2011-06-15T11:45:35-05:00 2010-07-31 GRANT THORNTON LLP 2001 MARKET STREET SUITE 3100 PHILADELPHIA PA 19103 990 2009-08-01 231353340 MILTON HERSHEY SCHOOL AND SCHOOL TRUST MILT 7175201100 PO BOX 445 HERSHEY PA 17033 WILLIAM DAVIES 2011-06-13 2155614200 2009 2016-02-24 21:20:13Z ANTHONY J COLISTRA PO BOX 830 HERSHEY PA 17033 512184217 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. 8 0 1492 588 -969140 -976352 1449 41874 565898 636525 -5360601 211039271 57718 -112726 -4735536 211604944 7780835 2762757 0 0 95404827 103186517 0 0 0 92756723 102312426 195942385 208261700 -200677921 3343244 6967123520 7738773688 157042496 168602026 6810081024 7570171662 MILTON HERSHEY SCHOOL AND SCHOOL TRUST MISSION - SEE SCHEDULE O FOR FURTHER DETAILS. false false 60755582 2762757 0 Education & Guidance - See Schedule O for further details. 56103121 0 0 Board, Lodging & Clothing - See Schedule O for further details. 25931130 0 636525 Health Services, Recreation & Social Life - See Schedule O for further details. 142789833 true true false false false false true false true true true false true false true false false false false false false false true true false false false false false false false false false false false false true true true false false true 327 0 true 1492 true true true true LU false false false false false false false 8 0 true false false false false true false true true false false true true true true true true true true false X GAYLA BUSH HERSHEY TRUST CO 7175201100 PO BOX 445 HERSHEY PA 17033 ROBERT F CAVANAUGH 9.0 X 0 128913 202954 RAYMOND L GOVER 5.5 X 0 127500 2953 JAMES M MEAD 6.0 X 0 128539 2953 JAMES E NEVELS 5.0 X 0 418566 122953 VELMA A REDMOND ESQ 6.0 X 0 138546 2953 ROBERT M REESE 57.0 X 0 1415773 20822 JOSEPH M SENSER 9.0 X 0 120000 2953 LEROY S ZIMMERMAN 6.5 X 0 291750 218551 HERSHEY TRUST COMPANY X 1000 0 0 ELLIOTT ROBINSON 48.0 X 213265 0 66554 JOAN SINGLETON 50.0 X 206352 0 64275 PETER GURT 50.0 X 248665 0 65630 JAMES M SHEEHANend 610 40.0 X 230418 111979 63009 ANTHONY J COLISTRA ED D 46.0 X 160782 84250 71174 GAYLA M BUSH 43.0 X 0 247277 49014 WILLIAM DAVIESBEG 1109 48.0 X 0 224229 46306 ROBERT FEHRS 55.0 X 195424 0 47191 ANNETTE COLE GILL 50.0 X 156308 0 39093 BETH SHAW 48.0 X 173230 0 39177 MIKE WELLER 50.0 X 160061 0 39959 CONNIE MCNAMARA 50.0 X 111997 0 32595 AL CARBONARA 40.0 X 164614 0 39994 JANICE L BRATTON 35.0 X 0 214599 40082 KENNETH GALL 54.0 X 0 124154 39907 VINCENT B RUDISILL 29.0 X 0 1042319 47700 MARY LOUISE PORTER ESQ 10.0 X 0 262344 25768 MARLENE NAVADOend 311 40.0 X 144173 0 5982 JOHN OSMOLINSKI 48.0 X 132957 0 28514 TIM FAKE 46.0 X 133072 0 13787 MARK SEYMOUR 40.0 X 131454 0 33472 SANDRA CULOTTAend 110 40.0 X 129781 0 22874 ROBERT C VOWLERend 408 X 0 2844427 36034 JOHN O'BRIENEND 709 X 630534 0 75144 3324087 7925165 1610327 43 true true false SEE SCHEDULE O 0 41874 41874 AG MILK AND CROP SALES 900099 542162 542162 MEMORABILIA SALES TO PUBLIC 900099 54265 54265 CONCESSION STAND SALES 900099 40098 40098 636525 160951869 -191473 161143342 0 0 5799643 5912369 -112726 -112726 -777667 664941 336012988 8741318 293604173 1062731 42408815 7678587 50087402 50087402 0 0 0 0 211604944 636525 -969140 211895685 0 0 2762757 2762757 0 0 2324643 1043157 1281486 0 63835617 54547515 9288102 10617992 7644954 2973038 20623261 14657494 5965767 5785004 4165203 1619801 0 442548 26441 416107 97717 70356 27361 0 0 14444300 14444300 3475096 3475096 1039836 621372 418464 237540 170110 67430 488525 472025 16500 0 7215448 5633948 1581500 686805 670573 16232 0 89568 57866 31702 0 0 38556959 30074428 8482531 3621397 3348579 272818 TRUST EXPENSES 10353112 10353112 CONTRACTED SERVICES 6275613 2778813 3496800 FOOD,CLOTHING,HOUSE ITEMS 6166684 5977432 189252 EQUIPMENT RENTAL&MAINTENANCE 2781059 1616464 1164595 SUPPLIES 1959844 1819240 140604 4380375 1156010 3224365 208261700 142789833 65471867 0 76499030 74445817 16115548 19380064 1851196 1304048 2112175 2133346 1093390516 366331054 742326425 727059462 1766549009 1863164333 4361670137 5051286618 6967123520 7738773688 157042496 168602026 157042496 168602026 X 937888263 929005573 5872192761 6641166089 6810081024 7570171662 6967123520 7738773688 X false true true X false X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X X X false 5872192761 768973328 6641166089 6233173623 -360980862 5872192761 1.00000 false false 77896673 77896673 45173298 889005679 307055912 627123065 81314866 59275142 22039724 727059462 0 211604944 208261700 3343244 761637913 -4890519 756747394 760090638 973628182 761637913 -4890519 756747394 216880788 -5275844 -5275844 211604944 213537544 5275844 5275844 208261700 208261700 SCHEDULE D, PART III, LINE 4 MAINTAINING COLLECTIONS OF ART/HISTORICAL TREASURES, OR SIMILAR 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 intended to be used to fund the general 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 (4,890,519) SCHEDULE D, PART XII, LINE 2D RECONCILIATION OF REVENUE PER AUDITED FIN STMTS WITH REVENUE PER RETURN UNRECOGNIZED PENSION & POST RETIREMENT BENEFIT COST (4,890,519) SCHEDULE D, PART XII, LINE 4B RECONCILIATION OF REVENUE PER AUDITED FIN STMTS WITH REVENUE PER RETURN RENTAL EXPENSE (RECLASS) (5,912,369) PROGRAM SERVICE REVENUE (RECLASS) 636,525 ------------- (5,275,844) SCHEDULE D, PART XIII, LINE 2D RECONCILIATION OF EXPENSES PER AUDITED FIN STMTS WITH EXPENSES PER RETURN RENTAL EXPENSE (RECLASS) 5,912,369 PROGRAM SERVICE REVENUE (RECLASS) (636,525) ------------- 5,275,844 true true true 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." WE INCLUDE ON OUR WEBSITE, IN PUBLICATIONS AND IN CORRESPONDENCE WITH PERSPECTIVE STUDENTS, COMPLETE DISCLOSURES OF OUR "NONDISCRIMINATION POLICY." true true true true false false false false false false false false false true Europe (Including Iceland and Greenland) Investments true CONTINUING EDUCATION SCHOLARSHIPS 479 2762757 SEE SCHEDULE O FOR FURTHER DETAILS X X X X X true true X X X X X true true false false false false false false false ELLIOTT ROBINSON 186223 0 0 0 27042 0 48394 0 18160 0 279819 0 0 0 JOAN SINGLETON 182174 0 0 0 24178 0 43447 0 20828 0 270627 0 0 0 PETER GURT 224336 0 0 0 24329 0 48909 0 16721 0 314295 0 0 0 JAMES M SHEEHANend 610 200872 111979 0 0 29546 0 50519 0 12490 0 293427 111979 0 0 ANTHONY J COLISTRA ED D 100829 44250 50000 40000 9953 0 30172 0 26286 14716 217240 98966 0 0 JOHN O'BRIENEND 709 208165 0 75000 0 347369 0 36995 0 38149 0 705678 0 0 0 ROBERT FEHRS 171185 0 0 0 24239 0 29604 0 17587 0 242615 0 0 0 ANNETTE COLE GILL 148315 0 0 0 7993 0 20699 0 18394 0 195401 0 0 0 BETH SHAW 173009 0 0 0 221 0 22664 0 16513 0 212407 0 0 0 MIKE WELLER 159179 0 0 0 882 0 26400 0 13559 0 200020 0 0 0 AL CARBONARA 154878 0 0 0 9736 0 24884 0 15110 0 204608 0 0 0 MARLENE NAVADOend 311 144063 0 0 0 110 0 0 0 5982 0 150155 0 0 0 JOHN OSMOLINSKI 132529 0 0 0 428 0 11755 0 16759 0 161471 0 0 0 MARK SEYMOUR 131308 0 0 0 146 0 17234 0 16238 0 164926 0 0 0 ROBERT F CAVANAUGH 0 128913 0 0 0 0 0 200000 0 2954 0 331867 0 0 JAMES E NEVELS 0 418566 0 0 0 0 0 120000 0 2953 0 541519 0 130953 ROBERT M REESE 0 1232843 0 165983 0 16947 0 0 0 20822 0 1436595 0 0 LEROY S ZIMMERMAN 0 251750 0 40000 0 0 0 200000 0 18551 0 510301 0 0 GAYLA M BUSH 0 161636 0 84475 0 1166 0 36759 0 12255 0 296291 0 0 JANICE L BRATTON 0 136003 0 77968 0 628 0 32134 0 7948 0 254681 0 0 KENNETH GALL 0 101855 0 21998 0 301 0 19050 0 20857 0 164061 0 0 VINCENT B RUDISILL 0 354744 0 675298 0 12277 0 36750 0 10950 0 1090019 0 0 MARY LOUISE PORTER ESQ 0 208181 0 53521 0 642 0 6895 0 18873 0 288112 0 0 ROBERT C VOWLERend 408 0 139341 0 0 0 2705086 0 15400 0 20634 0 2880461 0 2705086 WILLIAM DAVIESBEG 1109 0 172740 0 34551 0 16938 0 20020 0 26286 0 270535 0 0 SANDRA CULOTTAend 110 129781 0 0 0 0 0 0 0 22874 0 152655 0 0 0 SCHEDULE J, PART I, LINE 1A First Class Travel and Travel for Companions Board Travel: The joint Board Travel Reimbursement Policy of Milton Hershey School AND Hershey Trust Company states "Coach airfare will be reimbursed. If Board members choose to fly first or business class, they will be responsible for the cost difference." Infrequently the President and Managing Director of Hershey Trust Company approves first class travel for those board members who live a great distance from Hershey, PA when frequent meetings are scheduled. 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 of Milton Hershey School is provided a residence on campus for his personal and public use. This residence is owned by the Milton Hershey School Trust. The value of this benefit (fair market value of rental) plus operating costs are nontaxable benefits. The President has an employment contract which includes a provision to provide housing. SCHEDULE J, PART I, LINE 1A 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 single membership and $240 for a family membership. 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. SCHEDULE J, PART I, LINE 4A SEVERANCE PAYMENT Robert C. Vowler, former President and director of Hershey Trust Company, was paid $140,000 by the related for-profit company as a severance payment. SCHEDULE J, PART I, LINE 4B NONQUALIFIED RETIREMENT PLAN Robert C. Vowler, former President and director of Hershey Trust Company, was paid $2,705,086 by the related for-profit company from a supplemental nonqualified retirement plan. SCHEDULE J, PART II SPECIAL RETIREMENT PAYMENT & PERFORMANCE BONUS Reported for Anthony Colistra is $50,000 as compensation that relates to acceptance of the presidency of Milton Hershey School. The amount is reported on Schedule J, Part II "Bonus & Incentive Compensation." Reported for John O'Brien, former president of Milton Hershey School, is a $200,000 special retirement payment in lieu of an executive retirement plan pursuant to his employment contract executed August 15, 2006. This payment pertains to the period January 1, 2008 through December 31, 2008 and was paid on January 9, 2009. In addition a pro rata payment in lieu of an executive retirement plan of $125,000 for the period January 1, 2009 through July 31, 2009 was paid in July 2009. Both payments are combined and reported on Schedule J, Part II as "Other Reportable Compensation." SCHEDULE J, PART II CONSULTING ARRANGEMENT The former President John O'Brien was paid $75,000 to assist the new President Anthony Colistra or any other Milton Hershey School officers with items related to past or ongoing projects. The payment is reported as "Bonus & Incentive Compensation" on Schedule J, Part II. SCHEDULE J-2 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. As a result of the structure created by Mr. Hershey, Hershey Trust Company: (A) serves as trustee for the $7 billion 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 $218 million resort and entertainment company; (3) an actively managed portfolio of approximately $3.3 billion in securities and other investments; and (4) approximately 12,000 acres of real estate; (B) serves as trustee for the $28 million actively managed portfolio of the M.S. Hershey Foundation Trust; (C) serves as trustee of the actively managed portfolio of the Derry Township School District; and (D) operates a private wealth management business with $1.1 billion of assets under management. 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). 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 and School Trust (EIN 23-1353340), Hershey Trust Company (EIN 23-0692150) and Hershey Entertainment & Resorts Company (EIN 23-0691815). He received no compensation for serving on these boards. See the description below for his compensation as the Managing Director (Chief Executive Officer) of Hershey Trust Company. Joseph M. Senser Compensation reported consists only of director fees received from a related for-profit company, Hershey Trust Company (EIN 23-0692150). 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). The following information details the compensation arrangements of certain officers and key employees of the Milton Hershey School and School Trust and/or related entities who devote a substantial amount of their time to Milton Hershey School and School Trust matters. 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. Janice L. Bratton Ms. Bratton serves as Vice President and Investment Officer of Hershey Trust Company, Heritage Trusts (EIN: 23-0692150), a for-profit related corporation. Gayla M. Bush Ms. Bush serves as the Treasurer of Hershey Trust Company and Milton Hershey School and School Trust and Vice President, Finance of Hershey Trust Company, Heritage Trusts (EIN: 23-0692150), a for-profit related corporation. William E. Davies Mr. Davies served as Treasurer of Hershey Entertainment & Resorts Company (EIN: 23-0691815), a for-profit company wholly owned by Milton Hershey School and School Trust, from 1/1/09 to 11/15/09 and commencing 11/16/09, as the Chief Financial Officer of Milton Hershey School and School Trust and Hershey Trust Company (EIN: 23-0692150), a for-profit related corporation. Kenneth Gall Mr. Gall serves as the Director Real Estate of Hershey Trust Company, Heritage Trusts (EIN: 23-0692150), a for-profit related corporation. Mary Louise Porter, Esq. Ms. Porter serves as Chief Compliance Officer of Hershey Trust Company and General Counsel and Secretary of Hershey Trust Company, Private Wealth Management Group (EIN: 23-0692150), a for-profit related corporation. Ms. Porter was formerly employed by The Hershey Company prior to the commencement of her employment with Hershey Trust Company on March 2, 2009. As an employee of The Hershey Company, Ms. Porter received compensation and benefit coverage from The Hershey Company during calendar year ending December 31, 2009 that is included in the reported compensation. Ms. Porter succeeded James Sheehan as General Counsel of Milton Hershey School in June 2010. As the current form 990 discloses compensation from the calendar year 2009, none of the amounts disclosed were paid by Milton Hershey School and School Trust during the reporting period. Robert Reese In addition to serving on the boards mentioned above, Mr. Reese is the Managing Director (Chief Executive Officer) and President of a related, for-profit company, Hershey Trust Company (EIN 23-0692150). Of Mr. Reese's compensation of $1,232,843, $334,500 is retroactive-pay for his prior year (2008) service as Managing Director and President that was not paid until 2009. Mr. Reese retired from The Hershey Company prior to his employment with Hershey Trust Company. As a retiree, Mr. Reese received pension, deferred incentive payouts and benefit coverage from The Hershey Company during the reporting period that is included in the reported compensation. Vincent B. Rudisill Mr. Rudisill serves as the Assistant Secretary of Hershey Trust Company and the Chief Investment Officer of Hershey Trust Company, Heritage Trusts (EIN: 23-0692150), a for-profit related corporation. Robert C. Vowler Mr. Vowler was an officer and director of the related for-profit entity, Hershey Trust Company (EIN 23-0692150) until April 2008. Compensation reported consists of amounts paid by Hershey Trust Company in accordance with an advisor contract executed April 7, 2008 and non-taxable benefits received during 2009 from Hershey Entertainment & Resorts Company as a retired director of the company. Hershey Trust Company Hershey Trust Company, Trustee, is paid $1,000 annually for its services as stipulated in the Deed of Trust. The Trustee's actual time spent per week on Milton Hershey School and School Trust matters would be an accumulation of the officer and staff time. Each officer's individual time is detailed on Schedule J-2. COMPENSATION DISCLOSURES FOR OTHER OFFICERS AND KEY EMPLOYEES OF THE MILTON HERSHEY SCHOOL and SCHOOL TRUST: 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 and School Trust (EIN 23-1353340) until June 2010. The compensation reported in column (E) of Part VII and in row (ii) of Schedule J, Part II includes base salary paid by Hershey Trust Company for services as General Counsel of Hershey Trust Company. the amounts included in columns (d) and (f) of Part VII and row (i) of Schedule J were paid by Milton Hershey School and School Trust for his services as Vice President, Legal Affairs & External Relations of Milton Hershey School. Anthony J. Colistra, Ed.D. In August 2009, Dr. Colistra was appointed President of Milton Hershey School. Dr. Colistra was a board m SCHEDULE J-2 HOURS SPENT ON RELATED ORGANIZATIONS The following indicates Milton Hershey School AND School Trust Managers, officers and key employees who are also directors, officers or key employees of related organizations and the hours spent per week on duties for these related organizations: Hershey M.S. Hershey Entertain Hershey Hershey Trust & Resorts Company Fdn Company ROBERT F CAVANAUGH - 6 - Footnote(1) ANTHONY J COLISTRA 1.5 - - - RAYMOND L GOVER - - 1 Footnote(1) JAMES M MEAD - - 1 Footnote(1) JAMES E NEVELS - 17 - Footnote(1) VELMA A REDMOND - - 1 Footnote(1) ROBERT REESE 4 - 3 Footnote(1) JOSEPH M SENSER - - - Footnote(1) LEROY S ZIMMERMAN 2 2.5 1 Footnote(1) JANICE L BRATTON - - .5 20 GAYLA M BUSH - - 2 10 WILLIAM DAVIES - - 2 Footnote(1) KENNETH GALL - - 1 Footnote(1) MARY LOUISE PORTER - - 5 40 VINCENT B RUDISILL - - 2 10 JAMES M SHEEHAN - - 3 15 ROBERT C VOWLER - - - - FOOTNOTE (1)- Time spent on Hershey Trust Company matters is included in the Milton Hershey School and School Trust average hours worked per week on Form 990, Part VII, Section A, Column (b). 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 1,800 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 140 student homes with 10-12 students of similar ages. 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. In their senior year, students live together in buildings which house several two-bedroom apartments, and 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. Part III - Program Service Accomplishments: EDUCATION AND GUIDANCE: 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 90 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 about 100 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. BOARD, LODGING, AND CLOTHING: 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 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 3,598 individual clothing fittings for students during this period. HEALTH SERVICES, RECREATION & SOCIAL LIFE: 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 30,500 procedures - from teeth cleanings to orthodontic work. There were more than 47,000 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 $139,088 in total by the three related companies during the reporting period. The Milton Hershey School and School Trust paid Delta Development Group, Inc. $6,359 during the period for consulting related to real estate development. None of the $6,359 was lobbying. 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, Schedule 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 eight individuals 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 Milton Hershey School and School Trust's Form 990 is prepared under direction of the Senior Director-Finance of Milton Hershey School and School Trust and the Vice President, Finance & Treasurer of Hershey Trust Company, Trustee. The Form 990 is reviewed by additional members of Milton Hershey School and School Trust management, and 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. Due to the significant changes made in the 990 form first used for the fiscal year ending 7/31/09, both management and the Milton hershey School and School Trust's independent tax advisors reviewed the changes with the Audit Committee and the full board on several occasions over the last three years. 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 and School Trust is documented in Milton Hershey School and School Trust's Conflict of Interest policy. 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, the Senior Director-Finance and purchasing department personnel at the Milton Hershey School, as well as the Vice President, Finance, and accounting personnel at 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 President or compliance officer of Hershey Trust Company. The relevant President (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 Presidents or managers/directors, the matter would be discussed with the Audit Committee of the Board of Directors of the Hershey Trust Company or the board of managers of the Milton Hershey School. The Joint Audit 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 President and Managing Director 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 VII, SECTION B INDEPENDENT CONTRACTORS NAME & ADDRESS DESCRIPTION OF SERVICES COMPENSATION BDT CAPITAL INVESTMENT BANKING $3,556,937 401 NORTH MICHIGAN AVENUE CHICAGO, IL 60611 WARFEL CONSTRUCTION CONSTRUCTION $3,372,923 1110 ENTERPRISE ROAD E. PETERSBURG, PA 17520 PYRAMID CONSTRUCTION CONSTRUCTION $2,230,482 4425 VALLEY STREET ENOLA, PA 17025 SILCHESTER INVESTMENT MGMT $1,207,396 780 THIRD AVENUE NEW YORK, NY 10017 MID-STATE CONSTRUCTION $1,119,267 638 ANTOINE STREET HARRISBURG, PA 17105 TOTAL NUMBER OF INDEPENDENT CONTRACTORS (INCLUDING THOSE LISTED ABOVE) WHO RECEIVED MORE THAN $100,000 IN COMPENSATION FROM THE ORGANIZATION: 39 FORM 990, PARTS VIII AND IX DETAIL OF REVENUES AND EXPENSES Part VIII, Statement of Revenue (LOWER RIGHT CORNER PAGE #10) Milton Hershey Milton Hershey Line School Trust School Total 1f CONTRIBUTIONS 41,874 0 41,874 2 PROGRAM SERVICE REV 0 636,525 636,525 3 INVESTMENT INCOME 160,951,869 0 160,951,869 6 NET RENTAL INCOME (112,726) 0 (112,726) 7(i)GAIN ON SALE-SECURITIES 42,408,815 0 42,408,815 7(ii)GAIN ON SALE-OTHER 7,645,087 33,500 7,678,587 12 TOTAL REVENUE 210,934,919 670,025 211,604,944 Part IX, Statement of Functional Expenses (LOWER RIGHT CORNER PAGE #11) Milton Hershey Milton Hershey Line School Trust School Total 2 GRANTS TO INDIVIDUALS 0 2,762,757 2,762,757 5 COMPENSATION OFFICERS 1,000 2,323,643 2,324,643 7 OTHER SALARIES & WAGES 0 63,835,617 63,835,617 8 PENSION PLAN CONTRIBUTIONS 0 10,617,992 10,617,992 9 OTHER EMPLOYEE BENEFITS 0 20,623,261 20,623,261 10 PAYROLL TAXES 0 5,785,004 5,785,004 11b LEGAL FEES 0 442,548 442,548 11c ACCOUNTING FEES 0 97,717 97,717 11f INVEST MANAGEMENT FEES 14,444,300 0 14,444,300 11g OTHER FEES FOR SERVICES 0 3,475,096 3,475,096 12 ADVERTISING 0 1,039,836 1,039,836 13 OFFICE EXPENSES 0 237,540 237,540 14 INFORMATION TECHNOLOGY 0 488,525 488,525 16 OCCUPANCY 0 7,215,448 7,215,448 17 TRAVEL 0 686,805 686,805 19 CONFERENCES MEETINGS 0 89,568 89,568 22 DEPRECIATION AMORTIZATION 0 38,556,959 38,556,959 23 INSURANCE 0 3,621,397 3,621,397 24a TRUST EXPENSES(*) 10,353,112 0 10,353,112 24b CONTRACTED SERVICES 0 6,275,613 6,275,613 24c FOOD,CLOTHING,HOUSE ITEMS 0 6,166,684 6,166,684 24d EQUIPMENT MAINTENANCE 0 2,781,059 2,781,059 24e OPERATING SUPPLIES 0 1,959,844 1,959,844 24f ALL OTHER EXPENSES 0 4,380,375 4,380,375 26 TOTAL FUNCTIONAL EXPS 24,798,412 183,463,288 208,261,700 (*) TRUST EXPENSES INCLUDE LEGAL, CONSULTING AND OTHER EXPENSES RELATED TO MANAGEMENT OF THE ENDOWMENT. 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 X, LINE 27 (LOWER RIGHT CORNER PAGE #12) UNRESTRICTED NET ASSETS Milton Hershey Milton Hershey School Trust School Total Cash 31,713,664 15,595 31,729,259 Investments 327,101,558 0 327,101,558 Accounts Receivable 10,932,426 674,742 11,607,168 Inventories for sale/use 0 1,304,048 1,304,048 Prepaid/deferred charges 0 2,133,347 2,133,347 Property Equipmt,at cost 998,123,800 82,153,592 1,080,277,392 Less: Accumulated Dep. (307,055,912) (59,275,142) (366,331,054) Current liabilities (4,138,182) (154,677,963) (158,816,145) Net Unrestricted Assets 1,056,677,354 (127,671,781) 929,005,573 FORM 990, PART X BALANCE SHEET DETAIL PART X, LINE 11 PUBLICLY TRADED SECURITIES U.S. GOVERNMENT OBLIGATIONS $ 382,246,565 FMV AGENCY BONDS 94,209,728 FMV CORPORATE BONDS 301,000,477 FMV COMMON STOCKS-OTHER 1,085,707,563 FMV -------------- TOTAL PART X, LINE 11 $1,863,164,333 PART X, LINE 12 CLOSELY-HELD EQUITY INTERESTS THE HERSHEY COMPANY - COMMON SHARES $ 588,126,087 FMV HERSHEY ENTERTAINMENT RESORTS 218,744,000 FMV HERSHEY TRUST COMPANY 38,193,749 FMV THE HERSHEY CO - CLASS B SHARES 2,848,764,564 FMV -------------- SUB-TOTAL CLOSELY-HELD INTERESTS $3,693,828,400 PART X, LINE 12 (CONTINUED) OTHER FUNDS - OTHER $1,011,112,598 FMV REIT FUNDS 11,779,406 FMV ALTERNATIVE ASSETS-MARKETABLE 43,025,097 FMV ALTERNATIVE ASSETS-NON MARKETABLE 291,541,117 FMV -------------- SUB-TOTAL OTHER $1,357,458,218 TOTAL PART X, LINE 12 $5,051,286,618 SCHEDULE C Lobbying Activities of Related Organizations Although not technically lobbying, the Milton Hershey School and School Trust paid $76,523 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 $81,656 during the reporting period for consulting on transportation issues. Of this amount, $42,656 was for Pennsylvania lobbying services. Hershey Trust Company, Hershey Entertainment & Resorts Company, and The Hershey Company paid a consultant $139,088 during the reporting period for consulting on transportation issues. Of this amount, $46,750 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 $126,775 during the reporting period. Their political action committee made disbursements of $8,750 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. SCHEDULE I, PART I, QUESTION 2 GRANTS & ASSISTANCE TO INDIVIDUALS - 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 grant 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 2010 will be $79,000. 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 that 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 $2,762,757, and $7,780,835 during the years ended July 31, 2010 and 2009, 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 479 students currently receiving continuing education scholarships as well as the 822 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 $4,587,684 of cash grants paid during the year, reduced by $1,824,927 which represents a reduction in the tuition accrual for grants to be paid in future years. The net of these amounts totals $2,762,757. 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 will be the acquisition, holding and development of rent-producing real estate, and their principal source of revenue will be 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 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 tax pursuant to IRC 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 Dearden House Advisory Board (EIN 20-2579678) is a Pennsylvania nonprofit that is exempt from Federal 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 32.1% 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 32.1% 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. SCHEDULE R, PART V Transactions with related organizations 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. Schedule R-1, Part V, Line 2 (ITEM 7) 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 Queen Latifah's promotion of the Milton Hershey School as well as candy packaging advertisements. The value of this benefit during the reporting period was $5,100,000. Schedule R-1, Part V, Line 2 (ITEM 9) During the reporting period, the Milton hershey School and School Trust swapped three tax parcels and cash of $148,385 for twenty-three Hershey Entertainment & Resorts Company tax parcels. The total value of real estate swapped was approximately $7.8 million, resulting in a $7.6 million gain by the Milton Hershey School and School Trust. Schedule R-1, Part V, Line 2 (ITEM 10) Hershey Entertainment & Resorts Co. provided Hersheypark and Giant Center tickets to Milton Hershey School students at no cost. The value of these benefits was $243,558. Schedule R-1, Part V, Line 2 (ITEM 11) Hershey Entertainment & Resorts Co. also participated in the Milton Hershey School's Anniversary by sponsoring a free concert and refreshments for the Milton Hershey School students and the Milton Hershey School employees. The value of this benefit during the reporting period was $150,767. MHST CORPUS LLC PO BOX 445 HERSHEY PA 17033 271451942 RE RENTAL PA 29807 12956240 N/A MHST INCOME LLC POX BOX 445 HERSHEY PA 17033 271451914 RE RENTAL PA 0 0 N/A THE MS HERSHEY FOUNDATION PO BOX 445 HERSHEY PA 17033 236242734 EDUCATION PA 501(C)(3) 9 HTC Trustee DEARDEN HOUSE ADVISORY BOARD 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 CO PA HTC Trustee C CORP 9987014 46410643 1.00000 HERSHEY ENTERTAINMENT & RESORTS CO 27 W CHOCOLATE HERSHEY PA 17033 230691815 ENTERTAINMENT PA HTC Trustee C CORP 250935044 340557169 1.00000 THE HERSHEY CO 100 CRYSTAL A DR HERSHEY PA 17033 230691590 CONFECTIONARY PA HTC Trustee C CORP 792522526 1146996781 0.80000 true false false false false true false true false false true false false true true false false HERSHEY ENTERTAINMENT & RESORTS CO A 347946 HERSHEY TRUST COMPANY A 449683 THE HERSHEY COMPANY A 220000 THE MS HERSHEY FOUNDATION A 45983 HERSHEY ENTERTAINMENT & RESORTS CO O 709215 THE MS HERSHEY FOUNDATION O 76955 THE HERSHEY COMPANY P 5100000 HERSHEY ENTERTAINMENT & RESORTS CO F 100000 HERSHEY ENTERTAINMENT & RESORTS CO H 148385 HERSHEY ENTERTAINMENT & RESORTS CO P 243558 HERSHEY ENTERTAINMENT & RESORTS CO P 150767