Hershey Corp. 101

Common Size Income Statement

2005 2006

ANNUAL REPORT PROJECT PHASE 4 QUESTIONS

1. Describe the history and development of the corporation (one page maximum).

2. Briefly explain the process by which you obtained copies of the company annual report and 10K. What was the filing date for the most recent 10-K? Was it filed timely (i.e. was a NT 10K filed prior to submission of the 10-K)? Has the 10K been amended since the original filing date (10-K/A files)?

Called Hershey and asked for 2 copies. Hershey then mailed them to me. The most recent date their 10-K was 2/19/08, it was filed timely because there was no NT 10-K filed previously and there were no amended 10-K’s filed since 2/19/08.

3. How many 8-K filings have there been in last three months, were any particularly noteworthy?

There have been 4, 8-K filings in the last three months. (Jan-March). The 8-K filed 3/27/08 was much longer than the others in the past, this seems noteworthy. It did include underwriting agreements offers/sales of securities.

4. Who is the Chairperson of the Board, CEO, and CFO? Provide a brief background description for the CEO and CFO.

The Chairman is Kenneth L. Wolfe, the CEO is David J. West, and the CFO is Humberto P. Alfonlso.

5. The corporate headquarters is located in what city? When and where will the next annual meeting be held?

The corporate headquarters is located in Hershey, PA. The next annual meeting is 4/22/2008 at 10:00 am (ET) at the Giant Center in Hershey, PA.

6. When is the corporate fiscal year end?

The fiscal year ends 12/31

7. What is (are) the primary products of the corporation?

The primary products of the corporation are chocolate and other non-chocolate candies.

8. Find at least one article on your company in a business magazine or newspaper. Write a summary of the article. Include a copy of the article with phase four.

During November 12, 2007 the Hershey Company had a reshuffling of it’s board of directors due to languishing stocks. According to LeRoy S. Zimmerman, the current chairman of Hershey Trust board. In the last six months before Hershey shares had fallen by 25%, hurt by higher dairy costs and competition from Mars Inc. This overall change in board of directors has increased stock.

9. What is the purpose of the section of the 10-K entitled "Management Discussion and Analysis"?

The purpose of the 10-K entitled “Management Discussion and Analysis” Some is included, seems more like a business review. They experienced a slow-down in retail sales but foresee new product soon to boost sales.

10. Does the annual report contain a similar section? If so, is it similar in content, if not are there any other sections which serve a similar function?

It is slightly included in the business review.

11. Summarize compensation to directors disclosed in the proxy statement (this information may be in the 10K or you may need to seek it through the proxy statement).

Compensation plan is designed to attract and retain the highly qualified non-employee directors and to align non-employees directors with those of their stock holders. The schedule of compensation is part of several benefits including stock grants, cash fees, and retainers.

12. Does there seem to be any correlation between the compensation package for the CEO and the company’s performance?

Yes and no. None of the executive officers received a bonus in 2006 after a very disappointing year due to slowing sales, rising competition, and the rising price of both energy and dairy. Bonuses for executives are based on fulfilling company plans and goals. In order for executives to receive bonuses, annual revenue growth must increase by at least 3%. None of the goals were met in 2006. However, that being said, Richard Lenny, CEO, did receive an additional $10,249,910 in stock options, option awards, pension plan, deferred compensation earnings, and other compensation.

13. What is the name of the company's Independent Auditing firm?

KPMG LLP

14.