FactBook April 2011

8/3/2019 FactBook April 2011

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FACTS

The Hershey CompanyInvestor Relations Department100 Crystal A Drive, P.O. Box 810Hershey, PA 17033-0810Internet: www.hersheys.com

Contacts:

Matthew F. MillerInvestor Relations ManagerTele: (717) 534-7554Fax: (717) 534-6550

E-mail: [email protected]

Prepared by:

Mark K. PogharianVice President, Investor RelationsTele: (717) 534-7556Fax: (717) 534-6550E-mail: [email protected]


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The Hershey CompanyFact Book

Table of Contents

Page(S)Mission Statement 3

Acquisition/Divestiture Summary 4

Key Corporate Events 5-24

Financial Data

Summary of Statements of Income - GAAP: 2010 & 2009 25Summary of Statements of Income - Pro Forma: 2010 & 2009 26Six-Year Consolidated Financial Summary 27Quarterly Performance (2010, 2009 & 2008) 282002 2010 GAAP & Non-GAAP Annual EPS 29Capitalization 30Financing Arrangements 31Long Term Financial Objectives 32Capital Expenditures 33Depreciation 33Cash Flow Analysis 34Share Repurchases 35-36Economic-ROIC 37HSY Stock Statistics 38-39

Key ManagementHershey Executive Team 40

OperationsU.S. Confectionery Industry 41-42U.S. Market Share 43-44U.S. Classes of Trade 45U.S. Snack Market 45Hershey Products 46-47Hershey Canada 48-50Hershey Mexico 51Hershey International 52-53Commodities

Cocoa 54-55Sugar 56

Hershey Manufacturing and Distribution 57


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The Hershey Company

What it means to stakeholders

Delivering quality consumer-drivenconfectionery experiences for all occasions

Consumers

Winning with an aligned and empoweredorganizationwhile having fun

BusinessPartners

Employees

Shareholders

Communities Honoring our heritage through continuedcommitment to making a positivedifference

Creating sustainable value

Building collaborative relationships forprofitable growth with our customers,suppliers and partners

Page 3


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The Hershey Company

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DATE ACQUISITIONS (DIVESTITURES) REFERENCE

JUL 1963 H.B. Reese Candy Co. page 5

JUN 1966 San Giorgio Macaroni, Inc. - pasta page 5

SEP 1966 Delmonico Foods, Inc. - pasta page 5

DEC 1967 Cory Corporation page 5

JAN 1969 Nacional de Dulces - 50% equity interest page 5

MAY 1970 Portion Control Industries page 6

OCT 1974 Chadler Industrial du Bahia S.A. page 6

FEB 1977 AB Marabou -initial investment page 6

JUN 1977 (L.D. Properties Corporation) page 6

NOV 1977 Y&S Candies page 7

APR 1978 Procino-Rossi Corporation - pasta page 7

JAN 1979 Skinner Macaroni Company - pasta page 7

JAN 1979 Friendly Ice Cream Corporation page 8

JAN 1979 Codipra and Petybon - 40% equity interest page 7

SEP 1981 Philippine Cocoa Corporation page 9

NOV 1984 American Beauty Macaroni Company - pasta page 10

SEP 1985 Franklin's Restaurants Inc. page 8

NOV 1985 (Cory Food Service & Cory Canada Inc.) page 5

JUL 1986 Idlenot Farm Restaurants page 8

OCT 1986 (Chadler Industrial du Bahia S.A.) page 6

OCT 1986 The Dietrich Corporation (Ludens) page 10

DEC 1986 G&R Pasta Company - pasta page 10

DEC 1986 Litchfield Farm Shops page 8

JUN 1987 Nabisco Brands Ltd. -Canadian confectionery business page 11

AUG 1988 Cadbury's U.S. confectionery business page 11

SEP 1988 (Friendly Ice Cream Corporation) page 11

FEB 1990 Ronzoni Foods Corporation page 12

MAY 1990 (AB Marabou -sold interest) page 6

MAY 1991 Gubor Schokoladen - German confectionery page 12

MAY 1991 Dairymen's - aseptic drink business page 12

OCT 1991 Nacional de Dulces - remaining 50% equity page 12

FEB 1992 (Queen Anne, Inc) page 12

APR 1992 (Hershey do Brazil Participacoes including Petybon) page 13

MAY 1992 Freia Marabou A.S. - 18.6% interest page 13

OCT 1992 (Freia Marabou A.S. - 18.6% interest) page 13

JAN 1993 Hershey Japan Co. - remaining interest page 13

MAR 1993 Ideal / Mrs. Weiss - pasta page 13SEP 1993 Sperlari -Italian sugar confectionery business page 13

OCT 1993 Overspecht BV - OZF Jamin- Dutch confectionery page 14

JUN 1995 (Overspecht BV - OZF Jamin- Dutch confectionery) page 14

DEC 1995 Henry Heide - confectionery page 15

JAN 1996 (Hershey Canada's Planters and Lifesavers businesses) page 15

FEB 1996 Kneisl Schokoladen GmbH - German confectionery page 15

DEC 1996 Leaf North America page 15

DEC 1996 (Gubor Schokoladen - German confectionery) page 15

DEC 1996 (Sperlari -Italian sugar confectionery business) page 15

JUN 1997 (Ford Gum and Machine Co., and Carousel Brands) page 16

JAN 1999 (Hershey's Pasta businesses) page 16

NOV 1999 (Dairymen's - aseptic drink business) page 16

DEC 2000 Nabisco - mints and gum businesses page 17

AUG 2001 Visagis - Brazilian confectioner page 17SEP 2001 (Luden's Throat Drops business) page 17

JUN 2002 (Heide and certain other non-chocolate brands) page 17

AUG 2003 (Certain gum brands including Fruit Stripe, Rain-Blo and Super Bubble) page 18

OCT 2004 Grupo Lorena page 18

DEC 2004 Mauna Loa Macadamia Nut Corporation page 18

AUG 2005 Artisan Confections Company formed: Scharffen Berger; Joseph Schmidt page 19

OCT 2006 Dagoba Organic Chocolate, LLC page 20

APR 2007 Godrej Beverages & Foods, Ltd. page 22

MAY 2007 Lotte Confectionery Co., LTD page 23

FEB 2009 Van Houten (Asia) page 23

Items in bold represent acquisitions by Hershey which were not divested.


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The Hershey Company

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Business Description

The Hershey Company (originally Hershey Chocolate Corporation) was organized under the laws ofthe State of Delaware on October 24, 1927, as a successor to a business founded in 1894 by Milton S.Hershey.

The Hershey Company and its subsidiaries are engaged in the manufacture, distribution and sale ofconsumer food products. The Company produces and distributes a broad line of chocolate,confectionery, and chocolate-related grocery products.

Key Corporate Events

Key corporate events include the following:

(1) On April 15, 1961, construction began on a chocolate-manufacturing facility for HersheyChocolate of Canada Ltd. in Smiths Falls, Ontario. The plant was completed in June 1963.

(2) In June 1963, the H. B. Reese Candy Co. and subsidiary Reeco, Inc. of Hershey, Pennsylvania,

were acquired for 666,361 shares of Hershey common stock.

(3) In June 1966, the Company acquired San Giorgio Macaroni, Inc., Lebanon, Pennsylvania. InSeptember of the same year, a 90-percent interest in Delmonico Foods, Inc., Louisville,Kentucky was acquired. Subsequently the remaining 10 percent was acquired, and in January1975, Delmonico Foods was merged into San Giorgio Macaroni, Inc.

(4) In December 1967, Cory Corporation of Chicago, Illinois, was acquired for $26.3 million. InJanuary 1975, Cory Coffee Service Plan, Inc. was merged into Cory Corporation and the name

was changed to Cory Food Services, Inc. Cory provides a coffee and allied products service planto office locations and small business concerns in the United States and Canada.

On November 22, 1985, the Company sold Cory Food Services, Inc. and Cory Canada Inc., twowholly-owned subsidiaries, to ARA Services, Inc.of Philadelphia, Pennsylvania. Terms of thecash transaction were not disclosed. An after-tax loss on the disposal of the two subsidiaries inthe amount of $7.0 million was recorded in the third quarter ended September 29, 1985.

(5) In January 1969, the Company acquired a 50-percent interest in Nacional de Dulces, S.A. deC.V., a joint-venture company in Mexico, for approximately $1.0 million.

Not adjusted for the two-for-one stock split effective June 15, 2004, the two-for-one stock split effective September 13, 1996, or the three-for-one stock spliteffective September 15, 1986.


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The Hershey Company

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On October 8, 1991, Hershey International, a division of The Hershey Company, purchased theoutstanding shares of Nacional de Dulces, S.A. de C.V. from its joint- venture partner, GrupoCarso, S.A. de C.V. for $10.0 million. Nacional de Dulces, a Mexican corporation, has its mainoffices and manufacturing plant in Guadalajara, Mexico. It produces and markets chocolateproducts in the Mexican market under theHersheys brand name. Subsequent to the acquisition,Nacional de Dulces was renamed Hershey Mexico.

(6) In January 1970, the Company began U.S. distribution of Kit Kat chocolate wafer bars forRowntree Mackintosh of England. In July 1971, another Rowntree Mackintosh product, Rolocaramels in milk chocolate, was added to the Hershey line. In January 1973, production ofKitKatbars began at the Reese plant in Hershey, Pennsylvania. U.S. production ofRolo began atthe Main Hershey plant in 1978.

(7) In May 1970, Portion Control Industries, Inc., Chicago, Illinois, was acquired for an issue of500,000 shares of preferred stock. The operation was discontinued in 1975.

(8) In 1974, the Company acquired a 22.5-percent interest in Chadler Industrial da Bahia S. A., acocoa processor in Salvador, Bahia, Brazil.

In October 1986, the Company sold its 22.5-percent interest in Chadler Industrial de Bahia. Thesales price approximated the Companys investment.

(9) In February 1977, a 17.1-percent equity interest was acquired in AB Marabou, a chocolate andconfectionery company located in Sundbyberg, Sweden, for $3.8 million. In mid-1984, theCompany purchased for $1.7 million an additional interest in AB Marabou in order to maintainits 17.1-percent equity interest.

On May 23, 1990, the Company sold its shares of AB Marabou to Orkla Borregaard A.S., of

Oslo, Norway, for $78 million. The transaction resulted in a one-time, after-tax gain of $35.3million.

On May 5, 1992, the Company acquired an 18.6-percent interest in Freia Marabou A.S., theleading Scandinavian chocolate, confectionery and snack food company. The interest waspurchased from Orkla a.s, a diversified Norwegian company, for approximately $180 million.On October 27, 1992, the Company withdrew its bid to acquire Freia Marabou A.S. and tenderedits 18.6-percent interest to a subsidiary of Philip Morris Companies Inc. The Company recordeda gain on the sale of its interest in Freia Marabou in March 1993. The sale resulted in a pre-taxgain of $80.6 million and had the effect of increasing net income by $40.6 million.

(10) In June 1977, the Company sold for $20 million the real estate and operating equipment of L. D.Properties Corporation, a wholly-owned subsidiary engaged in almond growing in California foran after-tax gain of $5.3 million.


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The Hershey Company

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(11) In November 1977, Y&S Candies Inc. of Lancaster, Pennsylvania, a manufacturer of licorice-type products, was acquired for 701,982* shares of Hershey Common Stock in a pooling-of-interests transaction. On January 5, 1982, Y & S Candies was merged into The HersheyCompany.

(12) In April 1978, the Company acquired the net assets of Procino-Rossi Corporation, a regionalpasta manufacturer in Auburn, New York.

(13) On January 3, 1979, the Company, in a pooling-of-interests transaction, acquired all of theoutstanding shares of common stock of Skinner Macaroni Company of Omaha, Nebraska, in

exchange for 398,680 shares of Hersheys Common Stock. Skinners products are sold throughthe Southwest, Southeast, Midwest and some western states. In early 1980, Skinner was mergedinto San Giorgio Macaroni, Inc. to form San Giorgio-Skinner, Inc. On January 5, 1982, SanGiorgio-Skinner, Inc. was merged into the Company to form San Giorgio-Skinner Company, anoperating division of the Company. Subsequent to the acquisition of the American Beauty brandin 1984, this operating division was renamed Hershey Pasta Group. See page 10, #22.

(14) In January 1979, the Cormpany acquired a 40-percent interest in Codipra and Petybon, joint-venture companies with Matarazzo Food Group in Brazil, for $7.5 million. The Companypurchased the remaining 60-percent interest of its joint venture with Matarazzo in 1982 at a costof $13.0 million. Petybon manufactures pasta, biscuit and margarine products. Codipra, whichsold and distributed these products, and Petybon were combined into one entity, Petybon S.A. InDecember 1986, an agreement was reached to establish a joint venture in Brazil with the BungeBorn Group and to merge its pasta operations into Petybon. Hershey owned 45.0 percent of thatbusiness combination. In June 1990, the Companys ownership changed from 45.0 percent to41.7 percent.

In April 1992, the Company completed the sale of Hershey do Brasil Participacoes, a holding

company which owned a 41.7-percent equity interest in Petybon S.A., to the Bunge Born Groupfor approximately $7.0 million. Petybon S.A., located in Brazil, is a producer of pasta, biscuitsand margarine products. The sale resulted in a modest pre-tax gain and a reduction in theeffective income tax rate during the second quarter of 1992.

Not adjusted for the two-for-one stock split effective June 15, 2004, the two-for-one stock split effective September 13, 1996, the three-for-one stock split effeSeptember 15, 1986, or the two-for-one stock split effective September 15, 1983.


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The Hershey Company

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(15) During January 1979, the Company acquired for cash substantially all of the outstandingCommon Stock of Friendly Ice Cream Corporation, of Wilbraham, Massachusetts, and Friendlybecame a wholly-owned subsidiary through a merger effective April 9, 1979. The totalacquisition cost was approximately $164.0 million.

On September 30, 1985, Friendly Ice Cream Corporation purchased the stock of FranklinsRestaurants, Inc. for $3.0 million, and the Company assumed and immediately retired $3.5million of Franklins debt. Franklins consisted of twelve full-service family restaurants locatedin northeastern Pennsylvania.

On July 14, 1986, Friendly Ice Cream Corporation acquired the Idlenot Farm Restaurant chain ofSpringfield, Vermont for $3.4 million. Idlenot was a chain of 12 family-style restaurants locatedin Vermont, New Hampshire and New York.

On December 29, 1986, Friendly Ice Cream Corporation acquired Litchfield Farm Shops, Inc. ofWaterbury, Connecticut. Litchfield consisted of 23 family-style restaurants operating inConnecticut.

On September 2, 1988, the Company sold Friendly Ice Cream Corporation, its wholly-ownedsubsidiary, to Tennessee Restaurant Company. The total amount received for Friendlys stock, aconvenant not to compete and a trademark license was $375 million. An after-tax gain in theamount of $53.4 million was recorded in the third quarter ended October 4, 1988.

(16) On August 7, 1979, the Company announced that it entered into exclusive Agent-Importer,Trademark License and Technical Assistance Agreements with Fujiya Confectionery Co., Ltd. ofTokyo, Japan. Under those agreements, Fujiya imported, manufactured and sold Hersheysproducts in the Japanese market. Fujiya is a leading manufacturer of chocolate andconfectionery products, snack foods, beverages, ice cream and bakery products. It also owns and

operates a chain of restaurants and coffee shops.

On July 12, 1989, the Company signed a joint-venture agreement with Fujiya Co., Ltd. of Tokyo,to establish a new confectionery company in Japan. The new company, Hershey Japan Co. Ltd.,which is headquartered in Tokyo, markets, sells and distributes Hersheys chocolate andconfectionery products in the Japanese market. This new agreement incorporated and expandedupon the agreement established on August 7, 1979.

In January 1993, the Company purchased the remaining outstanding shares of Hershey JapanCo., Ltd., owned by its joint-venture partner.


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n Stock.

(17) In October 1980, the Company began the construction of a major confectionery manufacturingfacility in Stuarts Draft, Virginia, to support its new products program. The new plant wascompleted in October 1982, on schedule and within budget. The cost of the basic plant andequipment was approximately $86 million.

(18) On February 20, 1981, the Company entered into an exclusive licensing agreement withPhilippine Cocoa Corporation for the manufacture ofHersheys products in that country. Thisagreement was for an initial five-year term and licensed the use of trademarks and manufacturingtechnology. The Company purchased a 30-percent equity interest in Philippine CocoaCorporation in September 1981, which was increased to a 33.3-percent interest in 1986.

(19) On November 18, 1981, the Company offered 1.5 million* shares of Common Stock to the

public at $37 per share. The net proceeds from the sale of the Common Stock, $53,145,000,were added to the general funds of the Corporation to meet capital expenditure and workingcapital requirements.

(20) On August 2, 1983, the Company declared a two-for-one split of the Companys Common Stockeffective September 15, 1983, to stockholders of record August 24, 1983. Prior stock splitsinclude a three-for-one split effective September 16, 1947, and a five-for-one split effectiveMarch 27, 1962.

(21) On October 9, 1984, stockholders approved a proposal to increase the number of authorizedshares of Hersheys capital stock from 52 million to 230 million; 150 million shares weredesignated as Common Stock, 75 million shares as Class B Common Stock and 5 million asPreferred Stock, each class having a par value of one dollar per share. Holders of the CommonStock are entitled to one vote per share and a cash dividend 10 percent higher than the cashdividend on the Class B Common Stock, while holders of the Class B Common Stock areentitled to ten votes per share. Holders of the Common Stock, voting separately as a class, elect

one-sixth of the Board of Directors.

In an exchange offer completed on November 29, 1984, Hershey stockholders were given theopportunity to exchange their shares of Common Stock for shares of the new Class B CommonStock on a one-for-one basis. In the offer, 5,102,002** shares of Common Stock wereexchanged for Class B Common Stock shares. The Hershey Trust Company, Trustee for MiltonHershey School, the Companys majority stockholder, exchanged 5,051,001** shares of theCommon Stock for Class B Commo

Not adjusted for the two-for-one stock split effective June 15, 2004, the two-for-one stock split effective September 13, 1996, the three- for-one stock spliteffective September 15, 1986, or the two-for-one stock split effective September 15, 1983.**Not adjusted for the two-for-one stock split effective June 15, 2004, the two-for-one stock split effective September 13, 1996, or the three-for-one stock spliteffective September 15, 1986.


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The Hershey Company

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(22) On November 16, 1984, the Company purchased for cash the inventory, buildings, land,machinery and equipment, trademarks and certain other intangible assets of American Beauty (adivision of The Pillsbury Company) for approximately $56 million and assumed certainliabilities. The acquisition was accounted for as a purchase. American Beauty produces a fullline of consumer branded, dry pasta products distributed primarily in the central, southwesternand western United States.

(23) In 1984, the Company entered into a Technical Assistance and Know How and TrademarkLicense Agreement with Hai-Tai Confectionery Co., Ltd., of Seoul, Korea. Pursuant to thatAgreement, Hai Tai manufactures and sells in the Korean market certain of the Corporationschocolate and confectionery products.

(24) On August 5, 1986, the Company declared a three-for-one split of Hersheys Common Stock andClass B Common Stock effective September 15, 1986, to stockholders of record August 22,1986. See Page 9, #20 for prior stock splits.

(25) On October 27, 1986, the Company purchased the confectionery operations of The Dietrich

Corporation for approximately $100 million plus an amount equal to acquired cash and short-term investments. The purchase included Ludens, maker ofLudens throat drops, 5th Avenuecandy bar, and Ludens Mellomints candy mints; and Queen Anne, a producer of chocolate-covered cherries. The Ludens plant is located in Reading, Pennsylvania.

In February 1992, the Company sold the Queen Anne business to Portland Food ProductsCompany, Portland, Oregon.

(26) On November 14, 1986, a secondary offering of 5,175,000*** shares of Hershey Common Stockby the Companys largest stockholder, Hershey Trust Company, as Trustee for Milton HersheySchool, was completed. In a concurrent, separate transaction, the Company purchased

3,825,000*** of its Common Stock shares from Hershey Trust Company. The acquired shareswere retired and became authorized and unissued shares of Common Stock.

(27) On December 19, 1986, the Company acquired G&R Pasta Company, Inc. G&R produces a lineof dry gourmet pasta items under the Pastamania trademark. The products are distributedprimarily through specialty and health food stores in the Philadelphia area.

In July 1992, the Company sold the assets of G&R Pasta Company to the Seimer MillingCompany of Tuetopolis, Illinois.

***Not adjusted for the two-for-one stock split effective June 15, 2004, or the two-for-one stock split effective September 13, 1996.


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(28) On April 27, 1987, stockholders approved a proposal to increase the number of authorized sharesof Hersheys Common Stock from 150 million to 450 million shares. The authorized Class BCommon Stock and Preferred Stock remained unchanged at 75 million shares and 5 millionshares, respectively.

(29) On June 29, 1987, Hershey Canada Inc., a wholly-owned subsidiary of the Company, purchasedthe assets and trademark rights of Nabisco Brands Ltd.s Canadian confectionery and snack nutbusinesses. These businesses included candy sold under the brands Oh Henry! andLowney, hardroll candy sold under the brand namesLife Savers andBreath Savers, peanuts and other nuts soldunder the brand name Planters, chocolate chips sold under the brand name Chipits, boxedchocolates sold under the Moirs brand name, and gum and chewy candy sold under theCare*Free andBubble Yum brands. In 1986 these businesses had sales of approximately $135million U.S.

The purchase price was approximately $162 million U.S., and the assets purchased includedland, land improvements, buildings, fixtures, furnishings, machinery and equipment, inventory,working capital, trademarks and software, and other assets used in the operation of purchased

businesses. The Care*Free and Bubble Yum businesses were sold in November 1988, and thePlanters, Life Savers, and Breath Savers businesses were sold in January 1996. See page 13,#53.

(30) On August 25, 1988, the Company purchased the U.S. confectionery operations of CadburySchweppes plc. Cash consideration was $284.5 million plus the assumption of $30 million indebt. Plant locations involved in this transaction included facilities in Hazleton and York,Pennsylvania, as well as Naugatuck, Connecticut. The York plant was closed in January 1989,and operations were transferred to the Ludens plant in Reading, Pennsylvania.

In addition to the purchase by The Hershey Company of Cadburys U.S. operating assets, the

parties entered into licensing arrangements under which Hershey is manufacturing, marketingand distributing Cadburys U.S. confectionery brands including Peter Paul Mounds, Peter PaulAlmond Joy, Yorkpeppermint pattie, and the Cadbury label items includingDairy Milk, Fruit & Nut, Caramello and Creme Eggs. In 1987, Cadburys U.S. confectionery sales wereapproximately $300 million.

(31) On September 2, 1988, the Company sold Friendly Ice Cream Corporation, its wholly-ownedsubsidiary, to Tennessee Restaurant Company. The total amount received for Friendlys stock, acovenant not to compete and a trademark license was $375 million. An after-tax gain in theamount of $53.4 million was recorded in the third quarter ended October 4, 1988.


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(32) On February 12, 1990, the Company purchased all of the outstanding voting securities ofRonzoni Foods Corporation from Kraft General Foods, Inc., for $78.2 million, plus theassumption of $3.7 million in debt. The purchase included Ronzonis dry pasta, pasta sauces andcheese businesses. The acquired businesses had sales of approximately $85 million in 1989.

(33) In March 1990, the Company signed a licensing agreement with Japans largest dairy productscompany, Snow Brand Milk Products Co., Ltd. Snow Brand has been licensed to use theHersheys Trademark on all products in the cocoa-based ice cream and beverage categories.

(34) On January 9, 1991, the Company announced that it had recorded a one-time charge during thefourth quarter of 1990 related to the modernization and relocation of certain manufacturingoperations. The after-tax amount of the charge was approximately $15 million or $.17* pershare.

(35) On May 2, 1991, the Company completed the purchase of the Gubor Schokoladen business of H.Bahlsens Keksfabrik KG, a German company, for $31.9 million, plus the assumption of $9.0million in debt. Gubor operates two manufacturing plants in Germany and produces and markets

high quality, assorted pralines and seasonal chocolates under the Gubor brand name. Brandedsales of Gubor in 1990 were approximately DM100 million (approximately $65 million U.S. at1990 exchange rates), with total sales, including chocolate coatings, reaching DM155 million(approximately $100 million U.S.). The acquisition was effective as of January 1, 1991. Thebusiness was divested December 30, 1996.

(36) In May 1991, the Company purchased certain assets of Dairymen, Inc.s ultra-high temperaturefluid milk-processing business, including a Savannah, Georgia manufacturing facility for $2.2million, plus the assumption of $8.5 million debt.

(37) On October 8, 1991, Hershey International, a division of The Hershey Company, purchased the

outstanding shares of Nacional de Dulces, S.A. de C.V. from its joint venture partner, GrupoCarso, S.A. de C.V. for $10.0 million. Nacional de Dulces, a Mexican corporation, has its mainoffices and manufacturing plant in Guadalajara, Mexico. It produces and markets chocolateproducts in the Mexican market under the Hersheys brand name. Subsequent to the acquisition,Nacional de Dulces was renamed Hershey Mexico. See page 5, #5.

(38) On February 13, 1992, the Company sold the Queen Anne chocolate-covered cherries businessto Portland Foods Products Company of Portland, Oregon.

*Not adjusted for the two-for-one stock split effective June 15, 2004, or the two-for-one stock split effective September 13, 199


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(39) In April 1992, the Company completed the sale of Hershey do Brasil Participacoes, a holdingcompany which owned a 41.7-percent equity interest in Petybon S.A., to the Bunge Born Groupfor approximately $7.0 million. Petybon S.A., located in Brazil, is a producer of pasta, biscuitsand margarine products. The sale resulted in a modest pre-tax gain and a reduction in theeffective income tax rate during the second quarter of 1992. See page 7, #14.

(40) In May 1992, the Company acquired an 18.6-percent interest in Freia Marabou a.s from Orklaa.s, a diversified Norwegian company for approximately $180 million. Freia Marabou is theleading Scandinavian chocolate, confectionery and snack food company. The investment wasaccounted for under the cost method. See page 6, #9.

On October 27, 1992, the Company withdrew its bid to acquire Freia Marabou a.s and tenderedits 18.6-percent interest to a subsidiary of Philip Morris Companies Inc. The Company recordeda gain on the sale of its interest in Freia Marabou in March 1993. The sale resulted in a pre-taxgain of $80.6 million and had the effect of increasing net income by $40.6 million. See page 6,#9.

(41) In January 1993, the Company purchased the remaining outstanding shares of Hershey JapanCo., Ltd. (Hershey Japan), owned by its joint-venture partner, Fujiya. Hershey Japan imports,markets, sells and distributes selected Hersheys chocolate and confectionery products in theJapanese market.

(42) In March 1993, the Company purchased certain assets of the Ideal Macaroni Company and theMrs. Weiss Noodle Company (Ideal/Mrs. Weiss) for approximately $14.6 million. Ideal/Mrs.Weiss are located in the Cleveland, Ohio area.

(43) On June 25, 1993, the Company announced that the Board of Directors had approved a sharerepurchase program to acquire from time-to-time in the open market, or through privately

negotiated transactions, up to $200 million of its Common Stock. The program commencedshortly after the July 21, 1993, release of second quarter results.

(44) On September 14, 1993, the Company completed the acquisition of the Italianconfectionery business of Heinz Italia S.p.A. The business is the leader in the Italian sugarconfectionery market and manufactures and markets a wide range of confectionery products,including sugar candies and traditional products for special occasions such as nougat and giftboxes. Products are marketed under the Sperlari,Dondi, and Scaramellini brands. Sales areapproximately U.S. $100 million and manufacturing facilities are located in Cremona andGordona in northern Italy. Its products are sold principally in the Italian market. The businesswas divested on December 30, 1996.


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(45) October 27, 1993, the Company completed the acquisition of Overspecht BV, a Dutchconfectionery concern which manufactures chocolate and sugar confectionery, baked goods andice cream products for distribution primarily to private-label customers within the Beneluxcountries. Sales are approximately U.S. $65 million and manufacturing facilities are located inOosterhout, the Netherlands and Ieper, Belgium. This business was divested in June 1995.

(46) On November 2, 1993, the Company purchased two million* of its Common Stock shares fromHershey Trust Company, as Trustee for Milton Hershey School. The Company paidapproximately $103.1 million in the transaction. This transaction is part of a $200-million stockrepurchase program currently being conducted through open market purchases and privatelynegotiated transactions.

(47) On November 18, 1993, the Company filed a shelf registration statement with the Securities andExchange Commission under which it may offer up to $400 million of debt securities.Combined with the $100 million outstanding from a shelf registration filed in June 1990, theCompany had the ability to issue up to $500 million of debt securities.

(48) On November 1, 1994, the Company recorded a pre-tax restructuring charge of $106.1 million,following a comprehensive review of domestic and foreign operations, designed to enhanceperformance of operating assets by lowering operating and administrative costs, eliminatingunderperforming assets and streamlining the overall decision-making process. The charge of$106.1 million resulted in an after-tax charge of $80.2 million or $.92* per share in 1994.

As of December 31, 1995, $81.8 million of restructuring reserves had been utilized and $16.7million had been reversed to reflect revisions and changes in estimates to the originalrestructuring program. The remaining $7.6 million of accrued restructuring reserves wereutilized in early 1996 as the final aspects of the restructuring program are completed.

(49) On August 4, 1995, the Company purchased 9,049,773* shares of its Common Stock from theHershey Trust Company. The Corporation paid $55.25* per share, or approximately $500million for the shares.

(50) In October 1995, the Company issued $200 million of 6.7% Notes due October 1, 2005. Theproceeds were used to repay short-term borrowings associated with the August 4, 1995, commonstock repurchase. As of December 31, 1995, $300 million of debt securities remained availablefor issuance under the Companys November 1993 Registration Statement.

* Not adjusted for the two-for-one stock split effective June 15, 2004, or the two-for-one stock split effective September 13, 199


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(51) On December 4, 1995, the Company announced an eleven-percent price increase on its standardand king-size bars in the U.S. This price increase, the first in almost five years, was initiated as aresult of increased costs for packaging, fuel, transportation, labor and benefits, as well asincreased raw material costs.

(52) In December 1995, the Company completed the acquisition of the Henry Heide confectionerybusiness, for approximately $12.5 million. Henry Heides headquarters and manufacturingfacility are located in New Brunswick, New Jersey, where it manufactures a variety of non-chocolate confectionery products including Jujyfruits candies, and Wunderbeans jellybeans.Sales for fiscal year ended September 1995 were approximately $20 million.

(53) In December 1995, the Company entered into definitive agreements with Johnvince Foods ofOntario, Canada, to sell the assets of Hershey Canadas Planters nut business, and with BetaBrands Inc., to sell the Life Savers and Breath Savers hard candy business. These divestitureswere completed in January 1996. See page 11, #29.

(54) On February 6, 1996, the Board of Directors of The Hershey Company approved a sharerepurchase program to acquire from time-to-time in the open market, or through privatelynegotiated transactions, up to $200 million of its Common Stock. The shares acquired by theCompany will be held as Treasury shares.

(55) On February 12, 1996, the Company signed an agreement to purchase the assets of KneislSchokoladen GmbH & Co. KG, a small German manufacturer of chocolate-covered fruits. Theagreement was completed in May 1996, and the Kneisl business was integrated into Guborsoperations. Kneisl had net sales of $8.2 million in 1995.

(56) On August 6, 1996, the Company declared a two-for-one stock split of its Common Stock and

Class B Common Stock effective September 13, 1996, to stockholders of record August 23,1996. See page 9, #20 and page 10, #24 for prior stock splits.

(57) On December 30, 1996, the Company acquired Huhtamakis Leaf North AmericanConfectionery operations for U.S. $440 million plus royalties. Correspondingly, Huhtamakiacquired Hersheys European confectionery interests, Guborand Sperlari, for a purchase priceof U.S. $110 million. Leaf confectionery products includeJolly Rancher, Whoppers, Milk Duds,Good & Plenty, Pay Day, Heath, Rainblo and Super Bubble. Both agreements were finalized onDecember 30, 1996. See page 12, #35 and page 13, #44.


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58) On March 11, 1997, the Company issued $150.0 million of 6.95% Notes due 2007 under theNovember 1993 Form S-3 Registration Statement. Proceeds from the debt issuance were used torepay a portion of the commercial paper borrowings associated with the Leaf acquisition. Inaddition, on March 10, 1997, the Company issued a $150.0 million, 2-1/2 year amortizing,floating-to-fixed interest rate swap, maturing on September 10, 1999.

(59) On June 10, 1997, the Company sold the Ford Gum and Machine Company, Inc. and CarouselBrands to Akron Confections, Inc. The Company acquired these assets as part of the December30, 1996, acquisition of Leaf North America.

(60) On August 8, 1997, the Company purchased 9,900,990* shares of its Common Stock from theHershey Trust Company. The Company paid $50.50 per share, or approximately $500 millionfor the shares.

(61) On August 21, 1997, the Company issued $250 million of 7.20% Debentures due 2027 and $150million of 6.95% Notes due 2012. Proceeds from the debt issuance were used to repay the short-term borrowings associated with the Common Stock purchase of August 8, 1997.

(62) On January 28, 1999, the Company announced the completion of the sale of its U.S. pastabusiness to New World Pasta. The sale includes theAmerican Beauty,Ideal, San Giorgio,Lightn Fluffy, P&R, Mrs. Weiss, Ronzoni, San Giorgio and Skinner pasta brands along with sixmanufacturing plants. As a result of the transaction, Hershey received $450 million in cash andretained a minority interest in the business. After-tax proceeds were approximately $340million. The transaction resulted in a one-time after-tax gain of $165 million, or $1.17 pershare* diluted, which was recorded in the first quarter of 1999.

(63) On February 16, 1999, the Board of Directors of The Hershey Company approved a sharerepurchase program to acquire from time-to-time in the open market, or through privately

negotiated transactions, up to $230 million of its Common Stock. This authorization wascompleted in February 2000, and a new $200 million authorization was initiated at that time.The shares acquired by the Company will be held as Treasury shares.

(64) In November, 1999, Hershey sold its aseptic packaging plant in Savannah, Georgia (Dairymens)and switched to a contract manufacturing agreement for aseptic drinks. This asset sale is part ofHersheys continuing effort to remove low return assets from its asset base.

In April 2002, the Company announced the licensing of its aseptically-packaged drink productsin the United States to Morningstar, a division of Suiza.

_________________________* Not adjusted for the two-for-one stock split effective June 15, 2004.


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(65) On May 1, 2000, the new 1.2 million square foot Eastern Distribution Center near Hershey, PAbegan receiving inbound product shipments. Outbound product shipments to customers began onJune 30, and full utilization was realized by the end of November 2000. Hersheys newlyrenovated 405,000 square-foot regional distribution center in Atlanta, GA, began shippingproduct on May 15, 2000.

(66) On December 15, 2000, the Company purchased Nabisco's intense and breath freshener mintsand gum businesses for $135 million. The purchase of Nabiscos business, which had 1999 salesof approximately $270 million, included Ice Breakers and Breath Savers CoolBlasts intensemints, Breath Savers mints, and Ice Breakers, Care*free, Stick*free, Bubble Yum and FruitStripe gums. Also included in the purchase was Nabisco's gum-manufacturing plant in LasPiedras, Puerto Rico.

(67) On August 1, 2001, the Company acquired the chocolate confectionery business of Visagis, aBrazilian confectioner, for $17.1 million. The acquisition includes a manufacturing plant andconfectionery equipment in Sao Roque, Brazil. The acquired brands, including I0-I0 and

Visconti, had 2000 sales of approximately $20 million.

(68) On September 5, 2001, the Company announced the completion of the sale of theLudens ThroatDrops business to Pharmacia Corporation for approximately $60 million. Included in the salewere the trademarks and manufacturing equipment for the throat drop business. The Companyrecorded a gain of $19.2 million before tax, $1.1 million, or $.01 per share-diluted* after tax, as aresult of the transaction. A higher gain for tax purposes reflected the low tax basis of theintangible assets included in the sale, resulting in taxes on the gain of $18.1 million.

(69) On October 24, 2001, the Company announced a pre-tax restructuring charge of $275 million, or$1.24 per share-diluted*, supporting initiatives to enhance the future operating performance of

the Company.

On January 8, 2002, the Company announced a higher realignment charge and additionalanticipated savings from its value-enhancing initiatives announced on October 24, 2001. As aresult, the business realignment charges will increase from $275 million to $310 million andfrom $1.24 to $1.39 per share-diluted*.

(70) On June 24, 2002, the Company announced the completion of the sale of a group of Hersheysnon-chocolate confectionery brands for $12 million. Included in the transaction were Heide,Jujyfruits, Wunderbeans, and Amazin Fruit trademarked confectionery brands, as well as therights to sell Chuckles-branded products, under license.

_________________________* Not adjusted for the two-for-one stock split effective June 15, 2004.


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(71) On July 25, 2002, Hershey Foods Corporation confirmed that the Milton Hershey SchoolTrust, which at the time, controlled 77% of the combined voting power of The HersheyCompanys Common Stock and Class B Common Stock, informed the Company that it haddecided to diversify its holdings and in this regard wanted The Hershey Company to explore asale of the entire Company. On September 17, 2002, the Milton Hershey School Trustinstructed the Company to terminate the sale process.

(72) On December 11, 2002, the Company announced a 10.8 percent price increase on its standardsize, king size, variety pack, and 6-pack lines. This is the first price change the Company hasmade on its standard size bars since 1996.

(73) On July 17, 2003, the Company announced realignment initiatives expected to result in a netcharge of $17 million, or $.08 per share-diluted*. The total impact of the initiatives will becash flow positive in 2003 and slightly accretive in 2004, resulting from expected savings ofapproximately $5 million, annually.

(74) On August 29, 2003, The Hershey Company announced that it had entered into a definitiveagreement for the sale of a group of gum brands for $20 million to Farleys & Sathers CandyCompany. Included in the transaction were Fruit Stripe chewing gum, Rain-Blo gum balls,and Super Bubble bubble gum trademarked brands.

(75) On April 22, 2004, Hershey declared a two-for-one stock split of its Common Stock and ClassB Stock effective June 15, 2004, to shareholders of record May 25, 2004. See page 9, #20;page 8, #24; and page 13, #56 for prior stock splits.

(76) In April 2004, the Company began charging its new 1,100,000 square-foot Mid-WestDistribution Center. Shipments to customers from this facility began later that month. This

concludes the consolidation and modernization of the Companys distribution system.

(77) In October 2004, the Companys Mexican Subsidiary, Hershey Mexico, acquired GrupoLorena, one of Mexicos top confectionery companies, for $39.0 million. This business hasannual sales of over $30 million. Included in the acquisition was the Pelon Pelo Rico brand.

(78) In December 2004, the Company acquired Mauna Loa Macadamia Nut Corporation (MaunaLoa) for $127.8 million. Mauna Loa is the leading processor and marketer of macadamiasnacks with annual sales of approximately $80 million.

_______________________

* Not adjusted for the two-for-one stock split effective June 15, 2004.


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(79) In December 2004, the Company announced an increase in the wholesale prices ofapproximately half of its domestic confectionery line. The changes represent a 3% priceincrease over Hersheys entire domestic product line and will help offset increases in theCompanys input costs.

(80) In April 2005, Hersheys Board of Directors approved an authorization to acquire up to $250million of Hersheys Common Stock.

(81) In April 2005, the Companys stockholders approved an increase in the number of authorizedshares of the Common Stock from 450 million to 900 million shares and the Class B CommonStock from 75 million to 150 million shares.

(82) In April 2005, the Company announced that its stockholders approved the company namechange from Hershey Foods Corporation to The Hershey Company. The new name reflects theCompanys rich heritage and expresses how consumers and customers best know it.

(83) In July 2005, the Company announced an estimated pre-tax business realignment charge of$140 $150 million, or $0.35 - $0.38 per share-diluted, supporting initiatives to enhance thefuture operating performance of the Company. Included are a voluntary workforce reductionthrough an Early Retirement Program and an Enhanced Mutual Separation Program,streamlining and creating new capabilities in Hersheys North American operations, andclosure of the Companys under-utilized Las Piedras, Puerto Rico manufacturing facility.

(84) In August 2005, the Company announced that its newly formed, wholly owned subsidiary,Artisan Confections Company, has acquired the assets of Joseph Schmidt Confections, Inc.Hershey also completed the acquisition of Scharffen Berger Chocolate Maker, Inc. Thecombined purchase price for Scharffen Berger and Joseph Schmidt will be between $46.6million and $61.1 million, with the final amount reflecting actual sales growth through 2007.

Together, these companies have combined annual sales of approximately $25 million.

(85) In December 2005, the Company announced that its Board of Directors had approved anadditional $500 million stock repurchase authorization. The Company continues to execute the$250 million buyback authorized in April 2005 and expects to complete both authorizations bythe end of 2006.

In this connection, The Company and Hershey Trust Company, as trustee for the MiltonHershey School Trust (School Trust), have entered into an agreement under which the SchoolTrust intends to participate on a proportional basis in the Company's stock purchases.


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(86) In December 2005, the Company announced that it intends to begin expensing employee stockoptions and other share-based compensation in accordance with Financial AccountingStandards Board Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment ("SFAS No. 123R"), under the modified retrospective method effective in thefourth quarter of 2005. Under the modified retrospective method, the full-year results for 2005will be reported as though stock options granted by the Company had been expensed beginningJanuary 1, 2005.

Under the modified retrospective method, the financial statements for years prior to 2005 willbe adjusted to reflect the impact of the adoption of SFAS No. 123R. The impact of adoption ofSFAS No. 123R in 2005 was $0.09 per share-diluted, of which approximately $0.03 per share-diluted was recorded in the fourth quarter.

(87) The Company and Hershey Trust Company, as trustee for the Milton Hershey SchoolTrust, announced on January 27, 2006, that they have entered into an agreement under whichthe School Trust intends to participate on a proportional basis in the Company's Common

Stock repurchase program. This agreement will take effect January 30, 2006, and expire July31, 2006. This agreement is a renewal of an existing agreement which began December 13,2005, and expiring January 30, 2006. The terms of the agreement are described in a Form 8-Kfiled with the SEC.

The Company's Board of Directors had approved the repurchase of $250 million of itsCommon Stock in April 2005, of which $187.1 million was utilized through the end of 2005,leaving $62.9 million in that authorization. An additional $500 million authorization wasapproved by the Company's Board in December 2005. The Company expects to complete bothauthorizations by the end of 2006.

(88) In May 2006, the Company announced the establishment of the Hershey Center forHealth and Nutrition. The Center will direct cutting-edge scientific research to developproducts and technologies providing customers with health benefits in the areas of heart health,weight management, and mental and physical energy. The Center will build upon the science,clinical studies and research work already underway at The Hershey Company.

(89) In July, 2006, the Company and Hershey Trust Company, as trustee for the Milton HersheySchool Trust, announced that they have entered into an agreement under which the SchoolTrust intends to continue to participate on a proportional basis in the Company's CommonStock repurchase program. This agreement will take effect July 31, 2006, and expire February2, 2007. This agreement is a renewal of an existing agreement which began January 30, 2006,

and expired July 31, 2006. The terms of the agreement are described in a Form 8-K to be filedtoday with the SEC.

(90) In October, 2006, the Company, as part of its strategic focus on the high-growth premiumchocolate segment, announced that it has acquired the assets and operations of Dagoba Organic


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Chocolate, LLC. Based in Ashland, Oregon, Dagoba is known for its high-quality natural andorganic chocolate bars, hot chocolate and chocolate-covered coffee beans sold in natural foodsoutlets and gourmet stores.

(91) In December, 2006, the Company announced that its Board of Directors approved a $250million stock repurchase authorization. The Company expects to complete its currentrepurchase authorization of $500 million by the end of 2006. Purchases under the newauthorization will commence after the current program is completed. Acquired shares of theCommon Stock will be held as treasury shares.

(92) In January 2007, the Company announced a manufacturing joint venture in China with LotteConfectionery Co., Ltd., Koreas leading confectionery and ice cream manufacturer. The jointventure will produce Hershey and Lotte products for the market in China.

(93) On February 15, 2007, the Company announced a comprehensive, three-year supply chaintransformation program that is expected to be completed by December 31, 2009. Uponcompletion, this program will greatly enhance our manufacturing, sourcing and customer

service capabilities, and will generate significant resources to invest in our growth initiatives.These initiatives include accelerated marketplace momentum within our core U.S. business,creation of innovative new product platforms to meet consumer and customer needs, anddisciplined global expansion.

Under the program, which we will implement in stages over the next three years, we willsignificantly increase manufacturing capacity utilization by reducing the number of productionlines by more than one-third; outsource production of low value-added items; and, construct aflexible, cost-effective production facility in Monterrey, Mexico to meet current and emergingmarketplace needs.

We estimate that the program will incur pre-tax charges and non-recurring projectimplementation costs of $525 million to $575 million over the next three years. This estimateincludes $275 million to $300 million in asset write-offs, $200 million to $225 million inemployment-related costs, including the impact of curtailment charges associated with ourpension and other post-retirement benefit plans, and approximately $50 million in projectimplementation costs. We will incur these charges primarily in 2007 and 2008, withapproximately $300 million expected to be charged in 2007. We estimate the cash portion ofthe total charge to be $275 million to $300 million.

This initiative also includes gross capital investments of $300 million to $310 million. Capitalinvestments over the implementation period are expected to be approximately $200 million

more than previous expectations of $190 million to $200 million per year, resulting in totalcapital expenditures of $250 million to $300 million in 2007 and $225 million to $250 millionin 2008 and 2009. Following completion of this initiative, we expect annual capitalinvestments of approximately $140 million to $160 million. As a result of the program, weestimate that our gross margin should improve significantly, with on-going annual savings ofapproximately $170 million to $190 million generated by 2010.


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On January 27, 2009, the Company announced that the scope of the Global Supply ChainTransformation program increased modestly to include the closure of two subscalemanufacturing facilities of Artisan Confections Company, a wholly owned subsidiary, andconsolidation of the associated production into existing U.S. facilities, along withrationalization of other select items. These initiatives, which will be completed in 2009,increase the expected total cost and savings of the Global Supply Chain Transformationprogram by approximately $25 million and $5 million, respectively. Approximately $15million of the increased costs are non-cash charges.

Cumulative savings for the Global Supply Chain Transformation program are approximately$81 million and the estimate for total ongoing annual savings by 2010 is $175 million to $195million.

On April 23, 2009, the Company updated the forecast for total GSCT charges to $615 millionto $665 million to include $40 million to $65 million of non-cash pension settlement charges.Per SFAS No. 88, incremental pension settlement charges were added to the total GSCTprogram estimates based upon the current trends of year-to-date employee withdrawals. The

projected amount to be incurred in 2009 is $40 million to $50 million.

(94) On April 3, 2007, the Company announced the formation of a joint venture with GodrejBeverages and Foods, Ltd. to manufacture and distribute confectionery products, snacks, andbeverages across India.

The agreement gives Hershey a 51 percent ownership stake in a joint venture that hasapproximately $70 million in annual net sales, primarily in sugar confectionery and beverages.The combination will leverage Godrejs manufacturing and distribution network with Hersheybranded product manufactured in-country and distributed to over 1.6 million outlets in India.

(95) On April 4, 2007, the Company announced an increase in the wholesale prices of its domesticconfectionery line. An increase of approximately 4 5 percent on the Companys standardbar, king-size bar, 6-pack and vending lines is effective immediately. These products representroughly one-third of the Companys portfolio. This action will help offset the Companysinput costs, including raw materials, fuel, utilities and transportation. While there has been nochange in list prices on these impacted items since December 2004, over this period costs havecontinued to rise.

(96) On April 26, 2007, the Company announced a strategic supply and innovation partnership withBarry Callebaut, the worlds largest manufacturer of high-quality cocoa, industrial chocolate,and confectionery products.


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The companies will partner on a wide range of research and development activities with afocus on driving innovation in new chocolate taste experiences, premium chocolate, health andwellness, ingredient research and optimization.

Under the agreement, Barry Callebaut will construct and operate a facility to provide chocolatefor Hersheys new plant in Monterrey, Mexico. Barry Callebaut will also lease a portion ofHersheys Robinson, Ill., plant and operate chocolate-making equipment at the facility. Thepartnership includes a long-term global agreement under which Barry Callebaut will supplyHershey with a minimum of 80,000 tonnes per year of chocolate and chocolate products.

(97) In May, 2007, the Company entered into a manufacturing agreement in China with LotteConfectionery Co., LTD., to produce Hershey products and certain Lotte product for themarket in China. An investment of $39.0 million was made in 2007 for a 44% interest.

(98) On January 24, 2008 the Company announced the formation of a joint venture in Brazil withPandurata Alimentos Ltda (manufacturer of products sold in Brazil and Latin America underthe Bauducco brand) to manufacture, sell and distribute Hersheys branded products acrossBrazil using the Bauducco distribution network.

(99) On January 28, 2008, the Company announced an increase in the wholesale prices onapproximately one-third of its domestic confectionery line. The changes represented aweighted average 13% increase on the Company's standard bar, king-size bar, 6-pack andvending lines and approximated a 3% price increase over Hershey's entire domestic productline. The price increase will help offset increases in areas of the Company's input costs,including raw materials, fuel, utilities, and transportation.

(100) On August 15, 2008, the Company announced an increase in wholesale prices across its U.S.,Puerto Rico and export chocolate and sugar confectionery lines. These changes represented a

weighted average 11% increase on the Companys instant consumable, multi-pack andpackaged candy lines, and approximated a 10% increase over Hersheys entire domesticproduct line. The price increase will help offset a portion of the significant increases in theCompanys input costs, including raw materials, packaging materials, fuel, utilities, andtransportation.

(101) Effective February 28, 2009 the Company licensed the Van Houten brand from BarryCallebaut. Specifically, Hershey has a perpetual and exclusive license of the Van Houten brandname and related trademarks in Asia Pacific, the Middle East and Australia/New Zealand forconsumer products. Founded in 1990, Van Houten Singapore successfully develops andmarkets popular consumer chocolate products throughout Asia. This acquisition complementsthe Company's existing business in Asia and gives Hershey an immediate in-market presencein several high-potential markets, including Malaysia and Indonesia. The investment wasabout $15 million, or approximately 1-times sales.


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(102) On June 14, 2010, the Company announced the Project Next Century initiative as part of theCompanys ongoing efforts to create an advantaged supply chain and competitive coststructure. The Next Century capital investment includes a $200 million to $225 million plantexpansion of the existing West Hershey facility and approximately $50 million to $75 millionin distribution and administrative facilities located in Hershey, Pennsylvania. As part of theproject, production will transition from the Companys century-old facility at 19 EastChocolate Avenue in Hershey, Pennsylvania, to a planned expansion of the West Hersheyfacility, which was built in 1992. Production from the 19 East Chocolate Avenue plant, as wellas a portion of the workforce, will be relocated to the West Hershey facility. This change isexpected to result in the reduction of approximately 500 to 600 jobs as investments intechnology and automation result in enhanced efficiency in the new building.

The Company estimates that Project Next Century program will incur pre-tax charges and non-recurring project implementation costs of $140 million to $170 million over the next threeyears. This estimate includes $120 million to $150 million in pre-tax business realignment andimpairment charges and approximately $20 million in project implementation and start-upcosts. The cash portion of the total charge is estimated to be $95 million to $110 million,

including project implementation and start-up costs. Total capital expenditures related to theprogram are expected to be $250 million to $300 million. At the conclusion of the program in2014, ongoing annual savings are expected to be approximately $60 million to $80 million.

(103) On March 30, 2011, the Company announced an increase in wholesale prices across its U.S.,Puerto Rico and export chocolate and sugar confectionery lines. These changes represented aweighted average 9.8% increase on the Companys instant consumable, multi-pack packagedcandy and grocery lines. The price increase will help offset a portion of the significant increasesin the Companys input costs, including raw materials, packaging materials, fuel, utilities, andtransportation that the Company expects to incur in the future.


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The Hershey Company

Summary of Consolidated Statements of Income - GAAP

for the three months ended April 3, 2011 and April 4, 2010

(in thousands except per share amounts)

First Quarter

2011 2010

Net Sales $ 1,564,223 $ 1,407,84

Costs and Expenses:

Cost of Sales 908,038 813,86

Selling, Marketing and Administrative 377,798 340,64Business Realignment and Impairment

Charges, net 1,838 --

Total Costs and Expenses 1,287,674 1,154,50

Income Before Interest and Income Taxes (EBIT) 276,549 253,33

Interest Expense, net 24,477 23,74

Income Before Income Taxes 252,072 229,58

Provision for Income Taxes 91,957 82,19

Net Income $ 160,115 $ 147,39

Net Income Per Share - Basic - Common $ 0.72 $ 0.6

- Basic - Class B $ 0.65 $ 0.6

- Diluted - Common $ 0.70 $ 0.6

Shares Outstanding - Basic - Common 166,452 167,25

- Basic - Class B 60,682 60,70

- Diluted - Common 230,194 229,55

Key Margins:

Gross Margin 41.9% 42.2%

EBIT Margin 17.7% 18.0%

Net Margin 10.2% 10.5%


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The Hershey Company

Summary of Consolidated Statements of Income Pro Forma

for the three months ended April 3, 2011 and April 4, 2010(in thousands except per share amounts)

First Quarter

2011 2010

Net Sales $ 1,564,223 $ 1,407,84

Costs and Expenses:

Cost of Sales 901,179 813,86Selling, Marketing and Administrative 376,784 340,64

Total Costs and Expenses 1,277,963 1,154,50

Income Before Interest and Income Taxes (EBIT) 286,260 253,33

Interest Expense, net 24,477 23,74

Income Before Income Taxes 261,783 229,58

Provision for Income Taxes 95,551 82,19

Net Income $ 166,232 $ 147,39

Net Income Per Share - Basic - Common $ 0.75 $ 0.6

- Basic - Class B $ 0.68 $ 0.6

- Diluted - Common $ 0.72 $ 0.6

Shares Outstanding - Basic - Common 166,452 167,25

- Basic - Class B 60,682 60,70

- Diluted - Common 230,194 229,55

Key Margins:

Gross Margin 42.4% 42.2%

EBIT Margin 18.3% 18.0%

Net Margin 10.6% 10.5%


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SIX-YEAR CONSOLIDATED FINANCIAL SUMMARYAll dollar and share amounts in thousands except market price

and per share statistics

Page 27

5-YearCompound

Growth Rate 2010 2009 2008 2007 2006 2005Summary of OperationsNet Sales 3.3% $ 5,671,009 5,298,668 5,132,768 4,946,716 4,944,230 4,819,827

Cost of Sales 1.9% $ 3,255,801 3,245,531 3,375,050 3,315,147 3,076,718 2,956,682Selling, Marketing andAdministrative 9.3% $ 1,426,477 1,208,672 1,073,019 895,874 860,378 912,986Business Realignment andImpairment Charges, Net (2.9)% $ 83,433 82,875 94,801 276,868 14,576 96,537Interest Expense, Net 1.9% $ 96,434 90,459 97,876 118,585 116,056 87,985Provision for Income Taxes 1.5% $ 299,065 235,137 180,617 126,088 317,441 277,090

Net Income 0.9% $ 509,799 435,994 311,405 214,154 559,061 488,547

Net Income Per Share:BasicClass B Stock 2.4% $ 2.08 1.77 1.27 .87 2.19 1.85DilutedClass B Stock 2.4% $ 2.07 1.77 1.27 .87 2.17 1.84BasicCommon Stock 2.2% $ 2.29 1.97 1.41 .96 2.44 2.05DilutedCommon Stock 2.3% $ 2.21 1.90 1.36 .93 2.34 1.97

Weighted-Average SharesOutstanding:

BasicCommon Stock167,032 167,136 166,709 168,050 174,722 183,747

BasicClass B Stock60,708 60,709 60,777 60,813 60,817 60,821

Diluted230,313 228,995 228,697 231,449 239,071 248,292

Dividends Paid on CommonStock 4.6% $ 213,013 198,371 197,839 190,199 178,873 170,147

Per Share 6.6% $ 1.28 1.19 1.19 1.135 1.03 .93Dividends Paid on Class B Stock 6.6% $ 70,421 65,032 65,110 62,064 56,256 51,088

Per Share 6.7% $ 1.16 1.0712 1.0712 1.0206 .925 .84Net Income as a Percent of NetSales, GAAP Basis 9.0% 8.2% 6.1% 4.3% 11.3% 10.1%Non-GAAP Adjusted Income as a

Percent of Net Sales(a) 10.4% 9.4% 8.4% 9.7% 11.5% 11.7%Depreciation (3.2)% $ 169,677 157,996 227,183 292,658 181,038 200,132Advertising 25.6% $ 391,145 241,184 161,133 127,896 108,327 125,023Payroll (0.2)% $ 641,756 613,568 645,456 645,083 645,480 647,825Year-end Position and StatisticsCapital Additions (0.2)% $ 179,538 126,324 262,643 189,698 183,496 181,069Capitalized Software Additions 10.6% $ 21,949 19,146 20,336 14,194 15,016 13,236Total Assets 0.0% $ 4,272,732 3,675,031 3,634,719 4,247,113 4,157,565 4,262,699Short-term Debt and CurrentPortion of Long-term Debt (19.0)% $ 285,480 39,313 501,504 856,392 843,998 819,115Long-term Portion of Debt 10.3% $ 1,541,825 1,502,730 1,505,954 1,279,965 1,248,128 942,755Stockholders' Equity (1.6)% $ 937,601 760,339 349,944 623,520 683,423 1,016,380Full-time Employees

11,300 12,100 12,800 12,400 12,800 13,750Stockholders' DataOutstanding Shares of CommonStock and Class B Stock at Year-

end 227,030 227,998 227,035 227,050 230,264 240,524Market Price of Common Stock atYear-end (3.1)% $ 47.15 35.79 34.74 39.40 49.80 55.25Range During Year

$52.10-35.76 42.25-30.27 44.32-32.10 56.75-38.21 57.65-48.20 67.37-52.49

___________________

(a) Non-GAAP Adjusted Income as a Percent of Net Sales is calculated by dividing adjusted non-GAAP Income by Net Sales. A reconciliation of Net Income presaccordance with U.S. generally accepted accounting principles ("GAAP") to adjusted non-GAAP Income is provided on pages 20 and 21, along with the reasonbelieve that the use of adjusted non-GAAP financial measures provides useful information to investors.


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Year 2010 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year

Net Sales 1,407,843$ 1,233,242 1,547,115 1,482,809 5,671,009

EBIT 253,334$ 124,424 299,648 227,892 905,298

Net Income 147,394$ 46,723 180,169 135,513 509,799

Net Income per Share - Diluted(a)

0.64$ 0.20 0.78 0.59 2.21


Net Sales 1,236,031$ 1,171,183 1,484,118 1,407,336 5,298,668

EBIT 152,934$ 116,676 279,624 212,356 761,590

Net Income 75,894$ 71,298 162,023 126,779 435,994


0.33$ 0.31 0.71 0.55 1.90


Net Sales 1,160,342$ 1,105,437 1,489,609 1,377,380 5,132,768

EBIT 122,418$ 94,113 219,951 153,416 589,898

Net Income 63,245$ 41,467 124,538 82,155 311,405


0.28$ 0.18 0.54 0.36 1.36


Net Sales 1,407,843$ 1,233,242 1,547,115 1,482,809 5,671,009

EBIT 253,334$ 210,657 304,106 235,771 1,003,868

Net Income 147,394$ 117,047 182,918 140,375 587,734Net Income per Share - Diluted

(a)0.64$ 0.51 0.79 0.61 2.55


Net Sales 1,236,031$ 1,171,183 1,484,118 1,407,336 5,298,668

EBIT 171,906$ 159,367 290,640 238,808 860,721

Net Income 85,992$ 97,965 168,508 144,352 496,817


0.38$ 0.43 0.73 0.63 2.17


Net Sales 1,160,342$ 1,105,437 1,489,609 1,377,380 5,132,768

EBIT 153,091$ 133,369 250,981 233,127 770,568Net Income 83,915$ 66,952 145,813 133,842 430,522


0.37$ 0.29 0.64 0.59 1.88

* 2010, 2009 and 2008 Pro Forma excludes charges (credits) for business realignment initiatives.

weighted-average shares outstanding during the year.

(a) Quarterly income per share amounts may not total to the annual amounts due to the impact of changes in

AS REPORTED

PRO FORMA*

Summary of Quarterly Data

For the years ended December 31, 2010, 2009 and 2008

(in thousands of dollars except per share amounts)

Page 28


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The Hershey Company

Page 29

NON-GAAP EPS

NON-GAAP* GAAP

2010 $2.55 $2.212009 $2.17 $1.90

2008 $1.88 $1.36

2007 $2.08 $0.93

2006 $2.37 $2.34

2005 $2.27 $1.97

2004 $2.00 $2.24

2003 $1.72 $1.66

2002 $1.54 $1.43

* Excludes business realignment and other non-recurring items.

All years have been adjusted to reflect the adoption of SFAS 123Rand SAB No. 108.


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The Hershey Company

Capitalization

Long-Term Debt: Q1-11 2010 2009 2008 20

(in thousands of dollars)

5.30% Notes Due 2011 250,000 250,000 250,000 250,000 250,

6.95% Notes Due 2012 92,533 92,533 150,000 150,000 150,5.00% Notes Due 2013 250,000 250,000 250,000 250,0004.85% Notes Due 2015 250,000 250,000 250,000 250,000 250,5.45% Notes Due 2016 250,000 250,000 250,000 250,000 250,

4.125% Notes Due 2020 350,000 350,000 - - 8.8% Debentures Due 2021 100,000 100,000 100,000 100,000 100,

7.20% Debentures Due 2027 250,000 250,000 250,000 250,000 250,

Capitalized lease obligations - - - - Other obligations, net discounts 9,422 10,684 17,977 24,338 36,

1,801,955 1,803,217 1,517,977 1,524,338 1,286

Less--current portion (261,031) (261,392) (15,247) (18,384) (6,

TOTAL LONG-TERM DEBT 1,540,924 1,541,825 1,502,730 1,505,954 1,279

Stockholders' Equity: *

Common Stock 299,269 299,195 299,192 299,190 299

Class B Common Stock 60,632 60,706 60,709 60,711 60

Add'l. paid-in capital 438,371 434,865 394,678 352,375 335

Accum. Other Comprehensive Income (205,740) (215,067) (202,844) (359,908) (27,Retained Earnings 4,458,210 4,374,718 4,148,353 3,975,762 3,927

Treasury Stock (4,175,325) (4,052,101) (3,979,629) (4,009,931) (4,001

The Hershey CompanyStockholders' Equity 875,417 902,316 720,459 318,199 592

Non-Controlling Interests in Subsidiaries 33,567 35,285 39,880 31,745 30,

TOTAL STOCKHOLDERS' EQUITY 908,984 937,601 760,339 $349,944 $623

Total Capitalization 2,449,908 2,479,426 2,263,069 1,855,898 1,903

Long-Term Debt 62.9% 62.2% 66.4% 81.1% 67Stockholders' Equity 37.1% 37.8% 33.6% 18.9% 32

Total Capitalization 100% 100% 100% 100% 1

* Restated for the effects of FAS 123

Year-End

Page 30


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The Hershey Company

USA:

Bank of America $200 million $200 million

UBS 200 200

Citibank, N.A. 160 160

PNC Bank, N.A. 85 85

Sumitomo Mitsui Banking Corp. 85 85

Barclays Bank PLC 80 80

Northern Trust Company 75 75

US Agricultural Bank 75 75

J.P. Morgan Chase 50 50

Canadian Imperial Bank of Commerce 50 50

Scotiabanc 20 20

US Bank, N.A. 20 20

Total $ 1,100 millionTotal

Foreign Credit Lines: (local currency)

*THC's guaranty

Hershey Canada Inc. - CAD

Canadian Imperial Bank of Commerce* 10 m 10.4 m

*THC's guaranty for C$ 21,000,000

Hershey Mexico S.A. de C.V. - MXN

Banamex* 200 m 16.9 m

*THC's guaranty

Hershey do Brasil Ltda. - BRL

Citibank N.A.* 16 m 9.9 m

*THC's guaranty 51%, Bauducco 49%

Banco Itau ** 8 m 5.0 m

Bradesco ** 12 m 7.4 m

** Bauducco guaranty 100%

Hershey Philippines Inc. - PHP 36 m 22.3 m

Citibank N.A.* 113.4 m 2.6 m

*THC's guaranty

Hershey Foods Int'l. Trade (Shanghai)


J.P. Morgan 65.5 m 10.0 m

*THC's guaranty

Hershey Commercial (Shanghai) Co., Ltd.20.0 m


*THC's guaranty

Godrej - Hershey Foods & Beverages, Ltd.

AXIS Bank 150 m 3.4 m

Hershey Singapore Pte.

Citibank N.A. 0.4 m 0.3 m*THC's guaranty

TOTAL FOREIGN LINES US$ EQUIVALENT

Commercial Paper Standard & Poor's Corporation A1Moody's Investors Service, Inc. P1

Long Term Bonds and Debentures Standard & Poor's Corporation A

Moody's Investors Service, Inc. A2

Expires December 2012

FINANCING ARRANGEMENTS

Lines of Credit - April 3, 2011

$1.1 billion (U.S. $)

78.9 m

Total

U.S. $ Equivalent

Page 31


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The Hershey Company

Page 32

Long-Term FinancialStrategy/Objectives

Net Sales 3 - 5%

EPS* 6 - 8%

*Diluted excluding items affecting comparability.


33/57

The Hershey Company

Capital expenditures (including software)

$143

$170

1999 2000 20022001

$237

1998

$141

$204

$m

$145

2003 2004

$196 $194

2005

$199

2006 2007

$204

2008

$283

$145

2009

$201

2010

***

Operating Depreciation and Amortization$m

$176

$190

1999 2000 20022001

$178

1998

$163$158

$181

2003 2004

$190

2005

$218

$200

2006 2007

$202*

Reported D&A was $311 million and included accelerated D&A of $109 million.

$190**

2008

Reported D&A was $250 million and included accelerated D&A of $ 60 million.

2009

$178***

Reported D&A was $182 million and included accelerated D&A of $ 4 million.***Reported D&A was $197 million and included accelerated D&A of $ 12 million.****

$185****

2010

Page 33


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The Hershey Company

203 . 9

2 8 3 . 0

145.5

201

456 . 2415.5

401.6

421.7

312.3324 . 7

143.0

169.9

144.5

2 3 7 . 0 195.9

194.3

4 3 3 . 6

198.5

4 0 8 . 9

484 . 9

283

6 5 6 . 8

263 . 4

2 6 2 . 946 . 3

386 . 1

171.2

313.0

154.8

124.3

322 . 6

2 8 9 . 6

252 . 32 3 5 . 1221.2205 . 7

184.7

167.8144.9

381.7

416.5

Cash Flow Analysis

2000 2001 2002 2003 2004

Cash Flow from Operation

Dividends

CAP X including Software

($ Millions)

2005 2006 2007

287.9

412.2

706.4

625.3592.9

787.7

723.2

461.8

2008

778.8

519.6545.9

1,065.7

2009 2010

901.4

Page 34


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The Hershey Company

Common Stock Repurchases

Year Shares $Millions

Repurchase History

Avg. Price $27.66 per Share

Shares have been restated to reflect the two-for-one splits effective9/13/96 and 6/15/04.

* August 4, 1995, August 8, 1997, February 25, 1999, and July 28, 2004:Privately negotiated transactions with the Milton Hershey School Trust.

1993 10,292,400 131.21994 3,512,156 40.31995 1,890,564 26.21995* 36,199,092 500.01996 3,180,420 66.11997 216,520 7.7

1997* 19,801,980 500.01998 630,178 16.11999 7,797,200 218.01999* 3,159,558 100.02000 4,569,078 99.92001 1,353,200 40.32002 2,600,690 84.22003 9,848,400 329.42004 2,632,500 115.62004* 11,281,589 501.42005 4,153,228 242.12006 10,601,482 562.92007 2,915,665 150.02008 -- --2009 -- --2010 -- --2011 YTD 1,902,753 100.0

138,538,653 3,831.4

Page 35


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The Hershey Company

Repurchase History

Milton Hershey School Trust

Nov 1986* 15,300,000 86.9

Nov 1993 8,000,000 103.1

Aug 1995 36,199,092 500.0

Aug 1997 19,801,980 500.0

Feb 1999 3,159,558 100.0

July 2004 11,281,589 501.4

Dec 2005 68,728 3.9

YTD 12/31/06 689,704 38.5

94,500,651 $1,833.8

Average cost: $19.41 per share.

Date Shares $Millions

38

* The Trust also sold 10,350,000 shares in a secondary offering on the same date.

Common Stock Repurchases

10 0

12 0

14 0

16 0

18 0

20 0

22 0

24 0

26 0

28 0

30 0

32 0

34 0

36 0

38 0

9 2 9 3 9 4 9 5 9 6 9 7 9 8 9 9 0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0

361350

347

309 306

286 286277 273 271 268

259247

**Shares have been restated to reflect the two-for-one stock splits effective 9/13/96 and 6/15/04.

Year-end shares outstanding

241

227 227230 228

227

Page 36


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The Hershey Company

Economic - ROIC

15.2%

14.0%

15.3%

16.3%16.9%

17.8%

1998 1999 2000 2001 2002 2003 2004

19.3%

2005

20.0%

2006

18.9%

2007

16.5%

2008

14.1%

2009

16.1%

2010

18.3%

Economic ROIC measures EVA in a percentage format.

EROIC is calculated by dividing net operating profit after taxes

(NOPAT) by the average invested capital.

Page 37


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The Hershey Company

Market Summary 2010 2009 2008 2007 2006

Outstanding Shares of Common

Stock and Class B Common

Stock at Period-End (000) 227,030 227,998 227,035 227,050 230,264

Avg. Number of Shares of Common

Stock and Class B Common Stock

Outstanding YTD (000)

Basic 227,740 227,845 227,486 228,863 235,539

Diluted 230,313 228,995 228,697 231,449 239,071

Market Price of Common Stock

at End of Period 47.15 35.79 34.74 39.40 49.80

Range (YTD) Low 35.76 30.27 32.10 38.21 48.20

High 52.1 42.25 44.32 56.75 57.65

Number of Common Stock and

Class B Common Stock Holders

at Year-End 39,132 39,967 40,549 40,901 41,076

Year-End Book Value Per Share 4.13 3.33 1.54 2.75 2.97

Year-End Market to Book 1,142 1,073 2,254% 1,435% 1,677%

Dividends Paid Per Share (YTD)

Common Stock 1.2800 1.1900 1.1900 1.1350 1.0300

Class B Common Stock 1.1600 1.0712 1.0712 1.0206 0.9250

Year-End Yield on Dividends Paid 2.71% 3.32% 3.43% 2.88% 2.07%

Payout Ratio - Continuing Operations 48% 53% 61% 52% 41%

Page 38


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The Hershey Company

Page 39

Common Stock Price Ranges*The following table indicates the high, low and closing market prices of The Hershey Company's

Common Stock through March 31, 2011.Composite Market Price

High Low Close

1980 1.09 0.84 0.97

1981 1.72 0.97 1.50

1982 2.47 1.34 2.34

1983 2.91 2.03 2.63

1984 3.44 2.34 3.22

1985 4.59 2.91 4.28

1986 7.50 3.88 6.16

1987 9.44 5.19 6.13

1988 7.16 5.47 6.50

1989 9.22 6.19 8.97

1990 9.91 7.06 9.38

1991 11.13 8.78 11.09

1992 12.09 9.56 11.75

1993 13.97 10.88 12.25

1994 13.38 10.41 12.09

1995 16.97 12.00 16.25

1996 25.88 15.97 21.88

1997 31.94 21.06 30.97

1998 38.19 29.84 31.09

1999 32.44 22.88 23.72

2000 33.22 18.88 32.19

2001 35.08 27.57 33.85

2002 39.75 28.23 33.72

2003 39.33 30.35 38.50

2004 56.75 37.28 55.54

2005 67.37 52.49 55.25

2006 1st Quarter 55.44 50.62 52.23

2nd Quarter 57.65 48.20 55.07

3rd Quarter 57.30 50.48 53.454th Quarter 53.60 48.96 49.80

2007 1st Quarter 56.37 49.70 54.66

2nd Quarter 56.75 49.81 50.62

3rd Quarter 51.29 44.03 46.41

4th Quarter 47.41 38.21 39.40

2008 1st Quarter 39.45 33.54 37.67

2nd Quarter 40.75 32.47 32.78

3rd Quarter 44.32 32.31 39.54

4th Quarter 40.55 32.10 34.74

2009 1st Quarter 38.23 30.27 34.75

2nd Quarter 37.83 33.70 36.00

3rd Quarter 42.25 35.78 38.86

4th Quarter 41.62 35.05 35.79

2010 1st Quarter 43.58 35.76 42.81

2nd Quarter 52.10 42.79 47.933rd Quarter 51.67 45.31 47.59

4th Quarter 51.75 45.66 47.15

2011 1st Quarter 55.05 46.24 54.35

*Adjusted for the two-for-one split effective June 15, 2004, the two-for-one stock split effective September 13, 1996,

the three-for-one stock split effective September 15, 1986, and the two-for-one stock split effective September 15, 1983.


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The Hershey Company

MANAGEMENT TEAM

Chief Executive Officer

David J. West President and Chief Executive Officer

Hershey Executive Team

Humberto P. Alfonso Senior Vice President,

Chief Financial Officer

C. Daniel Azzara Senior Vice President,Global Research & Development

John P. Bilbrey Executive Vice President,Chief Operating Officer

Michele G. Buck Senior Vice President,

Global Chief Marketing Officer

Javier H. Idrovo Senior Vice President,Strategy & Business Development

Terence L. ODay Senior Vice President,Global Operations

Burton H. Snyder Senior Vice President,General Counsel and Secretary

Page 40


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The Hershey Company

OPERATIONS

THE HERSHEY COMPANY: U.S.A.

The U.S. confectionery industry was approximately $18.6 billion in 2009 at wholesale (including gum).Hershey is the market leader in chocolate confectionery in the United States. Using Department ofCommerce data per below, the total U.S. confectionery industry demonstrates a 9-year compound annualgrowth rate of 2.4%. The chocolate category grew at 2.7%. Non-chocolate grew at 1.9%.

Total ConfectioneryApparent Consumpt ion in Dollars (bill ions)

2000-2009

Source: US Department of Commerce, IBI updated 11/2010

Note: Apparent Consumption = Manufacturer Shipments Exports + Imports

8.6 8.6 8.810.0 10.3 10.2 10.2 10.6 10.9

4.9 4.8 4.95.0

5.4 5.7 5.8 5.75.6 5.8

1.6 1.8 1.81.8

1.9 1.71.8 1.6 1.9

1.9

9.4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Chocolate Sugar Conf. Gum

$15.0 $15.1 $15.4$16.3

$17.3$17.6 $17.8 $18.1$17.5

$18.6

Page 41


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The Hershey Company

Total ConfectioneryApparent Consumption In Pound s (bill ions)

2000 - 2009

3.3 3.2 3.4 3.4 3.6 3.6 3.5 3.4 3.5

3.1 2.9 2.93.0 3.1

3.3 3.4 3.3 3.3 3.3

0.50.5 0.5

0.5 0.50.5 0.5 0.5 0.4 0.4

3.4

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Chocolate Sugar Conf. Gum

6.96.5 6.7

6.9 7.17.3 7.4

Source: US Department of Commerce, IBI updated 11/2010

Note: Apparent Consumption = Manufacturer Shipments Exports + Imports

7.3 7.1 7.2

Competition

Major competition for Hershey's confectionery brands in the United States is provided byM & M/Mars, Wrigley, and Nestle. Hershey products also compete on a local basis with many local/regibrands.

Page 42


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The Hershey Company

The confectionery industry is made up of over 1,200 brands and approximately 1,000companies. However, only 15 to 20 companies have national distribution while theothers enjoy only local or regional distribution. The following market share data for thefood, drug, mass merchandiser [excluding Wal-Mart] and convenience store classes of

trade [FDMxC] represents approximately 65% of The Hershey Company's retail sales.

2011 Change vs. 2010

Mars/Wrigley 32.1 % -0.3 pts.

Hershey 27.9 % 0.3 pts.Cadbury (Adams) 7.9 % 0.2 pts.

Nestle 5.4 % -0.1 pts.

Private Label 2.8 % 0.1 pts.

R. Stover 2.5 % 0.0 pts.

Lindt/Ghirardelli 2.2 % 0.1 pts.

All Other 19.2 % -0.4 pts.

Category $ Growth at Retail: 3.0%

Hershey $ Growth at Retail: 4.2%

IRI/Neilsen ($): Candy/Mint/Gum TOTUS F/D/MX/C

US Total Confectionery Market ShareFDMxC ($) 52 weeks ending 3/19/11

2011 Change vs. 2010

Hershey 43.0 % 0.0 pts.

Mars/Wrigley 30.8 % 0.1 pts.

Nestle 6.3 % 0.0 pts.

R. Stover 4.6 % -0.1 pts.

Lindt/Ghirardelli 4.2 % 0.2 pts.



Hershey $ Growth at Retail: 4.8%


FDMxC ($) 52 weeks ending 3/19/11

US Chocolate Market Share

Page 43


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The Hershey Company

Change vs. 2010


Hershey 14.1 % 0.2 pts.Nestle 8.4 % -0.3 pts.

Private Label 8.3 % 0.5 pts.



Hershey $ Growth at Retail: 3.3%IRI/Neilsen ($): Candy/Mint/Gum TOTUS F/D/MX/C

Change vs. 2010


Cadbury 35.3 % 1.2 pts.

Hershey 2.8 % -0.7 pts.

All Other 4.8 % 0.5 pts.


Hershey $ Growth at Retail: -20.4%


Change vs. 2010

Hershey 31.2 % 3.0 pts.


Ferrero 22.5 % 0.1 pts.

Perfetti Van Melle 13.9 % 0.5 pts.Pfizer 5.9 % -0.5 pts.


Category $ Growth at Retail: -0.7%

Hershey $ Growth at Retail: 9.9%IRI/Neilsen ($): Candy/Mint/Gum TOTUS F/D/MX/C

US Non-Chocolate Market ShareFDMxC ($) 52 weeks ending 3/19/11

US Gum Market ShareFDMxC ($) 52 weeks ending 3/19/11

US Breath Freshner Mint Market ShareFDMxC ($) 52 weeks ending 3/19/11

2011

2011

2011

Page 44


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The Hershey Company

Customers

Full-time sales representatives and food brokers sell our products to our customers. Our customers are maiwholesale distributors, chain grocery stores, mass merchandisers, chain drug stores, vending companies,wholesale clubs, convenience stores, dollar stores, concessionaires, department stores and natural food storOur customers then resell our products to end-consumers in over 2 million retail outlets in North America other locations worldwide. In 2010, sales to McLane Company, Inc., one of the largest wholesale distributin the United States to convenience stores, drug stores, wholesale clubs and mass merchandisers, amountedapproximately 22% of our total net sales. McLane Company, Inc. is the primary distributor of our productsWal-Mart Stores, Inc.

Page 45

14

25

CC-- SSttoorreess

8

11

45

33 DD

rruu

gg

SSttoo

rree

ss

WWhhoolleessaalleeCClluubbss

DDoollllaarr SSttoorreess

SSppeecciiaallttyyCChhaannnneellss

4422%%

CCoonnffeeccttiioonneerryy

SSnnaacckk//NNuuttrriittiioonnBBaarrss

BBaakkeerryySSnnaacckkss

CCooookkiieess//CCrraacckkeerrss

SSaallttyySSnnaacckkss

4433%%

1166%%

2266%%

1111%%44%%

SSuuppeerrmmaarrkkeettss

MMaassssMMeerrcchhaannddiisseerrss

PPeerrcceenntt ooff SSaalleess

Source: Hershey Internal Data

Source: Datamonitor, IRI Hershey Estimates

UU..SS.. SSnnaacckk MMaarrkkeett $$7766bbnn


46/57

The Hershey Company

Page 46

Products

United StatesThe primary chocolate and sugar confectionery products we sell in the United States include the following:

Under theHERSHEY'S brand franchise:HERSHEY'S milk chocolate bar HERSHEY'S BLISS chocolates

HERSHEY'

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