10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2014

OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

COMMISSION FILE NUMBER 1-1361

Tootsie Roll Industries, Inc.

(Exact Name of Registrant as Specified in its Charter)

VIRGINIA	22-1318955
(State of Incorporation)	(I.R.S. Employer Identification No.)

7401 South Cicero Avenue, Chicago, Illinois	60629
(Address of Principal Executive Offices)	(Zip Code)

773-838-3400

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes ☒  No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (June 28, 2014).

Class	Outstanding
Common Stock, $.69 4/9 par value	37,777,410
Class B Common Stock, $.69 4/9 par value	22,909,591

TOOTSIE ROLL INDUSTRIES, INC.

June 28, 2014

INDEX

		Page No.
Part I —	Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Financial Position	3-4
	Condensed Consolidated Statements of Earnings and Retained Earnings	5
	Condensed Consolidated Statements of Comprehensive Earnings	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8-15
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17-21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
Part II —	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6.	Exhibits	23
Signatures		24
Certifications		25-27

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  See “Forward-Looking Statements” under Part I — Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TOOTSIE ROLL INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)  (UNAUDITED)

	June 28, 2014		December 31, 2013		June 29, 2013
ASSETS
CURRENT ASSETS:
Cash & cash equivalents	$	57,091	$	88,283	$	31,946
Investments		38,995		33,572		24,868
Trade accounts receivable, less allowances of $1,806, $2,042 & $1,907		25,698		40,721		24,888
Other receivables		2,240		4,616		5,292
Inventories:
Finished goods & work-in-process		73,747		37,012		69,715
Raw material & supplies		29,651		24,844		29,841
Prepaid expenses		7,200		5,581		2,221
Deferred income taxes		3,186		5,482		4,935
Total current assets		237,808		240,111		193,706
PROPERTY, PLANT & EQUIPMENT, at cost:
Land		22,536		21,683		21,685
Buildings		111,418		111,044		108,387
Machinery & equipment		341,672		340,405		329,861
Construction in progress		9,148		3,403		8,392
		484,774		476,535		468,325
Less-accumulated depreciation		289,248		279,619		270,827
Net property, plant and equipment		195,526		196,916		197,498
OTHER ASSETS:
Goodwill		73,237		73,237		73,237
Trademarks		175,024		175,024		175,024
Investments		162,275		148,532		170,373
Split dollar officer life insurance		40,296		40,296		41,394
Prepaid expenses		8,753		10,260		—
Restricted cash		1,791		—		—
Deferred income taxes		4,030		4,033		5,926
Total other assets		465,406		451,382		465,954
Total assets	$	898,740	$	888,409	$	857,158

(The accompanying notes are an integral part of these statements.)

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(in thousands except per share data) (UNAUDITED)

	June 28, 2014		December 31, 2013		June 29, 2013
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	14,040	$	9,153	$	11,630
Bank loans		151		—		—
Dividends payable		4,856		4,742		4,773
Accrued liabilities		44,598		45,580		45,773
Postretirement health care and life insurance benefits		111		319		555
Income taxes payable		-		327		249
Total current liabilities		63,756		60,121		62,980
NONCURRENT LIABILITIES:
Deferred income taxes		54,503		54,939		42,862
Bank loans		930		—		—
Postretirement health care and life insurance benefits		9,338		8,857		28,188
Industrial development bonds		7,500		7,500		7,500
Liability for uncertain tax positions		9,977		7,167		8,261
Deferred compensation and other liabilities		74,028		69,520		60,941
Total noncurrent liabilities		156,276		147,983		147,752
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS’ EQUITY:
Common stock, $.69-4/9 par value- 120,000 shares authorized; 37,777, 37,011 & 37,401, respectively, issued		26,234		25,702		25,973
Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 22,910, 22,256& 22,261, respectively, issued		15,909		15,455		15,459
Capital in excess of par value		613,467		572,669		584,969
Retained earnings		29,870		73,109		39,199
Accumulated other comprehensive loss		(5,252)		(4,638)		(17,182)
Treasury stock (at cost)- 78, 76 & 76 shares, respectively		(1,992)		(1,992)		(1,992)
Total Tootsie Roll Industries, Inc. shareholders’ equity		678,236		680,305		646,426
Noncontrolling interests		472		—		—
Total equity		678,708		680,305		646,426
Total liabilities and shareholders’ equity	$	898,740	$	888,409	$	857,158

(The accompanying notes are an integral part of these statements.)

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TOOTSIE ROLL INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

EARNINGS AND RETAINED EARNINGS

(in thousands except per share amounts)    (UNAUDITED)

	Quarter Ended				Year to Date Ended
	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013
Net product sales	$	104,061	$	101,988	$	210,873	$	212,267
Rental and royalty revenue		869		898		1,839		1,905
Total revenue		104,930		102,886		212,712		214,172
Product cost of goods sold		66,182		66,972		133,047		139,141
Rental and royalty cost		223		225		481		475
Total costs		66,405		67,197		133,528		139,616
Product gross margin		37,879		35,016		77,826		73,126
Rental and royalty gross margin		646		673		1,358		1,430
Total gross margin		38,525		35,689		79,184		74,556
Selling, marketing and administrative expenses		28,296		26,487		53,927		54,454
Earnings from operations		10,229		9,202		25,257		20,102
Other income, net		3,033		1,705		4,699		4,296
Earnings before income taxes		13,262		10,907		29,956		24,398
Provision for income taxes		4,305		2,538		11,642		6,960
Net earnings		8,957		8,369		18,314		17,438
Less: Net loss attributable to noncontrolling interests		69		-		293		-
Net earnings attributable to Tootsie Roll Industries, Inc.		9,026		8,369		18,607		17,438
Net earnings attributable to Tootsie Roll Industries, Inc. per share	$	0.15	$	0.14	$	0.31	$	0.28
Dividends per share *	$	0.08	$	0.08	$	0.16	$	0.16
Average number of shares outstanding		60,659		61,431		60,742		61,550
Retained earnings at beginning of period	$	25,694	$	35,598	$	73,109	$	80,210
Net earnings attributable to Tootsie Roll Industries, Inc.		9,026		8,369		18,607		17,438
Cash dividends		(4,850)		(4,768)		(9,565)		(9,421)
Stock dividends		-		-		(52,281)		(49,028)
Retained earnings at end of period	$	29,870	$	39,199	$	29,870	$	39,199

*Does not include 3% stock dividend to shareholders of record on 4/4/14 and 4/5/13.

(The accompanying notes are an integral part of these statements.)

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TOOTSIE ROLL INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS

(in thousands except per share amounts) (UNAUDITED)

	Quarter Ended				Year to Date Ended
	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013
Net earnings	$	8,957	$	8,369	$	18,314	$	17,438
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		138		(1,223)		(1,180)		(101)
Pension and post-retirement reclassification adjustments:
Unrealized gains (losses) for the period on postretirement and pension benefits		-		-		-		-
Less: reclassification adjustment for (gains) losses to net income		(451)		-		(902)		-
Unrealized gains (losses) on postretirement and pension benefits		(451)		-		(902)		-
Investments:
Unrealized gains (losses) for the period on investments		185		589		(31)		(181)
Less: reclassification adjustment for (gains) losses to net income		-		-		-		-
Unrealized gains (losses) on investments		185		589		(31)		(181)
Derivatives:
Unrealized gains (losses) for the period on derivatives		1,388		(802)		555		(1,732)
Less: reclassification adjustment for (gains) losses to net income		73		546		510		901
Unrealized gains (losses) on derivatives		1,461		(256)		1,065		(831)
Total other comprehensive income (loss), before tax		1,333		(890)		(1,048)		(1,113)
Income tax benefit (expense) related to items of other comprehensive income		(432)		(128)		434		378
Total comprehensive earnings		9,858		7,351		17,700		16,703
Comprehensive earnings attributable to noncontrolling interests		69		-		293		-
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc.	$	9,927	$	7,351	$	17,993	$	16,703

(The accompanying notes are an integral part of these statements.)

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TOOTSIE ROLL INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)   (UNAUDITED)

	Year to Date Ended
	June 28, 2014		June 29, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	18,314	$	17,438
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		10,189		9,783
Loss on step acquisition		529		-
Loss from equity method investment		-		477
Amortization of marketable security premiums		1,689		1,468
Changes in operating assets and liabilities:
Accounts receivable		16,520		17,207
Other receivables		3,710		(594)
Inventories		(39,770)		(37,188)
Prepaid expenses and other assets		1,063		27,442
Accounts payable and accrued liabilities		348		3,317
Income taxes payable and deferred		(1,119)		(5,159)
Postretirement health care and life insurance benefits		(421)		1,362
Deferred compensation and other liabilities		1,764		1,620
Other		101		(80)
Net cash from operating activities		12,917		37,093
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in step acquisition		161		-
Restricted cash		193		-
Capital expenditures		(5,895)		(5,960)
Net sales (purchases) of trading securities		(2,627)		(2,269)
Purchase of available for sale securities		(27,331)		(63,992)
Sale and maturity of available for sale securities		11,566		18,530
Net cash used in investing activities		(23,933)		(53,691)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares purchased and retired		(10,381)		(10,568)
Dividends paid in cash		(9,567)		(4,750)
Repayment of bank loans		(228)		-
Net cash used in financing activities		(20,176)		(15,318)
Decrease in cash and cash equivalents		(31,192)		(31,916)
Cash and cash equivalents at beginning of year		88,283		63,862
Cash and cash equivalents at end of quarter	$	57,091	$	31,946
Supplemental cash flow information:
Income taxes paid, net	$	10,496	$	12,996
Interest paid	$	31	$	17
Stock dividend issued	$	52,165	$	48,925

(The accompanying notes are an integral part of these statements.)

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TOOTSIE ROLL INDUSTRIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June28, 2014

(in thousands except per share amounts) (UNAUDITED)

Note 1 — Significant Accounting Policies

General Information

Foregoing data has been prepared from the unaudited financial records of Tootsie Roll Industries, Inc. (the Company) and in the opinion of management all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim period have been reflected.  Certain amounts previously reported have been reclassified to conform to the current year presentation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s 2013 Annual Report on Form 10-K.

Results of operations for the period ended June 28, 2014 are not necessarily indicative of results to be expected for the year to end December 31, 2014 because of the seasonal nature of the Company’s operations. Historically, the third quarter has been the Company’s largest sales quarter due to Halloween sales.

The results of the Company’s two less than wholly owned Spanish companies are consolidated and a noncontrolling interest has been recorded.  (See Note 10.)

Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on the condensed consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, which includes amendments that change the requirements for  reporting discontinued operations. The new guidance requires that the disposal of a component of an entity be reported as discontinued operations only if the action represents a strategic shift that will have a major effect on an entity’s operations and financial results, and would require expanded disclosures. This guidance will be effective beginning in the first quarter 2015. We do not expect the adoption of this guidance to have a significant impact on the condensed consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which requires presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  ASU 2013-11 provides explicit guidance on presentation in financial statements.  The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

In March 2013, the FASB issued ASU 2013-05, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had

8

resided, or, if a controlling financial interest is no longer held. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

Note 2 — Average Shares Outstanding

The average number of shares outstanding for year to date ended June 28, 2014 reflect stock purchases of 347 shares for $10,381 and a 3% stock dividend distributed on April 4, 2014. The average number of shares outstanding for year to date ended June 29, 2013 reflect stock purchases of 356 shares for $10,568 and a 3% stock dividend distributed on April 5, 2013.

Note 3 — Income Taxes

The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2010 through 2013. With few exceptions, the Company is no longer subject to examination by tax authorities for the year 2009 and prior. The consolidated effective tax rates were 32.5% and 23.3% in second quarter 2014 and 2013, respectively, and 38.9% and 28.5% in first half 2014 and 2013, respectively. The higher effective income tax rate in first half 2014reflects the reversal of deferred tax assets of $2,350 in first quarter 2014 relating to the step acquisition of the Spanish companies as discussed in Note 10. The more favorable effective income tax rates in prior year second quarter and first half 2013 reflects the benefits of a release of certain tax valuation allowances relating to prior capital losses as a result of capital gains realized on the sale of certain investments primarily in second quarter 2013.

Note 4 — Fair Value Measurements

Current accounting guidance defines fair value as the price that would be received on the sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below.

As of June 28, 2014, December 31, 2013 and June 29, 2013, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the purchase of certain raw materials and foreign currencies, investments in trading securities and available for sale securities, including an auction rate security. The Company’s available for sale and trading securities principally consist of municipal bonds and mutual funds that are publicly traded.

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The following table presents information about the Company’s financial assets and liabilities measured at fair value as of June 28, 2014, December 31, 2013 and June 29, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	Estimated Fair Value June 28, 2014
	Total		Input Levels Used
	Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	57,091	$	57,091	$	-	$	-
Available for sale securities		132,688		-		132,688		-
Foreign currency forward contracts		81		-		81		-
Commodity futures contracts		150		150		-		-
Trading securities		68,582		68,582		-		-
Total assets measured at fair value	$	258,592	$	125,823	$	132,769	$	-
	Estimated Fair Value December 31, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	88,283	$	88,283	$	-	$	-
Available for sale securities		118,647		-		118,647		-
Foreign currency forward contracts		(684)		-		(684)		-
Commodity futures contracts, net		(130)		(130)		-		-
Trading securities		63,215		63,215		-		-
Total assets measured at fair value	$	269,331	$	151,368	$	117,963	$	-
	Estimated Fair Value June 29, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	31,946	$	31,946	$	—	$	—
Auction rate security		10,162		—		—		10,162
Available for sale securities excluding the auction rate security		127,704		—		127,704		—
Foreign currency forward contracts		(759)		—		(759)		—
Commodity futures contracts		(223)		(223)		—		—
Trading securities		55,753		55,753		—		—
Total assets measured at fair value	$	224,583	$	87,476	$	126,945	$	10,162

During the fourth quarter 2013, the Company sold its investment in Jefferson County Alabama Sewer Revenue Refunding Warrants for $10,840. This was an auction rate security (ARS) originally purchased for $13,550 in 2008 with an insurance-backed AAA rating. The Company recorded an other-than-temporary pre-tax impairment of $5,140 in 2008 on this ARS investment which resulted in a carrying value of $8,410 at that time. Since recording the initial impairment in 2008, the Company carried this ARS investment at its estimated fair value utilizing a valuation model with Level 3 inputs, as defined by guidance, and resulting changes in the market value since the original impairment charge in 2008 were recorded as changes to accumulated other comprehensive income (loss) each year. The fair value of this instrument at June 29, 2013 was $10,162, with an unrealized loss in other comprehensive earnings of $677 recorded during the first half 2013.

The fair value of the Company’s industrial revenue development bonds at June 28, 2014, December 31, 2013 and June 29, 2013 were valued using Level 2 inputs which approximates the carrying value of $7,500 for both periods. Interest rates on these bonds are reset weekly based on current market conditions.

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Note 5 — Derivative Instruments and Hedging Activities

From time to time, the Company uses derivative instruments, including foreign currency forward contracts, commodity futures contracts and commodity option contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts and most commodity option contracts are intended and effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States. The Company does not engage in trading or other speculative use of derivative instruments.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Statement of Financial Position. Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities. The Company uses either hedge accounting or mark-to-market accounting for its derivative instruments. Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction.

Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives are expected to be reclassified to cost of goods sold. Substantially all amounts reported in accumulated other comprehensive loss for foreign currency derivatives are expected to be reclassified to other income, net.

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The following table summarizes the Company’s outstanding derivative contracts and their effects on its Condensed Consolidated Statements of Financial Position at June 28, 2014, December 31, 2013 and June 29, 2013:

	June 28, 2014
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	38,978	$	534	$	(453)
Commodity futures contracts		5,563		192		(42)
Total derivatives designated as hedging instruments				726		(495)
Derivatives not designated as hedging instruments:
Commodity futures contracts		-		-		-
Total derivatives not designated as hedging instruments				-		-
Total derivatives			$	726	$	(495)
	December 31, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	34,244	$	-	$	(684)
Commodity futures contracts		5,601		41		(191)
Total derivatives designated as hedging instruments				41		(875)
Derivatives not designated as hedging instruments:
Commodity futures contracts		321		20		-
Total derivatives not designated as hedging instruments				20		-
Total derivatives			$	61	$	(875)
	June 29, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	23,383	$	-	$	(759)
Commodity futures contracts		1,600		-		(246)
Total derivatives designated as hedging instruments				-		(1,005)
Derivatives not designated as hedging instruments:
Commodity futures contracts		1,272		25		(2)
Total derivatives not designated as hedging instruments				25		(2)
Total derivatives			$	25	$	(1,007)

The effects of derivative instruments on the Company’s Condensed Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings for periods ended June 28, 2014 and June 29, 2013 are as follows:

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	For Quarter Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	1,505	$	(189)	$	-
Commodity futures contracts		(117)		116		-
Commodity option contracts		-		-		-
Total	$	1,388	$	(73)	$	-
	For Quarter Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(585)	$	(73)	$	-
Commodity futures contracts		(217)		(473)		-
Commodity option contracts		-		-		-
Total	$	(802)	$	(546)	$	-
	For Year to Date Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	314	$	(451)	$	-
Commodity futures contracts		241		(59)		-
Commodity option contracts		-		-		-
Total	$	555	$	(510)	$	-
	For Year to Date Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(867)	$	(108)	$	-
Commodity futures contracts		(865)		(793)		-
Commodity option contracts		-		-		-
Total	$	(1,732)	$	(901)	$	-

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During the quarters and years to date ended June 28, 2014 and June 29, 2013, the Company recognized earnings (loss) of $(6) and $(31), and $(20) and $(39) respectively, related to mark-to-market accounting for certain commodity option and future contracts.

Note 6 — Pension Plans

During 2012 and 2013, the Company received notices from the Bakery and Confectionery Union and Industry International (BC&T) Pension Fund (Plan), a multi-employer defined benefit pension plan for certain Company union employees. The notices indicate that the Plan’s actuary has certified that the Plan is in critical status, the “Red Zone”, as defined by the Pension Protection Act (PPA), and that a plan of rehabilitation was adopted by the Trustees of the Plan in fourth quarter 2012. The rehabilitation plan adopted requires that employer contributions include 5% compounded annual surcharges each year for an unspecified period of time beginning January 2013 (in addition to the 5% interim surcharge initiated in June 2012) as well as certain plan benefit reductions. The Company was advised by the Plan that if the Company had withdrawn from the Plan during 2012 its estimated withdrawal liability would have been $37,200. The Company does not have any updated information as to its withdrawal liability. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than $37,200, would be payable to the Plan. The Company’s existing labor contract with its BC&T local union commits the Company’s participation in this Plan through third quarter 2017. Pension expense, including surcharges as discussed above, for the BC&T Plan for first half 2014 and 2013 was $1,354 and $1,208, respectively. The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore, is unable to determine the effects on its consolidated financial statements, but, the ultimate outcome could be material to its consolidated results of operations in one or more future periods. See also the Company’s consolidated financial statements and related notes and Management and Discussion and Analysis incorporated into the Company’s 2013 Form 10-K.

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Note 7 — Accumulated Other Comprehensive Earnings (Loss)

Accumulated Other Comprehensive Earnings (Loss) consists of the following components:

											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2013	$	(13,527)	$	54	$	(436)	$	(96)	$	9,367	$	(4,638)
Other comprehensive earnings (loss) before reclassifications		(699)		(20)		200		155		-		(364)
Reclassifications from accumulated other comprehensive loss		-		-		288		38		(576)		(250)
Other comprehensive earnings (loss) before tax		(699)		(20)		488		193		(576)		(614)
Balance at June 28, 2014	$	(14,226)	$	34	$	52	$	97	$	8,791	$	(5,252)
											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2012	$	(13,406)	$	908	$	-	$	(111)	$	(3,838)	$	(16,447)
Other comprehensive earnings (loss) before reclassifications		(90)		(115)		(553)		(551)		-		(1,309)
Reclassifications from accumulated other comprehensive loss		-		-		69		505		-		574
Other comprehensive earnings (loss) before tax		(90)		(115)		(484)		(46)		-		(735)
Balance at June 29, 2013	$	(13,496)	$	793	$	(484)	$	(157)	$	(3,838)	$	(17,182)

The amounts reclassified from accumulated other comprehensive income (loss) consisted of the following:

	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Details about Accumulated Other	Quarter Ended				Year to Date Ended
Comprehensive Income Components	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013		Location of (Gain) Loss Recognized in Earnings
Foreign currency derivatives	$	189	$	73	$	451	$	108	Other income, net
Commodity derivatives		(116)		473		59		793	Product cost of goods sold
Postretirement and pension benefits		(230)		-		(460)		-	Selling, marketing and administrative expenses
Postretirement and pension benefits		(221)		-		(442)		-	Product cost of goods sold
Total before tax		(378)		546		(392)		901
Tax (expense) benefit		137		(198)		142		(326)
Net of tax	$	(241)	$	348	$	(250)	$	575

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Note 8 — Restricted Cash

Restricted cash comprises certain cash deposits of the Company’s less than wholly owned Spanish companies (see Note 10) with international banks that are pledged as collateral for letters of credit and bank borrowings.

Note 9 — Bank Loans

Long term bank loans comprise borrowings by the Company’s less than wholly owned Spanish companies (see Note 10) which are held in international banks. The average weighted interest rate in second quarter 2014 was of 3.2% and maturity dates range from 1 to 4 years. Short term bank loans also relate to the Company’s less than wholly owned Spanish companies.

Note 10 — Step Acquisition

During first quarter 2014, the Company gained operating control of its two50% owned Spanish companies when Company employee representatives assumed all positions on their boards of directors. This was considered a step acquisition, whereby the Company remeasured the previously held investment to fair value in first quarter 2014. As a result, the Company’s first quarter 2014 net earnings include a net loss of $529, including an income tax provision of $2,350 relating to deferred income taxes. The Company purchased newly issued capital stock of the Spanish companies for $736 which further increased the Company’s ownership and control to 75% at the end of second quarter 2014.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This financial review discusses the Company’s financial condition, results of operations, liquidity and capital resources, new accounting pronouncements and other matters. Dollars are presented in thousands, except per share amounts. This review should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and related footnotes and with the Company’s Condensed Consolidated Financial Statements and related notes and Management’s Discussion and Analysis included in the Company’s 2013 Form 10-K.

Net product sales were $104,061 in second quarter 2014 compared to $101,988 in second quarter 2013, an increase of $2,073 or 2.0%. First half 2014 net product sales were $210,873 compared to $212,267 in first half 2013, a decrease of $1,394 or 0.7%.Although many of our retail customers in the United States continue to experience challenges with sales and consumer spending, our second quarter 2014 sales in the United States moved slightly ahead of second quarter 2013. Second quarter and first half sales, however, were adversely affected by lower sales in both Mexico and Canada compared to the corresponding periods in 2013.

Product cost of goods sold were $66,182 in second quarter 2014 compared to $66,972 in second quarter 2013, and first half 2014 product cost of goods sold were $133,047 compared to $139,141 in first half 2013. Product cost of goods sold includes $564 and $241 of certain deferred compensation expenses in second quarter 2014 and 2013, respectively, and $632 and $937 of certain deferred compensation expenses in first half 2014 and 2013, respectively. These deferred compensation expenses principally result from the increase in the market value of investments and investment income from trading securities relating to compensation deferred in previous years and are not reflective of current operating results. Adjusting for the aforementioned, product cost of goods sold decreased from $66,731 in second quarter 2013 to $65,618 in second quarter 2014, a decrease of $1,113 or 1.7%; and decreased from $138,204 in first half 2013 to $132,415 in first half 2014, a decrease of $5,789 or 4.2%. As a percentage of net product sales, adjusted product cost of goods sold was 63.1% and 65.4% in second quarter 2014 and 2013, respectively, a favorable decrease of 2.3%; and adjusted product cost of goods sold was 62.8% and 65.1% in first half 2014 and 2013, respectively, a favorable decrease of 2.3%. These favorable changes reflect lower ingredient costs as well as manufacturing plant efficiencies driven by capital investments and ongoing cost containment programs. Although overall comparative ingredient costs were more favorable in second quarter and first half 2014 compared to the corresponding periods in the prior year, certain key ingredient costs are higher this year. The Company is continuing to make progress on restoring its margins to their historical levels before the increases in commodity and other input costs in past years.

Selling, marketing and administrative expenses were $28,296 in second quarter 2014 compared to $26,487 in second quarter 2013, and first half 2014 selling, marketing and administrative expenses were $53,927 compared to $54,454 in first half 2013.  Selling, marketing and administrative expenses includes $1,899 and $811 of certain deferred compensation expenses  in second quarter 2014 and 2013, respectively, and $2,109 and $3,168 of certain deferred compensation expenses in first half 2014 and 2013, respectively. As discussed above, these expenses principally result from changes in the market value of investments and investment income from trading securities relating to compensation deferred in previous years, and are not reflective of current operating results. Adjusting for the aforementioned, selling, marketing and administrative expenses increased from $25,676 in second quarter 2013 to $26,397 in second quarter 2014, an increase of $721 or 2.8%; and selling, marketing and administrative expenses increased from $51,286 in first half 2013 to $51,818 in first half 2014, an increase of $532 or 1.0%. As a percentage of net product sales, adjusted selling, marketing and administrative expenses increased from 25.2% in second quarter 2013 to 25.4% in second quarter 2014, an unfavorable increase of 0.2% as a percent of net sales; and adjusted selling, marketing and administrative expenses increased from 24.2% in first half 2013 to 24.6% in first half 2014, an unfavorable increase of 0.4%. Selling, marketing and administrative expenses include $10,693 and $10,380 for freight, delivery and warehousing expenses in second quarter 2014 and 2013, respectively, and $20,889 and $20,504 for freight, delivery and warehousing expenses in first half 2014 and 2013, respectively. These expenses were 10.3% and 10.2% of net product sales in second quarter 2014 and 2013, respectively, and 9.9% and 9.7% of

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net product sales in first half 2014 and 2013, respectively, and contributed to the above discussed increases in selling, marketing and administrative expenses in both second quarter and first half 2014.

Earnings from operations were $10,229 in second quarter 2014 compared to $9,202 in second quarter 2013, and were $25,257 in first half 2014 compared to $20,102 in first half 2013.  Earnings from operations include $2,463 and $1,052 of certain deferred compensation expenses  in second quarter 2014 and 2013, respectively, and include $2,741 and $4,105 of certain deferred compensation expenses in first half 2014 and 2013, respectively. As discussed above, these deferred compensation expenses relate to changes in deferred compensation liabilities resulting from corresponding changes in the market value of trading securities and related investment income that hedge these liabilities. Adjusting for the aforementioned, operating earnings were $12,692 and $10,254 in second quarter 2014 and 2013, respectively, an increase of $2,438 or 23.8%; and adjusted operating earnings were $27,998 and $24,207 in first half 2014 and 2013, respectively, an increase of $3,791 or 15.7%. As a percentage of net product sales, these adjusted operating earnings were 12.2% and 10.1% in second quarter 2014 and 2013, respectively, a favorable increase of 2.1% as a percentage of net product sales; and adjusted operating earnings were 13.3% and 11.4% in first half 2014 and 2013, respectively, a favorable increase of 1.9% as a percentage of net product sales. The above discussedincreases in adjusted operating earnings principally reflect more favorable gross profit margins which are discussed above. Management believes the presentation in this and the preceding paragraphs relating to amounts adjusted for deferred compensation expense are more reflective of the underlying operations of the Company.

Other income (expense) net, was $3,033 in second quarter 2014 compared to $1,705 in second quarter 2013, a favorable increase of $1,328; and other income (expense), net, was $4,699 in first half 2014 compared to $4,296 in first half 2013, a favorable increase of $403. Other income (expense), net for second quarter 2014 and 2013 includes aggregate net gains and investment income of $2,463 and $1,052, respectively, on trading securities relating to deferred compensation programs as discussed above; and other income, net for first half 2014 and 2013 includes aggregate net gains and investment income of $2,741 and $4,105, respectively, on trading securities relating to these programs. As discussed above, these increases in trading securities were substantially offset by a like amount of deferred compensation expense included in product cost of goods sold and selling, marketing, and administrative expenses in the respective periods as discussed above. Other income (expense) net, includes gains (losses) on foreign exchange of $211 and $281 in second quarter 2014 and 2013, respectively, and includes gains (losses) on foreign exchange of $(789) and $(323) in first half 2014 and 2013, respectively.  In addition, first quarter and first half 2014 other income, net includes a pre-tax gain of approximately $1,800 resulting from the step acquisition of the two Spanish companies discussed above.

The consolidated effective tax rates were 32.5% and 23.3% in second quarter 2014 and 2013, respectively, and 38.9% and 28.5% in first half 2014 and 2013, respectively. The higher effective income tax rate in first half 2014 reflects a reversal of deferred tax assets of $2,350 relating to the step acquisition of the Spanish companies discussed above. The more favorable effective income tax rate in prior year second quarter and first half 2013 also  reflects the release of certain tax valuation allowances relating to prior capital losses as a result of capital gains realized on the sale of certain investments primarily in second quarter 2013.

Net earnings attributable to Tootsie Roll Industries, Inc. were $9,026 (after $69 net loss attributed to non-controlling interests) in second quarter 2014 compared to $8,369 in second quarter 2013, and earnings per share were $0.15 and $0.14 in second quarter 2014 and second quarter 2013, respectively, an increase of $0.1 per share or 7%. First half 2014 net earnings attributable to Tootsie Roll Industries, Inc. were $18,607 (after $293 net loss attributed to non-controlling interests) compared to first half net earnings of $17,438, and net earnings per share were $0.31 and $.28  in first half 2014 and first half 2013, respectively.  an increase of $0.03 per share or 11%. The increase in earnings per share in second quarter and first half 2014 principally results from the improvements in gross profit margins as discussed above. The prior year comparative second quarter and first half 2013 periods also benefited from a lower effective income tax rate as discussed above. Earnings per share attributable to Tootsie Roll Industries, Inc. for second quarter and first half 2014 did benefit from the reduction in average shares outstanding resulting from common stock purchases in the open market by the Company. As a result, average shares outstanding decreased from 61,431 in second quarter 2013 to 60,659 in second quarter 2014, and from 61,550 in first half 2013 to 60,742 in first half 2014.

Goodwill and intangibles are assessed annually as of December 31 or whenever events or circumstances indicate that the carrying values may not be recoverable from future cash flows. The Company has not

18

identified any triggering events, as defined, or other adverse information that would indicate a material impairment of its goodwill or intangibles in first half 2014. There were also no impairments in the comparative first half 2013 period.

During first quarter 2014, the Company gained operating control of its two 50% owned Spanish companies when Company employee representatives assumed all positions on their boards of directors. This was considered a step acquisition, whereby the Company remeasured the previously held investment to fair value in first quarter 2014.As a result, the Company’s first quarter 2014 net earnings include a net loss of $529, including an additional income tax provision of $2,350 relating to deferred income taxes. The Company further increased its ownership and control to 75% at the end of second quarter 2014.

During 2012 and 2013, the Company received notices from the Bakery and Confectionery Union and Industry International (BC&T) Pension Plan (Plan), a multi-employer defined benefit pension plan for certain Company union employees. The notices indicate that the Plan’s actuary has certified that the Plan is in critical status, the “Red Zone”, as defined by the Pension Protection Act (PPA), and that a plan of rehabilitation was adopted by the Trustees of the Plan in fourth quarter 2012.  The rehabilitation plan requires that employer contributions include 5% compounded annual surcharges each year for an unspecified period of time beginning January 2013 (in addition to the 5% interim surcharge initiated in June 2012) as well as certain plan benefit reductions.  The Company was advised by the Plan that if the Company had withdrawn from the Plan during 2012 its estimated withdrawal liability would have been $37,200. The Company does not have any updated information as to its withdrawal liability.  Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than $37,200, would be payable to the Plan.  The Company’s existing labor contract with its BC&T local union commits the Company’s participation in this Plan through third quarter 2017. Pension expense, including surcharges, for the BC&T Plan for first half 2014 and 2013 was $1,354 and $1,208, respectively. The aforementioned expense includes surcharges of $179 and $112 in first half 2014 and 2013, respectively. The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore, is unable to determine the effects on its consolidated financial statements, but, the ultimate outcome could be material to its consolidated results of operations in one or more future periods. See also the Company’s consolidated financial statements and related notes and Management and Discussion and Analysis incorporated into the Company’s 2013 Form 10-K.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows provided by operating activities were $12,917 and $37,093 in first half 2014 and 2013, respectively. First half 2013 operating cash flows benefited from changes in prepaid expenses and other assets which affect the comparative net cash flows from operating activities for the respective periods.

Net cash used in investing activities was $23,933 in first half 2014 compared to $53,691 in first half 2013. Cash flows from investing activities reflect $27,331 and $63,992 relating to the purchase of available for sale securities during first half 2014 and 2013, respectively. First half 2014 and 2013 investing activities also include capital expenditures of $5,895 and $5,960, respectively.  Capital expenditures for the 2014 year are anticipated to be generally in line with historical annualized spending, and are to be funded from the Company’s cash flow from operations and internal sources.

The Company’s consolidated financial statements include bank borrowings of $1,081 as of the end of second quarter 2014, all of which relates to its two majority owned and controlled Spanish companies. The Company had no other outstanding bank borrowings as of the end of second quarter 2014.

Financing activities include Company common stock purchases and retirements of $10,381 and $10,568 in first half 2014 and 2013, respectively. Cash dividends of $9,567 and $4,750 were paid in first half 2014 and 2013, respectively. Fourth quarter 2012 included an accelerated payment (from first quarter 2013) of the regular quarterly dividend of $4,656 ($0.08 per share) which has historically been paid during the first week in January. This was in response to the uncertainty surrounding the future federal tax treatment of dividends at that time after giving consideration to the Company’s cash and investment position.

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The Company’s current ratio (current assets divided by current liabilities) was 3.7 to 1 as of the end of second quarter 2014 as compared to 4.0 to 1 as of the end of fourth quarter 2013 and 3.1 to 1 as of the end of second quarter 2013. Net working capital was $174,052 as of the end of second quarter 2014 as compared to $179,990 and $130,726 as of the end of fourth and second quarter 2013, respectively.

The aforementioned net working capital amounts are principally reflected in aggregate cash and cash equivalents and short-term investments which totaled $96,086 as of the end of second quarter 2014 compared to $121,855 and $56,814 as of the end of fourth and second quarters 2013, respectively. In addition, long term investments, principally debt securities comprising municipal bonds and trading securities, were $162,275 as of the end of first quarter 2014, as compared to $148,532 and $170,373 as of the end of fourth and second quarters 2013, respectively.  Aggregate cash and cash equivalents and short and long-term investments were $258,361, $270,387, and $227,187, as of the end of second quarter 2014, and as of the end of fourth and second quarters 2013, respectively. The aforementioned includes $68,582, $63,215, and $55,753 as of the end of the second quarter 2014, and fourth and second quarters 2013, respectively, relating to trading securities which are used as an economic hedge for the Company’s deferred compensation liabilities. Investments in municipal bonds and other debt securities that matured during first half 2014 and 2013 were generally used to purchase the Company’s common stock or were replaced with debt securities of similar maturities.

During fourth quarter 2013, the Company contributed $15,000 to a VEBA trust, managed and controlled by the Company, to fund the estimated future costs of certain employee health, welfare and other benefits. The Company is using these funds, as well as investment income in this VEBA trust, to pay the actual cost of such benefits beginning in fourth quarter 2013.  As of the end of second quarter 2014, the VEBA trust holds $12,111of aggregate cash, cash equivalents and investments. This asset is included in prepaid expenses in current and long-term assets on the Company’s condensed consolidated statement of financial position.

As discussed above, Company management gained operating control of its two 50% owned Spanish companies in first quarter 2014, and further increased its control and ownership to 75% as of the end of second quarter 2014.  The Company invested approximately $750 in the Spanish companies during second quarter 2014 resulting in its 75% ownership. These Spanish companies had operating losses for each of the years 2008 through 2013 and for first half 2014. Company management has restructured the Spanish operations and management believes that they should be at or near break-even cash flows from operating activities going forward as a result of this restructuring. Management believes that the business, competitive and economic challenges in Spain are likely to continue, and therefore, additional cash financing of these Spanish companies may be required in the future.

ACCOUNTING PRONOUNCEMENTS

See Note 1 of the Company’s condensed consolidated financial statements.

RISK FACTORS

The Company’s operations and financial results are subject to a number of risks and uncertainties that could adversely affect the Company’s operating results and financial condition. Significant risk factors, without limitation, that could impact the Company, are the following: (i) significant competitive activity, including advertising, promotional and price competition, and changes in consumer demand for the Company’s products; (ii) fluctuations in the cost and availability of commodities and ingredients, including the effects adverse weather and climate change, and the ability to recover cost increases through product sales price increases; (iii) inherent risks in the marketplace, including uncertainties about trade and consumer acceptance of product pricing changes and seasonal events such as Halloween; (iv) the effect of acquisitions on the Company’s results of operations and financial condition; (v) the effect of changes in foreign currencies on the Company’s foreign subsidiaries operating results, and the effect of the fluctuation of the Canadian dollar on products manufactured in Canada and marketed and sold in the United States in U.S. dollars; (vi) the Company’s reliance on third party vendors for various goods and services, including commodities used for ingredients that are primarily grown or sourced from foreign locations; (vii) the Company’s ability to successfully implement new production processes and manufacturing automation; (viii) the effect of changes in assumptions, including discount rates, sales growth and profit margins, which could affect the

20

Company’s impairment testing and analysis of its goodwill and trademarks; (ix) changes in the confectionery marketplace including actions taken by major retailers and customers; (x) customer, consumer and competitor response to marketing programs and price and product weight adjustments, and new products; (xi) dependence on significant customers, including the volume and timing of their purchases, availability of shelf space, and competitive products; (xii) increases in energy costs, including freight and delivery, that cannot generally be passed along to customers throughincreased price realization due to competitive reasons; (xiii) any significant labor stoppages, strikes or production interruptions; (xiv) changes in governmental laws or regulations that affect ingredients used in products, or taxes, tariffs or other government restrictions on products sold; (xv) the adverse effects should the Company either voluntarily or involuntarily recall its product(s) from the marketplace; (xvi) the risk that the market value of Company’s investments could decline including being classified as “other-than-temporary” as defined; (xvii) the Company’s dependence on its enterprise resource planning (ERP) computer system to manage its supply chain and customer deliveries, and the risk that the Company’s information technology systems fail to perform adequately or the Company is unable to protect its information technology systems against data corruption, cyber-based attacks or network security breaches; (xviii)  the potential adverse effects on the Company as to changes to improve the funding status of the Bakery and Confectionery Union and Industry Pension Plan, a multi-employer plan which covers certain Company union employees; (xix) adverse effects if restructuring efforts with respect to the Company’s Spanish operations are not fully successful; (xx) and the potential effects of current and future macroeconomic conditions and geopolitical events.

FORWARD-LOOKING STATEMENTS

This discussion and certain other sections contain forward-looking statements that are based largely on the Company’s current expectations and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “anticipated,” “believe,” “expect,” “intend,” “estimate,” “project,” and other words of similar meaning in connection with a discussion of future operating or financial performance and are subject to certain factors, risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in the forward-looking statements. Such factors, risks, trends and uncertainties, which in some instances are beyond the Company’s control, include the overall competitive environment in the Company’s industry, changes in assumptions and judgments discussed above under the heading “Significant Accounting Policies and Estimates,” and factors identified and referred to above under the heading “Risk Factors.”

The risk factors identified and referred to above are believed to be significant factors, but not necessarily all of the significant factors that could cause actual results to differ from those expressed in any forward-looking statement. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made only as of the date of this report. The Company undertakes no obligation to update such forward-looking statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is exposed to various market risks, including fluctuations in sugar, corn syrup, edible oils, including soybean and palm oils, cocoa, dextrose, milk and whey, and gum-base input ingredients and packaging, and fuel costs principally relating to freight and delivery fuel surcharges. The Company is exposed to exchange rate fluctuations in the Canadian dollar which is the currency used for a portion of the raw material and packaging material costs and operating expenses at its Canadian plants.  The Company invests in securities with maturities dates of up to approximately three years, the majority of which are held to maturity, which limits the Company’s exposure to interest rate fluctuations. There has been no material change in the Company’s market risks that would significantly affect the disclosures made in the Form 10-K for the year ended December 31, 2013.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, the Chief Executive Officer and Chief Financial Officer of the Company have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 28, 2014 and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting that occurred during the Company’s fiscal quarter ended June 28, 2014 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

TOOTSIE ROLL INDUSTRIES, INC.

AND SUBSIDIARIES

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes the Company’s purchases of its common stock during the quarter ended June 28, 2014:

					Approximate Dollar
	(a) Total			Shares	Value of Shares that
	Number of	(b) Average		Purchased as Part of	May Yet Be Purchased
	Shares	Price Paid per		Publicly Announced Plans	Under the Plans
Period	Purchased	Share		Or Programs	or Programs
Mar 30 to Apr 26	-	$	-	Not Applicable	Not Applicable
Apr 27 to May 24	69,007		27.84	Not Applicable	Not Applicable
May 25 to Jun 28	20,500		28.92	Not Applicable	Not Applicable
Total	89,507	$	28.09	Not Applicable	Not Applicable

While the Company does not have a formal or publicly announced stock purchase program, the Company’s board of directors periodically authorizes a dollar amount for share purchases. The treasurer executes share purchase transactions according to these guidelines.

ITEM 6. EXHIBITS

Exhibits 31.1 and 31.2 — Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32 — Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101.INS - XBRL Instance Document.

Exhibit 101.SCH - XBRL Taxonomy Extension Schema Document.

Exhibit 101.CAL - XBRL Taxonomy Extension Calculation Linkbase Document.

Exhibit 101.LAB - XBRL Taxonomy Extension Label Linkbase Document.

Exhibit 101.PRE - XBRL Taxonomy Extension Presentation Linkbase Document.

Exhibit 101.DEF - XBRL Taxonomy Extension Definition Linkbase Document.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		TOOTSIE ROLL INDUSTRIES, INC.
Date:	August5, 2014	BY:	/S/MELVIN J. GORDON
			Melvin J. Gordon
			Chairman and Chief
			Executive Officer
Date:	August5, 2014	BY:	/S/G. HOWARD EMBER, JR.
			G. Howard Ember, Jr.
			Vice President Finance and
			Chief Financial Officer

24

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Melvin J. Gordon, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tootsie Roll Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August5, 2014
By:	/S/MELVIN J. GORDON
	Melvin J. Gordon
	Chairman and Chief
	Executive Officer

25

EX-31.2

Exhibit 31.2

CERTIFICATION

I, G. Howard Ember, Jr. certify that:

1.I have reviewed this quarterly report on Form 10-Q of Tootsie Roll Industries, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August5, 2014
By:	/S/G. HOWARD EMBER, JR.
	G. Howard Ember, Jr.
	Vice President Finance and
	Chief Financial Officer

26

EX-32

Exhibit 32

Certificate Pursuant to Section 1350 of Chapter 63

Of Title 18 of the United States Code

Each of the undersigned officers of Tootsie Roll Industries, Inc. certifies that (i) the Quarterly Report on Form 10-Q of Tootsie Roll Industries, Inc. for the quarterly period ended June 28, 2014 (the Form 10-Q) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Tootsie Roll Industries, Inc.

Dated:	August5, 2014	/S/MELVIN J. GORDON
		Melvin J. Gordon
		Chairman and Chief
		Executive Officer
Dated:	August5, 2014	/S/G. HOWARD EMBER, JR.
		G. Howard Ember, Jr.
		Vice President Finance and
		Chief Financial Officer

27

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified										3 Months Ended		12 Months Ended		12 Months Ended
	Jun. 28, 2014	Dec. 31, 2013	Jun. 29, 2013	Jun. 28, 2014 Reported Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2013 Reported Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Jun. 29, 2013 Reported Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Jun. 28, 2014 Estimate of Fair Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2013 Estimate of Fair Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Jun. 29, 2013 Estimate of Fair Value Measurement [Member] Fair Value, Inputs, Level 2 [Member]	Dec. 31, 2013 Warrant [Member] Auction Rate Securities [Member]	Mar. 30, 2013 Warrant [Member] Auction Rate Securities [Member] Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2008 Warrant [Member] Auction Rate Securities [Member] Fair Value, Inputs, Level 3 [Member]	Jun. 29, 2013 Warrant [Member] Auction Rate Securities [Member] Fair Value, Inputs, Level 3 [Member]	Dec. 31, 2008 Warrant [Member] AAA Rating [Member] Auction Rate Securities [Member] Fair Value, Inputs, Level 3 [Member]
Fair value on a recurring basis
Sale value of investment										$ 10,840
Purchase cost of investment														13,550
Other-than-temporary pre-tax impairment on investment												5,140
Carrying value of investment													10,162	8,410
Unrealized loss in other comprehensive earnings											677
Industrial revenue development bonds, carrying amount, approximates fair value	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500	$ 7,500

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Average Shares Outstanding

6 Months Ended

Jun. 28, 2014

Average Shares Outstanding

Average Shares Outstanding

Note 2 — Average Shares Outstanding

The average number of shares outstanding for year to date ended June 28, 2014 reflect stock purchases of 347 shares for $10,381 and a 3% stock dividend distributed on April 4, 2014. The average number of shares outstanding for year to date ended June 29, 2013 reflect stock purchases of 356 shares for $10,568 and a 3% stock dividend distributed on April 5, 2013.

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Accumulated Other Comprehensive Earnings (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended								3 Months Ended		6 Months Ended				3 Months Ended		6 Months Ended					3 Months Ended	6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014 Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Translation Adjustment [Member]	Jun. 29, 2013 Accumulated Translation Adjustment [Member]	Jun. 28, 2014 Accumulated Net Unrealized Investment Gain (Loss) [Member]	Jun. 29, 2013 Accumulated Net Unrealized Investment Gain (Loss) [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Commodity Derivatives [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Commodity Derivatives [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Commodity Derivatives [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Commodity Derivatives [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Net Gain (Loss) from Commodity Derivatives [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 29, 2013 Accumulated Net Gain (Loss) from Commodity Derivatives [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Defined Benefit Plans Adjustment [Member]	Jun. 29, 2013 Accumulated Defined Benefit Plans Adjustment [Member]	Dec. 31, 2012 Accumulated Defined Benefit Plans Adjustment [Member]	Jun. 28, 2014 Accumulated Defined Benefit Plans Adjustment [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]	Jun. 28, 2014 Accumulated Defined Benefit Plans Adjustment [Member] Reclassification out of Accumulated Other Comprehensive Income [Member]
Accumulated other comprehensive earnings (loss), net of tax
Balance at the beginning of the period			$ (4,638)	$ (16,447)					$ (13,527)	$ (13,406)	$ 54	$ 908	$ (436)						$ (96)	$ (111)					$ 9,367	$ (3,838)	$ (3,838)
Other comprehensive earnings (loss) before reclassifications			(364)	(1,309)					(699)	(90)	(20)	(115)	200	(553)					155	(551)
Reclassifications from accumulated other comprehensive loss			(250)	574									288	69					38	505					(576)
Net other comprehensive earnings (loss) net of tax			(614)	(735)					(699)	(90)	(20)	(115)	488	(484)					193	(46)					(576)
Balance at the end of the period	(5,252)	(17,182)	(5,252)	(17,182)					(14,226)	(13,496)	34	793	52	(484)					97	(157)					8,791	(3,838)	(3,838)
Reclassification from Accumulated Other Comprehensive Income
Other Income	3,033	1,705	4,699	4,296											189	73	451	108
Product cost of goods sold	66,182	66,972	133,047	139,141																	(116)	473	59	793				(221)	(442)
Selling, marketing and administrative expenses	28,296	26,487	53,927	54,454																								(230)	(460)
Total before tax	13,262	10,907	29,956	24,398	(378)	546	(392)	901
Tax (expense) benefit	432	128	(434)	(378)	137	(198)	142	(326)
Net income	$ 8,957	$ 8,369	$ 18,314	$ 17,438	$ (241)	$ 348	$ (250)	$ 575

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Pension Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		1 Months Ended	6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 30, 2012 Multiemployer Plans, Pension [Member]	Jun. 28, 2014 Multiemployer Plans, Pension [Member]
Pension Plans
Percentage of compounded annual surcharge each year				5.00%
Percentage of interim surcharge			5.00%
Estimated liability upon withdrawal from plan in current year				$ 37,200
Pension plans
Pension expense	$ 1,354	$ 1,208

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Bank Loans (Details) (Spanish Companies)	6 Months Ended
	Jun. 28, 2014
Bank Loans
Average weighted interest rate (as a percent)	3.20%
Minimum [Member]
Bank Loans
Maturity period	1 year
Maximum [Member]
Bank Loans
Maturity period	4 years

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Step Acquisition (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014 company	Jun. 29, 2013	Jun. 28, 2014 Spanish Companies Acquisition [Member]	Mar. 29, 2014 Spanish Companies Acquisition [Member]	Jun. 28, 2014 Spanish Companies Acquisition [Member] company
Spanish companies
Number of Spanish companies			2				2
Ownership interest in Spanish companies (as a percent)					75.00%	50.00%	75.00%
Net loss related to acquired companies						$ 529
Income Tax Expense (Benefit)	4,305	2,538	11,642	6,960		2,350
Purchase of capital stock					$ 736

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Significant Accounting Policies

6 Months Ended

Jun. 28, 2014

Significant Accounting Policies

Significant Accounting Policies

Note 1 — Significant Accounting Policies

General Information

Foregoing data has been prepared from the unaudited financial records of Tootsie Roll Industries, Inc. (the Company) and in the opinion of management all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the interim period have been reflected.  Certain amounts previously reported have been reclassified to conform to the current year presentation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s 2013 Annual Report on Form 10-K.

Results of operations for the period ended June 28, 2014 are not necessarily indicative of results to be expected for the year to end December 31, 2014 because of the seasonal nature of the Company’s operations. Historically, the third quarter has been the Company’s largest sales quarter due to Halloween sales.

The results of the Company’s twoless than wholly owned Spanish companies are consolidated and a noncontrolling interest has been recorded.  (See Note 10.)

Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on the condensed consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, which includes amendments that change the requirements for  reporting discontinued operations. The new guidance requires that the disposal of a component of an entity be reported as discontinued operations only if the action represents a strategic shift that will have a major effect on an entity’s operations and financial results, and would require expanded disclosures. This guidance will be effective beginning in the first quarter 2015. We do not expect the adoption of this guidance to have a significant impact on the condensed consolidated financial statements.

In July 2013, the FASB issued ASU 2013-11, which requires presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  ASU 2013-11 provides explicit guidance on presentation in financial statements.  The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

In March 2013, the FASB issued ASU 2013-05, which permits an entity to release cumulative translation adjustments into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided, or, if a controlling financial interest is no longer held. The adoption of this guidance did not have a significant impact on the condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (USD $) In Thousands, unless otherwise specified	Jun. 28, 2014	Dec. 31, 2013	Jun. 29, 2013
CURRENT ASSETS:
Cash & cash equivalents	$ 57,091	$ 88,283	$ 31,946
Investments	38,995	33,572	24,868
Trade accounts receivable, less allowances of $1,806, $2,042 & $1,907	25,698	40,721	24,888
Other receivables	2,240	4,616	5,292
Inventories:
Finished goods & work-in-process	73,747	37,012	69,715
Raw material & supplies	29,651	24,844	29,841
Prepaid expenses	7,200	5,581	2,221
Deferred income taxes	3,186	5,482	4,935
Total current assets	237,808	240,111	193,706
PROPERTY, PLANT & EQUIPMENT, at cost:
Land	22,536	21,683	21,685
Buildings	111,418	111,044	108,387
Machinery & equipment	341,672	340,405	329,861
Construction in progress	9,148	3,403	8,392
Property, plant and equipment, gross	484,774	476,535	468,325
Less-accumulated depreciation	289,248	279,619	270,827
Net property, plant and equipment	195,526	196,916	197,498
OTHER ASSETS:
Goodwill	73,237	73,237	73,237
Trademarks	175,024	175,024	175,024
Investments	162,275	148,532	170,373
Split dollar officer life insurance	40,296	40,296	41,394
Prepaid expenses	8,753	10,260
Restricted cash	1,791
Deferred income taxes	4,030	4,033	5,926
Total other assets	465,406	451,382	465,954
Total assets	898,740	888,409	857,158
CURRENT LIABILITIES:
Accounts payable	14,040	9,153	11,630
Bank loan	151
Dividends payable	4,856	4,742	4,773
Accrued liabilities	44,598	45,580	45,773
Postretirement health care and life insurance benefits	111	319	555
Income taxes payable		327	249
Total current liabilities	63,756	60,121	62,980
NONCURRENT LIABILITIES:
Deferred income taxes	54,503	54,939	42,862
Bank loans	930
Postretirement health care and life insurance benefits	9,338	8,857	28,188
Industrial development bonds	7,500	7,500	7,500
Liability for uncertain tax positions	9,977	7,167	8,261
Deferred compensation and other liabilities	74,028	69,520	60,941
Total noncurrent liabilities	156,276	147,983	147,752
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY:
Capital in excess of par value	613,467	572,669	584,969
Retained earnings	29,870	73,109	39,199
Accumulated other comprehensive loss	(5,252)	(4,638)	(17,182)
Treasury stock (at cost)-78, 76 & 76 shares, respectively	(1,992)	(1,992)	(1,992)
Total Tootsie Roll Industries, Inc. shareholders' equity	678,236	680,305	646,426
Noncontrolling interests	472
Total equity	678,708	680,305	646,426
Total liabilities and shareholders' equity	898,740	888,409	857,158
Common Class A [Member]
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY:
Common stock, $.69-4/9 par value- 120,000 shares authorized; 37,777, 37,011 & 37,401, respectively, issued Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 22,910, 22,256 & 22,261, respectively, issued	26,234	25,702	25,973
Common Class B [Member]
TOOTSIE ROLL INDUSTRIES, INC. SHAREHOLDERS' EQUITY:
Common stock, $.69-4/9 par value- 120,000 shares authorized; 37,777, 37,011 & 37,401, respectively, issued Class B common stock, $.69-4/9 par value- 40,000 shares authorized; 22,910, 22,256 & 22,261, respectively, issued	$ 15,909	$ 15,455	$ 15,459

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014	Jun. 29, 2013
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE EARNINGS
Net earnings	$ 8,957	$ 8,369	$ 18,314	$ 17,438
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	138	(1,223)	(1,180)	(101)
Pension and postretirement reclassification adjustment:
Less: reclassification adjustment for (gains) losses to net income	(451)		(902)
Unrealized gains (losses) on postretirement and pension benefits	(451)		(902)
Investments:
Unrealized gains (losses) for the period on investments	185	589	(31)	(181)
Unrealized gains (losses) on investments	185	589	(31)	(181)
Derivatives:
Unrealized gains (losses) for the period on derivatives	1,388	(802)	555	(1,732)
Less: reclassification adjustment for (gains) losses to net income	73	546	510	901
Unrealized gains (losses) on derivatives	1,461	(256)	1,065	(831)
Total other comprehensive income (loss), before tax	1,333	(890)	(1,048)	(1,113)
Income tax benefit (expense) related to items of other comprehensive income	(432)	(128)	434	378
Total comprehensive earnings	9,858	7,351	17,700	16,703
Comprehensive earnings attributable to noncontrolling interests	69		293
Total comprehensive earnings attributable to Tootsie Roll Industries, Inc.	$ 9,927	$ 7,351	$ 17,993	$ 16,703

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Average Shares Outstanding (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended		6 Months Ended
	Apr. 04, 2014	Apr. 05, 2013	Jun. 28, 2014	Jun. 29, 2013
Average Shares Outstanding
Stock purchases (in shares)			347	356
Purchase of common shares			$ 10,381	$ 10,568
Stock dividends (as a percent)	3.00%	3.00%

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Fair Value Measurements (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Jun. 28, 2014	Dec. 31, 2013	Jun. 29, 2013
Estimate of Fair Value Measurement [Member]
Fair value measurements
Cash and cash equivalents	$ 57,091	$ 88,283	$ 31,946
Auction rate security			10,162
Available for sale securities, excluding the auction rate security			127,704
Available for sale securities	132,688	118,647
Trading securities	68,582	63,215	55,753
Total assets measured at fair value	258,592	269,331	224,583
Estimate of Fair Value Measurement [Member] | Foreign Exchange Forward [Member]
Fair value measurements
Derivative instruments, net	81	(684)	(759)
Estimate of Fair Value Measurement [Member] | Commodity Futures [Member]
Fair value measurements
Derivative instruments, net	150	(130)	(223)
Fair Value, Inputs, Level 1 [Member]
Fair value measurements
Cash and cash equivalents	57,091	88,283	31,946
Trading securities	68,582	63,215	55,753
Total assets measured at fair value	125,823	151,368	87,476
Fair Value, Inputs, Level 1 [Member] | Commodity Futures [Member]
Fair value measurements
Derivative instruments, net	150	(130)	(223)
Fair Value, Inputs, Level 2 [Member]
Fair value measurements
Available for sale securities, excluding the auction rate security			127,704
Available for sale securities	132,688	118,647
Total assets measured at fair value	132,769	117,963	126,945
Fair Value, Inputs, Level 2 [Member] | Foreign Exchange Forward [Member]
Fair value measurements
Derivative instruments, net	81	(684)	(759)
Fair Value, Inputs, Level 3 [Member]
Fair value measurements
Auction rate security			10,162
Total assets measured at fair value			$ 10,162

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$ 18,314	$ 17,438
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization	10,189	9,783
Loss on step acquisition	529
Loss from equity method investment		477
Amortization of marketable security premiums	1,689	1,468
Changes in operating assets and liabilities:
Accounts receivable	16,520	17,207
Other receivables	3,710	(594)
Inventories	(39,770)	(37,188)
Prepaid expenses and other assets	1,063	27,442
Accounts payable and accrued liabilities	348	3,317
Income taxes payable and deferred	(1,119)	(5,159)
Postretirement health care and life insurance benefits	(421)	1,362
Deferred compensation and other liabilities	1,764	1,620
Other	101	(80)
Net cash from operating activities	12,917	37,093
CASH FLOWS FROM INVESTING ACTIVITIES:
Net cash acquired in step acquisition	161
Restricted cash	193
Capital expenditures	(5,895)	(5,960)
Net sales (purchases) of trading securities	(2,627)	(2,269)
Purchase of available for sale securities	(27,331)	(63,992)
Sale and maturity of available for sale securities	11,566	18,530
Net cash used in investing activities	(23,933)	(53,691)
CASH FLOWS FROM FINANCING ACTIVITIES:
Shares purchased and retired	(10,381)	(10,568)
Dividends paid in cash	(9,567)	(4,750)
Repayment of bank loans	(228)
Net cash used in financing activities	(20,176)	(15,318)
Decrease in cash and cash equivalents	(31,192)	(31,916)
Cash and cash equivalents at beginning of year	88,283	63,862
Cash and cash equivalents at end of quarter	57,091	31,946
Supplemental cash flow information:
Income taxes paid, net	10,496	12,996
Interest paid	31	17
Stock dividend issued	$ 52,165	$ 48,925

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CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 28, 2014	Dec. 31, 2013	Jun. 29, 2013
Trade accounts receivable, allowances	$ 1,806	$ 2,042	$ 1,907
Treasury stock, shares	78,000	76,000	76,000
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.6944	$ 0.6944	$ 0.6944
Common stock, shares authorized	120,000	120,000	120,000
Common stock, shares issued	37,777,000	37,011,000	37,401,000
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.6944	$ 0.6944	$ 0.6944
Common stock, shares authorized	40,000,000	40,000,000	40,000,000
Common stock, shares issued	22,910,000	22,256,000	22,261,000

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Step Acquisition

6 Months Ended

Jun. 28, 2014

Step Acquisition

Step Acquisition

Note 10 — Step Acquisition

During first quarter 2014, the Company gained operating control of its two50% owned Spanish companies when Company employee representatives assumed all positions on their boards of directors. This was considered a step acquisition, whereby the Company remeasured the previously held investment to fair value in first quarter 2014. As a result, the Company’s first quarter 2014 net earnings include a net loss of $529, including an income tax provision of $2,350 relating to deferred income taxes. The Company purchased newly issued capital stock of the Spanish companies for $736 which further increased the Company’s ownership and control to 75% at the end of second quarter 2014.

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Document and Entity Information	6 Months Ended
	Jun. 28, 2014
Entity Registrant Name	TOOTSIE ROLL INDUSTRIES INC
Entity Central Index Key	0000098677
Document Type	10-Q
Document Period End Date	Jun. 28, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Common Class A [Member]
Entity Common Stock, Shares Outstanding	37,777,410
Common Class B [Member]
Entity Common Stock, Shares Outstanding	22,909,591

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 28, 2014

Fair Value Measurements

Schedule of financial assets and liabilities measured at fair value

	Estimated Fair Value June 28, 2014
	Total		Input Levels Used
	Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	57,091	$	57,091	$	-	$	-
Available for sale securities		132,688		-		132,688		-
Foreign currency forward contracts		81		-		81		-
Commodity futures contracts		150		150		-		-
Trading securities		68,582		68,582		-		-
Total assets measured at fair value	$	258,592	$	125,823	$	132,769	$	-
	Estimated Fair Value December 31, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	88,283	$	88,283	$	-	$	-
Available for sale securities		118,647		-		118,647		-
Foreign currency forward contracts		(684)		-		(684)		-
Commodity futures contracts, net		(130)		(130)		-		-
Trading securities		63,215		63,215		-		-
Total assets measured at fair value	$	269,331	$	151,368	$	117,963	$	-
	Estimated Fair Value June 29, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	31,946	$	31,946	$	—	$	—
Auction rate security		10,162		—		—		10,162
Available for sale securities excluding the auction rate security		127,704		—		127,704		—
Foreign currency forward contracts		(759)		—		(759)		—
Commodity futures contracts		(223)		(223)		—		—
Trading securities		55,753		55,753		—		—
Total assets measured at fair value	$	224,583	$	87,476	$	126,945	$	10,162

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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 28, 2014		Jun. 29, 2013		Jun. 28, 2014		Jun. 29, 2013
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
Net product sales	$ 104,061		$ 101,988		$ 210,873		$ 212,267
Rental and royalty revenue	869		898		1,839		1,905
Total revenue	104,930		102,886		212,712		214,172
Product cost of goods sold	66,182		66,972		133,047		139,141
Rental and royalty cost	223		225		481		475
Total costs	66,405		67,197		133,528		139,616
Product gross margin	37,879		35,016		77,826		73,126
Rental and royalty gross margin	646		673		1,358		1,430
Total gross margin	38,525		35,689		79,184		74,556
Selling, marketing and administrative expenses	28,296		26,487		53,927		54,454
Earnings from operations	10,229		9,202		25,257		20,102
Other income, net	3,033		1,705		4,699		4,296
Earnings before income taxes	13,262		10,907		29,956		24,398
Provision for income taxes	4,305		2,538		11,642		6,960
Net earnings	8,957		8,369		18,314		17,438
Less: Net loss attributable to noncontrolling interests	69				293
Net earnings attributable to Tootsie Roll Industries, Inc.	9,026		8,369		18,607		17,438
Net earnings attributable to Tootsie Roll Industries, Inc. per share (in dollars per share)	$ 0.15		$ 0.14		$ 0.31		$ 0.28
Dividends per share (in dollars per share)	$ 0.08	[1]	$ 0.08	[1]	$ 0.16	[1]	$ 0.16	[1]
Average number of shares outstanding (in shares)	60,659		61,431		60,742		61,550
Retained earnings at beginning of period	25,694		35,598		73,109		80,210
Net earnings attributable to Tootsie Roll Industries, Inc.	9,026		8,369		18,607		17,438
Cash dividends	(4,850)		(4,768)		(9,565)		(9,421)
Stock dividends					(52,281)		(49,028)
Retained earnings at end of period	$ 29,870		$ 39,199		$ 29,870		$ 39,199

[1] Does not include 3% stock dividend to shareholders of record on 4/4/14 and 4/5/13.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 28, 2014

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Note 5 — Derivative Instruments and Hedging Activities

From time to time, the Company uses derivative instruments, including foreign currency forward contracts, commodity futures contracts and commodity option contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts and most commodity option contracts are intended and effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar). Foreign currency forward contracts are intended and effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States. The Company does not engage in trading or other speculative use of derivative instruments.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Statement of Financial Position. Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities. The Company uses either hedge accounting or mark-to-market accounting for its derivative instruments. Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction.

Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives are expected to be reclassified to cost of goods sold. Substantially all amounts reported in accumulated other comprehensive loss for foreign currency derivatives are expected to be reclassified to other income, net.

The following table summarizes the Company’s outstanding derivative contracts and their effects on its Condensed Consolidated Statements of Financial Position at June 28, 2014, December 31, 2013 and June 29, 2013:

	June 28, 2014
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	38,978	$	534	$	(453)
Commodity futures contracts		5,563		192		(42)
Total derivatives designated as hedging instruments				726		(495)
Derivatives not designated as hedging instruments:
Commodity futures contracts		-		-		-
Total derivatives not designated as hedging instruments				-		-
Total derivatives			$	726	$	(495)
	December 31, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	34,244	$	-	$	(684)
Commodity futures contracts		5,601		41		(191)
Total derivatives designated as hedging instruments				41		(875)
Derivatives not designated as hedging instruments:
Commodity futures contracts		321		20		-
Total derivatives not designated as hedging instruments				20		-
Total derivatives			$	61	$	(875)
	June 29, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	23,383	$	-	$	(759)
Commodity futures contracts		1,600		-		(246)
Total derivatives designated as hedging instruments				-		(1,005)
Derivatives not designated as hedging instruments:
Commodity futures contracts		1,272		25		(2)
Total derivatives not designated as hedging instruments				25		(2)
Total derivatives			$	25	$	(1,007)

The effects of derivative instruments on the Company’s Condensed Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings for periods ended June 28, 2014 and June 29, 2013 are as follows:

	For Quarter Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	1,505	$	(189)	$	-
Commodity futures contracts		(117)		116		-
Commodity option contracts		-		-		-
Total	$	1,388	$	(73)	$	-
	For Quarter Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(585)	$	(73)	$	-
Commodity futures contracts		(217)		(473)		-
Commodity option contracts		-		-		-
Total	$	(802)	$	(546)	$	-
	For Year to Date Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	314	$	(451)	$	-
Commodity futures contracts		241		(59)		-
Commodity option contracts		-		-		-
Total	$	555	$	(510)	$	-
	For Year to Date Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(867)	$	(108)	$	-
Commodity futures contracts		(865)		(793)		-
Commodity option contracts		-		-		-
Total	$	(1,732)	$	(901)	$	-

During the quarters and years to date ended June 28, 2014 and June 29, 2013, the Company recognized earnings (loss) of $(6) and $(31), and $(20) and $(39) respectively, related to mark-to-market accounting for certain commodity option and future contracts.

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Fair Value Measurements

6 Months Ended

Jun. 28, 2014

Fair Value Measurements

Fair Value Measurements

Note 4 — Fair Value Measurements

Current accounting guidance defines fair value as the price that would be received on the sale of an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below.

As of June 28, 2014, December 31, 2013 and June 29, 2013, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the purchase of certain raw materials and foreign currencies, investments in trading securities and available for sale securities, including an auction rate security. The Company’s available for sale and trading securities principally consist of municipal bonds and mutual funds that are publicly traded.

The following table presents information about the Company’s financial assets and liabilities measured at fair value as of June 28, 2014, December 31, 2013 and June 29, 2013, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

	Estimated Fair Value June 28, 2014
	Total		Input Levels Used
	Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	57,091	$	57,091	$	-	$	-
Available for sale securities		132,688		-		132,688		-
Foreign currency forward contracts		81		-		81		-
Commodity futures contracts		150		150		-		-
Trading securities		68,582		68,582		-		-
Total assets measured at fair value	$	258,592	$	125,823	$	132,769	$	-
	Estimated Fair Value December 31, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	88,283	$	88,283	$	-	$	-
Available for sale securities		118,647		-		118,647		-
Foreign currency forward contracts		(684)		-		(684)		-
Commodity futures contracts, net		(130)		(130)		-		-
Trading securities		63,215		63,215		-		-
Total assets measured at fair value	$	269,331	$	151,368	$	117,963	$	-
	Estimated Fair Value June 29, 2013
		Total	Input Levels Used
		Fair Value		Level 1		Level 2		Level 3
Cash and cash equivalents	$	31,946	$	31,946	$	—	$	—
Auction rate security		10,162		—		—		10,162
Available for sale securities excluding the auction rate security		127,704		—		127,704		—
Foreign currency forward contracts		(759)		—		(759)		—
Commodity futures contracts		(223)		(223)		—		—
Trading securities		55,753		55,753		—		—
Total assets measured at fair value	$	224,583	$	87,476	$	126,945	$	10,162

During the fourth quarter 2013, the Company sold its investment in Jefferson County Alabama Sewer Revenue Refunding Warrants for $10,840. This was an auction rate security (ARS) originally purchased for $13,550 in 2008 with an insurance-backed AAA rating. The Company recorded an other-than-temporary pre-tax impairment of $5,140 in 2008 on this ARS investment which resulted in a carrying value of $8,410 at that time. Since recording the initial impairment in 2008, the Company carried this ARS investment at its estimated fair value utilizing a valuation model with Level 3 inputs, as defined by guidance, and resulting changes in the market value since the original impairment charge in 2008 were recorded as changes to accumulated other comprehensive income (loss) each year. The fair value of this instrument at June 29, 2013 was $10,162, with an unrealized loss in other comprehensive earnings of $677 recorded during the first half 2013.

The fair value of the Company’s industrial revenue development bonds at June 28, 2014, December 31, 2013 and June 29, 2013 were valued using Level 2 inputs which approximates the carrying value of $7,500 for both periods. Interest rates on these bonds are reset weekly based on current market conditions.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014	Jun. 29, 2013
Income Taxes
Consolidated effective tax rates (as a percent)	32.50%	23.30%	38.90%	28.50%
Reversal of deferred tax assets			$ 2,350

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 28, 2014

Derivative Instruments and Hedging Activities

Summary of the Company's outstanding derivative contracts and their effects on the Condensed Consolidated Statements of Financial Position

	June 28, 2014
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	38,978	$	534	$	(453)
Commodity futures contracts		5,563		192		(42)
Total derivatives designated as hedging instruments				726		(495)
Derivatives not designated as hedging instruments:
Commodity futures contracts		-		-		-
Total derivatives not designated as hedging instruments				-		-
Total derivatives			$	726	$	(495)
	December 31, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	34,244	$	-	$	(684)
Commodity futures contracts		5,601		41		(191)
Total derivatives designated as hedging instruments				41		(875)
Derivatives not designated as hedging instruments:
Commodity futures contracts		321		20		-
Total derivatives not designated as hedging instruments				20		-
Total derivatives			$	61	$	(875)
	June 29, 2013
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	23,383	$	-	$	(759)
Commodity futures contracts		1,600		-		(246)
Total derivatives designated as hedging instruments				-		(1,005)
Derivatives not designated as hedging instruments:
Commodity futures contracts		1,272		25		(2)
Total derivatives not designated as hedging instruments				25		(2)
Total derivatives			$	25	$	(1,007)

Effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Retained Earnings, and the Condensed Consolidated Statement of Comprehensive Earnings

	For Quarter Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	1,505	$	(189)	$	-
Commodity futures contracts		(117)		116		-
Commodity option contracts		-		-		-
Total	$	1,388	$	(73)	$	-
	For Quarter Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(585)	$	(73)	$	-
Commodity futures contracts		(217)		(473)		-
Commodity option contracts		-		-		-
Total	$	(802)	$	(546)	$	-
	For Year to Date Ended June 28, 2014
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	314	$	(451)	$	-
Commodity futures contracts		241		(59)		-
Commodity option contracts		-		-		-
Total	$	555	$	(510)	$	-
	For Year to Date Ended June 29, 2013
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain(Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency forward contracts	$	(867)	$	(108)	$	-
Commodity futures contracts		(865)		(793)		-
Commodity option contracts		-		-		-
Total	$	(1,732)	$	(901)	$	-

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Restricted Cash

6 Months Ended

Jun. 28, 2014

Restricted Cash

Restricted Cash

Note 8 — Restricted Cash

Restricted cash comprises certain cash deposits of the Company’s less than wholly owned Spanish companies (see Note 10) with international banks that are pledged as collateral for letters of credit and bank borrowings.

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Pension Plans

6 Months Ended

Jun. 28, 2014

Pension Plans

Pension Plans

Note 6 — Pension Plans

During 2012 and 2013, the Company received notices from the Bakery and Confectionery Union and Industry International (BC&T) Pension Fund (Plan), a multi-employer defined benefit pension plan for certain Company union employees. The notices indicate that the Plan’s actuary has certified that the Plan is in critical status, the “Red Zone”, as defined by the Pension Protection Act (PPA), and that a plan of rehabilitation was adopted by the Trustees of the Plan in fourth quarter 2012. The rehabilitation plan adopted requires that employer contributions include 5% compounded annual surcharges each year for an unspecified period of time beginning January 2013 (in addition to the 5% interim surcharge initiated in June 2012) as well as certain plan benefit reductions. The Company was advised by the Plan that if the Company had withdrawn from the Plan during 2012 its estimated withdrawal liability would have been $37,200. The Company does not have any updated information as to its withdrawal liability. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than $37,200, would be payable to the Plan. The Company’s existing labor contract with its BC&T local union commits the Company’s participation in this Plan through third quarter 2017. Pension expense, including surcharges as discussed above, for the BC&T Plan for first half 2014 and 2013 was $1,354 and $1,208, respectively. The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore, is unable to determine the effects on its consolidated financial statements, but, the ultimate outcome could be material to its consolidated results of operations in one or more future periods. See also the Company’s consolidated financial statements and related notes and Management and Discussion and Analysis incorporated into the Company’s 2013 Form 10-K.

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Accumulated Other Comprehensive Earnings (Loss)

6 Months Ended

Jun. 28, 2014

Accumulated Other Comprehensive Earnings (Loss)

Accumulated Other Comprehensive Earnings (Loss)

Note 7 — Accumulated Other Comprehensive Earnings (Loss)

Accumulated Other Comprehensive Earnings (Loss) consists of the following components:

											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2013	$	(13,527)	$	54	$	(436)	$	(96)	$	9,367	$	(4,638)
Other comprehensive earnings (loss) before reclassifications		(699)		(20)		200		155		-		(364)
Reclassifications from accumulated other comprehensive loss		-		-		288		38		(576)		(250)
Other comprehensive earnings (loss) before tax		(699)		(20)		488		193		(576)		(614)
Balance at June 28, 2014	$	(14,226)	$	34	$	52	$	97	$	8,791	$	(5,252)
											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2012	$	(13,406)	$	908	$	-	$	(111)	$	(3,838)	$	(16,447)
Other comprehensive earnings (loss) before reclassifications		(90)		(115)		(553)		(551)		-		(1,309)
Reclassifications from accumulated other comprehensive loss		-		-		69		505		-		574
Other comprehensive earnings (loss) before tax		(90)		(115)		(484)		(46)		-		(735)
Balance at June 29, 2013	$	(13,496)	$	793	$	(484)	$	(157)	$	(3,838)	$	(17,182)

The amounts reclassified from accumulated other comprehensive income (loss) consisted of the following:

	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Details about Accumulated Other	Quarter Ended				Year to Date Ended
Comprehensive Income Components	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013		Location of (Gain) Loss Recognized in Earnings
Foreign currency derivatives	$	189	$	73	$	451	$	108	Other income, net
Commodity derivatives		(116)		473		59		793	Product cost of goods sold
Postretirement and pension benefits		(230)		-		(460)		-	Selling, marketing and administrative expenses
Postretirement and pension benefits		(221)		-		(442)		-	Product cost of goods sold
Total before tax		(378)		546		(392)		901
Tax (expense) benefit		137		(198)		142		(326)
Net of tax	$	(241)	$	348	$	(250)	$	575

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Bank Loans

6 Months Ended

Jun. 28, 2014

Bank Loans

Bank Loans

Note 9 — Bank Loans

Long term bank loans comprise borrowings by the Company’s less than wholly owned Spanish companies (see Note 10) which are held in international banks. The average weighted interest rate in second quarter 2014 was of 3.2% and maturity dates range from 1 to 4 years. Short term bank loans also relate to the Company’s less than wholly owned Spanish companies.

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Significant Accounting Policies (Details)	6 Months Ended
	Jun. 28, 2014 company
Significant Accounting Policies
Number of Spanish companies consolidated in financial statements	2

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Derivative Instruments and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 28, 2014	Dec. 31, 2013	Jun. 29, 2013
Derivative contracts
Assets	$ 726	$ 61	$ 25
Liabilities	(495)	(875)	(1,007)
Designated as Hedging Instrument [Member]
Derivative contracts
Assets	726	41
Liabilities	(495)	(875)	(1,005)
Designated as Hedging Instrument [Member] | Foreign Exchange Forward [Member]
Derivative contracts
Notional Amounts	38,978	34,244	23,383
Assets	534
Liabilities	(453)	(684)	(759)
Designated as Hedging Instrument [Member] | Commodity Futures [Member]
Derivative contracts
Notional Amounts	5,563	5,601	1,600
Assets	192	41
Liabilities	(42)	(191)	(246)
Not Designated as Hedging Instrument [Member]
Derivative contracts
Assets		20	25
Liabilities			(2)
Not Designated as Hedging Instrument [Member] | Commodity Futures [Member]
Derivative contracts
Notional Amounts		321	1,272
Assets		20	25
Liabilities			$ (2)

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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (Parenthetical)	0 Months Ended
	Apr. 04, 2014	Apr. 05, 2013
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
Stock dividends (as a percent)	3.00%	3.00%

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Income Taxes

6 Months Ended

Jun. 28, 2014

Income Taxes

Income Taxes

Note 3 — Income Taxes

The Company is subject to taxation in the U.S. and various state and foreign jurisdictions. The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2010 through 2013. With few exceptions, the Company is no longer subject to examination by tax authorities for the year 2009 and prior. The consolidated effective tax rates were 32.5% and 23.3% in second quarter 2014 and 2013, respectively, and 38.9% and 28.5% in first half 2014 and 2013, respectively. The higher effective income tax rate in first half 2014 reflects the reversal of deferred tax assets of $2,350 in first quarter 2014 relating to the step acquisition of the Spanish companies as discussed in Note 10. The more favorable effective income tax rates in prior year second quarter and first half 2013 reflects the benefits of a release of certain tax valuation allowances relating to prior capital losses as a result of capital gains realized on the sale of certain investments primarily in second quarter 2013.

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Derivative Instruments and Hedging Activities (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 28, 2014	Jun. 29, 2013	Jun. 28, 2014	Jun. 29, 2013
Effect of derivative instruments on earnings
Gain (Loss) Recognized in OCI	$ 1,388	$ (802)	$ 555	$ (1,732)
Gain (Loss) Reclassified from Accumulated OCI into Earnings	9,026	8,369	18,607	17,438
Reclassification out of Accumulated Other Comprehensive Income [Member]
Effect of derivative instruments on earnings
Gain (Loss) Reclassified from Accumulated OCI into Earnings	(73)	(546)	(510)	(901)
Foreign Exchange Forward [Member]
Effect of derivative instruments on earnings
Gain (Loss) Recognized in OCI	1,505	(585)	314	(867)
Foreign Exchange Forward [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Effect of derivative instruments on earnings
Gain (Loss) Reclassified from Accumulated OCI into Earnings	(189)	(73)	(451)	(108)
Commodity Futures [Member]
Effect of derivative instruments on earnings
Gain (Loss) Recognized in OCI	(117)	(217)	241	(865)
Commodity Futures [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Effect of derivative instruments on earnings
Gain (Loss) Reclassified from Accumulated OCI into Earnings	116	(473)	(59)	(793)
Commodity Option and Future Contracts [Member]
Effect of derivative instruments on earnings
Recognized earnings (loss) related to mark-to-market accounting	$ (6)	$ (31)	$ (20)	$ (39)

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Accumulated Other Comprehensive Earnings (Loss) (Tables)

6 Months Ended

Jun. 28, 2014

Accumulated Other Comprehensive Earnings (Loss)

Schedule of components of accumulated other comprehensive earnings (loss), net of tax

											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2013	$	(13,527)	$	54	$	(436)	$	(96)	$	9,367	$	(4,638)
Other comprehensive earnings (loss) before reclassifications		(699)		(20)		200		155		-		(364)
Reclassifications from accumulated other comprehensive loss		-		-		288		38		(576)		(250)
Other comprehensive earnings (loss) before tax		(699)		(20)		488		193		(576)		(614)
Balance at June 28, 2014	$	(14,226)	$	34	$	52	$	97	$	8,791	$	(5,252)
											Accumulated
	Foreign				Foreign				Postretirement		Other
	Currency				Currency		Commodity		and Pension		Comprehensive
	Translation		Investments		Derivatives		Derivatives		Benefits		Earnings (Loss)
Balance at December 31, 2012	$	(13,406)	$	908	$	-	$	(111)	$	(3,838)	$	(16,447)
Other comprehensive earnings (loss) before reclassifications		(90)		(115)		(553)		(551)		-		(1,309)
Reclassifications from accumulated other comprehensive loss		-		-		69		505		-		574
Other comprehensive earnings (loss) before tax		(90)		(115)		(484)		(46)		-		(735)
Balance at June 29, 2013	$	(13,496)	$	793	$	(484)	$	(157)	$	(3,838)	$	(17,182)

Amount reclassified from accumulated other comprehensive income

	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
Details about Accumulated Other	Quarter Ended				Year to Date Ended
Comprehensive Income Components	June 28, 2014		June 29, 2013		June 28, 2014		June 29, 2013		Location of (Gain) Loss Recognized in Earnings
Foreign currency derivatives	$	189	$	73	$	451	$	108	Other income, net
Commodity derivatives		(116)		473		59		793	Product cost of goods sold
Postretirement and pension benefits		(230)		-		(460)		-	Selling, marketing and administrative expenses
Postretirement and pension benefits		(221)		-		(442)		-	Product cost of goods sold
Total before tax		(378)		546		(392)		901
Tax (expense) benefit		137		(198)		142		(326)
Net of tax	$	(241)	$	348	$	(250)	$	575