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HSY » Topics » Liabilities associated with marketing promotion programs

This excerpt taken from the HSY 10-K filed Feb 19, 2010.

Liabilities associated with marketing promotion programs

We recognize the costs of marketing promotion programs as a reduction to net sales along with a corresponding accrued liability based on estimates at the time of revenue recognition.

Information on our promotional costs and assumptions is as follows:

 

For the years ended December 31,

    2009    2008    2007
In millions of dollars               

Promotional costs

    $ 721.5    $ 766.6    $ 702.1

 

  •  

We determine the amount of the accrued liability by:

 

  •  

Analysis of programs offered;

 

  •  

Historical trends;

 

  •  

Expectations regarding customer and consumer participation;

 

  •  

Sales and payment trends; and

 

  •  

Experience with payment patterns associated with similar, previously offered programs.

 

  •  

The estimated costs of these programs are reasonably likely to change in the future due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products.

 

  •  

Reasonably possible near-term changes in the most material assumptions regarding the cost of promotional programs could result in changes within the following range:

 

  •  

A reduction in costs of approximately $13.1 million; and

 

  •  

An increase in costs of approximately $5.6 million.

 

  •  

Changes in these assumptions would affect net sales and income before income taxes.

 

  •  

Over the three-year period ended December 31, 2009, actual promotion costs have not deviated from the estimated amounts by more than 2%.

 

  •  

Changes in estimates related to the cost of promotional programs would not have a material impact on our liquidity or capital resources.

This excerpt taken from the HSY 10-K filed Feb 20, 2009.

Liabilities associated with marketing promotion programs

We recognize the costs of marketing promotion programs as a reduction to net sales along with a corresponding accrued liability based on estimates at the time of revenue recognition.

Information on our promotional costs and assumptions is as follows:

 

For the years ended December 31,

    2008    2007    2006
In millions of dollars               

Promotional costs

    $ 766.6    $ 702.1    $ 631.7

 

  •  

We determine the amount of the accrued liability by:

 

  •  

Analysis of programs offered;

 

  •  

Historical trends;

 

  •  

Expectations regarding customer and consumer participation;

 

  •  

Sales and payment trends; and

 

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  •  

Experience with payment patterns associated with similar, previously offered programs.

 

  •  

The estimated costs of these programs are reasonably likely to change in the future due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products.

 

  •  

Reasonably possible near-term changes in the most material assumptions regarding the cost of promotional programs could result in changes within the following range:

 

  •  

A reduction in costs of approximately $14.5 million

 

  •  

An increase in costs of approximately $6.0 million

 

  •  

Changes in these assumptions would affect net sales and income before income taxes.

 

  •  

Over the three-year period ended December 31, 2008, actual promotion costs have not deviated from the estimated amounts by more than 4%.

 

  •  

Changes in estimates related to the cost of promotional programs would not have a material impact on our liquidity or capital resources.

This excerpt taken from the HSY 10-K filed Feb 19, 2008.

Liabilities associated with marketing promotion programs

We recognize the costs of marketing promotion programs as a reduction to net sales along with a corresponding accrued liability based on estimates at the time of revenue recognition.

Information on our promotional costs and assumptions is as follows:

 

For the years ended December 31,

    2007    2006    2005
In millions of dollars               

Promotional costs

    $ 702.1    $ 631.7    $ 583.5

 

  •  

We determine the amount of the accrued liability by:

 

  •  

Analysis of programs offered;

 

  •  

Historical trends;

 

  •  

Expectations regarding customer and consumer participation;

 

  •  

Sales and payment trends; and

 

  •  

Experience with payment patterns associated with similar, previously offered programs.

 

  •  

The estimated costs of these programs are reasonably likely to change in the future due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products.

 

  •  

Reasonably possible near-term changes in the most material assumptions regarding the cost of promotional programs could result in changes within the following range:

 

  •  

A reduction in costs of approximately $16.0 million

 

  •  

An increase in costs of approximately $3.0 million

 

  •  

Changes in these assumptions would affect net sales and income before income taxes.

 

  •  

Over the three-year period ended December 31, 2007, actual promotion costs have not deviated from the estimated amounts by more than 6.0%.

 

  •  

Changes in estimates related to the cost of promotional programs would not have a material impact on our liquidity or capital resources.

This excerpt taken from the HSY 10-K filed Feb 23, 2007.

Liabilities associated with marketing promotion programs

We recognize the costs of marketing promotion programs as a reduction to net sales along with a corresponding accrued liability based on estimates at the time of revenue recognition.

Information on our promotional costs and assumptions is as follows:

 

For the years ended December 31,

    2006    2005    2004
In millions of dollars               

Promotional costs

    $ 625.8    $ 583.5    $ 555.9

 

36

  •  

We determine the amount of the accrued liability by:

 

  •  

Analysis of programs offered;

 

  •  

Historical trends;

 

  •  

Expectations regarding customer and consumer participation;

 

  •  

Sales and payment trends; and

 

  •  

Experience with payment patterns associated with similar, previously offered programs.

 

  •  

The estimated costs of these programs are reasonably likely to change in the future due to changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products.

 

  •  

Reasonably possible near-term changes in the most material assumptions regarding the cost of promotional programs could result in changes within the following range:

 

  •  

A reduction in costs of approximately $17.0 million

 

  •  

An increase in costs of approximately $4.0 million

 

  •  

Changes in these assumptions would affect net sales and income before income taxes.

 

  •  

Over the three-year period ended December 31, 2006, actual promotion costs have not deviated from the estimated amounts by more than 6%.

 

  •  

Changes in estimates related to the cost of promotional programs would not have a material impact on our liquidity or capital resources.

EXCERPTS ON THIS PAGE:

10-K
Feb 19, 2010
10-K
Feb 20, 2009
10-K
Feb 19, 2008
10-K
Feb 23, 2007

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