HERSHEY FOODS COMPANY STEPHANIE BLAINE ACG

Chocolate sales are doing well. Hershey is in a good position globally. Hershey Food sales will be going up in the future. Cash is flowing properly.

Richard H. Lenny Chief Executive Officer Hershey, Pennsylvania DECEMBER 31, 2003 Hershey’s Chocolate*Almond Joy*Mounds*Cadbury Crème Eggs*Hershey’s Kisses Reeses*Whoppers*Hugs*Kit Kat*Jolly Rancher WORLDWIDE

Independent Auditors KPMG LLP 345 Park Avenue New York, NY 10017

Stock price for February 19, 2004: $80.09 Twelve month trading range of the company’s stock: $64.05 (3/03)- $77.40 (11/03) Dividends were declared on October 7,2003 and February 17,2004 at $0.395 per share. Hold on to your investments. The market is slowly rising.

Hershey Foods’ goal is to have the #1 position in the North American confectionary market. Hershey wants to lead in the United States chocolate related grocery products.

Gross Profit Income from Operations $625,343$706,405 Net Income$403,578$207,156 Hershey Foods Corporation uses a single-step format There has been decreases this year due to returns, discounts, and allowances, plus customer bankruptcies and closings

Liabilities have not changed much while Stockholder’s Equity increased a lot, making Assets bigger. Assets = Liabilities + SHE 2002$348,0551=$2,108,848+$1,371, $3,247,430=$2,011,226+$1,147,204

Cash flows from operations are more than net income for the past two years. The company is growing through investing activities, like new software programs. What is the company’s primary source of financing is through stock sales. Overall, has cash decreased over the past year, while 2001 increased from 2000.

Principles of Consolidation Use of Estimates Revenue Recognition Cash Equivalents Commodities Futures Contracts Property, Plant and Equipment

For the past two years: Working Capital $716,772$561,097 Current Ratio Receivable turnover 445 times230 times Average days’ sales uncollected 8%158% Inventory turnover 387 times40times Average days’ inventory on hand 94%912.5%

For the past two years: Profit margin ( on every dollar) $0.097$0.056 Asset turnover Return on assets Return on equity

For the past two years: Debt to equity

For the past two years: Price/earnings per share $2.96$1.52 Dividend yield $2.93$1.50