The financial statements of The Hershey Company and Tootsie Roll are presented below.

Assume
Hersheys average number of shares outstanding was 220,688,000, and Tootsie Rolls was 57,892,000.
THE HERSHEY COMPANY
CONSOLIDATED STATEMENTS OF INCOME
For the years ended December 31,
2011
In thousands of dollars except per share amounts
$6,080,78
Net Sales
8
Costs and Expenses:
Cost of sales
3,548,896
Selling, marketing and administrative
1,477,750
Business realignment and impairment (credits) charges,
(886)
net
Total costs and expenses
5,025,760
Income before Interest and Income Taxes
1,055,028
Interest expense, net
92,183
Income before Income Taxes
962,845
Provision for income taxes
333,883
Net Income
$628,962
Net Income Per ShareBasicClass B Common
$2.58
Stock
Net Income Per ShareDilutedClass B Common
$2.56
Stock
Net Income Per ShareBasicCommon Stock
$2.85
Net Income Per ShareDilutedCommon Stock

$2.74

2010

2009

$5,671,009

$5,298,668

3,255,801
1,426,477

3,245,531
1,208,672

83,433

82,875

4,765,711
905,298
96,434
808,864
299,065
$509,799

4,537,078
761,590
90,459
671,131
235,137
$435,994

$2.08

$1.77

$2.07

$1.77

$2.29

$1.97

$2.21

$1.90

Cash Dividends Paid Per Share:

Common Stock
$1.3800
$1.2800
$1.1900
Class B Common Stock
1.2500
1.1600
1.0712
The notes to consolidated financial statements are an integral part of these statements and are
included in the Hershey's 2011 Annual Report, available at www.thehersheycompany.com.
THE HERSHEY COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
In thousands of dollars
ASSETS
Current Assets:
Cash and cash equivalents
Accounts receivabletrade
Inventories
Deferred income taxes
Prepaid expenses and other
Total current assets
Property, Plant and Equipment, Net
Goodwill
Other Intangibles
Deferred Income Taxes
Other Assets
Total assets
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts payable
Accrued liabilities

2011

2010

$693,686
399,499
648,953
136,861
167,559
2,046,558
1,559,717
516,745
111,913
38,544
138,722

$884,642
390,061
533,622
55,760
141,132
2,005,217
1,437,702
524,134
123,080
21,387
161,212
$4,272,73
2

$4,412,199

$420,017
612,186

$410,655
593,308

Accrued income taxes

Short-term debt
Current portion of long-term debt
Total current liabilities
Long-term Debt
Other Long-term Liabilities
Total liabilities
Commitments and Contingencies
Stockholders Equity:
The Hershey Company Stockholders Equity
Preferred Stock, shares issued: none in 2011 and 2010
Common Stock, shares issued: 299,269,702 in 2011 and
299,195,325 in 2010
Class B Common Stock, shares issued: 60,632,042 in 2011 and
60,706,419 in 2010
Additional paid-in capital
Retained earnings
TreasuryCommon Stock shares, at cost: 134,695,826 in 2011 and
132,871,512 in 2010
Accumulated other comprehensive loss
The Hershey Company stockholders equity
Noncontrolling interests in subsidiaries
Total stockholders equity
Total liabilities and stockholdersequity

1,899
42,080
97,593
1,173,775
1,748,500
617,276
3,539,551

9,402
24,088
261,392
1,298,845
1,541,825
494,461
3,335,131

299,269

299,195

60,632

60,706

490,817
4,699,597

434,865
4,374,718

(4,258,962)

(4,052,101)

(442,331)
849,022
23,626
872,648

(215,067)
902,316
35,285
937,601
$4,272,73
2

$4,412,199

THE HERSHEY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
2011
In thousands of dollars
Cash Flows Provided from (Used by) Operating Activities
$628,96
Net income
2
Adjustments to reconcile net income to net cash provided from
operations:
Depreciation and amortization
215,763
Stock-based compensation expense, net of tax of $15,127,
28,341
$17,413 and $19,223, respectively
Excess tax benefits from stock-based compensation
(13,997)
Deferred income taxes
33,611
Gain on sale of trademark licensing rights, net of tax of $5,962
(11,072)
Business realignment and impairment charges, net of tax of
30,838
$18,333, $20,635 and $38,308, respectively
Contributions to pension plans
(8,861)
Changes in assets and liabilities, net of effects from business
acquisitions and divestitures:
Accounts receivabletrade
(9,438)
Inventories
(115,331)
Accounts payable
7,860
Other assets and liabilities
(205,809)
Net Cash Provided from Operating Activities
Cash Flows Provided from (Used by) Investing Activities
Capital additions
Capitalized software additions
Proceeds from sales of property, plant and equipment

2010

2009

$509,79
9

$435,994

197,116

182,411

32,055

34,927

(1,385)
(18,654)

(4,455)
(40,578)

77,935

60,823

(6,073)
20,329
(13,910)
90,434
13,777

580,867

901,423

(323,961)
(23,606)
312

(179,538)
(21,949)
2,201

(54,457)
46,584
74,000
37,228
293,272
1,065,74
9
(126,324)
(19,146)
10,364

Proceeds from sales of trademark licensing rights

Business acquisitions
Net Cash (Used by) Investing Activities
Cash Flows Provided from (Used by) Financing Activities
Net change in short-term borrowings
Long-term borrowings
Repayment of long-term debt
Proceeds from lease financing agreement
Cash dividends paid
Exercise of stock options
Excess tax benefits from stock-based compensation
Contributions from noncontrolling interests in subsidiaries
Repurchase of Common Stock
Net Cash (Used by) Financing Activities
(Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents as of January 1
Cash and Cash Equivalents as of December 31
Interest Paid
Income Taxes Paid
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CONSOLIDATED STATEMENTS OF
Financial Position
TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share
data)
Assets
December 31,
2011
2010
CURRENT ASSETS:
$115,97
Cash and cash equivalents
$78,612
6
Investments
10,895
7,996
Accounts receivable trade, less allowances of $1,731 and $1,531
41,895
37,394
Other receivables
3,391
9,961
Inventories:
Finished goods and work-in-process
42,676
35,416
Raw materials and supplies
29,084
21,236
Prepaid expenses
5,070
6,499
Deferred income taxes
578
689
Total current assets
212,201
235,167
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land
21,939
21,696
Buildings
107,567
102,934
Machinery and equipment
322,993
307,178
Construction in progress
2,598
9,243
455,097
440,974
LessAccumulated depreciation
242,935
225,482
Net property, plant and equipment
212,162
215,492
OTHER ASSETS:
Goodwill
73,237
73,237
Trademarks
175,024
175,024
Investments
96,161
64,461
Split dollar officer life insurance
74,209
74,441
Prepaid expenses
3,212
6,680

Equity method investment

Deferred income taxes
Total other assets
Total assets
Liabilities and Shareholders Equity
CURRENT LIABILITIES:
Accounts payable
Dividends payable
Accrued liabilities
Total current liabilities
NONCURRENT LIABILITES:
Deferred income taxes
Postretirement health care and life insurance benefits
Industrial development bonds
Liability for uncertain tax positions
Deferred compensation and other liabilities
Total noncurrent liabilities
SHAREHOLDERS EQUITY:
Common stock, $.69-4/9 par value120,000 shares authorized36,479
and 36,057 respectively, issued
Class B common stock, $.69-4/9 par value40,000 shares authorized
21,025 and 20,466 respectively, issued
Capital in excess of par value
Retained earnings, per accompanying statement
Accumulated other comprehensive loss
Treasury stock (at cost)71 shares and 69 shares, respectively
Total shareholders equity
Total liabilities and shareholders equity

3,935
4,254
7,715
9,203
433,493
407,300
$857,85
$857,95
6
9
December 31,
2011
2010
$10,683
4,603
43,069
58,355

$9,791
4,529
44,185
58,505

43,521
26,108
7,500
8,345
48,092
133,566

47,865
20,689
7,500
9,835
46,157
132,046

25,333

25,040

14,601

14,212

533,677
114,269
(19,953)
(1,992)
665,935
$857,85
6

505,495
135,866
(11,213)
(1,992)
667,408
$857,95
9

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
Cash Flows (in thousands)
For the year ended December
31,
2011
2010
2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$43,938
$53,063
$53,157
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation
19,229
18,279
17,862
Impairment charges

14,000
Impairment of equity method investment

4,400
Loss from equity method investment
194
342
233
Amortization of marketable security premiums
1,267
522
320
Changes in operating assets and liabilities:
Accounts receivable
(5,448)
717
(5,899)
Other receivables
3,963
(2,373)
(2,088)
Inventories
(15,631)
(1,447)
455
Prepaid expenses and other assets
5,106
4,936
5,203
Accounts payable and accrued liabilities
84
2,180
(2,755)
Income taxes payable and deferred
(5,772)
2,322
(12,543)
Postretirement health care and life insurance benefits
2,022
1,429
1,384
Deferred compensation and other liabilities
2,146
2,525
2,960

Others
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Net purchase of trading securities
Purchase of available for sale securities
Sale and maturity of available for sale securities
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares repurchased and retired
Dividends paid in cash
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(708)
50,390

310
82,805

305
76,994

(16,351)
(3,234)
(39,252)
7,680
(51,157)

(12,813)
(2,902)
(9,301)
8,208
(16,808)

(20,831)
(1,713)
(11,331)
17,511
(16,364)

(18,190)
(18,407)
(36,597)
(37,364)
115,976
$78,612

(22,881)
(18,130)
(41,011)
24,986
90,990
$115,976

(20,723)
(17,825)
(38,548)
22,082
68,908
$90,990

Supplemental cash flow information

Income taxes paid
$16,906
$20,586
Interest paid
$38
$49
Stock dividend issued
$47,053
$46,683
(The accompanying notes are an integral part of these statements.)

$22,364
$182
$32,538

For each company calculate the following values for 2011. (Hint: When calculating free cash flow, do
not consider business acquisitions to be part of capital expenditures.) (Round all ratios to 1
decimal places, e.g. 15.2:1 or 15.2%, earnings per share to 2 decimal places, e.g. 15.21 and
all other answers to thousands. Enter negative amounts using either a negative sign
preceding the number e.g. -45 or parentheses e.g. (45).)
(1) Working capital.
Working capital
$

Hershey Company

872,783

Tootsie Roll

153,846

(2) Current ratio.

Current ratio
:1

Hershey Company

1.7

Tootsie Roll

3.6

:1

(3) Debt to assets ratio.

Debt to assets ratio
Hershey Company

80.2

Tootsie Roll

22.4

(4) Free cash flow.

Free cash flow
$

Hershey Company

-47,177

Tootsie Roll

15,632

(5) Earnings per share.

Earnings per share
Hershey Company
Tootsie Roll

$
2.85

$
0.61