DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 29, 2018 | |
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, 2018 | ||
Document fiscal year focus | 2,018 | ||
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 | $ 13,038,400,227 | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Common stock | |||
Document Information [Line Items] | |||
Entity common stock, shares outstanding (shares) | 147,906,017 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity common stock, shares outstanding (shares) | 60,613,777 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 |
Cost of sales | 4,215,744 | 4,060,050 | 4,270,642 | ||||||||
Gross profit | 944,352 | 863,493 | 793,420 | 974,060 | 837,241 | 942,936 | 765,847 | 909,352 | 3,575,325 | 3,455,376 | 3,169,539 |
Selling, marketing and administrative expense | 1,874,829 | 1,885,492 | 1,891,305 | ||||||||
Long-lived asset impairment charges | 57,729 | 208,712 | 4,204 | ||||||||
Business realignment costs | 19,103 | 47,763 | 18,857 | ||||||||
Operating profit | 1,623,664 | 1,313,409 | 1,255,173 | ||||||||
Interest expense, net | 138,837 | 98,282 | 90,143 | ||||||||
Other (income) expense, net | 74,766 | 104,459 | 65,549 | ||||||||
Income before income taxes | 1,410,061 | 1,110,668 | 1,099,481 | ||||||||
Provision for income taxes | 239,010 | 354,131 | 379,437 | ||||||||
Net income including noncontrolling interest | 1,171,051 | 756,537 | 720,044 | ||||||||
Net income (loss) attributable to noncontrolling interests | (6,511) | (26,444) | 0 | ||||||||
Net income attributable to The Hershey Company | $ 336,791 | $ 263,713 | $ 226,855 | $ 350,203 | $ 181,133 | $ 273,303 | $ 203,501 | $ 125,044 | $ 1,177,562 | $ 782,981 | $ 720,044 |
Common stock | |||||||||||
Net income per share—basic: | |||||||||||
Net income per share - basic (USD per share) | $ 1.65 | $ 1.29 | $ 1.11 | $ 1.71 | $ 0.88 | $ 1.32 | $ 0.98 | $ 0.60 | $ 5.76 | $ 3.79 | $ 3.45 |
Net income per share—diluted: | |||||||||||
Net income per share - diluted (USD per share) | 1.60 | 1.25 | 1.08 | 1.65 | 0.85 | 1.28 | 0.95 | 0.58 | 5.58 | 3.66 | 3.34 |
Dividends paid per share: | |||||||||||
Dividends paid per share (USD per share) | 0.722 | 0.722 | 0.656 | 0.656 | 0.656 | 0.656 | 0.618 | 0.618 | 2.756 | 2.548 | 2.402 |
Class B common stock | |||||||||||
Net income per share—basic: | |||||||||||
Net income per share - basic (USD per share) | 1.50 | 1.17 | 1.01 | 1.55 | 0.80 | 1.20 | 0.89 | 0.55 | 5.24 | 3.44 | 3.15 |
Net income per share—diluted: | |||||||||||
Net income per share - diluted (USD per share) | 1.49 | 1.17 | 1.01 | 1.55 | 0.80 | 1.20 | 0.89 | 0.55 | 5.22 | 3.44 | 3.14 |
Dividends paid per share: | |||||||||||
Dividends paid per share (USD per share) | $ 0.656 | $ 0.656 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.562 | $ 0.562 | $ 2.504 | $ 2.316 | $ 2.184 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income including noncontrolling interest | $ 1,171,051 | $ 756,537 | $ 720,044 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments, pre-tax amount | (31,143) | 19,616 | (13,041) |
Foreign currency translation adjustments, tax (expense) benefit | 0 | 0 | 0 |
Foreign currency translation adjustments, after-tax amount | (31,143) | 19,616 | (13,041) |
Reclassification to earnings due to sale of business, pre-tax amount | (25,131) | 0 | 0 |
Reclassification to earnings due to sale of business, pre-tax amount, tax (expense) benefit | 0 | 0 | 0 |
Reclassification to earnings due to sale of business, after-tax amount | (25,131) | 0 | 0 |
Pension and post-retirement benefit plans: | |||
Net actuarial gain (loss) and prior service cost, pre-tax amount | (39,724) | 28,718 | 20,304 |
Net actuarial gain (loss) and prior service cost, tax (expense) benefit | 10,120 | (10,883) | (7,776) |
Net actuarial gain (loss) and prior service cost, after-tax amount | (29,604) | 17,835 | 12,528 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, pre tax effect, pension and post-retirement benefit plans | 0 | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, tax effect, pension and post-retirement benefit plans | (36,535) | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, after tax pension and post-retirement benefit plans | (36,535) | 0 | 0 |
Reclassification to earnings, pre-tax amount | 40,421 | 46,305 | 56,604 |
Reclassification to earnings, tax (expense) benefit | (9,986) | (26,497) | (21,653) |
Reclassification to earnings, after-tax amount | 30,435 | 19,808 | 34,951 |
Cash flow hedges: | |||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 5,822 | (4,931) | (52,708) |
Gains (losses) on cash flow hedging derivatives, tax (expense) benefit | (86) | 73 | 18,701 |
Gains (losses) on cash flow hedging derivatives, after-tax amount | 5,736 | (4,858) | (34,007) |
Tax cuts and jobs act, reclassification from aoci to retained earnings, pre tax effect, cash flow hedges | 0 | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, tax effect, cash flow hedges | (11,121) | 0 | 0 |
Tax cuts and jobs act, reclassification from aoci to retained earnings, after tax, cash flow hedges | (11,121) | 0 | 0 |
Reclassification to earnings, pre-tax amount | 5,573 | 14,434 | (16,482) |
Reclassification to earnings, tax (expense) benefit | (2,677) | (3,853) | 7,524 |
Reclassification to earnings, after-tax amount | 2,896 | 10,581 | (8,958) |
Total other comprehensive income (loss), pre-tax amount | 6,080 | 104,142 | (5,323) |
Total other comprehensive income (loss), tax (expense) benefit | (50,285) | (41,160) | (3,204) |
Total other comprehensive income (loss), after-tax amount | (44,205) | 62,982 | (8,527) |
Total comprehensive income including noncontrolling interest | 1,126,846 | 819,519 | 711,517 |
Comprehensive loss attributable to noncontrolling interest | (7,682) | (25,604) | (3,664) |
Comprehensive income attributable to The Hershey Company | $ 1,134,528 | $ 845,123 | $ 715,181 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 587,998 | $ 380,179 |
Accounts receivable—trade, net | 594,145 | 588,262 |
Inventories | 784,879 | 752,836 |
Prepaid expenses and other | 272,159 | 280,633 |
Total current assets | 2,239,181 | 2,001,910 |
Property, plant and equipment, net | 2,130,294 | 2,106,697 |
Goodwill | 1,801,103 | 821,061 |
Other intangibles | 1,278,292 | 369,156 |
Other assets | 252,984 | 251,879 |
Deferred income taxes | 1,166 | 3,023 |
Total assets | 7,703,020 | 5,553,726 |
Current liabilities: | ||
Accounts payable | 502,314 | 523,229 |
Accrued liabilities | 679,163 | 676,134 |
Accrued income taxes | 33,773 | 17,723 |
Short-term debt | 1,197,929 | 559,359 |
Current portion of long-term debt | 5,387 | 300,098 |
Total current liabilities | 2,418,566 | 2,076,543 |
Long-term debt | 3,254,280 | 2,061,023 |
Other long-term liabilities | 446,048 | 438,939 |
Deferred income taxes | 176,860 | 45,656 |
Total liabilities | 6,295,754 | 4,622,161 |
Stockholders’ equity: | ||
Preferred stock, shares issued: none in 2018 and 2017 | 0 | 0 |
Additional paid-in capital | 982,205 | 924,978 |
Retained earnings | 7,032,020 | 6,371,082 |
Treasury—common stock shares, at cost: 150,172,840 in 2018 and 149,040,927 in 2017 | (6,618,625) | (6,426,877) |
Accumulated other comprehensive loss | (356,780) | (313,746) |
Total—The Hershey Company stockholders’ equity | 1,398,721 | 915,338 |
Noncontrolling interest in subsidiary | 8,545 | 16,227 |
Total stockholders’ equity | 1,407,266 | 931,565 |
Total liabilities and stockholders’ equity | 7,703,020 | 5,553,726 |
Common stock | ||
Stockholders’ equity: | ||
Common stock | 299,287 | 299,281 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 60,614 | $ 60,620 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, shares issued (shares) | 0 | 0 |
Common stock, shares issued (shares) | 359,901,744 | 359,901,744 |
Treasury stock, shares (shares) | 150,172,840 | 149,040,927 |
Common stock | ||
Common stock, shares issued (shares) | 299,287,967 | 299,281,967 |
Class B common stock | ||
Common stock, shares issued (shares) | 60,613,777 | 60,619,777 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | |||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | $ 132,486 | ||
Net income including noncontrolling interest | 1,171,051 | $ 756,537 | $ 720,044 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 295,144 | 261,853 | 301,837 |
Stock-based compensation expense | 49,286 | 51,061 | 54,785 |
Deferred income taxes | 36,255 | 18,582 | (38,097) |
Impairment of long-lived and intangible assets (see Notes 3 and 7) | 57,729 | 208,712 | 4,204 |
Write-down of equity investments | 50,329 | 66,209 | 43,482 |
Gain on settlement of SGM liability (see Note 2) | 0 | 0 | (26,650) |
Other | 37,278 | 77,291 | 51,375 |
Changes in assets and liabilities, net of business acquisitions and divestitures: | |||
Accounts receivable—trade, net | 8,585 | (6,881) | 21,096 |
Inventories | (12,746) | (71,404) | 13,965 |
Prepaid expenses and other current assets | (39,899) | 18,214 | (42,955) |
Accounts payable and accrued liabilities | (100,252) | (52,960) | (63,467) |
Accrued income taxes | 75,568 | (71,027) | (937) |
Contributions to pension and other benefit plans | (25,864) | (56,433) | (41,697) |
Other assets and liabilities | (2,471) | 49,761 | 16,443 |
Net cash provided by operating activities | 1,599,993 | 1,249,515 | 1,013,428 |
Investing Activities | |||
Capital additions (including software) | (328,601) | (257,675) | (269,476) |
Proceeds from sales of property, plant and equipment and other long-lived assets | 49,759 | 7,609 | 3,651 |
Proceeds from sales of businesses, net of cash and cash equivalents divested | 167,048 | 0 | 0 |
Equity investments in tax credit qualifying partnerships | (52,641) | (78,598) | (44,255) |
Business acquisitions, net of cash and cash equivalents acquired | (1,338,459) | 0 | (285,374) |
Net cash used in investing activities | (1,502,894) | (328,664) | (595,454) |
Financing Activities | |||
Net increase (decrease) in short-term debt | 645,805 | (81,426) | 275,607 |
Long-term borrowings | 1,199,845 | 954 | 792,953 |
Repayment of long-term debt | (910,844) | 0 | (500,000) |
Repayment of tax receivable obligation | (72,000) | 0 | 0 |
Payment of SGM liability (see Note 2) | 0 | 0 | 35,762 |
Cash dividends paid | (562,521) | (526,272) | (499,475) |
Repurchase of common stock | (247,500) | (300,312) | (592,550) |
Exercise of stock options | 63,323 | 63,288 | 94,831 |
Net cash provided by (used in) financing activities | 116,108 | (843,768) | (464,396) |
Effect of exchange rate changes on cash and cash equivalents | (5,388) | 6,129 | (3,140) |
Increase (decrease) in cash and cash equivalents | 207,819 | 83,212 | (49,562) |
Cash and cash equivalents, beginning of period | 380,179 | 296,967 | 346,529 |
Cash and cash equivalents, end of period | 587,998 | 380,179 | 296,967 |
Supplemental Disclosure | |||
Interest paid | 101,874 | 90,951 | |
Income taxes paid | $ 118,842 | $ 351,832 | $ 425,539 |
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 | Selling, marketing and administrative | Selling, marketing and administrativeNoncontrolling Interests in Subsidiaries |
Beginning 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 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income attributable to The Hershey Company | 720,044 | 720,044 | |||||||||||||
Net income (loss) attributable to noncontrolling interests | 0 | $ (3,970) | $ (3,970) | ||||||||||||
Net income including noncontrolling interest | 720,044 | ||||||||||||||
Other comprehensive income (loss) | (8,527) | (4,863) | (3,664) | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | $ (369,292) | $ (132,394) | $ (369,292) | $ (132,394) | |||||||||||
Stock-based compensation | 54,429 | 54,429 | |||||||||||||
Exercise of stock options and incentive-based transactions | 112,485 | 31,551 | 80,934 | ||||||||||||
Repurchase of common stock | (592,550) | (592,550) | |||||||||||||
Ending balance, stockholders' equity at Dec. 31, 2016 | 827,687 | 0 | 299,281 | 60,620 | 869,857 | 6,115,961 | (6,183,975) | (375,888) | 41,831 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income attributable to The Hershey Company | 782,981 | 782,981 | |||||||||||||
Net income (loss) attributable to noncontrolling interests | (26,444) | ||||||||||||||
Net income including noncontrolling interest | 756,537 | ||||||||||||||
Other comprehensive income (loss) | 62,982 | 62,142 | 840 | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | (387,466) | (140,394) | (387,466) | (140,394) | |||||||||||
Stock-based compensation | 49,243 | 49,243 | |||||||||||||
Exercise of stock options and incentive-based transactions | 63,288 | 5,878 | 57,410 | ||||||||||||
Repurchase of common stock | (300,312) | (300,312) | |||||||||||||
Ending balance, stockholders' equity at Dec. 31, 2017 | 931,565 | 0 | 299,281 | 60,620 | 924,978 | 6,371,082 | (6,426,877) | (313,746) | 16,227 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net income attributable to The Hershey Company | 1,177,562 | 1,177,562 | |||||||||||||
Net income (loss) attributable to noncontrolling interests | (6,511) | (6,511) | |||||||||||||
Net income including noncontrolling interest | 1,171,051 | ||||||||||||||
Other comprehensive income (loss) | 3,451 | 4,622 | (1,171) | ||||||||||||
Dividends (including dividend equivalents): | |||||||||||||||
Common Stock | $ (412,491) | $ (151,789) | $ (412,491) | $ (151,789) | |||||||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | 6 | (6) | |||||||||||||
Stock-based compensation | 49,656 | 49,656 | |||||||||||||
Exercise of stock options and incentive-based transactions | 63,323 | 7,571 | 55,752 | ||||||||||||
Repurchase of common stock | (247,500) | (247,500) | |||||||||||||
Tax cuts and jobs act, reclassification from aoci to retained earnings, tax effect | 47,656 | (47,656) | |||||||||||||
Ending balance, stockholders' equity at Dec. 31, 2018 | $ 1,407,266 | $ 0 | $ 299,287 | $ 60,614 | $ 982,205 | $ 7,032,020 | $ (6,618,625) | $ (356,780) | $ 8,545 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock | |||||||||||
Dividends paid per share (USD per share) | $ 0.722 | $ 0.722 | $ 0.656 | $ 0.656 | $ 0.656 | $ 0.656 | $ 0.618 | $ 0.618 | $ 2.756 | $ 2.548 | $ 2.402 |
Class B common stock | |||||||||||
Dividends paid per share (USD per share) | $ 0.656 | $ 0.656 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.562 | $ 0.562 | $ 2.504 | $ 2.316 | $ 2.184 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
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, Kisses, Jolly Rancher and Ice Breakers, which are marketed, sold and distributed in approximately 90 countries worldwide. Hershey's structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. 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 12. 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 in 2016 was not considered significant and was recorded within selling, marketing and administrative expense in the Consolidated Statements of Income. See Note 13 for additional information on our noncontrolling interest. We use the equity method of accounting when we have a 20% to 50% interest in other companies and exercise significant influence. In addition, we use the equity method of accounting for our investments in partnership entities which make equity investments in projects eligible to receive federal historic and energy tax credits. See Note 9 for additional information on our equity investments in partnership entities qualifying for tax credits. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Our significant estimates and assumptions include, among others, pension and other post-retirement benefit plan assumptions, valuation assumptions of goodwill and other intangible assets, useful lives of long-lived assets, marketing and trade promotion accruals and income taxes. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and the effects of any revisions are reflected in the consolidated financial statements in the period that they are determined. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Revenue Recognition The majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of our products, including chocolate, sweets, mints and other grocery and snack offerings. Net sales reflect the transaction prices for these contracts based on our selling list price which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts associated with aged or potentially unsaleable products. We recognize revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon delivery to the customer or other customer-designated delivery point. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Our trade promotional programs and consumer incentives are used to promote our products and include, but are not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The estimated costs associated with these programs and incentives are based upon our analysis of the programs offered, expectations regarding customer and consumer participation, historical sales and payment trends, and our experience with payment patterns associated with similar programs offered in the past. The estimated costs of these programs are reasonably likely to change in future periods due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. Differences between estimated expense and actual program performance are recognized as a change in estimate in a subsequent period and are normally not significant. During 2018, 2017 and 2016, actual promotional costs have not deviated from the estimated amount by more than 3% . The Company’s unsettled portion remaining in accrued liabilities at year-end for these activities was $171,449 and $173,669 at December 31, 2018 and 2017, respectively. We also recognize a minor amount of royalty income (less than 1% of our consolidated net sales) from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Shipping and handling costs incurred to deliver product to the customer are recorded within cost of sales. Sales, value add, and other taxes we collect concurrent with revenue producing activities are excluded from revenue. The majority of our products are confectionery or confectionery-based and, therefore, exhibit similar economic characteristics, as they are based on similar ingredients and are marketed and sold through the same channels to the same customers. In connection with our recent acquisitions, we have expanded our portfolio of snacking products, which also exhibit similar economic characteristics to our confectionery products and are sold through the same channels to the same customers. See Note 12 for revenues reported by geographic segment, which is consistent with how we organize and manage our operations, as well as product line net sales information. In 2018 , 2017 and 2016 , approximately 28% , 29% and 25% , respectively, of our consolidated net sales were made to McLane Company, Inc., one of the largest wholesale distributors in the United States to convenience stores, drug stores, wholesale clubs and mass merchandisers and the primary distributor of our products to Wal-Mart Stores, Inc. Cost of Sales Cost of sales represents costs directly related to the manufacture and distribution of our products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes. Selling, Marketing and Administrative Expense Selling, marketing and administrative expense (“SM&A”) represents costs incurred in generating revenues and in managing our business. Such costs include advertising and other marketing expenses, selling expenses, research and development costs, administrative and other indirect overhead costs, amortization of capitalized software and intangible assets and depreciation of administrative facilities. Research and development costs, charged to expense as incurred, totaled $38,521 in 2018 , $45,850 in 2017 and $47,268 in 2016 . Advertising expense is also charged to expense as incurred and totaled $479,908 in 2018 , $541,293 in 2017 and $521,479 in 2016 . Prepaid advertising expense was $594 and $56 as of December 31, 2018 and 2017 , 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 McLane Company, Inc. and Target Corporation, two customers served principally by our North America segment. As of December 31, 2018 , McLane Company, Inc. accounted for approximately 26% of our total accounts receivable. No other customer accounted for more than 10% of our year-end accounts receivable. We believe that we have little concentration of credit risk associated with the remainder of our customer base. Accounts receivable-trade in the Consolidated Balance Sheets is presented net of allowances for bad debts and anticipated discounts of $24,610 and $41,792 at December 31, 2018 and 2017 , 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, 2018 , approximately 60% 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 were valued at the lower of first-in, first-out (“FIFO”) cost or net realizable value. LIFO cost of inventories valued using the LIFO method was $466,911 as of December 31, 2018 and $443,492 as of December 31, 2017 . The adjustment to LIFO, as shown in Note 17, approximates the excess of replacement cost over the stated LIFO inventory value. The net impact of LIFO acquisitions and liquidations was not material to 2018 , 2017 or 2016 . Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for machinery and equipment; and 25 to 40 years for buildings and related improvements. At December 31, 2018 and December 31, 2017 , property, plant and equipment included assets under capital lease arrangements with net book values totaling $110,249 and $116,843 , respectively. Total depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $231,012 , $211,592 and $231,735 , respectively, and included depreciation on assets recorded under capital lease arrangements. Maintenance and repairs are expensed as incurred. We capitalize applicable interest charges incurred during the construction of new facilities and production lines and amortize these costs over the assets’ estimated useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated. If these assets are considered to be impaired, we measure impairment as the amount by which the carrying amount of the assets exceeds the fair value of the assets. We report assets held for sale or disposal at the lower of the carrying amount or fair value less cost to sell. We assess asset retirement obligations on a periodic basis and recognize the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. We capitalize associated asset retirement costs as part of the carrying amount of the long-lived asset. Computer Software We capitalize costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and it is probable the software being developed will be completed and placed in service. Capitalized costs include only (i) external direct costs of materials and services consumed in developing or obtaining internal-use software, (ii) payroll and other related costs for employees who are directly associated with and who devote time to the internal-use software project and (iii) interest costs incurred, when material, while developing internal-use software. We cease capitalization of such costs no later than the point at which the project is substantially complete and ready for its intended purpose. The unamortized amount of capitalized software totaled $126,379 and $104,881 at December 31, 2018 and 2017 , respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 7 years. Accumulated amortization of capitalized software was $316,710 and $296,042 as of December 31, 2018 and 2017 , respectively. Such amounts are recorded within other assets in the Consolidated Balance Sheets. We review the carrying value of software and development costs for impairment in accordance with our policy pertaining to the impairment of long-lived assets. Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment tests are conducted at the beginning of the fourth quarter. We test goodwill for impairment by performing either a qualitative or quantitative assessment. If we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors in assessing the fair value of the related reporting unit. If we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge for the differential (up to the carrying value of goodwill). We test individual indefinite-lived intangible assets by comparing the estimated fair values with the book values of each asset. We determine the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we calculate the fair value of our reporting units and indefinite-lived intangible assets based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to measure fair value. Our estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans which incorporate estimates for sales growth and profitability, and cash flows associated with taxes and capital spending. Additional assumptions include forecasted growth rates, estimated discount rates, which may be risk-adjusted for the operating market of the reporting unit, and estimated royalty rates that would be charged for comparable branded licenses. We believe such assumptions also reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. 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. The weighted-average amortization period for our finite-lived intangible assets is approximately 27 years, which is primarily driven by recently acquired trademarks. If certain events or changes in operating conditions indicate that the carrying value of these assets, or related asset groups, may not be recoverable, we perform an impairment assessment and may adjust the remaining useful lives. 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 have designated it and it qualified as part of a hedging relationship, as noted below: • Changes in the fair value of a derivative that is designated as a cash flow hedge are recorded in accumulated other comprehensive income (“AOCI”) to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. • Changes in the fair value of a derivative that is designated as a fair value hedge, along with the offsetting loss or gain on the hedged asset or liability that is attributable to the risk being hedged, are recorded in earnings, thereby reflecting in earnings the net extent to which the hedge is not effective in achieving offsetting changes in fair value. • Changes in the fair value of a derivative not designated as a hedging instrument are recognized in earnings in cost of sales or SM&A, consistent with the related exposure. For derivatives designated as hedges, we assess, both at the hedge's inception and on an ongoing basis, whether they are highly effective in offsetting changes in fair values or cash flows of hedged items. The ineffective portion, if any, is recorded directly in earnings. In addition, if we determine that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively. We do not hold or issue derivative instruments for trading or speculative purposes and are not a party to any instruments with leverage or prepayment features. Cash flows related to the derivative instruments we use to manage interest, commodity or other currency exposures are classified as operating activities. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a company to reclassify the income tax effects of the 2017 Tax Cuts and Jobs Act (“U.S. tax reform”) on items within AOCI to retained earnings. We adopted the provisions of this ASU in the first quarter of 2018. We elected to reclassify the income tax effects of U.S. tax reform from items in AOCI as of January 1, 2018 so that the tax effects of items within AOCI are reflected at the appropriate tax rate. The impact of the reclassification resulted in a $47,656 decrease to AOCI and a corresponding increase to retained earnings. In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715) . This ASU requires an employer to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if presented, or disclosed separately. In addition, only the service cost component may be eligible for capitalization where applicable. The amendments should be applied on a retrospective basis. We adopted the provisions of this ASU in the first quarter of 2018, with retrospective adjustment to the comparative periods determined using the previously disclosed service cost and other costs from our prior year pension and other post-retirement benefit plan footnote. As a result, the following amounts were reclassified for the the years ended December 31, 2017 and 2016 to correspond to the current year presentation: 2017 2016 Reclassified from: Cost of sales $ 10,857 $ 11,648 Selling, marketing and administrative expense 27,911 24,073 Business realignment costs — 13,669 Reclassified to Other (income) expense, net $ 38,768 $ 49,390 The adoption of this ASU had no impact on our consolidated balance sheets or statements of cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606), which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. On January 1, 2018, we adopted the requirements of ASC Topic 606 and the amendments related thereto and applied the new requirements to all of our contracts using the modified retrospective method. Upon completing our implementation assessment of ASC Topic 606, we concluded that no adjustment was required to the opening balance of retained earnings at the date of initial application. The comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. Additional disclosures required by ASC Topic 606 are presented within the aforementioned Revenue Recognition policy disclosure. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires the income tax consequences of intra-entity transfers of assets other than inventory to be recognized when the intra-entity transfer occurs rather than deferring recognition of income tax consequences until the transfer was made with an outside party. We adopted the provisions of this ASU in the first quarter of 2018. Adoption of the new standard did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . We adopted the provisions of this ASU in the first quarter of 2017. This update principally affects the recognition of excess tax benefits and deficiencies and the cash flow classification of share-based compensation-related transactions. These classification requirements were adopted retrospectively to the Consolidated Statement of Cash Flows. As a result, for the year ended December 31, 2017 , the impact resulted in a $24,901 increase in net cash flow from operating activities and a corresponding $24,901 decrease in net cash flow from financing activities. For the year ended December 31, 2016 , the impact resulted in a $29,953 increase in net cash flow from operating activities and a corresponding $29,953 decrease in net cash flow from financing activities. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) assets. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The Company adopted the standard as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification. In addition, we elected to combine the lease and non-lease components for the asset categories comprising the majority of our leases and are making an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less. We have implemented new controls and processes, as well as new software functionality, to enable the preparation of financial information as necessitated by the new standard. We estimate that adoption of the standard will result in recognition of operating lease ROU assets and lease liabilities of approximately $230,000 and $220,000 , respectively, with the difference largely due to prepaid and deferred rent that will be reclassified to the ROU asset value. In addition, we expect to derecognize a build-to-suit arrangement in accordance with the transition requirements, which will result in an adjustment to retained earnings of approximately $7,000 . We do not expect adoption of the standard to materially affect our consolidated net income or cash flows. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends ASC 815. The purpose of this ASU is to better align accounting rules with a company’s risk management activities and financial reporting for hedging relationships, better reflect economic results of hedging in financial statements, simplify hedge accounting requirements and improve the disclosures of hedging arrangements. The amendment should be applied using the modified retrospective transition method. ASU 2017-12 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted. We intend to adopt the provisions of this ASU in the first quarter of 2019. We believe the adoption of the new standard will not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. ASU 2018-07 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted but no earlier than an entity’s adoption date of ASC Topic 606. The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. We will adopt the provisions of this ASU in the first quarter of 2019. Adoption of the new standard is not expected to have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We are currently evaluating the effect that ASU 2018-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2018-14 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the effect that ASU 2018-15 will have on our consolidated financial statements and related disclosures. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Business Acquisitions | BUSINESS ACQUISITIONS 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 acquisition is allocated to the assets acquired and liabilities assumed. In conjunction with acquisitions noted below, we used various valuation techniques to determine fair value of the assets acquired, with the primary techniques being discounted cash flow analysis, relief-from-royalty, and a form of the multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Under these valuation approaches, we are required to make estimates and assumptions about sales, operating margins, growth rates, royalty rates and discount rates based on budgets, business plans, economic projections, anticipated future cash flows and marketplace data. 2018 Activity Pirate Brands On October 17, 2018, we completed the acquisition of Pirate Brands, which includes the Pirate's Booty , Smart Puffs and Original Tings brands, from B&G Foods, Inc. Pirate Brands offers baked, trans fat free and gluten free snacks and is available in a wide range of food distribution channels in the United States. Pirate Brands is expected to generate annualized net sales of approximately $90,000 in 2019. The purchase consideration for Pirate Brands totaled $423,002 and consisted of short-term borrowings and cash on hand. Acquisition-related costs for the Pirate Brands acquisition were immaterial. The acquisition has been accounted for as a purchase and, accordingly, Pirate Brands' results of operations have been included within the North America segment results in our consolidated financial statements since the date of acquisition. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Inventories $ 4,663 Plant, property and equipment, net 48 Goodwill 129,991 Other intangible assets 289,300 Accrued liabilities (1,000 ) Net assets acquired $ 423,002 The purchase price allocation presented above has been finalized as of the end of the fourth quarter of 2018. Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets). The goodwill derived from this acquisition is expected to be deductible for tax purposes and reflects the value of leveraging the Company's resources to expand the distribution locations and customer base for the Pirate Brands' products. Other intangible assets includes trademarks valued at $272,000 and customer relationships valued at $17,300 . Trademarks were assigned estimated useful lives of 45 years and customer relationships were assigned estimated useful lives ranging from 16 to 18 years. Amplify Snack Brands, Inc. On January 31, 2018, we completed the acquisition of all of the outstanding shares of Amplify Snack Brands, Inc. (“Amplify”), previously a publicly traded company based in Austin, Texas that owns several popular better-for-you snack brands such as SkinnyPop , Oatmega and Paqui . Amplify's anchor brand, SkinnyPop , is a market-leading ready-to-eat popcorn brand and is available in a wide range of food distribution channels in the United States. Total consideration of $968,781 included payment of $12.00 per share for Amplify's outstanding common stock (for a total of $907,766 ), as well as payment of Amplify's transaction related expenses, including accelerated equity compensation, consultant fees and other deal costs. The business enables us to capture more consumer snacking occasions by contributing a new portfolio of brands. The acquisition has been accounted for as a purchase and, accordingly, Amplify's results of operations have been included within the North America segment results in our consolidated financial statements since the date of acquisition. The purchase consideration, net of cash acquired totaling $53,324 , was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Accounts receivable $ 41,152 Other current assets 35,509 Plant, property and equipment, net 71,093 Goodwill 939,388 Other intangible assets 682,000 Other non-current assets 1,049 Accounts payable (32,394 ) Accrued liabilities (109,565 ) Current debt (610,836 ) Other current liabilities (2,931 ) Non-current deferred income taxes (93,859 ) Non-current liabilities (5,149 ) Net assets acquired $ 915,457 In connection with the acquisition, the Company agreed to pay in full all outstanding debt owed by Amplify under its existing credit agreement as of January 31, 2018, as well as the amount due under Amplify's existing tax receivable obligation. The Company funded the acquisition and repayment of the acquired debt utilizing proceeds from the issuance of commercial paper. During 2018, we recorded measurement period adjustments totaling $27,001 , the majority of which related to an increase in the final valuation of the assumed tax receivable obligation. The purchase price allocation has been finalized as of the end of the fourth quarter of 2018. Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets) and is not expected to be deductible for tax purposes. The goodwill that resulted from the acquisition is attributable primarily to cost-reduction synergies as Amplify leverages Hershey's resources, expertise and capability-building. Other intangible assets includes trademarks valued at $648,000 and customer relationships valued at $34,000 . Trademarks were assigned estimated useful lives ranging from 28 to 38 years and customer relationships were assigned estimated useful lives ranging from 14 to 18 years. The Company incurred acquisition-related costs of $20,577 related to the acquisition of Amplify, the majority of which were incurred during the first quarter of 2018. Acquisition-related costs consisted primarily of legal fees, consultant fees, valuation fees and other deal costs and are recorded in the selling, marketing and administrative expense caption within the Consolidated Statements of Operations. 2016 Activity Ripple Brand Collective, LLC On April 26, 2016 , we completed the acquisition of all of the outstanding shares of Ripple Brand Collective, LLC, a privately held company that owned the barkTHINS mass premium chocolate snacking brand. The barkTHINS brand is largely sold in the United States in take-home resealable packages and is available in the club channel, as well as select natural and conventional grocers. The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Goodwill $ 128,110 Trademarks 91,200 Other intangible assets 60,900 Other assets, primarily current assets, net of cash acquired totaling $674 12,375 Current liabilities (7,211 ) Net assets acquired $ 285,374 Goodwill was 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 barkTHINS products. Acquired trademarks were assigned estimated useful lives of 27 years , while other intangibles, including customer relationships and covenants not to compete, were assigned estimated useful lives ranging from 2 to 14 years. The recorded goodwill, trademarks and other intangibles are expected to be deductible for tax purposes. Shanghai Golden Monkey In September 2014, we completed the acquisition of 80% of the outstanding shares of Shanghai Golden Monkey Food Joint Stock Co., Ltd. (“SGM”), a confectionery company based in Shanghai, China, whose product line is primarily sold through traditional trade channels. The acquisition was undertaken in order to leverage these traditional trade channels, which complemented our traditional China chocolate business that has historically been primarily distributed through Tier 1 or hypermarket channels. On February 3, 2016, we completed the purchase of the remaining 20% of the outstanding shares of SGM for cash consideration totaling $35,762 , pursuant to a new agreement entered into during the fourth quarter of 2015 with the selling SGM shareholders which revised the originally-agreed purchase price for these shares. For accounting purposes, we treated the acquisition as if we had acquired 100% at the initial acquisition date in 2014 and financed the payment for the remaining 20% of the outstanding shares. Therefore, the cash settlement of the liability for the purchase of these remaining shares is reflected within the financing section of the Consolidated Statements of Cash Flows. The final settlement also resulted in an extinguishment gain of $26,650 representing the net carrying amount of the recorded liability in excess of the cash paid to settle the obligation for the remaining 20% of the outstanding shares. This gain is recorded within non-operating other (income) expense, net within the Consolidated Statements of Income. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 are as follows: North America International and Other Total Goodwill $ 797,163 $ 377,529 $ 1,174,692 Accumulated impairment loss (4,973 ) (357,375 ) (362,348 ) Balance at January 1, 2017 792,190 20,154 812,344 Foreign currency translation 7,739 978 8,717 Balance at December 31, 2017 799,929 21,132 821,061 Acquired during the period (see Note 2) 1,069,379 — 1,069,379 Purchase price allocation adjustments (see Note 2) 27,001 — 27,001 Divested during the period (see Note 7) (98,379 ) — (98,379 ) Foreign currency translation (15,085 ) (2,874 ) (17,959 ) Balance at December 31, 2018 $ 1,782,845 $ 18,258 $ 1,801,103 We had no goodwill impairment charges in 2018, 2017 or 2016. The following table provides the gross carrying amount and accumulated amortization for each major class of intangible asset: December 31, 2018 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 1,173,770 $ (60,995 ) $ 277,473 $ (37,510 ) Customer-related 163,860 (33,516 ) 128,182 (34,659 ) Patents 16,306 (15,772 ) 17,009 (15,975 ) Total 1,353,936 (110,283 ) 422,664 (88,144 ) Intangible assets not subject to amortization: Trademarks 34,639 34,636 Total other intangible assets $ 1,278,292 $ 369,156 As discussed in Note 8, in February 2017, we commenced the Margin for Growth Program which included an initiative to optimize the manufacturing operations supporting our China business. We deemed this to be a triggering event requiring us to test our China long-lived asset group for impairment by first determining whether the carrying value of the asset group was recovered by our current estimates of future cash flows associated with the asset group. Because this assessment indicated that the carrying value was not recoverable, we calculated an impairment loss as the excess of the asset group's carrying value over its fair value. The resulting impairment loss was allocated to the asset group's long-lived assets. Therefore, as a result of this testing, during the first quarter of 2017, we recorded an impairment charge totaling $105,992 representing the portion of the impairment loss that was allocated to the distributor relationship and trademark intangible assets that had been recognized in connection with the 2014 SGM acquisition. In connection with our annual impairment testing of indefinite lived intangible assets for 2016, we recognized a trademark impairment charge of $4,204 , primarily resulting from plans to discontinue a brand sold in India. Total amortization expense for the years ended December 31, 2018 , 2017 and 2016 was $38,555 , $23,376 and $26,687 , respectively. Amortization expense for the next five years, based on current intangible asset balances, is estimated to be as follows: Year ending December 31, 2019 2020 2021 2022 2023 Amortization expense $ 44,565 $ 43,986 $ 43,971 $ 43,971 $ 43,971 |
SHORT AND LONG-TERM DEBT
SHORT AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
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 $1.4 billion unsecured revolving credit facility, which currently expires in November 2020. 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, 2018 , we are in compliance 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 $386,590 at December 31, 2018 and $440,148 at December 31, 2017 . 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 $113,189 at December 31, 2018 and $110,684 at December 31, 2017 . Commitment fees relating to our revolving credit facility and lines of credit are not material. At December 31, 2018 , we had outstanding commercial paper totaling $1,084,740 , at a weighted average interest rate of 2.4% . At December 31, 2017 , we had outstanding commercial paper totaling $448,675 , at a weighted average interest rate of 1.4% . The maximum amount of short-term borrowings outstanding during 2018 and 2017 was $2,246,485 and $815,588 , respectively. The weighted-average interest rate on short-term borrowings outstanding was 2.5% as of December 31, 2018 and 1.7% as of December 31, 2017 . Long-term Debt Long-term debt consisted of the following: December 31, 2018 2017 1.60% Notes due 2018 (1) $ — $ 300,000 2.90% Notes due 2020 (2) 350,000 — 4.125% Notes due 2020 350,000 350,000 3.10% Notes due 2021 (2) 350,000 — 8.8% Debentures due 2021 84,715 84,715 3.375% Notes due 2023 (2) 500,000 — 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 300,000 2.30% Notes due 2026 (3) 500,000 500,000 7.2% Debentures due 2027 193,639 193,639 3.375% Notes due 2046 (3) 300,000 300,000 Capital lease obligations 101,980 99,194 Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts (20,667 ) (16,427 ) Total long-term debt 3,259,667 2,361,121 Less—current portion 5,387 300,098 Long-term portion $ 3,254,280 $ 2,061,023 (1) In August 2018, we repaid $300,000 of 1.60% Notes due in 2018 upon their maturity. (2) In May 2018, we issued $350,000 of 2.90% Notes due in 2020, $350,000 of 3.10% Notes due in 2021 and $500,000 of 3.375% Notes due in 2023 (the "2018 Notes"). Proceeds from the issuance of the 2018 Notes, net of discounts and issuance costs, totaled $1,193,830 . The 2018 Notes were issued under a shelf registration statement on Form S-3 filed in June 2015 that registered an indeterminate amount of debt securities. (3) In August 2016, we issued $500,000 of 2.30% Notes due in 2026 and $300,000 of 3.375% Notes due in 2046 (the "2016 Notes"). Proceeds from the issuance of the 2016 Notes, net of discounts and issuance costs, totaled $792,953 . The 2016 Notes were issued under a shelf registration statement on Form S-3 filed in June 2015 that registered an indeterminate amount of debt securities. Additionally, in September 2016, we repaid $250,000 of 5.45% Notes due in 2016 upon their maturity. In November 2016, we repaid $250,000 of 1.50% Notes due in 2016 upon their maturity Aggregate annual maturities of our long-term Notes (excluding capital lease obligations and net impact of interest rate swaps, debt issuance costs and unamortized debt discounts) are as follows for the years ending December 31: 2019 $ — 2020 700,000 2021 434,715 2022 — 2023 750,000 Thereafter 1,293,639 Our debt is principally unsecured and of equal priority. None of our debt is convertible into our Common Stock. Interest Expense Net interest expense consists of the following: For the years ended December 31, 2018 2017 2016 Interest expense $ 151,950 $ 104,232 $ 97,851 Capitalized interest (5,092 ) (4,166 ) (5,903 ) Interest expense 146,858 100,066 91,948 Interest income (8,021 ) (1,784 ) (1,805 ) Interest expense, net $ 138,837 $ 98,282 $ 90,143 |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS We are exposed to market risks arising principally from changes in foreign currency exchange rates, interest rates and commodity prices. We use certain derivative instruments to manage these risks. These include interest rate swaps to manage interest rate risk, foreign currency forward exchange contracts to manage foreign currency exchange rate risk, and commodities futures and options contracts to manage commodity market price risk exposures. In entering into these contracts, we have assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. We mitigate this risk by entering into exchanged-traded contracts with collateral posting requirements and/or by performing financial assessments prior to contract execution, conducting periodic evaluations of counterparty performance and maintaining a diverse portfolio of qualified counterparties. We do not expect any significant losses from counterparty defaults. Commodity Price Risk We enter into commodities futures and options contracts and other commodity derivative instruments to reduce the effect of future price fluctuations associated with the purchase of raw materials, energy requirements and transportation services. We generally hedge commodity price risks for 3 - to 24 -month periods. Our open commodity derivative contracts had a notional value of $693,463 as of December 31, 2018 and $405,288 as of December 31, 2017 . Derivatives used to manage commodity price risk are not designated for hedge accounting treatment. Therefore, the changes in fair value of these derivatives are recorded as incurred within cost of sales. As discussed in Note 12, we define our segment income to exclude gains and losses on commodity derivatives until the related inventory is sold, at which time the related gains and losses are reflected within segment income. This enables us to continue to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income. Foreign Exchange Price Risk We are exposed to foreign currency exchange rate risk related to our international operations, including non-functional currency intercompany debt and other non-functional currency transactions of certain subsidiaries. Principal currencies hedged include the euro, Canadian dollar, Japanese yen, British pound, and Brazilian real. We typically utilize foreign currency forward exchange contracts to hedge these exposures for periods ranging from 3 to 12 months . The contracts are either designated as cash flow hedges or are undesignated. The net notional amount of foreign exchange contracts accounted for as cash flow hedges was $29,458 at December 31, 2018 and $135,962 at December 31, 2017 . 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 $11,072 at December 31, 2018 and $2,791 at December 31, 2017 . The change in fair value on these instruments is recorded directly in cost of sales or selling, marketing and administrative expense, depending on the nature of the underlying exposure. Interest Rate Risk We manage our targeted mix of fixed and floating rate debt with debt issuances and by entering into fixed-to-floating interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. These swaps are designated as fair value hedges, for which the gain or loss on the derivative and the offsetting loss or gain on the hedged item are recognized in current earnings as interest expense (income), net. We had one interest rate derivative instrument in a fair value hedging relationship with a notional amount of $350,000 at December 31, 2018 and 2017 . In order to manage interest rate exposure, in previous years we utilized interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. These swaps, which were settled upon issuance of the related debt, were designated as cash flow hedges and the gains and losses that were deferred in other comprehensive income are being recognized as an adjustment to interest expense over the same period that the hedged interest payments affect earnings. During 2016, we had one interest rate swap agreement in a cash flow hedging relationship with a notional amount of $500,000 , which was settled in connection with the issuance of debt in August 2016, resulting in a payment of approximately $87,000 which is reflected as an operating cash flow within the Consolidated Statement of Cash Flows. Equity Price Risk We are exposed to market price changes in certain broad market indices related to our deferred compensation obligations to our employees. To mitigate this risk, we use equity swap contracts to hedge the portion of the exposure that is linked to market-level equity returns. These contracts are not designated as hedges for accounting purposes and are entered into for periods of 3 to 12 months . The change in fair value of these derivatives is recorded in selling, marketing and administrative expense, together with the change in the related liabilities. The notional amount of the contracts outstanding at December 31, 2018 and 2017 was $33,168 and $25,246 , respectively. The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of December 31, 2018 and 2017 : December 31, 2018 2017 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Foreign exchange contracts $ 3,394 $ 485 $ 423 $ 1,427 Derivatives designated as fair value hedging instruments: Interest rate swap agreements — 4,832 — 1,897 Derivatives not designated as hedging instruments: Commodities futures and options (2) 7,230 262 390 3,054 Deferred compensation derivatives — 4,736 1,581 — Foreign exchange contracts 70 484 31 — 7,300 5,482 2,002 3,054 Total $ 10,694 $ 10,799 $ 2,425 $ 6,378 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) As of December 31, 2018 , amounts reflected on a net basis in assets were assets of $63,978 and liabilities of $57,351 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period. The comparable amounts reflected on a net basis in liabilities at December 31, 2017 were assets of $48,505 and liabilities of $50,179 . At December 31, 2018 and 2017 , the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively. Income Statement Impact of Derivative Instruments The effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2018 and December 31, 2017 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) 2018 2017 2018 2017 2018 2017 Commodities futures and options $ 69,379 $ (55,734 ) $ — $ — $ — $ (1,774 ) Foreign exchange contracts 972 (23 ) 5,822 (4,931 ) 3,906 (3,180 ) Interest rate swap agreements — — — — (9,479 ) (9,480 ) Deferred compensation derivatives (2,173 ) 4,497 — — — — Total $ 68,178 $ (51,260 ) $ 5,822 $ (4,931 ) $ (5,573 ) $ (14,434 ) (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. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. The amount of pretax net losses on derivative instruments, including interest rate swap agreements and foreign currency forward exchange contracts expected to be reclassified into earnings in the next 12 months was approximately $6,570 as of December 31, 2018 . This amount is primarily associated with interest rate swap agreements. Fair Value Hedges For the years ended December 31, 2018 and 2017 , we recognized net incremental interest expense of $748 and a net benefit to interest expense of $2,660 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Accounting guidance on fair value measurements requires that financial assets and liabilities be classified and disclosed in one of the following categories of the fair value hierarchy: Level 1 – Based on unadjusted quoted prices for identical assets or liabilities in an active market. Level 2 – Based on observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 – Based on unobservable inputs that reflect the entity's own assumptions about the assumptions that a market participant would use in pricing the asset or liability. We did not have any level 3 financial assets or liabilities, nor were there any transfers between levels during the periods presented. The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of December 31, 2018 and 2017 : Assets (Liabilities) Level 1 Level 2 Level 3 Total December 31, 2018: Derivative Instruments: Assets: Foreign exchange contracts (1) $ — $ 3,464 $ — $ 3,464 Commodities futures and options (4) 7,230 — — 7,230 Liabilities: Foreign exchange contracts (1) — 969 — 969 Interest rate swap agreements (2) — 4,832 — 4,832 Deferred compensation derivatives (3) — 4,736 — 4,736 Commodities futures and options (4) 262 — — 262 December 31, 2017: Assets: Foreign exchange contracts (1) $ — $ 454 $ — $ 454 Deferred compensation derivatives (3) — 1,581 — 1,581 Commodities futures and options (4) 390 — — 390 Liabilities: Foreign exchange contracts (1) — 1,427 — 1,427 Interest rate swap agreements (2) — 1,897 — 1,897 Commodities futures and options (4) 3,054 — — 3,054 (1) The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. (2) The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. (3) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (4) The fair value of commodities futures and options contracts is based on quoted market prices. Other Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximated fair values as of December 31, 2018 and December 31, 2017 because of the relatively short maturity of these instruments. The estimated fair value of our long-term debt is based on quoted market prices for similar debt issues and is, therefore, classified as Level 2 within the valuation hierarchy. The fair values and carrying values of long-term debt, including the current portion, were as follows: Fair Value Carrying Value At December 31, 2018 2017 2018 2017 Current portion of long-term debt $ 5,387 $ 299,430 $ 5,387 $ 300,098 Long-term debt 3,228,877 2,113,296 3,254,280 2,061,023 Total $ 3,234,264 $ 2,412,726 $ 3,259,667 $ 2,361,121 Other Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, GAAP requires that, under certain circumstances, we also record assets and liabilities at fair value on a nonrecurring basis. In connection with the acquisitions of Amplify in the first quarter of 2018 and Pirate Brands in the fourth quarter of 2018, as discussed in Note 2, we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis, relief-from-royalty, and a form of the multi-period excess earnings valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. In connection with disposal groups classified as held for sale, as discussed in Note 7, during 2018, we recorded impairment charges totaling $57,729 to adjust the long-lived asset values within certain disposal groups, including the SGM and Tyrrells businesses, the Lotte Shanghai Foods Co., Ltd. joint venture and other assets. These charges represent the excess of the disposal groups' carrying values, including the related currency translation adjustment amounts realized or to be realized upon completion of the sales, over the sales values less costs to sell for the respective businesses. The fair values of the disposal groups were supported by the sales prices paid by third-party buyers or estimated sales prices based on marketing of the disposal group, when the sale has not yet been completed. The sales of SGM and Tyrrells were both completed in July 2018. During the first quarter of 2017, as discussed in Note 8, we recorded impairment charges totaling $105,992 to write down distributor relationship and trademark intangible assets that had been recognized in connection with the 2014 SGM acquisition and wrote down property, plant and equipment by $102,720 |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE ASSETS AND LIABILITIES HELD FOR SALE (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets and Liabilities Held for Sale | ASSETS AND LIABILITIES HELD FOR SALE As of December 31, 2018 , the following disposal groups have been classified as held for sale, in each case stated at the lower of net book value or estimated sales value less costs to sell: • The Lotte Shanghai Foods Co., Ltd. joint venture, which was taken out of operation and classified as held for sale during the second quarter of 2018. We sold a portion of the joint venture's equipment in the third and fourth quarters of 2018, and expect the sale of the remaining business to be completed by mid-2019. • Other assets, which are predominantly comprised of select Pennsylvania facilities and land that met the held for sale criteria in the third quarter of 2018. We expect these long-lived assets to be sold by the end of 2019. The amounts classified as assets and liabilities held for sale at December 31, 2018 include the following: Assets held for sale, included in prepaid expenses and other assets Property, plant and equipment, net $ 20,905 Other assets 2,516 $ 23,421 Liabilities held for sale, included in accrued liabilities Accounts payable and accrued liabilities $ 596 $ 596 During 2018, we completed the sale of other disposal groups that had been previously classified as assets and liabilities held for sale, as follows: • In April 2018, we sold the licensing rights for a non-core trademark relating to a brand marketed outside of the United States for sale proceeds of approximately $13,000 , realizing a gain on the sale of $2,658 , which is recorded in the selling, marketing and administrative expense caption within the Consolidated Statements of Operations. • During the second and third quarters of 2018, we sold select China facilities that were taken out of operation and classified as assets held for sale during the first quarter of 2017 in connection with the Operational Optimization Program (as defined in Note 8). Proceeds from the sale of these facilities totaled $27,468 , resulting in a gain on the sale of $6,562 , which is recorded in the business realignment costs caption within the Consolidated Statements of Operations. • In July 2018, we sold the Tyrrells and SGM businesses, both of which were previously classified as held for sale. Total proceeds from the sale of Tyrrells and SGM, net of cash divested, were approximately $167,048 . We recorded impairment charges of $33,729 |
BUSINESS REALIGNMENT ACTIVITIES
BUSINESS REALIGNMENT ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Business Realignment Activities | BUSINESS REALIGNMENT ACTIVITIES We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies. Costs recorded in 2018 , 2017 and 2016 related to these activities were as follows: For the years ended December 31, 2018 2017 2016 Margin for Growth Program: Severance $ 15,378 $ 32,554 $ — Accelerated depreciation 9,131 6,873 — Other program costs 30,940 16,407 — Operational Optimization Program: Severance — 13,828 17,872 Gain on sale of facilities (6,562 ) — — Accelerated depreciation — — 48,590 Other program costs 2,940 (303 ) 21,831 2015 Productivity Initiative: Other program costs — — 5,609 Total $ 51,827 $ 69,359 $ 93,902 The costs and related benefits of the Margin for Growth Program relate approximately 60% to the North America segment and 40% to the International and Other segment. The costs and related benefits of the Operational Optimization Program relate approximately 40% to the North America segment and 60% to the International and Other segment. The costs and related benefits to be derived from the 2015 Productivity Initiative relate primarily to the North America segment. However, segment operating results do not include these business realignment expenses because we evaluate segment performance excluding such costs. Margin for Growth Program In the first quarter 2017, the Company's Board of Directors ("Board") unanimously approved several initiatives under a single program designed to drive continued net sales, operating income and earnings per-share diluted growth over the next several years. This program is focused on improving global efficiency and effectiveness, optimizing the Company’s supply chain, streamlining the Company’s operating model and reducing administrative expenses to generate long-term savings. We originally estimated that the Margin for Growth Program would result in total pre-tax charges of $375,000 to $425,000 , to be incurred from 2017 to 2019. The majority of the initiatives relating to the program have been executed, with the final initiatives to be completed over approximately the next nine months. To date, we have incurred pre-tax charges to execute the program totaling $336,295 . This includes long-lived asset impairment charges of $208,712 related to the operations supporting our China business as noted below, as well as the $16,300 incremental impairment charge resulting from the sale of SGM (see Note 7). In addition to the impairment charges, we have incurred employee separation costs of $47,932 and other business realignment costs of $63,351 . We expect the remaining spending on this program to be minimal in 2019, bringing total estimated project costs to approximately $340,000 to $355,000 . The cash portion of the total program charges is estimated to be $97,000 to $110,000 . The Company reduced its global workforce by approximately 15% as a result of this program, with a majority of the reductions coming from hourly headcount positions outside of the United States. During 2018, we recognized total costs associated with the Margin for Growth Program of $55,449 . These charges include employee severance, largely relating to initiatives to improve the cost structure of our China business and to further streamline our corporate operating model, as well as non-cash, asset-related incremental depreciation expense as part of optimizing the global supply chain. In addition, we incurred other program costs, which relate primarily to third-party charges in support of our initiative to improve global efficiency and effectiveness. During 2017, we recognized total costs associated with the Margin for Growth Program of $55,834 . The 2017 charges are consistent in nature to the 2018 activity. The program included an initiative to optimize the manufacturing operations supporting our China business. When the program was approved in 2017, we deemed this to be a triggering event requiring us to test our China long-lived asset group for impairment by first determining whether the carrying value of the asset group was recovered by our current estimates of future cash flows associated with the asset group. Because this assessment indicated that the carrying value was not recoverable, we calculated an impairment loss as the excess of the asset group's carrying value over its fair value. The resulting impairment loss was allocated to the asset group's long-lived assets. Therefore, as a result of this testing, during the first quarter of 2017, we recorded impairment charges totaling $208,712 , with $105,992 representing the portion of the impairment loss that was allocated to the distributor relationship and trademark intangible assets that had been recognized in connection with the 2014 SGM acquisition and $102,720 representing the portion of the impairment loss that was allocated to property, plant and equipment. These impairment charges are recorded in the long-lived asset impairment charges caption within the Consolidated Statements of Operations. 2016 Operational Optimization Program In the second quarter of 2016, we commenced a program (the “Operational Optimization Program”) to optimize our production and supply chain network, which included select facility consolidations. The program encompassed the transition of our China chocolate and SGM operations into a united Golden Hershey platform, including the integration of the China sales force, as well as workforce planning efforts and the consolidation of production within certain facilities in China and North America. During 2018, we incurred pre-tax costs totaling $2,940 , relating primarily to third-party charges in support of our initiative to optimize our production and supply chain network. In addition, we completed the sale of select China facilities in 2018 that had been taken out of service in connection with the Operational Optimization Program resulting in a gain of $6,562 . During 2017 and 2016, we incurred pre-tax costs totaling $13,525 and $88,293 , respectively, including non-cash asset-related incremental depreciation costs in 2016, employee related costs, costs to consolidate, and relocate production, and third party costs incurred to execute these activities. This program was completed in 2018. 2015 Productivity Initiative In mid-2015, we initiated a 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 was undertaken 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 of 2015, resulting in a net reduction of approximately 300 positions, with the majority of the departures taking place by the end of 2015. The 2015 Productivity Initiative was completed during the third quarter 2016. Final costs incurred in 2016 relating to this program totaled $5,609 . Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows: For the years ended December 31, 2018 2017 2016 Cost of sales $ 11,323 $ 5,147 $ 58,106 Selling, marketing and administrative expense 21,401 16,449 16,939 Business realignment costs 19,103 47,763 18,857 Costs associated with business realignment activities $ 51,827 $ 69,359 $ 93,902 The following table presents the liability activity for costs qualifying as exit and disposal costs for the year ended December 31, 2018 : Total Liability balance at December 31, 2017 $ 38,992 2018 business realignment charges (1) 25,940 Cash payments (50,996 ) Other, net 669 Liability balance at December 31, 2018 (reported within accrued liabilities) $ 14,605 (1) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The components of income (loss) before income taxes were as follows: For the years ended December 31, 2018 2017 2016 Domestic $ 1,195,645 $ 1,187,825 $ 1,395,440 Foreign 214,416 (77,157 ) (295,959 ) Income before income taxes $ 1,410,061 $ 1,110,668 $ 1,099,481 The components of our provision for income taxes were as follows: For the years ended December 31, 2018 2017 2016 Current: Federal $ 151,107 $ 314,277 $ 391,705 State 38,243 37,628 51,706 Foreign 13,405 (16,356 ) (25,877 ) 202,755 335,549 417,534 Deferred: Federal 35,035 19,204 (7,706 ) State 7,572 7,573 (452 ) Foreign (6,352 ) (8,195 ) (29,939 ) 36,255 18,582 (38,097 ) Total provision for income taxes $ 239,010 $ 354,131 $ 379,437 U.S. Tax Cuts and Jobs Act of 2017 The U.S. Tax Cuts and Jobs Act, enacted in December 2017 (“U.S. tax reform”), significantly changed U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018 and creating a territorial tax system with a one-time mandatory tax on previously deferred foreign earnings of U.S. subsidiaries. Under GAAP (specifically, ASC Topic 740), the effects of changes in tax rates and laws on deferred tax balances are recognized in the period in which the new legislation is enacted. During the fourth quarter of 2017, we recorded a net provisional charge of $32.5 million , which included the estimated impact of the one-time mandatory tax on previously deferred earnings of non-U.S. subsidiaries offset in part by the benefit from revaluation of net deferred tax liabilities based on the new lower corporate income tax rate. During 2018, we recorded net benefits totaling $19.5 million as measurement period adjustments to the net provisional charge. The accounting for income tax effects of U.S. tax reform is complete based on additional tax regulations available as of December 31, 2018. Amounts recorded during 2018 and 2017 are reflected within the respective provision for income taxes in the Consolidated Statements of Income. Additionally, U.S. tax reform subjects a U.S. shareholder to current tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. We have elected to not recognize deferred taxes for temporary differences until such differences reverse as GILTI in future years. Deferred taxes reflect temporary differences between the tax basis and financial statement carrying value of assets and liabilities. The significant temporary differences that comprised the deferred tax assets and liabilities are as follows: December 31, 2018 2017 Deferred tax assets: Post-retirement benefit obligations $ 52,915 $ 58,306 Accrued expenses and other reserves 85,180 103,769 Stock-based compensation 30,448 31,364 Derivative instruments 17,423 27,109 Pension 8,921 — Lease financing obligation 12,284 12,310 Accrued trade promotion reserves 13,670 26,028 Net operating loss carryforwards 161,242 226,142 Capital loss carryforwards 26,670 23,215 Other 9,969 7,748 Gross deferred tax assets 418,722 515,991 Valuation allowance (239,959 ) (312,148 ) Total deferred tax assets 178,763 203,843 Deferred tax liabilities: Property, plant and equipment, net 144,044 132,443 Acquired intangibles 161,003 68,476 Inventories 21,366 20,769 Pension — 969 Other 28,044 23,819 Total deferred tax liabilities 354,457 246,476 Net deferred tax (liabilities) assets $ (175,694 ) $ (42,633 ) Included in: Non-current deferred tax assets, net 1,166 3,023 Non-current deferred tax liabilities, net (176,860 ) (45,656 ) Net deferred tax (liabilities) assets $ (175,694 ) $ (42,633 ) Changes in deferred tax assets for net operating loss carryforwards resulted primarily from the sale of SGM in July 2018. Changes in the valuation allowance resulted primarily from the sale of SGM and the realization of U.S. capital loss carryforwards for which there was previously a valuation allowance. Changes in the deferred tax liabilities for acquired intangibles resulted primarily from the acquisition of Amplify in January 2018. The valuation allowances as of December 31, 2018 and 2017 were 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, 2018 2017 2016 Federal statutory income tax rate 21.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income taxes, net of Federal income tax benefits 2.7 2.6 3.4 Qualified production income deduction — (2.9 ) (3.8 ) Business realignment and impairment charges 0.6 4.3 0.4 Foreign rate differences (2.0 ) (4.3 ) 3.6 Historic and solar tax credits (3.5 ) (4.8 ) (3.3 ) U.S. tax reform (1.4 ) 2.9 — Tax contingencies 0.5 0.5 0.1 Other, net (0.9 ) (1.4 ) (0.9 ) Effective income tax rate 17.0 % 31.9 % 34.5 % A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2018 2017 Balance at beginning of year $ 42,082 $ 36,002 Additions for tax positions taken during prior years 1,174 2,492 Reductions for tax positions taken during prior years (2,581 ) (1,689 ) Additions for tax positions taken during the current year 61,627 10,018 Settlements — (1,481 ) Expiration of statutes of limitations (4,772 ) (3,260 ) Balance at end of year $ 97,530 $ 42,082 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $93,507 as of December 31, 2018 and $37,587 as of December 31, 2017 . We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net tax expense of $1,785 in 2018 , a net tax expense of $795 in 2017 and a net tax benefit of $75 in 2016 for interest and penalties. Accrued net interest and penalties were $6,154 as of December 31, 2018 and $4,966 as of December 31, 2017 . 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 Company’s major taxing jurisdictions currently include the United States (federal and state), as well as various foreign jurisdictions such as Canada, China, Mexico, Brazil, India, Malaysia and Switzerland. The number of years with open tax audits varies depending on the tax jurisdiction, with 2010 representing the earliest tax year that remains open for examination by certain taxing authorities. The U.S. Internal Revenue Service is examining our U.S. federal income tax returns for 2013, 2014 and 2016. We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $9,637 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. As of December 31, 2018 , we had approximately $550,591 of undistributed earnings of our international subsidiaries. We intend to continue to reinvest earnings outside of the United States for the foreseeable future and, therefore, have not recognized additional tax expense (e.g., foreign withholding taxes due upon repatriation) on these earnings beyond the one-time U.S. repatriation tax due under the 2017 Tax Cuts and Jobs Act. Investments in Partnerships Qualifying for Tax Credits We invest in partnerships which make equity investments in projects eligible to receive federal historic and energy tax credits. The investments are accounted for under the equity method and reported within other 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 years ended December 31, 2018 and 2017 , we recognized investment tax credits and related outside basis difference benefits totaling $60,111 and $74,600 , respectively, and we wrote-down the equity investment by $50,329 and $66,209 |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Other Post-Retirement Benefit Plans | PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS We sponsor a number of defined benefit pension plans. The primary plans are The Hershey Company Retirement Plan and The Hershey Company Retirement Plan for Hourly Employees. These are cash balance plans that provide pension benefits for most domestic employees hired prior to January 1, 2007. We also sponsor two post-retirement benefit plans: health care and life insurance. The health care plan is contributory, with participants’ contributions adjusted annually. The life insurance plan is non-contributory. Obligations and Funded Status A summary of the changes in benefit obligations, plan assets and funded status of these plans is as follows: Pension Benefits Other Benefits December 31, 2018 2017 2018 2017 Change in benefit obligation Projected benefit obligation at beginning of year $ 1,117,564 $ 1,118,318 $ 236,112 $ 242,846 Service cost 21,223 20,657 230 263 Interest cost 31,943 40,996 6,923 8,837 Plan amendments — (8,473 ) — — Actuarial (gain) loss (50,432 ) 40,768 (10,842 ) 2,207 Curtailment (16 ) — — — Settlement (61,268 ) (44,978 ) — — Currency translation and other (4,674 ) 6,749 (1,073 ) 889 Benefits paid (23,134 ) (56,473 ) (16,631 ) (18,930 ) Projected benefit obligation at end of year 1,031,206 1,117,564 214,719 236,112 Change in plan assets Fair value of plan assets at beginning of year 1,086,226 1,023,676 — — Actual return on plan assets (43,118 ) 121,241 — — Employer contributions 9,233 37,503 16,631 18,930 Settlement (61,268 ) (44,978 ) — — Currency translation and other (4,078 ) 5,257 — — Benefits paid (23,134 ) (56,473 ) (16,631 ) (18,930 ) Fair value of plan assets at end of year 963,861 1,086,226 — — Funded status at end of year $ (67,345 ) $ (31,338 ) $ (214,719 ) $ (236,112 ) Amounts recognized in the Consolidated Balance Sheets: Other assets $ 332 $ 14,988 $ — $ — Accrued liabilities (1,298 ) (6,916 ) (19,553 ) (20,792 ) Other long-term liabilities (66,379 ) (39,410 ) (195,166 ) (215,320 ) Total $ (67,345 ) $ (31,338 ) $ (214,719 ) $ (236,112 ) Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: Actuarial net (loss) gain $ (254,735 ) $ (207,659 ) $ 17,967 $ 8,313 Net prior service credit (cost) 32,350 30,994 (812 ) (1,174 ) Net amounts recognized in AOCI $ (222,385 ) $ (176,665 ) $ 17,155 $ 7,139 The accumulated benefit obligation for all defined benefit pension plans was $994,278 as of December 31, 2018 and $1,077,112 as of December 31, 2017 . Plans with accumulated benefit obligations in excess of plan assets were as follows: December 31, 2018 2017 Projected benefit obligation $ 1,030,382 $ 711,767 Accumulated benefit obligation 993,892 675,660 Fair value of plan assets 962,705 665,441 Net Periodic Benefit Cost The components of net periodic benefit cost were as follows: Pension Benefits Other Benefits For the years ended December 31, 2018 2017 2016 2018 2017 2016 Amounts recognized in net periodic benefit cost Service cost $ 21,223 $ 20,657 $ 23,075 $ 230 $ 263 $ 299 Interest cost 31,943 40,996 41,875 6,923 8,837 9,731 Expected return on plan assets (58,612 ) (57,370 ) (58,820 ) — — — Amortization of prior service (credit) cost (7,202 ) (5,822 ) (1,555 ) 836 748 575 Amortization of net loss (gain) 26,875 33,648 34,940 — (1 ) (13 ) Curtailment credit (299 ) — — — — — Settlement loss 20,211 17,732 22,657 — — — Total net periodic benefit cost $ 34,139 $ 49,841 $ 62,172 $ 7,989 $ 9,847 $ 10,592 Change in plan assets and benefit obligations recognized in AOCI, pre-tax Actuarial net (gain) loss $ 3,715 $ (73,768 ) $ (31,772 ) $ (10,771 ) $ 2,139 $ (3,047 ) Prior service (credit) cost 7,198 (2,650 ) (41,517 ) (838 ) (744 ) (572 ) Total recognized in other comprehensive (income) loss, pre-tax $ 10,913 $ (76,418 ) $ (73,289 ) $ (11,609 ) $ 1,395 $ (3,619 ) Net amounts recognized in periodic benefit cost and AOCI $ 45,052 $ (26,577 ) $ (11,117 ) $ (3,620 ) $ 11,242 $ 6,973 Amounts expected to be amortized from AOCI into net periodic benefit cost during 2019 are as follows: Pension Plans Post-Retirement Benefit Plans Amortization of net actuarial loss $ 33,695 $ 811 Amortization of prior service (credit) cost $ (7,235 ) $ (384 ) Assumptions The weighted-average assumptions used in computing the year end benefit obligations were as follows: Pension Benefits Other Benefits December 31, 2018 2017 2018 2017 Discount rate 4.1 % 3.4 % 4.2 % 3.5 % Rate of increase in compensation levels 3.6 % 3.8 % 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, 2018 2017 2016 2018 2017 2016 Discount rate 3.4 % 3.8 % 4.0 % 3.5 % 3.8 % 4.0 % Expected long-term return on plan assets 5.8 % 5.8 % 6.1 % N/A N/A N/A Rate of compensation increase 3.8 % 3.8 % 3.8 % 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 base the asset return assumption on current and expected asset allocations, as well as historical and expected returns on the plan asset categories. Prior to December 31, 2017, the service and interest cost components of net periodic benefit cost were determined utilizing a single weighted-average discount rate derived from the yield curve used to measure the plan obligations. Beginning in 2018, we elected to utilize a full yield curve approach in the estimation of service and interest costs by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. We made this change to provide a more precise measurement of service and interest costs by improving the correlation between the projected cash flows to the corresponding spot rates along the yield curve. This change does not affect the measurement of our pension and other post-retirement benefit liabilities but generally results in lower benefit expense in periods when the yield curve is upward sloping, which was the case in 2018. We accounted for this change as a change in accounting estimate and, accordingly, accounted for it on a prospective basis starting in 2018. For purposes of measuring our post-retirement benefit obligation at December 31, 2018 and December 31, 2017 , we assumed a 7.0% annual rate of increase in the per capita cost of covered health care benefits for 2019 and 2018, grading down to 5.0% by 2023. 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 $ 94 $ (82 ) Effect on accumulated post-retirement benefit obligation 3,213 (2,833 ) The valuations and assumptions reflect adoption of the Society of Actuaries updated RP-2014 mortality tables with MP-2018 generational projection scales, which we adopted as of December 31, 2018. 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 public equity, fixed income, diversified credit strategies and diversified alternative strategies asset classes. Our target asset allocation for our major domestic pension plans as of December 31, 2018 was as follows: Asset Class Target Asset Allocation Cash 1% Equity securities 25% Fixed income securities 49% Alternative investments, including real estate, listed infrastructure and other 25% As of December 31, 2018 , actual allocations were consistent with the targets and within our allowable ranges. We expect the level of volatility in pension plan asset returns to be in line with the overall volatility of the markets within each asset class. The following table sets forth by level, within the fair value hierarchy (as defined in Note 6), pension plan assets at their fair values as of December 31, 2018 : Quoted prices in active markets of identical assets Significant other observable inputs Significant other unobservable inputs (Level 3) Investments Using NAV as a Practical Expedient (1) Total Cash and cash equivalents $ 1,040 $ 17,857 $ — $ 664 $ 19,561 Equity securities: Global all-cap (a) — — — 210,850 210,850 Fixed income securities: U.S. government/agency — — — 242,618 242,618 Corporate bonds (b) — — — 117,656 117,656 International government/corporate bonds (d) — — — 29,115 29,115 Diversified credit (e) — — — 94,008 94,008 Alternative investments: Global diversified assets (f) — — — 147,661 147,661 Global real estate investment trusts (g) — — — 57,854 57,854 Global infrastructure (h) — — — 44,538 44,538 Total pension plan assets $ 1,040 $ 17,857 $ — $ 944,964 $ 963,861 The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2017 : Quoted prices in active markets of identical assets (Level 1) Significant other observable inputs Significant other unobservable inputs (Level 3) Investments Using NAV as a Practical Expedient (1) Total Cash and cash equivalents $ 1,179 $ 18,161 $ — $ 730 $ 20,070 Equity securities: Global all-cap (a) — — — 276,825 276,825 Fixed income securities: U.S. government/agency — — — 239,686 239,686 Corporate bonds (b) — 33,019 — 162,633 195,652 Collateralized obligations (c) — 40,350 — 34,538 74,888 International government/corporate bonds (d) — — — 32,447 32,447 Alternative investments: Global diversified assets (f) — — — 149,030 149,030 Global real estate investment trusts (g) — — — 50,213 50,213 Global infrastructure (h) — — — 47,415 47,415 Total pension plan assets $ 1,179 $ 91,530 $ — $ 993,517 $ 1,086,226 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in our Obligations and Funded Status table. (a) This category comprises equity funds that primarily track the MSCI World Index or MSCI All Country World Index. (b) This category comprises fixed income funds primarily invested in investment grade and high yield bonds. (c) This category comprises fixed income funds primarily invested in high quality mortgage-backed securities and other asset-backed obligations. (d) This category comprises fixed income funds primarily invested in Canadian and other international bonds. (e) This category comprises fixed income funds primarily invested in high yield bonds, loans, securitized debt, and emerging market debt. (f) This category comprises diversified funds invested across alternative asset classes. (g) This category comprises equity funds primarily invested in publicly traded real estate securities. (h) This category comprises equity funds primarily invested in publicly traded listed infrastructure securities. 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, 2018 . We comply with the rules and regulations promulgated under the Employee Retirement Income Security Act of 1974 (“ERISA”) and we prohibit investments and investment strategies not allowed by ERISA. We do not permit direct purchases of our Company’s securities or the use of derivatives for the purpose of speculation. We invest the assets of non-domestic plans in compliance with laws and regulations applicable to those plans. Cash Flows and Plan Termination Our policy is to fund domestic pension liabilities in accordance with the limits imposed by the ERISA, federal income tax laws and the funding requirements of the Pension Protection Act of 2006. We fund non-domestic pension liabilities in accordance with laws and regulations applicable to those plans. We made total contributions to the pension plans of $9,233 during 2018 . In 2017 , we made total contributions of $37,503 to the pension plans. These included contributions totaling $29,201 to fund payouts from the unfunded supplemental retirement plans and $6,461 to complete the termination of The Hershey Company Puerto Rico Hourly Pension Plan, which was approved in 2016 by the Compensation and Executive Organization Committee of the Board. For 2019 , minimum funding requirements for our pension plans are approximately $1,445 . 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 2019 2020 2021 2022 2023 2024-2028 Pension Benefits $ 113,395 $ 95,461 $ 92,790 $ 115,509 $ 92,411 $ 396,875 Other Benefits 19,582 18,573 17,407 16,595 15,841 68,234 Multiemployer Pension Plan During 2016, we exited a facility as part of the Operational Optimization Program (see Note 7) and no longer participate in the BCTGM Union and Industry Canadian Pension Plan, a trustee-managed multiemployer defined benefit pension plan. Our obligation during the term of the collective bargaining agreement was limited to remitting the required contributions to the plan and contributions made were not significant during 2015 through 2016. 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 $47,959 in 2018 , $46,154 in 2017 and $43,545 in 2016 |
STOCK COMPENSATION PLANS
STOCK COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 , 65.8 million shares were authorized and approved by our stockholders for grants under the EICP. The EICP also provides for the deferral of stock-based compensation awards by participants if approved by the Compensation and 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 that they elect to convert into deferred stock units under our Directors’ Compensation Plan. At the time stock options are exercised or RSUs and PSUs become payable, common stock is issued from our accumulated treasury shares. Dividend equivalents are credited on RSUs on the same date and at the same rate as dividends are paid on Hershey’s common stock. These dividend equivalents are charged to retained earnings. 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, 2018 2017 2016 Pre-tax compensation expense $ 49,286 $ 51,061 $ 54,785 Related income tax benefit 9,463 13,684 17,148 Compensation costs for stock compensation plans are primarily included in selling, marketing and administrative expense. As of December 31, 2018 , total stock-based compensation cost related to non-vested awards not yet recognized was $56,547 and the weighted-average period over which this amount is expected to be recognized was approximately 2.1 years . Stock Options The exercise price of each stock option awarded under the EICP equals the closing price of our Common Stock on the New York Stock Exchange on the date of grant. Each stock option has a maximum term of 10 years . Grants of stock options provide for pro-rated vesting, typically over a four-year period. Expense for stock options is based on grant date fair value and recognized on a straight-line method over the vesting period, net of estimated forfeitures. A summary of activity relating to grants of stock options for the year ended December 31, 2018 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 5,921,062 $89.06 5.8 years Granted 945,220 $99.93 Exercised (1,110,712 ) $68.69 Forfeited (361,188 ) $102.20 Outstanding as of December 31, 2018 5,394,382 $94.28 5.6 years $ 70,398 Options exercisable as of December 31, 2018 3,506,304 $90.77 4.1 years $ 57,789 The weighted-average fair value of options granted was $15.58 , $15.76 and $11.46 per share in 2018 , 2017 and 2016 , 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, 2018 2017 2016 Dividend yields 2.4 % 2.4 % 2.4 % Expected volatility 16.6 % 17.2 % 16.8 % Risk-free interest rates 2.8 % 2.2 % 1.5 % Expected term in years 6.6 6.8 6.8 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 term” 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 $38,382 , $45,998 and $73,944 in 2018 , 2017 and 2016 , respectively. As of December 31, 2018 , there was $13,902 of total unrecognized compensation cost related to non-vested stock option awards 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, 2018 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $33.40 - $90.39 2,079,250 4.2 $77.54 1,704,705 $74.72 $90.40 - $105.91 1,676,763 7.0 $102.54 711,683 $105.12 $105.92 - $111.76 1,638,369 5.8 $107.06 1,089,916 $106.52 $33.40 - $111.76 5,394,382 5.6 $94.28 3,506,304 $90.77 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 PSUs granted, the target award is a combination of a market-based total shareholder return and performance-based components. The performance scores for 2016 through 2018 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 2018 , 2017 and 2016 , 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 award vesting period based on the grant date fair value of our Common Stock. We recognize expense for employee RSUs based on the straight-line method. We recognize the compensation cost associated with non-employee director RSUs ratably over the vesting period, net of estimated forfeitures. A summary of activity relating to grants of PSUs and RSUs for the period ended December 31, 2018 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards (per unit) Outstanding at beginning of year 923,364 $103.11 Granted 457,315 $97.86 Performance assumption change 16,961 $102.71 Vested (287,101 ) $103.59 Forfeited (111,521 ) $103.48 Outstanding at end of year 999,018 $101.57 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, 2018 2017 2016 Units granted 457,315 478,044 545,750 Weighted-average fair value at date of grant $ 97.86 $ 110.97 $ 93.55 Monte Carlo simulation assumptions: Estimated values $ 29.17 $ 46.85 $ 38.02 Dividend yields 2.6 % 2.3 % 2.5 % Expected volatility 20.4 % 20.4 % 17.0 % 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 fair value of shares vested totaled $28,752 , $29,981 and $22,062 in 2018 , 2017 and 2016 , respectively. Deferred PSUs, deferred RSUs and deferred stock units representing directors’ fees totaled 303,855 units as of December 31, 2018 . Each unit is equivalent to one |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Our organizational structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. Our business is organized around geographic regions, which enables us to build processes for repeatable success in our global markets. As a result, we have defined our operating segments on a geographic basis, as this aligns with how our Chief Operating Decision Maker (“CODM”) manages our business, including resource allocation and performance assessment. Our North America business, which generates approximately 89% of our consolidated revenue, is our only reportable segment. None of our other operating segments meet the quantitative thresholds to qualify as reportable segments; therefore, these operating segments are combined and disclosed below as International and Other. • North America - This segment is responsible for our traditional chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines. • International and Other - International and Other is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. We currently have operations and manufacture product in China, Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa and other regions. This segment also includes our global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania, New York City, Las Vegas, Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain of the Company's trademarks and products to third parties around the world. For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources. Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating income are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well the measure of segment performance used for incentive compensation purposes. 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, 2018 2017 2016 Net sales: North America $ 6,901,607 $ 6,621,173 $ 6,532,988 International and Other 889,462 894,253 907,193 Total $ 7,791,069 $ 7,515,426 $ 7,440,181 Segment income (loss): North America $ 2,020,082 $ 2,044,218 $ 2,040,454 International and Other 73,762 11,532 (29,139 ) Total segment income 2,093,844 2,055,750 2,011,315 Unallocated corporate expense (1) 486,716 499,251 488,318 Unallocated mark-to-market (gains) losses on commodity derivatives (168,263 ) (35,292 ) 163,238 Long-lived and intangible asset impairment charges 57,729 208,712 4,204 Costs associated with business realignment activities 51,827 69,359 93,902 Acquisition-related costs 44,829 311 6,480 Gain on sale of licensing costs (2,658 ) — — Operating profit 1,623,664 1,313,409 1,255,173 Interest expense, net 138,837 98,282 90,143 Other (income) expense, net 74,766 104,459 65,549 Income before income taxes $ 1,410,061 $ 1,110,668 $ 1,099,481 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. Activity within the unallocated mark-to-market (gains) losses on commodity derivatives is as follows: For the years ended December 31, 2018 2017 2016 Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income $ (69,379 ) $ 55,734 $ 171,753 Net losses on commodity derivative positions reclassified from unallocated to segment income (98,884 ) (91,026 ) (8,515 ) Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses $ (168,263 ) $ (35,292 ) $ 163,238 As of December 31, 2018 , the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $40,318 . Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax losses on commodity derivatives of $409 to segment operating results in the next twelve months. Depreciation and amortization expense included within segment income presented above is as follows: For the years ended December 31, 2018 2017 2016 North America $ 205,340 $ 171,265 $ 162,211 International and Other 35,656 42,542 50,753 Corporate (1) 54,148 48,046 88,873 Total $ 295,144 $ 261,853 $ 301,837 (1) Corporate includes non-cash asset-related accelerated depreciation and amortization related to business realignment activities, as discussed in Note 8. Such amounts are not included within our measure of segment income. Additional geographic information is as follows: For the years ended December 31, 2018 2017 2016 Net sales: United States $ 6,535,675 $ 6,263,703 $ 6,196,723 Other 1,255,394 1,251,723 1,243,458 Total $ 7,791,069 $ 7,515,426 $ 7,440,181 Long-lived assets: United States $ 1,668,186 $ 1,575,496 $ 1,528,255 Other 462,108 531,201 648,993 Total $ 2,130,294 $ 2,106,697 $ 2,177,248 In conjunction with recent acquisitions, in 2018 we introduced our snacks portfolio, an additional product line represented by ready-to-eat popcorn, baked snacks, meat snack products and other better-for-you snacks. Net sales related to our snacks portfolio in 2017 and 2016 , respectively, were immaterial. Additional product line information is as follows: For the year ended December 31, 2018 Net sales: Confectionery and confectionery-based portfolio $ 7,453,364 Snacks portfolio 337,705 Total $ 7,791,069 |
EQUITY AND NONCONTROLLING INTER
EQUITY AND NONCONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity and Noncontrolling Interest | EQUITY AND NONCONTROLLING INTEREST We had 1,055,000,000 authorized shares of capital stock as of December 31, 2018 . 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. 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 2018 , 6,000 shares of Class B Stock were converted into Common Stock. During 2017 and 2016 no shares of Class B Stock were converted into Common Stock. Changes in the outstanding shares of Common Stock for the past three years were as follows: For the years ended December 31, 2018 2017 2016 Shares issued 359,901,744 359,901,744 359,901,744 Treasury shares at beginning of year (149,040,927 ) (147,642,009 ) (143,124,384 ) Stock repurchases: Shares repurchased in the open market under pre-approved share repurchase programs (1,406,093 ) — (4,640,964 ) Shares repurchased directly from the Milton Hershey School Trust (450,000 ) (1,500,000 ) — Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation (615,719 ) (1,278,675 ) (1,820,766 ) Stock issuances: Shares issued for stock options and incentive compensation 1,339,899 1,379,757 1,944,105 Treasury shares at end of year (150,172,840 ) (149,040,927 ) (147,642,009 ) Net shares outstanding at end of year 209,728,904 210,860,817 212,259,735 We are authorized to purchase our outstanding shares in open market and privately negotiated transactions. The programs have no expiration date and acquired shares of Common Stock will be held as treasury shares. Purchases under approved share repurchase authorizations are in addition to our practice of buying back shares sufficient to offset those issued under incentive compensation plans. Hershey Trust Company Hershey Trust Company, as trustee for the Milton Hershey School Trust (the "Trust") and as direct owner of investment shares, held 3,903,121 shares of our Common Stock as of December 31, 2018 . As trustee for the Trust, Hershey Trust Company held 60,612,012 shares of the Class B Stock as of December 31, 2018 , 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 Trust, or any successor trustee, or Milton Hershey School, as appropriate, must approve any issuance of shares of Common Stock or other action that would result in it not continuing to have voting control of our Company. In November 2018, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Trust, pursuant to which the Company agreed to purchase 450,000 shares of the Company’s common stock from the Trust at a price equal to $106.30 per share, for a total purchase price of $47,835 . In August 2017, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Trust, pursuant to which the Company agreed to purchase 1,500,000 shares of the Company’s common stock from the Trust at a price equal to $106.01 per share, for a total purchase price of $159,015 . Noncontrolling Interest in Subsidiary We currently own a 50% controlling interest in Lotte Shanghai Foods Co., Ltd. (“LSFC”), a joint venture established in 2007 in China for the purpose of manufacturing and selling product to the joint venture partners. A roll-forward showing the 2018 activity relating to the noncontrolling interest follows: Noncontrolling Interest Balance, December 31, 2017 $ 16,227 Net loss attributable to noncontrolling interest (6,511 ) Other comprehensive loss - foreign currency translation adjustments (1,171 ) Balance, December 31, 2018 $ 8,545 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase obligations We enter into certain obligations for the purchase of raw materials. These obligations are primarily in the form of forward contracts for the purchase of raw materials from third-party brokers and dealers. These contracts minimize the effect of future price fluctuations by fixing the price of part or all of these purchase obligations. Total obligations consisted of fixed price contracts for the purchase of commodities and unpriced contracts that were valued using market prices as of December 31, 2018 . 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, 2018 , we satisfied these obligations by taking delivery of and making payment for the specific commodities. As of December 31, 2018 , we had entered into agreements for the purchase of raw materials with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2018 : in millions 2019 2020 2021 2022 2023 Purchase obligations $ 1,495.9 $ 870.9 $ 7.5 $ 0.7 $ — Lease commitments We also have commitments under various operating and capital lease arrangements. Future minimum payments under lease arrangements with a remaining term in excess of one year were as follows as of December 31, 2018 : Operating leases (1) Capital leases (2) 2019 $ 38,041 $ 6,980 2020 24,047 5,272 2021 16,883 3,901 2022 15,424 4,399 2023 13,494 4,577 Thereafter 185,608 169,686 (1) Future minimum rental payments reflect commitments under non-cancelable operating leases primarily for offices, retail stores, warehouse and distribution facilities. Total rent expense for the years ended December 31, 2018 , 2017 and 2016 was $34,157 , $25,525 and $20,330 , respectively, including short-term rentals. (2) Future minimum rental payments reflect commitments under non-cancelable capital leases primarily for offices and warehouse facilities, as well as vehicles. Environmental contingencies We have a number of facilities that contain varying amounts of asbestos in certain locations within the facilities. Our asbestos management program is compliant with current applicable regulations, which require that we handle or dispose of asbestos in a special manner if such facilities undergo major renovations or are demolished. We do not have sufficient information to estimate the fair value of any asset retirement obligations related to these facilities. We cannot specify the settlement date or range of potential settlement dates and, therefore, sufficient information is not available to apply an expected present value technique. We expect to maintain the facilities with repairs and maintenance activities that would not involve or require the removal of significant quantities of asbestos. Legal contingencies We are subject to various pending or threatened legal proceedings and claims that arise in the ordinary course of our business. While it is not feasible to predict or determine the outcome of such proceedings and claims with certainty, in our opinion these matters, both individually and in the aggregate, are not expected to have a material effect on our financial condition, results of operations or cash flows. Collective Bargaining As of December 31, 2018 , the Company employed approximately 14,930 full-time and 1,490 part-time employees worldwide. Collective bargaining agreements covered approximately 5,780 employees, or approximately 35% of the Company’s employees worldwide. During 2019, agreements will be negotiated for certain employees at three facilities outside of the United States, comprising approximately 67% |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 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) $ 410,732 $ 151,789 $ 385,878 $ 140,394 $ 367,081 $ 132,394 Allocation of undistributed earnings 449,372 165,669 188,286 68,423 162,299 58,270 Total earnings—basic $ 860,104 $ 317,458 $ 574,164 $ 208,817 $ 529,380 $ 190,664 Denominator (shares in thousands): Total weighted-average shares—basic 149,379 60,614 151,625 60,620 153,519 60,620 Earnings Per Share—basic $ 5.76 $ 5.24 $ 3.79 $ 3.44 $ 3.45 $ 3.15 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 860,104 $ 317,458 $ 574,164 $ 208,817 $ 529,380 $ 190,664 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 317,458 — 208,817 — 190,664 — Reallocation of undistributed earnings — (803 ) — (492 ) — (324 ) Total earnings—diluted $ 1,177,562 $ 316,655 $ 782,981 $ 208,325 $ 720,044 $ 190,340 Denominator (shares in thousands): Number of shares used in basic computation 149,379 60,614 151,625 60,620 153,519 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — 60,620 — Employee stock options 651 — 1,144 — 964 — Performance and restricted stock units 345 — 353 — 201 — Total weighted-average shares—diluted 210,989 60,614 213,742 60,620 215,304 60,620 Earnings Per Share—diluted $ 5.58 $ 5.22 $ 3.66 $ 3.44 $ 3.34 $ 3.14 The earnings per share calculations for the years ended December 31, 2018 , 2017 and 2016 excluded 4,196 , 2,374 and 3,680 |
OTHER (INCOME) EXPENSE, NET OTH
OTHER (INCOME) EXPENSE, NET OTHER (INCOME) EXPENSE, NET | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense, Net | OTHER (INCOME) EXPENSE, NET Other (income) expense, net reports certain gains and losses associated with activities not directly related to our core operations. A summary of the components of other (income) expense, net is as follows: For the years ended December 31, 2018 2017 2016 Write-down of equity investments in partnerships qualifying for tax credits $ 50,329 $ 66,209 $ 43,482 Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans 20,672 38,768 49,390 Settlement of SGM liability (see Note 2) — — (26,650 ) Other (income) expense, net 3,765 (518 ) (673 ) Total $ 74,766 $ 104,459 $ 65,549 |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Inventories: Raw materials $ 237,086 $ 224,940 Goods in process 107,139 93,627 Finished goods 618,798 614,945 Inventories at FIFO 963,023 933,512 Adjustment to LIFO (178,144 ) (180,676 ) Total inventories $ 784,879 $ 752,836 Prepaid expenses and other: Prepaid expenses $ 68,490 $ 128,735 Assets held for sale 23,421 21,124 Other current assets 180,248 130,774 Total prepaid expenses and other $ 272,159 $ 280,633 Property, plant and equipment: Land $ 102,074 $ 108,300 Buildings 1,211,011 1,214,158 Machinery and equipment 2,988,027 2,925,353 Construction in progress 280,559 212,912 Property, plant and equipment, gross 4,581,671 4,460,723 Accumulated depreciation (2,451,377 ) (2,354,026 ) Property, plant and equipment, net $ 2,130,294 $ 2,106,697 Other assets: Capitalized software, net $ 126,379 $ 104,881 Other non-current assets 126,605 146,998 Total other assets $ 252,984 $ 251,879 Accrued liabilities: Payroll, compensation and benefits $ 180,546 $ 190,863 Advertising, promotion and product allowances 293,642 305,107 Liabilities held for sale 596 — Other 204,379 180,164 Total accrued liabilities $ 679,163 $ 676,134 Other long-term liabilities: Post-retirement benefits liabilities $ 195,166 $ 215,320 Pension benefits liabilities 66,379 39,410 Other 184,503 184,209 Total other long-term liabilities $ 446,048 $ 438,939 Accumulated other comprehensive loss: Foreign currency translation adjustments $ (96,678 ) $ (91,837 ) Pension and post-retirement benefit plans, net of tax (205,230 ) (169,526 ) Cash flow hedges, net of tax (54,872 ) (52,383 ) Total accumulated other comprehensive loss $ (356,780 ) $ (313,746 ) |
QUARTERLY DATA (Unaudited)
QUARTERLY DATA (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Data (Unaudited) | QUARTERLY DATA (Unaudited) Summary quarterly results were as follows: Year 2018 First Second Third Fourth Net sales $ 1,971,959 $ 1,751,615 $ 2,079,593 $ 1,987,902 Gross profit 974,060 793,420 863,493 944,352 Net income attributable to The Hershey Company 350,203 226,855 263,713 336,791 Common stock: Net income per share—Basic (a) 1.71 1.11 1.29 1.65 Net income per share—Diluted (a) 1.65 1.08 1.25 1.60 Dividends paid per share 0.656 0.656 0.722 0.722 Class B common stock: Net income per share—Basic (a) 1.55 1.01 1.17 1.50 Net income per share—Diluted (a) 1.55 1.01 1.17 1.49 Dividends paid per share 0.596 0.596 0.656 0.656 Market price—common stock: High 114.06 100.60 106.60 110.01 Low 96.06 89.54 91.04 101.64 Year 2017 First Second Third Fourth Net sales $ 1,879,678 $ 1,662,991 $ 2,033,121 $ 1,939,636 Gross profit 909,352 765,847 942,936 837,241 Net income attributable to The Hershey Company 125,044 203,501 273,303 181,133 Common stock: Net income per share—Basic (a) 0.60 0.98 1.32 0.88 Net income per share—Diluted (a) 0.58 0.95 1.28 0.85 Dividends paid per share 0.618 0.618 0.656 0.656 Class B common stock: Net income per share—Basic (a) 0.55 0.89 1.20 0.80 Net income per share—Diluted (a) 0.55 0.89 1.20 0.80 Dividends paid per share 0.562 0.562 0.596 0.596 Market price—common stock: High 109.61 115.96 110.50 115.45 Low 103.45 106.41 104.06 102.87 (a) |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2018 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS For the Years Ended December 31, 2018 , 2017 and 2016 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, 2018 Allowances deducted from assets Accounts receivable—trade, net (a) $ 41,792 $ 222,819 $ — $ (240,001 ) $ 24,610 Valuation allowance on net deferred taxes (b) 312,148 18,413 — (90,602 ) 239,959 Inventory obsolescence reserve (c) 19,348 32,379 — (31,591 ) 20,136 Total allowances deducted from assets $ 373,288 $ 273,611 $ — $ (362,194 ) $ 284,705 For the year ended December 31, 2017 Allowances deducted from assets Accounts receivable—trade, net (a) $ 40,153 $ 166,993 $ — $ (165,354 ) $ 41,792 Valuation allowance on net deferred taxes (b) 235,485 92,139 — (15,476 ) 312,148 Inventory obsolescence reserve (c) 20,043 35,666 — (36,361 ) 19,348 Total allowances deducted from assets $ 295,681 $ 294,798 $ — $ (217,191 ) $ 373,288 For the year ended December 31, 2016 Allowances deducted from assets Accounts receivable—trade, net (a) $ 32,638 $ 174,314 $ — $ (166,799 ) $ 40,153 Valuation allowance on net deferred taxes (b) 207,055 28,430 — — 235,485 Inventory obsolescence reserve (c) 22,632 30,053 — (32,642 ) 20,043 Total allowances deducted from assets $ 262,325 $ 232,797 $ — $ (199,441 ) $ 295,681 (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. The 2017 deductions from reserves reflects the change in valuation allowance due to the remeasurement of corresponding U.S. deferred tax assets at the lower enacted corporate tax rates resulting from the U.S. tax reform. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business The Hershey Company together with its wholly-owned subsidiaries and entities in which it has a controlling interest, (the “Company,” “Hershey,” “we” or “us”) is a global confectionery leader known for its branded portfolio of chocolate, sweets, mints and other great-tasting snacks. The Company has more than 80 brands worldwide including such iconic brand names as Hershey’s, Reese’s, Kisses, Jolly Rancher and Ice Breakers, which are marketed, sold and distributed in approximately 90 countries worldwide. Hershey's structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. 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 12. Basis of Presentation |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying disclosures. Our significant estimates and assumptions include, among others, pension and other post-retirement benefit plan assumptions, valuation assumptions of goodwill and other intangible assets, useful lives of long-lived assets, marketing and trade promotion accruals and income taxes. These estimates and assumptions are based on management’s best judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and the effects of any revisions are reflected in the consolidated financial statements in the period that they are determined. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. |
Revenue Recognition | Revenue Recognition The majority of our revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of our products, including chocolate, sweets, mints and other grocery and snack offerings. Net sales reflect the transaction prices for these contracts based on our selling list price which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts associated with aged or potentially unsaleable products. We recognize revenue at the point in time that control of the ordered product(s) is transferred to the customer, which is typically upon delivery to the customer or other customer-designated delivery point. Amounts billed and due from our customers are classified as accounts receivables on the balance sheet and require payment on a short-term basis. Our trade promotional programs and consumer incentives are used to promote our products and include, but are not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The estimated costs associated with these programs and incentives are based upon our analysis of the programs offered, expectations regarding customer and consumer participation, historical sales and payment trends, and our experience with payment patterns associated with similar programs offered in the past. The estimated costs of these programs are reasonably likely to change in future periods due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. Differences between estimated expense and actual program performance are recognized as a change in estimate in a subsequent period and are normally not significant. During 2018, 2017 and 2016, actual promotional costs have not deviated from the estimated amount by more than 3% . The Company’s unsettled portion remaining in accrued liabilities at year-end for these activities was $171,449 and $173,669 at December 31, 2018 and 2017, respectively. We also recognize a minor amount of royalty income (less than 1% of our consolidated net sales) from sales-based licensing arrangements, pursuant to which revenue is recognized as the third-party licensee sales occur. Shipping and handling costs incurred to deliver product to the customer are recorded within cost of sales. Sales, value add, and other taxes we collect concurrent with revenue producing activities are excluded from revenue. The majority of our products are confectionery or confectionery-based and, therefore, exhibit similar economic characteristics, as they are based on similar ingredients and are marketed and sold through the same channels to the same customers. In connection with our recent acquisitions, we have expanded our portfolio of snacking products, which also exhibit similar economic characteristics to our confectionery products and are sold through the same channels to the same customers. See Note 12 for revenues reported by geographic segment, which is consistent with how we organize and manage our operations, as well as product line net sales information. In 2018 , 2017 and 2016 , approximately 28% , 29% and 25% |
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 costs, administrative and other indirect overhead costs, amortization of capitalized software and intangible assets and depreciation of administrative facilities. Research and development costs, charged to expense as incurred, totaled $38,521 in 2018 , $45,850 in 2017 and $47,268 in 2016 . Advertising expense is also charged to expense as incurred and totaled $479,908 in 2018 , $541,293 in 2017 and $521,479 in 2016 . Prepaid advertising expense was $594 and $56 as of December 31, 2018 and 2017 |
Cash Equivalents | Cash EquivalentsCash 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 InvestmentsShort-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 McLane Company, Inc. and Target Corporation, two customers served principally by our North America segment. As of December 31, 2018 , McLane Company, Inc. accounted for approximately 26% of our total accounts receivable. No other customer accounted for more than 10% of our year-end accounts receivable. We believe that we have little concentration of credit risk associated with the remainder of our customer base. Accounts receivable-trade in the Consolidated Balance Sheets is presented net of allowances for bad debts and anticipated discounts of $24,610 and $41,792 at December 31, 2018 and 2017 |
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, 2018 , approximately 60% 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 were valued at the lower of first-in, first-out (“FIFO”) cost or net realizable value. LIFO cost of inventories valued using the LIFO method was $466,911 as of December 31, 2018 and $443,492 as of December 31, 2017 . The adjustment to LIFO, as shown in Note 17, approximates the excess of replacement cost over the stated LIFO inventory value. The net impact of LIFO acquisitions and liquidations was not material to 2018 , 2017 or 2016 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets, as follows: 3 to 15 years for machinery and equipment; and 25 to 40 years for buildings and related improvements. At December 31, 2018 and December 31, 2017 , property, plant and equipment included assets under capital lease arrangements with net book values totaling $110,249 and $116,843 , respectively. Total depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $231,012 , $211,592 and $231,735 , respectively, and included depreciation on assets recorded under capital lease arrangements. Maintenance and repairs are expensed as incurred. We capitalize applicable interest charges incurred during the construction of new facilities and production lines and amortize these costs over the assets’ estimated useful lives. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets to be held and used by a comparison of the carrying amount of long-lived assets to future undiscounted net cash flows expected to be generated. If these assets are considered to be impaired, we measure impairment as the amount by which the carrying amount of the assets exceeds the fair value of the assets. We report assets held for sale or disposal at the lower of the carrying amount or fair value less cost to sell. |
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 $126,379 and $104,881 at December 31, 2018 and 2017 , respectively. We amortize software costs using the straight-line method over the expected life of the software, generally 3 to 7 years. Accumulated amortization of capitalized software was $316,710 and $296,042 as of December 31, 2018 and 2017 , respectively. Such amounts are recorded within other assets in the Consolidated Balance Sheets. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized, but are evaluated for impairment annually or more often if indicators of a potential impairment are present. Our annual impairment tests are conducted at the beginning of the fourth quarter. We test goodwill for impairment by performing either a qualitative or quantitative assessment. If we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors in assessing the fair value of the related reporting unit. If we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed. Otherwise, no further testing is required. For those reporting units tested using a quantitative approach, we compare the fair value of each reporting unit with the carrying amount of the reporting unit, including goodwill. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge for the differential (up to the carrying value of goodwill). We test individual indefinite-lived intangible assets by comparing the estimated fair values with the book values of each asset. We determine the fair value of our reporting units and indefinite-lived intangible assets using an income approach. Under the income approach, we calculate the fair value of our reporting units and indefinite-lived intangible assets based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to measure fair value. Our estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans which incorporate estimates for sales growth and profitability, and cash flows associated with taxes and capital spending. Additional assumptions include forecasted growth rates, estimated discount rates, which may be risk-adjusted for the operating market of the reporting unit, and estimated royalty rates that would be charged for comparable branded licenses. We believe such assumptions also reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. 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. The weighted-average amortization period for our finite-lived intangible assets is approximately 27 |
Currency Translation | Currency TranslationThe financial statements of our foreign entities with functional currencies other than the U.S. dollar are translated into U.S. dollars, with the resulting translation adjustments recorded as a component of other comprehensive income (loss). Assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expense items are translated using the average exchange rates during the period. |
Derivative Instruments | Derivative Instruments We use derivative instruments principally to offset exposure to market risks arising from changes in commodity prices, foreign currency exchange rates and interest rates. See Note 5 for additional information on our risk management strategy and the types of instruments we use. Derivative instruments are recognized on the 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 have designated it and it qualified as part of a hedging relationship, as noted below: • Changes in the fair value of a derivative that is designated as a cash flow hedge are recorded in accumulated other comprehensive income (“AOCI”) to the extent effective and reclassified into earnings in the same period or periods during which the transaction hedged by that derivative also affects earnings. • Changes in the fair value of a derivative that is designated as a fair value hedge, along with the offsetting loss or gain on the hedged asset or liability that is attributable to the risk being hedged, are recorded in earnings, thereby reflecting in earnings the net extent to which the hedge is not effective in achieving offsetting changes in fair value. • Changes in the fair value of a derivative not designated as a hedging instrument are recognized in earnings in cost of sales or SM&A, consistent with the related exposure. For derivatives designated as hedges, we assess, both at the hedge's inception and on an ongoing basis, whether they are highly effective in offsetting changes in fair values or cash flows of hedged items. The ineffective portion, if any, is recorded directly in earnings. In addition, if we determine that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively. We do not hold or issue derivative instruments for trading or speculative purposes and are not a party to any instruments with leverage or prepayment features. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits a company to reclassify the income tax effects of the 2017 Tax Cuts and Jobs Act (“U.S. tax reform”) on items within AOCI to retained earnings. We adopted the provisions of this ASU in the first quarter of 2018. We elected to reclassify the income tax effects of U.S. tax reform from items in AOCI as of January 1, 2018 so that the tax effects of items within AOCI are reflected at the appropriate tax rate. The impact of the reclassification resulted in a $47,656 decrease to AOCI and a corresponding increase to retained earnings. In March 2017, the FASB issued ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715) . This ASU requires an employer to report the service cost component of net benefit cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if presented, or disclosed separately. In addition, only the service cost component may be eligible for capitalization where applicable. The amendments should be applied on a retrospective basis. We adopted the provisions of this ASU in the first quarter of 2018, with retrospective adjustment to the comparative periods determined using the previously disclosed service cost and other costs from our prior year pension and other post-retirement benefit plan footnote. As a result, the following amounts were reclassified for the the years ended December 31, 2017 and 2016 to correspond to the current year presentation: 2017 2016 Reclassified from: Cost of sales $ 10,857 $ 11,648 Selling, marketing and administrative expense 27,911 24,073 Business realignment costs — 13,669 Reclassified to Other (income) expense, net $ 38,768 $ 49,390 The adoption of this ASU had no impact on our consolidated balance sheets or statements of cash flows. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606), which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. On January 1, 2018, we adopted the requirements of ASC Topic 606 and the amendments related thereto and applied the new requirements to all of our contracts using the modified retrospective method. Upon completing our implementation assessment of ASC Topic 606, we concluded that no adjustment was required to the opening balance of retained earnings at the date of initial application. The comparative information was not restated and continues to be reported under the accounting standards in effect for those periods. Additional disclosures required by ASC Topic 606 are presented within the aforementioned Revenue Recognition policy disclosure. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This ASU requires the income tax consequences of intra-entity transfers of assets other than inventory to be recognized when the intra-entity transfer occurs rather than deferring recognition of income tax consequences until the transfer was made with an outside party. We adopted the provisions of this ASU in the first quarter of 2018. Adoption of the new standard did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . We adopted the provisions of this ASU in the first quarter of 2017. This update principally affects the recognition of excess tax benefits and deficiencies and the cash flow classification of share-based compensation-related transactions. These classification requirements were adopted retrospectively to the Consolidated Statement of Cash Flows. As a result, for the year ended December 31, 2017 , the impact resulted in a $24,901 increase in net cash flow from operating activities and a corresponding $24,901 decrease in net cash flow from financing activities. For the year ended December 31, 2016 , the impact resulted in a $29,953 increase in net cash flow from operating activities and a corresponding $29,953 decrease in net cash flow from financing activities. Recently Issued Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) assets. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The Company adopted the standard as of January 1, 2019, using a modified retrospective approach and applying the standard’s transition provisions at January 1, 2019, the effective date. We elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward the historical lease classification. In addition, we elected to combine the lease and non-lease components for the asset categories comprising the majority of our leases and are making an accounting policy election to exclude from balance sheet reporting those leases with initial terms of 12 months or less. We have implemented new controls and processes, as well as new software functionality, to enable the preparation of financial information as necessitated by the new standard. We estimate that adoption of the standard will result in recognition of operating lease ROU assets and lease liabilities of approximately $230,000 and $220,000 , respectively, with the difference largely due to prepaid and deferred rent that will be reclassified to the ROU asset value. In addition, we expect to derecognize a build-to-suit arrangement in accordance with the transition requirements, which will result in an adjustment to retained earnings of approximately $7,000 . We do not expect adoption of the standard to materially affect our consolidated net income or cash flows. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends ASC 815. The purpose of this ASU is to better align accounting rules with a company’s risk management activities and financial reporting for hedging relationships, better reflect economic results of hedging in financial statements, simplify hedge accounting requirements and improve the disclosures of hedging arrangements. The amendment should be applied using the modified retrospective transition method. ASU 2017-12 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted. We intend to adopt the provisions of this ASU in the first quarter of 2019. We believe the adoption of the new standard will not have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. ASU 2018-07 is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods, with early adoption permitted but no earlier than an entity’s adoption date of ASC Topic 606. The new guidance is required to be applied retrospectively with the cumulative effect recognized at the date of initial application. We will adopt the provisions of this ASU in the first quarter of 2019. Adoption of the new standard is not expected to have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . This ASU modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. ASU 2018-13 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. We are currently evaluating the effect that ASU 2018-13 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for defined benefit pension plans and other post-retirement plans. ASU 2018-14 is effective for annual periods beginning after December 15, 2020, with early adoption permitted. The amendments in this ASU should be applied on a retrospective basis to all periods presented. We are currently evaluating the effect that ASU 2018-14 will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods, with early adoption permitted. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We are currently evaluating the effect that ASU 2018-15 will have on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements Changes | As a result, the following amounts were reclassified for the the years ended December 31, 2017 and 2016 to correspond to the current year presentation: 2017 2016 Reclassified from: Cost of sales $ 10,857 $ 11,648 Selling, marketing and administrative expense 27,911 24,073 Business realignment costs — 13,669 Reclassified to Other (income) expense, net $ 38,768 $ 49,390 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Pirate Brands | |
Business Acquisition and Divestitures [Line Items] | |
Schedule of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Inventories $ 4,663 Plant, property and equipment, net 48 Goodwill 129,991 Other intangible assets 289,300 Accrued liabilities (1,000 ) Net assets acquired $ 423,002 |
Amplify Snack Brands, Inc. | |
Business Acquisition and Divestitures [Line Items] | |
Schedule of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | The purchase consideration, net of cash acquired totaling $53,324 , was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Accounts receivable $ 41,152 Other current assets 35,509 Plant, property and equipment, net 71,093 Goodwill 939,388 Other intangible assets 682,000 Other non-current assets 1,049 Accounts payable (32,394 ) Accrued liabilities (109,565 ) Current debt (610,836 ) Other current liabilities (2,931 ) Non-current deferred income taxes (93,859 ) Non-current liabilities (5,149 ) Net assets acquired $ 915,457 |
Ripple Brand Collective, LLC | |
Business Acquisition and Divestitures [Line Items] | |
Schedule of Purchase Consideration Allocation to Assets Acquired and Liabilities Assumed | The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows: Goodwill $ 128,110 Trademarks 91,200 Other intangible assets 60,900 Other assets, primarily current assets, net of cash acquired totaling $674 12,375 Current liabilities (7,211 ) Net assets acquired $ 285,374 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of the Changes in the Carrying Value of Goodwill by Reportable Segment | The changes in the carrying value of goodwill by reportable segment for the years ended December 31, 2018 and 2017 are as follows: North America International and Other Total Goodwill $ 797,163 $ 377,529 $ 1,174,692 Accumulated impairment loss (4,973 ) (357,375 ) (362,348 ) Balance at January 1, 2017 792,190 20,154 812,344 Foreign currency translation 7,739 978 8,717 Balance at December 31, 2017 799,929 21,132 821,061 Acquired during the period (see Note 2) 1,069,379 — 1,069,379 Purchase price allocation adjustments (see Note 2) 27,001 — 27,001 Divested during the period (see Note 7) (98,379 ) — (98,379 ) Foreign currency translation (15,085 ) (2,874 ) (17,959 ) Balance at December 31, 2018 $ 1,782,845 $ 18,258 $ 1,801,103 |
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, 2018 2017 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Intangible assets subject to amortization: Trademarks $ 1,173,770 $ (60,995 ) $ 277,473 $ (37,510 ) Customer-related 163,860 (33,516 ) 128,182 (34,659 ) Patents 16,306 (15,772 ) 17,009 (15,975 ) Total 1,353,936 (110,283 ) 422,664 (88,144 ) Intangible assets not subject to amortization: Trademarks 34,639 34,636 Total other intangible assets $ 1,278,292 $ 369,156 |
Schedule of Amortization Expense, for the Next Five Years | Amortization expense for the next five years, based on current intangible asset balances, is estimated to be as follows: Year ending December 31, 2019 2020 2021 2022 2023 Amortization expense $ 44,565 $ 43,986 $ 43,971 $ 43,971 $ 43,971 |
SHORT AND LONG-TERM DEBT (Table
SHORT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following: December 31, 2018 2017 1.60% Notes due 2018 (1) $ — $ 300,000 2.90% Notes due 2020 (2) 350,000 — 4.125% Notes due 2020 350,000 350,000 3.10% Notes due 2021 (2) 350,000 — 8.8% Debentures due 2021 84,715 84,715 3.375% Notes due 2023 (2) 500,000 — 2.625% Notes due 2023 250,000 250,000 3.20% Notes due 2025 300,000 300,000 2.30% Notes due 2026 (3) 500,000 500,000 7.2% Debentures due 2027 193,639 193,639 3.375% Notes due 2046 (3) 300,000 300,000 Capital lease obligations 101,980 99,194 Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts (20,667 ) (16,427 ) Total long-term debt 3,259,667 2,361,121 Less—current portion 5,387 300,098 Long-term portion $ 3,254,280 $ 2,061,023 (1) In August 2018, we repaid $300,000 of 1.60% Notes due in 2018 upon their maturity. (2) In May 2018, we issued $350,000 of 2.90% Notes due in 2020, $350,000 of 3.10% Notes due in 2021 and $500,000 of 3.375% Notes due in 2023 (the "2018 Notes"). Proceeds from the issuance of the 2018 Notes, net of discounts and issuance costs, totaled $1,193,830 . The 2018 Notes were issued under a shelf registration statement on Form S-3 filed in June 2015 that registered an indeterminate amount of debt securities. (3) In August 2016, we issued $500,000 of 2.30% Notes due in 2026 and $300,000 of 3.375% Notes due in 2046 (the "2016 Notes"). Proceeds from the issuance of the 2016 Notes, net of discounts and issuance costs, totaled $792,953 |
Schedule of Maturities of Long-term Debt | Aggregate annual maturities of our long-term Notes (excluding capital lease obligations and net impact of interest rate swaps, debt issuance costs and unamortized debt discounts) are as follows for the years ending December 31: 2019 $ — 2020 700,000 2021 434,715 2022 — 2023 750,000 Thereafter 1,293,639 |
Schedule of Net Interest Expense | Net interest expense consists of the following: For the years ended December 31, 2018 2017 2016 Interest expense $ 151,950 $ 104,232 $ 97,851 Capitalized interest (5,092 ) (4,166 ) (5,903 ) Interest expense 146,858 100,066 91,948 Interest income (8,021 ) (1,784 ) (1,805 ) Interest expense, net $ 138,837 $ 98,282 $ 90,143 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of the Classification of Derivative Assets and Liabilities within the Consolidated Balance Sheets | The following table presents the classification of derivative assets and liabilities within the Consolidated Balance Sheets as of December 31, 2018 and 2017 : December 31, 2018 2017 Assets (1) Liabilities (1) Assets (1) Liabilities (1) Derivatives designated as cash flow hedging instruments: Foreign exchange contracts $ 3,394 $ 485 $ 423 $ 1,427 Derivatives designated as fair value hedging instruments: Interest rate swap agreements — 4,832 — 1,897 Derivatives not designated as hedging instruments: Commodities futures and options (2) 7,230 262 390 3,054 Deferred compensation derivatives — 4,736 1,581 — Foreign exchange contracts 70 484 31 — 7,300 5,482 2,002 3,054 Total $ 10,694 $ 10,799 $ 2,425 $ 6,378 (1) Derivatives assets are classified on our balance sheet within prepaid expenses and other as well as other assets. Derivative liabilities are classified on our balance sheet within accrued liabilities and other long-term liabilities. (2) As of December 31, 2018 , amounts reflected on a net basis in assets were assets of $63,978 and liabilities of $57,351 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period. The comparable amounts reflected on a net basis in liabilities at December 31, 2017 were assets of $48,505 and liabilities of $50,179 . At December 31, 2018 and 2017 , the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively. |
Schedule of the Effect of Derivative Instruments on the Consolidated Statements of Income | The effect of derivative instruments on the Consolidated Statements of Income for the years ended December 31, 2018 and December 31, 2017 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) 2018 2017 2018 2017 2018 2017 Commodities futures and options $ 69,379 $ (55,734 ) $ — $ — $ — $ (1,774 ) Foreign exchange contracts 972 (23 ) 5,822 (4,931 ) 3,906 (3,180 ) Interest rate swap agreements — — — — (9,479 ) (9,480 ) Deferred compensation derivatives (2,173 ) 4,497 — — — — Total $ 68,178 $ (51,260 ) $ 5,822 $ (4,931 ) $ (5,573 ) $ (14,434 ) (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. Losses reclassified from AOCI into income for interest rate swap agreements were included in interest expense. |
FAIR VALUE MEASUREMENTS FAIR _2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
FAIR VALUE MEASUREMENTS [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of December 31, 2018 and 2017 : Assets (Liabilities) Level 1 Level 2 Level 3 Total December 31, 2018: Derivative Instruments: Assets: Foreign exchange contracts (1) $ — $ 3,464 $ — $ 3,464 Commodities futures and options (4) 7,230 — — 7,230 Liabilities: Foreign exchange contracts (1) — 969 — 969 Interest rate swap agreements (2) — 4,832 — 4,832 Deferred compensation derivatives (3) — 4,736 — 4,736 Commodities futures and options (4) 262 — — 262 December 31, 2017: Assets: Foreign exchange contracts (1) $ — $ 454 $ — $ 454 Deferred compensation derivatives (3) — 1,581 — 1,581 Commodities futures and options (4) 390 — — 390 Liabilities: Foreign exchange contracts (1) — 1,427 — 1,427 Interest rate swap agreements (2) — 1,897 — 1,897 Commodities futures and options (4) 3,054 — — 3,054 (1) The fair value of foreign currency forward exchange contracts is the difference between the contract and current market foreign currency exchange rates at the end of the period. We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences. (2) The fair value of interest rate swap agreements represents the difference in the present value of cash flows calculated at the contracted interest rates and at current market interest rates at the end of the period. We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. (3) The fair value of deferred compensation derivatives is based on quoted prices for market interest rates and a broad market equity index. (4) |
Schedule of Fair Values and Carrying Values of Long-Term Debt | The fair values and carrying values of long-term debt, including the current portion, were as follows: Fair Value Carrying Value At December 31, 2018 2017 2018 2017 Current portion of long-term debt $ 5,387 $ 299,430 $ 5,387 $ 300,098 Long-term debt 3,228,877 2,113,296 3,254,280 2,061,023 Total $ 3,234,264 $ 2,412,726 $ 3,259,667 $ 2,361,121 |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Assets and Liabilities Held for Sale | The amounts classified as assets and liabilities held for sale at December 31, 2018 include the following: Assets held for sale, included in prepaid expenses and other assets Property, plant and equipment, net $ 20,905 Other assets 2,516 $ 23,421 Liabilities held for sale, included in accrued liabilities Accounts payable and accrued liabilities $ 596 $ 596 |
BUSINESS REALIGNMENT ACTIVITI_2
BUSINESS REALIGNMENT ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Business Realignment Activity | Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows: For the years ended December 31, 2018 2017 2016 Cost of sales $ 11,323 $ 5,147 $ 58,106 Selling, marketing and administrative expense 21,401 16,449 16,939 Business realignment costs 19,103 47,763 18,857 Costs associated with business realignment activities $ 51,827 $ 69,359 $ 93,902 2018 , 2017 and 2016 related to these activities were as follows: For the years ended December 31, 2018 2017 2016 Margin for Growth Program: Severance $ 15,378 $ 32,554 $ — Accelerated depreciation 9,131 6,873 — Other program costs 30,940 16,407 — Operational Optimization Program: Severance — 13,828 17,872 Gain on sale of facilities (6,562 ) — — Accelerated depreciation — — 48,590 Other program costs 2,940 (303 ) 21,831 2015 Productivity Initiative: Other program costs — — 5,609 Total $ 51,827 $ 69,359 $ 93,902 |
Schedule of Liability Activity for Costs Qualifying as Exit and Disposal Costs | The following table presents the liability activity for costs qualifying as exit and disposal costs for the year ended December 31, 2018 : Total Liability balance at December 31, 2017 $ 38,992 2018 business realignment charges (1) 25,940 Cash payments (50,996 ) Other, net 669 Liability balance at December 31, 2018 (reported within accrued liabilities) $ 14,605 (1) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) Before Income Taxes | The components of income (loss) before income taxes were as follows: For the years ended December 31, 2018 2017 2016 Domestic $ 1,195,645 $ 1,187,825 $ 1,395,440 Foreign 214,416 (77,157 ) (295,959 ) Income before income taxes $ 1,410,061 $ 1,110,668 $ 1,099,481 |
Schedule of Components of Income Tax Expense (Benefit) | The components of our provision for income taxes were as follows: For the years ended December 31, 2018 2017 2016 Current: Federal $ 151,107 $ 314,277 $ 391,705 State 38,243 37,628 51,706 Foreign 13,405 (16,356 ) (25,877 ) 202,755 335,549 417,534 Deferred: Federal 35,035 19,204 (7,706 ) State 7,572 7,573 (452 ) Foreign (6,352 ) (8,195 ) (29,939 ) 36,255 18,582 (38,097 ) Total provision for income taxes $ 239,010 $ 354,131 $ 379,437 |
Schedule of Deferred Tax Asset and Liabilities | The significant temporary differences that comprised the deferred tax assets and liabilities are as follows: December 31, 2018 2017 Deferred tax assets: Post-retirement benefit obligations $ 52,915 $ 58,306 Accrued expenses and other reserves 85,180 103,769 Stock-based compensation 30,448 31,364 Derivative instruments 17,423 27,109 Pension 8,921 — Lease financing obligation 12,284 12,310 Accrued trade promotion reserves 13,670 26,028 Net operating loss carryforwards 161,242 226,142 Capital loss carryforwards 26,670 23,215 Other 9,969 7,748 Gross deferred tax assets 418,722 515,991 Valuation allowance (239,959 ) (312,148 ) Total deferred tax assets 178,763 203,843 Deferred tax liabilities: Property, plant and equipment, net 144,044 132,443 Acquired intangibles 161,003 68,476 Inventories 21,366 20,769 Pension — 969 Other 28,044 23,819 Total deferred tax liabilities 354,457 246,476 Net deferred tax (liabilities) assets $ (175,694 ) $ (42,633 ) Included in: Non-current deferred tax assets, net 1,166 3,023 Non-current deferred tax liabilities, net (176,860 ) (45,656 ) Net deferred tax (liabilities) assets $ (175,694 ) $ (42,633 ) |
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, 2018 2017 2016 Federal statutory income tax rate 21.0 % 35.0 % 35.0 % Increase (reduction) resulting from: State income taxes, net of Federal income tax benefits 2.7 2.6 3.4 Qualified production income deduction — (2.9 ) (3.8 ) Business realignment and impairment charges 0.6 4.3 0.4 Foreign rate differences (2.0 ) (4.3 ) 3.6 Historic and solar tax credits (3.5 ) (4.8 ) (3.3 ) U.S. tax reform (1.4 ) 2.9 — Tax contingencies 0.5 0.5 0.1 Other, net (0.9 ) (1.4 ) (0.9 ) Effective income tax rate 17.0 % 31.9 % 34.5 % |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: December 31, 2018 2017 Balance at beginning of year $ 42,082 $ 36,002 Additions for tax positions taken during prior years 1,174 2,492 Reductions for tax positions taken during prior years (2,581 ) (1,689 ) Additions for tax positions taken during the current year 61,627 10,018 Settlements — (1,481 ) Expiration of statutes of limitations (4,772 ) (3,260 ) Balance at end of year $ 97,530 $ 42,082 |
PENSION AND OTHER POST-RETIRE_2
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Obligations, Plan Assets, and Funded Status | A summary of the changes in benefit obligations, plan assets and funded status of these plans is as follows: Pension Benefits Other Benefits December 31, 2018 2017 2018 2017 Change in benefit obligation Projected benefit obligation at beginning of year $ 1,117,564 $ 1,118,318 $ 236,112 $ 242,846 Service cost 21,223 20,657 230 263 Interest cost 31,943 40,996 6,923 8,837 Plan amendments — (8,473 ) — — Actuarial (gain) loss (50,432 ) 40,768 (10,842 ) 2,207 Curtailment (16 ) — — — Settlement (61,268 ) (44,978 ) — — Currency translation and other (4,674 ) 6,749 (1,073 ) 889 Benefits paid (23,134 ) (56,473 ) (16,631 ) (18,930 ) Projected benefit obligation at end of year 1,031,206 1,117,564 214,719 236,112 Change in plan assets Fair value of plan assets at beginning of year 1,086,226 1,023,676 — — Actual return on plan assets (43,118 ) 121,241 — — Employer contributions 9,233 37,503 16,631 18,930 Settlement (61,268 ) (44,978 ) — — Currency translation and other (4,078 ) 5,257 — — Benefits paid (23,134 ) (56,473 ) (16,631 ) (18,930 ) Fair value of plan assets at end of year 963,861 1,086,226 — — Funded status at end of year $ (67,345 ) $ (31,338 ) $ (214,719 ) $ (236,112 ) Amounts recognized in the Consolidated Balance Sheets: Other assets $ 332 $ 14,988 $ — $ — Accrued liabilities (1,298 ) (6,916 ) (19,553 ) (20,792 ) Other long-term liabilities (66,379 ) (39,410 ) (195,166 ) (215,320 ) Total $ (67,345 ) $ (31,338 ) $ (214,719 ) $ (236,112 ) Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: Actuarial net (loss) gain $ (254,735 ) $ (207,659 ) $ 17,967 $ 8,313 Net prior service credit (cost) 32,350 30,994 (812 ) (1,174 ) Net amounts recognized in AOCI $ (222,385 ) $ (176,665 ) $ 17,155 $ 7,139 |
Schedule of Accumulated Benefit Obligations in Excess of Plan Assets | Plans with accumulated benefit obligations in excess of plan assets were as follows: December 31, 2018 2017 Projected benefit obligation $ 1,030,382 $ 711,767 Accumulated benefit obligation 993,892 675,660 Fair value of plan assets 962,705 665,441 |
Schedule 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, 2018 2017 2016 2018 2017 2016 Amounts recognized in net periodic benefit cost Service cost $ 21,223 $ 20,657 $ 23,075 $ 230 $ 263 $ 299 Interest cost 31,943 40,996 41,875 6,923 8,837 9,731 Expected return on plan assets (58,612 ) (57,370 ) (58,820 ) — — — Amortization of prior service (credit) cost (7,202 ) (5,822 ) (1,555 ) 836 748 575 Amortization of net loss (gain) 26,875 33,648 34,940 — (1 ) (13 ) Curtailment credit (299 ) — — — — — Settlement loss 20,211 17,732 22,657 — — — Total net periodic benefit cost $ 34,139 $ 49,841 $ 62,172 $ 7,989 $ 9,847 $ 10,592 Change in plan assets and benefit obligations recognized in AOCI, pre-tax Actuarial net (gain) loss $ 3,715 $ (73,768 ) $ (31,772 ) $ (10,771 ) $ 2,139 $ (3,047 ) Prior service (credit) cost 7,198 (2,650 ) (41,517 ) (838 ) (744 ) (572 ) Total recognized in other comprehensive (income) loss, pre-tax $ 10,913 $ (76,418 ) $ (73,289 ) $ (11,609 ) $ 1,395 $ (3,619 ) Net amounts recognized in periodic benefit cost and AOCI $ 45,052 $ (26,577 ) $ (11,117 ) $ (3,620 ) $ 11,242 $ 6,973 |
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 2019 are as follows: Pension Plans Post-Retirement Benefit Plans Amortization of net actuarial loss $ 33,695 $ 811 Amortization of prior service (credit) cost $ (7,235 ) $ (384 ) |
Schedule of Weighted-Average Assumptions Used in Computing the Benefit Obligation | The weighted-average assumptions used in computing the year end benefit obligations were as follows: Pension Benefits Other Benefits December 31, 2018 2017 2018 2017 Discount rate 4.1 % 3.4 % 4.2 % 3.5 % Rate of increase in compensation levels 3.6 % 3.8 % 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, 2018 2017 2016 2018 2017 2016 Discount rate 3.4 % 3.8 % 4.0 % 3.5 % 3.8 % 4.0 % Expected long-term return on plan assets 5.8 % 5.8 % 6.1 % N/A N/A N/A Rate of compensation increase 3.8 % 3.8 % 3.8 % 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 $ 94 $ (82 ) Effect on accumulated post-retirement benefit obligation 3,213 (2,833 ) |
Schedule of Allocation of Plan Assets | Our target asset allocation for our major domestic pension plans as of December 31, 2018 was as follows: Asset Class Target Asset Allocation Cash 1% Equity securities 25% Fixed income securities 49% Alternative investments, including real estate, listed infrastructure and other 25% December 31, 2018 : Quoted prices in active markets of identical assets Significant other observable inputs Significant other unobservable inputs (Level 3) Investments Using NAV as a Practical Expedient (1) Total Cash and cash equivalents $ 1,040 $ 17,857 $ — $ 664 $ 19,561 Equity securities: Global all-cap (a) — — — 210,850 210,850 Fixed income securities: U.S. government/agency — — — 242,618 242,618 Corporate bonds (b) — — — 117,656 117,656 International government/corporate bonds (d) — — — 29,115 29,115 Diversified credit (e) — — — 94,008 94,008 Alternative investments: Global diversified assets (f) — — — 147,661 147,661 Global real estate investment trusts (g) — — — 57,854 57,854 Global infrastructure (h) — — — 44,538 44,538 Total pension plan assets $ 1,040 $ 17,857 $ — $ 944,964 $ 963,861 The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair values as of December 31, 2017 : Quoted prices in active markets of identical assets (Level 1) Significant other observable inputs Significant other unobservable inputs (Level 3) Investments Using NAV as a Practical Expedient (1) Total Cash and cash equivalents $ 1,179 $ 18,161 $ — $ 730 $ 20,070 Equity securities: Global all-cap (a) — — — 276,825 276,825 Fixed income securities: U.S. government/agency — — — 239,686 239,686 Corporate bonds (b) — 33,019 — 162,633 195,652 Collateralized obligations (c) — 40,350 — 34,538 74,888 International government/corporate bonds (d) — — — 32,447 32,447 Alternative investments: Global diversified assets (f) — — — 149,030 149,030 Global real estate investment trusts (g) — — — 50,213 50,213 Global infrastructure (h) — — — 47,415 47,415 Total pension plan assets $ 1,179 $ 91,530 $ — $ 993,517 $ 1,086,226 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in our Obligations and Funded Status table. (a) This category comprises equity funds that primarily track the MSCI World Index or MSCI All Country World Index. (b) This category comprises fixed income funds primarily invested in investment grade and high yield bonds. (c) This category comprises fixed income funds primarily invested in high quality mortgage-backed securities and other asset-backed obligations. (d) This category comprises fixed income funds primarily invested in Canadian and other international bonds. (e) This category comprises fixed income funds primarily invested in high yield bonds, loans, securitized debt, and emerging market debt. (f) This category comprises diversified funds invested across alternative asset classes. (g) This category comprises equity funds primarily invested in publicly traded real estate securities. (h) This category comprises equity funds primarily invested in publicly traded listed infrastructure securities. |
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 2019 2020 2021 2022 2023 2024-2028 Pension Benefits $ 113,395 $ 95,461 $ 92,790 $ 115,509 $ 92,411 $ 396,875 Other Benefits 19,582 18,573 17,407 16,595 15,841 68,234 |
STOCK COMPENSATION PLANS (Table
STOCK COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Compensation Costs | For the periods presented, compensation expense for all types of stock-based compensation programs and the related income tax benefit recognized were as follows: For the years ended December 31, 2018 2017 2016 Pre-tax compensation expense $ 49,286 $ 51,061 $ 54,785 Related income tax benefit 9,463 13,684 17,148 |
Schedule of Activity Relating to the Grants of Stock Options | A summary of activity relating to grants of stock options for the year ended December 31, 2018 is as follows: Stock Options Shares Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at beginning of the period 5,921,062 $89.06 5.8 years Granted 945,220 $99.93 Exercised (1,110,712 ) $68.69 Forfeited (361,188 ) $102.20 Outstanding as of December 31, 2018 5,394,382 $94.28 5.6 years $ 70,398 Options exercisable as of December 31, 2018 3,506,304 $90.77 4.1 years $ 57,789 |
Schedule of Fair Value Estimated on the Grant Date and the Weighted Average Assumptions | The fair value was estimated on the date of grant using a Black-Scholes option-pricing model and the following weighted-average assumptions: For the years ended December 31, 2018 2017 2016 Dividend yields 2.4 % 2.4 % 2.4 % Expected volatility 16.6 % 17.2 % 16.8 % Risk-free interest rates 2.8 % 2.2 % 1.5 % Expected term in years 6.6 6.8 6.8 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 term” means the period of time that stock options granted are expected to be outstanding based primarily on historical data. |
Schedule of Outstanding Stock Options | The following table summarizes information about stock options outstanding as of December 31, 2018 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted- Weighted- Number Weighted- $33.40 - $90.39 2,079,250 4.2 $77.54 1,704,705 $74.72 $90.40 - $105.91 1,676,763 7.0 $102.54 711,683 $105.12 $105.92 - $111.76 1,638,369 5.8 $107.06 1,089,916 $106.52 $33.40 - $111.76 5,394,382 5.6 $94.28 3,506,304 $90.77 |
Schedule of Activity Relating to Grants of PSUs and RSUs | A summary of activity relating to grants of PSUs and RSUs for the period ended December 31, 2018 is as follows: Performance Stock Units and Restricted Stock Units Number of units Weighted-average grant date fair value for equity awards (per unit) Outstanding at beginning of year 923,364 $103.11 Granted 457,315 $97.86 Performance assumption change 16,961 $102.71 Vested (287,101 ) $103.59 Forfeited (111,521 ) $103.48 Outstanding at end of year 999,018 $101.57 |
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, 2018 2017 2016 Units granted 457,315 478,044 545,750 Weighted-average fair value at date of grant $ 97.86 $ 110.97 $ 93.55 Monte Carlo simulation assumptions: Estimated values $ 29.17 $ 46.85 $ 38.02 Dividend yields 2.6 % 2.3 % 2.5 % Expected volatility 20.4 % 20.4 % 17.0 % 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, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Earnings by Segment | Our segment net sales and earnings were as follows: For the years ended December 31, 2018 2017 2016 Net sales: North America $ 6,901,607 $ 6,621,173 $ 6,532,988 International and Other 889,462 894,253 907,193 Total $ 7,791,069 $ 7,515,426 $ 7,440,181 Segment income (loss): North America $ 2,020,082 $ 2,044,218 $ 2,040,454 International and Other 73,762 11,532 (29,139 ) Total segment income 2,093,844 2,055,750 2,011,315 Unallocated corporate expense (1) 486,716 499,251 488,318 Unallocated mark-to-market (gains) losses on commodity derivatives (168,263 ) (35,292 ) 163,238 Long-lived and intangible asset impairment charges 57,729 208,712 4,204 Costs associated with business realignment activities 51,827 69,359 93,902 Acquisition-related costs 44,829 311 6,480 Gain on sale of licensing costs (2,658 ) — — Operating profit 1,623,664 1,313,409 1,255,173 Interest expense, net 138,837 98,282 90,143 Other (income) expense, net 74,766 104,459 65,549 Income before income taxes $ 1,410,061 $ 1,110,668 $ 1,099,481 (1) Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, and (d) other gains or losses that are not integral to segment performance. |
Schedule of Unallocated Mark-to-Market (Gains) Losses on Commodity Derivatives | Activity within the unallocated mark-to-market (gains) losses on commodity derivatives is as follows: For the years ended December 31, 2018 2017 2016 Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income $ (69,379 ) $ 55,734 $ 171,753 Net losses on commodity derivative positions reclassified from unallocated to segment income (98,884 ) (91,026 ) (8,515 ) Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses $ (168,263 ) $ (35,292 ) $ 163,238 |
Schedule of Depreciation and Amortization Expense Included within Segment Income | Depreciation and amortization expense included within segment income presented above is as follows: For the years ended December 31, 2018 2017 2016 North America $ 205,340 $ 171,265 $ 162,211 International and Other 35,656 42,542 50,753 Corporate (1) 54,148 48,046 88,873 Total $ 295,144 $ 261,853 $ 301,837 (1) |
Schedule of Segment Information by Geography | Additional geographic information is as follows: For the years ended December 31, 2018 2017 2016 Net sales: United States $ 6,535,675 $ 6,263,703 $ 6,196,723 Other 1,255,394 1,251,723 1,243,458 Total $ 7,791,069 $ 7,515,426 $ 7,440,181 Long-lived assets: United States $ 1,668,186 $ 1,575,496 $ 1,528,255 Other 462,108 531,201 648,993 Total $ 2,130,294 $ 2,106,697 $ 2,177,248 |
Schedule of Revenue from External Customers by Products and Services | Additional product line information is as follows: For the year ended December 31, 2018 Net sales: Confectionery and confectionery-based portfolio $ 7,453,364 Snacks portfolio 337,705 Total $ 7,791,069 |
EQUITY AND NONCONTROLLING INT_2
EQUITY AND NONCONTROLLING INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of the Changes in the Outstanding Shares of Common Stock | Changes in the outstanding shares of Common Stock for the past three years were as follows: For the years ended December 31, 2018 2017 2016 Shares issued 359,901,744 359,901,744 359,901,744 Treasury shares at beginning of year (149,040,927 ) (147,642,009 ) (143,124,384 ) Stock repurchases: Shares repurchased in the open market under pre-approved share repurchase programs (1,406,093 ) — (4,640,964 ) Shares repurchased directly from the Milton Hershey School Trust (450,000 ) (1,500,000 ) — Shares repurchased to replace Treasury Stock issued for stock options and incentive compensation (615,719 ) (1,278,675 ) (1,820,766 ) Stock issuances: Shares issued for stock options and incentive compensation 1,339,899 1,379,757 1,944,105 Treasury shares at end of year (150,172,840 ) (149,040,927 ) (147,642,009 ) Net shares outstanding at end of year 209,728,904 210,860,817 212,259,735 |
Schedule of Activity Relating to the Noncontrolling Interest | A roll-forward showing the 2018 activity relating to the noncontrolling interest follows: Noncontrolling Interest Balance, December 31, 2017 $ 16,227 Net loss attributable to noncontrolling interest (6,511 ) Other comprehensive loss - foreign currency translation adjustments (1,171 ) Balance, December 31, 2018 $ 8,545 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase Obligations Covered by Purchase Agreements with Various Suppliers Future Maturity Schedule | As of December 31, 2018 , we had entered into agreements for the purchase of raw materials with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2018 : in millions 2019 2020 2021 2022 2023 Purchase obligations $ 1,495.9 $ 870.9 $ 7.5 $ 0.7 $ — |
Schedule of Future Minimum Lease Payments for Capital Leases | Future minimum payments under lease arrangements with a remaining term in excess of one year were as follows as of December 31, 2018 : Operating leases (1) Capital leases (2) 2019 $ 38,041 $ 6,980 2020 24,047 5,272 2021 16,883 3,901 2022 15,424 4,399 2023 13,494 4,577 Thereafter 185,608 169,686 (1) Future minimum rental payments reflect commitments under non-cancelable operating leases primarily for offices, retail stores, warehouse and distribution facilities. Total rent expense for the years ended December 31, 2018 , 2017 and 2016 was $34,157 , $25,525 and $20,330 , respectively, including short-term rentals. (2) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | We compute basic and diluted earnings per share based on the weighted-average number of shares of Common Stock and Class B common stock outstanding as follows: For the years ended December 31, 2018 2017 2016 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) $ 410,732 $ 151,789 $ 385,878 $ 140,394 $ 367,081 $ 132,394 Allocation of undistributed earnings 449,372 165,669 188,286 68,423 162,299 58,270 Total earnings—basic $ 860,104 $ 317,458 $ 574,164 $ 208,817 $ 529,380 $ 190,664 Denominator (shares in thousands): Total weighted-average shares—basic 149,379 60,614 151,625 60,620 153,519 60,620 Earnings Per Share—basic $ 5.76 $ 5.24 $ 3.79 $ 3.44 $ 3.45 $ 3.15 Diluted earnings per share: Numerator: Allocation of total earnings used in basic computation $ 860,104 $ 317,458 $ 574,164 $ 208,817 $ 529,380 $ 190,664 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock 317,458 — 208,817 — 190,664 — Reallocation of undistributed earnings — (803 ) — (492 ) — (324 ) Total earnings—diluted $ 1,177,562 $ 316,655 $ 782,981 $ 208,325 $ 720,044 $ 190,340 Denominator (shares in thousands): Number of shares used in basic computation 149,379 60,614 151,625 60,620 153,519 60,620 Weighted-average effect of dilutive securities: Conversion of Class B common stock to Common shares outstanding 60,614 — 60,620 — 60,620 — Employee stock options 651 — 1,144 — 964 — Performance and restricted stock units 345 — 353 — 201 — Total weighted-average shares—diluted 210,989 60,614 213,742 60,620 215,304 60,620 Earnings Per Share—diluted $ 5.58 $ 5.22 $ 3.66 $ 3.44 $ 3.34 $ 3.14 |
OTHER (INCOME) EXPENSE, NET O_2
OTHER (INCOME) EXPENSE, NET OTHER (INCOME) EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Schedule of Other (Income) Expense, Net | A summary of the components of other (income) expense, net is as follows: For the years ended December 31, 2018 2017 2016 Write-down of equity investments in partnerships qualifying for tax credits $ 50,329 $ 66,209 $ 43,482 Non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans 20,672 38,768 49,390 Settlement of SGM liability (see Note 2) — — (26,650 ) Other (income) expense, net 3,765 (518 ) (673 ) Total $ 74,766 $ 104,459 $ 65,549 |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 Inventories: Raw materials $ 237,086 $ 224,940 Goods in process 107,139 93,627 Finished goods 618,798 614,945 Inventories at FIFO 963,023 933,512 Adjustment to LIFO (178,144 ) (180,676 ) Total inventories $ 784,879 $ 752,836 Prepaid expenses and other: Prepaid expenses $ 68,490 $ 128,735 Assets held for sale 23,421 21,124 Other current assets 180,248 130,774 Total prepaid expenses and other $ 272,159 $ 280,633 Property, plant and equipment: Land $ 102,074 $ 108,300 Buildings 1,211,011 1,214,158 Machinery and equipment 2,988,027 2,925,353 Construction in progress 280,559 212,912 Property, plant and equipment, gross 4,581,671 4,460,723 Accumulated depreciation (2,451,377 ) (2,354,026 ) Property, plant and equipment, net $ 2,130,294 $ 2,106,697 Other assets: Capitalized software, net $ 126,379 $ 104,881 Other non-current assets 126,605 146,998 Total other assets $ 252,984 $ 251,879 Accrued liabilities: Payroll, compensation and benefits $ 180,546 $ 190,863 Advertising, promotion and product allowances 293,642 305,107 Liabilities held for sale 596 — Other 204,379 180,164 Total accrued liabilities $ 679,163 $ 676,134 Other long-term liabilities: Post-retirement benefits liabilities $ 195,166 $ 215,320 Pension benefits liabilities 66,379 39,410 Other 184,503 184,209 Total other long-term liabilities $ 446,048 $ 438,939 Accumulated other comprehensive loss: Foreign currency translation adjustments $ (96,678 ) $ (91,837 ) Pension and post-retirement benefit plans, net of tax (205,230 ) (169,526 ) Cash flow hedges, net of tax (54,872 ) (52,383 ) Total accumulated other comprehensive loss $ (356,780 ) $ (313,746 ) |
QUARTERLY DATA (Tables)
QUARTERLY DATA (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Summary quarterly results were as follows: Year 2018 First Second Third Fourth Net sales $ 1,971,959 $ 1,751,615 $ 2,079,593 $ 1,987,902 Gross profit 974,060 793,420 863,493 944,352 Net income attributable to The Hershey Company 350,203 226,855 263,713 336,791 Common stock: Net income per share—Basic (a) 1.71 1.11 1.29 1.65 Net income per share—Diluted (a) 1.65 1.08 1.25 1.60 Dividends paid per share 0.656 0.656 0.722 0.722 Class B common stock: Net income per share—Basic (a) 1.55 1.01 1.17 1.50 Net income per share—Diluted (a) 1.55 1.01 1.17 1.49 Dividends paid per share 0.596 0.596 0.656 0.656 Market price—common stock: High 114.06 100.60 106.60 110.01 Low 96.06 89.54 91.04 101.64 Year 2017 First Second Third Fourth Net sales $ 1,879,678 $ 1,662,991 $ 2,033,121 $ 1,939,636 Gross profit 909,352 765,847 942,936 837,241 Net income attributable to The Hershey Company 125,044 203,501 273,303 181,133 Common stock: Net income per share—Basic (a) 0.60 0.98 1.32 0.88 Net income per share—Diluted (a) 0.58 0.95 1.28 0.85 Dividends paid per share 0.618 0.618 0.656 0.656 Class B common stock: Net income per share—Basic (a) 0.55 0.89 1.20 0.80 Net income per share—Diluted (a) 0.55 0.89 1.20 0.80 Dividends paid per share 0.562 0.562 0.596 0.596 Market price—common stock: High 109.61 115.96 110.50 115.45 Low 103.45 106.41 104.06 102.87 (a) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) | 12 Months Ended |
Dec. 31, 2018countrysegmentbrand_name | |
Accounting Policies [Abstract] | |
Number of brand names | brand_name | 80 |
Number of countries in which products are marketed, sold and distributed (country) | country | 90 |
Number of reportable segments (segment) | segment | 2 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Promotional Costs, Estimate Deviation, Percentage (Less Than) | 3.00% | 3.00% | 3.00% |
Unsettled Accrued Liabilities | $ 171,449 | $ 173,669 | |
Sales Revenue, Goods, Net | Customer Concentration Risk | McLane Company, Inc. | |||
Concentration Risk, Percentage | 28.00% | 29.00% | 25.00% |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SELLING, MARKETING AND ADMINISTRATIVE EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Research and development costs | $ 38,521 | $ 45,850 | $ 47,268 |
Advertising expense | 479,908 | 541,293 | $ 521,479 |
Prepaid advertising expense | $ 594 | $ 56 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ACCOUNTS RECEIVABLE - TRADE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | ||
Allowance for doubtful accounts | $ 24,610 | $ 41,792 |
McLane Company, Inc. | Customer Concentration Risk | Accounts Receivable | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 26.00% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Percentage of LIFO inventory | 60.00% | |
LIFO inventory amount | $ 466,911 | $ 443,492 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Assets under capital lease arrangements, net | $ 110,249 | $ 116,843 | |
Depreciation | $ 231,012 | $ 211,592 | $ 231,735 |
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 ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - COMPUTER SOFTWARE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | $ 126,379 | $ 104,881 |
Computer Software | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | 126,379 | 104,881 |
Capitalized computer software, accumulated amortization | $ 316,710 | $ 296,042 |
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 | 7 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of sales | $ 4,215,744 | $ 4,060,050 | $ 4,270,642 | |
Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings | 47,656 | |||
Selling, General and Administrative Expense | (1,874,829) | (1,885,492) | (1,891,305) | |
Restructuring Charges, Business Realignment | (19,103) | (47,763) | (18,857) | |
Other Nonoperating Income (Expense) | (74,766) | (104,459) | (65,549) | |
Net Cash Provided by (Used in) Operating Activities | 1,599,993 | 1,249,515 | 1,013,428 | |
Net Cash Provided by (Used in) Financing Activities | (116,108) | 843,768 | 464,396 | |
Accounting Standards Update 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cost of sales | (10,857) | (11,648) | ||
Selling, General and Administrative Expense | 27,911 | 24,073 | ||
Restructuring Charges, Business Realignment | 0 | 13,669 | ||
Other Nonoperating Income (Expense) | $ 38,768 | 49,390 | ||
Accounting Standards Update 2016-09, Excess Tax Benefit Component [Member] | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Net Cash Provided by (Used in) Operating Activities | 24,901 | 29,953 | ||
Net Cash Provided by (Used in) Financing Activities | $ 24,901 | $ 29,953 | ||
Accounting Standards Update 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Lease right-of-use asset | $ 230,000 | |||
Lease liability | 220,000 | |||
Accounting Standards Update 2016-02 | Retained Earnings | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect of new accounting principle in period of adoption | $ 7,000 |
BUSINESS ACQUISITIONS - PIRATE
BUSINESS ACQUISITIONS - PIRATE BRANDS NARRATIVE (Details) - USD ($) $ in Thousands | Oct. 17, 2018 | Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||||||||||||
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 | ||
Pirate Brands | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Business Combination, Consideration Transferred | $ 423,002 | ||||||||||||
Finite-Lived Trademarks, Gross | 272,000 | ||||||||||||
Finite-Lived Customer Relationships, Gross | $ 17,300 | ||||||||||||
Trademarks | Pirate Brands | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-Lived Intangible Asset, Useful Life | 45 years | ||||||||||||
Minimum | Customer Relationships | Pirate Brands | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-Lived Intangible Asset, Useful Life | 16 years | ||||||||||||
Maximum | Customer Relationships | Pirate Brands | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Finite-Lived Intangible Asset, Useful Life | 18 years | ||||||||||||
Scenario, Forecast | Pirate Brands | |||||||||||||
Business Acquisition [Line Items] | |||||||||||||
Net sales | $ 90,000 |
BUSINESS ACQUISITIONS - PIRAT_2
BUSINESS ACQUISITIONS - PIRATE BRANDS ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 17, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,801,103 | $ 821,061 | $ 812,344 | |
Pirate Brands | ||||
Business Acquisition [Line Items] | ||||
Inventories | $ 4,663 | |||
Plant, property and equipment, net | 48 | |||
Goodwill | 129,991 | |||
Other intangible assets | 289,300 | |||
Accrued liabilities | 1,000 | |||
Net assets acquired | $ 423,002 |
BUSINESS ACQUISITIONS - AMPLIFY
BUSINESS ACQUISITIONS - AMPLIFY SNACK BRANDS, INC NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Business Acquisition, Equity Interests Received, Common Stock, Value | $ 907,766 | |
Purchase price allocation adjustments | $ 27,001 | |
Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Business Combination, Consideration Transferred | $ 968,781 | |
Business Acquisition, Share Price | $ 12 | |
Purchase price allocation adjustments | 27,001 | |
Finite-Lived Trademarks, Gross | $ 648,000 | |
Finite-Lived Customer Relationships, Gross | $ 34,000 | |
Business Combination, Acquisition Related Costs | $ 20,577 | |
Minimum | Trademarks | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 28 years | |
Minimum | Customer Relationships | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 14 years | |
Maximum | Trademarks | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 38 years | |
Maximum | Customer Relationships | Amplify Snack Brands, Inc. | ||
Business Acquisition [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 18 years |
BUSINESS ACQUISITIONS - AMPLI_2
BUSINESS ACQUISITIONS - AMPLIFY SNACK BRANDS, INC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,801,103 | $ 821,061 | $ 812,344 | |
Amplify Snack Brands, Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash acquired | $ 53,324 | |||
Accounts receivable | 41,152 | |||
Other current assets | 35,509 | |||
Plant, property and equipment, net | 71,093 | |||
Goodwill | 939,388 | |||
Other intangible assets | 682,000 | |||
Other non-current assets | 1,049 | |||
Accounts payable | (32,394) | |||
Accrued liabilities | (109,565) | |||
Current debt | (610,836) | |||
Other current liabilities | (2,931) | |||
Non-current deferred income taxes | (93,859) | |||
Non-current liabilities | (5,149) | |||
Net assets acquired | $ 915,457 |
BUSINESS ACQUISITIONS - RIPPLE
BUSINESS ACQUISITIONS - RIPPLE BRAND COLLECTIVE, LLC ASSETS ACQUIRED AND LIABILITIES ASSUMED ALLOCATION (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Apr. 26, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,801,103 | $ 821,061 | $ 812,344 | |
Ripple Brand Collective, LLC | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 128,110 | |||
Other current assets | 12,375 | |||
Cash acquired | 674 | |||
Current liabilities | (7,211) | |||
Net assets acquired | 285,374 | |||
Trademarks | Ripple Brand Collective, LLC | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | 91,200 | |||
Other intangible assets | Ripple Brand Collective, LLC | ||||
Business Acquisition [Line Items] | ||||
Other intangible assets | $ 60,900 |
BUSINESS ACQUISITIONS - RIPPL_2
BUSINESS ACQUISITIONS - RIPPLE BRAND COLLECTIVE, LLC NARRATIVE (Details) - Ripple Brand Collective, LLC | Apr. 26, 2016 |
Trademarks | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 27 years |
Other intangible assets | Minimum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 2 years |
Other intangible assets | Maximum | |
Business Acquisition [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 14 years |
BUSINESS ACQUISITIONS - SHANGHA
BUSINESS ACQUISITIONS - SHANGHAI GOLDEN MONKEY NARRATIVE (Details) - USD ($) $ in Thousands | Feb. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 26, 2014 |
Business Acquisition [Line Items] | ||||||
Payment of SGM liability (see Note 2) | $ 0 | $ 0 | $ 35,762 | |||
Gain on settlement of SGM liability (see Note 2) | 0 | 0 | 26,650 | |||
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 20.00% | 100.00% | 80.00% | |||
Payment of SGM liability (see Note 2) | $ 35,762 | |||||
Gain on settlement of SGM liability (see Note 2) | $ 26,650 | $ 0 | $ 0 | $ 26,650 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF CHANGES IN CARRYING VALUE OF GOODWILL BY REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Line Items] | |||
Goodwill, gross | $ 1,174,692 | ||
Accumulated impairment loss | (362,348) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 1,801,103 | $ 821,061 | 812,344 |
Acquired during the period (see Note 2) | 1,069,379 | ||
Purchase price allocation adjustments | 27,001 | ||
Divested during the period | (98,379) | ||
Foreign Currency Translation | (17,959) | 8,717 | |
Goodwill, ending balance | 1,801,103 | 821,061 | |
Operating Segments | North America | |||
Goodwill [Line Items] | |||
Goodwill, gross | 797,163 | ||
Accumulated impairment loss | (4,973) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 1,782,845 | 799,929 | 792,190 |
Acquired during the period (see Note 2) | 1,069,379 | ||
Purchase price allocation adjustments | 27,001 | ||
Divested during the period | (98,379) | ||
Foreign Currency Translation | (15,085) | 7,739 | |
Goodwill, ending balance | 1,782,845 | 799,929 | |
Operating Segments | International and Other | |||
Goodwill [Line Items] | |||
Goodwill, gross | 377,529 | ||
Accumulated impairment loss | (357,375) | ||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 18,258 | 21,132 | $ 20,154 |
Acquired during the period (see Note 2) | 0 | ||
Purchase price allocation adjustments | 0 | ||
Divested during the period | 0 | ||
Foreign Currency Translation | (2,874) | 978 | |
Goodwill, ending balance | $ 18,258 | $ 21,132 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - GOODWILL AND INTANGIBLE ASSETS NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill, Impairment Loss | $ 0 | $ 0 | $ 0 |
Impairment of Intangible Assets (Excluding Goodwill) | 105,992 | 4,204 | |
Amortization of Intangible Assets | $ 38,555 | $ 23,376 | $ 26,687 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF GROSS CARRYING AMOUNT AND ACCUMULATED AMORTIZATION FOR EACH MAJOR CLASS OF INTANGIBLE ASSET (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 1,353,936 | $ 422,664 |
Finite-lived intangible assets, accumulated amortization | (110,283) | (88,144) |
Total other intangible assets | 1,278,292 | 369,156 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets, excluding goodwill | 34,639 | 34,636 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 1,173,770 | 277,473 |
Finite-lived intangible assets, accumulated amortization | (60,995) | (37,510) |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 163,860 | 128,182 |
Finite-lived intangible assets, accumulated amortization | (33,516) | (34,659) |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | 16,306 | 17,009 |
Finite-lived intangible assets, accumulated amortization | $ (15,772) | $ (15,975) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - SCHEDULE OF AMORTIZATION EXPENSE, FOR THE NEXT FIVE YEARS (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 44,565 |
2,020 | 43,986 |
2,021 | 43,971 |
2,022 | 43,971 |
2,023 | $ 43,971 |
SHORT AND LONG-TERM DEBT - SHOR
SHORT AND LONG-TERM DEBT - SHORT-TERM DEBT NARRATIVE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Short-term debt | $ 1,197,929,000 | $ 559,359,000 |
Short-term debt, weighted average interest rate | 2.50% | 1.70% |
Maximum amount of short term borrowing outstanding | $ 2,246,485,000 | $ 815,588,000 |
Commercial Paper | ||
Line of Credit Facility [Line Items] | ||
Short-term debt | $ 1,084,740,000 | $ 448,675,000 |
Short-term debt, weighted average interest rate | 2.40% | 1.40% |
Revolving Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
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 | $ 386,590,000 | $ 440,148,000 |
Short-term foreign bank loans against the lines of credit | 113,189,000 | $ 110,684,000 |
Line of Credit | Revolving Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,400,000,000 |
SHORT AND LONG-TERM DEBT - SCHE
SHORT AND LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT INSTRUMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 3,259,667 | $ 2,361,121 |
Net impact of interest rate swaps, debt issuance costs and unamortized debt discounts | (20,667) | (16,427) |
Less—current portion | 5,387 | 300,098 |
Long-term portion | 3,254,280 | 2,061,023 |
Proceeds from Issuance of Other Long-term Debt | 1,193,830 | 792,953 |
Corporate Debt Securities | 1.60% Notes due 2018 (1) | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 0 | $ 300,000 |
Repayments of Debt | $ 300,000 | |
Interest rate, stated percentage | 1.60% | 1.60% |
Corporate Debt Securities | 2.90% Notes due 2020 (2) | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 350,000 | $ 0 |
Interest rate, stated percentage | 2.90% | 2.90% |
Corporate Debt Securities | 4.125% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 350,000 | $ 350,000 |
Interest rate, stated percentage | 4.125% | 4.125% |
Corporate Debt Securities | 3.10% Notes due 2021 (2) | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 350,000 | $ 0 |
Interest rate, stated percentage | 3.10% | 3.10% |
Corporate Debt Securities | 8.8% Debentures due 2021 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 84,715 | $ 84,715 |
Interest rate, stated percentage | 8.80% | 8.80% |
Corporate Debt Securities | 3.375% Notes due 2023 (2) | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 500,000 | $ 0 |
Interest rate, stated percentage | 3.375% | 3.375% |
Corporate Debt Securities | 2.625% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 250,000 | $ 250,000 |
Interest rate, stated percentage | 2.625% | 2.625% |
Corporate Debt Securities | 3.20% Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 300,000 | $ 300,000 |
Interest rate, stated percentage | 3.20% | 3.20% |
Corporate Debt Securities | 2.30% Notes due 2026 (3) | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 500,000 | $ 500,000 |
Interest rate, stated percentage | 2.30% | 2.30% |
Corporate Debt Securities | 7.2% Debentures due 2027 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 193,639 | $ 193,639 |
Interest rate, stated percentage | 7.20% | 7.20% |
Corporate Debt Securities | 3.375% Notes due 2046 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 300,000 | $ 300,000 |
Interest rate, stated percentage | 3.375% | 3.375% |
Lease Obligations | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 101,980 | $ 99,194 |
SHORT AND LONG-TERM DEBT - LONG
SHORT AND LONG-TERM DEBT - LONG TERM DEBT INTEREST RATES (Details) - Corporate Debt Securities | Dec. 31, 2018 | Dec. 31, 2017 |
1.60% Notes due 2018 (1) | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 1.60% | 1.60% |
2.90% Notes due 2020 (2) | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.90% | 2.90% |
4.125% Notes due 2020 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 4.125% | 4.125% |
3.10% Notes due 2021 (2) | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.10% | 3.10% |
8.8% Debentures due 2021 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 8.80% | 8.80% |
3.375% Notes due 2023 (2) | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.375% | 3.375% |
2.625% Notes due 2023 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.625% | 2.625% |
3.20% Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.20% | 3.20% |
2.30% Notes due 2026 (3) | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 2.30% | 2.30% |
7.2% Debentures due 2027 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 7.20% | 7.20% |
3.375% Notes due 2046 | ||
Debt Instrument [Line Items] | ||
Interest rate, stated percentage | 3.375% | 3.375% |
SHORT AND LONG-TERM DEBT - LO_2
SHORT AND LONG-TERM DEBT - LONG TERM DEBT NARRATIVE (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
Nov. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||||
Long-term Debt | $ 3,259,667 | $ 2,361,121 | ||
Corporate Debt Securities | 5.45% Notes due 2016 | ||||
Debt Instrument [Line Items] | ||||
Repayments of Debt | $ 250,000 | |||
Interest rate, stated percentage | 5.45% | |||
Corporate Debt Securities | 1.50% Notes due 2016 | ||||
Debt Instrument [Line Items] | ||||
Repayments of Debt | $ 250,000 | |||
Interest rate, stated percentage | 1.50% |
SHORT AND LONG-TERM DEBT - SC_2
SHORT AND LONG-TERM DEBT - SCHEDULE OF MATURITIES OF LONG-TERM DEBT (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,019 | $ 0 |
2,020 | 700,000 |
2,021 | 434,715 |
2,022 | 0 |
2,023 | 750,000 |
Thereafter | $ 1,293,639 |
SHORT AND LONG-TERM DEBT - SC_3
SHORT AND LONG-TERM DEBT - SCHEDULE OF NET INTEREST EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |||
Interest expense | $ 151,950 | $ 104,232 | $ 97,851 |
Capitalized interest | 5,092 | 4,166 | 5,903 |
Interest expense | 146,858 | 100,066 | 91,948 |
Interest income | (8,021) | (1,784) | (1,805) |
Interest expense, net | $ 138,837 | $ 98,282 | $ 90,143 |
DERIVATIVE INSTRUMENTS - DERIVA
DERIVATIVE INSTRUMENTS - DERIVATIVE INSTRUMENTS NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 6,570 | ||
Commodities futures and options | Non-designated Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 693,463 | $ 405,288 | |
Commodities futures and options | Non-designated Hedges | Minimum | |||
Derivative [Line Items] | |||
Derivative, term of contract | 3 months | ||
Commodities futures and options | Non-designated Hedges | Maximum | |||
Derivative [Line Items] | |||
Derivative, term of contract | 24 months | ||
Foreign exchange contracts | |||
Derivative [Line Items] | |||
Minimum length of time, hedged in cash flow hedge | 3 months | ||
Maximum length of time, hedged in cash flow hedge | 12 months | ||
Foreign exchange contracts | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 29,458 | 135,962 | |
Foreign exchange contracts | Non-designated Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | 11,072 | 2,791 | |
Interest rate swap agreements | Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 500,000 | ||
Increase (Decrease) in Derivative Assets and Liabilities | $ 87,000 | ||
Interest rate swap agreements | Designated as Hedging Instrument | Fair Value Hedging | |||
Derivative [Line Items] | |||
Derivative, notional amount | 350,000 | 350,000 | |
Deferred compensation derivatives | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 33,168 | 25,246 | |
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 | $ (748) | $ 2,660 |
DERIVATIVE INSTRUMENTS - SCHEDU
DERIVATIVE INSTRUMENTS - SCHEDULE OF THE CLASSIFICATION OF DERIVATIVE ASSETS AND LIABILITIES WITHIN THE CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset | $ 10,694 | $ 2,425 |
Derivative liability | 10,799 | 6,378 |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 3,394 | 423 |
Derivative liability | 485 | 1,427 |
Designated as Hedging Instrument | Fair Value Hedging | Interest rate swap agreements | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 4,832 | 1,897 |
Non-designated Hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 7,300 | 2,002 |
Derivative liability | 5,482 | 3,054 |
Non-designated Hedges | Commodities futures and options | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 7,230 | 390 |
Derivative liability | 262 | 3,054 |
Gross derivative assets, included within derivative liabilities | 63,978 | 48,505 |
Derivative liability, gross liabilities | 57,351 | 50,179 |
Non-designated Hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 70 | 31 |
Derivative liability | 484 | 0 |
Non-designated Hedges | Deferred compensation derivatives | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset | 0 | 1,581 |
Derivative liability | $ 4,736 | $ 0 |
DERIVATIVE INSTRUMENTS - SCHE_2
DERIVATIVE INSTRUMENTS - SCHEDULE OF THE EFFECT OF DERIVATIVE INSTRUMENTS ON THE CONSOLIDATED STATEMENTS OF INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | $ 68,178 | $ (51,260) | |
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 5,822 | (4,931) | $ (52,708) |
Commodities futures and options | |||
Derivative [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 69,379 | (55,734) | |
Foreign exchange contracts | |||
Derivative [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 972 | (23) | |
Interest rate swap agreements | |||
Derivative [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | |
Deferred compensation derivatives | |||
Derivative [Line Items] | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (2,173) | 4,497 | |
Designated as Hedging Instrument | Cash Flow Hedges | |||
Derivative [Line Items] | |||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 5,822 | (4,931) | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | (5,573) | (14,434) | |
Designated as Hedging Instrument | Cash Flow Hedges | Commodities futures and options | |||
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 | (1,774) | |
Designated as Hedging Instrument | Cash Flow Hedges | Foreign exchange contracts | |||
Derivative [Line Items] | |||
Gains (losses) recognized in other comprehensive income (“OCI”) (effective portion) | 5,822 | (4,931) | |
Gains (losses) reclassified from accumulated OCI into income (effective portion) | 3,906 | (3,180) | |
Designated as Hedging Instrument | Cash Flow Hedges | Interest rate swap agreements | |||
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) | (9,479) | (9,480) | |
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 |
FAIR VALUE MEASUREMENTS - SCHED
FAIR VALUE MEASUREMENTS - SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | $ 10,694 | $ 2,425 |
Derivative liability | 10,799 | 6,378 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 3,464 | 454 |
Derivative liability | 969 | 1,427 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 3,464 | 454 |
Derivative liability | 969 | 1,427 |
Fair Value, Measurements, Recurring | Foreign exchange contracts | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Interest rate swap agreements | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 4,832 | 1,897 |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 4,832 | 1,897 |
Fair Value, Measurements, Recurring | Interest rate swap agreements | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 1,581 | |
Derivative liability | 4,736 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 1,581 | |
Derivative liability | 4,736 | |
Fair Value, Measurements, Recurring | Deferred compensation derivatives | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Measurements, Recurring | Commodities futures and options | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 7,230 | 390 |
Derivative liability | 262 | 3,054 |
Fair Value, Measurements, Recurring | Commodities futures and options | Quoted prices in active markets of identical assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 7,230 | 390 |
Derivative liability | 262 | 3,054 |
Fair Value, Measurements, Recurring | Commodities futures and options | Significant other observable inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Fair Value, Measurements, Recurring | Commodities futures and options | Significant other unobservable inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - SCH_2
FAIR VALUE MEASUREMENTS - SCHEDULE OF FAIR VALUES AND CARRYING VALUES OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of long-term debt | $ 5,387 | $ 300,098 |
Long-term portion | 3,254,280 | 2,061,023 |
Long-term Debt | 3,259,667 | 2,361,121 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term Debt, Current Maturities, Fair Value | 5,387 | 299,430 |
Long-term Debt, Excluding Current Maturities, Fair Value | 3,228,877 | 2,113,296 |
Long-term Debt, Fair Value | 3,234,264 | 2,412,726 |
Current portion of long-term debt | 5,387 | 300,098 |
Long-term portion | 3,254,280 | 2,061,023 |
Long-term Debt | $ 3,259,667 | $ 2,361,121 |
FAIR VALUE MEASUREMENTS - FAIR
FAIR VALUE MEASUREMENTS - FAIR VALUE MEASUREMENTS NARRATIVE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||||
Impairment of Long-Lived Assets to be Disposed of | $ 57,729,000 | |||
Impairment of Intangible Assets (Excluding Goodwill) | $ 105,992,000 | $ 4,204,000 | ||
Margin for Growth Program | ||||
Derivative [Line Items] | ||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 105,992,000 | 105,992,000 | ||
Impairment of Long-Lived Assets Held-for-use | $ 102,720,000 | 102,720,000 | ||
Significant other unobservable inputs (Level 3) | ||||
Derivative [Line Items] | ||||
Fair Value, Net Asset (Liability) | $ 0 | $ 0 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE ASSETS AND LIABILITIES HELD FOR SALE (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Jul. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment | $ 20,905 | ||||
Disposal Group, Including Discontinued Operation, Other Assets | 2,516 | ||||
Disposal Group, Including Discontinued Operation, Assets | 23,421 | $ 21,124 | |||
Disposal Group, Including Discontinued Operation, Accounts Payable and Accrued Liabilities | 596 | ||||
Disposal Group, Including Discontinued Operation, Liabilities | 596 | 0 | |||
Proceeds from sales of property, plant and equipment and other long-lived assets | 49,759 | 7,609 | $ 3,651 | ||
Proceeds from sales of businesses, net of cash and cash equivalents divested | 167,048 | 0 | 0 | ||
Long-lived asset impairment charges | 57,729 | $ 208,712 | $ 4,204 | ||
Facility Closing | Operation Optimization Program | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sales of property, plant and equipment and other long-lived assets | 27,468 | ||||
Gain (loss) on disposition of property plant equipment | $ (6,562) | ||||
Tyrrells and Shanghai Golden Monkey (SGM) | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sales of businesses, net of cash and cash equivalents divested | $ 167,048 | ||||
Long-lived asset impairment charges | $ 33,729 | ||||
Licensing Agreements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from sale of intangible assets | $ 13,000 | ||||
Gain (loss) on disposition of intangible assets | $ 2,658 |
BUSINESS REALIGNMENT ACTIVITI_3
BUSINESS REALIGNMENT ACTIVITIES - SCHEDULE OF BUSINESS REALIGNMENT ACTIVITY (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | $ 51,827,000 | $ 69,359,000 | $ 93,902,000 |
Margin for Growth Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 55,449,000 | 55,834,000 | |
Operation Optimization Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 13,525,000 | 88,293,000 | |
Severance | Margin for Growth Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 15,378,000 | 32,554,000 | 0 |
Severance | Operation Optimization Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 0 | 13,828,000 | 17,872,000 |
Accelerated depreciation and amortization | Margin for Growth Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 9,131,000 | 6,873,000 | 0 |
Accelerated depreciation and amortization | Operation Optimization Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 0 | 0 | 48,590,000 |
Other program costs | Margin for Growth Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 30,940,000 | 16,407,000 | 0 |
Other program costs | Operation Optimization Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 2,940,000 | (303,000) | 21,831,000 |
Other program costs | Productivity Initiative 2015 [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 0 | 0 | 5,609,000 |
Facility Closing | Operation Optimization Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | (6,562,000) | 0 | 0 |
Cost of Sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 11,323,000 | 5,147,000 | 58,106,000 |
Selling, marketing and administrative | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | 21,401,000 | 16,449,000 | 16,939,000 |
Business realignment charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Business realignment costs | $ 19,103,000 | $ 47,763,000 | $ 18,857,000 |
BUSINESS REALIGNMENT ACTIVITI_4
BUSINESS REALIGNMENT ACTIVITIES - BUSINESS REALIGNMENT ACTIVITIES NARRATIVE (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Apr. 02, 2017USD ($) | Dec. 31, 2015employee | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Feb. 28, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||||
Long-lived asset impairment charges | $ 57,729,000 | $ 208,712,000 | $ 4,204,000 | |||
Business realignment costs | 51,827,000 | 69,359,000 | 93,902,000 | |||
Impairment of Intangible Assets (Excluding Goodwill) | 105,992,000 | 4,204,000 | ||||
Margin for Growth Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Cost Incurred to Date | 336,295,000 | |||||
Long-lived asset impairment charges | $ 208,712,000 | 16,300,000 | 208,712,000 | |||
Restructuring and Related Cost, Expected Number of Positions Eliminated, Percent | 15.00% | |||||
Business realignment costs | 55,449,000 | 55,834,000 | ||||
Impairment of Intangible Assets (Excluding Goodwill) | 105,992,000 | 105,992,000 | ||||
Impairment of Long-Lived Assets Held-for-use | $ 102,720,000 | 102,720,000 | ||||
Margin for Growth Program | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Cost Incurred to Date | 47,932,000 | |||||
Business realignment costs | 15,378,000 | 32,554,000 | 0 | |||
Margin for Growth Program | Other program costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Cost Incurred to Date | 63,351,000 | |||||
Business realignment costs | 30,940,000 | 16,407,000 | 0 | |||
Operation Optimization Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Business realignment costs | 13,525,000 | 88,293,000 | ||||
Operation Optimization Program | Severance | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Business realignment costs | 0 | 13,828,000 | 17,872,000 | |||
Operation Optimization Program | Other program costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Business realignment costs | 2,940,000 | (303,000) | 21,831,000 | |||
Operation Optimization Program | Facility Closing | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Business realignment costs | (6,562,000) | 0 | 0 | |||
2015 Productivity Initiative | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and Related Cost, Cost Incurred to Date | 5,609,000 | |||||
Restructuring and Related Cost, Expected Number of Positions Eliminated | employee | 300 | |||||
2015 Productivity Initiative | Other program costs | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Business realignment costs | $ 0 | $ 0 | $ 5,609,000 | |||
Business realignment charges | Geographic Concentration Risk | North America | Margin for Growth Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Concentration Risk, Percentage | 60.00% | |||||
Business realignment charges | Geographic Concentration Risk | North America | Operation Optimization Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Concentration Risk, Percentage | 40.00% | |||||
Business realignment charges | Geographic Concentration Risk | International and Other | Margin for Growth Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Concentration Risk, Percentage | 40.00% | |||||
Business realignment charges | Geographic Concentration Risk | International and Other | Operation Optimization Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Concentration Risk, Percentage | 60.00% | |||||
Minimum | Margin for Growth Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, expected cost | $ 340,000,000 | $ 375,000,000 | ||||
Restructuring and Related Cost, Expected Cost, Cash Portion | 97,000,000 | |||||
Maximum | Margin for Growth Program | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring and related cost, expected cost | 355,000,000 | $ 425,000,000 | ||||
Restructuring and Related Cost, Expected Cost, Cash Portion | $ 110,000,000 |
BUSINESS REALIGNMENT ACTIVITI_5
BUSINESS REALIGNMENT ACTIVITIES - SCHEDULE OF LIABILITY ACTIVITY FOR COSTS QUALIFYING AS EXIT AND DISPOSAL COSTS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Restructuring Reserve [Roll Forward] | |
Liability balance at December 31, 2017 | $ 38,992 |
2018 business realignment charges | 25,940 |
Cash payments | (50,996) |
Other, net | 669 |
Liability balance at December 31, 2018 | $ 14,605 |
INCOME TAXES - SCHEDULE OF INCO
INCOME TAXES - SCHEDULE OF INCOME (LOSS) BEFORE TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 1,195,645 | $ 1,187,825 | $ 1,395,440 |
Foreign | 214,416 | (77,157) | (295,959) |
Income before income taxes | $ 1,410,061 | $ 1,110,668 | $ 1,099,481 |
INCOME TAXES - SCHEDULE OF COMP
INCOME TAXES - SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Federal | $ 151,107 | $ 314,277 | $ 391,705 |
State | 38,243 | 37,628 | 51,706 |
Foreign | 13,405 | (16,356) | (25,877) |
Current provision for income taxes | 202,755 | 335,549 | 417,534 |
Deferred: | |||
Federal | 35,035 | 19,204 | (7,706) |
State | 7,572 | 7,573 | (452) |
Foreign | (6,352) | (8,195) | (29,939) |
Deferred income tax provision | 36,255 | 18,582 | (38,097) |
Total provision for income taxes | $ 239,010 | $ 354,131 | $ 379,437 |
INCOME TAXES - INCOME TAXES NAR
INCOME TAXES - INCOME TAXES NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Tax Cuts and Jobs Act of 2017, change in tax rate, income tax expense | $ 32,500 | ||
Tax Cuts and Jobs Act of 2017, measurement period adjustment, income tax expense (benefit) | $ 19,500 | ||
Amount of unrecognized tax benefits that if recognized would affect the effective tax rate | 93,507 | 37,587 | |
Net tax expense (benefit) for interest and penalties | 1,785 | 795 | $ (75) |
Accrued net interest and penalties | 6,154 | 4,966 | |
Expected reduction in the liability for unrecognized tax benefits within the next 12 months | 9,637 | ||
Undistributed earnings of foreign subsidiaries | 550,591 | ||
Investment tax credits and related tax depreciation benefits | 60,111 | 74,600 | |
Write-down of equity investments in partnerships qualifying for historic tax credits | 50,329 | 66,209 | $ 43,482 |
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 | $ 50,329 | $ 66,209 |
INCOME TAXES - SCHEDULE OF DEFE
INCOME TAXES - SCHEDULE OF DEFERRED TAX ASSET AND LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Post-retirement benefit obligations | $ 52,915 | $ 58,306 |
Accrued expenses and other reserves | 85,180 | 103,769 |
Stock-based compensation | 30,448 | 31,364 |
Derivative instruments | 17,423 | 27,109 |
Pension | 8,921 | 0 |
Lease financing obligation | 12,284 | 12,310 |
Accrued trade promotion reserves | 13,670 | 26,028 |
Net operating loss carryforwards | 161,242 | 226,142 |
Capital loss carryforwards | 26,670 | 23,215 |
Other | 9,969 | 7,748 |
Gross deferred tax assets | 418,722 | 515,991 |
Valuation allowance | (239,959) | (312,148) |
Total deferred tax assets | 178,763 | 203,843 |
Deferred tax liabilities: | ||
Property, plant and equipment, net | 144,044 | 132,443 |
Acquired intangibles | 161,003 | 68,476 |
Inventories | 21,366 | 20,769 |
Pension | 0 | 969 |
Other | 28,044 | 23,819 |
Total deferred tax liabilities | 354,457 | 246,476 |
Net deferred tax liabilities | (175,694) | (42,633) |
Included in: | ||
Non-current deferred tax assets, net | 1,166 | 3,023 |
Non-current deferred tax liabilities, net | $ (176,860) | $ (45,656) |
INCOME TAXES - SCHEDULE OF EFFE
INCOME TAXES - SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 35.00% | 35.00% |
State income taxes, net of Federal income tax benefits | 2.70% | 2.60% | 3.40% |
Qualified production income deduction | 0.00% | (2.90%) | (3.80%) |
Business realignment and impairment charges | 0.60% | 4.30% | 0.40% |
Foreign rate differences | (2.00%) | (4.30%) | 3.60% |
Historic and solar tax credits | (3.50%) | (4.80%) | (3.30%) |
U.S. tax reform | (1.40%) | 2.90% | 0.00% |
Tax contingencies | 0.50% | 0.50% | 0.10% |
Other, net | (0.90%) | (1.40%) | (0.90%) |
Effective income tax rate | 17.00% | 31.90% | 34.50% |
INCOME TAXES - SCHEDULE OF UNRE
INCOME TAXES - SCHEDULE OF UNRECOGNIZED TAX BENEFITS ROLL FORWARD (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 42,082 | $ 36,002 |
Additions for tax positions taken during prior years | 1,174 | 2,492 |
Reductions for tax positions taken during prior years | (2,581) | (1,689) |
Additions for tax positions taken during the current year | 61,627 | 10,018 |
Settlements | 0 | (1,481) |
Expiration of statutes of limitations | (4,772) | (3,260) |
Balance at end of year | $ 97,530 | $ 42,082 |
PENSION AND OTHER POST-RETIRE_3
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS NARRATIVE (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)postretirement_plan | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2023 | |
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 | $ 994,278 | $ 1,077,112 | ||
Defined contribution pan, cost recognized | 47,959 | 46,154 | $ 43,545 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contributions | 9,233 | 37,503 | ||
Defined benefit plans, minimum future employer contributions in next fiscal year | $ 1,445 | |||
Pension Benefits | Unfunded Plan | Hershey Company Puerto Rico Hourly Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contributions | 6,461 | |||
Supplemental Employee Retirement Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Employer contributions | $ 29,201 | |||
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined Benefit Plan, Health Care Cost Trend Rate Assumed, Next Fiscal Year | 7.00% | 7.00% | ||
Employer contributions | $ 16,631 | $ 18,930 | ||
Other Benefits | Scenario, Forecast | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan, ultimate health care cost trend rate | 5.00% |
PENSION AND OTHER POST-RETIRE_4
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF DEFINED BENEFIT OBLIGATIONS, PLAN ASSETS AND FUNDED STATUS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Net amounts recognized in AOCI | $ 205,230 | $ 169,526 | |
Pension Benefits | |||
Change in benefit obligation | |||
Projected benefit obligation at beginning of year | 1,117,564 | 1,118,318 | |
Service cost | 21,223 | 20,657 | $ 23,075 |
Interest cost | 31,943 | 40,996 | 41,875 |
Plan amendments | 0 | (8,473) | |
Actuarial (gain) loss | (50,432) | 40,768 | |
Curtailment | (16) | 0 | |
Settlement | (61,268) | (44,978) | |
Currency translation and other | (4,674) | 6,749 | |
Benefits paid | 23,134 | 56,473 | |
Projected benefit obligation at end of year | 1,031,206 | 1,117,564 | 1,118,318 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 1,086,226 | 1,023,676 | |
Actual return on plan assets | (43,118) | 121,241 | |
Employer contributions | 9,233 | 37,503 | |
Settlement | (61,268) | (44,978) | |
Currency translation and other | (4,078) | 5,257 | |
Benefits paid | 23,134 | 56,473 | |
Fair value of plan assets at end of year | 963,861 | 1,086,226 | 1,023,676 |
Funded status at end of year | (67,345) | (31,338) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Other assets | 332 | 14,988 | |
Accrued liabilities | (1,298) | (6,916) | |
Other long-term liabilities | (66,379) | (39,410) | |
Total | (67,345) | (31,338) | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Actuarial net (loss) gain | (254,735) | (207,659) | |
Net prior service credit (cost) | 32,350 | 30,994 | |
Net amounts recognized in AOCI | (222,385) | (176,665) | |
Other Benefits | |||
Change in benefit obligation | |||
Projected benefit obligation at beginning of year | 236,112 | 242,846 | |
Service cost | 230 | 263 | 299 |
Interest cost | 6,923 | 8,837 | 9,731 |
Plan amendments | 0 | 0 | |
Actuarial (gain) loss | (10,842) | 2,207 | |
Curtailment | 0 | 0 | |
Settlement | 0 | 0 | |
Currency translation and other | (1,073) | 889 | |
Benefits paid | 16,631 | 18,930 | |
Projected benefit obligation at end of year | 214,719 | 236,112 | 242,846 |
Change in plan assets | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 16,631 | 18,930 | |
Settlement | 0 | 0 | |
Currency translation and other | 0 | 0 | |
Benefits paid | 16,631 | 18,930 | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Funded status at end of year | (214,719) | (236,112) | |
Amounts recognized in the Consolidated Balance Sheets: | |||
Other assets | 0 | 0 | |
Accrued liabilities | (19,553) | (20,792) | |
Other long-term liabilities | (195,166) | (215,320) | |
Total | (214,719) | (236,112) | |
Amounts recognized in Accumulated Other Comprehensive Income (Loss), net of tax: | |||
Actuarial net (loss) gain | 17,967 | 8,313 | |
Net prior service credit (cost) | (812) | (1,174) | |
Net amounts recognized in AOCI | $ 17,155 | $ 7,139 |
PENSION AND OTHER POST-RETIRE_5
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF ACCUMULATED BENEFIT OBLIGATIONS IN EXCESS OF PLAN ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Retirement Benefits [Abstract] | ||
Projected benefit obligation | $ 1,030,382 | $ 711,767 |
Accumulated benefit obligation | 993,892 | 675,660 |
Fair value of plan assets | $ 962,705 | $ 665,441 |
PENSION AND OTHER POST-RETIRE_6
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF COMPONENTS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits | |||
Amounts recognized in net periodic benefit cost | |||
Service cost | $ 21,223 | $ 20,657 | $ 23,075 |
Interest cost | 31,943 | 40,996 | 41,875 |
Expected return on plan assets | (58,612) | (57,370) | (58,820) |
Amortization of prior service (credit) cost | (7,202) | (5,822) | (1,555) |
Amortization of net loss (gain) | 26,875 | 33,648 | 34,940 |
Curtailment credit | (299) | 0 | 0 |
Settlement loss | 20,211 | 17,732 | 22,657 |
Total net periodic benefit cost | 34,139 | 49,841 | 62,172 |
Change in plan assets and benefit obligations recognized in AOCI, pre-tax | |||
Actuarial net (gain) loss | 3,715 | (73,768) | (31,772) |
Prior service (credit) cost | 7,198 | (2,650) | (41,517) |
Total recognized in other comprehensive (income) loss, pre-tax | 10,913 | (76,418) | (73,289) |
Net amounts recognized in periodic benefit cost and AOCI | 45,052 | (26,577) | (11,117) |
Other Benefits | |||
Amounts recognized in net periodic benefit cost | |||
Service cost | 230 | 263 | 299 |
Interest cost | 6,923 | 8,837 | 9,731 |
Expected return on plan assets | 0 | 0 | 0 |
Amortization of prior service (credit) cost | 836 | 748 | 575 |
Amortization of net loss (gain) | 0 | (1) | (13) |
Curtailment credit | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0 |
Total net periodic benefit cost | 7,989 | 9,847 | 10,592 |
Change in plan assets and benefit obligations recognized in AOCI, pre-tax | |||
Actuarial net (gain) loss | (10,771) | 2,139 | (3,047) |
Prior service (credit) cost | (838) | (744) | (572) |
Total recognized in other comprehensive (income) loss, pre-tax | (11,609) | 1,395 | (3,619) |
Net amounts recognized in periodic benefit cost and AOCI | $ (3,620) | $ 11,242 | $ 6,973 |
PENSION AND OTHER POST-RETIRE_7
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF AMOUNTS EXPECTED TO BE AMORTIZED FROM AOCI INTO NET PERIODIC BENEFIT (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of net actuarial loss | $ 33,695 |
Amortization of prior service (credit) cost | (7,235) |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Amortization of net actuarial loss | 811 |
Amortization of prior service (credit) cost | $ (384) |
PENSION AND OTHER POST-RETIRE_8
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING BENEFIT OBLIGATIONS (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.10% | 3.40% |
Rate of increase in compensation levels | 3.60% | 3.80% |
Other Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 4.20% | 3.50% |
PENSION AND OTHER POST-RETIRE_9
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS USED IN COMPUTING NET PERIODIC BENEFIT COST (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.40% | 3.80% | 4.00% |
Expected long-term return on plan assets | 5.80% | 5.80% | 6.10% |
Rate of compensation increase | 3.80% | 3.80% | 3.80% |
Other Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.50% | 3.80% | 4.00% |
PENSION AND OTHER POST-RETIR_10
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF EFFECT OF ONE PERCENT CHANGE IN ASSUMED HEALTH CARE TREND RATES (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Retirement Benefits [Abstract] | |
Effect on total service and interest cost components, one percentage point increase | $ 94 |
Effect on post-retirement benefit obligation, one percentage point increase | 3,213 |
Effect on total service and interest cost components, one percentage point decrease | (82) |
Effect on post-retirement benefit obligation, one percentage point decrease | $ (2,833) |
PENSION AND OTHER POST-RETIR_11
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF PLAN ASSETS ACROSS ASSET CLASSES (Details) - Domestic Plans | Dec. 31, 2018 |
Cash | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 1.00% |
Equity securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 25.00% |
Fixed income securities | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 49.00% |
Alternative investments, including real estate, listed infrastructure and other | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined Benefit Plan, Plan Assets, Target Allocation, Percentage | 25.00% |
PENSION AND OTHER POST-RETIR_12
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF PENSION PLAN ASSETS WITHIN THE FAIR VALUE HIERARCHY (Details) - Pension Benefits - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 963,861 | $ 1,086,226 | $ 1,023,676 |
Fair Value, Measurements, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 963,861 | 1,086,226 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 944,964 | 993,517 | |
Fair Value, Measurements, Recurring | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 1,040 | 1,179 | |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 17,857 | 91,530 | |
Fair Value, Measurements, Recurring | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 19,561 | 20,070 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 664 | 730 | |
Fair Value, Measurements, Recurring | Cash and cash equivalents | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 1,040 | 1,179 | |
Fair Value, Measurements, Recurring | Cash and cash equivalents | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 17,857 | 18,161 | |
Fair Value, Measurements, Recurring | Cash and cash equivalents | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global all-cap | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 210,850 | 276,825 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 210,850 | 276,825 | |
Fair Value, Measurements, Recurring | Global all-cap | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global all-cap | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global all-cap | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | U.S. government/agency | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 242,618 | 239,686 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 242,618 | 239,686 | |
Fair Value, Measurements, Recurring | U.S. government/agency | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | U.S. government/agency | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | U.S. government/agency | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 117,656 | 195,652 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 117,656 | 162,633 | |
Fair Value, Measurements, Recurring | Corporate bonds | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Corporate bonds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 33,019 | |
Fair Value, Measurements, Recurring | Corporate bonds | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Collateralized obligations | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 74,888 | ||
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 34,538 | ||
Fair Value, Measurements, Recurring | Collateralized obligations | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | ||
Fair Value, Measurements, Recurring | Collateralized obligations | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 40,350 | ||
Fair Value, Measurements, Recurring | Collateralized obligations | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | ||
Fair Value, Measurements, Recurring | International government/corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 29,115 | 32,447 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 29,115 | 32,447 | |
Fair Value, Measurements, Recurring | International government/corporate bonds | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | International government/corporate bonds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | International government/corporate bonds | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Diversified credit | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 94,008 | ||
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 94,008 | ||
Fair Value, Measurements, Recurring | Diversified credit | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | ||
Fair Value, Measurements, Recurring | Diversified credit | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | ||
Fair Value, Measurements, Recurring | Diversified credit | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | ||
Fair Value, Measurements, Recurring | Global diversified assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 147,661 | 149,030 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 147,661 | 149,030 | |
Fair Value, Measurements, Recurring | Global diversified assets | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global diversified assets | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global diversified assets | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global real estate investment trusts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 57,854 | 50,213 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 57,854 | 50,213 | |
Fair Value, Measurements, Recurring | Global real estate investment trusts | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global real estate investment trusts | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global real estate investment trusts | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global infrastructure | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 44,538 | 47,415 | |
Defined Benefit Plan, Plan Assets Measured at Net Asset Value | 44,538 | 47,415 | |
Fair Value, Measurements, Recurring | Global infrastructure | Quoted prices in active markets of identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global infrastructure | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Fair Value, Measurements, Recurring | Global infrastructure | Significant other unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 0 | $ 0 |
PENSION AND OTHER POST-RETIR_13
PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS - SCHEDULE OF EXPECTED BENEFIT PAYMENTS TO BE PAID (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | $ 113,395 |
2,020 | 95,461 |
2,021 | 92,790 |
2,022 | 115,509 |
2,023 | 92,411 |
2024-2028 | 396,875 |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2,019 | 19,582 |
2,020 | 18,573 |
2,021 | 17,407 |
2,022 | 16,595 |
2,023 | 15,841 |
2024-2028 | $ 68,234 |
STOCK COMPENSATION PLANS - STOC
STOCK COMPENSATION PLANS - STOCK COMPENSATION PLANS NARRATIVE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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) | 65,800,000 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized | $ 56,547 | ||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 1 month 6 days | ||
Intrinsic value of share-based liabilities paid, combined with the fair value of shares vested (in millions of dollars) | $ 28,752 | $ 29,981 | $ 22,062 |
Deferred performance stock units, deferred restricted stock units, and directors' fees and accumulated dividend amounts representing deferred stock units outstanding | 303,855 | ||
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 4 months 24 days | ||
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 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 15.58 | $ 15.76 | $ 11.46 |
Intrinsic value of options exercised (in millions of dollars) | $ 38,382 | $ 45,998 | $ 73,944 |
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 13,902 | ||
Performance shares | |||
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 | ||
Performance shares | 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 | 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 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, conversion basis (shares) | 1 |
STOCK COMPENSATION PLANS - SCHE
STOCK COMPENSATION PLANS - SCHEDULE OF COMPENSATION EXPENSE AND INCOME TAX BENEFITS FOR STOCK-BASED COMPENSATION PROGRAMS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Pre-tax compensation expense | $ 49,286 | $ 51,061 | $ 54,785 |
Related income tax benefit | $ 9,463 | $ 13,684 | $ 17,148 |
STOCK COMPENSATION PLANS - SC_2
STOCK COMPENSATION PLANS - SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding shares at beginning of year (shares) | 5,921,062 | |
Granted (shares) | 945,220 | |
Exercised (shares) | (1,110,712) | |
Forfeited (shares) | (361,188) | |
Outstanding as of December 31, 2018 (shares) | 5,394,382 | 5,921,062 |
Options exercisable as of December 31, 2018 (shares) | 3,506,304 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding (USD per share) | $ 89.06 | |
Granted (USD per share) | 99.93 | |
Exercises (USD per share) | 68.69 | |
Forfeited (USD per share) | 102.20 | |
Outstanding (USD per share) | 94.28 | $ 89.06 |
Options exercisable (USD per share) | $ 90.77 | |
Options outstanding, weighted-average remaining contractual term | 5 years 7 months 6 days | 5 years 9 months 18 days |
Options exercisable, weighted aver remaining contractual term | 4 years 1 month 6 days | |
Aggregate intrinsic value of options outstanding | $ 70,398 | |
Aggregate intrinsic value of options exercisable | $ 57,789 |
STOCK COMPENSATION PLANS - SC_3
STOCK COMPENSATION PLANS - SCHEDULE OF FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Dividend yields | 2.40% | 2.40% | 2.40% |
Expected volatility | 16.60% | 17.20% | 16.80% |
Risk-free interest rates | 2.80% | 2.20% | 1.50% |
Expected term in years | 6 years 7 months 6 days | 6 years 9 months 18 days | 6 years 9 months 18 days |
STOCK COMPENSATION PLANS - SC_4
STOCK COMPENSATION PLANS - SCHEDULE OF STOCK OPTION INFORMATION BY EXERCISE PRICE RANGE (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
$33.40 - $90.39 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $ 33.40 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 90.39 |
Number Outstanding as of 12/31/18 (shares) | shares | 2,079,250 |
Weighted- Average Remaining Contractual Life in Years | 4 years 2 months 12 days |
Weighted- Average Exercise Price (USD per share) | $ 77.54 |
Number Exercisable as of 12/31/18 (shares) | shares | 1,704,705 |
Weighted- Average Exercise Price (USD per share) | $ 74.72 |
$90.40 - $105.91 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 90.40 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 105.91 |
Number Outstanding as of 12/31/18 (shares) | shares | 1,676,763 |
Weighted- Average Remaining Contractual Life in Years | 7 years |
Weighted- Average Exercise Price (USD per share) | $ 102.54 |
Number Exercisable as of 12/31/18 (shares) | shares | 711,683 |
Weighted- Average Exercise Price (USD per share) | $ 105.12 |
$105.92 - $111.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 105.92 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 111.76 |
Number Outstanding as of 12/31/18 (shares) | shares | 1,638,369 |
Weighted- Average Remaining Contractual Life in Years | 5 years 9 months 18 days |
Weighted- Average Exercise Price (USD per share) | $ 107.06 |
Number Exercisable as of 12/31/18 (shares) | shares | 1,089,916 |
Weighted- Average Exercise Price (USD per share) | $ 106.52 |
$33.40 - $111.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | 33.40 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 111.76 |
Number Outstanding as of 12/31/18 (shares) | shares | 5,394,382 |
Weighted- Average Remaining Contractual Life in Years | 5 years 7 months 6 days |
Weighted- Average Exercise Price (USD per share) | $ 94.28 |
Number Exercisable as of 12/31/18 (shares) | shares | 3,506,304 |
Weighted- Average Exercise Price (USD per share) | $ 90.77 |
STOCK COMPENSATION PLANS - SC_5
STOCK COMPENSATION PLANS - SCHEDULE OF PSUs AND RSUs ACTIVITY (Details) - Performance and restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Outstanding at beginning of year (shares) | 923,364 | ||
Granted (shares) | 457,315 | 478,044 | 545,750 |
Performance assumption change (shares) | 16,961 | ||
Vested (shares) | (287,101) | ||
Forfeited (shares) | (111,521) | ||
Outstanding at end of year (shares) | 999,018 | 923,364 | |
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) | $ 103.11 | ||
Weighted-average fair value at date of grant (USD per share) | 97.86 | $ 110.97 | $ 93.55 |
Performance assumption change | 102.71 | ||
Vested (USD per share) | 103.59 | ||
Forfeited (USD per share) | 103.48 | ||
Outstanding at end of year (USD per share) | $ 101.57 | $ 103.11 |
STOCK COMPENSATION PLANS - SC_6
STOCK COMPENSATION PLANS - SCHEDULE OF PSUs AND RSUS FAIR VALUE WEIGHTED-AVERAGE ASSUMPTIONS (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yields | 2.40% | 2.40% | 2.40% |
Performance and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units granted (shares) | 457,315 | 478,044 | 545,750 |
Weighted-average fair value at date of grant (USD per share) | $ 97.86 | $ 110.97 | $ 93.55 |
Estimated values (USD per share) | $ 29.17 | $ 46.85 | $ 38.02 |
Dividend yields | 2.60% | 2.30% | 2.50% |
Expected volatility | 20.40% | 20.40% | 17.00% |
- SEGMENT INFORMATION NARRATIVE
- SEGMENT INFORMATION NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
North America | Geographic Concentration Risk | Sales Revenue, Goods, Net | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration Risk, Percentage | 89.00% | |||
Operating Segments | Commodities futures and options | ||||
Revenue, Major Customer [Line Items] | ||||
Net Gain Loss On Commodity Derivative Positions Reclassified From Unallocated Derivative Gains Losses To Segment Income | $ (98,884) | $ (91,026) | $ (8,515) | |
Scenario, Forecast | Operating Segments | Commodities futures and options | ||||
Revenue, Major Customer [Line Items] | ||||
Net Gain Loss On Commodity Derivative Positions Reclassified From Unallocated Derivative Gains Losses To Segment Income | $ (409) | |||
Cost of Sales | Commodities futures and options | ||||
Revenue, Major Customer [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (40,318) |
- SCHEDULE OF NET SALES AND EAR
- SCHEDULE OF NET SALES AND EARNINGS BY SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 |
Operating Income (Loss) | 1,623,664 | 1,313,409 | 1,255,173 | ||||||||
Costs associated with business realignment activities | 51,827 | 69,359 | 93,902 | ||||||||
Interest expense, net | 138,837 | 98,282 | 90,143 | ||||||||
Other (income) expense, net | 74,766 | 104,459 | 65,549 | ||||||||
Income before income taxes | 1,410,061 | 1,110,668 | 1,099,481 | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 2,093,844 | 2,055,750 | 2,011,315 | ||||||||
Operating Segments | North America | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 6,901,607 | 6,621,173 | 6,532,988 | ||||||||
Operating Income (Loss) | 2,020,082 | 2,044,218 | 2,040,454 | ||||||||
Operating Segments | International and Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 889,462 | 894,253 | 907,193 | ||||||||
Operating Income (Loss) | 73,762 | 11,532 | (29,139) | ||||||||
Corporate, Non-Segment | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Income (Loss) | 486,716 | 499,251 | 488,318 | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Derivative, Gain (Loss) on Derivative, Net | (168,263) | (35,292) | 163,238 | ||||||||
Goodwill and long-lived asset impairment charges | 57,729 | 208,712 | 4,204 | ||||||||
Costs associated with business realignment activities | 51,827 | 69,359 | 93,902 | ||||||||
Acquisition-related costs | 44,829 | 311 | 6,480 | ||||||||
Gain (loss) on disposition of intangible assets | $ (2,658) | $ 0 | $ 0 |
SEGMENT INFORMATION - SCHEDULE
SEGMENT INFORMATION - SCHEDULE OF UNALLOCATED MARK-TO-MARKET (GAINS) LOSSES ON COMMODITY DERIVATIVES (Details) - Commodities futures and options - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reconciling Items | |||
Segment Reporting Information [Line Items] | |||
Net Mark to Market Valuation of Certain Derivative Positions Recognized in Unallocated Derivative Gains Losses | $ (168,263) | $ (35,292) | $ 163,238 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net Gain Loss On Commodity Derivative Positions Reclassified From Unallocated Derivative Gains Losses To Segment Income | (98,884) | (91,026) | (8,515) |
Non-designated Hedges | |||
Segment Reporting Information [Line Items] | |||
Derivative, Gain (Loss) on Derivative, Net | $ (69,379) | $ (55,734) | $ 171,753 |
- SCHEDULE OF DEPRECIATION AND
- SCHEDULE OF DEPRECIATION AND AMORTIZATION EXPENSE INCLUDED WITHIN SEGMENT INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 295,144 | $ 261,853 | $ 301,837 |
Operating Segments | North America | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 205,340 | 171,265 | 162,211 |
Operating Segments | International and Other | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 35,656 | 42,542 | 50,753 |
Corporate, Non-Segment | Corporate (1) | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 54,148 | $ 48,046 | $ 88,873 |
- SCHEDULE OF SEGMENT INFORMATI
- SCHEDULE OF SEGMENT INFORMATION BY GEOGRAPHY (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 |
Long-lived assets | 2,130,294 | 2,106,697 | 2,130,294 | 2,106,697 | 2,177,248 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 6,535,675 | 6,263,703 | 6,196,723 | ||||||||
Long-lived assets | 1,668,186 | 1,575,496 | 1,668,186 | 1,575,496 | 1,528,255 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,255,394 | 1,251,723 | 1,243,458 | ||||||||
Long-lived assets | $ 462,108 | $ 531,201 | $ 462,108 | $ 531,201 | $ 648,993 |
SEGMENT INFORMATION - SCHEDUL_2
SEGMENT INFORMATION - SCHEDULE OF ADDITIONAL PRODUCT LINE SALES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 |
Confectionery and confectionery-based portfolio | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 7,453,364 | ||||||||||
Snacks portfolio | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 337,705 |
EQUITY AND NONCONTROLLING INT_3
EQUITY AND NONCONTROLLING INTEREST - EQUITY AND NONCONTROLLING INTEREST NARRATIVE (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018vote$ / sharesshares | Dec. 31, 2017shares | Dec. 31, 2016shares | |
Class of Stock [Line Items] | |||||
Common and preferred shares authorized (shares) | 1,055,000,000 | 1,055,000,000 | |||
Preferred stock, shares authorized (shares) | 5,000,000 | 5,000,000 | |||
Common stock, shares, outstanding (shares) | 209,728,904 | 209,728,904 | 210,860,817 | 212,259,735 | |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 1 | $ 1 | |||
Noncontrolling Interests in Subsidiaries | Lotte Shanghai Food Company | |||||
Class of Stock [Line Items] | |||||
Noncontrolling interest, ownership percentage by parent | 50.00% | 50.00% | |||
Common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (shares) | 900,000,000 | 900,000,000 | |||
Common stock, par (USD per share) | $ / shares | $ 1 | $ 1 | |||
Common stock, voting rights (vote) | vote | 1 | ||||
Dividends, common sock, cash, additional percentage over Class B common stock dividends | 10.00% | ||||
Treasury Stock, Shares, Acquired | 1,406,093 | 0 | 4,640,964 | ||
Common Stock Voting Rights, Board Election Percentage | 16.66% | ||||
Common stock | Hershey Trust Company | |||||
Class of Stock [Line Items] | |||||
Common stock, shares, outstanding (shares) | 3,903,121 | 3,903,121 | |||
Class B common stock | |||||
Class of Stock [Line Items] | |||||
Common stock, shares authorized (shares) | 150,000,000 | 150,000,000 | |||
Common stock, voting rights (vote) | vote | 10 | ||||
Conversion of stock | 6,000 | 0 | 0 | ||
Class B common stock | Hershey Trust Company | |||||
Class of Stock [Line Items] | |||||
Common stock, shares, outstanding (shares) | 60,612,012 | 60,612,012 | |||
Common stock, voting percentage | 80.00% | ||||
Hershey Trust Company | |||||
Class of Stock [Line Items] | |||||
Treasury Stock, Shares, Acquired | 1,500,000 | 450,000 | |||
Treasury Stock Acquired, Average Cost Per Share | $ / shares | $ 106.01 | $ 106.30 | |||
Stock Repurchased During Period, Value | $ | $ 159,015,000 | $ 47,835,000 |
EQUITY AND NONCONTROLLING INT_4
EQUITY AND NONCONTROLLING INTEREST - SCHEDULE OF THE CHANGES IN THE OUTSTANDING SHARES OF COMMMON STOCK (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Class of Stock [Line Items] | |||
Common stock, shares issued (shares) | 359,901,744 | 359,901,744 | 359,901,744 |
Treasury stock, shares, beginning of the period (shares) | (149,040,927) | (147,642,009) | (143,124,384) |
Stock issuances: | |||
Treasury stock, shares, end of the period (shares) | (150,172,840) | (149,040,927) | (147,642,009) |
Common stock, shares, outstanding (shares) | 209,728,904 | 210,860,817 | 212,259,735 |
Employee stock options | |||
Stock repurchases: | |||
Treasury Stock, Shares, Acquired | 615,719 | 1,278,675 | 1,820,766 |
Stock issuances: | |||
Stock issued during period, shares, share-based compensation (gross) | 1,339,899 | 1,379,757 | 1,944,105 |
Common stock | |||
Class of Stock [Line Items] | |||
Common stock, shares issued (shares) | 299,287,967 | 299,281,967 | |
Stock repurchases: | |||
Treasury Stock, Shares, Acquired | 1,406,093 | 0 | 4,640,964 |
Hershey Trust Company | |||
Stock repurchases: | |||
Treasury Stock, Shares, Acquired | 450,000 | 1,500,000 | 0 |
EQUITY AND NONCONTROLLING INT_5
EQUITY AND NONCONTROLLING INTEREST - SCHEDULE OF ACTIVITY RELATING TO THE NONCONTROLLING INTEREST (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance, December 31, 2017 | $ 16,227 | ||
Net income (loss) attributable to noncontrolling interests | (6,511) | $ (26,444) | $ 0 |
Balance, December 31, 2018 | 8,545 | 16,227 | |
Noncontrolling Interests in Subsidiaries | |||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
Balance, December 31, 2017 | 16,227 | ||
Net income (loss) attributable to noncontrolling interests | (6,511) | ||
Other comprehensive loss - foreign currency translation adjustments | (1,171) | ||
Balance, December 31, 2018 | $ 8,545 | $ 16,227 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF PURCHASE OBLIGATIONS COVERED BY PUTCHASE AGREEMENTS WITH VARIOUS SUPPLIERS FUTURE MATURTY SCHEDULE (Details) - Inventories $ in Millions | Dec. 31, 2018USD ($) |
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |
2,019 | $ 1,495.9 |
2,020 | 870.9 |
2,021 | 7.5 |
2,022 | 0.7 |
2,023 | $ 0 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - SCHEDULE OF OPERATING AND CAPITAL LEASE OBLIGATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 38,041 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 24,047 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 16,883 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 15,424 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 13,494 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 185,608 | ||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | 6,980 | ||
Capital Leases, Future Minimum Payments Due in Two Years | 5,272 | ||
Capital Leases, Future Minimum Payments Due in Three Years | 3,901 | ||
Capital Leases, Future Minimum Payments Due in Four Years | 4,399 | ||
Capital Leases, Future Minimum Payments Due in Five Years | 4,577 | ||
Capital Leases, Future Minimum Payments Due Thereafter | 169,686 | ||
Operating Leases, Rent Expense | $ 34,157 | $ 25,525 | $ 20,330 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - COMMITMENTS AND CONTINGENCIES NARRATIVE (Details) - employee | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Line Items] | ||
Entity number of employees | 14,930 | |
Entity number of part-time employees | 1,490 | |
Workforce Subject to Collective Bargaining Arrangements | ||
Concentration Risk [Line Items] | ||
Entity number of employees | 5,780 | |
Percentage of employees | 35.00% | |
Workforce Subject to Collective Bargaining Arrangements | Scenario, Forecast | ||
Concentration Risk [Line Items] | ||
Percentage of employees | 67.00% |
- SCHEDULE OF BASIC AND DILUTED
- SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Common stock | |||||||||||
Basic earnings per share: | |||||||||||
Allocation of distributed earnings (cash dividends paid) | $ 410,732 | $ 385,878 | $ 367,081 | ||||||||
Allocation of undistributed earnings | 449,372 | 188,286 | 162,299 | ||||||||
Total earnings—basic | $ 860,104 | $ 574,164 | $ 529,380 | ||||||||
Total weighted-average shares—basic (shares) | 149,379 | 151,625 | 153,519 | ||||||||
Earnings Per Share—basic (USD per share) | $ 1.65 | $ 1.29 | $ 1.11 | $ 1.71 | $ 0.88 | $ 1.32 | $ 0.98 | $ 0.60 | $ 5.76 | $ 3.79 | $ 3.45 |
Diluted earnings per share: | |||||||||||
Allocation of total earnings used in basic computation | $ 860,104 | $ 574,164 | $ 529,380 | ||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 317,458 | 208,817 | 190,664 | ||||||||
Reallocation of undistributed earnings | 0 | 0 | 0 | ||||||||
Total earnings—diluted | $ 1,177,562 | $ 782,981 | $ 720,044 | ||||||||
Conversion of Class B common stock to Common shares outstanding | 60,614 | 60,620 | 60,620 | ||||||||
Total weighted-average shares—diluted (shares) | 210,989 | 213,742 | 215,304 | ||||||||
Earnings Per Share—diluted (USD per share) | 1.60 | 1.25 | 1.08 | 1.65 | 0.85 | 1.28 | 0.95 | 0.58 | $ 5.58 | $ 3.66 | $ 3.34 |
Common stock | Employee stock options | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 651 | 1,144 | 964 | ||||||||
Common stock | Performance and restricted stock units | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 345 | 353 | 201 | ||||||||
Class B common stock | |||||||||||
Basic earnings per share: | |||||||||||
Allocation of distributed earnings (cash dividends paid) | $ 151,789 | $ 140,394 | $ 132,394 | ||||||||
Allocation of undistributed earnings | 165,669 | 68,423 | 58,270 | ||||||||
Total earnings—basic | $ 317,458 | $ 208,817 | $ 190,664 | ||||||||
Total weighted-average shares—basic (shares) | 60,614 | 60,620 | 60,620 | ||||||||
Earnings Per Share—basic (USD per share) | 1.50 | 1.17 | 1.01 | 1.55 | 0.80 | 1.20 | 0.89 | 0.55 | $ 5.24 | $ 3.44 | $ 3.15 |
Diluted earnings per share: | |||||||||||
Allocation of total earnings used in basic computation | $ 317,458 | $ 208,817 | $ 190,664 | ||||||||
Reallocation of total earnings as a result of conversion of Class B common stock to Common stock | 0 | 0 | 0 | ||||||||
Reallocation of undistributed earnings | (803) | (492) | (324) | ||||||||
Total earnings—diluted | $ 316,655 | $ 208,325 | $ 190,340 | ||||||||
Conversion of Class B common stock to Common shares outstanding | 0 | 0 | 0 | ||||||||
Total weighted-average shares—diluted (shares) | 60,614 | 60,620 | 60,620 | ||||||||
Earnings Per Share—diluted (USD per share) | $ 1.49 | $ 1.17 | $ 1.01 | $ 1.55 | $ 0.80 | $ 1.20 | $ 0.89 | $ 0.55 | $ 5.22 | $ 3.44 | $ 3.14 |
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 units | |||||||||||
Diluted earnings per share: | |||||||||||
Incremental common shares attributable to dilutive effect of share-based payment arrangements | 0 | 0 | 0 |
EARNINGS PER SHARE - EARNINGS P
EARNINGS PER SHARE - EARNINGS PER SHARE NARRATIVE (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (shares) | 4,196 | 2,374 | 3,680 |
OTHER (INCOME) EXPENSE, NET - S
OTHER (INCOME) EXPENSE, NET - SCHEDULE OF OTHER (INCOME) AND EXPENSE, NET (Details) - USD ($) $ in Thousands | Feb. 03, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||||
Write-down of equity investments in partnerships qualifying for tax credits | $ 50,329 | $ 66,209 | $ 43,482 | |
Defined Benefit Plan, Non-Service Cost | 20,672 | 38,768 | 49,390 | |
Gain on settlement of SGM liability (see Note 2) | 0 | 0 | 26,650 | |
Other (income) expense, net | 3,765 | (518) | (673) | |
Total | 74,766 | 104,459 | 65,549 | |
Shanghai Golden Monkey Food Joint Stock Co., Ltd. | ||||
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | ||||
Gain on settlement of SGM liability (see Note 2) | $ 26,650 | $ 0 | $ 0 | $ 26,650 |
- SCHEDULE OF SUPPLEMENTAL BALA
- SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory, Net [Abstract] | |||
Raw materials | $ 237,086 | $ 224,940 | |
Goods in process | 107,139 | 93,627 | |
Finished goods | 618,798 | 614,945 | |
Inventories at FIFO | 963,023 | 933,512 | |
Adjustment to LIFO | (178,144) | (180,676) | |
Total inventories | 784,879 | 752,836 | |
Prepaid Expense and Other Assets, Current [Abstract] | |||
Prepaid Expense | 68,490 | 128,735 | |
Disposal Group, Including Discontinued Operation, Assets | 23,421 | 21,124 | |
Other Assets, Current | 180,248 | 130,774 | |
Prepaid Expenses and Other | 272,159 | 280,633 | |
Property, Plant and Equipment [Abstract] | |||
Land | 102,074 | 108,300 | |
Buildings | 1,211,011 | 1,214,158 | |
Machinery and equipment | 2,988,027 | 2,925,353 | |
Construction in progress | 280,559 | 212,912 | |
Property, plant and equipment, gross | 4,581,671 | 4,460,723 | |
Accumulated depreciation | (2,451,377) | (2,354,026) | |
Property, plant and equipment, net | 2,130,294 | 2,106,697 | $ 2,177,248 |
Other Assets, Noncurrent [Abstract] | |||
Capitalized software, net | 126,379 | 104,881 | |
Other non-current assets | 126,605 | 146,998 | |
Total other assets | 252,984 | 251,879 | |
Accrued Liabilities, Current [Abstract] | |||
Payroll, compensation and benefits | 180,546 | 190,863 | |
Advertising, promotion and product allowances | 293,642 | 305,107 | |
Disposal Group, Including Discontinued Operation, Liabilities | 596 | 0 | |
Other | 204,379 | 180,164 | |
Total accrued liabilities | 679,163 | 676,134 | |
Other Liabilities, Noncurrent [Abstract] | |||
Post-retirement benefits liabilities | 195,166 | 215,320 | |
Pension benefits liabilities | 66,379 | 39,410 | |
Other | 184,503 | 184,209 | |
Total other long-term liabilities | 446,048 | 438,939 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Foreign currency translation adjustments | (96,678) | (91,837) | |
Pension and post-retirement benefit plans, net of tax | (205,230) | (169,526) | |
Cash flow hedges, net of tax | (54,872) | (52,383) | |
Total accumulated other comprehensive loss | $ (356,780) | $ (313,746) |
- SCHEDULE OF QUARTERLY FINANCI
- SCHEDULE OF QUARTERLY FINANCIAL INFORMATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net sales | $ 1,987,902 | $ 2,079,593 | $ 1,751,615 | $ 1,971,959 | $ 1,939,636 | $ 2,033,121 | $ 1,662,991 | $ 1,879,678 | $ 7,791,069 | $ 7,515,426 | $ 7,440,181 |
Gross profit | 944,352 | 863,493 | 793,420 | 974,060 | 837,241 | 942,936 | 765,847 | 909,352 | 3,575,325 | 3,455,376 | 3,169,539 |
Net income attributable to The Hershey Company | $ 336,791 | $ 263,713 | $ 226,855 | $ 350,203 | $ 181,133 | $ 273,303 | $ 203,501 | $ 125,044 | $ 1,177,562 | $ 782,981 | $ 720,044 |
Maximum | |||||||||||
Market price of common stock throughout the quarter (USD per share) | $ 110.01 | $ 106.60 | $ 100.60 | $ 114.06 | $ 115.45 | $ 110.50 | $ 115.96 | $ 109.61 | $ 110.01 | $ 115.45 | |
Minimum | |||||||||||
Market price of common stock throughout the quarter (USD per share) | 101.64 | 91.04 | 89.54 | 96.06 | 102.87 | 104.06 | 106.41 | 103.45 | 101.64 | 102.87 | |
Common stock | |||||||||||
Net income per share - basic (USD per share) | 1.65 | 1.29 | 1.11 | 1.71 | 0.88 | 1.32 | 0.98 | 0.60 | 5.76 | 3.79 | $ 3.45 |
Net income per share - diluted (USD per share) | 1.60 | 1.25 | 1.08 | 1.65 | 0.85 | 1.28 | 0.95 | 0.58 | 5.58 | 3.66 | 3.34 |
Dividends paid per share (USD per share) | 0.722 | 0.722 | 0.656 | 0.656 | 0.656 | 0.656 | 0.618 | 0.618 | 2.756 | 2.548 | 2.402 |
Class B common stock | |||||||||||
Net income per share - basic (USD per share) | 1.50 | 1.17 | 1.01 | 1.55 | 0.80 | 1.20 | 0.89 | 0.55 | 5.24 | 3.44 | 3.15 |
Net income per share - diluted (USD per share) | 1.49 | 1.17 | 1.01 | 1.55 | 0.80 | 1.20 | 0.89 | 0.55 | 5.22 | 3.44 | 3.14 |
Dividends paid per share (USD per share) | $ 0.656 | $ 0.656 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.596 | $ 0.562 | $ 0.562 | $ 2.504 | $ 2.316 | $ 2.184 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 373,288 | $ 295,681 | $ 262,325 |
Charged to Costs and Expenses | 273,611 | 294,798 | 232,797 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | 362,194 | 217,191 | 199,441 |
Balance at End of Period | 284,705 | 373,288 | 295,681 |
Allowance for Trade Receivables | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 41,792 | 40,153 | 32,638 |
Charged to Costs and Expenses | 222,819 | 166,993 | 174,314 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | 240,001 | 165,354 | 166,799 |
Balance at End of Period | 24,610 | 41,792 | 40,153 |
Valuation Allowance of Net Deferred Taxes | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 312,148 | 235,485 | 207,055 |
Charged to Costs and Expenses | 18,413 | 92,139 | 28,430 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | 90,602 | 15,476 | 0 |
Balance at End of Period | 239,959 | 312,148 | 235,485 |
Inventory Obsolescence Reserve | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 19,348 | 20,043 | 22,632 |
Charged to Costs and Expenses | 32,379 | 35,666 | 30,053 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions from Reserves | 31,591 | 36,361 | 32,642 |
Balance at End of Period | $ 20,136 | $ 19,348 | $ 20,043 |