Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Hershey Co., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Goodwill	2,606,956)	2,633,174)	1,988,215)	1,985,955)	1,801,103)
Trademarks	1,701,932)	1,705,390)	1,211,086)	1,212,172)	1,173,770)
Customer-related	513,188)	504,667)	204,101)	207,749)	163,860)
Patents	8,053)	8,623)	8,556)	16,711)	16,306)
Intangible assets subject to amortization, gross carrying amount	2,223,173)	2,218,680)	1,423,743)	1,436,632)	1,353,936)
Accumulated amortization	(291,593)	(215,514)	(163,097)	(130,331)	(110,283)
Intangible assets subject to amortization, net	1,931,580)	2,003,166)	1,260,646)	1,306,301)	1,243,653)
Trademarks	34,689)	34,422)	34,568)	34,865)	34,639)
Intangible assets not subject to amortization	34,689)	34,422)	34,568)	34,865)	34,639)
Other intangible assets	1,966,269)	2,037,588)	1,295,214)	1,341,166)	1,278,292)
Goodwill and intangible assets	4,573,225)	4,670,762)	3,283,429)	3,327,121)	3,079,395)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Hershey Co. goodwill increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Other intangible assets	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Hershey Co. other intangible assets increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Hershey Co. goodwill and intangible assets increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Hershey Co., adjustments to financial statements

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,703,020)
Less: Goodwill	2,606,956)	2,633,174)	1,988,215)	1,985,955)	1,801,103)
Total assets (adjusted)	8,341,864)	7,779,057)	7,143,630)	6,154,440)	5,901,917)
Adjustment to Total The Hershey Company Stockholders’ Equity
Total The Hershey Company stockholders’ equity (as reported)	3,299,544)	2,757,229)	2,234,352)	1,739,222)	1,398,721)
Less: Goodwill	2,606,956)	2,633,174)	1,988,215)	1,985,955)	1,801,103)
Total The Hershey Company stockholders’ equity (adjusted)	692,588)	124,055)	246,137)	(246,733)	(402,382)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Hershey Co., Financial Data: Reported vs. Adjusted

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Hershey Co., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Total Asset Turnover
Reported total asset turnover	0.95	0.86	0.89	0.98	1.01
Adjusted total asset turnover	1.25	1.15	1.14	1.30	1.32
Financial Leverage
Reported financial leverage	3.32	3.78	4.09	4.68	5.51
Adjusted financial leverage	12.04	62.71	29.02	—	—
Return on Equity (ROE)
Reported ROE	49.85%	53.59%	57.23%	66.10%	84.19%
Adjusted ROE	237.49%	1,191.01%	519.51%	—	—
Return on Assets (ROA)
Reported ROA	15.02%	14.19%	14.00%	14.12%	15.29%
Adjusted ROA	19.72%	18.99%	17.90%	18.68%	19.95%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Hershey Co. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Hershey Co. adjusted financial leverage ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Hershey Co. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Hershey Co. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Hershey Co., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net sales	10,419,294)	8,971,337)	8,149,719)	7,986,252)	7,791,069)
Total assets	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,703,020)
Activity Ratio
Total asset turnover¹	0.95	0.86	0.89	0.98	1.01
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net sales	10,419,294)	8,971,337)	8,149,719)	7,986,252)	7,791,069)
Adjusted total assets	8,341,864)	7,779,057)	7,143,630)	6,154,440)	5,901,917)
Activity Ratio
Adjusted total asset turnover²	1.25	1.15	1.14	1.30	1.32

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 10,419,294 ÷ 10,948,820 = 0.95

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 10,419,294 ÷ 8,341,864 = 1.25

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Hershey Co. adjusted total asset turnover ratio improved from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,703,020)
Total The Hershey Company stockholders’ equity	3,299,544)	2,757,229)	2,234,352)	1,739,222)	1,398,721)
Solvency Ratio
Financial leverage¹	3.32	3.78	4.09	4.68	5.51
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	8,341,864)	7,779,057)	7,143,630)	6,154,440)	5,901,917)
Adjusted total The Hershey Company stockholders’ equity	692,588)	124,055)	246,137)	(246,733)	(402,382)
Solvency Ratio
Adjusted financial leverage²	12.04	62.71	29.02	—	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total The Hershey Company stockholders’ equity
= 10,948,820 ÷ 3,299,544 = 3.32

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total The Hershey Company stockholders’ equity
= 8,341,864 ÷ 692,588 = 12.04

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Hershey Co. adjusted financial leverage ratio increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Total The Hershey Company stockholders’ equity	3,299,544)	2,757,229)	2,234,352)	1,739,222)	1,398,721)
Profitability Ratio
ROE¹	49.85%	53.59%	57.23%	66.10%	84.19%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Adjusted total The Hershey Company stockholders’ equity	692,588)	124,055)	246,137)	(246,733)	(402,382)
Profitability Ratio
Adjusted ROE²	237.49%	1,191.01%	519.51%	—	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income attributable to The Hershey Company ÷ Total The Hershey Company stockholders’ equity
= 100 × 1,644,817 ÷ 3,299,544 = 49.85%

² Adjusted ROE = 100 × Net income attributable to The Hershey Company ÷ Adjusted total The Hershey Company stockholders’ equity
= 100 × 1,644,817 ÷ 692,588 = 237.49%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Hershey Co. adjusted ROE improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Total assets	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,703,020)
Profitability Ratio
ROA¹	15.02%	14.19%	14.00%	14.12%	15.29%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Adjusted total assets	8,341,864)	7,779,057)	7,143,630)	6,154,440)	5,901,917)
Profitability Ratio
Adjusted ROA²	19.72%	18.99%	17.90%	18.68%	19.95%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income attributable to The Hershey Company ÷ Total assets
= 100 × 1,644,817 ÷ 10,948,820 = 15.02%

² Adjusted ROA = 100 × Net income attributable to The Hershey Company ÷ Adjusted total assets
= 100 × 1,644,817 ÷ 8,341,864 = 19.72%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Hershey Co. adjusted ROA improved from 2020 to 2021 and from 2021 to 2022.

Hershey Co. (NYSE:HSY)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Hershey Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Hershey Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)