Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Hershey Co., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal	121,968)	161,402)	117,348)	179,358)	151,107)
State	85,741)	60,979)	46,198)	38,232)	38,243)
Foreign	27,656)	78,650)	29,158)	31,514)	13,405)
Current	235,365)	301,031)	192,704)	249,104)	202,755)
Federal	34,848)	26,726)	24,486)	14,958)	35,035)
State	3,393)	8,253)	3,746)	1,865)	7,572)
Foreign	(1,352)	(21,605)	(1,352)	(31,895)	(6,352)
Deferred	36,889)	13,374)	26,880)	(15,072)	36,255)
Provision for income taxes	272,254)	314,405)	219,584)	234,032)	239,010)

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
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Hershey Co. current increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Hershey Co. deferred decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Hershey Co. provision for income taxes increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Hershey Co., effective income tax rate (EITR) reconciliation

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Federal statutory income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%
State income taxes, net of Federal income tax benefits	3.20%	2.80%	2.70%	1.80%	2.70%
Business realignment and impairment charges	0.00%	0.00%	0.00%	0.00%	0.60%
Foreign rate differences	-0.10%	-0.20%	-0.50%	-1.50%	-2.00%
Historic and solar tax credits	-9.90%	-6.20%	-7.70%	-3.40%	-3.50%
U.S. tax reform	0.00%	0.00%	0.00%	0.00%	-1.40%
Tax contingencies	0.40%	1.70%	0.10%	0.90%	0.50%
Stock compensation	-0.70%	-0.50%	-0.60%	-1.30%	-0.30%
Valuation allowance release	0.00%	0.00%	0.00%	-1.50%	0.00%
Other, net	0.30%	-1.10%	-0.30%	0.90%	-0.60%
Effective income tax rate	14.20%	17.50%	14.70%	16.90%	17.00%

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
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Hershey Co. effective income tax rate increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Hershey Co., components of deferred tax assets and liabilities

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Post-retirement benefit obligations	40,100)	51,026)	58,059)	56,384)	52,915)
Accrued expenses and other reserves	78,523)	81,847)	86,412)	88,590)	85,180)
Stock-based compensation	19,847)	21,898)	18,831)	19,304)	30,448)
Derivative instruments	3,983)	—)	15,550)	16,864)	17,423)
Pension	—)	—)	8,203)	3,952)	8,921)
Lease liabilities	91,099)	95,503)	64,192)	64,988)	12,284)
Accrued trade promotion reserves	23,082)	25,382)	25,877)	21,709)	13,670)
Net operating loss carryforwards	130,944)	152,389)	154,445)	160,584)	161,242)
Capital loss carryforwards	1,999)	2,522)	15,401)	26,022)	26,670)
Other	52,802)	49,760)	10,027)	9,685)	9,969)
Gross deferred tax assets	442,379)	480,327)	456,997)	468,082)	418,722)
Valuation allowance	(137,531)	(167,788)	(193,310)	(206,743)	(239,959)
Deferred tax assets	304,848)	312,539)	263,687)	261,339)	178,763)
Property, plant and equipment, net	(247,964)	(234,474)	(180,633)	(161,449)	(144,044)
Acquired intangibles	(193,160)	(168,087)	(156,439)	(144,314)	(161,003)
Lease ROU assets	(28,573)	(76,285)	(46,778)	(48,419)	—)
Inventories	(72,602)	(20,105)	(21,086)	(29,158)	(21,366)
Derivative instruments	—)	(1,352)	—)	—)	—)
Pension	(11,038)	(11,871)	—)	—)	—)
Other	(39,416)	(47,496)	(58,410)	(46,984)	(28,044)
Deferred tax liabilities	(592,753)	(559,670)	(463,346)	(430,324)	(354,457)
Net deferred tax assets (liabilities)	(287,905)	(247,131)	(199,659)	(168,985)	(175,694)

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
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Hershey Co. gross deferred tax assets increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Hershey Co. deferred tax assets increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Hershey Co. net deferred tax assets (liabilities) decreased from 2020 to 2021 and from 2021 to 2022.

Hershey Co., deferred tax assets and liabilities, classification

US$ in thousands

		Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
	Non-current deferred tax assets, net	40,498)	40,873)	29,369)	31,033)	1,166)
	Non-current deferred tax liabilities, net	328,403)	288,004)	229,028)	200,018)	176,860)

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
Non-current deferred tax assets, net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Hershey Co. non-current deferred tax assets, net increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.
Non-current deferred tax liabilities, net	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Hershey Co. non-current deferred tax liabilities, net increased from 2020 to 2021 and 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: Noncurrent deferred tax assets, net	40,498)	40,873)	29,369)	31,033)	1,166)
Total assets (adjusted)	10,908,322)	10,371,358)	9,102,476)	8,109,362)	7,701,854)
Adjustment to Total Liabilities
Total liabilities (as reported)	7,649,276)	7,655,002)	6,893,962)	6,395,401)	6,295,754)
Less: Noncurrent deferred tax liabilities, net	328,403)	288,004)	229,028)	200,018)	176,860)
Total liabilities (adjusted)	7,320,873)	7,366,998)	6,664,934)	6,195,383)	6,118,894)
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: Net deferred tax assets (liabilities)	(287,905)	(247,131)	(199,659)	(168,985)	(175,694)
Total The Hershey Company stockholders’ equity (adjusted)	3,587,449)	3,004,360)	2,434,011)	1,908,207)	1,574,415)
Adjustment to Net Income Attributable To The Hershey Company
Net income attributable to The Hershey Company (as reported)	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Add: Deferred income tax expense (benefit)	36,889)	13,374)	26,880)	(15,072)	36,255)
Net income attributable to The Hershey Company (adjusted)	1,681,706)	1,490,886)	1,305,588)	1,134,620)	1,213,817)

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
Net Profit Margin
Reported net profit margin	15.79%	16.47%	15.69%	14.40%	15.11%
Adjusted net profit margin	16.14%	16.62%	16.02%	14.21%	15.58%
Total Asset Turnover
Reported total asset turnover	0.95	0.86	0.89	0.98	1.01
Adjusted total asset turnover	0.96	0.87	0.90	0.98	1.01
Financial Leverage
Reported financial leverage	3.32	3.78	4.09	4.68	5.51
Adjusted financial leverage	3.04	3.45	3.74	4.25	4.89
Return on Equity (ROE)
Reported ROE	49.85%	53.59%	57.23%	66.10%	84.19%
Adjusted ROE	46.88%	49.62%	53.64%	59.46%	77.10%
Return on Assets (ROA)
Reported ROA	15.02%	14.19%	14.00%	14.12%	15.29%
Adjusted ROA	15.42%	14.38%	14.34%	13.99%	15.76%

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 net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Hershey Co. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Hershey Co. adjusted total asset turnover ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
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 decreased from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Hershey Co. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted 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 income attributable to The Hershey Company	1,644,817)	1,477,512)	1,278,708)	1,149,692)	1,177,562)
Net sales	10,419,294)	8,971,337)	8,149,719)	7,986,252)	7,791,069)
Profitability Ratio
Net profit margin¹	15.79%	16.47%	15.69%	14.40%	15.11%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to The Hershey Company	1,681,706)	1,490,886)	1,305,588)	1,134,620)	1,213,817)
Net sales	10,419,294)	8,971,337)	8,149,719)	7,986,252)	7,791,069)
Profitability Ratio
Adjusted net profit margin²	16.14%	16.62%	16.02%	14.21%	15.58%

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 Net profit margin = 100 × Net income attributable to The Hershey Company ÷ Net sales
= 100 × 1,644,817 ÷ 10,419,294 = 15.79%

² Adjusted net profit margin = 100 × Adjusted net income attributable to The Hershey Company ÷ Net sales
= 100 × 1,681,706 ÷ 10,419,294 = 16.14%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Hershey Co. adjusted net profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

	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 Deferred Taxes
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	10,908,322)	10,371,358)	9,102,476)	8,109,362)	7,701,854)
Activity Ratio
Adjusted total asset turnover²	0.96	0.87	0.90	0.98	1.01

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 ÷ 10,908,322 = 0.96

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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 deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.

	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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	10,908,322)	10,371,358)	9,102,476)	8,109,362)	7,701,854)
Adjusted total The Hershey Company stockholders’ equity	3,587,449)	3,004,360)	2,434,011)	1,908,207)	1,574,415)
Solvency Ratio
Adjusted financial leverage²	3.04	3.45	3.74	4.25	4.89

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
= 10,908,322 ÷ 3,587,449 = 3.04

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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 decreased 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)
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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to The Hershey Company	1,681,706)	1,490,886)	1,305,588)	1,134,620)	1,213,817)
Adjusted total The Hershey Company stockholders’ equity	3,587,449)	3,004,360)	2,434,011)	1,908,207)	1,574,415)
Profitability Ratio
Adjusted ROE²	46.88%	49.62%	53.64%	59.46%	77.10%

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 × Adjusted net income attributable to The Hershey Company ÷ Adjusted total The Hershey Company stockholders’ equity
= 100 × 1,681,706 ÷ 3,587,449 = 46.88%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Hershey Co. adjusted ROE deteriorated 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)
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 Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to The Hershey Company	1,681,706)	1,490,886)	1,305,588)	1,134,620)	1,213,817)
Adjusted total assets	10,908,322)	10,371,358)	9,102,476)	8,109,362)	7,701,854)
Profitability Ratio
Adjusted ROA²	15.42%	14.38%	14.34%	13.99%	15.76%

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 × Adjusted net income attributable to The Hershey Company ÷ Adjusted total assets
= 100 × 1,681,706 ÷ 10,908,322 = 15.42%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted 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 Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Hershey Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Hershey Co., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)