Hershey Foods (HSY)

December 31,

Current assets

Property, plant and equipment, net

Goodwill and other intangibles

Deferred income taxes

Other assets

Total assets

The change in current assets from 2008 to 2009 was primarily due to the following:

Higher cash and cash equivalents in 2009 due to improved cash flows from operations, which significantly reduced the need for short-term borrowings;

A decrease in accounts receivable primarily resulting from the timing of sales and cash collections in December 2009 as compared with December 2008, along with a decrease in extended dated receivables associated with sales of seasonal items and new products;

A decrease in inventories primarily related to initiatives to improve sales forecasting and inventory planning;

A decrease in deferred income taxes primarily related to the effect of hedging transactions; and

A decrease in prepaid expenses and other current assets primarily reflecting the timing of income tax payments for various tax jurisdictions and the effect of certain hedging transactions.

Property, plant and equipment was lower in 2009 as depreciation expense of $158.0 million and asset retirements more than offset capital additions of $126.3 million. Accelerated depreciation of fixed assets at facilities which were being closed as well as certain asset retirements resulted primarily from the global supply chain transformation program.

Goodwill and other intangibles increased primarily as a result of the Van Houten Singapore acquisition and the effect of currency translation adjustments.

Other assets increased primarily due to the change in the funded status of our pension plans as well as the effect of certain hedging transactions.

December 31,

Current assets

Property, plant and equipment, net

Goodwill and other intangibles

Deferred income taxes

Other assets

Total assets

The change in current assets from 2007 to 2008 was primarily due to the following:

Lower cash and cash equivalents in 2008 primarily as a result of decisions to reduce short-term borrowings;

A decrease in accounts receivable primarily resulting from the timing of sales and cash collections in November and December 2008 as compared with November and December 2007, along with a decrease in extended dated receivables associated with sales of seasonal items and new products;

An increase in prepaid expenses and other current assets primarily reflecting assets associated with certain commodity and treasury hedging transactions.

Property, plant and equipment was lower in 2008 primarily due to depreciation expense of $227.2 million and asset retirements. Accelerated depreciation of fixed assets at facilities which are being closed as well as certain asset retirements resulted primarily from the global supply chain transformation program.

Goodwill and other intangibles decreased as a result of total impairment charges of $45.7 million associated with certain trademarks and the effect of currency translation adjustments, offset partially by the $13.7 million intangible asset associated with the cooperative agreement with Bauducco.

The decrease in other assets was primarily associated with the change in the funded status of our pension plans in 2008, resulting from a significant reduction in the fair value of pension plan assets.

December 31,

Current assets

Property, plant and equipment, net

Goodwill and other intangibles

Other assets

Total assets

The change in current assets from 2006 to 2007 was primarily due to the following:

Higher cash and cash equivalents in 2007 due to the timing of cash collections;

A decrease in accounts receivable primarily resulting from lower sales in December 2007 as compared with December 2006;

A decrease in inventories in 2007 reflecting lower raw material and goods in process inventories resulting from reduced manufacturing requirements and the global supply chain transformation program, in addition to lower finished goods inventories as a result of working capital improvement initiatives, partially offset by an inventory build in anticipation of the relocation of certain manufacturing processes under the global supply chain transformation program;

An increase in deferred income taxes primarily associated with the 2007 business realignment and impairment charges as well as impending executive retirement benefit payments; and

An increase in prepaid expenses and other current assets primarily reflecting receivables associated with certain commodity transactions, and assets acquired through the Godrej Hershey Foods and Beverages Company acquisition.

Property, plant and equipment was lower in 2007 primarily due to depreciation expense of $292.7 million and asset retirements, partially offset by capital additions and assets acquired through the Godrej Hershey Foods and Beverages Company acquisition. Accelerated depreciation of facilities designated for closure and certain asset retirements resulted primarily from the global supply chain transformation program.

Goodwill and other intangibles increased as a result of the Godrej Hershey Foods and Beverages Company acquisition and the effect of currency translation adjustments, offset partially by a reduction resulting from the goodwill impairment charge associated with our business in Brazil. Further information is included in Note 1 and Note 16 to the Consolidated Financial Statements.

The increase in other assets was primarily associated with the 2007 business acquisitions, as well as the reclassification of certain tax benefits to other assets in accordance with the adoption of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (“FIN No. 48”).

December 31,

Current assets

Property, plant and equipment, net

Goodwill and other intangibles

Other assets

Total assets

The change in current assets from 2005 to 2006 was primarily due to the following:

Higher cash and cash equivalents in 2006 due to the timing of cash collections;

An increase in accounts receivable in 2006 resulting from the timing of sales in December;

An increase in inventories reflecting higher raw material inventories to support manufacturing requirements; and

A decrease in prepaid expenses and other current assets reflecting the implementation of SFAS No. 158 and lower prepaid selling and marketing expenses, partially offset by a receivable of approximately $14.0 million related to the recovery of damages resulting from the product recall in Canada.

Property, plant and equipment was lower in 2006 primarily due to depreciation expense of $181.0 million and asset retirements, partially offset by capital additions.

The change in other assets in 2006 was primarily due to the implementation of SFAS No. 158 which resulted in the reclassification of $143.9 million of assets related to our pension plans to accumulated other comprehensive loss.