The acquisition of certain assets from Weaver Popcorn Manufacturing, Inc. was completed on May 31, 2023, providing additional manufacturing capacity for the company's SkinnyPop brand. This strategic move strengthens the company's supply chain capabilities in the salty snacks segment.

International net sales increased by 11.2%, with growth primarily attributable to World Travel Retail, Mexico and Brazil & Latin America. This indicates a successful strategy of focusing on targeted emerging markets for profitable growth.

The Board of Directors approved the Advancing Agility & Automation Initiative in February 2024, a multi-year productivity program to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings.

The company utilizes continuous listening surveys to gather employee feedback and align the workforce with the company's strategic objectives. This proactive approach to employee engagement enhances productivity and job satisfaction.

The company undertook business realignment activities, including the International Optimization Program, to increase efficiency and reduce costs. These efforts demonstrate a commitment to operational excellence and resource optimization.

The company continues to make progress on its ESG priorities, including sustainability and social impact across its value chain. This includes improving the lives of cocoa farmers and cocoa communities, addressing climate change, and responsibly sourcing inputs.

The company acknowledges the potential for climate-related changes to impact its supply chain, increase costs, and affect its ability to meet environmental goals. This highlights the importance of proactive measures to mitigate these risks.

The company recognizes the ongoing threat of cyber attacks and data breaches and invests in security technology and training to mitigate these risks. However, the potential for disruptions and negative impacts remains a concern.

Changes in governmental laws and regulations could increase costs and liabilities or impact demand for our products. For example, the European Union's Deforestation Regulation (“EUDR") will require the Company to conduct extensive diligence on seven commodities, including cocoa, palm oil and soy.

The company operates in highly competitive markets and relies on continued demand for its products. To generate revenues and profits, the company must sell products that appeal to its customers and to consumers.

The global confectionery and snacks packaged goods industry is intensely competitive and consolidation in this industry continues. Some of our competitors are large private companies, as well as large retailers, that have significant resources and substantial international operations.

For the full year 2023, our total U.S. retail takeaway increased 6.0% in the expanded multi-outlet combined plus convenience store channels (IRI MULO + C-Stores), which includes candy, mint, gum, salty snacks and grocery items. Our U.S. candy, mint and gum (“CMG”) consumer takeaway increased 6.0% and experienced a CMG market share decline of 83 basis points. Our Salty consumer takeaway increased 5.6% and experienced a Salty market share decline of 9 basis points.

The company experienced unfavorable costs driven by higher supply chain costs, including higher labor costs, partially offset by lower logistics costs, and unfavorable mix.

Gross margin was 44.8% in 2023 compared with 43.2% in 2022, an increase of 160 basis points. The increase was driven by favorable price realization and increased supply chain productivity.

In February 2024, the Board of Directors approved the Advancing Agility & Automation Initiative, which is a multi-year productivity program to improve supply chain and manufacturing-related spend, optimize selling, general and administrative expenses, leverage new technology and business models to further simplify and automate processes, and generate long-term savings.

Capital expenditures, including capitalized software, primarily to support the ERP system implementation, capacity expansion, innovation and cost savings, were $771.1 million in 2023, $519.5 million in 2022 and $495.9 million in 2021.

SM&A expenses increased 9.0% in 2023 driven by higher compensation costs and investments in capabilities and technology across segments.

The company is in the process of transforming its manufacturing, commercial and corporate operations through digital technologies and enhancing data analytics capabilities to develop new commercial insights.

The company repurchased shares of Common Stock to offset the dilutive impact of treasury shares issued under equity compensation plans. In December 2023, our Board of Directors approved an additional $500 million share repurchase authorization.

Total dividend payments to holders of our Common Stock and Class B Common Stock were $889.1 million in 2023, $775.0 million in 2022 and $686.0 million in 2021. Dividends per share of Common Stock increased 15.0% to $4.456 per share in 2023 compared to $3.874 per share in 2022.

We make investments in partnership entities that in turn make equity investments in projects eligible to receive federal historic and energy tax credits. We invested approximately $256.8 million in 2023, $275.5 million in 2022 and $128.4 million in 2021 in projects qualifying for tax credits.

The Company continues that legacy today through our global sustainability strategy: Our Shared Goodness Promise, which guides how we empower the remarkable people who make and sell our brands, interact with farming communities that grow our ingredients, deliver on our commitments to consumers, customers, and external stakeholders, protect the environment and support children and youth.

The Company publishes its environmental goals, with a particular focus on achieving a 50% absolute reduction in our Scope 1 and 2 GHG emissions and a 25% absolute reduction in our Scope 3 GHG emissions by 2030 (compared to a 2018 baseline), as well as having 100% of plastic packaging be recyclable, reusable or compostable and eliminating 25 million pounds of packaging by 2030.

Our gender representation includes women occupying many of the top positions in the Company, including Chief Executive Officer and Chairman of the Board, Chief Accounting Officer and President, Salty Snacks, and approximately 50% representation across the Company. In 2023, we maintained fair and equitable pay achievements, including 1:1 aggregate people of color pay equity (2021) and 1:1 aggregate gender pay (2020) for salaried employees in the United States.

Throughout 2023, the rate of inflation has slowed; however, negative macroeconomic conditions and future outlook, including fears of a pending recession, have negatively impacted consumer behaviors.

Furthermore, certain geopolitical events, specifically the conflict between Russia and Ukraine, have increased global economic and political uncertainty.

However, we are continuing to monitor for any significant escalation or expansion of economic or supply chain disruptions or broader inflationary costs, which may result in material adverse effects on our results of operations.