The financial statements of The Hershey Company and Tootsie Roll are presented b

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The financial statements of The Hershey Company and Tootsie Roll are presented below. THE HERSHEY COMPANY CONSOLIDATED STATEMENTS OF INCOME For the years ended December 31, 2011 2010 2009 In thousands of dollars except per share amounts Net Sales $6,080,788 $5,671,009 $5,298,668 Costs and Expenses: Cost of sales 3,548,896 3,255,801 3,245,531 Selling, marketing and administrative 1,477,750 1,426,477 1,208,672 Business realignment and impairment (credits) charges, (886) 83,433 82,875 net Total costs and expenses 5,025,760 4,765,711 4,537,078 Income before Interest and Income Taxes 1,055,028 905,298 761,590 Interest expense, net 92,183 96,434 90,459 Income before Income Taxes 962,845 808,864 671,131 Provision for income taxes 333,883 299,065 235,137 Net Income $628,962 $509,799 $435,994 Net Income Per Share—Basic—Class B Common $2.58 $2.08 $1.77 Stock Net Income Per Share—Diluted—Class B Common $2.56 $2.07 $1.77 Stock Net Income Per Share—Basic—Common Stock $2.85 $2.29 $1.97 Net Income Per Share—Diluted—Common Stock $2.74 $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 receivable—trade 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 Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term Debt 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 $4,412,199 $884,642 390,061 533,622 55,760 141,132 2,005,217 1,437,702 524,134 123,080 21,387 161,212 $4,272,732 $420,017 612,186 1,899 42,080 97,593 1,173,775 1,748,500 $410,655 593,308 9,402 24,088 261,392 1,298,845 1,541,825 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 Treasury—Common 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 stockholders’equity 617,276 3,539,551 — 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 $4,412,199 (215,067) 902,316 35,285 937,601 $4,272,732 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 Net income $628,962 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 (11,072) $5,962 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 receivable—trade (9,438) Inventories (115,331) Accounts payable 7,860 Other assets and liabilities (205,809) Net Cash Provided from Operating Activities 580,867 Cash Flows Provided from (Used by) Investing Activities Capital additions (323,961) Capitalized software additions (23,606) Proceeds from sales of property, plant and equipment 312 Proceeds from sales of trademark licensing rights 20,000 Business acquisitions (5,750) Net Cash (Used by) Investing Activities (333,005) Cash Flows Provided from (Used by) Financing Activities Net change in short-term borrowings 10,834 Long-term borrowings 249,126 Repayment of long-term debt (256,189) Proceeds from lease financing agreement 47,601 Cash dividends paid (304,083) 2010 2009 $509,799 $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 13,777 901,423 (54,457) 46,584 74,000 37,228 293,272 1,065,749 (179,538) (21,949) 2,201 — — (199,286) (126,324) (19,146) 10,364 — (15,220) (150,326) 1,156 348,208 (71,548) — (283,434) (458,047) — (8,252) — (263,403) 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 184,411 92,033 13,997 1,385 — 10,199 (384,515) (169,099) (438,818) (71,100) (190,956) 631,037 884,642 253,605 $693,686 $884,642 $97,892 $97,932 292,315 350,948 28,318 4,455 7,322 (9,314) (698,921) 216,502 37,103 $253,605 $91,623 252,230 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Earnings, Comprehensive Earnings and Retained Earnings (in thousands except per share data) For the year ended December 31, 2011 2010 2009 Net product sales $528,369 $517,149 $495,592 Rental and royalty revenue 4,136 4,299 3,739 Total revenue 532,505 521,448 499,331 Product cost of goods sold 365,225 349,334 319,775 Rental and royalty cost 1,038 1,088 852 Total costs 366,263 350,422 320,627 Product gross margin 163,144 167,815 175,817 Rental and royalty gross margin 3,098 3,211 2,887 Total gross margin 166,242 171,026 178,704 Selling, marketing and administrative expenses 108,276 106,316 103,755 Impairment charges — — 14,000 Earnings from operations 57,966 64,710 60,949 Other income (expense), net 2,946 8,358 2,100 Earnings before income taxes 60,912 73,068 63,049 Provision for income taxes 16,974 20,005 9,892 Net earnings $43,938 $53,063 $53,157 Net earnings Other comprehensive earnings (loss) Comprehensive earnings Retained earnings at beginning of year. Net earnings Cash dividends Stock dividends Retained earnings at end of year Earnings per share $43,938 (8,740) $35,198 $135,866 43,938 (18,360) (47,175) $114,269 $0.76 $53,063 1,183 $54,246 $53,157 2,845 $56,002 $147,687 53,063 (18,078) (46,806) $135,866 $144,949 53,157 (17,790) (32,629) $147,687 $0.90 $0.89 Average Common and Class B Common shares outstanding 57,892 58,685 (The accompanying notes are an integral part of these statements.) 59,425 CONSOLIDATED STATEMENTS OF Financial Position TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES (in thousands except per share data) Assets December 31, 2011 2010 CURRENT ASSETS: Cash and cash equivalents $78,612 $115,976 Investments Accounts receivable trade, less allowances of $1,731 and $1,531 Other receivables Inventories: Finished goods and work-in-process Raw materials and supplies Prepaid expenses Deferred income taxes Total current assets PROPERTY, PLANT AND EQUIPMENT, at cost: Land Buildings Machinery and equipment Construction in progress Less—Accumulated depreciation Net property, plant and equipment OTHER ASSETS: Goodwill Trademarks Investments Split dollar officer life insurance Prepaid expenses 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 value—120,000 shares authorized—36,479 and 36,057 respectively, issued Class B common stock, $.69-4/9 par value—40,000 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 10,895 41,895 3,391 7,996 37,394 9,961 42,676 29,084 5,070 578 212,201 35,416 21,236 6,499 689 235,167 21,939 107,567 322,993 2,598 455,097 242,935 212,162 21,696 102,934 307,178 9,243 440,974 225,482 215,492 73,237 73,237 175,024 175,024 96,161 64,461 74,209 74,441 3,212 6,680 3,935 4,254 7,715 9,203 433,493 407,300 $857,856 $857,959 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 $857,856 TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF Cash Flows (in thousands) 505,495 135,866 (11,213) (1,992) 667,408 $857,959 For the year ended December 31, 2011 2010 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation Impairment charges Impairment of equity method investment Loss from equity method investment Amortization of marketable security premiums Changes in operating assets and liabilities: Accounts receivable Other receivables Inventories Prepaid expenses and other assets Accounts payable and accrued liabilities Income taxes payable and deferred Postretirement health care and life insurance benefits Deferred compensation and other liabilities 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 Supplemental cash flow information Income taxes paid Interest paid Stock dividend issued (The accompanying notes are an integral part of $43,938 $53,063 $53,157 19,229 — — 194 1,267 18,279 — — 342 522 17,862 14,000 4,400 233 320 (5,448) 3,963 (15,631) 5,106 84 (5,772) 2,022 2,146 (708) 50,390 717 (2,373) (1,447) 4,936 2,180 2,322 1,429 2,525 310 82,805 (5,899) (2,088) 455 5,203 (2,755) (12,543) 1,384 2,960 305 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 $16,906 $20,586 $38 $49 $47,053 $46,683 these statements.) $22,364 $182 $32,538 Based on the information contained in these financial statements, determine the following values for each company. (Round all percentages to 1 decimal places, e.g. 17.5%, and all other answers to thousands.) (1) Profit margin for 2011. (For Tootsie Roll, use “Total Revenue.”) Profit margin ratio Tootsie Roll % Hershey Company % (2) Gross profit for 2011. (For Tootsie Roll, use “Product” amounts.) Gross profit (000’s) Tootsie Roll Hershey Company $ $ (3) Gross profit rate for 2011. (For Tootsie Roll, use “Product” amounts.) Gross profit rate Tootsie Roll % Hershey Company % (4) Operating income for 2011. Operating income (000's) Tootsie Roll Hershey Company $ $ (5) Percentage change in operating income from 2011 to 2010. (Show decrease with either a negative sign, e.g. -15.2% or in parentheses, e.g. (15.2) %.) Percent change in operating income Tootsie Roll % Hershey Company % Don't show me this message again for the assignment
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