2012-06-15T11:04:03-04:00 2011-07-31 PricewaterhouseCoopers LLP 2001 MARKET ST SUITE 1700 PHILADELPHIA PA 19103 990 2010-08-01 231353340 MILTON HERSHEY SCHOOL AND SCHOOL TRUST MILT 7175201100 PO BOX 445 HERSHEY PA 17033 GAYLA M BUSH 2012-06-11 Eric M McNeil 2673303000 2010 2016-02-24 21:20:13Z ANTHONY J COLISTRA PO BOX 830 HERSHEY PA 17033 1542775231 false X WWW.MHS-PA.ORG X SEE SCH O 1909 PA IN KEEPING WITH MILTON AND CATHERINE HERSHEY'S DEED OF TRUST, MILTON HERSHEY SCHOOL NURTURES AND EDUCATES CHILDREN IN SOCIAL AND FINANCIAL NEED TO LEAD FULFILLING AND PRODUCTIVE LIVES. SEE SCHEDULE O. 10 0 1998 617 -241805 -261699 41874 40306 636525 720033 211039271 334677188 -112726 -639841 211604944 334797686 2762757 6013232 0 0 103186517 102536089 0 0 0 102312426 95611122 208261700 204160443 3343244 130637243 7738773688 8989400274 168602026 165482063 7570171662 8823918211 X MILTON HERSHEY SCHOOL AND SCHOOL TRUST MISSION - SEE SCHEDULE O FOR FURTHER DETAILS. false false 169157979 6013232 720033 SEE SCHEDULE O FOR FURTHER DETAILS. 169157979 true true false true false false true false true true true false false false true true false true false true false false false false false false false true true false false false false false false false true false false false false true true true true false false true 285 0 true 1998 true true true true LU false false false false false false false false X 10 0 true false false false false true false true true false false true true true true true true true true false X GAYLA BUSH 7175201100 HERSHEY TRUST CO PO BOX 445 HERSHEY PA 17033 X ROBERT F CAVANAUGH 5.0 X 0 205360 123254 RAYMOND L GOVER 2.5 X 0 119456 3254 JAMES M MEAD 4.0 X 0 125000 3254 JAMES E NEVELS 3.5 X 0 459616 123254 VELMA A REDMOND ESQ 5.0 X 0 122740 3254 ROBERT M REESE 57.0 X 0 943479 37321 JOSEPH M SENSER 5.0 X 0 112500 3254 LEROY S ZIMMERMAN 4.5 X 0 273500 219001 BARBARA M BARRETT 8.0 X 0 55833 3254 ROBERT HEIST X 0 0 0 RICHARD ZILMER X 0 0 0 JAMES M SHEEHAN 40.0 X 146248 121744 49185 HERSHEY TRUST COMPANY X 1000 0 0 ELLIOTT ROBINSON 48.0 X 220384 0 71659 JOAN SINGLETON 50.0 X 216712 0 65052 PETER GURT 50.0 X 262498 0 91509 ANTHONY J COLISTRA ED D 50.0 X 366057 26667 183562 GAYLA M BUSH 43.0 X 0 235693 44999 MARY LOUISE PORTER ESQ 50.0 X 108418 178185 39632 WILLIAM DAVIES 48.0 X 0 272753 61142 ROBERT CROBAK 45.0 X 138507 0 35251 CONNIE MCNAMARA 50.0 X 128120 0 37681 ROBERT FEHRS 50.0 X 204532 0 67087 ANNETTE COLE GILL 48.0 X 172167 0 59442 BETH SHAW 50.0 X 178867 0 41563 MIKE WELLER 50.0 X 166422 0 64422 AL CARBONARA 40.0 X 170335 0 41484 MARLENE NAVADOENDS 311 45.0 X 163364 0 24582 SANDRA WALLS-CULOTTAENDS 110 40.0 X 154318 0 2963 JAMES CARTER 45.0 X 191346 0 20437 SANDRA BARNES 45.0 X 145587 0 4929 SCOTT RICHARDSON 45.0 X 145876 0 21527 3280758 3252526 1547208 73 true true false BDT CAPITAL NORTH MICHIGAN AVENUE CHICAGO IL 60611 INVESTMENT BANKING 2150053 DAVIS POLK WARDELL 450 LEXINGTON AVENUE NEW YORK NY 10017 LEGAL 1916748 RANDALL YOST CONSTRUCTION PO BOX 692 MAYTOWN PA 17550 CONSTRUCTION 1622104 SILCHESTER 780 THIRD AVENUE NEW YORK NY 10017 INVESTMENT MGMT 1384560 BOSTON COMPANY ONE BOSTON PLACE BOSTON MA 02108 INVESTMENT MGMT 1245797 83 40306 40306 AG MILK AND CROP SALES 900099 548323 548323 MEMORABILIA SALES TO PUBLIC 900099 5902 5902 CONCESSION STAND SALES 900099 51147 51147 UTILITIES REBATES 900099 70369 70369 FOOD REBATES 900099 11928 11928 32364 32364 720033 176022363 791836 175230527 0 0 6045472 6685313 -639841 -639841 -1033641 400636 1359866248 80809 1200555469 736763 159310779 -655954 158654825 158654825 0 0 0 0 334797686 720033 -241805 334285988 0 6013232 6013232 0 0 2928130 1664401 1263729 0 0 62778392 59573270 3205122 0 14844942 13805796 1039146 0 16217774 15082530 1135244 0 5766851 5363171 403680 0 0 328757 0 328757 0 103108 0 103108 0 0 0 18249825 0 18249825 0 3372577 3372577 0 0 1369575 753182 616393 0 1813015 1631830 181185 0 514401 509166 5235 0 0 7290954 6787651 503303 0 630163 619526 10637 0 0 95127 83983 11144 0 0 0 37911578 35257768 2653810 0 3062352 842065 2220287 0 TRUST EXPENSES 1879699 0 1879699 0 FOOD, CLOTHING & HOUSEHOLD 6041525 5904906 136619 0 SUPPLIES 1760360 1720262 40098 0 CONTRACTED SERVICES/CONSULTING 5513682 4740381 773301 0 EQUIP RENTAL & MAINTENANCE 2864970 2678821 186149 0 2809454 2753461 55993 0 204160443 169157979 35002464 0 16995 74445817 127248820 19380064 47139599 1304048 1252511 2133346 911750 1115347397 390596255 727059462 724751142 1863164333 1995212953 5051286618 6092866504 7738773688 8989400274 168602026 165482063 168602026 165482063 X 929005573 1025244030 6641166089 7798674181 7570171662 8823918211 7738773688 8989400274 X 130637243 1123109306 X false true true X false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 FORM 990, SCHEDULE C, PART IV Although not technically lobbying, the Milton Hershey School and School Trust paid $76,314 during the reporting period to a consultant to maintain contact with local legislators for zoning and transportation issues as well as for security services. The Hershey Trust Company, a for-profit corporation wholly owned by the Milton Hershey School and School Trust, paid a consultant $81,476 during the reporting period for consulting on transportation issues. Of this amount, $42,476 was for Pennsylvania lobbying services. Hershey Trust Company, Hershey Entertainment & Resorts Company, and The Hershey Company paid a consultant $103,226 during the reporting period for consulting on transportation issues. Of this amount, $48,625 was for Federal lobbying services. Hershey Entertainment & Resorts Company, a for-profit corporation wholly owned by the Milton Hershey School and School Trust, had state lobbying expenses of $125,717 during the reporting period. Their political action committee made disbursements of $14,654 during the reporting period. The Hershey Company, a for-profit corporation, files quarterly lobbyist disclosure reports that detail the issues being lobbied and the dollar value of time dedicated to each reportable issue. These reports are filed as follows: United States House of Representatives (quarterly) ID # 3127490000 United States Senate (quarterly) ID # 18103-12 Pennsylvania Department of State (quarterly) P-00745; L-00972 Filed reports represent expenditures relating to both internal and external resources. X X X false 6641166089 1157508092 7798674181 5872192761 768973328 6641166089 6233173623 -360980862 5872192761 1.00000 false false 67562619 67562619 107267096 856587227 327147562 636706761 83930455 63448693 20481762 724751142 0 0 0 334797686 204160443 130637243 1095942546 27166760 1123109306 1253746549 1463872272 1095942546 27166760 1123109306 340762966 -5965280 -5965280 334797686 210125723 5965280 5965280 204160443 204160443 SCHEDULE D, PART III, LINE 1A & 4 MAINTAINING COLLECTIONS OF ART, HISTORICAL TREASURES, OR SIMILAR ASSETS THE ORGANIZATION ELECTED, AS PERMITTED UNDER SFAS 116, NOT TO REPORT IN ITS REVENUE STATEMENT AND BALANCE SHEET WORKS OF ART, HISTORICAL TREASURES, OR OTHER SIMILAR ASSETS HELD FOR PUBLIC EXHIBITION, EDUCATION OR RESEARCH IN FURTHERANCE OF PUBLIC SERVICE. THE DEPARTMENT OF SCHOOL HISTORY AND THE MHS HERITAGE CENTER AT KINDERHAUS PROVIDE FOR THE CARE AND MANAGEMENT OF THE HISTORICAL ASSETS OF THE MILTON HERSHEY SCHOOL COMMUNITY. THE HISTORICAL ASSETS (COLLECTION) CONSIST OF ARCHIVAL RECORDS AND DOCUMENTS, THREE DIMENSIONAL OBJECTS, INTERPRETIVE EXHIBITS, AND HISTORICAL CAMPUS BUILDINGS WHICH HELP TO DOCUMENT THE LIVES AND VALUES OF MILTON AND CATHERINE HERSHEY AS FOUNDERS OF OUR SCHOOL, THE HISTORY AND TRADITIONS OF THE SCHOOL AS AN INSTITUTION, AND THE STORIES OF THE STUDENTS, STAFF, AND ALUMNI WHO MAKE UP THE SCHOOL COMMUNITY. EXCLUDED FROM THIS MANDATE ARE LEGAL BOARD RECORDS, STUDENT RECORDS, AND ALUMNI RECORDS. Schedule D, Part V, Line 4 Endowment Funds The endowment funds are to be used to fund the operations of the Milton Hershey School and School Trust. The endowment funds and other investment assets of the Milton Hershey School Trust (the "Assets") are invested for the long term because the school is to exist in perpetuity per the desire of Milton Hershey as stated in the Deed of Trust. The assets are invested to ensure that funds are available to meet current and future obligations of the school. THE BOARD AND THE TRUSTEE CONTINUALLY REVIEW THE PERFORMANCE OF THE ASSETS. THE BOARD ALSO PERIODICALLY REVIEWS THE PROCESS OF INVESTING THE ASSETS WITH THE ASSISTANCE OF THE TRUSTEE AND THIRD-PARTY INVESTMENT CONSULTANTS. THEY HAVE A DISCIPLINED PROCESS TO REVIEW ASSET ALLOCATION, MANAGER SELECTION, AND OUTSIDE MANAGER FEES, AS WELL AS THE DETAILED INVESTMENT POLICY AND GUIDELINES. SCHEDULE D, PART X LINE 2 FIN 48 FOOTNOTE TAX POSITIONS ARE RECOGNIZED OR DERECOGNIZED BASED ON A "MORE-LIKELY THAN-NOT" THRESHOLD FOR POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST ADOPTED THIS GUIDANCE EFFECTIVE AUGUST 1, 2009. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST'S ACCOUNTING POLICY FOR EVALUATING UNCERTAIN TAX POSITIONS IS TO RECOGNIZE TAX POSITIONS IF THEY ARE PROBABLE OF BEING ULTIMATELY REALIZED. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST DOES NOT BELIEVE THERE ARE ANY UNRECOGNIZED TAX BENEFITS OR LIABILITIES THAT SHOULD BE RECORDED. Schedule D, Part XI, Line 8 RECONCILIATION OF CHANGE IN NET ASSETS FROM FORM 990 TO AUDITED FIN STMTS UNRECOGNIZED PENSION & POST RETIREMENT BENEFIT COST 27,166,760 SCHEDULE D, PART XII, LINE 2D RECONCILIATION OF REVENUE PER AUDITED FIN STMTS WITH REVENUE PER RETURN UNRECOGNIZED PENSION & POST RETIREMENT BENEFIT COST 27,166,760 SCHEDULE D, PART XII, LINE 4B RECONCILIATION OF REVENUE PER AUDITED FIN STMTS WITH REVENUE PER RETURN RENTAL EXPENSE (RECLASS) (6,685,313) PROGRAM SERVICE REVENUE (RECLASS) 720,033 _________ (5,965,280) SCHEDULE D, PART XIII, LINE 2D RECONCILIATION OF EXPENSES PER AUDITED FIN STMTS WITH REVENUE PER RETURN RENTAL EXPENSE (RECLASS) 6,685,313 PROGRAM SERVICE REVENUE (RECLASS) (720,033) _________ 5,965,280 SUPPLEMENTAL INFORMATION FORM 990, PARTS VIII AND IX: DETAIL OF REVENUE AND EXPENSES PART VIII, STATEMENT OF REVENUE MILTON HERSHEY MILTON HERSHEY TOTAL LINE SCHOOL TRUST SCHOOL 1F CONTRIBUTIONS 40,306 - 40,306 2 PROGRAM SERVICE REV - 720,033 720,033 3 INVESTMENT INCOME 176,022,363 - 176,022,363 6 NET RENTAL INCOME (639,841) - (639,841) 7(I) GAIN ON SALE-SECURITIES 159,310,779 - 159,310,779 7(II) GAIN ON SALE-OTHER (721,270) 65,316 (655,954) ___________ _______ ___________ 12 TOTAL REVENUE 334,012,337 785,349 334,797,686 PART IX, STATEMENT OF FUNCTIONAL EXPENSES MILTON HERSHEY MILTON HERSHEY TOTAL LINE SCHOOL TRUST SCHOOL 2 GRANTS TO INDIVIDUALS - 6,013,232 6,013,232 5 COMPENSATION OFFICERS 1,000 2,927,130 2,928,130 7 OTHER SALARIES & WAGES - 62,778,392 62,778,392 8 PENSION PLAN CONTRIBUTIONS - 14,844,942 14,844,942 9 OTHER EMPLOYEE BENEFITS - 16,217,774 16,217,774 10 PAYROLL TAXES - 5,766,851 5,766,851 11B LEGAL FEES - 328,757 328,757 11C ACCOUNTING FEES - 103,108 103,108 11F INVEST MGMT FEES 18,249,825 - 18,249,825 11G OTHER FEES FOR SERVICES - 3,372,577 3,372,577 12 ADVERTISING - 1,369,575 1,369,575 13 OFFICE EXPENSES - 1,813,015 1,813,015 14 INFORMATION TECHNOLOGY - 514,401 514,401 16 OCCUPANCY - 7,290,954 7,290,954 17 TRAVEL - 630,163 630,163 19 CONFERENCES - 95,127 95,127 22 DEPRECIATION - 37,911,578 37,911,578 23 INSURANCE - 3,062,352 3,062,352 24A TRUST EXPENSES (*) 1,879,699 - 1,879,699 24b FOOD/CLOTHES/HOUSE ITEMS - 6,041,525 6,041,525 24C SUPPLIES - 1,760,360 1,760,360 24D CONTRACTED SERV/CONSULTING - 5,513,682 5,513,682 24E EQUIPMENT MAINTENANCE - 2,864,970 2,864,970 24F ALL OTHER EXPENSES - 2,809,454 2,809,454 ___________ ___________ ___________ 26 TOTAL FUNCTIONAL EXPENSES 20,130,524 184,029,919 204,160,443 (*) TRUST EXPENSES INCLUDE LEGAL, CONSULTING AND OTHER EXPENSES RELATED TO MANAGEMENT OF THE ENDOWMENT. SUPPLEMENTAL INFORMATION FORM 990, PART X, LINE 27: UNRESTRICTED NET ASSETS MILTON HERSHEY MILTON HERSHEY TOTAL LINE SCHOOL TRUST SCHOOL CASH 0 16,995 16,995 SAVINGS & TEMP INVEST 45,083,326 0 45,083,326 INVEST: PUBLICLY TRADED 354,514,660 0 354,514,660 INVEST: OTHER 43,202,797 0 43,202,797 ACCOUNTS RECEIVABLE 9,136,566 131,448 9,268,014 INVENTORIES FOR SALE/USE 0 1,252,511 1,252,511 PREPAID/DEFERRED CHARGES 0 911,750 911,750 PROPERTY EQUIPMT, AT COST 1,018,882,235 83,930,455 1,102,812,690 LESS: ACCUMULATED DEP. (327,147,561) (63,448,693 (390,596,254) CURRENT LIABILITIES (4,166,896) (137,055,563) (141,222,459) NET UNRESTRICTED ASSETS 1,139,505,127 (114,261,097) 1,025,244,030 FORM 990, PART X BALANCE SHEET DETAIL PART X, LINE 11 PUBLICLY TRADED SECURITIES/U.S. GOVERNMENT OBLIGATIONS $ 258,105,297 FMV AGENCY BONDS 237,147,432 FMV CORPORATE BONDS 318,211,519 FMV COMMON STOCKS-OTHER 1,181,748,705 FMV ______________ TOTAL PART X, LINE 11 $1,995,212,953 PART X, LINE 12/SCHEDULE D, PART VII CLOSELY HELD EQUITY INTERESTS THE HERSHEY COMPANY - COMMON SHARES $ 706,257,481 FMV HERSHEY ENTERTAINMENT & RESORTS 279,600,000 FMV HERSHEY TRUST COMPANY 52,337,387 FMV THE HERSHEY CO - CLASS B SHARES 3,420,941,957 FMV ______________ SUB-TOTAL CLOSELY-HELD INTERESTS $4,459,136,825 PART X, LINE 12 (CONTINUED) OTHER FUNDS - OTHER $1,164,248,611 FMV REIT FUNDS 14,388,133 FMV ALTERNATIVE ASSETS-MARKETABLE 85,800,103 FMV ALTERNATIVE ASSETS-NON MARKETABLE 369,292,832 FMV ______________ SUB-TOTAL OTHER $1,633,729,679 TOTAL PART X, LINE 12 $6,092,866,504 true true true true true true true false false false false false false false false false false true SCHEDULE E, LINE 3 THE APPLICATION FOR ADMISSION STATES "MILTON HERSHEY SCHOOL ADMITS STUDENTS OF ANY RACE AND DOES NOT DISCRIMINATE IN THE ADMINISTRATION OF ITS POLICIES AND PROGRAMS." THE POLICY IS AVAILABLE ON OUR WEBSITE AND IN VARIOUS PUBLICATIONS AND CORRESPONDENCE WITH PROSPECTIVE STUDENTS. Europe (Including Iceland and Greenland) Investments 175632433 175632433 175632433 true false false true true false true CONTINUING EDUCATION SCHOLARSHIPS 504 6013232 SCHEDULE I, PART I, QUESTION 2 MONITORING THE USE OF GRANT FUNDS THE CONTINUING EDUCATION SCHOLARSHIP (CES) HAS BEEN ESTABLISHED TO PROVIDE SCHOLARSHIP ASSISTANCE TO ELIGIBLE MILTON HERSHEY SCHOOL GRADUATES PURSUING FULL-TIME STUDY TOWARDS AN ACCREDITED, CLASSROOM-BASED UNDERGRADUATE PROGRAM OF AT LEAST NINE MONTHS IN LENGTH THAT IS INTENDED TO LEAD TO A DIPLOMA, CERTIFICATE OR DEGREE FROM A u.s. INSTITUTION. tHE ces PROGRAM SUPPLEMENTS A STUDENT'S POST-SECONDARY COSTS BY HELPING TO PAY FOR STANDARD FULL-TIME TUITION, FEES, ROOM AND BOARD COSTS (AND POSSIBLY A BASIC COLLEGE HEALTH INSURANCE PLAN) NOT COVERED BY OTHER FORMS OF GIFT AID AT ACCREDITED U.S. SCHOOLS. THE MILTON HERSHEY SCHOOL, THROUGH CES OFFICE STAFF, UTILIZES A COMBINATION OF THE FOLLOWING "SOURCE DOCUMENTS" TO VALIDATE SCHOLARSHIP ELIGIBILITY AND COLLEGE COST & FINANCIAL AID DATA: COLLEGE ACADEMIC TRANSCRIPTS/GRADES, STANDARDIZED COST AND AID ASSESSMENT FORM THAT IS COMPLETED BY THE INSTITUTION'S FINANCIAL AID OFFICE (RELEASE FORM), COLLEGE BILLS, SIGNED COPIES OF LEASES/RENTAL AGREEMENTS, RECEIPTS, DEGREE COMPLETION EVALUATIONS, AND OTHER DOCUMENTATION AS NEEDED. SCHEDULE I, PART III GRANTS & ASSISTANCE TO INDIVIDUALS IN THE U.S. THE MILTON HERSHEY SCHOOL MAINTAINS A CONTINUING EDUCATION SCHOLARSHIP PROGRAM FOR STUDENTS WHO GRADUATED PRIOR TO AND INCLUDING THE SPRING OF 2004, UNDER WHICH GRANTS ARE MADE TO STUDENTS TO PURSUE POSTSECONDARY EDUCATION. THE GRANTS UNDER THIS PROGRAM WILL COVER ALL ELIGIBLE CONTINUING EDUCATION EXPENSES THAT EXCEED GRANTS AID FROM ALL SOURCES AND A $2,000 ANNUAL CONTRIBUTION BY THE STUDENT. THE PAYMENT OF THE FULL AMOUNT OF THESE GRANTS IS DEPENDENT UPON THE STUDENT'S ANNUAL ACADEMIC PERFORMANCE AND CERTAIN OTHER CONDITIONS. A LIABILITY IS ESTABLISHED FOR THE ESTIMATED AMOUNTS TO BE PAID UPON GRANTING OF THE SCHOLARSHIP. SIGNIFICANT ASSUMPTIONS IN DETERMINING THE LIABILITY FOR THIS PROGRAM INCLUDE PARTICIPATION RATES, DISCOUNT RATES, AND COLLEGE TUITION INFLATION RATES, AND ARE BASED ON HISTORICAL TRENDS OF THE PROGRAM. THE MILTON HERSHEY SCHOOL MAINTAINS A CONTINUING EDUCATION SCHOLARSHIP PROGRAM FOR STUDENTS GRADUATING AFTER THE SPRING OF 2004, WHERE SCHOLARSHIP CREDITS ARE EARNED GRADUALLY EACH YEAR OF HIGH SCHOOL. THE MAXIMUM AWARD FOR THE GRADUATING CLASS OF 2011 WILL BE $80,000. THE MAXIMUM AWARD MAY BE INCREASED EVERY YEAR TO MATCH THE AVERAGE U.S. COLLEGE INFLATION RATE. THE EARNING OF THE SCHOLARSHIP AWARD IS DEPENDENT ON THE STUDENTS' ANNUAL ACADEMIC PERFORMANCE AND CERTAIN OTHER CONDITIONS. UPON INCEPTION OF THIS PROGRAM, CURRENT HIGH SCHOOL STUDENTS WERE AWARDED THE SCHOLARSHIP CREDIT FOR GRADES PREVIOUSLY COMPLETED. STUDENTS WHO HAD GRADUATED IN OR PRIOR TO THE SPRING OF 2004 WERE NOT AFFECTED BY THE NEW POLICY. SIGNIFICANT ASSUMPTIONS IN DETERMINING THE LIABILITY FOR THIS PROGRAM INCLUDE PARTICIPATION AND DISCOUNT RATES. THE EXPENSE RECOGNIZED FOR THE CONTINUING EDUCATION PROGRAMS DESCRIBED ABOVE WAS $6,013,232, AND $2,762,757 DURING THE YEARS ENDED JULY 31, 2011 AND 2010, RESPECTIVELY, AND IS INCLUDED IN CONTINUING EDUCATION PROGRAMS ON THE STATEMENT OF ACTIVITIES OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST FINANCIAL STATEMENTS. THE AMOUNT REPORTED COVERS THE 504 STUDENTS CURRENTLY RECEIVING CONTINUING EDUCATION SCHOLARSHIPS AS WELL AS THE 882 STUDENTS EARNING CREDITS TOWARD THEIR FUTURE SCHOLARSHIPS. SCHEDULE I, PART III, COLUMN (C): THE AMOUNT REPORTED IN COLUMN (C) "AMOUNT OF CASH GRANT" CONSISTS OF $4,804,365 OF CASH GRANTS PAID DURING THE YEAR AND $1,208,867 WHICH REPRESENTS AN INCREASE IN THE TUITION ACCRUAL FOR GRANTS TO BE PAID IN FUTURE YEARS. THE TOTAL OF THESE AMOUNTS IS $6,013,232. X X X X true true X X X X X true false false false false false false false false ROBERT F CAVANAUGH 0 205360 0 0 0 0 0 120000 0 3254 0 328614 0 0 JAMES E NEVELS 0 310893 0 0 0 148723 0 120000 0 3254 0 582870 0 148723 ROBERT M REESE 0 735206 0 10000 0 198273 0 7350 0 29971 0 980800 0 0 LEROY S ZIMMERMAN 0 233500 0 40000 0 0 0 200000 0 19001 0 492501 0 0 ELLIOTT ROBINSON 191445 0 0 0 28939 0 49284 0 22375 0 292043 0 0 0 JOAN SINGLETON 187498 0 0 0 29214 0 44144 0 20908 0 281764 0 0 0 PETER GURT 231376 0 0 0 31122 0 49684 0 41825 0 354007 0 0 0 ANTHONY J COLISTRA ED D 250330 0 75000 26667 40727 0 89963 0 82989 10610 539009 37277 0 0 GAYLA M BUSH 0 159354 0 74120 0 2219 0 35118 0 9881 0 280692 0 0 MARY LOUISE PORTER ESQ 107915 89435 0 88140 503 610 16500 0 11195 11937 136113 190122 0 0 WILLIAM DAVIES 0 234080 0 37314 0 1359 0 36750 0 24392 0 333895 0 0 ROBERT CROBAK 137758 0 0 0 749 0 16500 0 18751 0 173758 0 0 0 CONNIE MCNAMARA 127730 0 0 0 390 0 17046 0 20635 0 165801 0 0 0 ROBERT FEHRS 179098 0 0 0 25434 0 47299 0 19788 0 271619 0 0 0 ANNETTE COLE GILL 163958 0 0 0 8209 0 39035 0 20407 0 231609 0 0 0 BETH SHAW 178432 0 0 0 435 0 23375 0 18188 0 220430 0 0 0 MIKE WELLER 165288 0 0 0 1134 0 48693 0 15729 0 230844 0 0 0 AL CARBONARA 168517 0 0 0 1818 0 25785 0 15699 0 211819 0 0 0 MARLENE NAVADOENDS 311 163132 0 0 0 232 0 18103 0 6479 0 187946 0 0 0 SANDRA WALLS-CULOTTAENDS 110 20431 0 0 0 133887 0 2927 0 36 0 157281 0 0 0 JAMES CARTER 82761 0 0 0 108585 0 11827 0 8610 0 211783 0 0 0 JAMES M SHEEHAN 132348 121744 0 0 13900 0 38218 0 7713 3254 192179 124998 0 0 SANDRA BARNES 28484 0 1000 0 116103 0 3338 0 1591 0 150516 0 0 0 SCOTT RICHARDSON 80238 0 0 0 65638 0 10670 0 10857 0 167403 0 0 0 SCHEDULE J, PART I, LINE 1A TRAVEL FOR COMPANIONS Spouse/Dependent Travel: Spousal travel costs to attend the retreat and/or graduation are treated as taxable income to the board of managers member by Hershey Trust Company. Dependent travel costs to attend graduation are treated as taxable income to the board of managers member by Hershey Trust Company. The Joint Board Travel Reimbursement Policy of Milton Hershey School AND HERSHEY TRUST COMPANY states "Spouses may be invited to Board retreats and graduation at the discretion of the School or Trust Company. Children are not invited to attend regular Board meetings or the retreat. (If children accompany the Board member, all charges related to the children are the responsibility of the Board member.) However, children may be invited to attend the graduation weekend events and celebration. For this occasion, transportation, lodging, and meals for the children, as well as for spouses, will be covered and reported as taxable income to the Board member." SCHEDULE J, PART I, LINE 1A Housing Allowance or Residence for Personal Use Certain Milton Hershey School officers are provided with a housing allowance of $15,457 per year, which is included in reportable compensation and is taxable to them. The President and the Senior Vice President/Chief Operating Officer of Milton Hershey School are provided residences on campus for their personal and public use. These residences are owned by the Milton Hershey School Trust. The president has an employment contract which includes a provision to provide housing. The senior vice president/chief operating officer responsibilities include residential and student support. He is required to live on campus as a condition of his employment for the convenience of the school. The value of these benefits (fair market value of rental) plus operating costs are nontaxable benefits. SCHEDULE J, PART I, LINE 1A TAX INDEMNIFICATION AND GROSS-UP PAYMENTS: CERTAIN OFFICERS OF THE MILTON HERSHEY SCHOOL RECEIVE MINOR TAX GROSS-UP PAYMENTS. Health Club Dues All employees of the Milton Hershey School are eligible for reimbursement of health club dues not to exceed $120 per annum for A single membership and $240 for a family membership. SCHEDULE J, PART I LINE 4A SEVERANCE WAS PROVIDED AS FOLLOWS: SANDRA WALLS-CULOTTA - SENIOR DIRECTOR (ENDS 1/10) $133,838 SCOTT RICHARDSON - DIRECTOR SPRINGBOARD $ 65,520 SANDRA BARNES - DIRECTOR ASSESS PROG EVAL $116,043 JAMES CARTER - DIRECTOR HOME LIFE $108,355 SCHEDULE J Reportable Compensation Mr. and Mrs. Hershey organized the Milton Hershey School ("the School") in the form of a trust ("School Trust") created under an original 1909 Deed of Trust that, as amended, still governs the operation of the School. The Deed of Trust sets forth the respective powers and authorities of the trustee and Managers of the School, names the Hershey Trust Company, a state-chartered trust company, as trustee for compensation of no more than $1,000 per year and provides for the trustee to appoint the individual Managers of the School from its own Board of Directors. The Managers subsequently incorporated. That corporation, acting as manager under the deed of trust, together with the School Trust are the components of the integrated tax-exempt organization, the Milton Hershey School and School Trust (EIN: 23-1353340). Mr. Hershey created the same structure for his other charity, The M.S. Hershey Foundation (EIN: 23-6242734). As a result of the structure created by Mr. Hershey, Hershey Trust Company: (A) serves as trustee for the Milton Hershey School & School Trust (administration of which trust includes responsibility for (1) The Hershey Company, a Fortune 500 company; (2) Hershey Entertainment & Resorts Company, a $279.6 million resort and entertainment company; (3) an actively managed portfolio of approximately $3.7 billion in securities and other investments; and (4) approximately 12,000 acres of real estate); and (B) serves as trustee for the $34 million M.S. Hershey Foundation Trust. The compensation of Board members serving on the boards of any of the related for-profit entities (Hershey Trust Company, Hershey Entertainment & Resorts Company and The Hershey Company) is commensurate with their responsibilities with respect to the relevant for-profit entity. The following information details the compensation arrangements of the Board of Managers who are compensated by related for-profit entities. None of the compensation was paid directly by Milton Hershey School and School Trust (EIN 23-1353340). Barbara M. Barrett Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). Ambassador Barrett joined the Hershey Trust Company and Milton Hershey School boards in August 2010. Robert F. Cavanaugh Compensation reported consists only of director fees received from related for-profit companies, Hershey Trust Company (EIN 23-0692150) and The Hershey Company (EIN 23-0691590). Raymond L. Gover Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). James M. Mead Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). James E. Nevels Compensation reported consists only of director fees received from related for-profit companies, Hershey Trust Company (EIN 23-0692150) and The Hershey Company (EIN 23-0691590). Velma A. Redmond Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). Robert Reese Mr. Reese served on the boards of Milton Hershey School (EIN 23-1353340), Hershey Trust Company (EIN 23-0692150) and Hershey Entertainment & Resorts Company (EIN 23-0691815) until February 2011. He did not receive director fees from Milton Hershey School or Hershey Trust Company. He did receive compensation and non-taxable benefits from Hershey Entertainment & Resorts Company (EIN 23-0691590) as well as compensation from Hershey Trust Company in his role as the Managing Director (Chief Executive Officer) until October 31, 2010. He also received compensation as a former officer of The Hershey Company. Joseph M. Senser Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). James M. Sheehan, Esq. Mr. Sheehan served as General Counsel of Hershey Trust Company (EIN: 23-0692150), a for-profit related corporation and as the Vice President, Legal Affairs & External Relations of Milton Hershey School (EIN 23-1353340) until June 2010. In August 2010, Mr. Sheehan joined the boards of Hershey Trust Company and Milton Hershey School. Compensation reported includes director fees received from the related for-profit company, Hershey Trust Company, as well as employee compensation from Hershey Trust Company and the Milton Hershey School. The amounts reported in columns (D) of Part VII and row (i) of Schedule J were paid by Milton Hershey School. LeRoy S. Zimmerman Compensation reported consists only of director fees received from related for-profit companies, Hershey Trust Company (EIN 23-0692150), The Hershey Company (EIN 23-0691590) and Hershey Entertainment & Resorts Company (EIN 23-0691815). Mr. Robert C. Heist and Lt. General Richard Zilmer joined the Hershey Trust Company and Milton Hershey School boards in February 2011. As 2010 compensation is required to be reported on this 990, no amounts are reported for these directors. The following information details the compensation arrangements of certain officers and key employees of the Milton Hershey School and School Trust. They are compensated by related for-profit entities. Their compensation is determined by independent compensation consultants. This process is based on position comparables taking into account responsibilities and duties, authority, and objectives. None of their compensation, employee benefit contributions or non-taxable benefits was paid directly by the Milton Hershey School and School Trust during the reporting period. Gayla M. Bush Ms. Bush served as the Treasurer of Hershey Trust Company and Milton Hershey School and School Trust until February 2011. She also serves as Vice President, Finance of Hershey Trust Company (EIN: 23-0692150), a for-profit related corporation. None of her compensation, employee benefit contributions or non-taxable benefits was paid by Milton Hershey School & School Trust. William E. Davies Mr. Davies serves as the Chief Financial Officer (effective November 2009) and Treasurer (effective February 2011) of Milton Hershey School and School Trust and Hershey Trust Company (EIN: 23-0692150). Mr. Davies previously served as Treasurer of Hershey Entertainment & Resorts Company (EIN: 23-0691815), a for-profit company wholly owned by Milton Hershey School and School Trust until November 2009. None of his compensation, em HERSHEY ENTERTAINMENT RESORTS CO COMMON DIRECTORS 490173 PAYMENT OF RENT TO MHS&ST false HERSHEY TRUST COMPANY COMMON DIRECTORS 414641 PAYMENT OF RENT TO MHS&ST false HERSHEY ENTERTAINMENT RESORTS CO COMMON DIRECTORS 540615 REIMBUR. PAID FOR EXPENSES false THE HERSHEY COMPANY COMMON DIRECTORS 1414808 SEE PART V false HERSHEY TRUST COMPANY COMMON DIRECTORS 157801 REIMBUR. FOR SHARED EMPLOYEES false HERSHEY ENTERTAINMENT RESORTS CO COMMON DIRECTORS 260707 SEE PART V false SCHEDULE L, PART IV, COLUMN (B) SEE SCHEDULE J, PART III FOR A DESCRIPTION OF THE COMMON DIRECTOR RELATIONSHIPS. SCHEDULE L, PART IV, ITEM 4 THE MILTON HERSHEY SCHOOL CELEBRATED ITS 100-YEAR ANNIVERSARY IN 2009. THE HERSHEY COMPANY PARTICIPATED IN THE SCHOOL'S ANNIVERSARY DURING 2009, AND CONTINUING INTO 2010, BY SPONSORING TELEVISION ADVERTISEMENTS, DOCUMENTARIES, AND PROMOTION OF THE MILTON HERSHEY SCHOOL AS WELL AS CANDY PACKAGING ADVERTISEMENTS. THE VALUE OF THIS BENEFIT DURING THE REPORTING PERIOD WAS $1,414,808. SCHEDULE L, PART IV, ITEM 6 HERSHEY ENTERTAINMENT & RESORTS CO. PROVIDED HERSHEYPARK AND GIANT CENTER TICKETS AND OTHER BENEFITS TO MILTON HERSHEY SCHOOL STUDENTS AT NO COST. THE VALUE OF THESE BENEFITS WAS $260,707. FORM 990, PART I, LINE 1 & FORM 990, PART III, LINE 1 MILTON HERSHEY SCHOOL & SCHOOL TRUST MISSION UNABLE TO HAVE CHILDREN OF THEIR OWN, MILTON AND CATHERINE HERSHEY SIGNED THE DEED OF TRUST ESTABLISHING MILTON HERSHEY SCHOOL ("THE SCHOOL") IN 1909. FOR MORE THAN 100 YEARS THE MISSION OF THE SCHOOL HAS REMAINED THE SAME - TO PROVIDE A NURTURING HOME AND SCHOOL TO CHILDREN IN NEED. TODAY, THE SCHOOL SERVES ABOUT 1,850 STUDENTS FROM PRE-K TO 12TH GRADE, WHO COME FROM FAMILIES IN SOCIAL AND FINANCIAL NEED. THE SCHOOL PROVIDES A FAMILY-LIKE COMMUNITY WHICH HOLISTICALLY SUPPORTS EACH STUDENT. MILTON HERSHEY SCHOOL AND SCHOOL TRUST IS UNLIKE ANY OTHER ORGANIZATION. IT MUST OPERATE UNDER THE TERMS OF THE DEED OF TRUST AND PROVIDES A UNIQUE BREADTH OF SERVICES INCLUDING EDUCATION AND GUIDANCE, BOARDING, LODGING, AND CLOTHING, AS WELL AS HEALTH SERVICES, RECREATION AND SOCIAL LIFE ACTIVITIES TO ITS STUDENTS. HOUSING, FOOD, CLOTHING, DENTAL AND MEDICAL CARE ARE PROVIDED TO ALL OF THE CHILDREN SERVED, AT ABSOLUTELY NO FINANCIAL COST TO THE CHILDREN OR THEIR FAMILIES. NO TUITION IS CHARGED, AND FAMILIES ARE NOT SUBJECTED TO ANY FEES. STUDENTS LIVE IN MORE THAN 160 STUDENT HOMES WITH 10-12 STUDENTS OF SIMILAR AGES AND THE SAME GENDER, PRIOR TO THEIR SENIOR YEAR. A MARRIED HOUSEPARENT COUPLE LIVES IN EACH HOME, AND ACTS AS SURROGATE PARENTS TO THE STUDENTS, PROVIDING SUPERVISION, COMFORT AND COUNSEL. IN THEIR SENIOR YEAR, THE SCHOOL STUDENTS MOVE IN TO TRANSITIONAL LIVING APARTMENTS AND LIVE TOGETHER IN BUILDINGS WHICH HOUSE SEVERAL TWO-BEDROOM APARTMENTS. THEY ARE RESPONSIBLE FOR MANAGING THEIR MONEY, COOKING SOME OF THEIR OWN MEALS, AND BUDGETING THEIR TIME. THE PROGRAM WAS IMPLEMENTED TO BETTER PREPARE STUDENTS FOR LIFE AFTER GRADUATION. THE SCHOOL CARES FOR ITS STUDENTS 24-HOURS A DAY, AND OPERATES YEAR-ROUND, INCLUDING HOLIDAYS AND DURING THE SUMMER. BECAUSE THE SCHOOL STRIVES TO PREPARE STUDENTS FOR A SUCCESSFUL FUTURE, EVERY HIGH SCHOOL STUDENT CAN EARN APPROXIMATELY $80,000 TO USE FOR POSTSECONDARY EDUCATION. MILTON HERSHEY SCHOOL AND SCHOOL TRUST IS AN INTEGRATED TAX-EXEMPT ORGANIZATION COMPOSED OF THE NOT-FOR-PROFIT CORPORATION, ACTING AS MANAGER UNDER THE DEED OF TRUST, AND THE TRUST ITSELF. THIS INFORMATIONAL RETURN IS REQUIRED TO INCLUDE THE EXPENSES OF THE ORGANIZATION AS A WHOLE, WITH DETAIL AS REQUIRED BY THE FORM INSTRUCTIONS. AS A RESULT, THIS RETURN INCLUDES ALL EXPENSES OF SERVING THE STUDENTS ENROLLED IN THE SCHOOL AND THE COSTS OF ADMINISTERING THE INVESTMENTS HELD IN TRUST. FORM 990, PART III PROGRAM SERVICE ACCOMPLISHMENTS THE SCHOOL PROVIDES FOR THE NEEDS OF THE CHILDREN WHILE THEY RESIDE ON CAMPUS. THE PROVISION OF THE SCHOOL INCLUDES BUT IS NOT LIMITED TO THE FOLLOWING: MILTON HERSHEY SCHOOL AND SCHOOL TRUST PROVIDES FOR THE EDUCATION, PHYSICAL, SOCIAL, AND PSYCHOLOGICAL NEEDS OF ITS STUDENTS. THE SCHOOL HAS A RIGOROUS ACADEMIC PROGRAM WHICH HAS RECEIVED MEASURABLE RESULTS. ALTHOUGH STUDENTS OFTEN COME TO THE SCHOOL WITH KNOWLEDGE FAR BELOW THEIR GRADE-LEVEL, THE DEDICATED STAFF HELP BRIDGE THAT KNOWLEDGE GAP. STUDENTS PERFORM QUITE WELL ON THE STATE STANDARDIZED TESTS, AND EVEN OUTPERFORM STUDENTS FROM SOME OF THE TOP SCHOOL DISTRICTS IN THE STATE IN SOME SUBJECT AREAS. IN ADDITION TO ACADEMICS, THE SCHOOL STRESSES CAREER TECHNICAL EDUCATION, SO THAT EACH STUDENT GRADUATES EQUIPPED TO ENTER THE WORLD OF WORK. ABOUT 97 PERCENT OF 12TH GRADERS COMPLETED AT LEAST ONE STATE OR NATIONAL CERTIFICATION EXAM IN THEIR CAREER/TECHNICAL AREA. THE SCHOOL OPERATES YEAR-ROUND, WITH MORE THAN 70 PERCENT OF ITS STUDENTS ATTENDING DURING ONE OR MORE SUMMER WEEKS, AND APPROXIMATELY 190 STUDENTS STAYING ON CAMPUS EVEN DURING HOLIDAY BREAKS. A VARIETY OF PROGRAMS ARE OFFERED THROUGHOUT THE SUMMER, PROVIDING ACADEMIC AND CULTURAL ENRICHMENT FOR THE CHILDREN. STUDENTS LIVE IN STUDENT HOMES WITH 10 TO 12 CHILDREN OF SIMILAR AGES AND THE SAME GENDER. THEY ARE PROVIDED NUTRITIOUS MEALS AND SNACKS. DURING THE PERIOD COVERED BY THIS REPORT, THE SCHOOL'S FOOD SERVICES PROVIDED APPROXIMATELY 2.5 MILLION MEALS, USING 66,000 GALLONS OF MILK, 53,000 POUNDS OF GROUND BEEF, 29,000 DOZEN EGGS, AND 11,000 POUNDS OF AMERICAN CHEESE. IN ADDITION, EACH STUDENT RECEIVES A COMPLETE WARDROBE, INCLUDING EVERYTHING FROM UNDERWEAR AND PAJAMAS, TO SWIMSUITS AND WINTER COATS. THE SCHOOL'S CLOTHING CENTER CONDUCTED 3,554 INDIVIDUAL CLOTHING FITTINGS FOR STUDENTS DURING THIS PERIOD. ALL STUDENTS RECEIVE REGULAR PHYSICAL AND DENTAL CHECKUPS FROM THE SCHOOL, AS WELL AS ANY OTHER NECESSARY HEALTH SERVICES. LAST YEAR, THE SCHOOL'S DENTAL PROFESSIONALS PERFORMED MORE THAN 30,700 PROCEDURES - FROM TEETH CLEANINGS TO ORTHODONTIC WORK. THERE WERE MORE THAN 35,000 MEDICAL VISITS BY STUDENTS TO THE SCHOOL'S MEDICAL PROFESSIONALS, WHICH INCLUDE NURSES, A PHYSICIAN AND CONSULTING MEDICAL SPECIALISTS. IN KEEPING WITH ITS CONCERN FOR THE WELL-BEING OF THE WHOLE STUDENT, THE SCHOOL PROVIDES A VAST NUMBER OF RECREATIONAL OPPORTUNITIES TO ITS STUDENTS. THOSE OPPORTUNITIES INCLUDE ORGANIZED SPORTS ACTIVITIES, VISUAL AND PERFORMING ARTS OPPORTUNITIES, SCOUTING PROGRAMS, ACADEMIC ORGANIZATIONS, AND CLUBS CENTERED ON HOBBIES. IN ALL, THE SCHOOL OFFERS MORE THAN 100 EXTRACURRICULAR ACTIVITIES AND CLUBS. FORM 990, PART IV, QUESTION 28B TRANSACTIONS WITH INTERESTED PERSONS ALTHOUGH NOT REQUIRED TO BE REPORTED ON SCHEDULE L, THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST CHOOSES TO DISCLOSE THE FOLLOWING INFORMATION: ANTHONY B. SEITZ IS A FAMILY MEMBER OF BOARD MEMBER LEROY S. ZIMMERMAN. ANTHONY B. SEITZ IS A PARTIAL OWNER OF DELTA DEVELOPMENT GROUP, INC. (THE COMPANY). THE COMPANY PROVIDES TRANSPORTATION CONSULTING SERVICES FOR HERSHEY TRUST COMPANY, HERSHEY ENTERTAINMENT & RESORTS COMPANY AND THE HERSHEY COMPANY. DELTA DEVELOPMENT GROUP, INC. WAS PAID $103,226 IN TOTAL BY THE THREE RELATED COMPANIES DURING THE REPORTING PERIOD. FORM 990, PART VI, SECTION A, LINE 2 FAMILY/BUSINESS RELATIONSHIP SEVERAL OF THE BOARD OF MANAGERS MEMBERS AND OFFICERS OF THE FILING ORGANIZATION ALSO SERVE AS DIRECTORS AND OFFICERS OF BUSINESS ENTITIES THAT ARE RELATED TO THIS FILING ORGANIZATION. OTHER THAN THEIR OVERLAPPING SERVICE ON RELATED COMPANY BOARDS, THEY HAVE NO FAMILY OR BUSINESS RELATIONSHIPS WITH EACH OTHER. PLEASE SEE FORM 990, SCHEDULES J AND R FOR FURTHER INFORMATION. FORM 990, PART VI, SECTION A, LINE 7A ELECTION OF MEMBERS OF GOVERNING BODY THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST HAVE A UNIQUE, SELF-PERPETUATING, INTERLOCKING AND INTEGRATED GOVERNANCE STRUCTURE. MR. AND MRS. HERSHEY ORGANIZED THE SCHOOL IN THE FORM OF A TRUST (THE "SCHOOL TRUST") CREATED UNDER AN ORIGINAL 1909 DEED OF TRUST THAT, AS AMENDED, STILL GOVERNS THE OPERATION OF THE SCHOOL. THE DEED OF TRUST SETS FORTH THE RESPECTIVE POWERS AND AUTHORITIES OF THE TRUSTEE AND INDIVIDUAL MANAGERS OF THE SCHOOL AND NAMES THE HERSHEY TRUST COMPANY ("HTC"), A STATE CHARTERED TRUST COMPANY, AS TRUSTEE FOR COMPENSATION OF NO MORE THAN $1,000 PER YEAR. UNDER THE DEED OF TRUST, THE TRUSTEE IS DIRECTED TO HOLD TITLE TO ALL SCHOOL PROPERTY AND ALL INVESTMENTS AND ASSETS THAT SUPPORT THE SCHOOL. THE INDIVIDUAL MANAGERS, IN TURN, ARE NOT PERMITTED TO HOLD SCHOOL ASSETS, BUT ARE OTHERWISE GENERALLY RESPONSIBLE FOR MANAGING THE SCHOOL, INCLUDING WITH RESPECT TO ADMISSIONS, THE PROGRAM OF EDUCATING AND FULL-TIME CARING FOR THE CHILDREN, AND EMPLOYMENT DECISIONS. AS REQUIRED UNDER THE DEED OF TRUST, THE MEMBERS OF THE BOARD OF MANAGERS OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST ARE APPOINTED BY THE TRUSTEE FROM AMONG THE TRUSTEE'S OWN BOARD OF DIRECTORS. SINCE MR. HERSHEY'S DEATH IN 1945, ALL OF THE STOCK OF HTC HAS BEEN OWNED BY THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST'S 100% OWNERSHIP OF THE STOCK OF HTC HAS ENSURED A SELF-PERPETUATING, INTERLOCKING GOVERNANCE STRUCTURE FOR THE SCHOOL BECAUSE THE HTC STOCK CARRIES THE RIGHT TO ELECT THE DIRECTORS OF HTC AND IN TURN TO APPOINT THE BOARD OF MANAGERS OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST FROM AMONG HTC'S OWN BOARD OF DIRECTORS. THE SAME TEN INDIVIDUALS (AS OF 7/31/11) SERVE ON THE BOARD OF DIRECTORS OF HTC AND THE BOARD OF MANAGERS OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST. FORM 990, PART VI, SECTION B, LINE 11 FORM 990 REVIEW PROCESS THE FORM 990 IS REVIEWED BY MILTON HERSHEY SCHOOL AND SCHOOL TRUST MANAGEMENT, OUTSIDE COUNSEL AND BY MILTON HERSHEY SCHOOL AND SCHOOL TRUST'S INDEPENDENT TAX ADVISOR, WHO SIGNS THE RETURN AS THE "PAID PREPARER." THE AUDIT COMMITTEE OF THE BOARD OF MANAGERS REVIEWS AND DISCUSSES THE FORM 990 AT ONE OF ITS SCHEDULED MEETINGS PRIOR TO FILING THE RETURN WITH THE IRS. ADDITIONALLY, THE FORM 990 IS PROVIDED TO THE FULL BOARD OF MANAGERS, NOTING KEY DISCLOSURES, PRIOR TO THE FILING OF THE FORM 990 WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C CONFLICT OF INTEREST THE BOARD OF MANAGERS, OFFICERS AND KEY EMPLOYEES OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST HAVE A FIDUCIARY RELATIONSHIP WITH THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST WHICH REQUIRES THAT THEY ACT IN GOOD FAITH WITH REGARD TO THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST'S BEST INTERESTS. IT IS ESSENTIAL IN FULFILLING THEIR DUTIES THAT THEY APPLY THE HIGHEST MORAL, LEGAL, AND ETHICAL STANDARDS IN THEIR CONDUCT AND BUSINESS RELATIONSHIPS. THE MILTON HERSHEY SCHOOL AND HERSHEY TRUST COMPANY, TRUSTEE FOR THE MILTON HERSHEY SCHOOL TRUST, HAVE WRITTEN CONFLICT OF INTEREST POLICIES WHICH ARE INTENDED TO PERMIT THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST AND ITS MANAGERS, OFFICERS AND OTHER KEY EMPLOYEES TO IDENTIFY, EVALUATE AND ADDRESS ANY CONFLICT OF INTEREST THAT MIGHT CALL INTO QUESTION THIS FIDUCIARY DUTY TO THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST. THE CONFLICT OF INTEREST POLICY COVERING THE MANAGERS OF THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST AND THE DIRECTORS OF HERSHEY TRUST COMPANY IS DOCUMENTED IN THEIR GOVERNANCE GUIDELINES MANUAL. THE CONFLICT OF INTEREST POLICY COVERING OFFICERS AND OTHER KEY EMPLOYEES OF MILTON HERSHEY SCHOOL IS DOCUMENTED IN MILTON HERSHEY SCHOOL'S CONFLICT OF INTEREST POLICY AND CODE OF ETHICS. THE CONFLICT OF INTEREST POLICY COVERING OFFICERS AND OTHER KEY EMPLOYEES OF HERSHEY TRUST COMPANY, TRUSTEE FOR MILTON HERSHEY SCHOOL AND SCHOOL TRUST, IS DOCUMENTED IN HERSHEY TRUST COMPANY'S ETHICAL STANDARDS, CONFLICT OF INTEREST, AND CODE OF CONDUCT SECTIONS OF ITS POLICY MANUALS. EACH MANAGER, DIRECTOR, OFFICER AND KEY EMPLOYEE IS REQUIRED TO AVOID ALL ACTIVITY THAT COULD CREATE A CONFLICT OF INTEREST OR EVEN GIVE AN APPEARANCE OF A CONFLICT OF INTEREST. ANY CONFLICTS OF INTEREST ARE TO BE REPORTED AS SOON AS PRACTICAL AFTER THEY BECOME AWARE OF SUCH A CONFLICT. ANNUALLY EACH MANAGER, DIRECTOR, OFFICER AND KEY EMPLOYEE IS REQUIRED TO COMPLETE AN ANNUAL STATEMENT OF DISCLOSURE. THE FORMS IDENTIFY VENDORS, INVESTMENTS, OTHER BOARD MEMBERSHIPS, AND FAMILY MEMBERS THAT COULD GIVE RISE TO CONFLICTS OF INTEREST. THE STATEMENTS ARE REVIEWED BY THE GENERAL COUNSEL OF THE MILTON HERSHEY SCHOOL AS WELL AS THE COMPLIANCE OFFICER AND DEPUTY GENERAL COUNSEL OF HERSHEY TRUST COMPANY IN ORDER FOR THEM TO BE AWARE OF ACTIVITIES THAT COULD GIVE RISE TO CONFLICTS OF INTEREST. POTENTIAL CONFLICTS OF INTEREST RELATED TO MANAGERS, DIRECTORS, OFFICERS AND KEY EMPLOYEES ARE BROUGHT TO THE ATTENTION OF THE PRESIDENT OF MILTON HERSHEY SCHOOL OR THE CHIEF EXECUTIVE OFFICER OR COMPLIANCE OFFICER OF HERSHEY TRUST COMPANY. THE RELEVANT EXECUTIVE (OR HIS DESIGNEE) DETERMINES THE CORRECTIVE MEASURE, IF ANY, TO BE TAKEN TO RESOLVE THE CONFLICT, OR WILL IMPOSE APPROPRIATE RESTRICTIONS, IF ANY, ON THE PERSON WITH THE CONFLICT. FOR CONFLICTS OF INTEREST INVOLVING THE EXECUTIVES OR MANAGERS/DIRECTORS, THE MATTER WOULD BE DISCUSSED WITH THE NOMINATING AND GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS OF THE HERSHEY TRUST COMPANY AND THE BOARD OF MANAGERS OF THE MILTON HERSHEY SCHOOL. THE NOMINATING AND GOVERNANCE COMMITTEE, IN CONSULTATION WITH THE OTHER BOARD MEMBERS, EXCLUDING SUCH CONFLICTED PERSON, HAS THE FINAL APPROVAL OF ANY RECOMMENDED CORRECTIVE MEASURES OR IMPOSED RESTRICTIONS. FORM 990, PART VI, SECTION B, LINES 15A AND 15B COMPENSATION PROCESS AN INDEPENDENT COMPENSATION CONSULTANT EVALUATES AND COMPARES THE COMPENSATION OF THE OFFICERS AND SENIOR DIRECTORS OF MILTON HERSHEY SCHOOL AND SCHOOL TRUST TO SIMILARLY QUALIFIED PERSONS IN FUNCTIONALLY COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS TO DETERMINE THAT IT IS FAIR AND REASONABLE. THIS PROCESS OCCURS AT THE INITIAL HIRE OF THE OFFICER/SENIOR DIRECTOR AND AT REGULAR INTERVALS THEREAFTER, BUT NOT LESS FREQUENTLY THAN EVERY FIVE YEARS. THE COMPENSATION INFORMATION IS REVIEWED AND APPROVED BY THE BOARD OF MANAGERS, THE GOVERNING BODY OF THE MILTON HERSHEY SCHOOL, WHO DO NOT HAVE ANY CONFLICT OF INTEREST WITH RESPECT TO THE COMPENSATION ARRANGEMENTS OF THE OFFICERS AND SENIOR DIRECTORS. THE REVIEW OF THE COMPENSATION OF THE OFFICERS AND SENIOR DIRECTORS, INCLUDING DETAIL ON THE DELIBERATIONS AND DECISIONS, IS CONTEMPORANEOUSLY DOCUMENTED WITHIN THE MINUTES FROM THE BOARD MEETING. A FILE WITH POSITION DESCRIPTIONS, RESUMES OF OFFICERS AND SENIOR DIRECTORS, THE REPORT OF THE INDEPENDENT COMPENSATION CONSULTANT AND A COPY OF THE APPLICABLE BOARD MINUTES IS MAINTAINED BY THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST. THE COMPENSATION OF THE OFFICERS AND KEY EMPLOYEES OF HERSHEY TRUST COMPANY, TRUSTEE OF MILTON HERSHEY SCHOOL AND SCHOOL TRUST IS DETERMINED BY PERIODIC REVIEW (GENERALLY, AT LEAST EVERY 3 YEARS) BY THIRD PARTY COMPENSATION CONSULTANTS TO DETERMINE IT IS FAIR AND REASONABLE. THE COMPENSATION OF THE STATUTORY OFFICERS (PRESIDENT, SECRETARY, AND TREASURER) AND ALSO THE COMPLIANCE OFFICER IS FIXED BY THE BOARD OF DIRECTORS OF HERSHEY TRUST COMPANY IN ACCORDANCE WITH SECTION 5 OF ITS BYLAWS. THE CHIEF EXECUTIVE OFFICER OF HERSHEY TRUST COMPANY APPROVES COMPENSATION OF THE OTHER OFFICERS AND KEY EMPLOYEES AND REPORTS THIS COMPENSATION TO THE BOARD OF DIRECTORS OR A DESIGNATED COMMITTEE OF THE BOARD OF DIRECTORS AS ANY CHANGES ARE MADE. THE MEMBERS OF THE BOARD OF MANAGERS OF MILTON HERSHEY SCHOOL AND SCHOOL TRUST DO NOT RECEIVE ANY DIRECT COMPENSATION FROM MILTON HERSHEY SCHOOL AND SCHOOL TRUST. THE MANAGERS RECEIVE COMPENSATION FROM HERSHEY TRUST COMPANY AS DIRECTORS OF THE TRUST COMPANY IN ACCORDANCE WITH SECTION 16 OF ITS BYLAWS. THE COMPENSATION IS REVIEWED AT LEAST EVERY THREE YEARS BY NATIONALLY RECOGNIZED THIRD PARTY COMPENSATION CONSULTANTS. INDEPENDENT COUNSEL OPINES ON THE COMPENSATION PROCESS FOR DETERMINING COMPENSATION OF OFFICERS, AS APPROPRIATE, THAT IS IN ACCORDANCE WITH THE "REBUTTABLE PRESUMPTION OF REASONABLENESS" PROCEDURES SET OUT IN THE REGULATIONS FOR SECTION 4958 OF THE INTERNAL REVENUE CODE. FORM 990, PART VI, SECTION C, LINE 17 STATE FILING OF FORM 990 THE FORM 990 IS NOT REQUIRED TO BE FILED IN THE STATE OF PENNSYLVANIA; HOWEVER, A COPY IS DELIVERED TO THE PENNSYLVANIA OFFICE OF THE ATTORNEY GENERAL FOR THEIR REVIEW. FORM 990, PART VI, SECTION C, LINE 19 PUBLIC AVAILABILITY OF GOVERNING DOCUMENTS THE DEED OF TRUST ESTABLISHING THE MILTON HERSHEY SCHOOL TRUST IS POSTED ON THE MILTON HERSHEY SCHOOL WEBSITE. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST DOES NOT MAKE AVAILABLE TO THE PUBLIC ITS OTHER GOVERNING DOCUMENTS OR CONFLICT OF INTEREST POLICY. THE MILTON HERSHEY SCHOOL AND SCHOOL TRUST DOES HAVE ITS FORM 990 POSTED ON ANOTHER WEBSITE, GUIDESTAR. INCLUDED IN THE 990 ARE CERTAIN FINANCIAL STATEMENT COMPONENTS FOR REVIEW. THE FORM 990 AND TAX EXEMPTION LETTER ARE PROVIDED TO ANYONE WHO REQUESTS THEM IN ACCORDANCE WITH IRS REGULATIONS. FORM 990, PART IX STATEMENT OF FUNCTIONAL EXPENSES DURING THE PREPARATION OF THE IRS FORM 990 FOR FISCAL YEAR ENDED 7/31/2011, MILTON HERSHEY SCHOOL & SCHOOL TRUST REVIEWED THE IRS AND APPLICABLE INDUSTRY GUIDANCE IN DETERMINING THE METHODS OF COST ALLOCATIONS REQUIRED TO PREPARE PART IX STATEMENT OF FUNCTIONAL EXPENSES. BASED ON THIS ANALYSIS, IN ACCORDANCE WITH APPLICABLE GUIDANCE, CERTAIN COST ALLOCATION METHODS WERE REVISED FOR REPORTING OF EXPENSES ON PART IX STATEMENT OF FUNCTIONAL EXPENSES. FORM 990, PART IX, LINE 11G OTHER FEES FOR SERVICE THIS AMOUNT IS FOR HOSPITAL, MEDICAL, AND DENTAL SERVICES PROVIDED FOR THE STUDENTS. FORM 990, PART XI, LINE 5 RECONCILIATION OF NET ASSETS UNREALIZED GAIN $1,095,942,546 DECREASE-UNRECOGNIZED PENSION SERVICE COST 27,166,760 ______________ $1,123,109,306 MHST CORPUS LLC PO BOX 445 HERSHEY PA 17033 271451942 RE RENTAL PA 380910 12377823 NA MHST INCOME LLC PO BOX 445 HERSHEY PA 17033 271451914 RE RENTAL PA 0 0 NA THE MS HERSHEY FOUNDATION PO BOX 445 HERSHEY PA 17033 236242734 EDUCATION PA 501(C)(3) 9 HTC TRUSTEE THE WILLIAM E DEARDEN ALUMNI CAMPUS INC PO BOX 830 HERSHEY PA 17033 202579678 SVCS TO ALUM PA 501(C)(3) 7 NA HERSHEY CEMETERY COMPANY PO BOX 445 HERSHEY PA 17033 231973529 CEMETERY PA 501(C)(13) NA HERSHEY TRUST COMPANY PO BOX 445 HERSHEY PA 17033 230692150 STATE TRUST C PA HTC TRUSTEE C CORP 11790724 56445653 1.00000 HERSHEY ENTERTAINMENT & RESORTS CO 27 W CHOCOLATE HERSHEY PA 17033 230691815 ENTERTAINMENT PA HTC TRUSTEE C CORP 282517468 316944348 1.00000 THE HERSHEY CO 100 CRYSTAL A DR HERSHEY PA 17033 230691590 CONFECTIONARY PA HTC TRUSTEE C CORP 868137364 1336102784 0.80000 true false false false false false false false false false false false false true true true false false HERSHEY ENTERTAINMENT & RESORTS CO A 490173 HERSHEY TRUST COMPANY A 414641 THE MS HERSHEY FOUNDATION A 4475 HERSHEY ENTERTAINMENT & RESORTS CO O 540615 THE HERSHEY COMPANY P 1414808 THE MS HERSHEY FOUNDATION P 54288 HERSHEY TRUST COMPANY (ITEM 7) N 157801 HERSHEY ENTERTAINMENT & RESORTS CO (ITEM 8) P 260707 SCHEDULE R, PART I Disregarded Entities The Milton Hershey School and School Trust owns 100% of MHST Corpus LLC and MHST Income LLC. Both are Pennsylvania single-member limited liability companies. The LLCs' principal activity are the acquisition, holding and development of rent-producing real estate, and their principal source of revenue is rent. They are disregarded single-member LLCs for tax purposes. MHST Corpus LLC holds investment real estate; MHST Income LLC does not currently have any assets or income. All of MHST Corpus LLC's rental income and expenses are included in the Milton Hershey School and School Trust's financial statements. SCHEDULE R, PART II RELATED TAX-EXEMPT ORGANIZATIONS The M.S. Hershey Foundation (EIN 23-6242734) is a Pennsylvania nonprofit that is exempt from Federal income tax pursuant to Internal Revenue Code Section 501(c)(3). Milton Hershey funded the Foundation in 1935 and appointed Hershey Trust Company as its trustee. The Foundation has several operations in Hershey, Pennsylvania including the Hershey Story, Hershey Gardens, Hershey Community Archives and the Hershey Theatre. The members of the Board of Managers of the Foundation are appointed by the Hershey Trust Company, in its capacity as trustee, from among its own board of directors. Together the trustee and board of managers serve as the governing body of the Foundation. Hershey Cemetery Company (EIN 23-1973529) is a Pennsylvania cemetery company that is exempt from Federal income tax pursuant to INTERNAL REVENUE CODE Section 501(c)(13). Hershey Trust Company operates the Cemetery Company and is trustee of the Hershey Cemetery Perpetual Maintenance Fund Trust (EIN: 23-6629638) that was established to provide funding for perpetual maintenance for the Hershey Cemetery. Hershey Cemetery is the final resting place of Milton & Catherine Hershey. The Hershey Trust Company and the Hershey Cemetery Company are related to Milton Hershey School and School Trust. The WILLIAM E. DEARDEN ALUMNI CAMPUS, INC. (EIN 20-2579678) is a Pennsylvania nonprofit that is exempt from Federal income tax pursuant to Internal Revenue Code Section 501(c)(3). The nonprofit's mission is to promote and enhance the education and general welfare of the students and alumni of the School; to achieve closer cooperation between the School and alumni, in the interest of the education and general welfare of the students and alumni; to develop among teachers, administration, students, alumni and the general public such programs and activities as will secure for all students and alumni the highest advantages in physical, mental and social education and development; to serve as a clearing house for the gathering and dissemination of information and know-how in furtherance of the foregoing purposes; and to solicit and accept donations, gifts, grants, legacies and bequests to further the foregoing purposes. Per its governing instrument, several of the board members are selected from the officers of the Milton Hershey School and School Trust or are appointed by the President of the Milton Hershey School. SCHEDULE R, PART IV RELATED ORGANIZATIONS TAXABLE AS A CORPORATION OR TRUST The Milton Hershey School and School Trust holds 32.2% of the outstanding combined Common and Class B shares of the Hershey Company. Each share of the Class B common stock entitles its holder to 10 votes. The Milton Hershey School and School Trust has 80% of all votes entitled to be cast on matters requiring the vote of common stock and class B common stock voting together. Columns (F) and (G) reflect the Milton Hershey School and School Trust's 32.2% share of the Hershey Company's total income and end-of-year assets. Column (H) reflects the Milton Hershey School and School Trust's total combined voting power. (PERCENTAGES AS OF DECEMBER 31, 2010) SCHEDULE R, PART V TRANSACTIONS WITH RELATED ORGANIZATIONS SCHEDULE R, PART V, LINE 2 (ITEM 5) THE MILTON HERSHEY SCHOOL CELEBRATED ITS 100-YEAR ANNIVERSARY IN 2009. THE HERSHEY COMPANY PARTICIPATED IN THE SCHOOL'S ANNIVERSARY DURING 2009, AND CONTINUING INTO 2010, BY SPONSORING TELEVISION ADVERTISEMENTS, DOCUMENTARIES, AND PROMOTION OF THE MILTON HERSHEY SCHOOL AS WELL AS CANDY PACKAGING ADVERTISEMENTS. THE VALUE OF THIS BENEFIT DURING THE REPORTING PERIOD WAS $1,414,808. SCHEDULE R, PART V, LINE 2 (ITEM 8) HERSHEY ENTERTAINMENT & RESORTS CO. PROVIDED HERSHEYPARK AND GIANT CENTER TICKETS AND OTHER BENEFITS TO MILTON HERSHEY SCHOOL STUDENTS AT NO COST. THE VALUE OF THESE BENEFITS WAS $260,707. The following is a transaction between the Milton Hershey School and School Trust and related organizations reported on Schedule R, Parts II and IV that is not required to be reported per the instructions to Schedule R because it is below the threshold. Fee for performance of trustee service by Hershey Trust Company was $1,000.