What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-17 compared with 2025-02-18 · 197 added, 111 removed, 1615 unchanged (16% of the section changed)

47 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The Hershey Company | 2025 Form 10-K | Page 48

11 unchanged sentences

We also performed sensitivity analyses of assumptions to evaluate the changes in the estimate that would result from changes in the assumptions.

The Hershey Company | 2025 Form 10-K | Page 49

Accounting for the Provisional Valuation of Identifiable Intangible Assets in the Acquisition of LesserEvil, LLC

Description of the Matter As described in Note 2 to the consolidated financial statements, the Company completed the acquisition of LesserEvil, LLC (“LesserEvil”) on November 18, 2025 for consideration of $815.2 million.

As of December 31, 2025, the purchase price that has been provisionally allocated to acquired intangible assets consisting of trademarks and customer relationships was $303.0 million and $301.5 million, respectively.

Auditing the Company’s accounting for its acquisition of LesserEvil was complex due to the significant estimation uncertainty in determining the fair values of the trademarks and customer relationships.

The Company used the relief from royalty method to value the trademarks and the multi-period excess earnings method to value the customer relationships, both of which were complex and required the use of assumptions that were inherently uncertain.

The significant assumptions used to estimate the fair value of the trademarks included forecasted revenue growth rates, the discount rate, and the royalty rate.

The significant assumptions used to estimate the fair value of the customer relationships included forecasted revenue growth rates and forecasted EBITDA margins.

All of these significant assumptions are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s estimation of the fair values of the trademarks and customer relationships.

For example, we tested controls over the valuation of these acquired identifiable intangible assets, including controls over management’s review of the valuation models and the significant assumptions described above, forecasted financial information, and the completeness and accuracy of underlying data used in the valuation models.

To test the provisional estimated fair value of the trademarks and customer relationships, we performed audit procedures that included, among others, assessing the fair value methodologies utilized by management as well as the significant assumptions discussed above, including the completeness and accuracy of the underlying data used in the valuation models.

For example, when evaluating the significant assumptions, we compared them to current financial and operating plans, market and industry studies, and historical trends.

We also performed sensitivity analyses to evaluate the changes in the fair value of the trademarks and customer relationships that would result from changes in the significant assumptions.

We involved our valuation specialists to assist in evaluating the discount rate, royalty rate, and valuation methodologies used by the Company.

/s/ Ernst & Young LLP

8 unchanged sentences

In our opinion, The Hershey Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the acquisition of the Sour Strips brand from Actual Candy, LLC (“Sour Strips”) on November 8, 2024, which is included in the 2024 consolidated financial statements of the Company and constituted less than 1% of total assets as of December 31, 2024 and less than 1% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Sour Strips.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of LesserEvil, LLC (“LesserEvil”), which was acquired on November 18, 2025, and is included in the 2025 consolidated financial statements of the Company and constituted 7.3% of total assets as of December 31, 2025 and less than 1% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of LesserEvil.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, cash flows, and stockholders' equity for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February 17, 2026 expressed an unqualified opinion thereon.

125 unchanged sentences

Deferred income taxes 122,293 73,235 16,233

Goodwill impairment charges 6,403 — —

Write-down of equity investments 24,483 243,311 210,484

Unrealized gains on derivative contracts ( 513,800 ) — —

Unrealized losses (gains) on derivative contracts 530,445 ( 513,800 ) —

Other 101,227 76,604 103,287

10 unchanged sentences

Capital additions (including software) ( 454,622 ) ( 605,942 ) ( 771,109 )

Equity investments in tax credit qualifying partnerships ( 285,499 ) ( 256,815 ) ( 275,534 )

Receipts (payments) related to equity investments in tax credit qualifying partnerships 11,878 ( 285,499 ) ( 256,815 )

Business acquisitions, net of cash and cash equivalents acquired ( 756,135 ) ( 75,500 ) ( 165,818 )

Purchase of intangible assets ( 73,597 ) — —

Other investing activities ( 6,241 ) 6,627 ( 4,934 )

1 unchanged sentence

Financing Activities

Net increase (decrease) in short-term debt 607,006 26,049 ( 245,633 )

Net (decrease) increase in short-term debt ( 1,098,731 ) 607,006 26,049

Long-term borrowings, net of debt issuance costs 1,984,545 — 744,092

28 unchanged sentences

Net income 1,861,787 1,861,787

Other comprehensive loss ( 3,118 ) ( 3,118 )

Other comprehensive income 22,255 22,255

Dividends (including dividend equivalents):

3 unchanged sentences

( 225,895 ) ( 225,895 )

Stock-based compensation 65,909 65,909

Conversion of Class B Common Stock into Common Stock 3,500 ( 3,500 ) —

Stock-based compensation 81,130 81,130

Exercise of stock options and incentive-based transactions ( 32,122 ) 23,128 ( 8,994 )

3 unchanged sentences

Net income 2,221,239 2,221,239

Other comprehensive income 22,255 22,255

Other comprehensive loss 25,317 ( 73,812 ) ( 48,495 )

Dividends (including dividend equivalents):

10 unchanged sentences

Net income 883,259 883,259

Other comprehensive income (loss) 25,317 ( 73,812 ) ( 48,495 )

Other comprehensive income 56,540 56,540

Dividends (including dividend equivalents):

5 unchanged sentences

Exercise of stock options and incentive-based transactions ( 16,480 ) 18,998 2,518

Repurchase of common stock (including excise tax) ( 498,926 ) ( 498,926 )

Balance, December 31, 2025

61 unchanged sentences

Advertising expense is also charged to expense as incurred and totaled $ 611,951 in 2025, $ 600,094 in 2024 and $ 604,853 in 2023.

Prepaid advertising expense was $ 1,351 as of December 31, 2024.

There was no prepaid advertising expense as of December 31, 2025.

Prepaid advertising expense was $ 1,351 as of December 31, 2024.

Cash Equivalents

19 unchanged sentences

The adjustment to LIFO, as shown in Note 19 , approximates the excess of replacement cost over the stated LIFO inventory value.

The net impact of LIFO liquidations during 2024 was $ 32,139 .

The net impact of LIFO acquisitions and liquidations was not material to 2023 or 2022.

The net impact of LIFO acquisitions and liquidations during 2025 and 2024 were acquisitions of $ 35,959 and liquidations of $ 32,139 , respectively.

The net impact of LIFO acquisitions and liquidations was not material to 2023.

Property, Plant and Equipment

26 unchanged sentences

If we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors in assessing the fair value of the related reporting unit.

If we determine that it is more likely than not that the fair value of

If we determine that it is more likely than not that the fair value of the

The Hershey Company | 2025 Form 10-K | Page 60

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

the reporting unit is less than its carrying value, a quantitative test is then performed.

reporting unit is less than its carrying value, a quantitative test is then performed.

Otherwise, no further testing is required.

15 unchanged sentences

Supplier Finance Program Obligations

We have agreements with two third-party financial institutions to facilitate a supplier finance program which allows qualifying suppliers to sell their receivables from the Company to the financial institution.

We have agreements with four third-party financial institutions to facilitate a supplier finance program which allows qualifying suppliers to sell their receivables from the Company to the financial institution.

These participating suppliers negotiate their outstanding receivable arrangements directly with the financial institution, and our rights and obligations to our suppliers are not impacted.

38 unchanged sentences

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

This ASU requires public business entities on an annual basis to disclose specific categories in a tabular rate reconciliation and provide additional information for reconciling items that meet a five percent quantitative threshold.

Additionally, the ASU requires all entities to disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, as well as individual jurisdictions where income taxes paid are equal to or greater than five percent of total income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

We adopted the provisions of this ASU in the fourth quarter of 2025 and applied the provisions on a prospective basis.

The Hershey Company | 2025 Form 10-K | Page 62

THE HERSHEY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

3 unchanged sentences

We adopted the provisions of this ASU in the fourth quarter of 2024 and applied the provisions retrospectively to each period presented in the consolidated financial statements.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

The ASU is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

Entities may apply this ASU upon issuance through December

The Hershey Company | 2024 Form 10-K | Page 61

THE HERSHEY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

31, 2022 on a prospective basis.

We early adopted the provisions of this ASU in the first quarter of 2022.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In September 2022, the FASB issued ASU No.

6 unchanged sentences

We early adopted provisions of this ASU in the fourth quarter of 2022, with the exception of the amendment on rollforward information, which we adopted in the fourth quarter of 2023.

Adoption of the new standard did not have a material impact on our consolidated financial statements.

In October 2021, the FASB issued ASU No.

6 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted and the updated should be applied on a prospective basis, with a retrospective application permitted in the financial statements.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

As a result, we intend to adopt the provisions of this ASU in the fourth quarter of 2025.

In November 2024, the FASB issued ASU No.

6 unchanged sentences

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) :

Targeted Improvements to the Accounting for Internal-Use Software.

This ASU modernizes the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.

Under this ASU, costs are capitalized when management has authorized and committed funding and it is probable the project will be completed and the software used as intended.

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

Early adoption is permitted and the amendments in this update permit an entity to apply the new guidance using a prospective, retrospective or modified transition approach.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures.

12 unchanged sentences

2025 Activity

LesserEvil, LLC

On 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.

The purchase consideration, inclusive of the acquisition date fair value of the contingent consideration and certain holdbacks, was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:

Initial Allocation

Goodwill $ 289,142

Other intangible assets 604,500

Current assets acquired, including cash and cash equivalents 65,060

Property, plant and equipment, net 15,572

Other non-current assets, primarily operating lease ROU assets 28,214

Current liabilities assumed ( 21,141 )

Other long-term liabilities, primarily operating lease liabilities ( 22,054 )

Deferred income taxes ( 144,143 )

Net assets acquired $ 815,150

The purchase price allocation presented above is preliminary.

We are in the process of evaluating additional information necessary to finalize the valuation of assets acquired and liabilities assumed as of the acquisition date including, but not limited to, post-closing adjustments to the working capital acquired including certain holdbacks, as well as the valuation and step-up on property, plant and equipment.

The final fair value determination could result in material adjustments to the values presented in the preliminary purchase price allocation, including other intangible assets and goodwill.

We expect to finalize the purchase price allocation by mid-2026.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets).

The goodwill derived from this acquisition is not expected to be deductible for tax purposes and reflects the value of leveraging our brand building expertise, supply chain capabilities and retail relationships to accelerate growth and access to the portfolio of LesserEvil’s products.

The Hershey Company | 2025 Form 10-K | Page 64

THE HERSHEY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

Other intangible assets include the following estimated useful lives and values:

Estimated Useful Life Initial Allocation

Trademarks Indefinite $ 303,000

Customer relationships 20 years

Other intangible assets $ 604,500

2024 Activity

On November 8, 2024, we completed the acquisition of the Sour Strips brand from Actual Candy, LLC.

6 unchanged sentences

The purchase consideration, inclusive of the acquisition date fair value of the contingent consideration, was allocated to minimal net assets acquired, goodwill and other intangible assets.

The purchase price allocation is preliminary as we are in the process of evaluating additional information necessary to finalize the valuation of assets acquired and liabilities assumed as of the acquisition date including, but not limited to, post-closing adjustments to the working capital acquired.

The final fair value determination is not expected to result in material adjustments to our preliminary purchase price allocation, including other intangible assets and goodwill.

We expect to finalize the purchase price allocation by mid-2025.

The purchase price allocation was finalized as of the second quarter of 2025

and included an immaterial amount of measurement period adjustments.

The measurement period adjustments to the

initial allocation were based on more detailed information obtained about the specific assets acquired and liabilities

assumed, specifically, post-closing adjustments to the working capital acquired.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired (including the identifiable intangible assets).

9 unchanged sentences

The acquisition has been accounted for as a business combination and, accordingly, Weaver has been included within the North America Salty Snacks segment from the date of acquisition.

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values and consisted of $ 85,231 to goodwill,

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values and consisted of $ 85,231 to goodwill, $ 79,136 to property, plant and equipment, net and $ 1,451 to other net assets acquired.

The purchase price allocation has been finalized as of the fourth quarter of 2023 and did not include measurement period adjustments.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired.

The goodwill derived from this acquisition is deductible for tax purposes and reflects the value of leveraging our supply chain capabilities to accelerate growth and access to our portfolio of salty snacks products.

The Hershey Company | 2025 Form 10-K | Page 65

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

$ 79,136 to property, plant and equipment, net and $ 1,451 to other net assets acquired.

The purchase price allocation has been finalized as of the fourth quarter of 2023 and did not include measurement period adjustments.

Goodwill was determined as the excess of the purchase price over the fair value of the net assets acquired.

GOODWILL AND INTANGIBLE ASSETS

11 unchanged sentences

— 289,142 — 289,142

Measurement period adjustments 1,382 — — 1,382

Impairment loss — — ( 6,403 ) ( 6,403 )

Foreign currency translation 4,859 — 1,272 6,131

1 unchanged sentence

$ 2,039,098 $ 946,143 $ 10,764 $ 2,996,005

In 2025, we recognized an immaterial non-cash goodwill impairment charge related to a reporting unit within our International segment.

We had no goodwill impairment charges in 2024 or 2023.

12 unchanged sentences

$ 2,475,698 $ 1,873,866

In 2025, the gross carrying amount of our intangible assets and corresponding accumulated amortization increased as a result of the second quarter purchase of the Fulfil brand in North America and the fourth quarter acquisition of LesserEvil.

Total amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 85,398 , $ 84,640 and $ 88,771 , respectively.

9 unchanged sentences

As 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 $ 1.35 billion unsecured revolving credit facility with the option to increase borrowings by an additional $ 500 million with the consent of the lenders.

This facility is scheduled to expire on April 26, 2028;

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.

24 unchanged sentences

0.900 % Notes (1)

November 15, 2024 — 300,000

0.900 % Notes

June 1, 2025 — 300,000

6 unchanged sentences

4.550 % Notes (3)

February 24, 2028 500,000 —

4.250 % Notes

May 4, 2028 350,000 350,000

2 unchanged sentences

4.750 % Notes (3)

February 24, 2030 500,000 —

1.700 % Notes

June 1, 2030 350,000 350,000

4.950 % Notes (3)

February 24, 2032 500,000 —

4.500 % Notes

May 4, 2033 400,000 400,000

5.100 % Notes (3)

February 24, 2035 500,000 —

3.375 % Notes

August 15, 2046 300,000 300,000

9 unchanged sentences

Long-term portion $ 4,681,194 $ 3,190,210

(1) In November 2024, we repaid $ 300,000 of 2.050 % Notes due upon their maturity.

(2) During the second quarter of 2023, we issued $ 350,000 of 4.250 % Notes due in May 2028 and $ 400,000 of 4.500 % Notes due in May 2033 (together, the “2023 Notes”).

(1) In June 2025, we repaid $ 300,000 of 0.900 % Notes due upon their maturity.

(2) In August 2025, we repaid $ 300,000 of 3.200 % Notes due upon their maturity.

(3) During the first quarter of 2025, we issued $ 500,000 of 4.550 % Notes due in February 2028, $ 500,000 of 4.750 % Notes due in February 2030, $ 500,000 of 4.950 % Notes due in February 2032 and $ 500,000 of 5.100 % Notes due in February 2035 (together, the “2025 Notes”).

Proceeds from the issuance of the 2025 Notes, net of discounts and issuance costs, totaled $ 1,984,545 .

70 unchanged sentences

Derivative liabilities are classified on our Consolidated Balance Sheets within accrued liabilities and other long-term liabilities.

(2) As of December 31, 2024, amounts reflected on a net basis in assets were assets of $ 533,115 and liabilities of $ 32,998 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period and the fair value of options contracts based on quoted market prices.

The comparable amounts reflected on a net basis in liabilities at December 31, 2023 were assets of $ 29,881 and liabilities of $ 30,493 .

(2) As of December 31, 2025, amounts reflected on a net basis in liabilities were assets of $ 46,467 and liabilities of $ 63,531 , which are associated with cash transfers receivable or payable on commodities futures contracts reflecting the change in quoted market prices on the last trading day for the period and the fair value of options contracts based on quoted market prices.

The comparable amounts reflected on a net basis in assets at December 31, 2024 were assets of $ 533,115 and liabilities of $ 32,998 .

At December 31, 2025 and 2024, the remaining amount reflected in assets and liabilities related to the fair value of other non-exchange traded derivative instruments, respectively.

41 unchanged sentences

Foreign exchange contracts (1) — 3,095 — 3,095

Deferred compensation derivatives (3) — 775 — 775

Commodities futures and options (3) 20,829 — — 20,829

24 unchanged sentences

In addition to assets and liabilities that are recorded at fair value on a recurring basis, GAAP requires that, under certain circumstances, we also record assets and liabilities at fair value on a nonrecurring basis.

2024 Activity

In connection with the acquisition of Sour Strips in 2024, as discussed in Note 2 , we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and the relief-from-royalty, a form of the multi-period excess earnings, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.

Additionally, we estimated the fair value of the contingent consideration using a Monte Carlo simulation model.

2025 and 2024 Activity

In connection with the acquisition of LesserEvil in 2025 and Sour Strips in 2024, as discussed in Note 2 , we used various valuation techniques to determine fair value, with the primary techniques being discounted cash flow analysis and the relief-from-royalty, a form of the multi-period excess earnings, which use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy.

Additionally, we estimated the fair value of the contingent consideration using a Monte Carlo simulation model for each acquisition.

2023 Activity

62 unchanged sentences

Supplemental cash flow and other information related to leases were as follows:

2025 2024 2023

Cash paid for amounts included in the measurement of lease liabilities:

35 unchanged sentences

In the fourth quarter of 2020, we commenced a program (“International Optimization Program”) to streamline resources and investments in select international markets, including the optimization of our China operating model that will improve our operational efficiency and provide for a strong, sustainable, and simplified base going forward.

The International Optimization Program was originally expected to total pre-tax costs of $ 50,000 to $ 75,000 , with cash costs in the range of $ 40,000 to $ 65,000 , primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities.

The International Optimization Program originally expected to total pre-tax costs of $ 50,000 to $ 75,000 , with cash costs in the range of $ 40,000 to $ 65,000 , primarily related to workforce reductions of approximately 350 positions outside of the United States, costs to consolidate and relocate production, and third-party costs incurred to execute these activities.

The costs and related benefits of the International Optimization Program relate to the International segment.

1 unchanged sentence

This program was completed in 2023.

For the years ended December 31, 2023 and 2022, we recognized total costs associated with the International Optimization Program of $ 3,440 and $ 4,417 , respectively.

For the year ended December 31, 2023, we recognized total costs associated with the International Optimization Program of $ 3,440 .

These charges predominantly included third-party charges in support of our initiative to transform our China operating model, as well as severance and employee benefit costs.

Since inception, we have incurred pre-tax charges to execute the program totaling $ 53,799 .

Since inception through completion, we incurred pre-tax charges to execute the program totaling $ 53,799 .

Costs associated with business realignment activities are classified in our Consolidated Statements of Income as follows:

55 unchanged sentences

15,986 16,656

Derivative instruments

Lease liabilities

28 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

The following table reconciles the federal statutory income tax rate with our effective income tax rate:

The following table presents the updated requirements of ASU 2023-09 for 2025 and reconciles the federal statutory income tax rate with our effective income tax rate:

For the year ended December 31, 2025

Amount ($) Percent (%)

Federal statutory income tax rate $ 254,984 21.0 %

Effect of cross-border tax laws

Foreign branch ( 22,863 ) ( 1.9 )

Other 4,660 0.4

Domestic federal

Solar income tax credit investments ( 29,116 ) ( 2.4 )

Other ( 1,864 ) ( 0.2 )

Changes in valuation allowances ( 8,102 ) ( 0.7 )

Non-taxable or non-deductible items 6,020 0.5

Other, net ( 3,786 ) ( 0.3 )

State and local income taxes, net of federal income tax effect (1) 49,658 4.1

Foreign tax effects

Changes in valuation allowance 28,842 2.4

Other ( 3,140 ) ( 0.3 )

Transfer pricing reimbursement ( 15,343 ) ( 1.3 )

Other 11,161 1.0

Other income-based taxes 13,381 1.1

Other ( 14,911 ) ( 1.2 )

Other foreign jurisdictions 2,911 0.3

Worldwide changes in unrecognized tax benefits 58,457 4.8

Effective income tax rate $ 330,949 27.3 %

(1) During the year ended December 31, 2025, state taxes in Pennsylvania, California, Indiana, and Illinois made up the majority (greater than 50%) of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the following table reconciles the federal statutory income tax rate with our effective income tax rate:

For the years ended December 31, 2024 2023

8 unchanged sentences

Effective income tax rate 10.2 % 14.3 %

The Hershey Company | 2025 Form 10-K | Page 79

THE HERSHEY COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(amounts in thousands, except share data or if otherwise indicated)

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

13 unchanged sentences

We report accrued interest and penalties related to unrecognized tax benefits in income tax expense.

We recognized a net tax benefit of $ 7,068 in 2024, and a net tax expense of $ 12,027 and $ 4,862 in 2023 and 2022, respectively, for interest and penalties.

We recognized a net tax benefit of $ 14,472 in 2025, a net tax benefit of $ 7,068 in 2024 and a net tax expense of $ 12,027 in 2023, respectively, for interest and penalties.

Accrued net interest and penalties were $ 44,786 as of December 31, 2025, and $ 30,286 as of December 31, 2024.

4 unchanged sentences

Based on our current assessments, we believe adequate provision has been made for all income tax uncertainties.

We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $ 5,462 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits.

As of December 31, 2024, we had approximately $ 1.1 billion of undistributed earnings of our international subsidiaries.

As of December 31, 2025, we had approximately $ 770,866 of undistributed earnings of our international subsidiaries.

We 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 beyond the one-time U.S.

repatriation tax due under the 2017 Tax Cuts and Jobs Act.

The following table presents the updated requirements of ASU 2023-09 for 2025 which requires additional information about cash taxes paid disaggregated by jurisdiction.

Cash taxes paid for prior periods are presented as a supplemental disclosure in the Consolidated Statements of Cash Flows:

For the year ended December 31, 2025

Federal $ 20,013

State & Local

Pennsylvania 7,589

Mexico 44,039

Switzerland 24,693

Total cash paid for income taxes $ 140,616

The Hershey Company | 2025 Form 10-K | Page 80

2 unchanged sentences

(amounts in thousands, except share data or if otherwise indicated)

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law.

The OBBBA introduces changes to United States tax policy, trade regulations, and federal spending priorities.

Key provisions include the extension and modification of tax provisions from the 2017 Tax Cuts and Jobs Act, modification of certain energy-related tax credits and incentives, and timing of deductions related to certain domestic expenses.

The OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025.

Organization for Economic Cooperation Development

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Actuarial (gain) loss 18,974 ( 5,337 ) 20,668 4,845

Curtailment — — — ( 740 )

Settlement ( 70,647 ) ( 64,665 ) ( 2,762 ) —

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Net amounts recognized in AOCI $ ( 83,982 ) $ ( 112,399 ) $ ( 23,637 ) $ ( 9,698 )

The projected benefit obligation during 2024 was impacted by actuarial gain of $ 5,337 which was mainly the result of the discount rate assumption increasing from 5.1 % at December 31, 2023 to 5.5 % at December 31, 2024.

The projected benefit obligation during 2025 was impacted by actuarial loss of $ 18,974 which was mainly the result of the discount rate assumption decreasing from 5.5 % at December 31, 2024 to 5.2 % at December 31, 2025.

The accumulated benefit obligation for all defined benefit pension plans was $ 733,179 as of December 31, 2025 and $ 753,886 as of December 31, 2024.

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This approach does not affect the measurement of our pension and other post-retirement benefit liabilities but generally results in lower benefit expense in periods when the yield curve is upward sloping.

For purposes of measuring our post-retirement benefit obligation at December 31, 2024, we assumed a 6.9 % annual rate of increase in the per capita cost of covered health care benefits for 2025, grading down to 4.9 % by 2033.

For purposes of measuring our post-retirement benefit obligation at December 31, 2025, we assumed an 8.7 % annual rate of increase in the per capita cost of covered health care benefits for 2026, grading down to 4.9 % by 2034.

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As of December 31, 2025, actual allocations were consistent with the targets and within our allowable ranges.

We expect the level of volatility in pension plan asset returns to be in line with the overall volatility of the markets within

We expect the level of volatility in pension plan asset returns to be in line with the overall volatility of the markets within each asset class.

The Hershey Company | 2025 Form 10-K | Page 84

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(amounts in thousands, except share data or if otherwise indicated)

each asset class.

The following table sets forth by level, within the fair value hierarchy (as defined in Note 6 ), pension plan assets at their fair values as of December 31, 2025:

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9,520 9,139 8,828 8,627 8,010 36,289

Annuitization of Other Post Employment Benefits

On August 21, 2023, the Hershey Employee Benefits Committee approved the purchase of an irrevocable group annuity contract with an insurance company for eligible retirees of The Hershey Company Retiree Medical and Life Insurance Plan to cover their medical benefits.

On August 31, 2023, we paid $ 88,689 for the irrevocable group annuity contract.

As a result of this transaction, we remeasured the projected benefit obligation and recognized a $ 926 non-cash pre-tax settlement charge during the quarter ended October 1, 2023.

Savings Plans

The Company sponsors several defined contribution plans to provide retirement benefits to employees.

Contributions to The Hershey Company 401(k) Plan and similar plans for non-domestic employees are based on a portion of eligible

Contributions to The Hershey Company 401(k) Plan and similar plans for non-domestic employees are based on a portion of eligible pay up to a defined maximum.

All matching contributions were made in cash.

Expense associated with the defined contribution plans was $ 72,889 in 2025, $ 74,094 in 2024 and $ 67,763 in 2023.

The Hershey Company | 2025 Form 10-K | Page 86

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(amounts in thousands, except share data or if otherwise indicated)

pay up to a defined maximum.

All matching contributions were made in cash.

Expense associated with the defined contribution plans was $ 74,094 in 2024, $ 67,763 in 2023 and $ 61,477 in 2022.

STOCK COMPENSATION PLANS

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Vesting is contingent upon the achievement of certain performance objectives.

We grant PSUs over 3 -year performance cycles.

If we meet targets for financial measures at the end of the applicable 3 -year performance cycle, we award a resulting number of shares of our Common Stock to the participants.

We grant PSUs over three-year performance cycles.

If we meet targets for financial measures at the end of the applicable three-year performance cycle, we award a resulting number of shares of our Common Stock to the participants.

The number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with the terms established at the time of the award .

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The performance scores of PSUs granted in 2025, 2024, and 2023 can range from 0 % to 250 % of the targeted amounts.

We recognize the compensation expense associated with PSUs ratably over the 3 -year term.

We recognize the compensation expense associated with PSUs ratably over the three-year term.

Compensation expense is based on the grant date fair value because the grants can only be settled in shares of our Common Stock.

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The following table sets forth information about the fair value of the PSUs and RSUs granted for potential future distribution to employees and non-employee directors.

In addition, the table provides assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant.

In addition, the table provides weighted average assumptions used to determine the fair value of the market-based total shareholder return component using the Monte Carlo simulation model on the date of grant.

For the years ended December 31, 2025 2024 2023

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(i) North America Confectionery, (ii) North America Salty Snacks and (iii) International.

This organizational structure aligns with how our CODM, Michele Buck, Chairman of the Board, 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.

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.

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Unallocated corporate expense (1) 814,313

Unallocated mark-to-market gains on commodity derivatives ( 460,437 )

Unallocated mark-to-market losses on commodity derivatives 423,161

Costs associated with business realignment activities (see Note 9 )

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Unallocated corporate expense (1) 701,266

Unallocated mark-to-market losses on commodity derivatives 58,939

Unallocated mark-to-market gains on commodity derivatives ( 460,437 )

Costs associated with business realignment activities (see Note 9 )

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Net gains on commodity derivative positions reclassified from unallocated to segment income 441,998 49,433 5,854

Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains) $ ( 460,437 ) $ 58,939 $ 78,182

As of December 31, 2024, the cumulative amount of mark-to-market gains on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $ 410,230 .

Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax gains on commodity derivatives of $ 143,779 to segment operating results in the next twelve months.

Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains) $ 423,161 $ ( 460,437 ) $ 58,939

As of December 31, 2025, the cumulative amount of mark-to-market losses on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $ 12,930 .

Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax losses on commodity derivatives of $ 23,752 to segment operating results in the next twelve months.

Depreciation and amortization expense included within segment income presented above is as follows:

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Class B Stock can be converted into Common Stock on a share-for-share basis at any time.

During 2024, no shares of Class B Stock were converted into Common Stock.

During 2023 and 2022, 3,500,000 shares and 2,500,000 shares, respectively, of Class B Stock were converted to Common Stock by Hershey Trust Company, as trustee for the Milton Hershey School Trust (the “School Trust”).

During 2025 and 2024, no shares of Class B Stock were converted into Common Stock.

During 2023, 3,500,000 shares of Class B Stock were converted to Common Stock by Hershey Trust Company, as trustee for the Milton Hershey School Trust (the “School Trust”).

Changes in the outstanding shares of Common Stock for the past three years were as follows:

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Net shares outstanding at end of year 202,839,656 202,383,069 204,392,926

On August 16, 2022, the IRA was signed into law, which enacted a 1% excise tax on share repurchases beginning after December 31, 2022.

As of December 31, 2024 and December 31, 2023, Hershey’s excise tax associated with net share repurchases was $ 4.7 million and $ 2.4 million, respectively.

A corresponding liability for the December 31, 2024 excise tax associated with net share repurchases is classified on our Consolidated Balance Sheets within accrued liabilities.

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which enacted a 1% excise tax on share repurchases beginning after December 31, 2022.

During 2025, we had no share repurchases or excise tax related to treasury stock activity.

As of December 31, 2024, the Company’s excise tax associated with net share repurchases was $ 4.7 million.

A corresponding liability for the December 31, 2024 excise tax associated with net share repurchases is classified on our Consolidated Balance Sheets within accrued liabilities, and was subsequently paid in 2025.

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

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As a result of this repurchase, our July 2018 share repurchase authorization program was completed in February 2023.

In February 2022, the Company entered into a Stock Purchase Agreement with Hershey Trust Company, as trustee for the School Trust, pursuant to which the Company purchased 1,000,000 shares of the Company’s Common Stock from the School Trust at a price equal to $ 203.35 per share, for a total purchase price of $ 203,350 .

COMMITMENTS AND CONTINGENCIES

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Collective bargaining agreements covered approximately 5,570 employees, or approximately 28 % of the Company’s employees worldwide.

During 2025, agreements will be negotiated for certain employees at seven facilities, none of which are within the United States, comprising approximately 69 % of total employees under collective bargaining agreements.

During 2026, agreements will be negotiated for certain employees at six facilities, one of which are within the United States, comprising approximately 76 % of total employees under collective bargaining agreements.

We currently expect that we will be able to renegotiate such agreements on satisfactory terms when they expire.

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Most transactions with these related parties are immaterial and do not require disclosure, but certain transactions are more significant in nature and have been deemed material for disclosure.

There were no material related party transactions with Hershey Trust Company and/or its affiliates for the year ended December 31, 2024.

A summary of material related party transactions with Hershey Trust Company and/or its affiliates for the years ended December 31, 2023 and 2022 is noted below.

Sale and Donation of Property, Plant and Equipment

In May 2022, the Company entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with Hershey Trust Company, as trustee for the School Trust, pursuant to which the Company agreed to sell certain real and personal property consisting of approximately six acres of land located in Hershey, Pennsylvania, together with portions of a building located on the land.

Additionally, in June 2022, the Company entered into a Donation Agreement with Hershey Trust Company, as trustee for The M.S.

Hershey Foundation, pursuant to which the Company agreed to donate a portion of the building concurrently with the closing of the Purchase Agreement.

The sale and donation transactions closed in June 2022.

Total proceeds from the sale were approximately $ 6,300 (net of transaction and closing costs), resulting in a loss of $ 13,568 , which was recorded in the SM&A expense caption within the Consolidated Statements of Income.

The fair values of the disposed assets were supported by a proposed sales price submitted by a third-party buyer received prior to executing the Purchase Agreement.

There were no material related party transactions with Hershey Trust Company and/or its affiliates for the year ended December 31, 2025 or 2024.

A summary of material related party transactions with Hershey Trust Company and/or its affiliates for the year ended December 31, 2023 is noted below.

Stock Purchase Agreements

In February 2023 and February 2022, the Company entered into Stock Purchase Agreements with Hershey Trust Company, as trustee for the School Trust, pursuant to which the Company purchased shares of its Common Stock from the School Trust (see Note 14 ).

In February 2023, the Company entered into Stock Purchase Agreements with Hershey Trust Company, as trustee for the School Trust, pursuant to which the Company purchased shares of its Common Stock from the School Trust (see Note 14 ).

The Hershey Company | 2025 Form 10-K | Page 98

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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-K

Item 8. Financial Statements and Supplementary Data