XML 42 R22.htm IDEA: XBRL DOCUMENT v3.25.0.1
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
The Company reports its operations through three segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. This organizational structure aligns with how our CODM, Michele Buck, Chairman of the Board, President, and Chief Executive Officer manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve.
•North America Confectionery – This segment is responsible for our traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes our retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania; New York, New York; Las Vegas, Nevada; Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain of the Company’s trademarks and products to third parties around the world.
•North America Salty Snacks – This segment is responsible for our salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat free snacks, pretzels and other snacks.
•International – International is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. We currently have operations and manufacture product in Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa and other regions.
For segment reporting purposes, the CODM uses “segment income” to evaluate segment performance and allocate resources, including considering budget-to-actual variances and prior year-to-actual variances on a monthly basis. Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating profit are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well the measure of segment performance used for incentive compensation purposes.
Accounting policies associated with our operating segments are generally the same as those described in Note 1.
As discussed in Note 5, derivatives used to manage commodity price risk are not designated for hedge accounting treatment. These derivatives are recognized at fair market value with the resulting realized and unrealized (gains) losses recognized in unallocated derivative (gains) losses outside of the reporting segment results until the related inventory is sold, at which time the related gains and losses are reallocated to segment income. This enables us to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income.
Certain manufacturing, warehousing, distribution and other activities supporting our global operations are integrated to maximize efficiency and productivity. As a result, assets and capital expenditures are not managed on a segment basis and are not included in the information reported to the CODM for the purpose of evaluating performance or allocating resources. We disclose depreciation and amortization that is generated by segment-specific assets, since these amounts are included within the measure of segment income reported to the CODM.
Our segment net sales and earnings were as follows:

For the year ended December 31, 2024
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$9,118,590 $1,135,720 $947,953 $11,202,263 
Cost of sales4,984,764 719,850 642,634 
SM&A expense1,188,138 216,480 193,800 
Total segment income$2,945,688 $199,390 $111,519 $3,256,597 
Unallocated corporate expense (1)701,266 
Unallocated mark-to-market gains on commodity derivatives(460,437)
Costs associated with business realignment activities (see Note 9)
117,536 
Operating profit$2,898,232 
Interest expense, net (see Note 4)
165,655 
Other (income) expense, net (see Note 17)
258,641 
Income before income taxes$2,473,936 

For the year ended December 31, 2023
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$9,123,139 $1,092,689 $949,164 $11,164,992 
Cost of sales4,781,671 726,569 601,175 
SM&A expense1,224,424 207,787 199,730 
Total segment income$3,117,044 $158,333 $148,259 $3,423,636 
Unallocated corporate expense (1)800,390 
Unallocated mark-to-market losses on commodity derivatives58,939 
Costs associated with business realignment activities (see Note 9)
3,440 
Operating profit$2,560,867 
Interest expense, net (see Note 4)
151,785 
Other (income) expense, net (see Note 17)
237,218 
Income before income taxes$2,171,864 

For the year ended December 31, 2022
North America ConfectioneryNorth America Salty SnacksInternationalTotal
Net sales$8,536,480 $1,029,405 $853,409 $10,419,294 
Cost of sales4,573,435 704,589 560,258 
SM&A expense1,151,979 164,881 185,224 
Total segment income$2,811,066 $159,935 $107,927 $3,078,928 
Unallocated corporate expense (1)735,542 
Unallocated mark-to-market losses on commodity derivatives78,182 
Costs associated with business realignment activities (see Note 9)
4,417 
Operating profit$2,260,787 
Interest expense, net (see Note 4)
137,557 
Other (income) expense, net (see Note 17)
206,159 
Income before income taxes$1,917,071 
(1)Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based
compensation expense, (d) acquisition-related costs and (e) other gains or losses that are not integral to segment performance.

Activity within the unallocated mark-to-market losses (gains) on commodity derivatives is as follows:
For the years ended December 31,202420232022
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income$(509,870)$53,085 $(44,569)
Net gains on commodity derivative positions reclassified from unallocated to segment income 49,433 5,854 122,751 
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains)$(460,437)$58,939 $78,182 
As of December 31, 2024, the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $410,230. Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax gains on commodity derivatives of $143,779 to segment operating results in the next twelve months.

Depreciation and amortization expense included within segment income presented above is as follows:
For the years ended December 31,202420232022
North America Confectionery$259,502 $238,786 $228,399 
North America Salty Snacks86,44685,56668,600
International24,79323,69923,148
Corporate84,51471,76458,812
Total$455,255 $419,815 $378,959 
Additional information regarding our net sales and long-lived assets disaggregated by geographical region is as follows:
For the years ended December 31,202420232022
Net sales:
United States
$9,771,343 $9,752,314 $9,121,166 
Other
1,430,920 1,412,678 1,298,128 
Total$11,202,263 $11,164,992 $10,419,294 
Long-lived assets:
United States
$2,925,420 $2,732,787 $2,272,811 
Other
533,433 576,891 496,891 
Total$3,458,853 $3,309,678 $2,769,702