What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-04-28 compared with 2021-10-28 · 171 added, 222 removed, 154 unchanged (72% of the section changed)

11 unchanged sentences

• Safe Harbor Statement

Hershey is a global confectionery leader known for bringing goodness to the world through chocolate, sweets, mints, gum and other great tasting snacks.

Hershey is a global confectionery leader known for making more moments of goodness through chocolate, sweets, mints and other great tasting snacks.

We are the largest producer of quality chocolate in North America, a leading snack maker in the United States (“U.S.”) and a global leader in chocolate and non-chocolate confectionery.

We market, sell and distribute our products under more than 100 brand names in approximately 80 countries worldwide.

We report our operations through two segments:

North America and International and Other.

The majority of our products are confectionery or confectionery-based and include chocolate and non-chocolate confectionery products, gum and mint refreshment products, spreads, snack bites and mixes, as well as pantry items such as baking ingredients, toppings and sundae syrups.

The confectionery and confectionery-based portfolio is predominantly sold under the renowned brands of Hershey’s , Reese’s and Kisses , as well as Kit Kat®, Jolly Rancher, Ice Breakers, Twizzlers, Heath, Payday, Cadbury and a variety of other popular brands.

Our snacks portfolio includes ready-to-eat popcorn, baked and trans fat free snacks, protein bars and other better-for-you snacks.

The snacks portfolio is predominantly sold under the brands of SkinnyPop , Pirate's Booty , ONE Bar , and Paqui .

2021 Acquisition and Divestiture

Our principal product offerings include chocolate and non-chocolate confectionery products;

gum and mint refreshment products and protein bars;

pantry items, such as baking ingredients, toppings and beverages;

and snack items such as spreads, bars, and snack bites and mixes, popcorn, pretzels and protein bars.

Business Acquisitions and Divestiture

In December 2021, we completed the acquisition of Pretzels Inc.

(“Pretzels”), previously a privately held company that manufactures and sells pretzels and other salty snacks for other branded products and private labels in the United States.

Pretzels is an industry leader in the pretzel category with a product portfolio that includes filled, gluten free and seasoned pretzels, as well as extruded snacks that complements Hershey’s snacks portfolio.

Based in Bluffton, Indiana, Pretzels operates three manufacturing locations in Indiana and Kansas.

Pretzels provides Hershey deep pretzel category and product expertise and the manufacturing capabilities to support brand growth and future pretzel innovation.

Additionally, we completed the acquisition of Dot’s Pretzels, LLC (“Dot’s”), previously a privately held company that produces and sells pretzels and other snack food products to retailers and distributors in the United States, with Dot’s Homestyle Pretzels snacks as its primary product.

Dot’s is the fastest-growing scale brand in the pretzel category and complements Hershey’s snacks portfolio.

In June 2021, we completed the acquisition of Lily’s Sweets, LLC (“Lily’s”), previously a privately held company that sells a line of sugar-free and low-sugar confectionery foods to retailers and distributors in the United States and Canada.

Lily’s products include dark and milk chocolate style bars, baking chips, peanut butter cups and other confection products that complement Hershey’s confectionery and confectionery-based portfolio.

Lily’s is expected to generate annualized net sales over $100 million.

In January 2021, we completed the divestiture of Lotte Shanghai Foods Co., Ltd.

(“LSFC”), which was previously included within the International and Other segment results in our consolidated financial statements.

In January 2021, we completed the divestiture of Lotte Shanghai Foods Co., Ltd., which was previously included within the International segment results in our consolidated financial statements.

Total proceeds from the divestiture and the impact on our consolidated financial statements were immaterial.

2020 Divestitures

During the second quarter of 2020, we completed the divestitures of KRAVE Pure Foods, Inc.

(“Krave”) and the Scharffen Berger and Dagoba brands, all of which were previously included within the North America segment results in our consolidated financial statements.

Total proceeds from the divestitures and the impact on our consolidated financial statements, both individually and on an aggregate basis, were immaterial.

The Hershey Company | Q1 2022 Form 10-Q | Page 30

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On March 11, 2020, the World Health Organization designated coronavirus disease 2019 (“COVID-19”) as a global pandemic, which has spread worldwide and impacted various markets around the world, including the U.S.

Various policies and initiatives have been implemented to reduce the global transmission of COVID-19.

Local, state and national governments continue to emphasize the importance of food supply during this pandemic and have asked that food manufacturers and retailers remain open to meet the needs of our communities.

Employee safety is our first priority, and as a result, we put preparedness plans in place at our manufacturing facilities.

Our manufacturing facilities are currently open;

however, we have adjusted shift schedules, enforced social distancing, increased sanitation and adjusted time and attendance policies for worker absenteeism.

Our sales teams continue to support community food supplies, while adhering to social distancing guidelines, implementing flexible hours, reducing person-to-person interaction and increasing safety measures.

At the onset of the pandemic, the Company temporarily closed all Hershey’s Chocolate World stores in the U.S.

(3 locations), Niagara Falls (Ontario) and Singapore;

however, since July 2020, all locations have been re-opened on a limited capacity basis with increased safety measures and enforced social distancing.

In June 2020 we commenced a phased-in approach to reopen our corporate headquarters in Hershey, Pennsylvania and other select offices with increased safety protocols.

We have successfully onboarded several teams;

however, occupancy levels remain low as we continue to monitor the latest COVID-19 related public health and government guidance.

As a result, a majority of our office-based employees continue to work remotely where possible.

We have crisis management teams in place to monitor the continually evolving situation and recommending risk mitigation actions as deemed necessary.

Since the onset of COVID-19, there has been minimal disruption to our supply chain network.

However, during the third quarter of 2021, continued strong demand for consumer goods and the effects of COVID-19 mitigation strategies have led to broad-based supply chain disruptions across the U.S., including inflation on many consumer products, labor shortages and demand outpacing supply.

As a result, we experienced corresponding incremental costs and gross margin pressures during the three months ended October 3, 2021 (see Results of Operations included in this MD&A).

We are working closely with our business units, contract manufacturers, distributors, contractors and other external business partners to minimize the potential impact on our business.

During 2021, many state governments began easing COVID-19 restrictions, resulting in increased travel during the summer season, full capacity at major sporting and entertainment events, increased occupancy limits for indoor gatherings and the removal of face covering requirements (subject to certain exceptions).

This led to a temporary resurgence of COVID-19 cases during the summer months but has declined in recent weeks as the availability of vaccinations (including vaccine boosters) continues to increase around the world, albeit with slower than anticipated rollouts and challenges within certain countries.

We experienced an increase in our net sales during the three and nine months ended October 3, 2021, which was primarily driven by strong everyday performance on our core U.S.

confection brands and solid growth in our snacks portfolio and select international markets (see Segment Results included in this MD&A).

Despite higher net sales, our net income during the three months ended October 3, 2021 decreased slightly due to the aforementioned supply chain disruptions and gross margin pressures.

As of October 3, 2021, we believe we have sufficient liquidity to satisfy our cash needs;

however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can operate effectively during the ongoing COVID-19 pandemic.

Throughout the pandemic we have remained committed to promoting the health and safety of our employees and communities and helping to maintain the global food supply.

In 2022, minimal COVID-19 restrictions remained as the availability of vaccinations (including vaccine boosters) continued to increase around the world, albeit with slower than anticipated rollouts and challenges within certain countries.

The lifting of restrictions has resulted in daily activities and habits being more representative of pre-pandemic times.

However, beginning in 2021, and continuing through the three months ended April 3, 2022, the continued strong demand for consumer goods and the effects of COVID-19 mitigation strategies have led to broad-based supply chain disruptions across the U.S.

and globally, including inflation on many consumer products, labor shortages and demand outpacing supply.

As a result, during the three months ended April 3, 2022, we continued to experience corresponding incremental costs and gross margin pressures (see Results of Operations included in this MD&A).

We are continuing to work closely with our business units, contract manufacturers, distributors, contractors and other external business partners to minimize the potential impact on our business.

In addition to COVID-19 and broad-based supply chain disruptions, certain geopolitical events, specifically the conflict between Russia and Ukraine, have increased global economic and political uncertainty.

For the three months ended April 3, 2022, this conflict did not have a material impact on our commodity prices or supply availability.

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

We experienced an increase in our net sales and net income during the three months ended April 3, 2022, which was primarily driven by strong everyday performance on our core U.S.

confection brands and salty snack brands (see Segment Results included in this MD&A), partially offset by the aforementioned supply chain disruptions and gross margin pressures.

As of April 3, 2022, we believe we have sufficient liquidity to satisfy our key strategic initiatives and other material cash requirements;

however, we continue to evaluate and take action, as necessary, to preserve adequate liquidity and ensure that our business can operate effectively during the current economic environment.

We continue to monitor our discretionary spending across the organization (see Liquidity and Capital Resources included in this MD&A).

Based on the length and severity of COVID-19, including broad-based supply chain disruptions, new trends in outbreaks and hotspots, the spread of COVID-19 variants, resurgences and the continued distribution of vaccinations, we may experience continued volatility in retail foot traffic, consumer shopping and consumption behavior and may experience increasing supply chain costs and higher inflation.

We will continue to evaluate the nature and extent of these potential and evolving impacts to our business, consolidated results of operations, segment results, liquidity and capital resources.

Based on the length and severity of COVID-19 and the conflict between Russia and Ukraine, including broad-based supply chain disruptions, rising levels of inflation, new trends in outbreaks and hotspots, the spread of COVID-19 variants, resurgences and the continued distribution of vaccinations, we may experience continued volatility in retail foot traffic, consumer shopping and consumption behavior and may experience increasing supply chain costs and higher inflation.

We will continue to evaluate the nature and extent of these potential and evolving impacts on our business, consolidated results of operations, segment results, liquidity and capital resources.

The Hershey Company | Q1 2022 Form 10-Q | Page 31

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 Percent Change October 3, 2021 September 27, 2020 Percent Change

Three Months Ended

April 3, 2022 April 4, 2021 Percent Change

In millions of dollars except per share amounts

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SM&A expense as a percent of net sales 19.7 % 21.5 %

Long-lived asset impairment charges — — NM — 9.1 NM

Business realignment costs (benefits) 0.4 — NM 2.7 (0.5) (678.5) %

Business realignment activities 0.3 1.2 (77.9) %

Operating profit 721.0 553.0 30.4 %

5 unchanged sentences

Net income including noncontrolling interest 533.5 396.9 34.4 %

Net gain (loss) attributable to noncontrolling interest — — NM 1.1 (3.2) (133.1) %

Net gain attributable to noncontrolling interest — 1.1 NM

Net income attributable to The Hershey Company $ 533.5 $ 395.8 34.8 %

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NM = not meaningful

Results of Operations - Third Quarter 2021 vs.

Third Quarter 2020

Net sales increased 6.3% in the third quarter of 2021 compared to the same period of 2020, reflecting a favorable price realization of 3.1% due to higher prices on certain products, a 1.4% increase from the 2021 acquisition of Lily’s, a v olume increase of 1.3% due to an increase in our snacks portfolio, as well as, a favorable impact from foreign currency exchange rates of 0.5%.

Results of Operations - First Quarter 2022 vs.

First Quarter 2021

Net sales increased 16.1% in the first quarter of 2022 compared to the same period of 2021, reflecting a favorable price realization of 6.9% primarily due to higher list prices across our reportable segments, a volume increase of 4.6% driven by increases in everyday core U.S.

confection brands, salty snack brands and our international markets.

There was a 4.6% benefit from the 2021 acquisitions of Pretzels, Dot’s and Lily’s.

Marketplace Metrics

For the third quarter of 2021, our total U.S.

retail takeaway increased 8.9% in the expanded multi-outlet combined plus convenience store channels (IRI MULO + C-Stores), which includes candy, mint, gum, salty snacks, meat snacks and grocery items.

candy, mint and gum (“CMG”) consumer takeaway increased 8.0% and experienced a CMG market share loss of approximately 95 basis points.

For the first quarter of 2022, our total U.S.

retail takeaway declined 1.4% in the expanded multi-outlet combined plus convenience store channels (IRI MULO + C-Stores), which includes candy, mint, gum, salty snacks and grocery items.

candy, mint and gum (“CMG”) co nsumer takeaway decreased 4.4% and experienced a CMG market share loss of approximately 156 basis points as a result of capacity constraints limiting the Company’s ability to fully service consumer demand.

The CMG consumer takeaway and market share information reflects measured channels of distribution accounting for approximately 90% of our U.S.

4 unchanged sentences

Cost of Sales and Gross Margin

Cost of sales increased 13.9% in the third quarter of 2021 compared to the same period of 2020.

The increase was driven by higher sales volume, higher freight and logistics costs and additional plant costs, as well as, the incremental $40.6 million of unfavorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases.

The increase was partially offset by favorable price realization and supply chain productivity.

Gross margin decreased by 370 basis p oints in the third quarter of 2021 compared to the same period of 2020.

The decrease was driven by higher freight and logistics costs and additional plant costs and the unfavorable year-over-year mark-to-market impact from commodity derivative instruments.

These factors were offset by favorable price realization and supply chain productivity.

Cost of sales increased 13.9% in the first quarter of 2022 compared to the same period of 2021.

The increase was driven by higher sales volume, higher freight and logistics costs, as well as higher supply chain inflation costs.

The increase was partially offset by favorable price realization, supply chain productivity, as well as the incremental $37.1 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases.

Gross margin increased by 100 basis p oints in the first quarter of 2022 compared to the same period of 2021.

The increase was driven by favorable price realization, volume increases and favorable year-over-year mark-to-market impact from commodity derivative instruments.

These factors were offset by higher freight and logistics costs, higher supply chain inflation costs, as well as unfavorable product mix.

SM&A Expenses

SM&A expenses increased $17.5 million or 3.7% in the third quarter of 2021 driven by increased corporate expenses.

Total advertising and related consumer marketing expenses decreased 3.6% driven by lower advertising in the North America segment in response to sustained consumer demand and capacity constraints on select brands.

SM&A expenses, excluding advertising and related consumer marketing, increased approximately 8.1% in the third quarter of 2021 driven by higher compensation costs and investments in capabilities and technology.

SM&A expenses increased $29.5 million, or 6.0%, in the first quarter of 2022.

Total advertising and related consumer marketing expenses decreased 0.7% driven by lower advertising in the North America Confectionery segment in response to sustained consumer demand and capacity constraints on select brands, offset by an increase in the North America Salty Snacks segment to raise brand awareness.

SM&A expenses, excluding advertising and related consumer marketing, increased approximately 9.9% in the first quarter of 2022 driven by an increase in acquisition and integration related costs, as well as higher compensation costs and investments in capabilities and technology.

Business Realignment Activities

We periodically undertake business realignment activities designed to increase our efficiency and focus our business in support of our key growth strategies.

In the third quarter of 2021, we recorded business realignment costs of $0.4 million related to the International Optimization Program, a program focused on optimizing our China operating model to improve our operational efficiency and provide for a strong, sustainable and simplified base going forward.

Th ere were no business realignment costs in the third quarter of 2020.

Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Operating Profit and Operating Profit Margin

Operating profit decreased 6.0% in the third quarter of 2021 compared to the same period of 2020 predominantly due to lower gross profit, as well as higher SM&A expenses, as noted above.

Operating profit margin decreased to 24.4% in 2021 from 27.5% in 2020 driven by these same factors.

Interest Expense, Net

Net interest expense was $7.1 million lower in the third quarter of 2021 compared to the same period of 2020.

The decrease was primarily due to lower long-term debt balances in 2021 versus 2020, specifically resulting from $785 million of long-term debt repayments with varying maturity dates during the last twelve months preceding October 3, 2021.

Other (Income) Expense, Net

Other (income) expense, net was $23.0 million in the third quarter of 2021 versus net expense of $11.6 million in the third quarter of 2020.

The increase in net expense was primarily due to higher write-downs on equity investments qualifying for historic and renewable energy tax credits in 2021 versus 2020 and higher non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans during 2021.

Income Taxes and Effective Tax Rate

The effective income tax rate was 14.7% for the third quarter of 2021 compared with 20.5% for the third quarter of 2020.

Relative to the 21% statutory rate, the 2021 effective tax rate benefited from investment tax credits and the utilization (during the third quarter of 2021) of previously generated capital losses, partially offset by state taxes.

Relative to the 21% statutory rate, the 2020 effective tax rate benefited from favorable foreign rate differential and investment tax credits, partially offset by state taxes.

The Hershey Company | Q3 2021 Form 10-Q | Page 37

Net Income Attributable to The Hershey Company and Earnings Per Share-diluted

Net income decreased $2.4 million, or 0.5%, while EPS-diluted had no change, in the third quarter of 2021 compared to the same period of 2020.

The decrease in net income was driven primarily by lower gross profit, as well as higher SM&A expenses and other expenses, partially offset by lower income taxes, as noted above.

Our 2021 EPS-diluted benefited from lower weighted-average shares outstanding as a result of share repurchases pursuant to our Board-approved repurchase programs.

Results of Operations - First Nine Months 2021 vs.

First Nine Months 2020

Net sales increased 11.4% in the first nine months of 2021 compared to the same period of 2020, reflecting a volume increase of 8.5% due to an increase in everyday core U.S.

confection brands and our snacks portfolio, a favorable price realization of 2.0% due to higher prices on certain products, a 0.5% increase from net acquisitions and divestitures (predominantly driven by the 2021 acquisition of Lily’s, partially offset by the 2020 divestitures of Krave and the Scharffen Berger and Dagoba brands), as well as, a favorable impact from foreign currency exchange rates of 0.4%.

Cost of Sales and Gross Margin

Cost of sales increased 11.9% in the first nine months of 2021 compared to the same period of 2020.

The increase was driven by higher sales volume, higher freight and logistics costs and additional plant costs.

These drivers were partially offset by the incremental $64.4 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases;

however, our mark-to-market activity was significantly impacted by financial market volatility during March 2020 amid COVID-19 fears.

Additionally, the increase was partially offset by favorable price realization and supply chain productivity.

Gross margin decreased by 20 basis points in the first nine months of 2021 compared to the same period of 2020.

The decrease was driven by higher freight and logistics costs and additional plant costs.

These factors were partially offset by favorable price realization, supply chain productivity and the favorable year-over-year mark-to-market impact from commodity derivative instruments.

SM&A Expenses

SM&A expenses increased $95.5 million or 7.1% in the first nine months of 2021.

Total advertising and related consumer marketing expenses increased 2.5% driven by increased investment in core brands and incremental sponsorships in North America.

SM&A expenses, excluding advertising and related consumer marketing, increased approximately 9.6% in the first nine months of 2021 driven by higher compensation costs and investments in capabilities and technology.

Long-Lived Asset Impairment Charges

We had no impairment charges during the first nine months of 2021.

During the first nine months of 2020, we recorded long-lived asset impairment charges of $9.1 million, predominantly comprising of impairment charges to adjust long-lived asset values of our LSFC disposal group which was previously classified as held for sale.

Additionally, in connection with a previous sale, the Company wrote-down certain receivables deemed uncollectible.

Business Realignment Activities

During the first nine months of 2021, we recorded business realignment costs of $2.7 million related to the International Optimization Program.

During the first nine months of 2020, we recorded business realignment benefits of $0.5 million related to the Margin for Growth Program.

In the first quarter of 2022, we recorded business realignment costs of $0.3 million versus costs of $1.2 million in the first quarter of 2021 related to the International Optimization Program.

This program is focused on optimizing our China operating model to improve our operational efficiency and provide for a strong, sustainable and simplified base going forward.

Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in Note 9 to the Unaudited Consolidated Financial Statements.

Operating Profit and Operating Profit Margin

O perating profit increased 15.0% in the first nine months of 2021 compared to the same period of 2020 predominantly due to higher gross profit and lower impairment charges, partially offset by higher SM&A expenses, as noted above.

Operating profit increased 30.4% in the first quarter of 2022 compared to the same period of 2021 predominantly due to higher gross profit, partially offset by higher SM&A expenses, as noted above.

Operating profit margin increased to 27.0% in 2022 from 24.1% in 2021 driven by these same factors.

The Hershey Company | Q3 2021 Form 10-Q | Page 38

Interest Expense, Net

Net interest expense was $13.9 million lower in the first nine months of 2021 compared to the same period of 2020.

Net interest expense was $3.2 million lower in the first quarter of 2022 c ompared to the same period of 2021.

The decrease was primarily due to lower long-term debt balances in 2022 versus 2021, specifically resulting from the repayment of $350 million of 3.100% Notes upon their maturity in May 2021.

This decrease was partially offset by higher short-term debt balances in 2022 versus 2021, specifically outstanding commercial paper borrowings.

Other (Income) Expense, Net

Other (income) expense, net was $32.6 million in the first nine months of 2021 versus expense of $34.4 million in the first nine months of 2020.

The decrease in net expense was primarily due to lower non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans during 2021 and lower write-downs on equity investments qualifying for historic and renewable energy tax credits in 2021 versus 2020.

Other (income) expense, net was $10.4 million in the first quarter of 2022 versus net expense of $2.4 million in the first quarter of 2021.

The increase in net expense was primarily due to higher write-downs on equity investments qualifying for tax credits in 2022 versus 2021, offset by lower non-service cost components of net periodic benefit cost relating to pension and other post-retirement benefit plans.

Income Taxes and Effective Tax Rate

Our effective income tax rate was 21.4% for the first nine months of 2021 compared with 20.1% for the first nine months of 2020.

Relative to the 21% statutory rate, the 2021 effective tax rate was impacted by incremental tax reserves incurred as a result of an adverse ruling in connection with a non-U.S.

tax litigation matter as well as state taxes, partially offset by investment tax credits and the utilization (during the third quarter of 2021) of previously generated capital losses.

Relative to the 21% statutory rate, the 2020 effective tax rate was favorably impacted by investment tax credits and the benefit of employee share-based payments, partially offset by state taxes.

The effective income tax rate was 21.2% for the first quarter of 2022 compared with 22.8% for the first quarter of 2021.

Relative to the 21% statutory rate, the 2022 and 2021 effective tax rates, were impacted by state taxes, partially offset by investment tax credits and the benefit of employee share-based payments.

The Hershey Company | Q1 2022 Form 10-Q | Page 33

Net Income Attributable to The Hershey Company and Earnings Per Share-diluted

Net income increased $154.6 million, or 15.7%, while EPS-diluted increased $0.78, or 16.6%, in the first nine months of 2021 compared to the same period of 2020.

The increase in both net income and EPS-diluted was driven primarily by higher gross profit, as well as, lower interest expense and impairment charges, partially offset by higher SM&A expenses and higher income taxes.

Our 2021 EPS-diluted also benefited from lower weighted-average shares outstanding as a result of share repurchases pursuant to our Board-approved repurchase programs.

Net income increased $137.7 million, or 34.8%, while EPS-diluted increased $0.67, or 35.3%, in the first quarter of 2022 compared to the same period of 2021.

The increase in both net income and EPS diluted was driven primarily by higher gross profit and lower income taxes, partially offset by higher SM&A expenses, as noted above.

Our 2022 EPS-diluted benefited from lower weighted-average shares outstanding as a result of share repurchases.

The Hershey Company | Q1 2022 Form 10-Q | Page 34

SEGMENT RESULTS

The summary that follows provides a discussion of the results of operations of our two reportable segments:

North America and International and Other.

The segments reflect our operations on a geographic basis.

The summary that follows provides a discussion of the results of operations of our three reportable segments:

North America Confectionery, North America Salty Snacks and International.

For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources.

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Our segment results, including a reconciliation to our consolidated results, were as follows:

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020

Three Months Ended

April 3, 2022 April 4, 2021

In millions of dollars

North America $ 2,125.6 $ 2,014.1 $ 5,986.7 $ 5,442.8

International and Other 234.2 205.7 658.5 521.7

North America Confectionery $ 2,217.0 $ 1,985.4

North America Salty Snacks 226.1 121.4

International 223.1 189.1

Total $ 2,666.2 $ 2,295.9

Segment Income:

North America $ 666.1 $ 647.1 $ 1,893.6 $ 1,726.3

International and Other 38.7 24.5 114.7 36.5

North America Confectionery $ 781.9 $ 642.6

North America Salty Snacks 21.3 25.4

International 42.0 27.4

Total segment income 845.2 695.4

Unallocated corporate expense (1) 150.3 137.8

Unallocated mark-to-market (gains) losses on commodity derivatives (2) (18.4) (71.8) (24.1) 10.5

Long-lived asset impairment charges — — — 9.1

Unallocated mark-to-market gains on commodity derivatives (2) (27.4) (2.3)

Costs associated with business realignment activities 1.3 6.9

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The Hershey Company | Q1 2022 Form 10-Q | Page 35

North America

The North America segment is responsible for our chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada.

This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines.

North America results, which accounted for 90.1% and 90.7% of our net sales for the three months ended October 3, 2021 and September 27, 2020, respectively, were as follows:

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 Percent Change October 3, 2021 September 27, 2020 Percent Change

North America Confectionery

The North America Confectionery segment is responsible for our chocolate and non-chocolate confectionery market position in the United States and Canada.

This includes developing and growing 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.

While a less significant component, 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 trademarks and products to third parties around the world.

North America Confectionery results, which accounted for 83.1% and 86.5% of our net sales for the three months ended April 3, 2022 and April 4, 2021, respectively, were as follows:

Three Months Ended

April 3, 2022 April 4, 2021 Percent Change

In millions of dollars

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Segment margin 35.3 % 32.4 %

Results of Operations - Third Quarter 2021 vs.

Third Quarter 2020

Net sales of our North America segment increased $111.5 million or 5.5% in the third quarter of 2021 compared to the same period of 2020, reflecting a favorable price realization of 2.4% due to higher prices on certain products, a volume increase of 1.3% due to an increase in our snacks portfolio, a 1.5% increase from the 2021 acquisition of Lily’s, and a favorable impact from foreign currency exchange rates of 0.3%.

Our North America segment income increased $19.0 million or 2.9% in the third quarter of 2021 compared to the same period of 2020, primarily due to volume increases and favorable price realization, partially offset by higher supply chain-related costs, higher freight and logistics costs, as well as unfavorable product mix.

Results of Operations - First Nine Months 2021 vs.

First Nine Months 2020

Net sales of our North America segment increased $543.9 million or 10.0% in the first nine months of 2021 compared to the same period of 2020, reflecting a volume increase of 7.6% due to an increase in everyday core U.S.

confection brands and our snacks portfolio, favorable price realization of 1.5% attributed to higher prices on certain products, a 0.5% increase from net acquisitions and divestitures (predominantly driven by the 2021 acquisition of Lily’s, partially offset by the 2020 divestitures of Krave and the Scharffen Berger and Dagoba brands) and a favorable impact from foreign currency exchange rates of 0.4%.

Our North America segment income increased $167.3 million or 9.7% in the first nine months of 2021 compared to the same period of 2020, primarily due to volume increases and favorable price realization, partially offset by higher supply chain-related costs and higher freight and logistics costs.

Results of Operations - First Quarter 2022 vs.

First Quarter 2021

Net sales of our North America Confectionery segment increased $231.6 million or 11.7% in the first quarter of 2022 compared to the same period of 2021, reflecting a favorable price realization of 6.8% due to list price increases on certain products across our portfolio, a volume increase of 3.8% due to an increase in everyday core U.S.

confection brands and a 1.1% increase from the 2021 acquisition of Lily’s.

Our North America Confectionery segment also includes licensing and owned retail.

This includes our Hershey’s Chocolate World stores in the United States (3 locations), Niagara Falls (Ontario) and Singapore.

Our net sales increased approximately 21.5% during the first quarter of 2022 compared to the same period of 2021.

Our North America Confectionery segment income increased $139.3 million or 21.7% in the first quarter of 2022 compared to the same period of 2021, primarily due to favorable price realization and volume increases, partially offset by higher freight and logistics costs, higher supply chain inflation costs, as well as, unfavorable product mix.

The Hershey Company | Q1 2022 Form 10-Q | Page 36

International and Other

The International and Other segment includes all other countries where we currently manufacture, import, market, sell or distribute chocolate and non-chocolate confectionery and other products.

Currently, this includes our operations in India and other Asia markets, Latin America, Europe, Africa and the Middle East, along with exports to these regions.

While a less significant component, this segment also includes our global retail operations, including Hershey’s Chocolate World stores in Hershey, Pennsylvania, New York City, Las Vegas, Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain trademarks and products to third parties around the world.

International and Other results, which accounted for 9.9% and 9.3% of our net sales for the three months ended October 3, 2021 and September 27, 2020, respectively, were as follows:

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 Percent Change October 3, 2021 September 27, 2020 Percent Change

North America Salty Snacks

The North America Salty Snacks segment is responsible for our grocery and snacks market positions, including our salty snacking products.

North America Salty Snacks results, which accounted for 8.5% and 5.3% of our net sales for the three months ended April 3, 2022 and April 4, 2021, respectively, were as follows:

Three Months Ended

April 3, 2022 April 4, 2021 Percent Change

In millions of dollars

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Segment margin 9.4 % 20.9 %

Results of Operations - Third Quarter 2021 vs.

Third Quarter 2020

Net sales of our International and Other segment increased $28.5 million or 13.9% in the third quarter of 2021 compared to the same period of 2020, reflecting a favorable price realization of 9.5% and volume increase of 1.9%.

The volume increase was primarily attributed to solid marketplace growth in Mexico, Brazil, and India, where net sales increased by 72.3%, 13.0%, and 5.0%, respectively.

These increases also benefited from a favorable impact from foreign currency exchange rates of 2.5%.

Our International and Other segment also includes licensing, owned retail and world travel retail.

At the onset of the pandemic, all Hershey's Chocolate World stores were temporarily closed and subsequently re-opened in July 2020 with increased safety measures.

This included the United States (3 locations), Niagara Falls (Ontario) and Singapore.

As a result, our net sales increased approximately 47.7% during the third quarter of 2021 compared to the same period of 2020.

Our International and Other segment generated income of $38.7 million in the third quarter of 2021 compared to $24.5 million in the third quarter of 2020 with the improvement primarily resulting from execution of our International Optimization Program in China, as we streamline and optimize our China operating model, as well as volume increases and favorable price realization.

Results of Operations - First Nine Months 2021 vs.

First Nine Months 2020

Net sales of our International and Other segment increased $136.8 million or 26.2% in the first nine months of 2021 compared to the same period of 2020, reflecting a volume increase of 17.2% and favorable price realization of 8.1%.

The volume increase was primarily attributed to solid marketplace growth in Mexico, Brazil, India and AEMEA Markets, where net sales increased by 50.0%, 25.4%, 34.4% and 17.5%, respectively.

Results of Operations - First Quarter 2022 vs.

First Quarter 2021

Net sales of our North America Salty Snacks segment increased $104.7 million or 86.2% in the first quarter of 2022 compared to the same period of 2021, reflecting a 69.0% benefit from the 2021 acquisitions of Dot’s and Pretzels, a favorable price realization of 13.2% due to higher prices on certain products and related trade promotions and a volume increase of 4.0% primarily related to SkinnyPop and Pirates Booty snacks.

Our North America Salty Snacks segment income decreased $4.1 million or 16.1% in the first quarter of 2022 compared to the same period of 2021 due to unfavorable product mix, as well as higher supply chain inflation costs and increased advertising and related consumer marketing costs, partially offset by favorable price realization and volume increases.

International

The International segment includes all other countries where we currently manufacture, import, market, sell or distribute chocolate and non-chocolate confectionery and other products.

Currently, this includes our operations in Asia, Latin America, Europe, Africa and the Middle East, along with exports to these regions.

International results, which accounted for 8.4% and 8.2% of our net sales for the three months ended April 3, 2022 and April 4, 2021, respectively, were as follows:

Three Months Ended

April 3, 2022 April 4, 2021 Percent Change

In millions of dollars

Net sales $ 223.1 $ 189.1 17.9 %

Segment income 42.0 27.4 53.4 %

Segment margin 18.8 % 14.5 %

Results of Operations - First Quarter 2022 vs.

First Quarter 2021

Net sales of our International segment increased $34.0 million or 17.9% in the first quarter of 2022 compared to the same period of 2021, reflecting a volume increase of 11.9% and a favorable price realization of 5.8%.

The volume increase was primarily attributable to solid marketplace growth in Brazil, Mexico, and India, where net sales increased by 34.9%, 29.5%, and 14.5%, respectively.

These increases also benefited from a favorable impact from foreign currency exchange rates of 0.2%.

Our International and Other segment also includes licensing, owned retail and world travel retail.

At the onset of the pandemic, all Hershey’s Chocolate World stores were temporarily closed and subsequently re-opened in July 2020 with increased safety measures.

This included the United States (3 locations), Niagara Falls (Ontario) and Singapore.

As a result, our net sales increased approximately 42.6% during the first nine months of 2021 compared to the same period of 2020.

Our International and Other segment generated income of $114.7 million in the first nine months of 2021 compared to $36.5 million in the first nine months of 2020 with the improvement primarily resulting from execution of our International Optimization Program in China, as we streamline and optimize our China operating model, as well as volume increases and favorable price realization.

Our International segment generated income of $42.0 million in the first quarter of 2022 compared to $27.4 million in the first quarter of 2021 with the improvement primarily resulting from execution of our International Optimization Program in China, as we streamline and optimize our China operating model, as well as volume increases and favorable price realization.

The Hershey Company | Q1 2022 Form 10-Q | Page 37

Unallocated Corporate Expense

Unallocated corporate expense includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense and (d) other gains or losses that are not integral to segment performance.

In the third quarter of 2021, unallocated corporate expense totaled $145.0 million, as compared to $132.0 million in the third quarter of 2020.

The increase is primarily driven by higher incentive compensation, higher group insurance costs from COVID-19-related delays in preventive care, and incremental investments in capabilities and technology.

In the first nine months of 2021, unallocated corporate expense totaled $434.0 million, as compared to $363.4 million in the first nine months of 2020.

Unallocated corporate expense includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense,(d) acquisition-related costs and (e) other gains or losses that are not integral to segment performance.

In the first quarter of 2022, unallocated corporate expense totaled $150.3 million, as compared to $137.8 million in the first quarter of 2021.

The increase is primarily driven by higher acquisition and integration related costs, as well as incremental investments in capabilities and technology and higher group insurance costs, partially offset by lower incentive compensation.

LIQUIDITY AND CAPITAL RESOURCES

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Commercial paper may also be issued, from time to time, to finance ongoing business transactions, such as the repayment of long-term debt, business acquisitions and for other general corporate purposes.

At October 3, 2021, our cash and cash equivalents totaled $675.5 million, a decrease of $468.5 million compared to the 2020 year-end balance.

At April 3, 2022, our cash and cash equivalents totaled $338.1 million, an increase of $8.8 million compared to the 2021 year-end balance.

We believe we have sufficient liquidity to satisfy our cash needs;

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Additional detail regarding the net uses of cash are outlined in the following discussion.

Approximately 90% of the balance of our cash and cash equivalents at October 3, 2021 was held by subsidiaries domiciled outside of the United States.

During the first nine months of 2021, previously undistributed earnings of certain international subsidiaries were no longer considered indefinitely reinvested;

however, the Company had previously recognized a one-time U.S.

repatriation tax due under U.S.

tax reform, and as a result, only an immaterial amount of withholding tax was recognized.

For the remainder of the Company’s cash held by international subsidiaries, we intend to continue to reinvest the undistributed earnings indefinitely.

Approximately 80% of the balance of our cash and cash equivalents at April 3, 2022 was held by subsidiaries domiciled outside of the United States.

We intend to continue to reinvest the remainder of the earnings outside of the United States for which there would be a material tax implication to distributing, such as withholding tax, for the foreseeable future and, therefore, have not recognized additional tax expense on these earnings.

We believe we have sufficient liquidity to satisfy our cash needs for at least the next twelve months, including our cash needs in the United States.

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The following table is derived from our Consolidated Statements of Cash Flows:

Nine Months Ended

In millions of dollars October 3, 2021 September 27, 2020

Three Months Ended

In millions of dollars April 3, 2022 April 4, 2021

Net cash provided by (used in):

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Cash classified as assets held for sale — 11.4

(Decrease) increase in cash and cash equivalents $ (468.5) $ 712.6

The Hershey Company | Q3 2021 Form 10-Q | Page 43

Increase (decrease) in cash and cash equivalents $ 8.8 $ (11.7)

Operating activities

We generated cash of $1.4 billion from operating activities in the first nine months of 2021, an increase of $308.4 million compared to $1.1 billion in the same period of 2020.

We generated cash of $656.5 million from operating activities in the first three months of 2022, an increase of $46.9 million compared to $609.6 million in the same period of 2021.

This increase in net cash provided by operating activities was mainly driven by the following factors:

• Net income adjusted for non-cash charges to operations (including depreciation, amortization, stock-based compensation, deferred income taxes, long-lived asset charges, a write-down of equity investments and other charges) resulted in $205.1 million of higher cash flow in 2021 relative to 2020.

• Net income adjusted for non-cash charges to operations (including depreciation, amortization, stock-based compensation, deferred income taxes, a write-down of equity investments and other charges) resulted in $166.9 million of higher cash flow in 2022 relative to 2021.

The Hershey Company | Q1 2022 Form 10-Q | Page 38

• The increase in cash provided by operating activities was partially offset by the following net cash outflows:

• Net working capital (comprised of trade accounts receivable, inventory, accounts payable and accrued liabilities) consumed cash of $128.9 million in 2022, compared to $25.7 million in 2021.

This $110.0 million fluctuation was mainly driven by strong demand of U.S.

inventories, specifically our everyday core U.S.

confection brands.

This $103.2 million fluctuation was mainly driven by a higher year-over-year build up of U.S.

inventories to satisfy product requirements and maintain sufficient levels to accommodate customer requirements and an increase in cash used by accounts receivable due to a longer Easter season in 2022 as compared to prior year, partially offset by the timing of vendor and supplier payments and higher accrued incentive compensation related to annual performance that was paid in the first quarter of 2022.

Investing activities

We used cash of $839.7 million for investing activities in the first nine months of 2021, an increase of $498.4 million compared to $341.3 million in the same period of 2020.

We used cash of $164.0 million for investing activities in the first three months of 2022, an increase of $27.0 million compared to $137.0 million in the same period of 2021.

This increase in net cash used in investing activities was mainly driven by the following factors:

• Capital spending .

Capital expenditures, including capitalized software, primarily to support capacity expansion, innovation and cost savings, were $347.5 million in the first nine months of 2021 compared to $292.1 million in the same period of 2020.

For full year 2021, we now expect capital expenditures, including capitalized software, to approximate $500 million to $525 million, a reduction from our previously announced estimate of $550 million, as we evaluate and re-prioritize our capital projects to align with consumer demand and broad-based supply chain disruptions.

Our 2021 capital expenditures are largely driven by the continuation of our new global enterprise resource planning system implementation, as well as our supply chain capacity projects.

Capital expenditures, including capitalized software, primarily to support our ERP system implementation, capacity expansion projects, innovation and cost savings, were $141.1 million in the first three months of 2022 compared to $114.5 million in the same period of 2021.

We expect our full year 2022 capital expenditures, including capitalized software, to approximate $600 million, the high end of our previously announced range of $550 million to $600 million.

Our 2022 capital expenditures are largely driven by our key strategic initiatives, including expanding the agility and capacity of the Company’s supply chain and building digital infrastructure across the enterprise.

We intend to use our existing cash and internally generated funds to meet our 2022 capital requirements.

• Investments in partnerships qualifying for tax credits .

We make investments in partnership entities that in turn make equity investments in projects eligible to receive federal historic and renewable energy tax credits.

We invested approximately $75.9 million in the first nine months of 2021, compared to $46.4 million in the same period of 2020.

• Business Acquisition .

In June 2021, we acquired Lily’s for an initial cash purchase price of $419.5 million.

Further details regarding our business acquisition activity is provided in Note 2 to the Unaudited Consolidated Financial Statements.

We invested approximately $22.5 million in the first three months of 2022, compared to $25.1 million in the same period of 2021.

Financing activities

We used cash of $1,037.8 million for financing activities in the first nine months of 2021, an increase of $1,017.8 million compared to $20.0 million in the same period of 2020.

This increase in net cash used in financing activities was mainly driven by the following factors:

We used cash of $463.5 million for financing activities in the first three months of 2022, a decrease of $28.3 million compared to $491.8 million in the same period of 2021.

This decrease in net cash used in financing activities was mainly driven by the following factors:

• Short-term borrowings, net.

In addition to utilizing cash on hand, we use short-term borrowings (commercial paper and bank borrowings) to fund seasonal working capital requirements and ongoing business needs.

During the first nine months of 2021, we generated cash flow of $340.0 million predominantly through the issuance of short-term commercial paper, partially offset by a reduction in short-term foreign borrowings.

During the first nine months of 2020, we generated cash flow of $13.4 million due to an increase in short-term foreign bank borrowings.

During the first three months of 2022, we used cash of $65.6 million to reduce a portion of our short-term commercial paper borrowings originally used to fund our 2021 acquisitions of Dot’s and Pretzels, partially offset by an increase in short-term foreign bank borrowings.

During the first three months of 2021, we used cash of $6.1 million to reduce a portion of our short-term foreign bank borrowings.

• Long-term debt borrowings and repayments .

During the first nine months of 2021, we repaid $84.7 million of 8.800% Debentures due upon their maturity and $350.0 million of 3.100% Notes due upon their maturity.

During the first nine months of 2020, we issued $300 million of 0.900% Notes due in 2025, $350 million of 1.700% Notes due in 2030 and $350 million of 2.650% Notes due in 2050 (the “2020 Notes”).

Proceeds from the issuance of the 2020 Notes, net of discounts and issuance costs, totaled $989.9 million.

Additionally, in May 2020, we repaid $350 million of 2.900% Notes due upon their maturity.

The Hershey Company | Q3 2021 Form 10-Q | Page 44

During the first three months of 2022, long-term debt activity was minimal.

During the first three months of 2021, we repaid $84.7 million of 8.800% Debentures due upon their maturity.

• Dividend payments .

Total dividend payments to holders of our Common Stock and Class B Common Stock were $505.2 million during the first nine months of 2021, an increase of $27.2 million compared to $478.0 million in the same period of 2020.

Total dividend payments to holders of our Common Stock and Class B Common Stock were $181.1 million during the first three months of 2022, an increase of $18.4 million compared to $162.7 million in the same period of 2021.

Details regarding our 2022 cash dividends paid to stockholders are as follows:

The Hershey Company | Q1 2022 Form 10-Q | Page 39

Quarter Ended

In millions of dollars except per share amounts April 4, 2021 July 4, 2021 October 3, 2021

In millions of dollars except per share amounts April 3, 2022

Dividends paid per share – Common stock $ 0.901

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Total cash dividends paid $ 181.1

Declaration date February 2, 2021 April 27, 2021 July 23, 2021

Record date February 19, 2021 May 21, 2021 August 20, 2021

Payment date March 15, 2021 June 15, 2021 September 15, 2021

Declaration date February 2, 2022

Record date February 18, 2022

Payment date March 15, 2022

• Share repurchases .

We used cash for total share repurchases of $458.0 million and $211.2 million during the first nine months of 2021 and 2020, respectively, pursuant to our practice of replenishing treasury shares available for issuance for stock options and incentive compensation, as well as our share repurchases in the open market under pre-approved share repurchase programs.

We repurchase shares of Common Stock to offset the dilutive impact of treasury shares issued under our equity compensation plans.

The value of these share repurchases in a given period varies based on the volume of stock options exercised and our market price.

In addition, we periodically repurchase shares of Common Stock pursuant to Board-authorized programs intended to drive additional stockholder value.

Details regarding our share repurchases are as follows:

Quarter Ended

In millions April 3, 2022 April 4, 2021

Milton Hershey School Trust repurchase $ 203.4 $ —

Shares repurchased in the open market to replace Treasury Stock issued for stock options and incentive compensation — 240.4

Cash used for total share repurchases $ 203.4 $ 240.4

In February 2022, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the Milton Hershey School Trust, pursuant to which the Company purchased 1,000,000 shares of the Company’s Common Stock from the Milton Hershey School Trust at a price equal to $203.35 per share, for a total purchase price of $203.4 million.

In July 2018, our Board of Directors approved a $500 million share repurchase authorization.

As of October 3, 2021, approximately $110 million remained available for repurchases of our Common Stock under this program.

As of April 3, 2022, approximately $110 million remained available for repurchases of our Common Stock under this program.

The share repurchase program does not have an expiration date.

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This program is to commence after the existing 2018 authorization is completed and is to be utilized at management’s discretion.

• Proceeds from the exercise of stock options, including tax benefits.

We received $23.4 million from employee exercises of stock options, net of employee taxes withheld from share-based awards, during the first nine months of 2021, a minimal increase compared to $19.1 million in the same period of 2020.

We expect 2022 share repurchases to be in line with our traditional buyback strategy.

• Proceeds from exercised stock options and employee tax withholding.

During the first three months of 2022, we received $16.7 million from employee exercises of stock options and paid $29.0 million of employee taxes withheld from share-based awards.

During the first three months of 2021, we received $15.1 million from employee exercises of stock options and paid $11.9 million of employee taxes withheld from share-based awards.

Variances are driven primarily by the number of shares exercised and the share price at the date of grant.

Recent Accounting Pronouncements

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We are subject to changing economic, competitive, regulatory and technological risks and uncertainties that could have a material impact on our business, financial condition or results of operations.

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we note the following factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions that we have discussed directly or implied in this Prospectus.

Many of these forward-looking statements can be identified by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would,” among others.

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• We might not be able to hire, engage and retain the talented global workforce we need to drive our growth strategies;

• Risks associated with climate change and other environmental impacts, and increased focus and evolving views of our customers, stockholders and other stakeholders on climate change issues, could negatively affect our business and operations;

• Increases in raw material and energy costs along with the availability of adequate supplies of raw materials could affect future financial results;

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• Changes in governmental laws and regulations could increase our costs and liabilities or impact demand for our products;

• Political, economic and/or financial market conditions could negatively impact our financial results;

The Hershey Company | Q1 2022 Form 10-Q | Page 41

• Political, economic and/or financial market conditions, including impacts on our business arising from the conflict between Russia and Ukraine, could negatively impact our financial results;

• Disruptions, failures or security breaches of our information technology infrastructure could have a negative impact on our operations;

• Complications with the design or implementation of our new enterprise resource planning system could adversely impact our business and operations;

• Such other matters as discussed in our 2020 Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q for the quarterly periods ended April 4, 2021 and July 4, 2021, and this Quarterly Report on Form 10-Q, including Part II, Item 1A, ”Risk Factors.”

• Such other matters as discussed in our 2021 Annual Report on Form 10-K and this Quarterly Report on Form 10-Q, including Part II, Item 1A, ”Risk Factors.”

We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations or events or circumstances after the date this Quarterly Report on Form 10-Q is filed.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis