An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

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)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	—)	226,062)
Total assets (adjusted)	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,929,082)
Adjustment to Total Debt
Total debt (as reported)	4,791,345)	5,028,894)	4,602,625)	4,266,485)	4,457,596)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	—)	226,062)
Add: Current operating lease liabilities	31,787)	36,292)	36,578)	29,209)	—)
Add: Non-current operating lease liabilities	294,849)	310,899)	181,871)	184,163)	—)
Total debt (adjusted)	5,117,981)	5,376,085)	4,821,074)	4,479,857)	4,683,658)

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).

^{1, 2} Equal to total present value of future operating lease payments.

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 Turnover¹
Reported total asset turnover	0.95	0.86	0.89	0.98	1.01
Adjusted total asset turnover	0.95	0.86	0.89	0.98	0.98
Debt to Equity²
Reported debt to equity	1.45	1.82	2.06	2.45	3.19
Adjusted debt to equity	1.55	1.95	2.16	2.58	3.35
Return on Assets³ (ROA)
Reported ROA	15.02%	14.19%	14.00%	14.12%	15.29%
Adjusted ROA	15.02%	14.19%	14.00%	14.12%	14.85%

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).

¹ See details »

² See details »

³ See details »

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 deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.
Adjusted debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Hershey Co. adjusted debt to equity ratio improved from 2020 to 2021 and 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 Operating Leases
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	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,929,082)
Activity Ratio
Adjusted total asset turnover²	0.95	0.86	0.89	0.98	0.98

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 ÷ 10,948,820 = 0.95

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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 debt	4,791,345)	5,028,894)	4,602,625)	4,266,485)	4,457,596)
Total The Hershey Company stockholders’ equity	3,299,544)	2,757,229)	2,234,352)	1,739,222)	1,398,721)
Solvency Ratio
Debt to equity¹	1.45	1.82	2.06	2.45	3.19
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	5,117,981)	5,376,085)	4,821,074)	4,479,857)	4,683,658)
Total The Hershey Company stockholders’ equity	3,299,544)	2,757,229)	2,234,352)	1,739,222)	1,398,721)
Solvency Ratio
Adjusted debt to equity²	1.55	1.95	2.16	2.58	3.35

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 Debt to equity = Total debt ÷ Total The Hershey Company stockholders’ equity
= 4,791,345 ÷ 3,299,544 = 1.45

² Adjusted debt to equity = Adjusted total debt ÷ Total The Hershey Company stockholders’ equity
= 5,117,981 ÷ 3,299,544 = 1.55

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Hershey Co. adjusted debt-to-equity 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)
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 Operating Leases
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	10,948,820)	10,412,231)	9,131,845)	8,140,395)	7,929,082)
Profitability Ratio
Adjusted ROA²	15.02%	14.19%	14.00%	14.12%	14.85%

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 ÷ 10,948,820 = 15.02%

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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 Operating Leases

Adjustments to Financial Statements for Operating Leases

Hershey Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios for Operating Leases (Summary)

Hershey Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)