• Hershey Reports Second-Quarter 2019 Financial Results; Updates 2019 Net Sales and Earnings Outlook

    Source: Nasdaq GlobeNewswire / 25 Jul 2019 07:01:22   America/New_York

    HERSHEY, Pa., July 25, 2019 (GLOBE NEWSWIRE) -- The Hershey Company (NYSE: HSY) today announced net sales and earnings for the second quarter ended June 30, 2019.  The company updated its net sales outlook to the mid-point of the previously guided range, and slightly raised its reported and adjusted earnings outlook to the top half of the previous range.

    “We are pleased with our second quarter results and the momentum we are seeing behind our key initiatives for this year,” said Michele Buck, The Hershey Company President and Chief Executive Officer.  “We continue to deliver differentiated results by growing both top and bottom line while investing in our brands and capabilities.  We are on track to deliver our financial commitments for the year driven by accelerated U.S. performance, a strengthened international business and continued operational excellence.”

    Second-Quarter 2019 Financial Results Summary1

    • Consolidated net sales of $1,767.2 million, an increase of 0.9%.

    • Organic constant currency net sales increased 1.8%.

    • The net impact of acquisitions and divestitures was a 0.6 point headwind, and foreign currency exchange was a 0.3 point headwind.

    • Reported net income of $312.8 million, or $1.48 per share-diluted, an increase of 37%.

    • Adjusted earnings per share-diluted of $1.31, an increase of 14.9%.

    1 All comparisons for the second quarter of 2019 are with respect to the second quarter ended July 1, 2018

    2019 Full-Year Financial Outlook Summary2

    • Full-year reported net sales are expected to increase around 2%, the mid-point of the previous 1-3% range.

        •  The net impact of acquisitions and divestitures is estimated to be approximately a 0.5 point benefit.

        •  The impact of foreign currency exchange is anticipated to be negligible based on current exchange rates.
    • Full-year reported earnings per share-diluted are expected to be in the $5.54 to $5.66 range, relatively flat with prior year.

    • Full-year adjusted earnings per share-diluted are expected to increase 6% to 7%, the upper half of the previous 5% to 7% range.

    2 All comparisons for full-year 2019 are with respect to the full year ended December 31, 2018

    Second-Quarter 2019 Results

    Consolidated net sales were $1,767.2 million in the second quarter of 2019 versus $1,751.6 million in the year ago period, an increase of 0.9%.  Net price realization and volume were a 1.2 point and 0.6 point benefit, respectively.  The net impact of acquisitions and divestitures was a 0.6 point headwind, and foreign currency exchange was a 0.3 point headwind.

    As outlined in the table below, the company’s second-quarter 2019 results, as prepared in accordance with U.S. generally accepted accounting principles (GAAP), included items impacting comparability of $39.7 million, or $0.17 per share-diluted.  For the second quarter of 2018, items impacting comparability totaled $22.6 million, or $0.06 per share-diluted.

    Reported gross margin was 49.5% in the second quarter of 2019, compared to 45.3% in the second quarter of 2018, an increase of 420 basis points.  Adjusted gross margin was 46.5% in the second quarter of 2019, compared to 44.5% in the second quarter of 2018, an increase of 200 basis points.  This increase in both reported and adjusted gross margin was driven by favorable mix and fixed cost absorption driven by increased production related to the company’s recently announced July 2019 price increase, favorable commodities, lower waste and net price realization.  The favorable impact of mix and fixed cost absorption was approximately 90 basis points in the second quarter and is expected to be offset in the second half, primarily Q3, as inventory levels normalize.

    Selling, marketing and administrative expenses increased 0.9% in the second quarter of 2019 versus the second quarter of 2018 driven by advertising.  Advertising and related consumer marketing expenses increased 5.6% in the second quarter of 2019 versus the same period last year driven by advertising increases in both North America and our International markets.  Selling, marketing and administrative expenses, excluding advertising and related consumer marketing, decreased 1.4% versus the second quarter of 2018 driven by decreased spending related to our Margin for Growth Program and lower acquisition-related costs.

    Second-quarter 2019 reported operating profit of $410.1 million increased 29.9% versus the second quarter of 2018, resulting in an operating margin of 23.2%, an increase of 520 basis points driven primarily by gross margin gains.  Adjusted operating profit of $370.0 million increased 9.0% versus the second quarter of 2018.  This resulted in an adjusted operating margin of 20.9%, an increase of 150 basis points versus the second quarter of 2018 driven primarily by gross margin gains.

    The effective tax rate in the second quarter of 2019 was 13.7%, a decrease of 40 basis points versus the second quarter of 2018.  The adjusted tax rate in the second quarter of 2019 was 14.8%, a decline of 120 basis points versus the second quarter of 2018.  Both the effective and adjusted tax rate favorability were driven primarily by valuation allowance releases in two international locations.

    The following table presents a summary of items impacting comparability in each period (see Appendix I for additional information):

     Pre-Tax (millions) Earnings Per Share-Diluted
     Three Months Ended Three Months Ended
     June 30, 2019 July 1, 2018 June 30, 2019 July 1, 2018
    Derivative Mark-to-Market Gains$(53.5) $(20.8) $(0.25) $(0.10)
    Business Realignment Activities6.4  15.3  0.03  0.07 
    Acquisition-Related Costs2.3  4.8  0.01  0.02 
    Long-Lived Asset Impairment Charges4.7  27.2  0.02  0.13 
    Noncontrolling Interest Share of Business Realignment and Impairment Charges0.4  (1.2)   (0.01)
    Gain on Sale of Licensing Rights  (2.7)   (0.01)
    Tax effect of all adjustments reflected above    0.02  (0.04)
    Total$(39.7) $22.6  $(0.17) $0.06 
                    

    The following are comments about segment performance for the second quarter of 2019 versus the year-ago period. See the schedule of supplementary information within this press release for additional information on segment net sales and profit.

    North America (U.S. and Canada)

    Hershey’s North America net sales were $1,568.0 million in the second quarter of 2019, an increase of 0.5% versus the same period last year.  Pricing was a 1.5 point benefit.  Volume was a 0.5 point headwind, the net impact of acquisitions and divestitures was a 0.3 point headwind, and foreign currency exchange rates were a 0.2 point headwind.

    Total Hershey U.S. retail takeaway for the 11 weeks ended July 14, 20193, in the expanded multi-outlet combined plus convenience store channels (IRI MULO + C-Stores) increased 1.9% versus the prior-year period. Hershey’s U.S. candy, mint and gum retail takeaway increased 1.9%, resulting in flat market share versus the prior-year period.

    North America advertising and related consumer marketing expenses increased 2.7% in the second quarter of 2019 versus the same period last year driven by advertising.  Favorable gross margin resulted in a segment income increase of 6.1% to $470.9 million in the second quarter of 2019, compared to $443.9 million in the second quarter of 2018.

    3 Includes candy, mint, gum, salty snacks, meat snacks and grocery items; 11 week period excludes the impact of the Easter shift

    International and Other

    Second-quarter 2019 net sales for Hershey’s International and Other segment increased 3.9% versus the same period last year, to $199.2 million.  Volume was a 9.6 point benefit.  Divestitures were a 3.2 point headwind, net price realization was a 1.3 point headwind, and foreign currency exchange rates were a 1.2 point headwind.  Combined net sales in our strategic focus markets (Mexico, Brazil, India and China) declined approximately 4%.  Excluding an approximate 6.5 point headwind from divestitures and a 2.5 point headwind from foreign currency exchange rates, combined organic constant currency net sales in Mexico, Brazil, India and China grew approximately 5%.

    A reconciliation between reported (i) constant currency net sales growth rates and (ii) organic constant currency net sales growth rates is provided below:

     Three Months Ended June 30, 2019
     Percentage
    Change as
    Reported
     Impact of
    Foreign
    Currency
    Exchange
     Percentage
    Change on
    Constant
    Currency Basis
     Impact of Acquisitions and Divestitures Percentage
    Change on
    Organic
    Constant
    Currency Basis
    Mexico8.0% 1.3% 6.7% % 6.7%
    Brazil(3.5)% (8.2)% 4.7% % 4.7%
    India0.3% (3.3)% 3.6% % 3.6%
    China(33.8)% (3.9)% (29.9)% (33.8)% 3.9%
    Total Strategic Focus Markets(4.0)% (2.5)% (1.5)% (6.5)% 5.0%
                   

    International and Other segment income increased 32.0% to $21.9 million in the second quarter of 2019 driven by gains from volume growth and gross margin expansion.

    Unallocated Corporate Expense

    Hershey's unallocated corporate expense in the second quarter of 2019 was $122.9 million, an increase of $1.9 million versus the same period of 2018.  This increase was driven primarily by compensation increases.

    2019 Full-Year Financial Outlook

    Full-year reported net sales are expected to increase around 2%.  The net impact of acquisitions and divestitures is estimated to be approximately a 0.5 point benefit and the foreign currency exchange rate impact is expected to be minimal based on current exchange rates.

    Full-year reported earnings per share-diluted are expected to be roughly in-line with 2018 reported earnings per share-diluted, while adjusted earnings per share-diluted are expected to increase 6% to 7% versus 2018.

    Below is a reconciliation of projected 2019 and full-year 2018 earnings per share-diluted calculated in accordance with GAAP to non-GAAP adjusted earnings per share-diluted:

     2019 (Projected) 2018
    Reported EPS – Diluted$5.54 – $5.66 $5.58
    Derivative mark-to-market gains (0.80)
    Business realignment activities0.01 – 0.03 0.25
    Acquisition-related costs0.04 – 0.06 0.21
    Gain on sale of licensing rights (0.01)
    Pension settlement charges relating to company-directed initiatives0.03 – 0.05 0.03
    Long-lived and intangible asset impairment charges 0.27
    Noncontrolling interest share of business realignment and impairment charges (0.03)
    Tax effect of all adjustments reflected above (0.14)
    Adjusted EPS – Diluted$5.68 – $5.74 $5.36
        

    2019 projected earnings per share-diluted, as presented above, does not include the impact of mark-to-market gains and losses on our commodity derivative contracts that will be reflected within corporate unallocated expense in segment results until the related inventory is sold, since we are not able to forecast the impact of the market changes.

    Live Webcast

    At 8:30 a.m. ET today, Hershey will host a conference call to elaborate on second-quarter results.  To access this call as a webcast, please go to Hershey’s web site at http://www.thehersheycompany.com.

    Note:  In this release, for the second quarter of 2019, Hershey references income measures that are not in accordance with GAAP because they exclude certain items impacting comparability, including business realignment activities, acquisition-related costs, pension settlement charges related to company-directed initiatives, and gains and losses associated with mark-to-market commodity derivatives.  These non-GAAP financial measures are used in evaluating results of operations for internal purposes and are not intended to replace the presentation of financial results in accordance with GAAP.  Rather, the company believes exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations.  A reconciliation of the non-GAAP financial measures referenced in this release to their nearest comparable GAAP financial measures as presented in the Consolidated Statements of Income is provided below.


    Reconciliation of Certain Non-GAAP Financial Measures
    Consolidated resultsThree Months Ended
    In thousands except per share dataJune 30, 2019 July 1, 2018
    Reported gross profit$874,744  $793,420 
    Derivative mark-to-market gains(53,552) (20,831)
    Business realignment activities  7,322 
    Acquisition-related costs  25 
    Non-GAAP gross profit$821,192  $779,936 
        
    Reported operating profit$410,070  $315,724 
    Derivative mark-to-market gains(53,552) (20,831)
    Business realignment activities6,378  15,296 
    Acquisition-related costs2,326  4,781 
    Long-lived asset impairment charges4,741  27,168 
    Gain on sale of licensing rights  (2,658)
    Non-GAAP operating profit$369,963  $339,480 
        
    Reported provision for income taxes$49,898  $36,687 
    Derivative mark-to-market gains*(4,541) (2,754)
    Business realignment activities*1,897  11,676 
    Acquisition-related costs*557  1,076 
    Gain on sale of licensing rights*  (1,203)
    Non-GAAP provision for income taxes$47,811  $45,482 
        
    Reported net income$312,840  $226,855 
    Derivative mark-to-market gains(49,011) (18,077)
    Business realignment activities4,481  3,619 
    Acquisition-related costs1,769  3,705 
    Long-lived asset impairment charges4,741  27,168 
    Noncontrolling interest share of business realignment and impairment charges417  (1,246)
    Gain on sale of licensing rights  (1,455)
    Non-GAAP net income$275,237  $240,569 
        
    Reported EPS - Diluted$1.48  $1.08 
    Derivative mark-to-market gains(0.25) (0.10)
    Business realignment activities0.03  0.07 
    Acquisition-related costs0.01  0.02 
    Long-lived asset impairment charges0.02  0.13 
    Noncontrolling interest share of business realignment and impairment charges  (0.01)
    Gain on sale of licensing rights  (0.01)
    Tax effect of all adjustments reflected above**0.02  (0.04)
    Non-GAAP EPS - Diluted$1.31  $1.14 

    * The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the company's quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
    ** Adjustments reported above are reported on a pre-tax basis before the tax effect described in the reconciliation above for Non-GAAP provision for income taxes. There is no tax effect associated with adjustments for Long-lived asset impairment charges and Noncontrolling interest share of business realignment and impairment charges.

    In the assessment of our results, we review and discuss the following financial metrics that are derived from the reported and non-GAAP financial measures presented above:

      
     Three Months Ended
     June 30, 2019 July 1, 2018
    As reported gross margin49.5% 45.3%
    Non-GAAP gross margin (1)46.5% 44.5%
        
    As reported operating profit margin23.2% 18.0%
    Non-GAAP operating profit margin (2)20.9% 19.4%
        
    As reported effective tax rate13.7% 14.1%
    Non-GAAP effective tax rate (3)14.8% 16.0%

    (1) Calculated as non-GAAP gross profit as a percentage of net sales for each period presented.
    (2) Calculated as non-GAAP operating profit as a percentage of net sales for each period presented.
    (3) Calculated as non-GAAP provision for income taxes as a percentage of non-GAAP income before taxes (calculated as non-GAAP operating profit minus non-GAAP interest expense, net plus or minus non-GAAP other (income) expense, net).

    We present certain percentage changes in net sales on a constant currency basis, which excludes the impact of foreign currency exchange.  To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rates in effect during the current period of the current fiscal year.  As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

    A reconciliation between reported (i) constant currency net sales growth rates and (ii) organic constant currency net sales growth rates is provided below:

      
     Three Months Ended June 30, 2019
     Percentage
    Change as
    Reported
     Impact of
    Foreign
    Currency
    Exchange
     Percentage
    Change on
    Constant
    Currency Basis
     Impact of Acquisitions and Divestitures Percentage
    Change on
    Organic
    Constant
    Currency Basis
    North America segment         
    Canada(3.7)% (3.6)% (0.1)% % (0.1)%
    Total North America segment0.5% (0.2)% 0.7% (0.3)% 1.0%
              
    International and Other segment         
    Mexico8.0% 1.3% 6.7% % 6.7%
    Brazil(3.5)% (8.2)% 4.7% % 4.7%
    India0.3% (3.3)% 3.6% % 3.6%
    China(33.8)% (3.9)% (29.9)% (33.8)% 3.9%
    Total International and Other segment3.9% (1.2)% 5.1% (3.2)% 8.3%
              
    Total Company0.9% (0.3)% 1.2% (0.6)% 1.8%
                   

    Appendix I

    Details of the charges included in GAAP results, as summarized in the press release (above), are as follows:

    Mark-to-Market Gains on Commodity Derivatives:  The mark-to-market (gains) losses on commodity derivatives are recorded as unallocated and excluded from adjusted results until such time as the related inventory is sold, at which time the corresponding (gains) losses are reclassified from unallocated to segment income.  Since we often purchase commodity contracts to price inventory requirements in future years, we make this adjustment to facilitate the year-over-year comparison of cost of sales on a basis that matches the derivative gains and losses with the underlying economic exposure being hedged for the period.

    Business Realignment Activities:  We periodically undertake restructuring and cost reduction activities as part of ongoing efforts to enhance long-term profitability.  During the first quarter of 2017, we commenced the Margin for Growth Program to drive continued net sales, operating profit and earnings per share-diluted growth over the next several years.  This program is focused on improving global efficiency and effectiveness, optimizing the company’s supply chain, streamlining the company’s operating model and reducing administrative expenses to generate long-term savings.  During the second quarter of 2019, business realignment charges related primarily to severance expenses and other third-party costs related to this program.  During the second quarter of 2018, business realignment charges related primarily to severance expenses, accelerated depreciation and other third-party costs related to this program.

    Acquisition-Related Costs:  Costs incurred during the second quarter of 2019 related to the integration of the 2018 acquisitions of Amplify Snack Brands, Inc and Pirate Brands.  Costs incurred during the second quarter of 2018 included legal and consultant fees incurred to effectuate the Amplify acquisition, as well as other costs relating to the integration of the business.

    Long-Lived Asset Impairment Charges:  During the second quarter of 2019, we recorded impairment charges, which are predominantly comprised of select land that has not yet met the held for sale criteria.  Additionally, included within our impairment charges is a contingency, that arose following the divestiture of Tyrrells, Inc. in July 2018.  During the second quarter of 2018, we recorded estimated losses to reduce the carrying values of the Shanghai Golden Monkey and Tyrrells businesses presented as held for sale to their estimated fair values less costs to sell.

    Noncontrolling Interest Share of Business Realignment and Impairment Charges:  Certain of the business realignment and impairment charges recorded in connection with the Margin for Growth Program related to a joint venture in which we own a 50% controlling interest.  Therefore, we have also adjusted for the portion of these charges included within the income (loss) attributed to the noncontrolling interest.

    Gain on Sale of Licensing Rights:  During the second quarter of 2018, we recorded a gain on the sale of licensing rights for a non-core trademark relating to a brand marketed outside of the United States.

    Tax Effect of All Adjustments:  This line item reflects the aggregate tax effect of all pre-tax adjustments reflected in the preceding line items of the applicable table.  The tax effect for each adjustment is determined by calculating the tax impact of the adjustment on the company’s quarterly effective tax rate, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

    Safe Harbor Statement

    This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Many of these forward-looking statements can be identified by the use of words such as “intend,” “believe,” “expect,” “anticipate,” “should,” “planned,” “projected,” “estimated,” and “potential,” among others.  These statements are made based upon current expectations that are subject to risk and uncertainty.  Because actual results may differ materially from those contained in the forward-looking statements, you should not place undue reliance on the forward-looking statements when deciding whether to buy, sell or hold the company's securities.  Factors that could cause results to differ materially include, but are not limited to: issues or concerns related to the quality and safety of our products, ingredients or packaging; changes in raw material and other costs, along with the availability of adequate supplies of raw materials; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; disruption to our manufacturing operations or supply chain; failure to successfully execute and integrate acquisitions, divestitures and joint ventures; changes in governmental laws and regulations, including taxes; political, economic, and/or financial market conditions; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure; our ability to hire, engage and retain a talented global workforce; our ability to realize expected cost savings and operating efficiencies associated with strategic initiatives or restructuring programs; complications with the design or implementation of our new enterprise resource planning system; and such other matters as discussed in our Annual Report on Form 10-K for the year ended December 31, 2018.  All information in this press release is as of June 30, 2019. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.


     
    The Hershey Company
    Consolidated Statements of Income
    for the periods ended June 30, 2019 and July 1, 2018
    (unaudited) (in thousands except per share amounts)
              
       Second Quarter Six Months
       2019 2018 2019 2018
              
    Net sales  $1,767,217  $1,751,615  $3,783,705  $3,723,574 
    Cost of sales892,473  958,195  2,016,457  1,956,094 
    Gross profit  874,744  793,420  1,767,248  1,767,480 
            
    Selling, marketing and administrative expense453,793  449,548  907,366  934,872 
    Long-lived asset impairment charges4,741  27,168  4,741  27,168 
    Business realignment costs6,140  980  6,202  9,204 
            
    Operating profit410,070  315,724  848,939  796,236 
    Interest expense, net33,776  34,952  71,234  64,291 
    Other (income) expense, net13,125  20,766  18,602  22,708 
            
    Income before income taxes363,169  260,006  759,103  709,237 
    Provision for income taxes49,898  36,687  141,951  135,199 
              
    Net income including noncontrolling interest313,271  223,319  617,152  574,038 
              
    Less: Net income (loss) attributable to noncontrolling interest431  (3,536) (46) (3,020)
    Net income attributable to The Hershey Company $312,840  $226,855  $617,198  $577,058 
              
    Net income per share- Basic- Common$1.54  $1.11  $3.03  $2.82 
     - Diluted- Common$1.48  $1.08  $2.93  $2.73 
     - Basic- Class B$1.39  $1.01  $2.75  $2.56 
              
    Shares outstanding- Basic- Common149,025  148,948  148,864  149,534 
     - Diluted- Common210,817  210,378  210,568  211,170 
     - Basic- Class B60,614  60,620  60,614  60,620 
               
    Key margins:       
    Gross margin49.5% 45.3% 46.7% 47.5%
    Operating profit margin23.2% 18.0% 22.4% 21.4%
    Net margin17.7% 13.0% 16.3% 15.5%
              


    The Hershey Company
    Supplementary Information – Segment Results
    for the periods ended June 30, 2019 and July 1, 2018
    (unaudited) (in thousands of dollars)
                
     Second Quarter Six Months
     2019 2018 % Change 2019 2018 % Change
    Net sales:           
    North America$1,568,040  $1,559,952  0.5% $3,374,998  $3,311,640  1.9%
    International and Other199,177  191,663  3.9% 408,707  411,934  (0.8)%
    Total$1,767,217  $1,751,615  0.9% $3,783,705  $3,723,574  1.6%
                
    Segment income:           
    North America$470,898  $443,859  6.1% $1,035,659  $978,285  5.9%
    International and Other21,944  16,627  32.0% 42,187  34,307  23.0%
    Total segment income492,842  460,486  7.0% 1,077,846  1,012,592  6.4%
    Unallocated corporate expense (1)122,879  121,006  1.5% 237,383  244,973  (3.1)%
    Mark-to-market adjustment for commodity derivatives (2)(53,552) (20,831) 157.1% (25,585) (117,081) (78.1)%
    Long-lived asset impairment charges4,741  27,168  (82.5)% 4,741  27,168  (82.5)%
    Costs associated with business realignment initiatives6,378  15,296  (58.3)% 6,862  31,247  (78.0)%
    Acquisition-related costs2,326  4,781  (51.3)% 5,506  32,707  (83.2)%
    Gain on sale of licensing rights  (2,658) NM    (2,658) NM 
    Operating profit410,070  315,724  29.9% 848,939  796,236  6.6%
    Interest expense, net33,776  34,952  (3.4)% 71,234  64,291  10.8%
    Other (income) expense, net13,125  20,766  (36.8)% 18,602  22,708  (18.1)%
    Income before income taxes$363,169  $260,006  39.7% $759,103  $709,237  7.0%
                
    (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, and (d) other gains or losses that are not integral to segment performance. 
     
    (2)  Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative (gains) losses.
     
    NM - not meaningful


     Second Quarter Six Months
     2019 2018 2019 2018
    Segment income as a percent of net sales:       
    North America30.0% 28.5% 30.7% 29.5%
    International and Other11.0% 8.7% 10.3% 8.3%


     
    The Hershey Company
    Consolidated Balance Sheets
    as of June 30, 2019 and December 31, 2018
     (in thousands of dollars)
        
    Assets2019 2018
     (unaudited)  
    Cash and cash equivalents$365,963  $587,998 
    Accounts receivable - trade, net538,746  594,145 
    Inventories957,953  784,879 
    Prepaid expenses and other230,896  272,159 
        
    Total current assets2,093,558  2,239,181 
        
    Property, plant and equipment, net2,107,185  2,130,294 
    Goodwill1,805,955  1,801,103 
    Other intangibles1,257,868  1,278,292 
    Other assets499,303  252,984 
    Deferred income taxes29,691  1,166 
        
    Total assets$7,793,560  $7,703,020 
        
    Liabilities and Stockholders' Equity   
        
    Accounts payable$479,792  $502,314 
    Accrued liabilities650,922  679,163 
    Accrued income taxes16,748  33,773 
    Short-term debt886,779  1,197,929 
    Current portion of long-term debt353,186  5,387 
        
    Total current liabilities2,387,427  2,418,566 
        
    Long-term debt2,888,043  3,254,280 
    Other long-term liabilities636,913  446,048 
    Deferred income taxes197,096  176,860 
        
    Total liabilities6,109,479  6,295,754 
        
    Total stockholders' equity1,684,081  1,407,266 
        
    Total liabilities and stockholders' equity$7,793,560  $7,703,020 


      
    FINANCIAL CONTACT:MEDIA CONTACT:
    Melissa PooleJeff Beckman
    717-534-7556717-534-8090

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