Hershey HSY · USD

SEGMENT INFORMATION The Company reports its operations through three segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International. This organizational structure aligns with how our CODM, Kirk Tanner, President and Chief Executive Officer, manages our business, including resource allocation and performance assessment, and further aligns with our product categories and the key markets we serve.•North America Confectionery – This segment is responsible for our traditional chocolate and non-chocolate confectionery market position in the United States and Canada. This includes our business in chocolate and non-chocolate confectionery, gum and refreshment products, protein bars, spreads, snack bites and mixes, as well as pantry and food service lines. This segment also includes our retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania; New York, New York; Las Vegas, Nevada; Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain of the Company’s trademarks and products to third parties around the world.•North America Salty Snacks – This segment is responsible for our salty snacking products in the United States. This includes ready-to-eat popcorn, baked and trans fat-free snacks, pretzels, and other snacks.•International – International is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America. We currently have operations and manufacture product in Mexico, Brazil, India, and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa, and other regions.For segment reporting purposes, the CODM uses “segment income” to evaluate segment performance and allocate resources, including considering budget-to-actual variances and prior year-to-actual variances on a monthly basis. Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance.

COMMITMENTS AND CONTINGENCIES Purchase obligationsWe enter into certain obligations for the purchase of raw materials. These obligations are primarily in the form of forward contracts for the purchase of raw materials from third-party brokers and dealers. These contracts minimize the effect of future price fluctuations by fixing the price of part or all of these purchase obligations. Total obligations consisted of fixed price contracts for the purchase of commodities and unpriced contracts that were valued using market prices as of December 31, 2025. The cost of commodities associated with the unpriced contracts is variable as market prices change over future periods. We mitigate the variability of these costs to the extent that we have entered into commodities futures contracts or other commodity derivative instruments to hedge our costs for those periods. Increases or decreases in market prices are offset by gains or losses on commodities futures contracts or other commodity derivative instruments. Taking delivery of and making payments for the specific commodities for use in the manufacture of finished goods satisfies our obligations under the forward purchase contracts. For each of the three years in the period ended December 31, 2025, we satisfied these obligations by taking delivery of and making payment for the specific commodities. As of December 31, 2025, we had entered into agreements for the purchase of raw materials with various suppliers. Subject to meeting our quality standards, the purchase obligations covered by these agreements were as follows as of December 31, 2025: in millions20262027202820292030Purchase obligations$1,059.3 $595.9 $125.7 $25.5 $25.5 Environmental contingenciesWe have a number of facilities that contain varying amounts of asbestos in certain locations within the facilities. Our asbestos management program is compliant with current applicable regulations, which require that we handle or dispose of asbestos in a special manner if such facilities undergo major renovations or are demolished. We do not have sufficient information to estimate the fair value of any asset retirement obligations related to these facilities. We cannot specify the settlement date or range of potential settlement dates and, therefore, sufficient information is not available to apply an expected present value technique.

SHORT AND LONG-TERM DEBT Short-term DebtAs a source of short-term financing, we utilize cash on hand and commercial paper or bank loans with an original maturity of three months or less. We maintain a $1.875 billion unsecured revolving credit facility with the option to increase the aggregate amount of the commitments by up to $1.0 billion with the consent of the lenders. This facility is scheduled to expire on October 21, 2030; however, we may extend the termination date for up to two additional one-year periods upon notice to the administrative agent under the facility.The unsecured committed revolving credit agreement contains a financial covenant whereby the ratio of (a) pre-tax income from operations from the most recent four fiscal quarters to (b) consolidated interest expense for the most recent four fiscal quarters may not be less than 2.0 to 1.0 at the end of each fiscal quarter. The credit agreement also contains customary representations, warranties and events of default. Payment of outstanding advances may be accelerated, at the option of the lenders, should we default in our obligation under the credit agreement. As of December 31, 2025, we are in compliance with all affirmative and negative covenants and the financial covenant pertaining to our credit agreement. There were no significant compensating balance agreements that legally restricted these funds. In addition to the revolving credit facility, we maintain lines of credit with domestic and international commercial banks. Our credit limit in various currencies was $517,062 at December 31, 2025 and $391,279 at December 31, 2024. These lines permit us to borrow at the respective banks’ prime commercial interest rates, or lower. Commitment fees relating to our revolving credit facility and lines of credit are not material. Short-term debt consisted of the following: December 31, 2025December 31, 2024Short-term foreign bank borrowings against lines of credit$218,546$161,364U.S. commercial paper—1,145,612Total short-term debt$218,546$1,306,976Weighted average interest rate on outstanding commercial paper— %4.5 %The maximum amount of short-term borrowings outstanding during 2025 and 2024 was $1,121,718 and $1,321,274, respectively. The weighted-average interest rate on short-term borrowings outstanding was 7.9% as of December 31, 2025 and 4.8% as of December 31, 2024. Long-term DebtLong-term debt consisted of the following: December 31,Maturity Date202520240.

INCOME TAXES The components of income before income taxes were as follows:For the years ended December 31,202520242023Domestic$1,160,843 $1,796,428$1,832,771Foreign53,365 677,508 339,093 Income before income taxes$1,214,208 $2,473,936$2,171,864The components of our provision for income taxes were as follows: For the years ended December 31,202520242023Current:Federal$81,916 $23,345 $141,753 State39,312 85,746 83,802 Foreign87,428 70,371 68,289 208,656 179,462 293,844 Deferred:Federal117,363 21,223 28,191 State27,142 3,616 (9,531)Foreign(22,212)48,396 (2,427)122,293 73,235 16,233 Total provision for income taxes$330,949 $252,697 $310,077 Deferred taxes reflect temporary differences between the tax basis and financial statement carrying value of assets and liabilities. The significant temporary differences that comprised the deferred tax assets and liabilities are as follows: December 31,20252024Deferred tax assets:Post-retirement benefit obligations$26,692 $23,503 Accrued expenses and other reserves99,106 83,263 Stock-based compensation15,986 16,656 Lease liabilities95,415 98,915 Accrued trade promotion reserves20,890 18,706 Net operating loss carryforwards134,203 98,159 Capital loss carryforwards8,453 8,002 Other54,258 87,525 Gross deferred tax assets455,003 434,729 Valuation allowance(145,052)(117,239)Total deferred tax assets309,951 317,490 Deferred tax liabilities:Property, plant and equipment, net334,995 295,911 Acquired intangibles418,073 254,884 Lease ROU assets74,448 78,852 Inventories22,828 10,736 Derivative instruments7,363 37,558 Pension13,965 8,440 Other90,017 18,287 Total deferred tax liabilities961,689 704,668 Net deferred tax liabilities$(651,738)$(387,178)Included in:Non-current deferred tax assets, net$27,802 $37,065 Non-current deferred tax liabilities, net(679,540)(424,243)Net deferred tax liabilities$(651,738)$(387,178)Changes in deferred taxes were primarily due to acquired intangibles, derivative instruments, and accelerated tax depreciation on property, plant and equipment.The valuation allowances as of December 31, 2025 and 2024 were primarily related to various foreign jurisdictions' net operating loss carryforwards and other deferred tax assets that we do not expect to realize.

LEASESWe lease office and retail space, warehouse and distribution facilities, land, vehicles, and equipment. We determine if an agreement is or contains a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet.ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are based on the estimated present value of lease payments over the lease term and are recognized at the lease commencement date.As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate in determining the present value of lease payments. The estimated incremental borrowing rate is derived from information available at the lease commencement date.Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. A limited number of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements generally do not contain residual value guarantees or material restrictive covenants.For real estate, equipment and vehicles that support selling, marketing and general administrative activities the Company accounts for the lease and non-lease components as a single lease component. These asset categories comprise the majority of our leases. The lease and non-lease components of real estate and equipment leases supporting production activities are not accounted for as a single lease component. Consideration for such contracts is allocated to the lease component and non-lease components based upon relative standalone prices either observable or estimated if observable prices are not readily available. The components of lease expense were as follows:Lease expenseClassification202520242023Operating lease costCost of sales or SM&A (1)$62,033 $53,141 $48,577 Finance lease cost:Amortization of ROU assetsDepreciation and amortization (1)8,598 9,017 8,140 Interest on lease liabilitiesInterest expense, net4,549 4,702 4,593 Net lease cost (2)$75,180 $66,860 $61,310 (1)Supply chain-related amounts were included in cost of sales.(2)Net lease cost does not include short-term leases, variable lease costs or sublease income, all of which are immaterial.

BUSINESS ACQUISITIONSAcquisitions of businesses are accounted for as business combinations and, accordingly, the results of operations of the businesses acquired have been included in the consolidated financial statements since the respective dates of the acquisitions. The purchase price for each acquisition is allocated to the assets acquired and liabilities assumed.In conjunction with acquisitions noted below, we used various valuation techniques to determine fair value of the assets acquired, with the primary techniques being discounted cash flow analysis, relief-from-royalty, a form of the multi-period excess earnings and the with-and-without valuation approaches, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. Inputs to these valuation approaches require significant judgment including: (i) forecasted sales, growth rates and customer attrition rates, (ii) forecasted operating margins, (iii) royalty rates and discount rates used to present value future cash flows, (iv) the amount of synergies expected from the acquisition, (v) the economic useful life of assets and (vi) the evaluation of historical tax positions. In certain acquisitions, historical data is limited; therefore, we base our estimates and assumptions on budgets, business plans, economic projections, anticipated future cash flows and marketplace data.2025 ActivityLesserEvil, LLCOn November 18, 2025, we completed the acquisition of LesserEvil, LLC (“LesserEvil”), previously a privately held company that produces and sells organic popcorn and puffed snack products to retailers and distributors in the United States and Canada, which complements Hershey’s existing product portfolio and brings additional manufacturing capacity. The initial cash consideration paid for LesserEvil totaled $769,090 and consisted of cash on hand and short-term borrowings; however, the Company may be required to pay additional contingent consideration ranging from zero to a maximum of $200,000 if certain defined earnings targets are met over a multi-year period. Acquisition-related costs for the LesserEvil acquisition were immaterial.The acquisition has been accounted for as a business combination and, accordingly, LesserEvil has been included within the North America Salty Snacks segment from the date of acquisition.

Information technology is important to our business operations, and we are committed to protecting the privacy, security, and integrity of our data, as well as our employee and customer data. The Company has a comprehensive cybersecurity program in place for assessing, identifying, and managing cybersecurity risks that is designed to protect its systems and data from unauthorized access, use or other security impact, that is aligned with the National Institute of Standards and Technology (“NIST”). This program is integrated into the Company’s overall Enterprise Risk Management and Resiliency process.We continuously monitor and update our information technology networks and infrastructure to prevent, detect, address, and mitigate risks associated with unauthorized access, misuse, computer viruses, and other events that could have a security impact. We invest in industry standard security technology to protect the Company’s data and business processes against risk of cybersecurity incidents. Our data security management program includes identity, trust, vulnerability, and threat management business processes, as well as adoption of standard data protection policies. We measure our data security effectiveness by benchmarking against industry-accepted methods and we work to remediate any significant findings. We maintain and routinely test backup systems and disaster recovery and have processes in place to prevent disruptions resulting from our implementation of new software and systems.The Company has a comprehensive incident response plan to address cybersecurity incidents. The Company’s incident response plan includes procedures for identifying, containing and responding to cybersecurity incidents and is subject to regular review and assessment to ensure that it is effective in protecting the Company’s information technology. To date, the Company believes that its cybersecurity program has been effective in protecting the confidentiality, integrity, and availability of its information; however, the Company cannot guarantee that its cybersecurity program will be successful in preventing all cybersecurity incidents. Further, we currently maintain a cyber insurance policy that provides coverage for security breaches; however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

EARNINGS PER SHARE We compute basic earnings per share for Common Stock and Class B common stock using the two-class method. The Class B common stock is convertible into Common Stock on a share-for-share basis at any time. The computation of diluted earnings per share for Common Stock assumes the conversion of Class B common stock using the if-converted method, while the diluted earnings per share of Class B common stock does not assume the conversion of those shares. We compute basic and diluted earnings per share based on the weighted-average number of shares of Common Stock and Class B common stock outstanding as follows:For the years ended December 31,202520242023Common StockClass B Common StockCommon StockClass B Common StockCommon StockClass B Common StockBasic earnings per share:Numerator:Allocation of distributed earnings (cash dividends paid)$813,321 $271,975 $812,826 $271,975 $663,176 $225,895 Allocation of undistributed earnings(151,372)(50,665)851,549 284,889 728,175 244,541 Total earnings—basic$661,949 $221,310 $1,664,375 $556,864 $1,391,351 $470,436 Denominator (shares in thousands):Total weighted-average shares—basic148,281 54,614 148,349 54,614 149,499 55,239 Earnings Per Share—basic$4.46 $4.05 $11.22 $10.20 $9.31 $8.52 Diluted earnings per share:Numerator:Allocation of total earnings used in basic computation$661,949 $221,310 $1,664,375 $556,864 $1,391,351 $470,436 Reallocation of total earnings as a result of conversion of Class B common stock to Common stock221,310 — 556,864 — 470,436 — Reallocation of undistributed earnings124 — — (753)— (987)Total earnings—diluted$883,383 $221,310 $2,221,239 $556,111 $1,861,787 $469,449 Denominator (shares in thousands):Number of shares used in basic computation148,281 54,614 148,349 54,614 149,499 55,239 Weighted-average effect of dilutive securities:Conversion of Class B common stock to Common shares outstanding54,614 — 54,614 — 55,239 — Employee stock options181 — 285 — 424 — Performance and restricted stock units303 — 239 — 385 — Total weighted-average shares—diluted203,379 54,614 203,487 54,614 205,547 55,239 Earnings Per Share—diluted$4.34 $4.05 $10.92 $10.18 $9.06 $8.50 The earnings per share calculations for the years ended December 31, 2025, 2024 and 2023 excluded 27, 13 and 15 stock options (in thousands), respectively, that would have been antidilutive.