When the costs of developing or modifying internal-use computer software significantly exceed the amount originally expected to develop or modify the software. 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 use a two-step process to quantitatively evaluate goodwill for impairment. In the first step, 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, we complete a second step to determine the amount of the goodwill impairment that we should record. In the second step, we determine an implied fair value of the reporting unit’s goodwill by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill (including any unrecognized intangible assets). We compare the resulting implied fair value of the goodwill to the carrying amount and record an impairment charge for the difference. We test individual indefinite-lived intangible assets by comparing the estimated fair value 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. See Note 3 for additional information regarding the results of impairment tests. 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, which are amortized over estimated useful lives of approximately 25 years , 15 years , and 5 years , respectively. When certain events or changes in operating conditions indicate that the carrying value of these assets may not be recoverable, we perform an impairment assessment and may adjust the remaining useful lives. 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 balance sheet 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 had 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. Other (Income) Expense, net In the second quarter of 2015, we began presenting a new non-operating "other (income) expense, net" classification to report certain gains and losses associated with activities not directly related to our core operations. For the years ended December 31, 2014 and 2013 , we reclassified from selling, marketing and administrative expenses to other (income) expense, net total net expense of $2,686 and income of $1,624 , respectively, to conform to the current year presentation. After considering these reclassifications, amounts reflected in other (income) expense, net include the following: Year Ended December 31, December 31, December 31, Gain on sale of non-core trademark $ (9,950 ) $ — $ — Write-down of equity investments in partnerships qualifying for historic tax credits (see Note 7) 39,489 — — Foreign currency exchange loss relating to strategy to cap Shanghai Golden Monkey acquisition price as denominated in U.S. dollars — 6,722 — Gain on acquisition of controlling interest in Lotte Shanghai Food Company — (4,628 ) — Other losses (gains), net 600 592 (1,624 ) Total $ 30,139 $ 2,686 $ (1,624 ) Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. Specifically, this includes amounts presented in our “other (income) expense, net” caption included in our Consolidated Statements of Income and the “effect of exchange rate changes on cash and cash equivalents” included in our Consolidated Statements of Cash Flows. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard was originally effective for us on January 1, 2017; however, in July 2015 the FASB decided to defer the effective date by one year. Early application is not permitted, but reporting entities may choose to adopt the standard as of the original effective date. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the effect that ASU No. 2014-09 will have on our consolidated financial statements and related disclosures, our transition date and transition method. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2015, with early adoption permitted. Management elected to early adopt this new guidance effective for the year ended December 31, 2015, and has applied changes retrospectively to all periods presented. Adoption of this ASU did not materially impact our consolidated financial statements or related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) . This ASU simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. This ASU is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted. Management elected to early adopt this new guidance effect for the year ended December 31, 2015 on a prospective basis. Prior period balances have not been adjusted. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
BUSINESS ACQUISITIONS AND DIVES
BUSINESS ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions and Divestitures | BUSINESS ACQUISITIONS AND DIVESTITURES Acquisitions of businesses are accounted for as purchases 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 of the acquisitions is allocated to the assets acquired and liabilities assumed. 2015 Acquisition KRAVE Pure Foods In March 2015 , we completed the acquisition of all of the outstanding shares of KRAVE Pure Foods, Inc. (“Krave”), manufacturer of KRAVE jerky, a leading all-natural snack brand of premium jerky products. The transaction was undertaken to allow Hershey to tap into the rapidly growing meat snacks category and further expand into the broader snacks space. Krave is headquartered in Sonoma, California and generated 2014 annual sales of approximately $35 million . Total purchase consideration included cash consideration of $220,016 , as well as agreement to pay additional cash consideration of up to $20,000 to the Krave shareholders if certain defined targets related to net sales and gross profit margin are met or exceeded during the twelve-month periods ending December 31, 2015 or March 31, 2016. The fair value of the contingent cash consideration was appropriately classified as a liability of $16,800 as of the acquisition date. Based on revised targets in a subsequent agreement with the Krave shareholders, the fair value was reduced over the second and third quarters of 2015 to $10,000 , with the adjustment to fair value recorded within selling, marketing and administrative expenses. The remaining $10,000 was paid in December 2015. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Goodwill $ 147,089 Trademarks 112,000 Other intangible assets 17,000 Other assets, primarily current assets, net of cash acquired totaling $1,362 9,465 Current liabilities (2,756 ) Non-current deferred tax liabilities (47,344 ) Net assets acquired $ 235,454 Goodwill is calculated as the excess of the purchase price over the fair value of the net assets acquired. The goodwill resulting from the acquisition is attributable primarily to the value of leveraging our brand building expertise, consumer insights, supply chain capabilities and retail relationships to accelerate growth and access to KRAVE products. The recorded goodwill is not expected to be deductible for tax purposes. The purchase price allocation for Krave was concluded in the third quarter of 2015. Acquired trademarks were assigned estimated useful lives of 22 years , while other intangibles, including customer relationships and covenants not to compete, were assigned estimated useful lives ranging from 5 to 16 years . 2014 Acquisitions Shanghai Golden Monkey On September 26, 2014 (the “Initial Acquisition”), our wholly-owned subsidiary, Hershey Netherlands B.V., completed the acquisition of 80% of the total outstanding shares of Shanghai Golden Monkey Food Joint Stock Co., Ltd. (“SGM”), a privately held confectionery company based in Shanghai, China operating through six production facilities located in China. The Golden Monkey product line is primarily sold in China's traditional trade channels. The business complements our position in China, and was undertaken to enable us to take advantage of SGM's distribution and manufacturing capabilities to expand sales of our Hershey products in the China marketplace. Our consolidated net sales for the year ended December 31, 2014 included approximately $54 million generated by SGM since the date of acquisition. The Initial Acquisition was funded by cash consideration of $394,470 , subject to working capital and net debt adjustments. At December 31, 2014, we had recorded a receivable of $37,860 , reflecting our current best estimate of the amount due from the selling SGM shareholders for the working capital and net debt adjustments. Such amount is reflected within prepaid expenses and other in the Consolidated Balance Sheet. As part of the transaction, Hershey Netherlands B.V. contractually agreed to purchase the remaining 20% of the outstanding shares of SGM on the one -year anniversary of the Initial Acquisition, subject to the parties obtaining government and regulatory approvals and satisfaction of other closing conditions. At December 31, 2014, we had recorded a liability of $100,067 , reflecting the acquisition date fair value of the future payment to be made to the SGM shareholders. This liability is included within accrued liabilities in the Consolidated Balance Sheet. The goodwill that resulted from the SGM acquisition was attributable primarily to the value of providing an established platform to leverage our brands in the China market, as well as expected synergies and other benefits from the combined brand portfolios. The recorded goodwill is not deductible for tax purposes. Acquired distribution channel relationships and trademarks were assigned estimated useful lives of 16 years and 22 years , respectively. During the first quarter of 2015, we came to an agreement with the selling SGM shareholders to revise the aforementioned receivable and liability balances to reflect partial settlement of the receivable. As a result, in the first quarter, the receivable was adjusted to $8,685 and the liability was adjusted to $76,815 . Additionally, during the first quarter of 2015, goodwill was increased by $6,623 to recognize revisions to the estimated value of assets and liabilities acquired in the acquisition. During the second quarter, based on our ongoing procedures to assess the quality of acquired trade accounts receivable, we recorded an additional adjustment to increase goodwill by $25,898 to reflect bad debt allowance for an additional amount of trade receivables considered to be uncollectible as of the acquisition date. During the third quarter of 2015, we continued our procedures to assess the quality of acquired trade accounts receivable. We also undertook procedures to further evaluate and quantify outstanding pre-acquisition trade promotion commitments to distributors, as well as allowances for returns and discounts related to excess and unsalable inventory held at distributors and sales branches as of the acquisition date. In addition, we concluded on our procedures to estimate the value of pre-acquisition indirect tax contingencies. As a result of these procedures, during the third quarter, we increased the value of acquired goodwill by $16,599 , with the corresponding offset principally represented by the establishment of additional opening balance sheet liabilities for the aforementioned commitments and contingencies. Based on all of the information obtained through the procedures noted previously, we updated our estimates of the acquisition-date fair values of the net assets acquired as of September 26, 2015, the conclusion of the one-year measurement period. Subsequent revisions to the valuation of acquired net assets have been reflected in current results. A roll-forward of the estimated acquisition-date fair values at December 31, 2014 to the final acquisition-date fair values as of September 26, 2015, the conclusion of the one-year measurement period, is as follows: Acquisition date purchase price allocation* In millions of dollars At 12/31/14 Adjustments At 9/26/15 Accounts receivable - trade $ 46 $ (26 ) $ 20 Inventories 42 (1 ) 41 Other current assets 37 6 43 Property, plant and equipment 112 2 114 Goodwill 235 49 284 Other intangible assets 145 — 145 Other non-current assets 35 (3 ) 32 Current liabilities assumed (54 ) (20 ) (74 ) Short-term debt assumed (105 ) — (105 ) Other non-current liabilities assumed, principally deferred taxes (52 ) (2 ) (54 ) Net assets acquired $ 441 $ 446 * Note that the final opening balance sheet value of goodwill presented in the schedule above differs from total write-off of $280.8 million due to changes in foreign currency exchange rates since the date of acquisition. In the fourth quarter of 2015, we entered into a new agreement with the selling SGM shareholders to reduce the originally-agreed purchase price for the remaining 20% of SGM to approximately $36 million. We completed the purchase on February 3, 2016. We are directing our efforts currently on developing an integration plan that is focused on the optimal structure for top-line growth. Goodwill impairment - SGM reporting unit As discussed in the second quarter of 2015, since its initial acquisition in 2014, the SGM business has performed below expectations, with net sales and earnings levels well below pre-acquisition levels. In addition, as part of our ongoing integration process, we continued to assess the quality of SGM’s accounts receivable and existing distributor networks. Based on the declining performance levels and the results of our assessment to date, we determined that an interim impairment test of the SGM reporting unit was required by U.S. generally accepted accounting principles. We performed the first step of this test as of July 5, 2015 using an income approach based on our estimates of future performance scenarios for the business. The results of this test indicated that the fair value of the reporting unit was less than the carrying amount as of the measurement date, suggesting that a goodwill impairment was probable, which required us to perform a second step analysis to confirm that an impairment exists and to determine the amount of the impairment based on our reassessed value of the reporting unit. Although preliminary, as a result of this reassessment, in the second quarter of 2015 we recorded an estimated $249,811 non-cash goodwill impairment charge, representing a write-down of all of the goodwill related to the SGM reporting unit as of July 5, 2015. As noted above, during the third quarter, we increased the value of acquired goodwill by $16,599 , with the corresponding offset principally represented by the establishment of additional opening balance sheet liabilities for the aforementioned commitments and contingencies. We also finalized the impairment test of the goodwill relating to the SGM reporting unit, which resulted in a write-off of this additional goodwill in the third quarter, for a total impairment of $266,409 . We also tested the other long-lived assets of SGM for recoverability by comparing the sum of the undiscounted cash flows to the carrying value of the asset group, and no impairment was indicated. Goodwill impairment - China chocolate reporting unit In connection with the SGM acquisition, we assigned approximately $15 million of goodwill to our existing China chocolate business, as this reporting unit was expected to benefit from acquisition synergies relating to the sale of Golden Monkey-branded product through its Tier 1 and hypermarket distributor networks. As the net sales and earnings of our China business continued to be adversely impacted by macroeconomic challenges and changing consumer shopping behavior through the third quarter, we determined that an interim impairment test of the goodwill in this reporting unit was also required. We performed the first step of this test in the third quarter of 2015 using an income approach based on our estimates of future performance scenarios for the business. The results of this test suggested that a goodwill impairment was probable, and the conclusions of the second step analysis resulted in a write-down of $14,393 , representing the full value of goodwill attributed to this reporting unit as of October 4, 2015. The Allan Candy Company Limited In December 2014 , our wholly-owned subsidiary, Hershey Canada Inc., completed the acquisition of all of the outstanding shares of The Allan Candy Company Limited (“Allan”) for cash consideration of approximately $27,376 , subject to a working capital adjustment. Allan is headquartered in Ontario, Canada and manufactures certain non-chocolate products on behalf of Hershey, in addition to manufacturing and distributing its own branded products, principally in Canada. The preliminary purchase price allocation includes fixed assets of $10,897 , goodwill of $6,996 , other intangible assets of $8,092 , and other net assets of $1,391 . Other intangibles include customer relationships and trademarks with estimated useful lives ranging from 3 to 19 years . During the first half of 2015, we increased goodwill by $1,820 to recognize revisions to the preliminary fair value of net assets acquired. The purchase price allocation for Allan was concluded in the second quarter of 2015. Lotte Shanghai Food Company In March 2014 , we acquired an additional 5.9% interest in Lotte Shanghai Food Company (“LSFC”), a joint venture established in 2007 in China for the purpose of manufacturing and selling product to the venture partners. For this additional interest, we paid $5,580 in cash, increasing our ownership from 44.1% to 50% . At the same time, we also amended the LSFC shareholders' agreement resulting in our operational control over the venture. With the additional operational control, we reassessed our involvement with LSFC and concluded that we have a controlling financial interest. Therefore, we consolidated the venture as of the March 2014 acquisition date. We had previously accounted for our investment in LSFC using the equity method. Total consideration transferred was approximately $99,161 , including the $5,580 cash consideration paid, the estimated fair value of our previously held equity interest of $43,857 and the estimated fair value of the remaining noncontrolling interest in LSFC of $49,724 , which fair values were determined using a market-based approach. The fair value of the LSFC assets acquired and liabilities assumed on the acquisition date was $99,449 , including fixed assets of $106,253 , short-term debt obligations of $13,292 and other net assets of $6,488 . We recognized a gain of approximately $4,627 in connection with this transaction, primarily related to the remeasurement of the fair value of our equity interest immediately before the business combination. The gain is included in other (income) expense, net within our Consolidated Statement of Income for the year ended December 31, 2014. Additionally, cash acquired in the transaction exceeded the $5,580 paid for the controlling interest by $10,035 , resulting in a positive cash impact from the acquisition as presented in the Consolidated Statement of Cash Flows for the year ended December 31, 2014. Pro Forma Presentation Pro forma results of operations have not been presented for these aforementioned acquisitions, as the impact to our consolidated financial statements was not expected to be material. In 2014 and 2013, we incurred net acquisition-related costs primarily related to the SGM acquisition of $13,270 and $4,072 , respectively. These costs primarily consist of third-party advisory fees and are recorded within selling, marketing and administrative costs in the Consolidated Statements of Income, with the exception of the 2014 costs reflecting net foreign currency exchange losses relating to our strategy to cap the SGM acquisition price as denominated in U.S. dollars, which are recorded within other (income) expense, net. Acquisition costs incurred in 2015 were not significant. 2015 Divestiture In December 2014, we entered into an agreement to sell the Mauna Loa Macadamia Nut Corporation (“Mauna Loa”). The transaction closed in the first quarter of 2015, resulting in proceeds, net of selling expenses and an estimated working capital adjustment, of approximately $32,400 . As a result of the expected sale, in 2014, we recorded an estimated loss on the anticipated sale of $22,256 to reflect the disposal entity at fair value, less an estimate of the selling costs. This amount included impairment charges totaling $18,531 to write down goodwill and the indefinite-lived trademark intangible asset, based on the valuation of these assets as implied by the agreed-upon sales price. The sale of Mauna Loa resulted in the recording of an additional loss on sale of $2,667 in the first quarter of 2015, based on updates to the selling expenses and tax benefits. The loss on the sale is reflected within business realignment and impairment costs in the Consolidated Statements of Income. Mauna Loa had historically been reported within our North America segment. Its operations were not material to our annual net sales, net income or earnings per share. Amounts classified as assets and liabilities held for sale at December 31, 2014 were presented within prepaid expenses and other assets and accrued liabilities, respectively, and included the following: Assets held for sale Inventories $ 21,489 Prepaid expenses and other 173 Property, plant and equipment, net 12,691 Other intangibles 12,705 $ 47,058 Liabilities held for sale Accounts payable and accrued liabilities $ 3,726 Other long-term liabilities 9,029 $ 12,755 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying value of goodwill by reportable segment for the years ended December 31, 2015 and 2014 are as follows: North America International and Other Total Goodwill $ 543,628 $ 103,079 $ 646,707 Accumulated impairment loss (4,973 ) (65,173 ) (70,146 ) Balance at January 1, 2014 538,655 37,906 576,561 Acquired during the period 6,996 235,138 242,134 Impairment — (11,400 ) (11,400 ) Transfer to assets held for sale (1,448 ) — (1,448 ) Foreign currency translation (10,854 ) (2,038 ) (12,892 ) Balance at December 31, 2014 533,349 259,606 792,955 Acquired during the period 147,334 — 147,334 Impairment — (280,802 ) (280,802 ) Purchase price allocation adjustments 1,575 46,203 47,778 Foreign currency translation (20,175 ) (2,838 ) (23,013 ) Balance at December 31, 2015 $ 662,083 $ 22,169 $ 684,252 As discussed in Note 1, we perform our annual impairment test of goodwill and other indefinite-lived intangible assets at the beginning of the fourth quarter. The $280,802 impairment charge recorded in 2015 resulted from our interim reassessment of the valuation of the SGM business, coupled with the write-down of goodwill attributed to the China chocolate business in connection with the SGM acquisition. See Note 2 for additional information. In 2014, the annual impairment testing of our India reporting unit resulted in a $11,400 goodwill impairment charge and a $4,500 pre-tax write-down of a trademark associated with the India business. These impairment charges were largely a result of our decision to exit the oils portion of the India business and realign our approach to regional marketing and distribution in India. Our remaining goodwill is currently attributed to seven reporting units. For step one of our 2015 annual test, the percentage of excess fair value over carrying value was at least 50% for each of our seven tested reporting units, with the exception of our Krave reporting unit, representing a recently acquired business whose estimated fair value approximated its carrying value. The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: December 31, 2015 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 227,511 $ (16,246 ) $ 129,223 $ (7,593 ) Customer-related 146,532 (26,643 ) 138,964 (20,404 ) Patents 16,857 (12,481 ) 18,383 (11,447 ) Other — — 8,805 (6,090 ) Total 390,900 (55,370 ) 295,375 (45,534 ) Intangible assets not subject to amortization: Trademarks 43,775 45,000 Total other intangible assets $ 379,305 $ 294,841 Total amortization expense for the years ended December 31, 2015, 2014 and 2013 was $22,306 , $11,328 and $10,849 , respectively. Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows: Year ending December 31, 2016 2017 2018 2019 2020 Amortization expense $ 21,928 $ 21,546 $ 20,006 $ 19,899 $ 19,660 |
SHORT AND LONG-TERM DEBT
SHORT AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2015 | |
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 $1.0 billion unsecured revolving credit facility, which currently expires in November 2020. The agreement also includes an option to increase borrowings by an additional $400,000 with the consent of the lenders. 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, 2015 , we complied with all customary 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 $516,916 in 2015 and $447,629 in 2014 . These lines permit us to borrow at the respective banks’ prime commercial interest rates, or lower. We had short-term foreign bank loans against these lines of credit for $313,520 and $329,701 in December 31, 2015 and December 31, 2014 , respectively. Commitment fees relating to our revolving credit facility and lines of credit are not material. At December 31, 2015 , we had outstanding commercial paper totaling $49,993 , at a weighted average interest rate of 0.40% . At December 31, 2014 , we had outstanding commercial paper totaling $54,995 , at a weighted average interest rate of 0.09% . The maximum amount of short-term borrowings outstanding during 2015 was $687,981 . The weighted-average interest rate on short-term borrowings outstanding was 3.0% as of December 31, 2015 and 3.2% as of December 31, 2014 . Long-term Debt Long-term debt consisted of the following: December 31, 2015 2014 4.85% Notes due 2015 $ — $ 250,000 5.45% Notes due 2016 250,000 250,000 1.50% Notes due 2016 250,000 250,000 1.60% Notes due 2018 300,000 — 4.125% Notes due 2020 350,000 350,000 8.8% Debentures due 2021 84,715 100,000 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 — 7.2% Debentures due 2027 193,639 250,000 Other obligations, net of debt issuance costs and unamortized debt discount 78,660 93,122 Total long-term debt 2,057,014 1,793,122 Less—current portion 499,923 250,805 Long-term portion $ 1,557,091 $ 1,542,317 In August 2015, we repaid $250,000 of 4.85% Notes due in 2015 at maturity with commercial paper. Also in August 2015, we issued $300,000 of 1.60% Notes due in 2018 and $300,000 of 3.20% Notes due in 2025 (the “Notes”). The Notes were issued under a shelf registration statement on Form S-3 filed in June 2015 that registered an indeterminate amount of debt securities. In August 2015, we paid $100,165 to repurchase $71,646 of our long-term debt as part of a cash tender offer, consisting of $15,285 of our 8.80% Debentures due in 2021 and $56,361 of our 7.20% Debentures due in 2027. We used a portion of the proceeds from the Notes issued in August 2015 to fund the repurchase. As a result of the repurchase, we recorded interest expense of $28,326 which represented the premium paid for the tender offer as well as the write-off of the related unamortized debt discount and debt issuance costs. Upon extinguishment of the debt, we unwound the fixed-to-floating interest rate swaps related to the tendered bonds and recognized a gain of $278 currently in interest expense resulting from the hedging instruments. In the third and fourth quarters of 2015, we reclassified to current liabilities $250,000 in outstanding principal of our 5.45% Notes which are due in September 2016 and $250,000 in outstanding principal of our 1.50% Notes which are due in November 2016, respectively. In the third quarter of 2014, we reclassified to current liabilities $250,000 in outstanding principal amount relating to our 4.85% Notes which came due in August 2015. Aggregate annual maturities of long-term debt are as follows for the years ending December 31: 2016 $ 499,923 2017 120 2018 300,279 2019 367 2020 350,462 Thereafter 905,863 Our debt is principally unsecured and of equal priority. None of our debt is convertible into our Common Stock. Interest Expense Net interest expense consisted of the following: For the years ended December 31, 2015 2014 2013 Interest expense $ 93,520 $ 93,777 $ 93,258 Capitalized interest (12,537 ) (6,179 ) (1,744 ) Loss on extinguishment of debt 28,326 — — Interest expense 109,309 87,598 91,514 Interest income (3,536 ) (4,066 ) (3,158 ) Interest expense, net $ 105,773 $ 83,532 $ 88,356 |
DERIVATIVE INSTRUMENTS AND FAIR
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurements | DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS We are exposed to market risks arising principally from changes in foreign currency exchange rates, interest rates and commodity prices. We use certain derivative instruments to manage these risks. These include interest rate swaps to manage interest rate risk, foreign currency forward exchange contracts and options to manage foreign currency exchange rate risk, and commodities futures and options contracts to manage commodity market price risk exposures. 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. Through 2015, we have designated the majority of our commodity derivative instruments as cash flow hedges under the hedge accounting requirements. We account for the effective portion of mark-to-market gains and losses on commodity derivative instruments in other comprehensive income, to be recognized in cost of sales in the same period that we record the hedged raw material requirements in cost of sales. The ineffective portion of gains and losses is recorded currently in cost of sales. Cocoa commodity derivatives did not qualify for hedge accounting treatment as of the beginning of the third quarter of 2015. Therefore, changes in the fair value of these derivatives were recorded as incurred within cost of sales for the third and fourth quarters of 2015. Effective January 1, 2016, we are no longer electing to designate any of our existing or new cocoa or other commodity derivatives for hedge accounting treatment. Additionally, we have revised our definition of segment income and redefined non-GAAP income and earnings per share measures to exclude gains and losses on commodity derivatives until the related inventory is sold. This change to our definition of segment income and non-GAAP income and non-GAAP earnings per share will continue to reflect 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 as well as non-GAAP income and non-GAAP earnings per share. Foreign Exchange Price Risk We are exposed to foreign currency exchange rate risk related to our international operations, including non-functional currency intercompany debt and other non-functional currency transactions of certain subsidiaries. Principal currencies hedged include the euro, Canadian dollar, Malaysian ringgit, Swiss franc, Chinese renminbi, Japanese yen, and Brazilian real. We typically utilize foreign currency forward exchange contracts and options to hedge these exposures for periods ranging from 3 to 24 months . The contracts are either designated as cash flow hedges or are undesignated. The net notional amount of foreign exchange contracts accounted for as cash flow hedges was $10,752 at December 31, 2015 and $22,725 at December 31, 2014 . The effective portion of the changes in fair value on these contracts is recorded in other comprehensive income and reclassified into earnings in the same period in which the hedged transactions affect earnings. The net notional amount of foreign exchange contracts that are not designated as accounting hedges was $2,791 at December 31, 2015 and $4,144 at December 31, 2014 . The change in fair value on these instruments is recorded directly in cost of sales or selling, marketing and administrative expense, depending on the nature of the underlying exposure. Interest Rate Risk In order to manage interest rate exposure, from time to time we enter into interest rate swap agreements that effectively convert variable rate debt to a fixed interest rate. These swaps are designated as cash flow hedges, with gains and losses deferred in other comprehensive income to be recognized as an adjustment to interest expense in the same period that the hedged interest payments affect earnings. The notional amount of interest rate derivative instruments in cash flow hedging relationships was $500,000 at December 31, 2015 and $750,000 at December 31, 2014 . We also manage our targeted mix of fixed and floating rate debt with debt issuances and by entering into fixed-to-floating interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. These swaps are designated as fair value hedges, for which the gain or loss on the derivative and the offsetting loss or gain on the hedged item are recognized in current earnings as interest expense (income), net. The notional amount, interest payment and maturity date of these swaps generally match the principal, interest payment and maturity date of the related debt, and the swaps are valued using observable benchmark rates (Level 2 valuation). The notional amount of interest rate derivative instruments in fair value hedge relationships was $350,000 at December 31, 2015 . We had $450,000 derivative instruments in fair value hedge relationships at December 31, 2014 . Equity Price Risk We are exposed to market price changes in certain broad market indices related to our deferred compensation obligations to our employees. In the first quarter of 2014, we entered into 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, 2015 was $22,230 . Fair Value Accounting guidance on fair value measurements requires that financial assets and liabilities be classified and disclosed in one of the following categories of the fair value hierarchy: Level 1 – Based on unadjusted quoted prices for identical assets or liabilities in an active market. Level 2 – Based on observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 – Based on unobservable inputs that reflect the entity's own assumptions about the assumptions that a market participant would use in pricing the asset or liability. We did not have any level 3 financial assets or liabilities, nor were there any transfers between levels during the periods presented. The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of December 31, 2015 and 2014 : December 31, 2015 2014 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Commodities futures and options (2) $ — $ 479 $ — $ 9,944 Foreign exchange contracts (3) 367 475 2,196 2,447 Interest rate swap agreements (4) — 40,299 — 29,505 Cross-currency swap agreement (5) — — 2,016 — 367 41,253 4,212 41,896 Derivatives designated as fair value hedging instruments: Interest rate swap agreements (4) 4,313 — 1,746 — Derivatives not designated as hedging instruments: Commodities futures and options (2) — 1,574 — — Deferred compensation derivatives (6) 1,198 — 1,074 — Foreign exchange contracts (3) 69 — 4,049 2,334 1,267 1,574 5,123 2,334 Total $ 5,947 $ 42,827 $ 11,081 $ 44,230 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) The fair value of commodities futures and options contracts is based on quoted market prices and is, therefore, categorized as Level 1 within the fair value hierarchy. As of December 31, 2015 , liabilities include the net of assets of $54,090 and liabilities of $54,860 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 liabilities at December 31, 2014 were assets of $51,225 and liabilities of $56,840 . At December 31, 2015, the remaining amount reflected in liabilities related to the fair value of other non-exchange traded derivative instruments. At December 31, 2014 , the amount reflected in assets related to the fair value of options contracts. (3) The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. These contracts are classified as Level 2 within the fair value hierarchy. (4) The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Such contracts are categorized as Level 2 within the fair value hierarchy. (5) The fair value of the cross-currency swap agreement is categorized as Level 2 within the fair value hierarchy and is estimated based on the difference between the contract and current market foreign currency exchange rates at the end of the period. (6) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index and is, therefore, categorized as Level 2 within the fair value hierarchy. Other Financial Instruments The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and short-term debt approximated fair value as of December 31, 2015 and December 31, 2014 because of the relatively short maturity of these instruments. The estimated fair value of our long-term debt is based on quoted market prices for similar debt issues and is, therefore, classified as Level 2 within the valuation hierarchy. The fair values and carrying values of long-term debt, including the current portion, was as follows: Fair Value Carrying Value At December 31, 2015 2014 2015 2014 Current portion of long-term debt $ 509,580 $ 257,280 $ 499,923 $ 250,805 Long-term debt 1,668,379 1,715,662 1,557,091 1,542,317 Total $ 2,177,959 $ 1,972,942 $ 2,057,014 $ 1,793,122 Other Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, U.S. GAAP requires that, under certain circumstances, we also record assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges. As discussed in Note 2, we conducted an interim impairment test on the goodwill generated by the SGM acquisition, which resulted in impairment charges totaling $280,802 . In 2014, as discussed in Note 3, in connection with our annual impairment testing of goodwill and indefinite-lived intangible assets, we recorded impairment charges totaling $15,900 relating to our India business. These charges were determined by comparing the fair value of the assets to their carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. As discussed in Note 2, in connection with the planned Mauna Loa divestiture, we classified the net assets as held for sale as of December 31, 2014, resulting in a write down of $18,531 based upon the agreed-upon sales price and related transaction costs. The loss was calculated based on Level 3 inputs and included in 2014 earnings. Income Statement Impact of Derivative Instruments The effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2015 and December 31, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ (2,777 ) $ 2,339 $ 84,382 $ (11,165 ) $ 40,600 $ 68,500 $ 987 $ 2,498 Foreign exchange contracts 487 (1,486 ) (155 ) 2,056 956 3,403 — — Interest rate swap agreements — — (22,388 ) (52,249 ) (4,922 ) (4,500 ) — — Deferred compensation derivatives 173 2,983 — — — — — — Total $ (2,117 ) $ 3,836 $ 61,839 $ (61,358 ) $ 36,634 $ 67,403 $ 987 $ 2,498 (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 were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains (losses) for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. For the year ended December 31, 2014, this included $3,801 relating to unrealized gains on foreign currency forward exchange contracts that were reclassified from AOCI to selling, marketing and administrative expenses as a result of the discontinuance of cash flow hedge accounting because it was determined to be probable that the original forecasted transactions would not occur within the time period originally designated or the subsequent two months thereafter. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. (c) Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts. The amount of net gains on derivative instruments, including interest rate swap agreements, foreign currency forward exchange contracts and options, commodities futures and options contracts, and other commodity derivative instruments expected to be reclassified into earnings in the next 12 months was approximately $15,005 after tax as of December 31, 2015 . This amount was primarily associated with commodities futures contracts. Fair Value Hedges For the years ended December 31, 2015 and 2014, we recognized a net pretax benefit to interest expense of $6,905 and $938 relating to our fixed-to-floating interest swap arrangements. |
COMPREHENSIVE INCOME
COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Comprehensive Income | COMPREHENSIVE INCOME A summary of the components of comprehensive income is as follows: For the year ended December 31, 2015 Pre-Tax Tax After-Tax Net income $ 512,951 Other comprehensive income (loss): Foreign currency translation adjustments $ (59,707 ) $ — (59,707 ) Pension and post-retirement benefit plans (a) 46,910 (16,908 ) 30,002 Cash flow hedges: Gains on cash flow hedging derivatives 61,839 (23,520 ) 38,319 Reclassification adjustments (b) (36,634 ) 13,416 (23,218 ) Total other comprehensive income (loss) $ 12,408 $ (27,012 ) (14,604 ) Total comprehensive income $ 498,347 Comprehensive loss attributable to noncontrolling interests 2,152 Comprehensive income attributable to The Hershey Company $ 500,499 For the year ended December 31, 2014 Pre-Tax Tax After-Tax Net income $ 846,912 Other comprehensive loss: Foreign currency translation adjustments $ (26,851 ) $ — (26,851 ) Pension and post-retirement benefit plans (a) (135,361 ) 50,345 (85,016 ) Cash flow hedges: Losses on cash flow hedging derivatives (61,358 ) 24,281 (37,077 ) Reclassification adjustments (b) (67,403 ) 24,341 (43,062 ) Total other comprehensive loss $ (290,973 ) $ 98,967 (192,006 ) Total comprehensive income $ 654,906 For the year ended December 31, 2013 Pre-Tax Tax After-Tax Net income $ 820,470 Other comprehensive income (loss): Foreign currency translation adjustments $ (26,003 ) $ — (26,003 ) Pension and post-retirement benefit plans (a) 265,015 (98,612 ) 166,403 Cash flow hedges: Gains on cash flow hedging derivatives 116,329 (43,995 ) 72,334 Reclassification adjustments (b) 9,365 (3,590 ) 5,775 Total other comprehensive income $ 364,706 $ (146,197 ) 218,509 Total comprehensive income $ 1,038,979 (a) These amounts are included in the computation of net periodic benefit costs. For more information, see Note 9. (b) For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 5. The components of accumulated other comprehensive loss, as shown on the Consolidated Balance Sheets, are as follows: December 31, 2015 2014 Foreign currency translation adjustments $ (101,236 ) $ (43,681 ) Pension and post-retirement benefit plans, net of tax (254,648 ) (284,650 ) Cash flow hedges, net of tax (15,141 ) (30,242 ) Total accumulated other comprehensive loss $ (371,025 ) $ (358,573 ) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our income (loss) before income taxes was as follows: For the years ended December 31, 2015 2014 2013 Domestic $ 1,357,618 $ 1,320,738 $ 1,252,208 Foreign (455,771 ) (14,695 ) (889 ) Income before income taxes $ 901,847 $ 1,306,043 $ 1,251,319 Our provision for income taxes was as follows: For the years ended December 31, 2015 2014 2013 Current: Federal $ 409,060 $ 385,642 $ 372,649 State 47,978 52,331 47,980 Foreign (29,605 ) 2,362 2,763 Current provision for income taxes 427,433 440,335 423,392 Deferred: Federal (31,153 ) 20,649 11,334 State (2,346 ) 2,725 2,212 Foreign (5,038 ) (4,578 ) (6,089 ) Deferred income tax provision (38,537 ) 18,796 7,457 Total provision for income taxes $ 388,896 $ 459,131 $ 430,849 The decrease in the federal deferred tax provision in 2015 was primarily due to higher deferred tax assets associated with reserves and inventory in 2015 compared with 2014 . The income tax benefit associated with stock-based compensation of $24,839 and $53,497 for the years ended December 31, 2015 and 2014 , respectively, reduced accrued income taxes on the Consolidated Balance Sheets. We credited additional paid-in capital to reflect these excess income tax benefits. 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 were as follows: December 31, 2015 2014 Deferred tax assets: Post-retirement benefit obligations $ 95,763 $ 109,973 Accrued expenses and other reserves 163,908 139,492 Stock-based compensation 46,665 46,061 Derivative instruments 8,858 19,171 Pension 28,940 24,584 Lease financing obligation 18,947 18,991 Accrued trade promotion reserves 36,501 41,332 Net operating loss carryforwards 99,155 50,044 Capital loss carryforwards 44,546 43,155 Other 14,444 3,208 Gross deferred tax assets 557,727 496,011 Valuation allowance (207,055 ) (147,223 ) Total deferred tax assets 350,672 348,788 Deferred tax liabilities: Property, plant and equipment, net 218,729 221,389 Acquired intangibles 120,420 85,037 Inventories 20,063 32,157 Other 8,258 9,063 Total deferred tax liabilities 367,470 347,646 Net deferred tax (liabilities) assets $ (16,798 ) $ 1,142 Included in: Current deferred tax assets, net $ — $ 100,515 Non-current deferred tax assets, net 36,390 — Non-current deferred tax liabilities, net (53,188 ) (99,373 ) Net deferred tax (liabilities) assets $ (16,798 ) $ 1,142 We believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the net deferred tax assets. Changes in deferred tax assets for net operating loss carryforwards resulted primarily from current year losses in foreign jurisdictions. Changes in deferred tax liabilities for acquired intangibles resulted from book intangibles related to the Krave acquisition in 2015. Additional information on income tax benefits and expenses related to components of accumulated other comprehensive loss is provided in Note 6. The valuation allowances as of December 31, 2015 and 2014 are primarily related to U.S. capital loss carryforwards and 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: For the years ended December 31, 2015 2014 2013 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income taxes, net of Federal income tax benefits 4.2 3.0 2.8 Qualified production income deduction (4.4 ) (2.4 ) (2.6 ) Business realignment and impairment charges and gain on sale of trademark licensing rights 10.8 0.7 0.1 International operations 2.2 (0.1 ) (0.4 ) Historic and solar tax credits (3.3 ) — — Other, net (1.4 ) (1.0 ) (0.5 ) Effective income tax rate 43.1 % 35.2 % 34.4 % A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2015 2014 Balance at beginning of year $ 32,230 $ 103,963 Additions for tax positions taken during prior years 1,122 — Reductions for tax positions taken during prior years (2,112 ) (71,643 ) Additions for tax positions taken during the current year 6,623 8,403 Settlements (702 ) (4,643 ) Expiration of statutes of limitations (3,750 ) (3,850 ) Balance at end of year $ 33,411 $ 32,230 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $25,947 as of December 31, 2015 and $23,502 as of December 31, 2014 . We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net tax expense of $1,153 in 2015 , a net tax benefit of $9,082 in 2014 and a net tax expense of $5,901 in 2013 for interest and penalties. Accrued net interest and penalties were $3,791 as of December 31, 2015 and $2,638 as of December 31, 2014 . We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe that our unrecognized tax benefits reflect the most likely outcome. We adjust these unrecognized tax benefits, as well as the related interest, in light of changing facts and circumstances. Settlement of any particular position could require the use of cash. Favorable resolution would be recognized as a reduction to our effective income tax rate in the period of resolution. The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions include the United States (federal and state), Canada, China and Mexico. U.S., Canadian, Chinese and Mexican federal audit issues typically involve the timing of deductions and transfer pricing adjustments. During the first quarter of 2013, the U.S. Internal Revenue Service (“IRS”) commenced its audit of our U.S. income tax returns for 2009 through 2011. The audit was concluded in the second quarter of 2014. Tax examinations by various state taxing authorities could be conducted for years beginning in 2012. We are no longer subject to Canadian federal income tax examinations by the Canada Revenue Agency (“CRA”) for years before 2007. The CRA commenced its audit of our Canadian income tax returns for 2010 through 2012 in the second quarter of 2014. During the fourth quarter of 2013, the CRA concluded its audit for 2007 through 2009 and issued a letter to us indicating proposed adjustments primarily associated with business realignment charges and transfer pricing. During the third quarter of 2014, the CRA withdrew the proposed adjustments related to business realignment charges and transfer pricing of inventory, and we paid a $2,212 assessment related to other cross-border adjustments. During the fourth quarter of 2014, the CRA concluded its audit for 2010 through 2012 and issued a letter to us indicating proposed transfer pricing adjustments. We provided notice to the U.S. Competent Authority and the CRA provided notice to the Canada Competent Authority of the likely need for their assistance to resolve the adjustments. Accordingly, as of December 31, 2015 , we recorded a non-current receivable of approximately $1,428 associated with the anticipated resolution of the adjustments by the Competent Authority of each country. We are no longer subject to Chinese federal income tax examinations by the China State Administration of Taxation ("China SAT") for years before 2010. We are no longer subject to Mexican federal income tax examinations by the Servicio de Administracion Tributaria (“Mexico SAT”) for years before 2010. We work with the IRS, the CRA, the China SAT and the Mexico SAT to resolve proposed audit adjustments and to minimize the amount of adjustments. We do not anticipate that any potential tax adjustments will have a significant impact on our financial position or results of operations. We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $8,649 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. As of December 31, 2015 , we had approximately $239,099 of undistributed earnings of our international subsidiaries. We intend to continue to reinvest earnings outside the United States for the foreseeable future and, therefore, have not recognized any U.S. tax expense on these earnings. Investments in Partnerships Qualifying for Tax Credits In the second quarter of 2015, the Company began making investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits. The investments are accounted for under the equity method and reported within other assets in our Consolidated Balance Sheets. The tax credits, when realized, are recognized as a reduction of tax expense, at which time the corresponding equity investment is written-down to reflect the remaining value of the future benefits to be realized. For the year ended December 31, 2015 , we recognized investment tax credits and related outside basis difference benefit totaling $43,437 , and we wrote-down the equity investment by $39,489 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. |
BUSINESS REALIGNMENT ACTIVITIES
BUSINESS REALIGNMENT ACTIVITIES | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Business Realignment Activities | BUSINESS REALIGNMENT ACTIVITIES Expenses recorded for business realignment activities during 2015 , 2014 and 2013 were as follows: For the years ended December 31, 2015 2014 2013 Cost of sales: Other international restructuring programs $ 8,801 $ — $ — Next Century program — 1,622 402 Total cost of sales 8,801 1,622 402 Selling, marketing and administrative: 2015 productivity initiative 13,614 — — Other international restructuring programs 3,754 2,947 18 Total selling, marketing and administrative 17,368 2,947 18 Business realignment charges: 2015 productivity initiative 92,139 — — Next Century program - plant closure expenses — 7,465 16,387 Divestiture of Mauna Loa (see Note 2) 2,667 22,256 — India voluntary retirement program — — 2,278 Total business realignment charges 94,806 29,721 18,665 Total charges associated with business realignment activities $ 120,975 $ 34,290 $ 19,085 On June 19, 2015, we announced a new productivity initiative (the “2015 Productivity Initiative”) intended to move decision making closer to the customer and the consumer, to enable a more enterprise-wide approach to innovation, to more swiftly advance our knowledge agenda, and to provide for a more efficient cost structure, while ensuring that we effectively allocate resources to future growth areas. Overall, the 2015 Productivity Initiative is intended to simplify the organizational structure to enhance the Company's ability to rapidly anticipate and respond to the changing demands of the global consumer. The 2015 Productivity Initiative was executed throughout the third and fourth quarters, resulting in a net reduction of approximately 300 positions, with the majority of the departures taking place by the end of 2015. For the year ended December 31, 2015 , we incurred charges totaling $105,753 , representing employee severance and related separation benefits as well as incremental third-party costs related to the design and implementation of the new organizational structure. This also includes a pension settlement cost of $10,178 relating to lump sum withdrawals by employees retiring or leaving the Company as a result of this program. Total pre-tax charges and costs for this program are expected to be approximately $120 million , the majority of which are cash. This excludes the impact of the 2015 pension settlement costs and any additional pension settlement costs that could be triggered by additional lump sum withdrawals in 2016. The remaining costs for the 2015 Initiative are expected to be incurred within the first three quarters of 2016. Other 2015 charges for business realignment activities relate principally to accelerated depreciation and amortization and employee severance costs for a couple of programs commenced in 2014 to rationalize certain non-U.S. manufacturing and distribution activities and to establish our own sales and distribution teams in Brazil in connection with our exit from the Bauducco joint venture. The 2014 and 2013 charges shown above relate primarily to the demolition of the Company's former manufacturing facility, representing the final phase of the Project Next Century program. This was program was substantially complete as of December 31, 2014. Segment operating results do not include business realignment and related charges because we evaluate segment performance excluding such charges. The following table summarizes our business realignment activity for the year ended December 31, 2015 : Employee related costs Other exit costs Other implementation costs Total Liability balance at December 31, 2014 $ 79 $ — $ — $ 79 2015 business realignment charges 81,961 — 6,785 88,746 Cash payments (65,336 ) — (6,785 ) (72,121 ) Other, net (394 ) — — (394 ) Liability balance at December 31, 2015 $ 16,310 $ — $ — $ 16,310 The charges reflected in the liability roll-forward above do not include items charged directly to expense, such as accelerated depreciation and amortization and the loss on the Mauna Loa divestiture and certain of the administrative charges associated with the 2015 Initiative, as those items are not reflected in the business realignment liability in our Consolidated Balance Sheets. |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [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: Pension Benefits Other Benefits December 31, 2015 2014 2015 2014 Change in benefit obligation Projected benefits obligation at beginning of year $ 1,260,895 $ 1,120,492 $ 294,064 $ 270,937 Service cost 28,300 26,935 542 706 Interest cost 44,179 48,886 10,187 11,696 Plan amendments 67 168 — — Actuarial (gain) loss (51,064 ) 134,902 (26,887 ) 35,688 Curtailment (2,693 ) — 292 — Settlement (57,193 ) — — — Divestiture (4,047 ) — — — Currency translation and other (11,456 ) (6,204 ) (2,206 ) (1,264 ) Benefits paid (37,564 ) (64,284 ) (20,375 ) (23,699 ) Projected benefits obligation at end of year 1,169,424 1,260,895 255,617 294,064 Change in plan assets Fair value of plan assets at beginning of year 1,136,943 1,091,985 — — Actual return on plan assets (19,804 ) 85,921 — — Employer contributions 32,898 29,409 20,375 23,699 Settlement (57,193 ) — — — Divestiture (2,485 ) — — — Currency translation and other (10,893 ) (6,088 ) — — Benefits paid (37,564 ) (64,284 ) (20,375 ) (23,699 ) Fair value of plan assets at end of year 1,041,902 1,136,943 — — Funded status at end of year $ (127,522 ) $ (123,952 ) $ (255,617 ) $ (294,064 ) Amounts recognized in the Consolidated Balance Sheets: Other assets $ — $ 25 $ — $ — Accrued liabilities (4,841 ) (9,054 ) (24,205 ) (25,214 ) Other long-term liabilities (122,681 ) (114,923 ) (231,412 ) (268,850 ) Total $ (127,522 ) $ (123,952 ) $ (255,617 ) $ (294,064 ) Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: Actuarial net (loss) gain $ (264,570 ) $ (279,625 ) $ 7,574 $ (7,936 ) Net prior service credit (cost) 4,267 5,341 (1,919 ) (2,430 ) Net amounts recognized in AOCI $ (260,303 ) $ (274,284 ) $ 5,655 $ (10,366 ) The accumulated benefit obligation for all defined benefit pension plans was $1,129,052 as of December 31, 2015 and $1,206,929 as of December 31, 2014 . Plans with accumulated benefit obligations in excess of plan assets were as follows: December 31, 2015 2014 Projected benefit obligation $ 1,110,232 $ 1,193,151 Accumulated benefit obligation 1,081,002 1,151,210 Fair value of plan assets 985,111 1,071,539 Net Periodic Benefit Cost The components of net periodic benefit cost were as follows: Pension Benefits Other Benefits For the years ended December 31, 2015 2014 2013 2015 2014 2013 Amounts recognized in net periodic benefit cost Service cost $ 28,300 $ 26,935 $ 31,339 $ 542 $ 706 $ 1,094 Interest cost 44,179 48,886 43,962 10,187 11,696 10,747 Expected return on plan assets (68,830 ) (74,080 ) (73,128 ) — — — Amortization of prior service (credit) cost (1,178 ) (667 ) 422 611 616 618 Amortization of net loss (gain) 30,510 23,360 40,397 (57 ) (141 ) (73 ) Curtailment credit (688 ) — (364 ) 204 — — Settlement loss 23,067 — 18 — — — Total net periodic benefit cost $ 55,360 $ 24,434 $ 42,646 $ 11,487 $ 12,877 $ 12,386 Change in plan assets and benefit obligations recognized in AOCI, pre-tax Actuarial net (gain) loss $ (21,554 ) $ 99,136 $ (230,605 ) $ (26,270 ) $ 36,021 $ (33,165 ) Prior service (credit) cost 1,748 833 (613 ) (834 ) (629 ) (632 ) Total recognized in other comprehensive (income) loss, pre-tax $ (19,806 ) $ 99,969 $ (231,218 ) $ (27,104 ) $ 35,392 $ (33,797 ) Net amounts recognized in periodic benefit cost and AOCI $ 35,554 $ 124,403 $ (188,572 ) $ (15,617 ) $ 48,269 $ (21,411 ) Amounts expected to be amortized from AOCI into net periodic benefit cost during 2016 are as follows: Pension Plans Post-Retirement Benefit Plans Amortization of net actuarial loss (gain) $ 35,230 $ (49 ) Amortization of prior service (credit) cost $ (1,046 ) $ 575 Assumptions The weighted-average assumptions used in computing the benefit obligations were as follows: Pension Benefits Other Benefits December 31, 2015 2014 2015 2014 Discount rate 4.0 % 3.7 % 4.0 % 3.7 % Rate of increase in compensation levels 3.8 % 4.0 % N/A N/A The weighted-average assumptions used in computing net periodic benefit cost were as follows: Pension Benefits Other Benefits For the years ended December 31, 2015 2014 2013 2015 2014 2013 Discount rate 3.7 % 4.5 % 3.7 % 3.7 % 4.5 % 3.7 % Expected long-term return on plan assets 6.3 % 7.0 % 7.8 % N/A N/A N/A Rate of compensation increase 4.1 % 4.0 % 4.0 % N/A N/A N/A 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 based the asset return assumption of 6.3% for 2015 , 7.0% for 2014 and 7.8% for 2013 on current and expected asset allocations, as well as historical and expected returns on the plan asset categories. For 2016 , we reduced the expected return on plan assets assumption to 6.1% from the 6.3% assumption used during 2015 , reflecting lower expected long-term returns due to slowing growth in developed and emerging markets. The historical average return over the 28 years prior to December 31, 2015 , was approximately 8.3% . For purposes of measuring our post-retirement benefit obligation at December 31, 2015 , we assumed a 6.5% pre-65 and a 7.3% post-65 annual rate of increase in the per capita cost of covered health care benefits for 2016 , grading down to 5.0% by 2019. Similarly, for measurement purposes as of December 31, 2014 , we assumed a 7.0% pre-65 and a 8.0% post-65 annual rate of increase in the per capita cost of covered health care benefits for 2015 , grading down to 5.0% by 2019. Assumed health care cost trend rates could have a significant effect on the amounts reported for the post-retirement health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects: Impact of assumed health care cost trend rates One-Percentage One-Percentage Effect on total service and interest cost components $ 139 $ (122 ) Effect on accumulated post-retirement benefit obligation 3,539 (3,144 ) The valuations and assumptions reflect adoption of the Society of Actuaries updated RP-2014 mortality tables with MP-2015 generational projection scales, which we adopted as of December 31, 2015. Adoption of the updated scale 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 domestic and international equities and fixed income asset classes. Our target asset allocation for our major domestic pension plans as of December 31, 2015 was as follows: Asset Class Target Asset Allocation Equity securities 50% Debt securities 49% Cash 1% As of December 31, 2015 , 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 5), pension plan assets at their fair values as of December 31, 2015 : Quoted prices in active markets of identical assets Significant other observable inputs Significant other unobservable Total Cash and cash equivalents $ 1,763 $ 30,389 $ — $ 32,152 Equity securities: U.S. all-cap (a) — 138,367 — 138,367 International all-cap (c) 108,862 3,118 — 111,980 Global all-cap (d) 73,157 196,063 — 269,220 Fixed income securities: U.S. government/agency 117,378 120,136 — 237,514 Corporate bonds (e) 101,476 37,748 — 139,224 Collateralized obligations (f) 32,532 8,157 — 40,689 International government/ corporate bonds (g) 31,917 40,839 — 72,756 Total assets at fair value $ 467,085 $ 574,817 $ — $ 1,041,902 The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2014 : Quoted prices in active markets of identical assets (Level 1) Significant other observable inputs(Level 2) Significant other unobservable inputs (Level 3) Total Cash and cash equivalents $ 2,123 $ 47,702 $ — $ 49,825 Equity securities: U.S. all-cap (a) 1,034 140,948 — 141,982 U.S. large-cap (b) 91,363 — — 91,363 U.S. small/mid-cap 37,797 — — 37,797 International all-cap (c) 121,901 3,510 — 125,411 Global all-cap (d) 165,131 — — 165,131 Fixed income securities: U.S. government/agency 138,556 42,787 — 181,343 Corporate bonds (e) 144,289 41,248 — 185,537 Collateralized obligations (f) 33,753 24,305 — 58,058 International government/corporate bonds (g) 53,205 47,291 — 100,496 Total assets at fair value $ 789,152 $ 347,791 $ — $ 1,136,943 (a) This category comprises equity funds that track the Russell 3000 index. (b) This category comprises equity funds that track the S&P 500 and/or Russell 1000 indices. (c) This category comprises equity funds that track the MSCI World Ex-US index. (d) This category comprises equity funds that track the MSCI World index and/or MSCI All Country World Index. (e) This category comprises fixed income funds primarily invested in investment grade bonds. (f) This category comprises fixed income funds primarily invested in high quality mortgage-backed securities and other asset-backed obligations. (g) This category comprises fixed income funds invested in Canadian and other international bonds. 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: l To ensure high correlation between the value of plan assets and liabilities; l To maintain careful control of the risk level within each asset class; and l 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, 2015 . 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 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 $32,898 during 2015 , including contributions of $22,900 to maintain the funded status of our domestic plans. In 2014 , we made total contributions of $29,409 to the pension plans. For 2016 , minimum funding requirements for our pension plans are approximately $800 and we expect to make additional contributions of approximately $18,500 to maintain the funded status of our domestic plans. 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: Expected Benefit Payments 2016 2017 2018 2019 2020 2021-2025 Pension Benefits $ 178,748 $ 93,577 $ 72,676 $ 76,944 $ 82,176 $ 447,262 Other Benefits 24,233 22,478 20,574 18,979 17,790 76,248 The pension benefit payments expected for 2016 include additional lump sum withdrawals related to the 2015 Productivity Initiative (see Note 8). Multiemployer Pension Plan With the acquisition of Brookside Foods Ltd. in January 2012, we began participation in the BCTGM Union and Industry Canadian Pension Plan, a trustee-managed multiemployer defined benefit pension plan. We currently have approximately 140 employees participating in the plan and contributions were not significant in 2015 , 2014 or 2013. Our obligation during the term of the collective bargaining agreement is limited to remitting the required contributions to the plan. 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 $44,285 in 2015 , $46,064 in 2014 and $43,257 in 2013 . |
STOCK COMPENSATION PLANS
STOCK COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [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: l Non-qualified stock options (“stock options”); l Performance stock units (“PSUs”) and performance stock; l Stock appreciation rights; l Restricted stock units (“RSUs”) and restricted stock; and l Other stock-based awards. As of December 31, 2015 , 68.5 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 Executive Organization Committee of our Board and if in accordance with an applicable deferred compensation plan of the Company. Currently, the Compensation and Executive Organization 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 after 2007 that they elect to convert into deferred stock units under our Directors’ Compensation Plan. For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows: For the years ended December 31, 2015 2014 2013 Pre-tax compensation expense $ 51,533 $ 54,068 $ 53,984 Related income tax benefit 17,109 18,653 18,517 Compensation costs for stock compensation plans are primarily included in selling, marketing and administrative expense. As of December 31, 2015 , total stock-based compensation cost related to non-vested awards not yet recognized was $54,526 and the weighted-average period over which this amount is expected to be recognized was approximately 2.2 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. A summary of activity relating to grants of stock options for the year ended December 31, 2015 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 7,319,377 $66.69 6.3 years Granted 1,355,575 $105.18 Exercised (1,449,054 ) $52.78 Forfeited (383,335 ) $99.20 Outstanding as of December 31, 2015 6,842,563 $75.48 5.8 years $ 128,710 Options exercisable as of December 31, 2015 4,284,014 $63.21 4.3 years $ 118,232 The weighted-average fair value of options granted was $18.99 , $21.50 and $14.51 per share in 2015, 2014 and 2013, respectively. The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: For the years ended December 31, 2015 2014 2013 Dividend yields 2.1 % 2.0 % 2.2 % Expected volatility 20.7 % 22.3 % 22.2 % Risk-free interest rates 1.9 % 2.1 % 1.4 % Expected lives in years 6.7 6.7 6.6 l “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; l “Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant; l “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 l “Expected lives” means the period of time that stock options granted are expected to be outstanding based primarily on historical data. The total intrinsic value of options exercised was $66,161 , $133,948 and $135,396 in 2015, 2014 and 2013, respectively. As of December 31, 2015 , there was $19,008 of total unrecognized compensation cost related to non-vested stock option compensation arrangements granted under the EICP, which we expect to recognize over a weighted-average period of 2.4 years . The following table summarizes information about stock options outstanding as of December 31, 2015 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $33.40 - $56.33 1,998,058 3.2 $44.52 1,998,058 $44.52 $60.68 - $81.73 2,420,944 5.8 $71.38 1,658,197 $69.89 $86.75 - $106.65 2,423,561 7.9 $105.09 627,759 $105.09 $33.40 - $106.65 6,842,563 5.8 $75.48 4,284,014 $63.21 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. For each PSU granted from 2013 through 2015 , 50% of the target award was comprised of a market-based total shareholder return component and 50% of the target award was comprised of performance-based components. The performance scores for 2013 through 2015 grants of PSUs can range from 0% to 250% of the targeted amounts. We recognize the compensation cost associated with PSUs ratably over the 3 -year term. Compensation cost 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 2015 , 2014 and 2013 , 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 cost associated with employee RSUs over a specified restriction period based on the grant date fair value or year-end market value of our Common Stock. We recognize expense for employee RSUs based on the straight-line method. We recognize the compensation cost associated with non-employee director RSUs ratably over the vesting period. A summary of activity relating to grants of PSUs and RSUs for the period ended December 31, 2015 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) Outstanding at beginning of year 904,306 $94.48 Granted 381,407 $104.68 Performance assumption change (281,902 ) $107.39 Vested (452,118 ) $75.40 Forfeited (56,486 ) $111.39 Outstanding at end of year 495,207 $106.40 The table above excludes PSU awards for 20,586 units as of December 31, 2015 and 25,462 units as of December 31, 2014 for which the measurement date has not yet occurred for accounting purposes. The following table sets forth information about the fair value of the PSUs and RSUs granted 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. For the years ended December 31, 2015 2014 2013 Units granted 381,407 331,788 395,862 Weighted-average fair value at date of grant $ 104.68 $ 115.57 $ 88.49 Monte Carlo simulation assumptions: Estimated values $ 61.22 $ 80.95 $ 55.49 Dividend yields 2.0 % 1.8 % 2.0 % Expected volatility 14.9 % 15.5 % 17.1 % l “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; l “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; l “Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant. The intrinsic value of share-based liabilities paid, combined with the fair value of shares vested, totaled $46,113 , $57,360 and $62,582 in 2015 , 2014 and 2013 , respectively. Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 505,992 units as of December 31, 2015 . Each unit is equivalent to one share of the Company’s Common Stock. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our organizational structure is designed to ensure continued focus on North America, coupled with an emphasis on accelerating growth in our focus international markets, as we transform into a more global company. Our business is organized around geographic regions, which enables us to build processes for repeatable success in our global markets. The Presidents of our geographic regions, along with the Senior Vice President responsible for our Global Retail and Licensing business, are accountable for delivering our annual financial plans and report into our CEO, who serves as our Chief Operating Decision Maker (“CODM”), so we have defined our operating segments on a geographic basis. Our North America business currently generates over 87% of our consolidated revenue and none of our other geographic regions are individually significant. Therefore, we currently define our reportable segments as follows: • North America - This segment is responsible for our traditional chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. • International and Other - This segment includes all other countries where The Hershey Company currently manufactures, imports, markets, sells or distributes chocolate and non-chocolate confectionery and other products. Currently, this includes our operations in China and other Asia markets, Latin America, Europe, Africa and the Middle East, along with exports to these regions. While a less significant component, this segment also includes our global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania, New York City, Chicago, Las Vegas, Shanghai, Niagara Falls (Ontario), Dubai, and Singapore, as well as operations associated with licensing the use of certain of the Company's trademarks and products to third parties around the world. For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources. Segment income excludes unallocated general corporate administrative expenses, as well as business realignment and impairment charges, acquisition-related costs, the non-service related portion of pension expense and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating income are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM. Accounting policies associated with our operating segments are generally the same as those described in Note 1. 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: For the years ended December 31, 2015 2014 2013 Net sales: North America $ 6,468,158 $ 6,352,729 $ 6,200,118 International and Other 918,468 1,069,039 945,961 Total $ 7,386,626 $ 7,421,768 $ 7,146,079 Segment income: North America $ 2,073,967 $ 1,916,207 $ 1,862,636 International and Other (98,067 ) 40,004 44,587 Total segment income 1,975,900 1,956,211 1,907,223 Unallocated corporate expense (1) 497,386 503,234 535,130 Goodwill and other intangible asset impairment 280,802 15,900 — Charges associated with business realignment activities 120,975 34,290 19,085 Non-service related pension expense (income) 18,079 (1,834 ) 10,885 Acquisition and integration costs 20,899 12,360 4,072 Operating profit 1,037,759 1,392,261 1,338,051 Interest expense, net 105,773 83,532 88,356 Other (income) expense, net 30,139 2,686 (1,624 ) Income before income taxes $ 901,847 $ 1,306,043 $ 1,251,319 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. Depreciation and amortization expense included within segment income presented above is as follows: For the years ended December 31, 2015 2014 2013 North America $ 153,185 $ 146,475 $ 143,640 International and Other 46,342 28,463 23,461 Corporate 45,401 36,594 33,932 Total $ 244,928 $ 211,532 $ 201,033 Additional geographic information is as follows: 2015 2014 2013 Net sales: United States $ 6,116,490 $ 5,996,564 $ 5,832,070 Other 1,270,136 1,425,204 1,314,009 Total $ 7,386,626 $ 7,421,768 $ 7,146,079 Long-lived assets: United States $ 1,528,723 $ 1,477,455 $ 1,474,155 Other 711,737 674,446 331,190 Total $ 2,240,460 $ 2,151,901 $ 1,805,345 |
EQUITY AND NONCONTROLLING INTER
EQUITY AND NONCONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Equity and Noncontrolling Interests | EQUITY AND NONCONTROLLING INTERESTS We had 1,055,000,000 authorized shares of capital stock as of December 31, 2015 . Of this total, 900,000,000 shares were designated as Common Stock, 150,000,000 shares were designated as Class B Stock and 5,000,000 shares were designated as Preferred Stock. Each class has a par value of one dollar per share. Changes in the outstanding shares of Common Stock for the past three years were as follows: For the years ended December 31, 2015 2014 2013 Shares issued 359,901,744 359,901,744 359,901,744 Treasury shares at beginning of year (138,856,786 ) (136,007,023 ) (136,115,714 ) Stock repurchases: Repurchase programs (4,209,112 ) (2,135,268 ) — Stock-based compensation programs (1,776,838 ) (3,676,513 ) (3,655,830 ) Stock issuances: Stock-based compensation programs 1,718,352 2,962,018 3,764,521 Treasury shares at end of year (143,124,384 ) (138,856,786 ) (136,007,023 ) Net shares outstanding at end of year 216,777,360 221,044,958 223,894,721 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 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 Stock. Class B Stock can be converted into Common Stock on a share-for-share basis at any time. During 2015 , no shares of Class B Stock were converted into Common Stock. During 2014 , 440 shares were converted and during 2013 , 8,600 shares were converted. Hershey Trust Company Hershey Trust Company, as trustee for the benefit of Milton Hershey School and as direct owner of investment shares, held 12,902,921 shares of our Common Stock as of December 31, 2015 . As trustee for the benefit of Milton Hershey School, Hershey Trust Company held 60,612,012 shares of the Class B Stock as of December 31, 2015 , and was entitled to cast approximately 80% 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 benefit of Milton Hershey School, 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. Noncontrolling Interests in Subsidiaries We currently own a 50% controlling interest in Lotte Shanghai Food Company (“LSFC”), a joint venture established in 2007 in China for the purpose of manufacturing and selling product to the venture partners. At December 31, 2014, we owned a 51% controlling interest in Hershey do Brasil under a cooperative agreement with Pandurata Netherlands B.V. (“Bauducco”), a leading manufacturer of baked goods in Brazil whose primary brand is Bauducco. At the end of 2014, per the terms of the prevailing quotaholder’s agreement, Bauducco provided notice of its intent to sell its 49% interest to us at an amount equal to fair value. Because the noncontrolling interest held by Bauducco was redeemable as a result of the put right, the balance sheet presentation of the noncontrolling interest during 2015 was revised to be reflected as a redeemable noncontrolling interest. The balance was increased in the first three quarters of 2015 by a total of $33,915 , in order to reflect the balance at its redemption value based on the internal valuation for the business. The offset of this adjustment was recorded to additional paid in capital. We purchased the remaining 49% interest in Hershey do Brasil in September. A roll-forward showing the 2015 activity relating to the noncontrolling interests and redeemable noncontrolling interest follows: Noncontrolling Interests Redeemable Noncontrolling Interest Balance, December 31, 2014 $ 64,468 $ — Reclassification from Total Equity to Redeemable Noncontrolling Interest (13,428 ) 13,428 Net income (loss) attributable to noncontrolling interests (1) 577 (4,393 ) Other comprehensive loss - foreign currency translation adjustments (2,152 ) (2,334 ) Adjustment to redemption value — 33,915 Other — (2,346 ) Purchase of redeemable noncontrolling interest — (38,270 ) Balance, December 31, 2015 $ 49,465 $ — (1) Amounts are not considered significant and are presented within selling, marketing and administrative expenses. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES 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, 2015 . 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, 2015 , we satisfied these obligations by taking delivery of and making payment for the specific commodities. As of December 31, 2015 , we had entered into purchase agreements with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2015 : In millions of dollars 2016 2017 2018 2019 Purchase obligations $ 1,343.1 $ 880.0 $ 87.9 $ 22.4 We have commitments under various lease obligations. Future minimum payments under lease obligations with a remaining term in excess of one year were as follows as of December 31, 2015 : In millions of dollars 2016 2017 2018 2019 2020 Thereafter Future minimum rental payments $ 12.6 $ 9.6 $ 3.7 $ 1.2 $ 0.4 $ 0.7 Future minimum rental payments reflect commitments under non-cancelable operating leases primarily for offices, retail stores, warehouse and distribution facilities, and certain equipment. Total rent expense for the years ended December 31, 2015 , 2014 and 2013 was $19,754 , $21,423 and $16,972 , respectively, including short-term rentals. 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. Costs associated with the removal of asbestos related to the closure of a manufacturing facility under the Next Century program were recorded primarily in 2012 and included in business realignment and impairment charges. The costs associated with the removal of asbestos from the facility were not material. With regard to other facilities, 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 In 2007, the Competition Bureau of Canada began an inquiry into alleged violations of the Canadian Competition Act in the sale and supply of chocolate products sold in Canada between 2002 and 2008 by members of the confectionery industry, including Hershey Canada, Inc. The U.S. Department of Justice also notified the Company in 2007 that it had opened an inquiry, but has not requested any information or documents. Subsequently, 13 civil lawsuits were filed in Canada and 91 civil lawsuits were filed in the United States against the Company. The lawsuits were instituted on behalf of direct purchasers of our products as well as indirect purchasers that purchase our products for use or for resale. Several other chocolate and confectionery companies were named as defendants in these lawsuits as they also were the subject of investigations and/or inquiries by the government entities referenced above. The cases sought recovery for losses suffered as a result of alleged conspiracies in restraint of trade in connection with the pricing practices of the defendants. The Canadian civil cases were settled in 2012. Hershey Canada, Inc. reached a settlement agreement with the Competition Bureau of Canada through their Leniency Program with regard to an inquiry into alleged violations of the Canadian Competition Act in the sale and supply of chocolate products sold in Canada by members of the confectionery industry. On June 21, 2013, Hershey Canada, Inc. pleaded guilty to one count of price fixing related to communications with competitors in Canada in 2007 and paid a fine of approximately $4.0 million . Hershey Canada, Inc. had promptly reported the conduct to the Competition Bureau, cooperated fully with its investigation and did not implement the planned price increase that was the subject of the 2007 communications. With regard to the U.S. lawsuits, the Judicial Panel on Multidistrict Litigation assigned the cases to the U.S. District Court for the Middle District of Pennsylvania (the “District Court”). Plaintiffs sought actual and treble damages against the Company and other defendants based on an alleged overcharge for certain, or in some cases all, chocolate products sold in the U.S. between December 2002 and December 2007, and certain plaintiff groups alleged damages that extended beyond the alleged conspiracy period. The lawsuits had been proceeding on different scheduling tracks for different groups of plaintiffs. On February 26, 2014, the District Court granted summary judgment to the Company in the cases brought by the direct purchaser plaintiffs that had not sought class certification as well as those that had been certified as a class. The direct purchaser plaintiffs appealed the District Court's decision to the United States Court of Appeals for the Third Circuit (“Third Circuit”) in May 2014. On September 15, 2015, the Third Circuit affirmed the District Court's summary judgment decision. The remaining plaintiff groups - the putative class plaintiffs that purchased product indirectly for resale, the putative class plaintiffs that purchased product indirectly for use, and direct purchaser Associated Wholesale Grocers, Inc. - dismissed their cases with prejudice, subject to reinstatement if the Third Circuit were to reverse the District Court’s summary judgment decision. The District Court entered judgment closing the case on April 17, 2014. We currently have no material pending legal proceedings, other than ordinary routine litigation incidental to our business. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2015 | |
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: For the years ended December 31, 2015 2014 2013 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) $ 352,953 $ 123,179 $ 328,752 $ 111,662 $ 294,979 $ 98,822 Allocation of undistributed earnings 27,324 9,495 303,801 102,697 319,883 106,786 Total earnings—basic $ 380,277 $ 132,674 $ 632,553 $ 214,359 $ 614,862 $ 205,608 Denominator (shares in thousands): Total weighted-average shares—basic 158,471 60,620 161,935 60,620 163,549 60,627 Earnings Per Share—basic $ 2.40 $ 2.19 $ 3.91 $ 3.54 $ 3.76 $ 3.39 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 380,277 $ 132,674 $ 632,553 $ 214,359 $ 614,862 $ 205,608 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 132,674 — 214,359 — 205,608 — Reallocation of undistributed earnings — (69 ) — (1,071 ) — (1,461 ) Total earnings—diluted $ 512,951 $ 132,605 $ 846,912 $ 213,288 $ 820,470 $ 204,147 Denominator (shares in thousands): Number of shares used in basic computation 158,471 60,620 161,935 60,620 163,549 60,627 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,620 — 60,620 — 60,627 — Employee stock options 1,335 — 1,920 — 2,476 — Performance and restricted stock options 225 — 362 — 551 — Total weighted-average shares—diluted 220,651 60,620 224,837 60,620 227,203 60,627 Earnings Per Share—diluted $ 2.32 $ 2.19 $ 3.77 $ 3.52 $ 3.61 $ 3.37 The earnings per share calculations for the years ended December 31, 2015 , December 31, 2014 and December 31, 2013 excluded 2,660 , 1,510 and 1,757 stock options, respectively, that would have been antidilutive. |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 12 Months Ended |
Dec. 31, 2015 | |
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: December 31, 2015 2014 Inventories: Raw materials $ 353,451 $ 377,620 Goods in process 67,745 63,916 Finished goods 534,983 531,608 Inventories at FIFO 956,179 973,144 Adjustment to LIFO (205,209 ) (172,108 ) Total inventories $ 750,970 $ 801,036 Property, plant and equipment: Land $ 96,666 $ 95,913 Buildings 1,084,958 1,031,050 Machinery and equipment 2,886,723 2,863,559 Construction in progress 448,956 338,085 Property, plant and equipment, gross 4,517,303 4,328,607 Accumulated depreciation (2,276,843 ) (2,176,706 ) Property, plant and equipment, net $ 2,240,460 $ 2,151,901 Other assets: Pension $ — $ 25 Capitalized software, net 68,004 63,252 Income tax receivable 1,428 1,568 Other non-current assets 85,934 71,281 Total other assets $ 155,366 $ 136,126 Accrued liabilities: Payroll, compensation and benefits $ 215,638 $ 225,439 Advertising and promotion 337,945 326,647 Due to SGM shareholders 72,025 98,884 Other 231,359 162,543 Total accrued liabilities $ 856,967 $ 813,513 Other long-term liabilities: Post-retirement benefits liabilities $ 231,412 $ 268,850 Pension benefits liabilities 122,681 114,923 Other 114,625 142,230 Total other long-term liabilities $ 468,718 $ 526,003 |
QUARTERLY DATA
QUARTERLY DATA | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data | QUARTERLY DATA (Unaudited) Summary quarterly results were as follows: Year 2015 First Second Third (b) Fourth (b) Net sales $ 1,937,800 $ 1,578,825 $ 1,960,779 $ 1,909,222 Gross profit 900,843 735,408 868,706 877,718 Net income (loss) 244,737 (99,941 ) 140,266 227,889 Common stock: Net income (loss) per share—Basic (a) 1.14 (0.47 ) 0.66 1.08 Net income (loss) per share—Diluted 1.10 (0.47 ) 0.64 1.04 Dividends paid per share 0.535 0.535 0.583 0.583 Class B common stock: Net income (loss) per share—Basic (a) 1.04 (0.42 ) 0.60 0.98 Net income (loss) per share—Diluted (a) 1.03 (0.42 ) 0.60 0.98 Dividends paid per share 0.486 0.486 0.530 0.530 Market price—common stock: High 110.78 101.74 94.31 97.07 Low 98.52 87.86 85.13 83.58 Year 2014 First Second Third Fourth Net sales $ 1,871,813 $ 1,578,350 $ 1,961,578 $ 2,010,027 Gross profit 871,490 717,474 860,137 887,065 Net income 252,495 168,168 223,741 202,508 Common stock: Net income per share—Basic (a) 1.16 0.78 1.03 0.94 Net income per share—Diluted 1.11 0.75 1.00 0.91 Dividends paid per share 0.485 0.485 0.535 0.535 Class B common stock: Net income per share—Basic 1.04 0.70 0.94 0.85 Net income per share—Diluted 1.03 0.70 0.94 0.85 Dividends paid per share 0.435 0.435 0.486 0.486 Market price—common stock: High 108.07 104.11 96.93 106.64 Low 95.54 96.02 88.15 91.09 (a) Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year, as well as the impact of excluding dilutive securities in the period in which there was a net loss. (b) The Company identified a material weakness in its internal control over financial reporting related to hedge accounting compliance for cocoa commodity derivatives. As a result, hedge accounting treatment for cocoa commodity derivatives was disallowed for the third and fourth quarters of 2015; therefore the impact of changes in fair value of the cocoa commodity futures outstanding during these periods should have been recorded within cost of sales as incurred, instead of deferred within AOCI. Such gains (losses) totaled $(23,358) for the third quarter of 2015 and an essentially offsetting amount for the fourth quarter of 2015. The amounts presented above for the third and fourth quarters of 2015 reflect the impact of reclassifying these gains (losses) deferred within AOCI to cost of sales for the respective periods. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2015, 2014 and 2013 Additions Description Balance at Beginning of Period Charged to Costs and Expenses Charged Deductions Balance of Period In thousands of dollars For the year ended December 31, 2015 Allowances deducted from assets Accounts receivable—trade, net (a) $ 15,885 $ 172,622 $ — $ (155,869 ) $ 32,638 Valuation allowance on net deferred taxes (b) 147,223 59,832 — — 207,055 Inventory obsolescence reserve (c) 11,748 32,434 — (21,550 ) 22,632 Total allowances deducted from assets $ 174,856 $ 264,888 $ — $ (177,419 ) $ 262,325 For the year ended December 31, 2014 Allowances deducted from assets Accounts receivable—trade, net (a) $ 14,329 $ 153,652 $ — $ (152,096 ) $ 15,885 Valuation allowance on net deferred taxes (b) 87,159 60,064 — — 147,223 Inventory obsolescence reserve (c) 564 24,660 — (13,476 ) 11,748 Total allowances deducted from assets $ 102,052 $ 238,376 $ — $ (165,572 ) $ 174,856 For the year ended December 31, 2013 Allowances deducted from assets Accounts receivable—trade, net (a) $ 15,246 $ 154,874 $ — $ (155,791 ) $ 14,329 Valuation allowance on net deferred taxes (b) 74,021 13,138 — — 87,159 Inventory obsolescence reserve (c) 9,264 17,446 — (26,146 ) 564 Total allowances deducted from assets $ 98,531 $ 185,458 $ — $ (181,937 ) $ 102,052 (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. (c) Includes adjustments to the inventory reserve, disposals and write-offs of obsolete inventory. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. Net income (loss) attributable to noncontrolling interests is not significant and is recorded within selling, marketing and administrative expense in the Consolidated Statements of Income. See Note 12 for additional information on our noncontrolling interests. We use the equity method of accounting when we have a 20% to 50% interest in other companies and exercise significant influence. Additionally, in 2015 we began making investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits which are accounted for using the equity method. See Note 7 for additional information on our equity investments in partnership entities qualifying for tax credits. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 | Revenue Recognition We record sales when all of the following criteria have been met: l A valid customer order with a fixed price has been received; l The product has been delivered to the customer; l There is no further significant obligation to assist in the resale of the product; and l Collectability is reasonably assured. Net sales include revenue from the sale of finished goods and royalty income, net of allowances for trade promotions, consumer coupon programs and other sales incentives, and allowances and discounts associated with aged or potentially unsaleable products. Trade promotions and sales incentives primarily include reduced price features, merchandising displays, sales growth incentives, new item allowances and cooperative advertising. Sales, use, value-added and other excise taxes are not recognized in revenue. |
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 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, administrative and other indirect overhead costs, amortization of capitalized software and depreciation of administrative facilities. |
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. |
Short-term Investments | Short-term Investments Short-term investments consist of bank term deposits that have original maturity dates ranging from greater than three months to twelve months. Short-term investments are carried at cost, which approximates fair value. |
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 concentrations of credit risk are associated with Wal-Mart Stores, Inc. and McLane Company, Inc., two customers served principally by our North America segment. As of December 31, 2015 , McLane Company, Inc. accounted for approximately 19% of our total accounts receivable. Wal-Mart Stores, Inc. accounted for approximately 14% of our total accounts receivable as of December 31, 2015 . 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. |
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, 2015 , approximately 55% of our inventories, representing the majority of our 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 are valued at the lower of first-in, first-out (“FIFO”) cost or market. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are 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. 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 | 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 $68,004 and $63,252 at December 31, 2015 and 2014 , respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 5 years . Accumulated amortization of capitalized software was $304,057 and $300,698 as of December 31, 2015 and 2014 , 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. Generally, we measure impairment under the following circumstances: l When internal-use computer software is not expected to provide substantive service potential; l When a significant change occurs in the extent or manner in which the software is used or is expected to be used; l When a significant change is made or will be made to the software program; and l When the costs of developing or modifying internal-use computer software significantly exceed the amount originally expected to develop or modify the software. |
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 use a two-step process to quantitatively evaluate goodwill for impairment. In the first step, 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, we complete a second step to determine the amount of the goodwill impairment that we should record. In the second step, we determine an implied fair value of the reporting unit’s goodwill by allocating the reporting unit’s fair value to all of its assets and liabilities other than goodwill (including any unrecognized intangible assets). We compare the resulting implied fair value of the goodwill to the carrying amount and record an impairment charge for the difference. We test individual indefinite-lived intangible assets by comparing the estimated fair value 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. See Note 3 for additional information regarding the results of impairment tests. 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, which are amortized over estimated useful lives of approximately 25 years , 15 years , and 5 years , respectively. When certain events or changes in operating conditions indicate that the carrying value of these assets may not be recoverable, we perform an impairment assessment and may adjust the remaining useful lives. |
Currency Translation | 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 Contracts | 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 balance sheet 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 had 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. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to current year presentation. Specifically, this includes amounts presented in our “other (income) expense, net” caption included in our Consolidated Statements of Income and the “effect of exchange rate changes on cash and cash equivalents” included in our Consolidated Statements of Cash Flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard was originally effective for us on January 1, 2017; however, in July 2015 the FASB decided to defer the effective date by one year. Early application is not permitted, but reporting entities may choose to adopt the standard as of the original effective date. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the effect that ASU No. 2014-09 will have on our consolidated financial statements and related disclosures, our transition date and transition method. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . ASU No. 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU is effective for fiscal years, and interim periods within those fiscal years beginning after December 15, 2015, with early adoption permitted. Management elected to early adopt this new guidance effective for the year ended December 31, 2015, and has applied changes retrospectively to all periods presented. Adoption of this ASU did not materially impact our consolidated financial statements or related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) . This ASU simplifies the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as non-current in a classified statement of financial position. This ASU is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods, with early adoption permitted. Management elected to early adopt this new guidance effect for the year ended December 31, 2015 on a prospective basis. Prior period balances have not been adjusted. 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. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary Other Nonoperating (Income) Expense | After considering these reclassifications, amounts reflected in other (income) expense, net include the following: Year Ended December 31, December 31, December 31, Gain on sale of non-core trademark $ (9,950 ) $ — $ — Write-down of equity investments in partnerships qualifying for historic tax credits (see Note 7) 39,489 — — Foreign currency exchange loss relating to strategy to cap Shanghai Golden Monkey acquisition price as denominated in U.S. dollars — 6,722 — Gain on acquisition of controlling interest in Lotte Shanghai Food Company — (4,628 ) — Other losses (gains), net 600 592 (1,624 ) Total $ 30,139 $ 2,686 $ (1,624 ) |
BUSINESS ACQUISITIONS AND DIV28
BUSINESS ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Mauna Loa Macadamia Nut Corporation | Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | |
Business Acquisition and Divestitures [Line Items] | |
Summary of Assets and Liabilities Held for Sale | Amounts classified as assets and liabilities held for sale at December 31, 2014 were presented within prepaid expenses and other assets and accrued liabilities, respectively, and included the following: Assets held for sale Inventories $ 21,489 Prepaid expenses and other 173 Property, plant and equipment, net 12,691 Other intangibles 12,705 $ 47,058 Liabilities held for sale Accounts payable and accrued liabilities $ 3,726 Other long-term liabilities 9,029 $ 12,755 |
KRAVE Pure Foods, Inc. | |
Business Acquisition and Divestitures [Line Items] | |
Summary 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: Goodwill $ 147,089 Trademarks 112,000 Other intangible assets 17,000 Other assets, primarily current assets, net of cash acquired totaling $1,362 9,465 Current liabilities (2,756 ) Non-current deferred tax liabilities (47,344 ) Net assets acquired $ 235,454 |
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | |
Business Acquisition and Divestitures [Line Items] | |
Summary of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | A roll-forward of the estimated acquisition-date fair values at December 31, 2014 to the final acquisition-date fair values as of September 26, 2015, the conclusion of the one-year measurement period, is as follows: Acquisition date purchase price allocation* In millions of dollars At 12/31/14 Adjustments At 9/26/15 Accounts receivable - trade $ 46 $ (26 ) $ 20 Inventories 42 (1 ) 41 Other current assets 37 6 43 Property, plant and equipment 112 2 114 Goodwill 235 49 284 Other intangible assets 145 — 145 Other non-current assets 35 (3 ) 32 Current liabilities assumed (54 ) (20 ) (74 ) Short-term debt assumed (105 ) — (105 ) Other non-current liabilities assumed, principally deferred taxes (52 ) (2 ) (54 ) Net assets acquired $ 441 $ 446 * Note that the final opening balance sheet value of goodwill presented in the schedule above differs from total write-off of $280.8 million due to changes in foreign currency exchange rates since the date of acquisition. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary 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, 2015 and 2014 are as follows: North America International and Other Total Goodwill $ 543,628 $ 103,079 $ 646,707 Accumulated impairment loss (4,973 ) (65,173 ) (70,146 ) Balance at January 1, 2014 538,655 37,906 576,561 Acquired during the period 6,996 235,138 242,134 Impairment — (11,400 ) (11,400 ) Transfer to assets held for sale (1,448 ) — (1,448 ) Foreign currency translation (10,854 ) (2,038 ) (12,892 ) Balance at December 31, 2014 533,349 259,606 792,955 Acquired during the period 147,334 — 147,334 Impairment — (280,802 ) (280,802 ) Purchase price allocation adjustments 1,575 46,203 47,778 Foreign currency translation (20,175 ) (2,838 ) (23,013 ) Balance at December 31, 2015 $ 662,083 $ 22,169 $ 684,252 |
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: December 31, 2015 2014 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 227,511 $ (16,246 ) $ 129,223 $ (7,593 ) Customer-related 146,532 (26,643 ) 138,964 (20,404 ) Patents 16,857 (12,481 ) 18,383 (11,447 ) Other — — 8,805 (6,090 ) Total 390,900 (55,370 ) 295,375 (45,534 ) Intangible assets not subject to amortization: Trademarks 43,775 45,000 Total other intangible assets $ 379,305 $ 294,841 |
Summary of Amortization Expense, for the Next Five Years | Amortization expense for the next five years, based on current intangible balances, is estimated to be as follows: Year ending December 31, 2016 2017 2018 2019 2020 Amortization expense $ 21,928 $ 21,546 $ 20,006 $ 19,899 $ 19,660 |
SHORT AND LONG-TERM DEBT (Table
SHORT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: December 31, 2015 2014 4.85% Notes due 2015 $ — $ 250,000 5.45% Notes due 2016 250,000 250,000 1.50% Notes due 2016 250,000 250,000 1.60% Notes due 2018 300,000 — 4.125% Notes due 2020 350,000 350,000 8.8% Debentures due 2021 84,715 100,000 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 — 7.2% Debentures due 2027 193,639 250,000 Other obligations, net of debt issuance costs and unamortized debt discount 78,660 93,122 Total long-term debt 2,057,014 1,793,122 Less—current portion 499,923 250,805 Long-term portion $ 1,557,091 $ 1,542,317 |
Schedule of Maturities of Long-term Debt | Aggregate annual maturities of long-term debt are as follows for the years ending December 31: 2016 $ 499,923 2017 120 2018 300,279 2019 367 2020 350,462 Thereafter 905,863 |
Schedule Of Net Interest Expense | Net interest expense consisted of the following: For the years ended December 31, 2015 2014 2013 Interest expense $ 93,520 $ 93,777 $ 93,258 Capitalized interest (12,537 ) (6,179 ) (1,744 ) Loss on extinguishment of debt 28,326 — — Interest expense 109,309 87,598 91,514 Interest income (3,536 ) (4,066 ) (3,158 ) Interest expense, net $ 105,773 $ 83,532 $ 88,356 |
DERIVATIVE INSTRUMENTS AND FA31
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of December 31, 2015 and 2014 : December 31, 2015 2014 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Commodities futures and options (2) $ — $ 479 $ — $ 9,944 Foreign exchange contracts (3) 367 475 2,196 2,447 Interest rate swap agreements (4) — 40,299 — 29,505 Cross-currency swap agreement (5) — — 2,016 — 367 41,253 4,212 41,896 Derivatives designated as fair value hedging instruments: Interest rate swap agreements (4) 4,313 — 1,746 — Derivatives not designated as hedging instruments: Commodities futures and options (2) — 1,574 — — Deferred compensation derivatives (6) 1,198 — 1,074 — Foreign exchange contracts (3) 69 — 4,049 2,334 1,267 1,574 5,123 2,334 Total $ 5,947 $ 42,827 $ 11,081 $ 44,230 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) The fair value of commodities futures and options contracts is based on quoted market prices and is, therefore, categorized as Level 1 within the fair value hierarchy. As of December 31, 2015 , liabilities include the net of assets of $54,090 and liabilities of $54,860 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 liabilities at December 31, 2014 were assets of $51,225 and liabilities of $56,840 . At December 31, 2015, the remaining amount reflected in liabilities related to the fair value of other non-exchange traded derivative instruments. At December 31, 2014 , the amount reflected in assets related to the fair value of options contracts. (3) The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. These contracts are classified as Level 2 within the fair value hierarchy. (4) The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Such contracts are categorized as Level 2 within the fair value hierarchy. (5) The fair value of the cross-currency swap agreement is categorized as Level 2 within the fair value hierarchy and is estimated based on the difference between the contract and current market foreign currency exchange rates at the end of the period. (6) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index and is, therefore, categorized as Level 2 within the fair value hierarchy. |
Schedule of Carrying Values and Estimated Fair Values of Long-term Debt, Including Current Portion | The fair values and carrying values of long-term debt, including the current portion, was as follows: Fair Value Carrying Value At December 31, 2015 2014 2015 2014 Current portion of long-term debt $ 509,580 $ 257,280 $ 499,923 $ 250,805 Long-term debt 1,668,379 1,715,662 1,557,091 1,542,317 Total $ 2,177,959 $ 1,972,942 $ 2,057,014 $ 1,793,122 |
Summary 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, 2015 and December 31, 2014 was as follows: Non-designated Hedges Cash Flow Hedges Gains (losses) recognized in income (a) Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) Gains (losses) reclassified from accumulated OCI into income (effective portion) (b) Gains recognized in income (ineffective portion) (c) 2015 2014 2015 2014 2015 2014 2015 2014 Commodities futures and options $ (2,777 ) $ 2,339 $ 84,382 $ (11,165 ) $ 40,600 $ 68,500 $ 987 $ 2,498 Foreign exchange contracts 487 (1,486 ) (155 ) 2,056 956 3,403 — — Interest rate swap agreements — — (22,388 ) (52,249 ) (4,922 ) (4,500 ) — — Deferred compensation derivatives 173 2,983 — — — — — — Total $ (2,117 ) $ 3,836 $ 61,839 $ (61,358 ) $ 36,634 $ 67,403 $ 987 $ 2,498 (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 were included in cost of sales for commodities futures and options contracts and for foreign currency forward exchange contracts designated as hedges of purchases of inventory or other productive assets. Other gains (losses) for foreign currency forward exchange contracts were included in selling, marketing and administrative expenses. For the year ended December 31, 2014, this included $3,801 relating to unrealized gains on foreign currency forward exchange contracts that were reclassified from AOCI to selling, marketing and administrative expenses as a result of the discontinuance of cash flow hedge accounting because it was determined to be probable that the original forecasted transactions would not occur within the time period originally designated or the subsequent two months thereafter. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. (c) Gains representing hedge ineffectiveness were included in cost of sales for commodities futures and options contracts. |
COMPREHENSIVE INCOME (Tables)
COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of the Components of Comprehensive Income | A summary of the components of comprehensive income is as follows: For the year ended December 31, 2015 Pre-Tax Tax After-Tax Net income $ 512,951 Other comprehensive income (loss): Foreign currency translation adjustments $ (59,707 ) $ — (59,707 ) Pension and post-retirement benefit plans (a) 46,910 (16,908 ) 30,002 Cash flow hedges: Gains on cash flow hedging derivatives 61,839 (23,520 ) 38,319 Reclassification adjustments (b) (36,634 ) 13,416 (23,218 ) Total other comprehensive income (loss) $ 12,408 $ (27,012 ) (14,604 ) Total comprehensive income $ 498,347 Comprehensive loss attributable to noncontrolling interests 2,152 Comprehensive income attributable to The Hershey Company $ 500,499 For the year ended December 31, 2014 Pre-Tax Tax After-Tax Net income $ 846,912 Other comprehensive loss: Foreign currency translation adjustments $ (26,851 ) $ — (26,851 ) Pension and post-retirement benefit plans (a) (135,361 ) 50,345 (85,016 ) Cash flow hedges: Losses on cash flow hedging derivatives (61,358 ) 24,281 (37,077 ) Reclassification adjustments (b) (67,403 ) 24,341 (43,062 ) Total other comprehensive loss $ (290,973 ) $ 98,967 (192,006 ) Total comprehensive income $ 654,906 For the year ended December 31, 2013 Pre-Tax Tax After-Tax Net income $ 820,470 Other comprehensive income (loss): Foreign currency translation adjustments $ (26,003 ) $ — (26,003 ) Pension and post-retirement benefit plans (a) 265,015 (98,612 ) 166,403 Cash flow hedges: Gains on cash flow hedging derivatives 116,329 (43,995 ) 72,334 Reclassification adjustments (b) 9,365 (3,590 ) 5,775 Total other comprehensive income $ 364,706 $ (146,197 ) 218,509 Total comprehensive income $ 1,038,979 (a) These amounts are included in the computation of net periodic benefit costs. For more information, see Note 9. (b) For information on the presentation of reclassification adjustments for cash flow hedges on the Consolidated Statements of Income, see Note 5. |
Summary of the Components of Accumulated Other Comprehensive Loss | The components of accumulated other comprehensive loss, as shown on the Consolidated Balance Sheets, are as follows: December 31, 2015 2014 Foreign currency translation adjustments $ (101,236 ) $ (43,681 ) Pension and post-retirement benefit plans, net of tax (254,648 ) (284,650 ) Cash flow hedges, net of tax (15,141 ) (30,242 ) Total accumulated other comprehensive loss $ (371,025 ) $ (358,573 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) Before Income Taxes | Our income (loss) before income taxes was as follows: For the years ended December 31, 2015 2014 2013 Domestic $ 1,357,618 $ 1,320,738 $ 1,252,208 Foreign (455,771 ) (14,695 ) (889 ) Income before income taxes $ 901,847 $ 1,306,043 $ 1,251,319 |
Schedule of Components of Income Tax Expense (Benefit) | Our provision for income taxes was as follows: For the years ended December 31, 2015 2014 2013 Current: Federal $ 409,060 $ 385,642 $ 372,649 State 47,978 52,331 47,980 Foreign (29,605 ) 2,362 2,763 Current provision for income taxes 427,433 440,335 423,392 Deferred: Federal (31,153 ) 20,649 11,334 State (2,346 ) 2,725 2,212 Foreign (5,038 ) (4,578 ) (6,089 ) Deferred income tax provision (38,537 ) 18,796 7,457 Total provision for income taxes $ 388,896 $ 459,131 $ 430,849 |
Schedule of Deferred Tax Asset and Liabilities | The significant temporary differences that comprised the deferred tax assets and liabilities were as follows: December 31, 2015 2014 Deferred tax assets: Post-retirement benefit obligations $ 95,763 $ 109,973 Accrued expenses and other reserves 163,908 139,492 Stock-based compensation 46,665 46,061 Derivative instruments 8,858 19,171 Pension 28,940 24,584 Lease financing obligation 18,947 18,991 Accrued trade promotion reserves 36,501 41,332 Net operating loss carryforwards 99,155 50,044 Capital loss carryforwards 44,546 43,155 Other 14,444 3,208 Gross deferred tax assets 557,727 496,011 Valuation allowance (207,055 ) (147,223 ) Total deferred tax assets 350,672 348,788 Deferred tax liabilities: Property, plant and equipment, net 218,729 221,389 Acquired intangibles 120,420 85,037 Inventories 20,063 32,157 Other 8,258 9,063 Total deferred tax liabilities 367,470 347,646 Net deferred tax (liabilities) assets $ (16,798 ) $ 1,142 Included in: Current deferred tax assets, net $ — $ 100,515 Non-current deferred tax assets, net 36,390 — Non-current deferred tax liabilities, net (53,188 ) (99,373 ) Net deferred tax (liabilities) assets $ (16,798 ) $ 1,142 |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the federal statutory income tax rate with our effective income tax rate: For the years ended December 31, 2015 2014 2013 Federal statutory income tax rate 35.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income taxes, net of Federal income tax benefits 4.2 3.0 2.8 Qualified production income deduction (4.4 ) (2.4 ) (2.6 ) Business realignment and impairment charges and gain on sale of trademark licensing rights 10.8 0.7 0.1 International operations 2.2 (0.1 ) (0.4 ) Historic and solar tax credits (3.3 ) — — Other, net (1.4 ) (1.0 ) (0.5 ) Effective income tax rate 43.1 % 35.2 % 34.4 % |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2015 2014 Balance at beginning of year $ 32,230 $ 103,963 Additions for tax positions taken during prior years 1,122 — Reductions for tax positions taken during prior years (2,112 ) (71,643 ) Additions for tax positions taken during the current year 6,623 8,403 Settlements (702 ) (4,643 ) Expiration of statutes of limitations (3,750 ) (3,850 ) Balance at end of year $ 33,411 $ 32,230 |
BUSINESS REALIGNMENT ACTIVITI34
BUSINESS REALIGNMENT ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Summary of Business Realignment And Impairment Charges | Expenses recorded for business realignment activities during 2015 , 2014 and 2013 were as follows: For the years ended December 31, 2015 2014 2013 Cost of sales: Other international restructuring programs $ 8,801 $ — $ — Next Century program — 1,622 402 Total cost of sales 8,801 1,622 402 Selling, marketing and administrative: 2015 productivity initiative 13,614 — — Other international restructuring programs 3,754 2,947 18 Total selling, marketing and administrative 17,368 2,947 18 Business realignment charges: 2015 productivity initiative 92,139 — — Next Century program - plant closure expenses — 7,465 16,387 Divestiture of Mauna Loa (see Note 2) 2,667 22,256 — India voluntary retirement program — — 2,278 Total business realignment charges 94,806 29,721 18,665 Total charges associated with business realignment activities $ 120,975 $ 34,290 $ 19,085 |
Summary of Business Realignment Activity | The following table summarizes our business realignment activity for the year ended December 31, 2015 : Employee related costs Other exit costs Other implementation costs Total Liability balance at December 31, 2014 $ 79 $ — $ — $ 79 2015 business realignment charges 81,961 — 6,785 88,746 Cash payments (65,336 ) — (6,785 ) (72,121 ) Other, net (394 ) — — (394 ) Liability balance at December 31, 2015 $ 16,310 $ — $ — $ 16,310 |
PENSION AND OTHER POST-RETIRE35
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Defined Benefit Plans | A summary of the changes in benefit obligations, plan assets and funded status of these plans is as follows: Pension Benefits Other Benefits December 31, 2015 2014 2015 2014 Change in benefit obligation Projected benefits obligation at beginning of year $ 1,260,895 $ 1,120,492 $ 294,064 $ 270,937 Service cost 28,300 26,935 542 706 Interest cost 44,179 48,886 10,187 11,696 Plan amendments 67 168 — — Actuarial (gain) loss (51,064 ) 134,902 (26,887 ) 35,688 Curtailment (2,693 ) — 292 — Settlement (57,193 ) — — — Divestiture (4,047 ) — — — Currency translation and other (11,456 ) (6,204 ) (2,206 ) (1,264 ) Benefits paid (37,564 ) (64,284 ) (20,375 ) (23,699 ) Projected benefits obligation at end of year 1,169,424 1,260,895 255,617 294,064 Change in plan assets Fair value of plan assets at beginning of year 1,136,943 1,091,985 — — Actual return on plan assets (19,804 ) 85,921 — — Employer contributions 32,898 29,409 20,375 23,699 Settlement (57,193 ) — — — Divestiture (2,485 ) — — — Currency translation and other (10,893 ) (6,088 ) — — Benefits paid (37,564 ) (64,284 ) (20,375 ) (23,699 ) Fair value of plan assets at end of year 1,041,902 1,136,943 — — Funded status at end of year $ (127,522 ) $ (123,952 ) $ (255,617 ) $ (294,064 ) Amounts recognized in the Consolidated Balance Sheets: Other assets $ — $ 25 $ — $ — Accrued liabilities (4,841 ) (9,054 ) (24,205 ) (25,214 ) Other long-term liabilities (122,681 ) (114,923 ) (231,412 ) (268,850 ) Total $ (127,522 ) $ (123,952 ) $ (255,617 ) $ (294,064 ) Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: Actuarial net (loss) gain $ (264,570 ) $ (279,625 ) $ 7,574 $ (7,936 ) Net prior service credit (cost) 4,267 5,341 (1,919 ) (2,430 ) Net amounts recognized in AOCI $ (260,303 ) $ (274,284 ) $ 5,655 $ (10,366 ) |
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets | Plans with accumulated benefit obligations in excess of plan assets were as follows: December 31, 2015 2014 Projected benefit obligation $ 1,110,232 $ 1,193,151 Accumulated benefit obligation 1,081,002 1,151,210 Fair value of plan assets 985,111 1,071,539 |
Summary of Components of Net Periodic Benefit Cost | The components of net periodic benefit cost were as follows: Pension Benefits Other Benefits For the years ended December 31, 2015 2014 2013 2015 2014 2013 Amounts recognized in net periodic benefit cost Service cost $ 28,300 $ 26,935 $ 31,339 $ 542 $ 706 $ 1,094 Interest cost 44,179 48,886 43,962 10,187 11,696 10,747 Expected return on plan assets (68,830 ) (74,080 ) (73,128 ) — — — Amortization of prior service (credit) cost (1,178 ) (667 ) 422 611 616 618 Amortization of net loss (gain) 30,510 23,360 40,397 (57 ) (141 ) (73 ) Curtailment credit (688 ) — (364 ) 204 — — Settlement loss 23,067 — 18 — — — Total net periodic benefit cost $ 55,360 $ 24,434 $ 42,646 $ 11,487 $ 12,877 $ 12,386 Change in plan assets and benefit obligations recognized in AOCI, pre-tax Actuarial net (gain) loss $ (21,554 ) $ 99,136 $ (230,605 ) $ (26,270 ) $ 36,021 $ (33,165 ) Prior service (credit) cost 1,748 833 (613 ) (834 ) (629 ) (632 ) Total recognized in other comprehensive (income) loss, pre-tax $ (19,806 ) $ 99,969 $ (231,218 ) $ (27,104 ) $ 35,392 $ (33,797 ) Net amounts recognized in periodic benefit cost and AOCI $ 35,554 $ 124,403 $ (188,572 ) $ (15,617 ) $ 48,269 $ (21,411 ) |
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year | Amounts expected to be amortized from AOCI into net periodic benefit cost during 2016 are as follows: Pension Plans Post-Retirement Benefit Plans Amortization of net actuarial loss (gain) $ 35,230 $ (49 ) Amortization of prior service (credit) cost $ (1,046 ) $ 575 |
Summary of Weighted-Average Assumptions Used in Computing the Benefit Obligation | The weighted-average assumptions used in computing the benefit obligations were as follows: Pension Benefits Other Benefits December 31, 2015 2014 2015 2014 Discount rate 4.0 % 3.7 % 4.0 % 3.7 % Rate of increase in compensation levels 3.8 % 4.0 % N/A N/A The weighted-average assumptions used in computing net periodic benefit cost were as follows: Pension Benefits Other Benefits For the years ended December 31, 2015 2014 2013 2015 2014 2013 Discount rate 3.7 % 4.5 % 3.7 % 3.7 % 4.5 % 3.7 % Expected long-term return on plan assets 6.3 % 7.0 % 7.8 % N/A N/A N/A Rate of compensation increase 4.1 % 4.0 % 4.0 % N/A N/A N/A |
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates | A one-percentage point change in assumed health care cost trend rates would have the following effects: Impact of assumed health care cost trend rates One-Percentage One-Percentage Effect on total service and interest cost components $ 139 $ (122 ) Effect on accumulated post-retirement benefit obligation 3,539 (3,144 ) |
Schedule of Allocation of Plan Assets | Our target asset allocation for our major domestic pension plans as of December 31, 2015 was as follows: Asset Class Target Asset Allocation Equity securities 50% Debt securities 49% Cash 1% The following table sets forth by level, within the fair value hierarchy (as defined in Note 5), pension plan assets at their fair values as of December 31, 2015 : Quoted prices in active markets of identical assets Significant other observable inputs Significant other unobservable Total Cash and cash equivalents $ 1,763 $ 30,389 $ — $ 32,152 Equity securities: U.S. all-cap (a) — 138,367 — 138,367 International all-cap (c) 108,862 3,118 — 111,980 Global all-cap (d) 73,157 196,063 — 269,220 Fixed income securities: U.S. government/agency 117,378 120,136 — 237,514 Corporate bonds (e) 101,476 37,748 — 139,224 Collateralized obligations (f) 32,532 8,157 — 40,689 International government/ corporate bonds (g) 31,917 40,839 — 72,756 Total assets at fair value $ 467,085 $ 574,817 $ — $ 1,041,902 The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2014 : Quoted prices in active markets of identical assets (Level 1) Significant other observable inputs(Level 2) Significant other unobservable inputs (Level 3) Total Cash and cash equivalents $ 2,123 $ 47,702 $ — $ 49,825 Equity securities: U.S. all-cap (a) 1,034 140,948 — 141,982 U.S. large-cap (b) 91,363 — — 91,363 U.S. small/mid-cap 37,797 — — 37,797 International all-cap (c) 121,901 3,510 — 125,411 Global all-cap (d) 165,131 — — 165,131 Fixed income securities: U.S. government/agency 138,556 42,787 — 181,343 Corporate bonds (e) 144,289 41,248 — 185,537 Collateralized obligations (f) 33,753 24,305 — 58,058 International government/corporate bonds (g) 53,205 47,291 — 100,496 Total assets at fair value $ 789,152 $ 347,791 $ — $ 1,136,943 (a) This category comprises equity funds that track the Russell 3000 index. (b) This category comprises equity funds that track the S&P 500 and/or Russell 1000 indices. (c) This category comprises equity funds that track the MSCI World Ex-US index. (d) This category comprises equity funds that track the MSCI World index and/or MSCI All Country World Index. (e) This category comprises fixed income funds primarily invested in investment grade bonds. (f) This category comprises fixed income funds primarily invested in high quality mortgage-backed securities and other asset-backed obligations. (g) This category comprises fixed income funds invested in Canadian and other international bonds. |
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: Expected Benefit Payments 2016 2017 2018 2019 2020 2021-2025 Pension Benefits $ 178,748 $ 93,577 $ 72,676 $ 76,944 $ 82,176 $ 447,262 Other Benefits 24,233 22,478 20,574 18,979 17,790 76,248 |
STOCK COMPENSATION PLANS (Table
STOCK COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary 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: For the years ended December 31, 2015 2014 2013 Pre-tax compensation expense $ 51,533 $ 54,068 $ 53,984 Related income tax benefit 17,109 18,653 18,517 |
Summary 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, 2015 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 7,319,377 $66.69 6.3 years Granted 1,355,575 $105.18 Exercised (1,449,054 ) $52.78 Forfeited (383,335 ) $99.20 Outstanding as of December 31, 2015 6,842,563 $75.48 5.8 years $ 128,710 Options exercisable as of December 31, 2015 4,284,014 $63.21 4.3 years $ 118,232 |
Summary 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: For the years ended December 31, 2015 2014 2013 Dividend yields 2.1 % 2.0 % 2.2 % Expected volatility 20.7 % 22.3 % 22.2 % Risk-free interest rates 1.9 % 2.1 % 1.4 % Expected lives in years 6.7 6.7 6.6 l “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; l “Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant; l “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 l “Expected lives” means the period of time that stock options granted are expected to be outstanding based primarily on historical data. |
Summary of Outstanding Stock Options | The following table summarizes information about stock options outstanding as of December 31, 2015 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $33.40 - $56.33 1,998,058 3.2 $44.52 1,998,058 $44.52 $60.68 - $81.73 2,420,944 5.8 $71.38 1,658,197 $69.89 $86.75 - $106.65 2,423,561 7.9 $105.09 627,759 $105.09 $33.40 - $106.65 6,842,563 5.8 $75.48 4,284,014 $63.21 |
Summary 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, 2015 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards or market value for liability awards (per unit) Outstanding at beginning of year 904,306 $94.48 Granted 381,407 $104.68 Performance assumption change (281,902 ) $107.39 Vested (452,118 ) $75.40 Forfeited (56,486 ) $111.39 Outstanding at end of year 495,207 $106.40 |
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. For the years ended December 31, 2015 2014 2013 Units granted 381,407 331,788 395,862 Weighted-average fair value at date of grant $ 104.68 $ 115.57 $ 88.49 Monte Carlo simulation assumptions: Estimated values $ 61.22 $ 80.95 $ 55.49 Dividend yields 2.0 % 1.8 % 2.0 % Expected volatility 14.9 % 15.5 % 17.1 % l “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; l “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; l “Expected volatility” means the historical volatility of our Common Stock over the expected term of each grant. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Summary of Net Sales and Earnings, and Depreciation and Amortization, by Segment | Our segment net sales and earnings were as follows: For the years ended December 31, 2015 2014 2013 Net sales: North America $ 6,468,158 $ 6,352,729 $ 6,200,118 International and Other 918,468 1,069,039 945,961 Total $ 7,386,626 $ 7,421,768 $ 7,146,079 Segment income: North America $ 2,073,967 $ 1,916,207 $ 1,862,636 International and Other (98,067 ) 40,004 44,587 Total segment income 1,975,900 1,956,211 1,907,223 Unallocated corporate expense (1) 497,386 503,234 535,130 Goodwill and other intangible asset impairment 280,802 15,900 — Charges associated with business realignment activities 120,975 34,290 19,085 Non-service related pension expense (income) 18,079 (1,834 ) 10,885 Acquisition and integration costs 20,899 12,360 4,072 Operating profit 1,037,759 1,392,261 1,338,051 Interest expense, net 105,773 83,532 88,356 Other (income) expense, net 30,139 2,686 (1,624 ) Income before income taxes $ 901,847 $ 1,306,043 $ 1,251,319 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. Depreciation and amortization expense included within segment income presented above is as follows: For the years ended December 31, 2015 2014 2013 North America $ 153,185 $ 146,475 $ 143,640 International and Other 46,342 28,463 23,461 Corporate 45,401 36,594 33,932 Total $ 244,928 $ 211,532 $ 201,033 |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Additional geographic information is as follows: 2015 2014 2013 Net sales: United States $ 6,116,490 $ 5,996,564 $ 5,832,070 Other 1,270,136 1,425,204 1,314,009 Total $ 7,386,626 $ 7,421,768 $ 7,146,079 Long-lived assets: United States $ 1,528,723 $ 1,477,455 $ 1,474,155 Other 711,737 674,446 331,190 Total $ 2,240,460 $ 2,151,901 $ 1,805,345 |
EQUITY AND NONCONTROLLING INT38
EQUITY AND NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary 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: For the years ended December 31, 2015 2014 2013 Shares issued 359,901,744 359,901,744 359,901,744 Treasury shares at beginning of year (138,856,786 ) (136,007,023 ) (136,115,714 ) Stock repurchases: Repurchase programs (4,209,112 ) (2,135,268 ) — Stock-based compensation programs (1,776,838 ) (3,676,513 ) (3,655,830 ) Stock issuances: Stock-based compensation programs 1,718,352 2,962,018 3,764,521 Treasury shares at end of year (143,124,384 ) (138,856,786 ) (136,007,023 ) Net shares outstanding at end of year 216,777,360 221,044,958 223,894,721 |
Summary of Activity Relating to the Non-controlling Interests and Redeemable Non-controlling Interest | A roll-forward showing the 2015 activity relating to the noncontrolling interests and redeemable noncontrolling interest follows: Noncontrolling Interests Redeemable Noncontrolling Interest Balance, December 31, 2014 $ 64,468 $ — Reclassification from Total Equity to Redeemable Noncontrolling Interest (13,428 ) 13,428 Net income (loss) attributable to noncontrolling interests (1) 577 (4,393 ) Other comprehensive loss - foreign currency translation adjustments (2,152 ) (2,334 ) Adjustment to redemption value — 33,915 Other — (2,346 ) Purchase of redeemable noncontrolling interest — (38,270 ) Balance, December 31, 2015 $ 49,465 $ — (1) Amounts are not considered significant and are presented within selling, marketing and administrative expenses. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Obligations Covered by Purchase Agreements with Various Suppliers Future Maturity Schedule | As of December 31, 2015 , we had entered into purchase agreements with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2015 : In millions of dollars 2016 2017 2018 2019 Purchase obligations $ 1,343.1 $ 880.0 $ 87.9 $ 22.4 |
Future Minimum Payments under Non-Cancelable Operating Leases | We have commitments under various lease obligations. Future minimum payments under lease obligations with a remaining term in excess of one year were as follows as of December 31, 2015 : In millions of dollars 2016 2017 2018 2019 2020 Thereafter Future minimum rental payments $ 12.6 $ 9.6 $ 3.7 $ 1.2 $ 0.4 $ 0.7 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
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: For the years ended December 31, 2015 2014 2013 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) $ 352,953 $ 123,179 $ 328,752 $ 111,662 $ 294,979 $ 98,822 Allocation of undistributed earnings 27,324 9,495 303,801 102,697 319,883 106,786 Total earnings—basic $ 380,277 $ 132,674 $ 632,553 $ 214,359 $ 614,862 $ 205,608 Denominator (shares in thousands): Total weighted-average shares—basic 158,471 60,620 161,935 60,620 163,549 60,627 Earnings Per Share—basic $ 2.40 $ 2.19 $ 3.91 $ 3.54 $ 3.76 $ 3.39 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 380,277 $ 132,674 $ 632,553 $ 214,359 $ 614,862 $ 205,608 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 132,674 — 214,359 — 205,608 — Reallocation of undistributed earnings — (69 ) — (1,071 ) — (1,461 ) Total earnings—diluted $ 512,951 $ 132,605 $ 846,912 $ 213,288 $ 820,470 $ 204,147 Denominator (shares in thousands): Number of shares used in basic computation 158,471 60,620 161,935 60,620 163,549 60,627 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,620 — 60,620 — 60,627 — Employee stock options 1,335 — 1,920 — 2,476 — Performance and restricted stock options 225 — 362 — 551 — Total weighted-average shares—diluted 220,651 60,620 224,837 60,620 227,203 60,627 Earnings Per Share—diluted $ 2.32 $ 2.19 $ 3.77 $ 3.52 $ 3.61 $ 3.37 |
SUPPLEMENTAL BALANCE SHEET IN41
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Balance Sheet Information | The components of certain Consolidated Balance Sheet accounts are as follows: December 31, 2015 2014 Inventories: Raw materials $ 353,451 $ 377,620 Goods in process 67,745 63,916 Finished goods 534,983 531,608 Inventories at FIFO 956,179 973,144 Adjustment to LIFO (205,209 ) (172,108 ) Total inventories $ 750,970 $ 801,036 Property, plant and equipment: Land $ 96,666 $ 95,913 Buildings 1,084,958 1,031,050 Machinery and equipment 2,886,723 2,863,559 Construction in progress 448,956 338,085 Property, plant and equipment, gross 4,517,303 4,328,607 Accumulated depreciation (2,276,843 ) (2,176,706 ) Property, plant and equipment, net $ 2,240,460 $ 2,151,901 Other assets: Pension $ — $ 25 Capitalized software, net 68,004 63,252 Income tax receivable 1,428 1,568 Other non-current assets 85,934 71,281 Total other assets $ 155,366 $ 136,126 Accrued liabilities: Payroll, compensation and benefits $ 215,638 $ 225,439 Advertising and promotion 337,945 326,647 Due to SGM shareholders 72,025 98,884 Other 231,359 162,543 Total accrued liabilities $ 856,967 $ 813,513 Other long-term liabilities: Post-retirement benefits liabilities $ 231,412 $ 268,850 Pension benefits liabilities 122,681 114,923 Other 114,625 142,230 Total other long-term liabilities $ 468,718 $ 526,003 |
QUARTERLY DATA (Tables)
QUARTERLY DATA (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Summary quarterly results were as follows: Year 2015 First Second Third (b) Fourth (b) Net sales $ 1,937,800 $ 1,578,825 $ 1,960,779 $ 1,909,222 Gross profit 900,843 735,408 868,706 877,718 Net income (loss) 244,737 (99,941 ) 140,266 227,889 Common stock: Net income (loss) per share—Basic (a) 1.14 (0.47 ) 0.66 1.08 Net income (loss) per share—Diluted 1.10 (0.47 ) 0.64 1.04 Dividends paid per share 0.535 0.535 0.583 0.583 Class B common stock: Net income (loss) per share—Basic (a) 1.04 (0.42 ) 0.60 0.98 Net income (loss) per share—Diluted (a) 1.03 (0.42 ) 0.60 0.98 Dividends paid per share 0.486 0.486 0.530 0.530 Market price—common stock: High 110.78 101.74 94.31 97.07 Low 98.52 87.86 85.13 83.58 Year 2014 First Second Third Fourth Net sales $ 1,871,813 $ 1,578,350 $ 1,961,578 $ 2,010,027 Gross profit 871,490 717,474 860,137 887,065 Net income 252,495 168,168 223,741 202,508 Common stock: Net income per share—Basic (a) 1.16 0.78 1.03 0.94 Net income per share—Diluted 1.11 0.75 1.00 0.91 Dividends paid per share 0.485 0.485 0.535 0.535 Class B common stock: Net income per share—Basic 1.04 0.70 0.94 0.85 Net income per share—Diluted 1.03 0.70 0.94 0.85 Dividends paid per share 0.435 0.435 0.486 0.486 Market price—common stock: High 108.07 104.11 96.93 106.64 Low 95.54 96.02 88.15 91.09 (a) Quarterly income per share amounts do not total to the annual amount due to changes in weighted-average shares outstanding during the year, as well as the impact of excluding dilutive securities in the period in which there was a net loss. (b) The Company identified a material weakness in its internal control over financial reporting related to hedge accounting compliance for cocoa commodity derivatives. As a result, hedge accounting treatment for cocoa commodity derivatives was disallowed for the third and fourth quarters of 2015; therefore the impact of changes in fair value of the cocoa commodity futures outstanding during these periods should have been recorded within cost of sales as incurred, instead of deferred within AOCI. Such gains (losses) totaled $(23,358) for the third quarter of 2015 and an essentially offsetting amount for the fourth quarter of 2015. The amounts presented above for the third and fourth quarters of 2015 reflect the impact of reclassifying these gains (losses) deferred within AOCI to cost of sales for the respective periods. |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2015countrysegmentbrand_name | |
Accounting Policies [Abstract] | |
Number of brand names worldwide (brand names) | brand_name | 80 |
Number of countries in which products are marketed, sold and distributed (country) | country | 70 |
Number of reportable segments (segment) | segment | 2 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - BASIS OF PRESENTATION (Details) | Dec. 31, 2014USD ($) |
Accounting Policies [Abstract] | |
Equity method investments | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN45
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SELLING, MARKETING AND ADMINISTRATIVE EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | |||
Research and development costs | $ 49,281 | $ 47,554 | $ 47,636 |
Advertising expense | 561,644 | 570,223 | $ 582,354 |
Prepaid advertising expense | $ 3,924 | $ 8,193 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ACCOUNTS RECEIVABLE - TRADE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue, Major Customer [Line Items] | |||
Allowance for doubtful accounts | $ 32,638 | $ 15,885 | |
McLane Company, Inc. | Customer Concentration Risk | Sales Revenue, Goods, Net | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 26.00% | 25.00% | 26.00% |
McLane Company, Inc. | Customer Concentration Risk | Accounts Receivable | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 19.00% | ||
Wal-Mart Stores, Inc. | Customer Concentration Risk | Accounts Receivable | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk, percentage | 14.00% |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Percentage of LIFO inventory | 55.00% | |
LIFO inventory amount | $ 410,865 | $ 430,094 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, PLANT AND EQUIPMENT (Details) | 12 Months Ended |
Dec. 31, 2015 | |
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 ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - COMPUTER SOFTWARE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | $ 68,004 | $ 63,252 |
Computer Software | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | 68,004 | 63,252 |
Capitalized computer software, accumulated amortization | $ 304,057 | $ 300,698 |
Computer Software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 3 years | |
Computer Software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GOODWILL AND OTHER INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Trademarks | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 25 years |
Customer Relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Patents | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - OTHER (INCOME) EXPENSE, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Write-down of equity investments in partnerships qualifying for historic tax credits (see Note 7) | $ 39,489 | $ 0 | $ 0 |
Gain on acquisition of controlling interest in Lotte Shanghai Food Company | 0 | (4,628) | 0 |
Other losses (gains), net | 600 | 592 | (1,624) |
Other (income) expense, net | 30,139 | 2,686 | (1,624) |
Lotte Shanghai Food Company | |||
Finite-Lived Intangible Assets [Line Items] | |||
Foreign currency exchange loss relating to strategy to cap Shanghai Golden Monkey acquisition price as denominated in U.S. dollars | 0 | 6,722 | 0 |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gain on sale of non-core trademark | $ (9,950) | 0 | 0 |
Selling, marketing and administrative | |||
Finite-Lived Intangible Assets [Line Items] | |||
Reclassification adjustment | (2,686) | 1,624 | |
Nonoperating Income (Expense) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Reclassification adjustment | $ 2,686 | $ 525 |
BUSINESS ACQUISITIONS AND DIV52
BUSINESS ACQUISITIONS AND DIVESTITURES - KRAVE PURE FOODS NARRATIVE (Details) - USD ($) | 1 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 04, 2015 | |
Business Acquisition [Line Items] | |||||||
Payment of contingent consideration | $ 10,000,000 | $ 0 | $ 0 | ||||
KRAVE Pure Foods, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition, revenue reported by acquired entity for last annual period | $ 35,000,000 | ||||||
Payments to acquire businesses | $ 220,016,000 | ||||||
Maximum contingent consideration amount | $ 20,000,000 | ||||||
Fair value of the contingent consideration | $ 16,800,000 | $ 10,000,000 | |||||
Payment of contingent consideration | $ 10,000,000 | ||||||
KRAVE Pure Foods, Inc. | Trademarks | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset, useful life | 22 years | ||||||
KRAVE Pure Foods, Inc. | Other intangible assets | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset, useful life | 5 years | ||||||
KRAVE Pure Foods, Inc. | Other intangible assets | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Finite-lived intangible asset, useful life | 16 years |
BUSINESS ACQUISITIONS AND DIV53
BUSINESS ACQUISITIONS AND DIVESTITURES - KRAVE PURE FOODS ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 684,252 | $ 792,955 | $ 576,561 | |
KRAVE Pure Foods, Inc. | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 147,089 | |||
Other current assets | 9,465 | |||
Current liabilities | (2,756) | |||
Non-current deferred tax liabilities | (47,344) | |||
Net assets acquired | 235,454 | |||
Cash acquired from acquisition | 1,362 | |||
KRAVE Pure Foods, Inc. | Trademarks | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | 112,000 | |||
KRAVE Pure Foods, Inc. | Other intangible assets | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets | $ 17,000 |
BUSINESS ACQUISITIONS AND DIV54
BUSINESS ACQUISITIONS AND DIVESTITURES - SHANGHAI GOLDEN MONKEY NARRATIVE (Details) | Sep. 26, 2014USD ($)production_facility | Dec. 31, 2015USD ($) | Oct. 04, 2015USD ($) | Jul. 05, 2015USD ($) | Apr. 05, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 26, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Business Acquisition [Line Items] | ||||||||||
Goodwill, purchase price allocation adjustments | $ 47,778,000 | |||||||||
Goodwill impairment | 280,802,000 | $ 11,400,000 | ||||||||
Goodwill | $ 684,252,000 | $ 792,955,000 | 684,252,000 | 792,955,000 | $ 576,561,000 | |||||
International and Other | CHINA | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Goodwill impairment | 14,393,000 | |||||||||
Goodwill | $ 15,000,000 | $ 15,000,000 | ||||||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition, percentage of voting interests acquired | 80.00% | 20.00% | 20.00% | 20.00% | ||||||
Number of production facilities (production facility) | production_facility | 6 | |||||||||
Revenue of acquiree since acquisition date | 54,000,000 | |||||||||
Payments to acquire businesses | $ 394,470,000 | $ 36,000,000 | ||||||||
Additional voting interest purchase period | 1 year | |||||||||
Goodwill, purchase price allocation adjustments | $ 16,599,000 | $ 25,898,000 | $ 6,623,000 | $ 49,000,000 | ||||||
Goodwill impairment | $ 249,811,000 | $ 266,409,000 | ||||||||
Impairment of intangible assets, indefinite-lived | $ 0 | |||||||||
Goodwill | 235,000,000 | $ 284,000,000 | 235,000,000 | |||||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | Customer-related | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible asset, useful life | 16 years | |||||||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | Trademarks | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangible asset, useful life | 22 years | |||||||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | Prepaid Expenses and Other Current Assets | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration, asset | 8,685,000 | 37,860,000 | 37,860,000 | |||||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | Accrued Liabilities | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Fair value of future payments to purchase a business | $ 76,815,000 | $ 100,067,000 | $ 100,067,000 |
BUSINESS ACQUISITIONS AND DIV55
BUSINESS ACQUISITIONS AND DIVESTITURES - SHANGHAI GOLDEN MONKEY ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Sep. 26, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 684,252 | $ 684,252 | $ 792,955 | $ 576,561 | |||
Adjustments | |||||||
Purchase price allocation adjustments | 47,778 | ||||||
Goodwill impairment | 280,802 | 11,400 | |||||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | |||||||
Business Acquisition [Line Items] | |||||||
Accounts receivable - trade | $ 20,000 | 46,000 | |||||
Inventories | 41,000 | 42,000 | |||||
Other current assets | 43,000 | 37,000 | |||||
Property, plant and equipment | 114,000 | 112,000 | |||||
Goodwill | 284,000 | 235,000 | |||||
Finite-lived intangible assets | 145,000 | 145,000 | |||||
Other non-current assets | 32,000 | 35,000 | |||||
Current liabilities | (74,000) | (54,000) | |||||
Short-term debt assumed | (105,000) | (105,000) | |||||
Other non-current liabilities assumed, principally deferred taxes | (54,000) | (52,000) | |||||
Net assets acquired | 446,000 | $ 441,000 | |||||
Adjustments | |||||||
Accounts receivable - trade | (26,000) | ||||||
Inventories | (1,000) | ||||||
Other current assets | 6,000 | ||||||
Property, plant and equipment | 2,000 | ||||||
Purchase price allocation adjustments | $ 16,599 | $ 25,898 | $ 6,623 | 49,000 | |||
Other intangible assets | 0 | ||||||
Other non-current assets | (3,000) | ||||||
Current liabilities assumed | (20,000) | ||||||
Short-term debt assumed | 0 | ||||||
Other non-current liabilities assumed, principally deferred taxes | $ (2,000) | ||||||
Goodwill impairment | $ 249,811 | $ 266,409 |
BUSINESS ACQUISITIONS AND DIV56
BUSINESS ACQUISITIONS AND DIVESTITURES - ALLAN CANDY COMPANY LIMITED (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 792,955 | $ 684,252 | $ 576,561 |
Purchase price allocation adjustments | 47,778 | ||
The Allan Candy Company Limited | |||
Business Acquisition [Line Items] | |||
Payments to acquire businesses | 27,376 | ||
Property, plant and equipment acquired | 10,897 | ||
Goodwill | 6,996 | ||
Finite-lived intangible assets acquired | 8,092 | ||
Other noncurrent assets acquired | $ 1,391 | ||
Purchase price allocation adjustments | $ 1,820 | ||
The Allan Candy Company Limited | Other intangible assets | Minimum | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible asset, useful life | 3 years | ||
The Allan Candy Company Limited | Other intangible assets | Maximum | |||
Business Acquisition [Line Items] | |||
Finite-lived intangible asset, useful life | 19 years |
BUSINESS ACQUISITIONS AND DIV57
BUSINESS ACQUISITIONS AND DIVESTITURES - LOTTE SHANGHAI FOOD COMPANY (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Noncontrolling interests in subsidiaries | $ 49,465 | $ 64,468 | |||
Business combination, step acquisition, equity interest in acquiree, remeasurement gain | 0 | 4,628 | $ 0 | ||
Amount in excess of cash acquired compared to cash paid in an acquisition | $ (218,654) | (396,265) | $ 0 | ||
Lotte Shanghai Food Company | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting interests acquired | 5.90% | ||||
Payments to acquire businesses | $ 5,580 | ||||
Equity interest ownership percentage prior to acquisition | 44.10% | ||||
Equity interest ownership percentage, after acquisition | 50.00% | ||||
Consideration transferred, including equity interest in acquiree held prior to combination | 99,161 | ||||
Equity interest in acquiree, fair value | $ 43,857 | ||||
Noncontrolling interests in subsidiaries | $ 49,724 | ||||
Fair value of assets acquired and liabilities assumed | 99,449 | ||||
Property, plant and equipment | 106,253 | ||||
Short-term debt assumed | 13,292 | ||||
Other noncurrent assets acquired | $ 6,488 | ||||
Amount in excess of cash acquired compared to cash paid in an acquisition | 10,035 | ||||
Lotte Shanghai Food Company | Other Nonoperating Income (Expense) | |||||
Business Acquisition [Line Items] | |||||
Business combination, step acquisition, equity interest in acquiree, remeasurement gain | $ 4,627 |
BUSINESS ACQUISITIONS AND DIV58
BUSINESS ACQUISITIONS AND DIVESTITURES - PRO FORMA INFORMATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | Selling, marketing and administrative | ||
Business Acquisition [Line Items] | ||
Acquisition related costs | $ 13,270 | $ 4,072 |
BUSINESS ACQUISITIONS AND DIV59
BUSINESS ACQUISITIONS AND DIVESTITURES - 2015 DIVESTITURE NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 05, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 32,408 | $ 0 | $ 0 | |
Goodwill and other intangible asset impairment charges | $ 280,802 | 15,900 | $ 0 | |
Mauna Loa Macadamia Nut Corporation | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Goodwill and other intangible asset impairment charges | 18,531 | |||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss on disposal of business | $ 2,667 | 22,256 | ||
Goodwill and other intangible asset impairment charges | $ 18,531 | |||
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations | Mauna Loa Macadamia Nut Corporation | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sale of business | $ 32,400 |
BUSINESS ACQUISITIONS AND DIV60
BUSINESS ACQUISITIONS AND DIVESTITURES - 2015 DIVESTITURE ASSETS AND LIABILITIES (Details) - Mauna Loa Macadamia Nut Corporation - Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations $ in Thousands | Dec. 31, 2014USD ($) |
Assets held for sale | |
Inventories | $ 21,489 |
Prepaid expenses and other | 173 |
Property, plant and equipment, net | 12,691 |
Other intangibles | 12,705 |
Disposal group, assets | 47,058 |
Liabilities held for sale | |
Accounts payable and accrued liabilities | 3,726 |
Other long-term liabilities | 9,029 |
Disposal group, liabilities | $ 12,755 |
GOODWILL AND INTANGIBLE ASSET61
GOODWILL AND INTANGIBLE ASSETS - SUMMARY OF CHANGES IN CARRYING VALUE OF GOODWILL BY REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Line Items] | |||
Goodwill, gross | $ 646,707 | ||
Accumulated impairment loss | (70,146) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 792,955 | $ 576,561 | |
Acquired during the period | 147,334 | 242,134 | |
Impairment | (280,802) | (11,400) | |
Transfer to assets held for sale | (1,448) | ||
Foreign currency translation | (23,013) | (12,892) | |
Purchase price allocation adjustments | 47,778 | ||
Goodwill, ending balance | 684,252 | 792,955 | |
Operating Segments | North America | |||
Goodwill [Line Items] | |||
Goodwill, gross | 543,628 | ||
Accumulated impairment loss | (4,973) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 533,349 | 538,655 | |
Acquired during the period | 147,334 | 6,996 | |
Impairment | 0 | 0 | |
Transfer to assets held for sale | (1,448) | ||
Foreign currency translation | (20,175) | (10,854) | |
Purchase price allocation adjustments | 1,575 | ||
Goodwill, ending balance | 662,083 | 533,349 | |
Operating Segments | International and Other | |||
Goodwill [Line Items] | |||
Goodwill, gross | 103,079 | ||
Accumulated impairment loss | $ (65,173) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 259,606 | 37,906 | |
Acquired during the period | 0 | 235,138 | |
Impairment | (280,802) | (11,400) | |
Transfer to assets held for sale | 0 | ||
Foreign currency translation | (2,838) | (2,038) | |
Purchase price allocation adjustments | 46,203 | ||
Goodwill, ending balance | $ 22,169 | $ 259,606 |
GOODWILL AND INTANGIBLE ASSET62
GOODWILL AND INTANGIBLE ASSETS - NARRATIVE (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015USD ($)reporting_unit | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Goodwill [Line Items] | |||
Goodwill impairment | $ 280,802 | $ 11,400 | |
Number of reporting units (reporting unit) | reporting_unit | 7 | ||
Reporting unit, percentage of fair value in excess of carrying amount | 50.00% | ||
Amortization expense | $ 22,306 | 11,328 | $ 10,849 |
Operating Segments | International and Other | |||
Goodwill [Line Items] | |||
Goodwill impairment | $ 280,802 | 11,400 | |
Operating Segments | International and Other | INDIA | |||
Goodwill [Line Items] | |||
Goodwill impairment | 11,400 | ||
Operating Segments | International and Other | INDIA | Trademarks | |||
Goodwill [Line Items] | |||
Impairment of intangible assets (excluding goodwill) | $ 4,500 |
GOODWILL AND INTANGIBLE ASSET63
GOODWILL AND INTANGIBLE ASSETS - CARRYING AMOUNTS AND ACCUMULATED AMORTIZATION (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 390,900 | $ 295,375 |
Finite-lived intangible assets, accumulated amortization | (55,370) | (45,534) |
Total other intangible assets | 379,305 | 294,841 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, excluding goodwill | 43,775 | 45,000 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 227,511 | 129,223 |
Finite-lived intangible assets, accumulated amortization | (16,246) | (7,593) |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 146,532 | 138,964 |
Finite-lived intangible assets, accumulated amortization | (26,643) | (20,404) |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 16,857 | 18,383 |
Finite-lived intangible assets, accumulated amortization | (12,481) | (11,447) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 0 | 8,805 |
Finite-lived intangible assets, accumulated amortization | $ 0 | $ (6,090) |
GOODWILL AND INTANGIBLE ASSET64
GOODWILL AND INTANGIBLE ASSETS - FUTURE ESTIMATED AMORTIZATION EXPENSE (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,016 | $ 21,928 |
2,017 | 21,546 |
2,018 | 20,006 |
2,019 | 19,899 |
2,020 | $ 19,660 |
SHORT AND LONG-TERM DEBT - SHOR
SHORT AND LONG-TERM DEBT - SHORT-TERM DEBT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||
Short-term debt | $ 363,513,000 | $ 384,696,000 |
Short-term debt, weighted average interest rate | 3.00% | 3.20% |
Maximum amount of short term borrowing outstanding | $ 687,981,000 | |
Commercial Paper | ||
Line of Credit Facility [Line Items] | ||
Short-term debt | $ 49,993,000 | $ 54,995,000 |
Short-term debt, weighted average interest rate | 0.40% | 0.09% |
Revolving Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000 | |
Line of credit facility, accordion feature increase limit | $ 400,000,000 | |
Debt instrument, covenant, pre-tax income from operations to consolidated interest expense, minimum | 200.00% | |
Revolving Credit Facility | Foreign Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 516,916,000 | $ 447,629,000 |
Short-term foreign bank loans against the lines of credit | $ 313,520,000 | $ 329,701,000 |
SHORT AND LONG-TERM DEBT - SUMM
SHORT AND LONG-TERM DEBT - SUMMARY OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Oct. 04, 2015 | Dec. 31, 2014 | Sep. 28, 2014 |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 2,057,014 | $ 1,793,122 | ||
Less—current portion | 499,923 | 250,805 | ||
Long-term portion | 1,557,091 | 1,542,317 | ||
Corporate Debt Securities | 4.85% Notes due 2015 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 0 | 250,000 | $ 250,000 | |
Corporate Debt Securities | 5.45% Notes due 2016 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 250,000 | $ 250,000 | 250,000 | |
Corporate Debt Securities | 1.50% Notes due 2016 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 250,000 | 250,000 | ||
Corporate Debt Securities | 1.60% Notes due 2018 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 300,000 | 0 | ||
Corporate Debt Securities | 4.125% Notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 350,000 | 350,000 | ||
Corporate Debt Securities | 8.8% Debentures due 2021 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 84,715 | 100,000 | ||
Corporate Debt Securities | 2.625% Notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 250,000 | 250,000 | ||
Corporate Debt Securities | 3.20% Notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 300,000 | 0 | ||
Corporate Debt Securities | 7.2% Debentures due 2027 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | 193,639 | 250,000 | ||
Notes Payable to Banks | Other obligations, net of debt issuance costs and unamortized debt discount | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 78,660 | $ 93,122 |
SHORT AND LONG-TERM DEBT - LONG
SHORT AND LONG-TERM DEBT - LONG TERM DEBT INTEREST RATES (Details) - Corporate Debt Securities | Dec. 31, 2015 | Oct. 04, 2015 | Aug. 31, 2015 | Dec. 31, 2014 | Sep. 28, 2014 |
4.85% Notes due 2015 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 4.85% | 4.85% | 4.85% | 4.85% | |
5.45% Notes due 2016 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 5.45% | 5.45% | 5.45% | ||
1.50% Notes due 2016 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 1.50% | 1.50% | |||
1.60% Notes due 2018 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 1.60% | 1.60% | 1.60% | ||
4.125% Notes due 2020 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 4.125% | 4.125% | |||
8.8% Debentures due 2021 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 8.80% | 8.80% | 8.80% | ||
2.625% Notes due 2023 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 2.625% | 2.625% | |||
3.20% Notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 3.20% | 3.20% | 3.20% | ||
7.2% Debentures due 2027 | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage | 7.20% | 7.20% | 7.20% |
SHORT AND LONG-TERM DEBT - LO68
SHORT AND LONG-TERM DEBT - LONG TERM DEBT NARRATIVE (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 04, 2015 | Sep. 28, 2014 | |
Debt Instrument [Line Items] | ||||||
Loss on early extinguishment of debt | $ 28,326,000 | $ 0 | $ 0 | |||
Gain on fair value hedge ineffectiveness | $ 278,000 | |||||
Long-term debt | $ 2,057,014,000 | $ 1,793,122,000 | ||||
Corporate Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument repurchase amount | 100,165,000 | |||||
Extinguishment of debt amount | 71,646,000 | |||||
Loss on early extinguishment of debt | 28,326,000 | |||||
8.8% Debentures due 2021 | Corporate Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of debt amount | 15,285,000 | |||||
7.2% Debentures due 2027 | Corporate Debt Securities | ||||||
Debt Instrument [Line Items] | ||||||
Extinguishment of debt amount | 56,361,000 | |||||
Corporate Debt Securities | 4.85% Notes due 2015 | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of Debt | $ 250,000,000 | |||||
Interest rate, stated percentage | 4.85% | 4.85% | 4.85% | 4.85% | ||
Long-term debt | $ 0 | $ 250,000,000 | $ 250,000,000 | |||
Corporate Debt Securities | 1.60% Notes due 2018 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 300,000,000 | |||||
Interest rate, stated percentage | 1.60% | 1.60% | 1.60% | |||
Long-term debt | $ 300,000,000 | $ 0 | ||||
Corporate Debt Securities | 3.20% Notes due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 300,000,000 | |||||
Interest rate, stated percentage | 3.20% | 3.20% | 3.20% | |||
Long-term debt | $ 300,000,000 | $ 0 | ||||
Corporate Debt Securities | 8.8% Debentures due 2021 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 8.80% | 8.80% | 8.80% | |||
Long-term debt | $ 84,715,000 | $ 100,000,000 | ||||
Corporate Debt Securities | 7.2% Debentures due 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 7.20% | 7.20% | 7.20% | |||
Long-term debt | $ 193,639,000 | $ 250,000,000 | ||||
Corporate Debt Securities | 5.45% Notes due 2016 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.45% | 5.45% | 5.45% | |||
Long-term debt | $ 250,000,000 | $ 250,000,000 | $ 250,000,000 | |||
Corporate Debt Securities | 1.50% Notes due 2016 | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 1.50% | 1.50% | ||||
Long-term debt | $ 250,000,000 | $ 250,000,000 |
SHORT AND LONG-TERM DEBT - LO69
SHORT AND LONG-TERM DEBT - LONG TERM DEBT MATURITY (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,016 | $ 499,923 |
2,017 | 120 |
2,018 | 300,279 |
2,019 | 367 |
2,020 | 350,462 |
Thereafter | $ 905,863 |
SHORT AND LONG-TERM DEBT - INTE
SHORT AND LONG-TERM DEBT - INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 93,520 | $ 93,777 | $ 93,258 |
Capitalized interest | (12,537) | (6,179) | (1,744) |
Loss on early extinguishment of debt | 28,326 | 0 | 0 |
Interest expense | 109,309 | 87,598 | 91,514 |
Interest income | (3,536) | (4,066) | (3,158) |
Interest expense, net | $ 105,773 | $ 83,532 | $ 88,356 |
DERIVATIVE INSTRUMENTS AND FA71
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS - NARRATIVE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative [Line Items] | |||
Goodwill and other intangible asset impairment charges | $ 280,802,000 | $ 15,900,000 | $ 0 |
Cash flow hedge gain (loss) to be reclassified within twelve months | 15,005,000 | ||
Mauna Loa Macadamia Nut Corporation | |||
Derivative [Line Items] | |||
Goodwill and other intangible asset impairment charges | 18,531,000 | ||
Operating Segments | International and Other | INDIA | |||
Derivative [Line Items] | |||
Goodwill and other intangible asset impairment charges | 15,900,000 | ||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | |||
Derivative [Line Items] | |||
Goodwill and other intangible asset impairment charges | 280,802,000 | ||
Significant other unobservable inputs (Level 3) | |||
Derivative [Line Items] | |||
Fair value, net asset (liability) | $ 0 | 0 | |
Commodities futures and options | |||
Derivative [Line Items] | |||
Minimum length of time, hedged in cash flow hedge | 3 months | ||
Maximum length of time, hedged in cash flow hedge | 24 months | ||
Foreign exchange contracts | |||
Derivative [Line Items] | |||
Minimum length of time, hedged in cash flow hedge | 3 months | ||
Maximum length of time, hedged in cash flow hedge | 24 months | ||
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 10,752,000 | 22,725,000 | |
Foreign exchange contracts | Non-designated Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | 2,791,000 | 4,144,000 | |
Interest rate swap agreements | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | 500,000,000 | 750,000,000 | |
Interest rate swap agreements | Designated as Hedging Instrument | Fair Value Hedging | Significant other observable inputs (Level 2) | |||
Derivative [Line Items] | |||
Derivative, notional amount | 350,000,000 | 450,000,000 | |
Deferred compensation derivatives | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 22,230,000 | ||
Deferred compensation derivatives | Non-designated Hedges | Minimum | |||
Derivative [Line Items] | |||
Derivative, term of contract | 3 months | ||
Deferred compensation derivatives | Non-designated Hedges | Maximum | |||
Derivative [Line Items] | |||
Derivative, term of contract | 12 months | ||
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | Interest Expense | |||
Derivative [Line Items] | |||
Fair value hedges, pre-tax benefit | $ 6,905,000 | $ 938,000 |
DERIVATIVE INSTRUMENTS AND FA72
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS - ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 5,947 | $ 11,081 |
Derivative liability | 42,827 | 44,230 |
Designated as Hedging Instrument | Cash Flow Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 367 | 4,212 |
Derivative liability | 41,253 | 41,896 |
Designated as Hedging Instrument | Cash Flow Hedges | Commodities futures and options | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 479 | 9,944 |
Designated as Hedging Instrument | Cash Flow Hedges | Commodities futures and options | Quoted prices in active markets of identical assets (Level 1) | ||
Derivatives, Fair Value [Line Items] | ||
Gross derivative assets, included within derivative liabilities | 54,090 | 51,225 |
Derivative liability, gross liabilities | 54,860 | 56,840 |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 367 | 2,196 |
Derivative liability | 475 | 2,447 |
Designated as Hedging Instrument | Cash Flow Hedges | Interest rate swap agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 40,299 | 29,505 |
Designated as Hedging Instrument | Cash Flow Hedges | Currency Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 2,016 |
Derivative liability | 0 | 0 |
Designated as Hedging Instrument | Fair Value Hedging | Interest rate swap agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 4,313 | 1,746 |
Derivative liability | 0 | 0 |
Non-designated Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 1,267 | 5,123 |
Derivative liability | 1,574 | 2,334 |
Non-designated Hedges | Commodities futures and options | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 1,574 | 0 |
Non-designated Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 69 | 4,049 |
Derivative liability | 0 | 2,334 |
Non-designated Hedges | Deferred compensation derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 1,198 | 1,074 |
Derivative liability | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND FA73
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS - FAIR VALUE OF LONG TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt | $ 499,923 | $ 250,805 |
Long-term portion | 1,557,091 | 1,542,317 |
Total long-term debt | 2,057,014 | 1,793,122 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt | 509,580 | 257,280 |
Long-term debt | 1,668,379 | 1,715,662 |
Total | 2,177,959 | 1,972,942 |
Current portion of long-term debt | 499,923 | 250,805 |
Long-term portion | 1,557,091 | 1,542,317 |
Total long-term debt | $ 2,057,014 | $ 1,793,122 |
DERIVATIVE INSTRUMENTS AND FA74
DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS - EFFECTS OF DERIVATIVE INSTRUMENTS ON THE CONSOLIDATED STATEMENTS OF INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Non-designated Hedges | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | $ (2,117) | $ 3,836 |
Non-designated Hedges | Commodities futures and options | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | (2,777) | 2,339 |
Non-designated Hedges | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | 487 | (1,486) |
Non-designated Hedges | Interest rate swap agreements | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | 0 | 0 |
Non-designated Hedges | Deferred compensation derivatives | ||
Derivative [Line Items] | ||
Gains (losses) recognized in income | 173 | 2,983 |
Designated as Hedging Instrument | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 61,839 | (61,358) |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 36,634 | 67,403 |
Gains recognized in income (ineffective portion) | 987 | 2,498 |
Designated as Hedging Instrument | Cash Flow Hedges | Commodities futures and options | ||
Derivative [Line Items] | ||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 84,382 | (11,165) |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 40,600 | 68,500 |
Gains recognized in income (ineffective portion) | 987 | 2,498 |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | (155) | 2,056 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 956 | 3,403 |
Gains recognized in income (ineffective portion) | 0 | 0 |
Gain on Discontinuation of Cash Flow Hedge Due to Forecasted Transaction Probable of Not Occurring | 3,801 | |
Designated as Hedging Instrument | Cash Flow Hedges | Interest rate swap agreements | ||
Derivative [Line Items] | ||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | (22,388) | (52,249) |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | (4,922) | (4,500) |
Gains recognized in income (ineffective portion) | 0 | 0 |
Designated as Hedging Instrument | Cash Flow Hedges | Deferred compensation derivatives | ||
Derivative [Line Items] | ||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 0 | 0 |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 0 | 0 |
Gains recognized in income (ineffective portion) | $ 0 | $ 0 |
COMPREHENSIVE INCOME - COMPONEN
COMPREHENSIVE INCOME - COMPONENTS OF COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Net income | $ 227,889 | $ 140,266 | $ (99,941) | $ 244,737 | $ 202,508 | $ 223,741 | $ 168,168 | $ 252,495 | $ 512,951 | $ 846,912 | $ 820,470 |
Pre-Tax Amount | |||||||||||
Other comprehensive income (loss), before tax | 12,408 | (290,973) | 364,706 | ||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||
Other comprehensive income (loss), tax | (27,012) | 98,967 | (146,197) | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||
Total other comprehensive (loss) income, net of tax | (14,604) | (192,006) | 218,509 | ||||||||
Total comprehensive income | 498,347 | 654,906 | 1,038,979 | ||||||||
Comprehensive loss attributable to noncontrolling interests | 2,152 | 0 | 0 | ||||||||
Comprehensive income attributable to The Hershey Company | 500,499 | 654,906 | 1,038,979 | ||||||||
Foreign currency translation adjustments | |||||||||||
Pre-Tax Amount | |||||||||||
Other comprehensive income (loss), before reclassifications, before tax | (59,707) | (26,851) | (26,003) | ||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||
Other comprehensive income (loss) before reclassifications, tax | 0 | 0 | 0 | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||
Other comprehensive income (loss), before reclassifications, net of tax | (59,707) | (26,851) | (26,003) | ||||||||
Pension and Post-retirement benefit plans | |||||||||||
Pre-Tax Amount | |||||||||||
Other comprehensive income (loss), before tax | 46,910 | (135,361) | 265,015 | ||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||
Other comprehensive income (loss), tax | (16,908) | 50,345 | (98,612) | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||
Total other comprehensive (loss) income, net of tax | 30,002 | (85,016) | 166,403 | ||||||||
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | |||||||||||
Pre-Tax Amount | |||||||||||
Other comprehensive income (loss), before reclassifications, before tax | 61,839 | (61,358) | 116,329 | ||||||||
Reclassification from accumulated other comprehensive income, current period, before tax | (36,634) | (67,403) | 9,365 | ||||||||
Other Comprehensive Income (Loss), Tax [Abstract] | |||||||||||
Other comprehensive income (loss) before reclassifications, tax | (23,520) | 24,281 | (43,995) | ||||||||
Reclassification from AOCI, current period, tax | 13,416 | 24,341 | (3,590) | ||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||
Other comprehensive income (loss), before reclassifications, net of tax | 38,319 | (37,077) | 72,334 | ||||||||
Reclassification from accumulated other comprehensive income, current period, net of tax | $ (23,218) | $ (43,062) | $ 5,775 |
COMPREHENSIVE INCOME - COMPON76
COMPREHENSIVE INCOME - COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||
Foreign currency translation adjustments | $ (101,236) | $ (43,681) |
Pension and post-retirement benefit plans, net of tax | (254,648) | (284,650) |
Cash flow hedges, net of tax | (15,141) | (30,242) |
Total accumulated other comprehensive loss | $ (371,025) | $ (358,573) |
INCOME TAXES - INCOME BEFORE TA
INCOME TAXES - INCOME BEFORE TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 1,357,618 | $ 1,320,738 | $ 1,252,208 |
Foreign | (455,771) | (14,695) | (889) |
Income before income taxes | $ 901,847 | $ 1,306,043 | $ 1,251,319 |
INCOME TAXES - COMPONENTS OF IN
INCOME TAXES - COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||
Federal | $ 409,060 | $ 385,642 | $ 372,649 |
State | 47,978 | 52,331 | 47,980 |
Foreign | (29,605) | 2,362 | 2,763 |
Current provision for income taxes | 427,433 | 440,335 | 423,392 |
Deferred: | |||
Federal | (31,153) | 20,649 | 11,334 |
State | (2,346) | 2,725 | 2,212 |
Foreign | (5,038) | (4,578) | (6,089) |
Deferred income tax provision | (38,537) | 18,796 | 7,457 |
Total provision for income taxes | $ 388,896 | $ 459,131 | $ 430,849 |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | ||||
Income tax benefit associated with stock-based compensation | $ 24,839 | $ 53,497 | ||
Amount of unrecognized tax benefits that if recognized would affect the effective tax rate | 25,947 | 23,502 | ||
Net tax expense (benefit) for interest and penalties | 1,153 | (9,082) | $ 5,901 | |
Accrued net interest and penalties | 3,791 | 2,638 | ||
Income tax receivable | 1,428 | 1,568 | ||
Expected reduction in the liability for unrecognized tax benefits within the next 12 months | 8,649 | |||
Undistributed earnings of foreign subsidiaries | 239,099 | |||
Investment tax credits and related tax depreciation benefits | 43,437 | |||
Write-down of equity investments in partnerships qualifying for historic tax credits | 39,489 | $ 0 | $ 0 | |
Other Nonoperating Income (Expense) | Partnerships Qualifying For Tax Credits | ||||
Income Tax Contingency [Line Items] | ||||
Write-down of equity investments in partnerships qualifying for historic tax credits | 39,489 | |||
Foreign Tax Authority | Canada Revenue Agency | ||||
Income Tax Contingency [Line Items] | ||||
Assessment related to other cross-border adjustments | $ 2,212 | |||
Income tax receivable | $ 1,428 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Post-retirement benefit obligations | $ 95,763 | $ 109,973 |
Accrued expenses and other reserves | 163,908 | 139,492 |
Stock-based compensation | 46,665 | 46,061 |
Derivative instruments | 8,858 | 19,171 |
Pension | 28,940 | 24,584 |
Lease financing obligation | 18,947 | 18,991 |
Accrued trade promotion reserves | 36,501 | 41,332 |
Net operating loss carryforwards | 99,155 | 50,044 |
Capital loss carryforwards | 44,546 | 43,155 |
Other | 14,444 | 3,208 |
Gross deferred tax assets | 557,727 | 496,011 |
Valuation allowance | (207,055) | (147,223) |
Total deferred tax assets | 350,672 | 348,788 |
Deferred tax liabilities: | ||
Property, plant and equipment, net | 218,729 | 221,389 |
Acquired intangibles | 120,420 | 85,037 |
Inventories | 20,063 | 32,157 |
Other | 8,258 | 9,063 |
Total deferred tax liabilities | 367,470 | 347,646 |
Net deferred tax liabilities | (16,798) | |
Net deferred tax assets | 1,142 | |
Included in: | ||
Current deferred tax assets, net | 0 | 100,515 |
Non-current deferred tax assets, net | 36,390 | 0 |
Non-current deferred tax liabilities, net | $ (53,188) | $ (99,373) |
INCOME TAXES - EFFECTIVE INCOME
INCOME TAXES - EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of Federal income tax benefits | 4.20% | 3.00% | 2.80% |
Qualified production income deduction | (4.40%) | (2.40%) | (2.60%) |
Business realignment and impairment charges and gain on sale of trademark licensing rights | 10.80% | 0.70% | 0.10% |
International operations | 2.20% | (0.10%) | (0.40%) |
Historic and solar tax credits | (3.30%) | (0.00%) | (0.00%) |
Other, net | (1.40%) | (1.00%) | (0.50%) |
Effective income tax rate | 43.10% | 35.20% | 34.40% |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS RECONCILIATION (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 32,230 | $ 103,963 |
Additions for tax positions taken during prior years | 1,122 | 0 |
Reductions for tax positions taken during prior years | (2,112) | (71,643) |
Additions for tax positions taken during the current year | 6,623 | 8,403 |
Settlements | (702) | (4,643) |
Expiration of statutes of limitations | (3,750) | (3,850) |
Balance at end of year | $ 33,411 | $ 32,230 |
BUSINESS REALIGNMENT ACTIVITI83
BUSINESS REALIGNMENT ACTIVITIES - REALIGNMENT RELATED CHARGES BY INCOME STATEMENT LOCATION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | $ 120,975 | $ 34,290 | $ 19,085 |
Cost of sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 8,801 | 1,622 | 402 |
Selling, marketing and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 17,368 | 2,947 | 18 |
Business realignment charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 94,806 | 29,721 | 18,665 |
Business realignment charges | International and Other | Operating Segments | INDIA | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 0 | 0 | 2,278 |
Business realignment charges | Mauna Loa Macadamia Nut Corporation | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 2,667 | 22,256 | 0 |
Other international restructuring programs | Cost of sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 8,801 | 0 | 0 |
Other international restructuring programs | Selling, marketing and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 3,754 | 2,947 | 18 |
Next Century program | Cost of sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 0 | 1,622 | 402 |
Next Century program | Business realignment charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 0 | 7,465 | 16,387 |
2015 productivity initiative | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 105,753 | ||
2015 productivity initiative | Selling, marketing and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | 13,614 | 0 | 0 |
2015 productivity initiative | Business realignment charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment charges | $ 92,139 | $ 0 | $ 0 |
BUSINESS REALIGNMENT ACTIVITI84
BUSINESS REALIGNMENT ACTIVITIES - NARRATIVE (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($)employee | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment charges | $ 120,975 | $ 34,290 | $ 19,085 | |
2015 productivity initiative | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and related cost, expected number of positions eliminated (employee) | employee | 300 | |||
Business realignment charges | 105,753 | |||
Restructuring and related cost, expected cost | $ 120,000 | 120,000 | ||
2015 productivity initiative | Pension Settlement Cost | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Business realignment charges | $ 10,178 |
BUSINESS REALIGNMENT ACTIVITI85
BUSINESS REALIGNMENT ACTIVITIES - REALIGMNMENT RESERVE ROLLFORWARD (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2014 | $ 79 |
2015 business realignment charges | 88,746 |
Cash payments | (72,121) |
Other, net | (394) |
Liability balance at December 31, 2015 | 16,310 |
Employee related costs | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2014 | 79 |
2015 business realignment charges | 81,961 |
Cash payments | (65,336) |
Other, net | (394) |
Liability balance at December 31, 2015 | 16,310 |
Other exit costs | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2014 | 0 |
2015 business realignment charges | 0 |
Cash payments | 0 |
Other, net | 0 |
Liability balance at December 31, 2015 | 0 |
Other implementation costs | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2014 | 0 |
2015 business realignment charges | 6,785 |
Cash payments | (6,785) |
Other, net | 0 |
Liability balance at December 31, 2015 | $ 0 |
PENSION AND OTHER POST-RETIRE86
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - NARRATIVE (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2016 | Dec. 31, 2015USD ($)postretirement_planemployee | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Number of defined benefit, other post-retirement plans, and defined contribution other post-retirement plans (postretirement plan) | postretirement_plan | 2 | ||||
Defined benefit plan, accumulated benefit obligation | $ 1,129,052 | $ 1,206,929 | |||
Multiemployer plan, number of participants (employee) | employee | 140 | ||||
Defined contribution pan, cost recognized | $ 44,285 | $ 46,064 | $ 43,257 | ||
Pension Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected long-term return on plan assets | 6.30% | 7.00% | 7.80% | ||
Defined benefit plan, assumptions used in calculating net periodic benefit cost, historical average return on long-term plan assets, historical period | 28 years | ||||
Defined benefit plan, assumptions used in calculating net periodic benefit cost, historical average return on long-term plan assets | 8.30% | ||||
Employer contributions | $ 32,898 | $ 29,409 | |||
Defined benefit plans, minimum future employer contributions in next fiscal year | $ 800 | ||||
Pension Benefits | Scenario, Forecast | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected long-term return on plan assets | 6.10% | ||||
Other Benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined benefit plan, ultimate health care cost trend rate, pre sixty five | 6.50% | 7.00% | |||
Defined benefit plan, ultimate health care cost trend rate, post sixty five | 7.30% | 8.00% | |||
Employer contributions | $ 20,375 | $ 23,699 | |||
Other Benefits | Scenario, Forecast | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Defined benefit plan, ultimate health care cost trend rate | 5.00% | ||||
Domestic Plans | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contributions | 22,900 | ||||
Defined benefit plan, voluntary employer contributions | $ 18,500 |
PENSION AND OTHER POST-RETIRE87
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - CHANGES IN BENEFIT OBLIGATIONS, AND PLAN ASSETS AND FUNDED STATUS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Other assets | $ 0 | $ 25 | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Net amounts recognized in AOCI | 254,648 | 284,650 | |
Pension Benefits | |||
Change in benefit obligation | |||
Projected benefits obligation at beginning of year | 1,260,895 | 1,120,492 | |
Service cost | 28,300 | 26,935 | $ 31,339 |
Interest cost | 44,179 | 48,886 | 43,962 |
Plan amendments | 67 | 168 | |
Actuarial (gain) loss | (51,064) | 134,902 | |
Curtailment | (2,693) | 0 | |
Settlement | (57,193) | 0 | |
Divestiture | (4,047) | 0 | |
Currency translation and other | (11,456) | (6,204) | |
Benefits paid | (37,564) | (64,284) | |
Projected benefits obligation at end of year | 1,169,424 | 1,260,895 | 1,120,492 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 1,136,943 | 1,091,985 | |
Actual return on plan assets | (19,804) | 85,921 | |
Employer contributions | 32,898 | 29,409 | |
Settlement | (57,193) | 0 | |
Divestiture | (2,485) | 0 | |
Currency translation and other | (10,893) | (6,088) | |
Benefits paid | (37,564) | (64,284) | |
Fair value of plan assets at end of year | 1,041,902 | 1,136,943 | 1,091,985 |
Funded status at end of year | (127,522) | (123,952) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Other assets | 0 | 25 | |
Accrued liabilities | (4,841) | (9,054) | |
Other long-term liabilities | (122,681) | (114,923) | |
Total | (127,522) | (123,952) | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Actuarial net (loss) gain | (264,570) | (279,625) | |
Net prior service credit (cost) | 4,267 | 5,341 | |
Net amounts recognized in AOCI | (260,303) | (274,284) | |
Other Benefits | |||
Change in benefit obligation | |||
Projected benefits obligation at beginning of year | 294,064 | 270,937 | |
Service cost | 542 | 706 | 1,094 |
Interest cost | 10,187 | 11,696 | 10,747 |
Plan amendments | 0 | 0 | |
Actuarial (gain) loss | (26,887) | 35,688 | |
Curtailment | 292 | 0 | |
Settlement | 0 | 0 | |
Divestiture | 0 | 0 | |
Currency translation and other | (2,206) | (1,264) | |
Benefits paid | (20,375) | (23,699) | |
Projected benefits obligation at end of year | 255,617 | 294,064 | 270,937 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 20,375 | 23,699 | |
Settlement | 0 | 0 | |
Divestiture | 0 | 0 | |
Currency translation and other | 0 | 0 | |
Benefits paid | (20,375) | (23,699) | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status at end of year | (255,617) | (294,064) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Other assets | 0 | 0 | |
Accrued liabilities | (24,205) | (25,214) | |
Other long-term liabilities | (231,412) | (268,850) | |
Total | (255,617) | (294,064) | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Actuarial net (loss) gain | 7,574 | (7,936) | |
Net prior service credit (cost) | (1,919) | (2,430) | |
Net amounts recognized in AOCI | $ 5,655 | $ (10,366) |
PENSION AND OTHER POST-RETIRE88
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - PLANS WITH ACCUMULATED BENEFIT OBLIGATIONS IN EXCESS OF PLAN ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | ||
Projected benefit obligation | $ 1,110,232 | $ 1,193,151 |
Accumulated benefit obligation | 1,081,002 | 1,151,210 |
Fair value of plan assets | $ 985,111 | $ 1,071,539 |
PENSION AND OTHER POST-RETIRE89
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Benefits | |||
Amounts recognized in net periodic benefit cost | |||
Service cost | $ 28,300 | $ 26,935 | $ 31,339 |
Interest cost | 44,179 | 48,886 | 43,962 |
Expected return on plan assets | (68,830) | (74,080) | (73,128) |
Amortization of prior service (credit) cost | (1,178) | (667) | 422 |
Amortization of net loss (gain) | 30,510 | 23,360 | 40,397 |
Curtailment credit | (688) | 0 | (364) |
Settlement loss | 23,067 | 0 | 18 |
Total net periodic benefit cost | 55,360 | 24,434 | 42,646 |
Change in plan assets and benefit obligations recognized in AOCI, pre-tax | |||
Actuarial net (gain) loss | (21,554) | 99,136 | (230,605) |
Prior service (credit) cost | 1,748 | 833 | (613) |
Total recognized in other comprehensive (income) loss, pre-tax | (19,806) | 99,969 | (231,218) |
Net amounts recognized in periodic benefit cost and AOCI | 35,554 | 124,403 | (188,572) |
Other Benefits | |||
Amounts recognized in net periodic benefit cost | |||
Service cost | 542 | 706 | 1,094 |
Interest cost | 10,187 | 11,696 | 10,747 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 611 | 616 | 618 |
Amortization of net loss (gain) | (57) | (141) | (73) |
Curtailment credit | 204 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Total net periodic benefit cost | 11,487 | 12,877 | 12,386 |
Change in plan assets and benefit obligations recognized in AOCI, pre-tax | |||
Actuarial net (gain) loss | (26,270) | 36,021 | (33,165) |
Prior service (credit) cost | (834) | (629) | (632) |
Total recognized in other comprehensive (income) loss, pre-tax | (27,104) | 35,392 | (33,797) |
Net amounts recognized in periodic benefit cost and AOCI | $ (15,617) | $ 48,269 | $ (21,411) |
PENSION AND OTHER POST-RETIRE90
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - AMOUNTS EXPECTED TO BE AMORTIZED FROM AOCI INTO NET PERIODIC BENEFIT (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of net actuarial loss (gain) | $ 35,230 |
Amortization of prior service (credit) cost | (1,046) |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of net actuarial loss (gain) | (49) |
Amortization of prior service (credit) cost | $ 575 |
PENSION AND OTHER POST-RETIRE91
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING BENEFIT OBLIGATIONS (Details) | Dec. 31, 2015 | Dec. 31, 2014 |
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.00% | 3.70% |
Rate of increase in compensation levels | 3.80% | 4.00% |
Other Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.00% | 3.70% |
PENSION AND OTHER POST-RETIRE92
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING NET PERIODIC BENEFIT COST (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.70% | 4.50% | 3.70% |
Expected long-term return on plan assets | 6.30% | 7.00% | 7.80% |
Rate of compensation increase | 4.10% | 4.00% | 4.00% |
Other Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.70% | 4.50% | 3.70% |
PENSION AND OTHER POST-RETIRE93
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - ONE PERCENT CHANGE IN ASSUMED HEALTH CARE TREND RATE EFFECTS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Compensation and Retirement Disclosure [Abstract] | |
Effect on total service and interest cost components, one percentage point increase | $ 139 |
Effect on total service and interest cost components, one percentage point decrease | (122) |
Effect on post-retirement benefit obligation, one percentage point increase | 3,539 |
Effect on post-retirement benefit obligation, one percentage point decrease | $ (3,144) |
PENSION AND OTHER POST-RETIRE94
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SUMMARY OF PLAN ASSETS ACROSS ASSET CLASSES (Details) - Domestic Plans | 12 Months Ended |
Dec. 31, 2015 | |
Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 50.00% |
Debt securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 49.00% |
Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 1.00% |
PENSION AND OTHER POST-RETIRE95
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - PENSION PLAN ASSETS WITHIN THE FAIR VALUE HIERARCHY (Details) - Pension Benefits - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 1,041,902 | $ 1,136,943 | $ 1,091,985 |
Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 467,085 | 789,152 | |
Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 574,817 | 347,791 | |
Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 32,152 | 49,825 | |
Cash and cash equivalents | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,763 | 2,123 | |
Cash and cash equivalents | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 30,389 | 47,702 | |
Cash and cash equivalents | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
U.S. all-cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 138,367 | 141,982 | |
U.S. all-cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 1,034 | |
U.S. all-cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 138,367 | 140,948 | |
U.S. all-cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
U.S. large-cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 91,363 | ||
U.S. large-cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 91,363 | ||
U.S. large-cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | ||
U.S. large-cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | ||
U.S. small-mid cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 37,797 | ||
U.S. small-mid cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 37,797 | ||
U.S. small-mid cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | ||
U.S. small-mid cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | ||
International all-cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 111,980 | 125,411 | |
International all-cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 108,862 | 121,901 | |
International all-cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 3,118 | 3,510 | |
International all-cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Global all-cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 269,220 | 165,131 | |
Global all-cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 73,157 | 165,131 | |
Global all-cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 196,063 | 0 | |
Global all-cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
U.S. government/agency | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 237,514 | 181,343 | |
U.S. government/agency | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 117,378 | 138,556 | |
U.S. government/agency | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 120,136 | 42,787 | |
U.S. government/agency | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 139,224 | 185,537 | |
Corporate bonds | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 101,476 | 144,289 | |
Corporate bonds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 37,748 | 41,248 | |
Corporate bonds | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
Collateralized obligations | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 40,689 | 58,058 | |
Collateralized obligations | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 32,532 | 33,753 | |
Collateralized obligations | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 8,157 | 24,305 | |
Collateralized obligations | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 0 | 0 | |
International government/corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 72,756 | 100,496 | |
International government/corporate bonds | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 31,917 | 53,205 | |
International government/corporate bonds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 40,839 | 47,291 | |
International government/corporate bonds | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $ 0 | $ 0 |
PENSION AND OTHER POST-RETIRE96
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - EXPECTED BENEFIT PAYMENTS TO BE PAID (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | $ 178,748 |
2,017 | 93,577 |
2,018 | 72,676 |
2,019 | 76,944 |
2,020 | 82,176 |
2021-2025 | 447,262 |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,016 | 24,233 |
2,017 | 22,478 |
2,018 | 20,574 |
2,019 | 18,979 |
2,020 | 17,790 |
2021-2025 | $ 76,248 |
STOCK COMPENSATION PLANS - NARR
STOCK COMPENSATION PLANS - NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, number of shares authorized (shares) | 68,500,000 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 54,526 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 2 months | ||
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested (in millions of dollars) | $ 46,113 | $ 57,360 | $ 62,582 |
Deferred performance stock units, deferred restricted stock units, and directors' fees and accumulated dividend amounts representing deferred stock units outstanding | 505,992 | ||
Employee stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 5 months | ||
Share-based compensation arrangement by share-based payment award, expiration period | 10 years | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 4 years | ||
Weighted-average fair value of options granted (per share) | $ 18.99 | $ 21.50 | $ 14.51 |
Intrinsic value of options exercised (in millions of dollars) | $ 66,161 | $ 133,948 | $ 135,396 |
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 19,008 | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 3 years | ||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | ||
Share based compensation arrangement, by share based payment award, equity instruments other than options, market-based shareholder return component, percentage | 50.00% | ||
Share based compensation arrangement, by share based payment award, equity instruments other than options, performance based, percentage | 50.00% | ||
Performance stock units for which measurement date has not yet occurred for accounting purposes (shares) | 20,586 | 25,462 | |
Performance Shares [Member] | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation arrangement, by share based payment award, equity instruments other than options, performance score, percentage | 0.00% | ||
Performance Shares [Member] | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation arrangement, by share based payment award, equity instruments other than options, performance score, percentage | 250.00% | ||
Performance Stock Units and Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, conversion basis (shares) | 1 |
STOCK COMPENSATION PLANS - COMP
STOCK COMPENSATION PLANS - COMPENSATION EXPENSE AND INCOME TAX BENEFITS FOR STOCK-BASED COMPENSATION PROGRAMS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Pre-tax compensation expense | $ 51,533 | $ 54,068 | $ 53,984 |
Related income tax benefit | $ 17,109 | $ 18,653 | $ 18,517 |
STOCK COMPENSATION PLANS - STOC
STOCK COMPENSATION PLANS - STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding shares at beginning of year (shares) | 7,319,377 | |
Granted (shares) | 1,355,575 | |
Exercised (shares) | (1,449,054) | |
Forfeited (shares) | (383,335) | |
Outstanding as of December 31, 2015 (shares) | 6,842,563 | 7,319,377 |
Options exercisable as of December 31, 2015 (shares) | 4,284,014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding (USD per share) | $ 66.69 | |
Granted (USD per share) | 105.18 | |
Exercises (USD per share) | 52.78 | |
Forfeited (USD per share) | 99.20 | |
Outstanding (USD per share) | 75.48 | $ 66.69 |
Options exercisable (USD per share) | $ 63.21 | |
Options outstanding, weighted-average remaining contractual term | 5 years 9 months | 6 years 4 months |
Options exercisable, weighted aver remaining contractual term | 4 years 3 months | |
Aggregate intrinsic value of options outstanding | $ 128,710 | |
Aggregate intrinsic value of options exercisable | $ 118,232 |
STOCK COMPENSATION PLANS - FAIR
STOCK COMPENSATION PLANS - FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yields | 2.10% | 2.00% | 2.20% |
Expected volatility | 20.70% | 22.30% | 22.20% |
Risk-free interest rates | 1.90% | 2.10% | 1.40% |
Expected lives in years | 6 years 8 months | 6 years 8 months | 6 years 7 months |
STOCK COMPENSATION PLANS - S101
STOCK COMPENSATION PLANS - STOCK OPTION INFORMATION BY EXERCISE PRICE RANGE (Details) | 12 Months Ended |
Dec. 31, 2015$ / sharesshares | |
$33.40 - $56.33 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based compensation, shares authorized under sock option plans, exercise price range, lower range limit | $ 33.40 |
Share-based compensation, shares authorized under sock option plans, exercise price range, upper range limit | $ 56.33 |
Number Outstanding as of 12/31/15 (shares) | shares | 1,998,058 |
Weighted- Average Remaining Contractual Life in Years | 3 years 2 months |
Weighted- Average Exercise Price (USD per share) | $ 44.52 |
Number Exercisable as of 12/31/15 (shares) | shares | 1,998,058 |
Weighted- Average Exercise Price (USD per share) | $ 44.52 |
$60.68 - $81.73 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based compensation, shares authorized under sock option plans, exercise price range, lower range limit | 60.68 |
Share-based compensation, shares authorized under sock option plans, exercise price range, upper range limit | $ 81.73 |
Number Outstanding as of 12/31/15 (shares) | shares | 2,420,944 |
Weighted- Average Remaining Contractual Life in Years | 5 years 9 months |
Weighted- Average Exercise Price (USD per share) | $ 71.38 |
Number Exercisable as of 12/31/15 (shares) | shares | 1,658,197 |
Weighted- Average Exercise Price (USD per share) | $ 69.89 |
$86.75 - $106.65 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based compensation, shares authorized under sock option plans, exercise price range, lower range limit | 86.75 |
Share-based compensation, shares authorized under sock option plans, exercise price range, upper range limit | $ 106.65 |
Number Outstanding as of 12/31/15 (shares) | shares | 2,423,561 |
Weighted- Average Remaining Contractual Life in Years | 7 years 11 months |
Weighted- Average Exercise Price (USD per share) | $ 105.09 |
Number Exercisable as of 12/31/15 (shares) | shares | 627,759 |
Weighted- Average Exercise Price (USD per share) | $ 105.09 |
$33.40 - $106.65 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based compensation, shares authorized under sock option plans, exercise price range, lower range limit | 33.40 |
Share-based compensation, shares authorized under sock option plans, exercise price range, upper range limit | $ 106.65 |
Number Outstanding as of 12/31/15 (shares) | shares | 6,842,563 |
Weighted- Average Remaining Contractual Life in Years | 5 years 9 months |
Weighted- Average Exercise Price (USD per share) | $ 75.48 |
Number Exercisable as of 12/31/15 (shares) | shares | 4,284,014 |
Weighted- Average Exercise Price (USD per share) | $ 63.21 |
STOCK COMPENSATION PLANS - SUMM
STOCK COMPENSATION PLANS - SUMMARY OF PSUs AND RSUs ACTIVITY (Details) - Performance and restricted stock options - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding at beginning of year (shares) | 904,306 | ||
Granted (shares) | 381,407 | 331,788 | 395,862 |
Performance assumption change (shares) | (281,902) | ||
Vested (shares) | (452,118) | ||
Forfeited (shares) | (56,486) | ||
Outstanding at end of year (shares) | 495,207 | 904,306 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding at beginning of year (USD per share) | $ 94.48 | ||
Weighted-average fair value at date of grant (USD per share) | 104.68 | $ 115.57 | $ 88.49 |
Performance assumption change | 107.39 | ||
Vested (USD per share) | 75.40 | ||
Forfeited (USD per share) | 111.39 | ||
Outstanding at end of year (USD per share) | $ 106.40 | $ 94.48 |
STOCK COMPENSATION PLANS - PSUs
STOCK COMPENSATION PLANS - PSUs AND RSUS FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yields | 2.10% | 2.00% | 2.20% |
Performance and restricted stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units granted (shares) | 381,407 | 331,788 | 395,862 |
Weighted-average fair value at date of grant (USD per share) | $ 104.68 | $ 115.57 | $ 88.49 |
Estimated values (USD per share) | $ 61.22 | $ 80.95 | $ 55.49 |
Dividend yields | 2.00% | 1.80% | 2.00% |
Expected volatility | 14.90% | 15.50% | 17.10% |
SEGMENT INFORMATION NARRATIVE (
SEGMENT INFORMATION NARRATIVE (Details) | 12 Months Ended |
Dec. 31, 2015 | |
North America | Geographic Concentration Risk | Sales Revenue, Goods, Net | |
Revenue, Major Customer [Line Items] | |
Concentration risk, percentage | 87.00% |
SEGMENT INFORMATION SALES AND I
SEGMENT INFORMATION SALES AND INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 1,909,222 | $ 1,960,779 | $ 1,578,825 | $ 1,937,800 | $ 2,010,027 | $ 1,961,578 | $ 1,578,350 | $ 1,871,813 | $ 7,386,626 | $ 7,421,768 | $ 7,146,079 |
Operating Income (Loss) | 1,037,759 | 1,392,261 | 1,338,051 | ||||||||
Goodwill and other intangible asset impairment charges | 280,802 | 15,900 | 0 | ||||||||
Charges associated with business realignment activities | 120,975 | 34,290 | 19,085 | ||||||||
Interest expense, net | 105,773 | 83,532 | 88,356 | ||||||||
Other (income) expense, net | 30,139 | 2,686 | (1,624) | ||||||||
Income before income taxes | 901,847 | 1,306,043 | 1,251,319 | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 1,975,900 | 1,956,211 | 1,907,223 | ||||||||
Operating Segments | North America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 6,468,158 | 6,352,729 | 6,200,118 | ||||||||
Operating Income (Loss) | 2,073,967 | 1,916,207 | 1,862,636 | ||||||||
Operating Segments | International and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 918,468 | 1,069,039 | 945,961 | ||||||||
Operating Income (Loss) | (98,067) | 40,004 | 44,587 | ||||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 497,386 | 503,234 | 535,130 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill and other intangible asset impairment charges | 280,802 | 15,900 | 0 | ||||||||
Charges associated with business realignment activities | 120,975 | 34,290 | 19,085 | ||||||||
Non-service related pension expense (income) | 18,079 | (1,834) | 10,885 | ||||||||
Acquisition and integration costs | $ 20,899 | $ 12,360 | $ 4,072 |
SEGMENT INFORMATION DEPRECIATIO
SEGMENT INFORMATION DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | $ 244,928 | $ 211,532 | $ 244,928 | $ 211,532 | $ 201,033 |
Operating Segments | North America | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 153,185 | 146,475 | 143,640 | ||
Operating Segments | International and Other | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 46,342 | 28,463 | 23,461 | ||
Corporate, Non-Segment | Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | $ 45,401 | $ 36,594 | $ 33,932 |
SEGMENT INFORMATION BY GEOGRAPH
SEGMENT INFORMATION BY GEOGRAPHY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 1,909,222 | $ 1,960,779 | $ 1,578,825 | $ 1,937,800 | $ 2,010,027 | $ 1,961,578 | $ 1,578,350 | $ 1,871,813 | $ 7,386,626 | $ 7,421,768 | $ 7,146,079 |
Long-lived assets | 2,240,460 | 2,151,901 | 2,240,460 | 2,151,901 | 1,805,345 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 6,116,490 | 5,996,564 | 5,832,070 | ||||||||
Long-lived assets | 1,528,723 | 1,477,455 | 1,528,723 | 1,477,455 | 1,474,155 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,270,136 | 1,425,204 | 1,314,009 | ||||||||
Long-lived assets | $ 711,737 | $ 674,446 | $ 711,737 | $ 674,446 | $ 331,190 |
EQUITY AND NONCONTROLLING IN108
EQUITY AND NONCONTROLLING INTERESTS - NARRATIVE (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Oct. 04, 2015USD ($) | Dec. 31, 2015USD ($)vote$ / sharesshares | Dec. 31, 2014shares | Dec. 31, 2013shares | Sep. 30, 2015 | |
Class of Stock [Line Items] | |||||
Common and preferred shares authorized (shares) | 1,055,000,000 | ||||
Preferred stock, shares authorized (shares) | 5,000,000 | ||||
Preferred stock, par value (USD per share) | $ / shares | $ 1 | ||||
Common stock, shares, outstanding (shares) | 216,777,360 | 221,044,958 | 223,894,721 | ||
Noncontrolling Interests in Subsidiaries | |||||
Class of Stock [Line Items] | |||||
Noncontrolling interest, change in redemption value | $ | $ 33,915 | $ 33,915 | |||
Noncontrolling Interests in Subsidiaries | Lotte Shanghai Food Company | |||||
Class of Stock [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 50.00% | ||||
Noncontrolling Interests in Subsidiaries | Hershey Do Brasil | |||||
Class of Stock [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 51.00% | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 49.00% | 49.00% | |||
Common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (shares) | 900,000,000 | ||||
Common stock, par (USD per share) | $ / shares | $ 1 | ||||
Common stock, voting rights (vote) | vote | 1 | ||||
Common stock voting rights, board election percentage | 16.66% | ||||
Dividends, common sock, cash, additional percentage over Class B common stock dividends | 10.00% | ||||
Common stock | Hershey Trust Company | |||||
Class of Stock [Line Items] | |||||
Common stock, shares, outstanding (shares) | 12,902,921 | ||||
Class B common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (shares) | 150,000,000 | ||||
Common stock, par (USD per share) | $ / shares | $ 1 | ||||
Common stock, voting rights (vote) | vote | 10 | ||||
Conversion of stock, shares converted (shares) | 0 | 440 | 8,600 | ||
Class B common stock | Hershey Trust Company | |||||
Class of Stock [Line Items] | |||||
Common stock, shares, outstanding (shares) | 60,612,012 | ||||
Common stock, voting percentage | 80.00% |
EQUITY AND NONCONTROLLING IN109
EQUITY AND NONCONTROLLING INTERESTS - COMMON STOCK OUTSTANDING (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | |||
Common stock, shares issued (shares) | 359,901,744 | 359,901,744 | 359,901,744 |
Treasury Stock, Shares [Roll Forward] | |||
Treasury stock, shares, beginning of the period (shares) | (138,856,786) | (136,007,023) | (136,115,714) |
Stock repurchases: | |||
Treasury stock, shares, end of the period (shares) | (143,124,384) | (138,856,786) | (136,007,023) |
Stock issuances: | |||
Common stock, shares, outstanding (shares) | 216,777,360 | 221,044,958 | 223,894,721 |
Employee stock options | |||
Stock repurchases: | |||
Stock repurchased during the period (shares) | (1,776,838) | (3,676,513) | (3,655,830) |
Stock issuances: | |||
Stock issued during period, shares, share-based compensation (gross) | 1,718,352 | 2,962,018 | 3,764,521 |
Common stock | |||
Class of Stock [Line Items] | |||
Common stock, shares issued (shares) | 299,281,967 | 299,281,967 | |
Stock repurchases: | |||
Stock repurchased during the period (shares) | (4,209,112) | (2,135,268) | 0 |
EQUITY AND NONCONTROLLING IN110
EQUITY AND NONCONTROLLING INTERESTS - NONCONTROLLING INTEREST AND REDEEMABLE NONCONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Oct. 04, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Balance, December 31, 2014 | $ 64,468 | $ 64,468 | ||
Impact of reclassification to and purchase of redeemable noncontrolling interest | (42,663) | |||
Net income (loss) attributable to noncontrolling interests | 577 | $ 3,526 | $ (406) | |
Balance, December 31, 2015 | 49,465 | 64,468 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Reclassification from Total Equity to Redeemable Noncontrolling Interest | 42,663 | |||
Noncontrolling Interests in Subsidiaries | ||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||
Balance, December 31, 2014 | 64,468 | 64,468 | ||
Impact of reclassification to and purchase of redeemable noncontrolling interest | (13,428) | |||
Net income (loss) attributable to noncontrolling interests | 577 | 3,526 | $ (406) | |
Other comprehensive loss - foreign currency translation adjustments | (2,152) | |||
Balance, December 31, 2015 | 49,465 | 64,468 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Balance, December 31, 2014 | 0 | 0 | ||
Reclassification from Total Equity to Redeemable Noncontrolling Interest | 13,428 | |||
Net loss attributable to temporary equity | (4,393) | |||
Temporary equity, foreign currency translation adjustments | (2,334) | |||
Adjustment to redemption value | $ 33,915 | 33,915 | ||
Other | (2,346) | |||
Purchase of redeemable noncontrolling interest | (38,270) | |||
Balance, December 31, 2015 | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - PURCHASE OBLIGATIONS (Details) - Inventories $ in Millions | Dec. 31, 2015USD ($) |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2,016 | $ 1,343.1 |
2,017 | 880 |
2,018 | 87.9 |
2,019 | $ 22.4 |
COMMITMENTS AND CONTINGENCIE112
COMMITMENTS AND CONTINGENCIES - OPERATING LEASE OBLIGATIONS (Details) $ in Millions | Dec. 31, 2015USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,016 | $ 12.6 |
2,017 | 9.6 |
2,018 | 3.7 |
2,019 | 1.2 |
2,020 | 0.4 |
Thereafter | $ 0.7 |
COMMITMENTS AND CONTINGENCIE113
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) $ in Thousands | Jun. 21, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2007lawsuit |
Loss Contingencies [Line Items] | |||||
Rent expense | $ | $ 19,754 | $ 21,423 | $ 16,972 | ||
CANADA | Restraint of Trade In Connection With Pricing Practices | Settled Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, new claims (lawsuit) | lawsuit | 13 | ||||
Litigation settlement, amount | $ | $ 4,000 | ||||
United States | Restraint of Trade In Connection With Pricing Practices | Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, new claims (lawsuit) | lawsuit | 91 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common stock | |||||||||||
Basic earnings per share: | |||||||||||
Allocation of distributed earnings (cash dividends paid) | $ 352,953 | $ 328,752 | $ 294,979 | ||||||||
Allocation of undistributed earnings | 27,324 | 303,801 | 319,883 | ||||||||
Total earnings—basic | $ 380,277 | $ 632,553 | $ 614,862 | ||||||||
Total weighted-average shares—basic (shares) | 158,471 | 161,935 | 163,549 | ||||||||
Earnings Per Share—basic (USD per share) | $ 1.08 | $ 0.66 | $ (0.47) | $ 1.14 | $ 0.94 | $ 1.03 | $ 0.78 | $ 1.16 | $ 2.40 | $ 3.91 | $ 3.76 |
Diluted earnings per share: | |||||||||||
Allocation of total earnings used in basic computation | $ 380,277 | $ 632,553 | $ 614,862 | ||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 132,674 | 214,359 | 205,608 | ||||||||
Reallocation of undistributed earnings | 0 | 0 | 0 | ||||||||
Total earnings—diluted | $ 512,951 | $ 846,912 | $ 820,470 | ||||||||
Conversion of Class B common stock to Common shares outstanding | 60,620 | 60,620 | 60,627 | ||||||||
Total weighted-average shares—diluted (shares) | 220,651 | 224,837 | 227,203 | ||||||||
Earnings Per Share—diluted (USD per share) | 1.04 | 0.64 | (0.47) | 1.10 | 0.91 | 1 | 0.75 | 1.11 | $ 2.32 | $ 3.77 | $ 3.61 |
Common stock | Employee stock options | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 1,335 | 1,920 | 2,476 | ||||||||
Common stock | Performance and restricted stock options | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 225 | 362 | 551 | ||||||||
Class B common stock | |||||||||||
Basic earnings per share: | |||||||||||
Allocation of distributed earnings (cash dividends paid) | $ 123,179 | $ 111,662 | $ 98,822 | ||||||||
Allocation of undistributed earnings | 9,495 | 102,697 | 106,786 | ||||||||
Total earnings—basic | $ 132,674 | $ 214,359 | $ 205,608 | ||||||||
Total weighted-average shares—basic (shares) | 60,620 | 60,620 | 60,627 | ||||||||
Earnings Per Share—basic (USD per share) | 0.98 | 0.60 | (0.42) | 1.04 | 0.85 | 0.94 | 0.70 | 1.04 | $ 2.19 | $ 3.54 | $ 3.39 |
Diluted earnings per share: | |||||||||||
Allocation of total earnings used in basic computation | $ 132,674 | $ 214,359 | $ 205,608 | ||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 0 | 0 | 0 | ||||||||
Reallocation of undistributed earnings | (69) | (1,071) | (1,461) | ||||||||
Total earnings—diluted | $ 132,605 | $ 213,288 | $ 204,147 | ||||||||
Conversion of Class B common stock to Common shares outstanding | 0 | 0 | 0 | ||||||||
Total weighted-average shares—diluted (shares) | 60,620 | 60,620 | 60,627 | ||||||||
Earnings Per Share—diluted (USD per share) | $ 0.98 | $ 0.60 | $ (0.42) | $ 1.03 | $ 0.85 | $ 0.94 | $ 0.70 | $ 1.03 | $ 2.19 | $ 3.52 | $ 3.37 |
Class B common stock | Employee stock options | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0 | 0 | 0 | ||||||||
Class B common stock | Performance and restricted stock options | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0 | 0 | 0 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 2,660 | 1,510 | 1,757 |
SUPPLEMENTAL BALANCE SHEET I116
SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Inventory, Net [Abstract] | |||
Raw materials | $ 353,451 | $ 377,620 | |
Goods in process | 67,745 | 63,916 | |
Finished goods | 534,983 | 531,608 | |
Inventories at FIFO | 956,179 | 973,144 | |
Adjustment to LIFO | (205,209) | (172,108) | |
Total inventories | 750,970 | 801,036 | |
Property, Plant and Equipment [Abstract] | |||
Land | 96,666 | 95,913 | |
Buildings | 1,084,958 | 1,031,050 | |
Machinery and equipment | 2,886,723 | 2,863,559 | |
Construction in progress | 448,956 | 338,085 | |
Property, plant and equipment, gross | 4,517,303 | 4,328,607 | |
Accumulated depreciation | (2,276,843) | (2,176,706) | |
Property, plant and equipment, net | 2,240,460 | 2,151,901 | $ 1,805,345 |
Other Assets, Noncurrent [Abstract] | |||
Pension | 0 | 25 | |
Capitalized software, net | 68,004 | 63,252 | |
Income tax receivable | 1,428 | 1,568 | |
Other non-current assets | 85,934 | 71,281 | |
Total other assets | 155,366 | 136,126 | |
Accrued Liabilities, Current [Abstract] | |||
Payroll, compensation and benefits | 215,638 | 225,439 | |
Advertising and promotion | 337,945 | 326,647 | |
Due to SGM shareholders | 72,025 | 98,884 | |
Other | 231,359 | 162,543 | |
Total accrued liabilities | 856,967 | 813,513 | |
Other Liabilities, Noncurrent [Abstract] | |||
Post-retirement benefits liabilities | 231,412 | 268,850 | |
Pension benefits liabilities | 122,681 | 114,923 | |
Other | 114,625 | 142,230 | |
Total other long-term liabilities | $ 468,718 | $ 526,003 |
QUARTERLY DATA (Details)
QUARTERLY DATA (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Oct. 04, 2015 | Jul. 05, 2015 | Apr. 05, 2015 | Dec. 31, 2014 | Sep. 28, 2014 | Jun. 29, 2014 | Mar. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net sales | $ 1,909,222 | $ 1,960,779 | $ 1,578,825 | $ 1,937,800 | $ 2,010,027 | $ 1,961,578 | $ 1,578,350 | $ 1,871,813 | $ 7,386,626 | $ 7,421,768 | $ 7,146,079 |
Gross profit | 877,718 | 868,706 | 735,408 | 900,843 | 887,065 | 860,137 | 717,474 | 871,490 | |||
Net income | $ 227,889 | 140,266 | $ (99,941) | $ 244,737 | $ 202,508 | $ 223,741 | $ 168,168 | $ 252,495 | 512,951 | 846,912 | 820,470 |
Increase to cost of good sold, due to recast adjustment | $ (4,003,951) | $ (4,085,602) | $ (3,865,231) | ||||||||
Hedge Accounting Compliance For Cocoa Commodity Derivatives | Recast Adjustment | |||||||||||
Increase to cost of good sold, due to recast adjustment | $ (23,358) | ||||||||||
Maximum | |||||||||||
Market price of common stock throughout the quarter (USD per share) | $ 97.07 | $ 94.31 | $ 101.74 | $ 110.78 | $ 106.64 | $ 96.93 | $ 104.11 | $ 108.07 | $ 97.07 | $ 106.64 | |
Minimum | |||||||||||
Market price of common stock throughout the quarter (USD per share) | 83.58 | 85.13 | 87.86 | 98.52 | 91.09 | 88.15 | 96.02 | 95.54 | 83.58 | 91.09 | |
Common stock | |||||||||||
Net income per share - basic (USD per share) | 1.08 | 0.66 | (0.47) | 1.14 | 0.94 | 1.03 | 0.78 | 1.16 | 2.40 | 3.91 | $ 3.76 |
Net income per share - diluted (USD per share) | 1.04 | 0.64 | (0.47) | 1.10 | 0.91 | 1 | 0.75 | 1.11 | 2.32 | 3.77 | 3.61 |
Dividends paid per share (USD per share) | 0.583 | 0.583 | 0.535 | 0.535 | 0.535 | 0.535 | 0.485 | 0.485 | 2.236 | 2.04 | 1.81 |
Class B common stock | |||||||||||
Net income per share - basic (USD per share) | 0.98 | 0.60 | (0.42) | 1.04 | 0.85 | 0.94 | 0.70 | 1.04 | 2.19 | 3.54 | 3.39 |
Net income per share - diluted (USD per share) | 0.98 | 0.60 | (0.42) | 1.03 | 0.85 | 0.94 | 0.70 | 1.03 | 2.19 | 3.52 | 3.37 |
Dividends paid per share (USD per share) | $ 0.53 | $ 0.53 | $ 0.486 | $ 0.486 | $ 0.486 | $ 0.486 | $ 0.435 | $ 0.435 | $ 2.032 | $ 1.842 | $ 1.63 |
SCHEDULE II - VALUATION AND 118
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 174,856 | $ 102,052 | $ 98,531 |
Charged to Costs and Expenses | 264,888 | 238,376 | 185,458 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | (177,419) | (165,572) | (181,937) |
Balance at End of Period | 262,325 | 174,856 | 102,052 |
Allowance for Trade Receivables | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 15,885 | 14,329 | 15,246 |
Charged to Costs and Expenses | 172,622 | 153,652 | 154,874 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | (155,869) | (152,096) | (155,791) |
Balance at End of Period | 32,638 | 15,885 | 14,329 |
Valuation Allowance of Net Deferred Taxes | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 147,223 | 87,159 | 74,021 |
Charged to Costs and Expenses | 59,832 | 60,064 | 13,138 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | 0 | 0 | 0 |
Balance at End of Period | 207,055 | 147,223 | 87,159 |
Inventory Obsolescence Reserve | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 11,748 | 564 | 9,264 |
Charged to Costs and Expenses | 32,434 | 24,660 | 17,446 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | (21,550) | (13,476) | (26,146) |
Balance at End of Period | $ 22,632 | $ 11,748 | $ 564 |