Hershey (HSY) 10-K risk factor changes: FY2024 vs FY2023

Approximately [removed: 72%] [added: 74%] of our manufacturing capacity is located in the United States.

- Pandemics, [removed: epidemics or] [added: epidemics, coronavirus disease and/or] other outbreak of [removed: disease (such as the coronavirus disease 2019 (“COVID-19”) global pandemic);][added: disease;]

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Investors, customers, advisory services, government regulators and other market participants [removed: have increasingly] [added: may be] focused on the environmental or sustainability [removed: practices] [added: practices, disclosures and performance] of [removed: companies, including Hershey.][added: companies.]

The costs of [removed: these] [added: our] voluntary commitments may be greater than expected, and there can be no assurance the Company will achieve its goals, or meet the evolving sustainability expectations and standards of our investors or other external stakeholders.

Any failure to achieve our goals, a perception of our failure to act responsibly with respect to the environment, or failure to respond to new or evolving legal and regulatory [added: requirements or other sustainability concerns could adversely affect our business, reputation and increase risk of litigation.]

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[removed: If] [added: We continue to monitor and use our risk management strategy where possible to hedge commodity prices in order to mitigate corresponding increases in our raw materials and energy costs, however, if] we are unable to offset cost increases for major raw materials and energy, there could be a negative impact on our financial condition and results of operations.

If we are not able to increase our selling prices or reduce product sizes (including if inflation outpaces our pricing elasticity) sufficiently, or in a timely manner, to offset increased raw material, energy or other input costs, including packaging, freight, [added: tariffs,] direct labor, overhead and employee benefits, or if our sales volume decreases significantly, there could be a negative impact on our financial condition and results of operations.

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Our largest customer, McLane Company, Inc., accounted for approximately [removed: 28%] [added: 27%] of our [removed: total] [added: consolidated] net sales in [removed: 2023.][added: 2024.]

While we believe significant operating synergies can be obtained in connection with these acquisitions, achievement of these synergies will be driven by our ability to successfully leverage Hershey’s [added: resources, expertise, capability-building, distribution locations and customer base.]

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[removed: In addition, the acquisitions of Dot’s and Pretzels are] [added: 2021 were] important steps in our journey to expand our breadth in snacking, as they should enable us to bring scale and category management capabilities to a key sub-segment of the warehouse snack aisle.

If we are unable to successfully couple Hershey’s scale and expertise in brand building with [removed: Lily’s, Dot’s and Pretzels’] [added: the] existing [removed: operations,] [added: operations of our acquired brands,] it may impact our ability to expand our snacking footprint at our desired pace.

In [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively, we derived approximately [removed: 12.7%, 12.5%] [added: 12.8%, 12.7%] and [removed: 13.0%] [added: 12.5%] of our net sales from customers located outside of the United States.

Additionally, approximately [removed: 17%] [added: 15%] of our total long-lived assets were located outside of the United States as of December 31, [removed: 2023.][added: 2024.]

- The imposition of [removed: tariffs,] [added: tariffs on U.S. imports and retaliatory tariffs in response,] quotas, trade barriers, other trade protection measures and import or export licensing requirements;

This program was intended to increase our operating effectiveness and efficiency, to reduce our costs and/or to generate savings that can be reinvested in other areas of our [added: business.]

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 13 | | | [removed: ] [added: ] | | |

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

Changes in governmental [removed: laws and] [added: laws,] regulations [added: and policies] could increase our costs and liabilities or impact demand for our products.

Changes in U.S. and non-U.S. [removed: laws and] [added: laws,] regulations and [added: policies and] the manner in which they are interpreted or applied may alter our business environment.

These negative impacts could result from changes in food and drug laws, laws related to advertising and marketing practices, accounting standards, taxation compliance and requirements, [added: tariffs on U.S. imports and retaliatory tariffs in response,] competition laws, employment laws, import/export requirements and environmental laws, among others.

The EUDR is scheduled to be effective in December [removed: 2024.][added: 2025, following a one-year postponement.]

Volatility in food and energy costs, sustained global recessions, broad political instability, rising unemployment, pandemic, or other outbreak of [removed: disease (such as COVID-19),] [added: disease,] climate change, weather, natural and other [removed: disasters] [added: disasters, changing consumer demand,] and declines in personal spending could adversely impact our revenues, profitability and financial condition.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 14 | | | [removed: ] [added: ] | | |

[removed: The] [added: This] ERP system [added: replaces our legacy operating and financial systems and] is designed to accurately maintain the Company’s financial records, enhance operational functionality and provide timely information to the Company’s management team related to the operation of the business.

The ERP system implementation process has required, and will continue to require, the investment of significant personnel and financial [removed: resources.][added: resources as we support post-implementation efforts and system functionality.]

We may not be able to successfully [removed: implement the ERP system] [added: support post-implementation efforts] without experiencing [removed: further] delays, increased costs and other difficulties.

If we are unable to successfully [removed: design and implement the] [added: manage post-implementation efforts related to our] new ERP system as planned, our financial positions, results of operations and cash flows could be negatively impacted.

[removed: Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the] effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be further delayed.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 15 | | | [removed: ] [added: ] | | |

The Company publishes its environmental goals, with a particular focus on achieving an absolute reduction in our Scope 1 and 2 GHG emissions, Forest Land and Agriculture (FLAG) emissions, and non-FLAG emissions consistent with global environmental standards.

For example, our cost of sales during the year ended 2024 compared to the same period of 2023 experienced an incremental $563.0 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases, more than offsetting higher commodity costs.

During the year ended 2024, market prices for the majority of our exchange traded commodities increased, including cocoa, which has increased approximately 130% since the beginning of the year.

In 2024, we completed the acquisition of the Sour Strips brand from Actual Candy, LLC.

Sour Strips is an emerging sour candy brand.

In addition, the acquisitions of Dot’s and Pretzels in

Additionally, in February 2024, the Board of Directors approved the Advancing Agility & Automation

We are in the process of a multi-year implementation of a new global enterprise resource planning (“ERP”) system; specifically, in April 2024, we operationalized the final phase of our project by implementing our new ERP system in the North America Confectionery segment and select business units included in our International segment.

Any disruptions or difficulties in using our ERP system could result in harm to our business, including our ability to forecast, manufacture or facilitate the shipment of our product, record net sales and collect our outstanding receivables.

Additionally, if the ERP system does not operate as intended, the

Shareholders and financial institutions have increasingly evaluated a company’s ESG practices, disclosures and performance before making investments or other financial decisions.

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

requirements or other sustainability concerns could adversely affect our business, reputation and increase risk of litigation.

In 2021, we successfully completed the divestiture of LSFC as we better prioritize resources against assets and brands that fit our business model and scale capabilities.

Additionally, we completed the acquisitions of Lily’s in June 2021 and Dot’s and Pretzels in December 2021.

resources, expertise, capability-building, distribution locations and customer base.

business.

For instance, in September 2023, we experienced a smishing breach, which did not have an impact on our consolidated financial statements.

Promptly after extracting the threat actor, we worked with a cyber expert firm and determined that certain employee and third-party personal information was exposed.

We are in the process of a multi-year implementation of a new global enterprise resource planning (“ERP”) system.

This ERP system will replace our existing operating and financial systems.

- [Business Model and Growth [removed: Strategy](#i4548f14c535242b19fed9e6fe5606926_43)][added: Strategy](#ibc2a376758d74fd1b63dc3bee1604694_46)]

- [Trends Affecting Our [removed: Business](#i4548f14c535242b19fed9e6fe5606926_49)][added: Business](#ibc2a376758d74fd1b63dc3bee1604694_52)]

- [Consolidated Results of [removed: Operations](#i4548f14c535242b19fed9e6fe5606926_52)][added: Operations](#ibc2a376758d74fd1b63dc3bee1604694_55)]

- [Segment [removed: Results](#i4548f14c535242b19fed9e6fe5606926_55)][added: Results](#ibc2a376758d74fd1b63dc3bee1604694_58)]

- [Liquidity and Capital [removed: Resources](#i4548f14c535242b19fed9e6fe5606926_58)][added: Resources](#ibc2a376758d74fd1b63dc3bee1604694_61)]

- [Critical Accounting Policies and [removed: Estimates](#i4548f14c535242b19fed9e6fe5606926_61)][added: Estimates](#ibc2a376758d74fd1b63dc3bee1604694_64)]

We report our operations through three segments: (i) North America Confectionery, (ii) North America Salty Snacks and (iii) International, as discussed in [Note [removed: 13](#i4548f14c535242b19fed9e6fe5606926_136)] [added: 13](#ibc2a376758d74fd1b63dc3bee1604694_139)] to the Consolidated Financial Statements.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 22 | | | [removed: ] [added: ] | | |

These surveys are further supplemented with quarterly and informative enterprise [added: summits] and team [removed: town halls,] [added: “Ask Me Anything” meetings,] which, in conjunction with the continuous listening surveys, generate stronger employee engagement with the Company’s strategy, initiatives and leadership.

In [removed: 2023,] [added: 2024,] we maintained fair and equitable pay achievements, including [removed: 1:1] aggregate [removed: people of color] [added: salary U.S. gender] pay equity [removed: (2021)] and [removed: 1:1] aggregate [removed: gender] [added: U.S. salary people of color] pay [removed: (2020) for salaried employees in the United States.][added: equity.]

We market, sell and distribute our products under more than 90 brand names in approximately [removed: 80] [added: 70] countries worldwide.

Business [removed: Acquisitions and Divestitures][added: Acquisitions]

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 23 | | | [removed: ] [added: ] | | |

Despite specific actions taken to mitigate these gross margin pressures, [added: we continue to experience overall declines in consumer demands for our products, and] higher prices for direct materials used to manufacture our products were, and continue to be, the primary incremental cost to our [removed: business.][added: business (see [Consolidated Results of Operations](#ibc2a376758d74fd1b63dc3bee1604694_55) included in this MD&A).]

We utilize many exchange traded commodities for our business that are subject to price volatility, specifically cocoa products, which experienced [removed: an average increase in] [added: a] market [removed: prices] [added: price increase] of approximately [removed: 32% during 2023.][added: 70% throughout 2024 (see [Item](#ibc2a376758d74fd1b63dc3bee1604694_67) [7A](#ibc2a376758d74fd1b63dc3bee1604694_67) [- Quantitative and Qualitative Disclosures about Market Risk](#ibc2a376758d74fd1b63dc3bee1604694_67) included in this Annual Report on Form 10-K).]

Furthermore, certain geopolitical events, specifically the conflict between Russia and Ukraine, [added: as well as the imposition of tariffs on U.S. imports and retaliatory tariffs in response,] have increased global economic and political uncertainty.

For the year ended December 31, [removed: 2023, this] [added: 2024, neither the] conflict [removed: did not have] [added: between Russia and Ukraine, nor the imposition of tariffs on U.S. imports and retaliatory tariffs, had] a material impact on our commodity prices or supply availability.

However, we are continuing to monitor [added: each of these events] 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.

As of December 31, [removed: 2023,] [added: 2024,] we believe we have sufficient liquidity to satisfy our key strategic initiatives and other material cash requirements in both the short-term and in the long-term; 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 [removed: Resources](#i4548f14c535242b19fed9e6fe5606926_58)] [added: Resources](#ibc2a376758d74fd1b63dc3bee1604694_61)] included in this MD&A).

Based on the length and severity of [added: the] fluctuating [removed: levels of inflation,] [added: macroeconomic environment,] including price volatility for our commodities, the [removed: likelihood] [added: possibility] of a [removed: potential] recession, changes in consumer shopping and consumption behavior, and changes in geopolitical events, including the ongoing conflict between Russia and Ukraine, we may experience increasing supply chain costs, higher inflation and other impacts to our business.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 24 | | | [removed: ] [added: ] | | |

| For the years ended December 31, | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2023] [added: 2024] vs [removed: 2022] [added: 2023] | | | | | | [removed: 2022] [added: 2023] vs [removed: 2021] [added: 2022] | | |

| Net sales | | | | | | $ | [removed: 11,165.0] [added: 11,202.3] | | | | | $ | [removed: 10,419.3] [added: 11,165.0] | | | | | $ | [removed: 8,971.3] [added: 10,419.3] | | | | | [removed: 7.2] [added: 0.3] | | % | | | | [removed: 16.1] [added: 7.2] | | % |

| Cost of sales | | | | | | [removed: 6,167.2] [added: 5,901.4] | | | | | | [removed: 5,920.5] [added: 6,167.2] | | | | | | [removed: 4,922.7] [added: 5,920.5] | | | | | | [removed: 4.2] [added: (4.3)] | | % | | | | [removed: 20.3] [added: 4.2] | | % |

| Gross profit | | | | | | [removed: 4,997.8] [added: 5,300.9] | | | | | | [removed: 4,498.8] [added: 4,997.8] | | | | | | [removed: 4,048.6] [added: 4,498.8] | | | | | | [removed: 11.1] [added: 6.1] | | % | | | | 11.1 | | % |

| *Gross margin* | | | | | | [removed: *44.8*] [added: *47.3*] | | *%* | | | | [removed: *43.2*] [added: *44.8*] | | *%* | | | | [removed: *45.1*] [added: *43.2*] | | *%* | | | | | | | | | | | | |

| Selling, Marketing & Administrative (“SM&A”) expense | | | | | | [removed: 2,436.5] [added: 2,373.6] | | | | | | [removed: 2,236.0] [added: 2,436.5] | | | | | | [removed: 2,001.4] [added: 2,236.0] | | | | | | [removed: 9.0] [added: (2.6)] | | % | | | | [removed: 11.7] [added: 9.0] | | % |

| *SM&A expense as a percent of net sales* | | | | | | [removed: *21.8*] [added: *21.2*] | | *%* | | | | [removed: *21.5%*] [added: *21.8%*] | | | | | | [removed: *22.3%*] [added: *21.5%*] | | | | | | | | | | | | | | |

| Business realignment costs | | | | | | [removed: 0.4] [added: 29.1] | | | | | | [removed: 2.0] [added: 0.4] | | | | | | [removed: 3.5] [added: 2.0] | | | | | | [removed: (77.8)] [added: NM] | | [removed: %] | | | | [removed: (43.6)] [added: (77.8)] | | % |

| Operating profit | | | | | | [removed: 2,560.9] [added: 2,898.2] | | | | | | [removed: 2,260.8] [added: 2,560.9] | | | | | | [removed: 2,043.7] [added: 2,260.8] | | | | | | [removed: 13.3] [added: 13.2] | | % | | | | [removed: 10.6] [added: 13.3] | | % |

| *Operating profit margin* | | | | | | [removed: *22.9*] [added: *25.9*] | | *%* | | | | [removed: *21.7*] [added: *22.9*] | | *%* | | | | [removed: *22.8*] [added: *21.7*] | | *%* | | | | | | | | | | | | |

| Interest expense, net | | | | | | [removed: 151.8] [added: 165.7] | | | | | | [removed: 137.6] [added: 151.8] | | | | | | [removed: 127.4] [added: 137.6] | | | | | | [removed: 10.3] [added: 9.1] | | % | | | | [removed: 8.0] [added: 10.3] | | % |

| Other (income) expense, net | | | | | | [removed: 237.2] [added: 258.6] | | | | | | [removed: 206.1] [added: 237.2] | | | | | | [removed: 119.1] [added: 206.1] | | | | | | [removed: 15.1] [added: 9.0] | | % | | | | [removed: 73.1] [added: 15.1] | | % |

| Provision for income taxes | | | | | | [removed: 310.1] [added: 252.7] | | | | | | [removed: 272.3] [added: 310.1] | | | | | | [removed: 314.4] [added: 272.3] | | | | | | [removed: 13.9] [added: (18.5)] | | % | | | | [removed: (13.4)] [added: 13.9] | | % |

| *Effective income tax rate* | | | | | | [removed: *14.3*] [added: *10.2*] | | *%* | | | | [removed: *14.2*] [added: *14.3*] | | *%* | | | | [removed: *17.5*] [added: *14.2*] | | *%* | | | | | | | | | | | | |

| Net income [removed: including noncontrolling interest] | | | | | | [removed: 1,861.8] [added: $] | [added: 2,221.2] | | | | | [removed: 1,644.8] [added: $] | [added: 1,861.8] | | | | | [removed: 1,482.8] [added: $] | [added: 1,644.8] | | | | | [removed: 13.2] [added: 19.3] | | % | | | | [removed: 10.9] [added: 13.2] | | % |

| Net income per share—diluted | | | | | | $ | [removed: 9.06] [added: 10.92] | | | | | $ | [removed: 7.96] [added: 9.06] | | | | | $ | [removed: 7.11] [added: 7.96] | | | | | [removed: 13.8] [added: 20.5] | | % | | | | [removed: 12.0] [added: 13.8] | | % |

[removed: These increases were] [added: The increase was] slightly offset by a volume decrease of 1.3% due to a decrease in consumer demand primarily in everyday core U.S. confection brands.

For the full year [removed: 2023,] [added: 2024,] our total U.S. retail takeaway increased [removed: 6.0%] [added: 0.8%] in the expanded multi-outlet combined plus convenience store channels [removed: (IRI MULO + C-Stores),] [added: (MULO+ w/ Convenience),] which includes candy, mint, gum, salty snacks and grocery items.

- [Overview](#ibc2a376758d74fd1b63dc3bee1604694_49)

Additionally, four of our 10 Board members are women (40% representation).

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

Sour Strips is

an emerging sour candy brand and is available in a wide range of food distribution channels in the United States.

Throughout 2024, U.S. consumer behavior continued to shift and evolve, as cost fatigue and labor markets restrict income growth and constrain consumer spending and purchasing patterns.

As a result, consumer behavior related to our products has shifted.

As such, for the year ended December 31, 2024,we continued to experience a dynamic macroeconomic environment, including price volatility related to select commodities, resulting in corresponding incremental costs and gross margin pressures, and net sales and net income declines.

*2024 compared with 2023*

Net sales were $11,202.3 million in 2024 compared to $11,165.0 million in 2023, an increase of $37.3 million, or 0.3%.

The net sales increase reflects a favorable price realization of approximately 3% primarily due to higher list prices in the North America Confectionery and International segments, partially offset by declines in North America Salty Snacks.

The increase was partially offset by a volume decrease of approximately 2% due to declines in the North America Confectionery and International segments, partially offset by an increase in North America Salty Snacks.

The increase was further offset by a minimal unfavorable impact from foreign currency exchange rates.

channels.

*2024 compared with 2023*

Cost of sales were $5,901.4 million in 2024 compared to $6,167.2 million in 2023, a decrease of $265.8 million, or 4.3%.

The decrease included $637.9 million of favorable costs, driven by an incremental $563.0 million of favorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases (See [Item 7A - Quantitative and Qualitative Disclosures About Market Risk](#ibc2a376758d74fd1b63dc3bee1604694_67) for more information) and lower costs, primarily related to lower sales volume, in line with the declines in net sales noted above.

The decrease was partially offset by $372.1 million of higher costs, primarily driven by higher commodity costs from cocoa, higher supply chain costs, unfavorable mix and incremental business realignment costs.

Gross margin was 47.3% in 2024 compared with 44.8% in 2023, an increase of 250 basis points.

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

The increase was partially offset by higher commodity costs, unfavorable product mix and increased business realignment costs.

*2024 compared with 2023*

Selling, marketing and administrative (“SM&A”) expenses were $2,373.6 million in 2024 compared to $2,436.5 million in 2023, a decrease of $62.9 million, or 2.6%.

The decrease was driven by lower corporate expenses.

Total advertising and related consumer marketing expenses declined 0.1%% driven by North America Confectionery, significantly offset by increased spending in North America Salty Snacks.

SM&A expenses, excluding advertising and related consumer marketing, decreased approximately 3.8% in 2024 driven by lower compensation and benefit costs across segments.

The 2024 costs related primarily to the Advancing Agility &

Automation Initiative that the Board of Directors approved in February 2024.

*2024 compared with 2023*

Operating profit was $2,898.2 million in 2024 compared to $2,560.9 million in 2023, an increase of $337.3 million, or 13.2%.

Operating profit margin increased to 25.9% in 2024 from 22.9% in 2023 by the same factors noted above in gross margin.

*2024 compared with 2023*

Net interest expense was $165.7 million in 2024 compared to $151.8 million in 2023, an increase of $13.9 million, or 9.1%.

The increase in the expense was partially offset by a decrease in short-term foreign bank borrowings and an increase in interest income

*2024 compared with 2023*

*2024 compared with 2023*

*2024 compared with 2023*

Net income was $2,221.2 million in 2024 compared to $1,861.8 million in 2023, an increase of $359.4 million, or 19.3%.

Earnings Per Share (“EPS”)-diluted was $10.92 in 2024 compared to $9.06 in 2023, an increase of $1.86, or 20.5%.

Refer to [Note 13](#ibc2a376758d74fd1b63dc3bee1604694_139) Segment Information in our audited consolidated financial statements for reconciliations of net sales for our reportable segments to consolidated total net sales and of segment operating income to consolidated income before taxes.

- [Overview](#i4548f14c535242b19fed9e6fe5606926_46)

Our expansion into snacking was fueled by the acquisitions of Dot’s and Pretzels in December 2021 and the acquisition of Weaver in 2023, which are included in our North America Salty Snacks segment.

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 with 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, which 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.

In January 2021, we completed the divestiture of Lotte Shanghai Foods Co., Ltd. (“LSFC”), 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.

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

Net sales and net income increased during the year ended December 31, 2023; however, this was primarily driven by price increases on certain products across our portfolio.

Additionally, we continued to experience corresponding incremental costs and gross margin pressures during the year ended December 31, 2023 (see [Consol](#i4548f14c535242b19fed9e6fe5606926_52)[idated R](#i4548f14c535242b19fed9e6fe5606926_52)[esults of Operations](#i4548f14c535242b19fed9e6fe5606926_52) included in this MD&A).

We continue to monitor and use our risk management strategy where possible to hedge commodity prices in order to mitigate corresponding increases in our raw materials and energy costs.

| Less: Net gain (loss) attributable to noncontrolling interest | | | | | | — | | | | | | — | | | | | | 5.3 | | | | | | NM | | | | | | NM | | |

| Net income attributable to The Hershey Company | | | | | | $ | 1,861.8 | | | | | $ | 1,644.8 | | | | | $ | 1,477.5 | | | | | 13.2 | | % | | | | 11.3 | | % |

*2022 compared with 2021*

Net sales were $10,419.3 million in 2022 compared to $8,971.3 million in 2021, an increase of $1,448.0 million, or 16.1%.

The net sales increase reflects a volume increase of 8.0% due to higher prices on certain products, a 4.3% benefit from net acquisitions and divestitures driven by the 2021 acquisitions of Lily’s, Dot’s and Pretzels and a volume increase of 4.0% due to an increase in consumer demand primarily in everyday core U.S. confection brands and salty snack brands.

These increases were slightly offset by an unfavorable impact from foreign currency exchange rates of 0.2%.

Cost of sales were $5,920.5 million in 2022 compared with $4,922.7 million in 2021, an increase of $997.8 million, or 20.3%.

The increase was further driven by an incremental $40.8 million of unfavorable mark-to-market activity on our commodity derivative instruments intended to economically hedge future years’ commodity purchases.

Additionally, we incurred incremental costs of $263.3 million associated with our 2021 acquisitions of Dot’s and Pretzels.

These increases were offset by $74.0 million of favorable price realization and supply chain productivity.

Gross margin was 43.2% in 2022 compared with 45.1% 2021, a decrease of 190 basis points.

These declines were offset by favorable price realization and volume increases.

SM&A expenses were $2,236.0 million in 2022 compared to $2,001.4 million in 2021, an increase of $234.6 million, or 11.7%, driven by increased corporate expenses.

Total advertising and related consumer marketing expenses increased 2.7% driven by advertising increases in our confectionery brands and increased investment in our salty snacks portfolio, which were partially offset by cost efficiencies related to new media partners.

SM&A expenses, excluding advertising and related consumer marketing, increased approximately 16.3% in 2022 driven by an increase in acquisition and integration related costs, as well as higher compensation costs, investments in capabilities and technology and broad-based marketplace inflation.

Operating profit was $2,260.8 million in 2022 compared to $2,043.7 million in 2021, an increase of $217.1 million, or 10.6%.

Operating profit margin decreased to 21.7% in 2022 from 22.8% in 2021 driven by these same factors.

Net interest expense was $137.6 million in 2022 compared to $127.4 million in 2021, an increase of $10.2 million, or 8.0%.

The increase was partially offset due to lower average long-term debt balances, specifically resulting from the repayment of $84.7 million of 8.800% Debentures upon their maturity in February 2021 and $350 million of 3.100% Notes upon their maturity in May 2021.

Net income was $1,644.8 million in 2022 compared to $1,477.5 million in 2021, an increase of $167.3 million, or 11.3%.

EPS-diluted was $7.96 in 2022 compared to $7.11 in 2021, an increase of $0.85, or 12.0%.

The increase reflected a favorable price realization of 8.1% due to higher prices on certain products, a volume increase of 2.8% due to an increase in everyday core U.S. confection brands, and a 0.4% benefit from the 2021 acquisition of Lily’s.

These increases were partially offset by an unfavorable impact from foreign currency exchange rates of 0.2%.

Our North America Confectionery segment income was $2,811.1 million in 2022 compared to $2,475.9 million in 2021, an increase of $335.2 million, or 13.5%.

Refer to [Note [removed: 1](#i4548f14c535242b19fed9e6fe5606926_97)] [added: 1](#ibc2a376758d74fd1b63dc3bee1604694_100)] and [Note [removed: 5](#i4548f14c535242b19fed9e6fe5606926_112)] [added: 5](#ibc2a376758d74fd1b63dc3bee1604694_115)] to the Consolidated Financial Statements for further discussion of these derivative instruments and our hedging policies.

The total amount of short-term debt, net of cash, amounted to net debt of [removed: $318] [added: $576] million and net debt of [removed: $230] [added: $318] million, respectively, at December 31, [removed: 2023] [added: 2024] and [removed: 2022.][added: 2023.]

A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of December 31, [removed: 2023] [added: 2024] would have changed interest expense by approximately [removed: $3.1] [added: $7.0] million for [removed: 2023] [added: 2024] and [removed: $4.5] [added: $3.1] million for [removed: 2022.][added: 2023.]

A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at December 31, [removed: 2023] [added: 2024] and December 31, [removed: 2022] [added: 2023] by approximately [removed: $203] [added: $169] million and [removed: $187] [added: $203] million, respectively.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 43 | | | [removed: ] [added: ] | | |

| December 31, | | | | | | [removed: 2023] [added: 2024] | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | |

| Foreign currency forward exchange contracts to purchase foreign currencies | | | | | | $ | [removed: 88.8] [added: 184.2] | | | | | Euros Malaysian ringgit British pound | | | | | | $ | [removed: 58.3] [added: 88.8] | | | | | Euros Malaysian ringgit [added: British pound] | | |

| Foreign currency forward exchange contracts to sell foreign currencies | | | | | | $ | [removed: 155.3] [added: 140.2] | | | | | Canadian dollars Brazilian reals Japanese yen | | | | | | $ | [removed: 119.6] [added: 155.3] | | | | | Canadian dollars Brazilian reals Japanese yen [removed: Mexican pesos] | | |

At December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the net fair value of these instruments was an asset of $0.7 [removed: million and an asset of $3.9 million, respectively.][added: million.]

In addition, assuming an unfavorable 10% change in year-end foreign currency exchange rates, the fair value of these instruments would have declined by [removed: $20.2] [added: $32.3] million and [removed: $18.4] [added: $20.2] million, respectively, generally offset by a reduction in foreign exchange associated with our transactional activities.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 44 | | | [removed: ] [added: ] | | |

During [removed: 2023,] [added: 2024,] average cocoa futures contract prices increased [removed: 31.9%] [added: 131.5%] compared with [removed: 2022 and traded higher every month from January to December from $1.19 and $1.90 per pound,] [added: 2023] based on the Intercontinental Exchange futures contract.

The production forecast for the [removed: 2023 –] 2024 [added: - 2025] season is [removed: down significantly] [added: up over 30% combined] in Ghana and Ivory [removed: Coast by over 20% combined,] [added: Coast,] due to [removed: a combination of inclement weather, lower inputs] [added: better weather] and [removed: marginally increased] [added: significantly improved] farmer [removed: prices versus inflation.][added: prices.]

The prices reflect the monthly averages of the [removed: quotations at noon] [added: close prices] of the [removed: three] [added: nearest] active futures trading contracts [removed: closest to maturity] [added: (second position)] on the Intercontinental Exchange.

| | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Annual Average | | | | | | $ | [removed: 1.49] [added: 3.45] | | | | | $ | [removed: 1.13] [added: 1.49] | | | | | $ | [removed: 1.14] [added: 1.13] | | | | | $ | [removed: 1.11] [added: 1.14] | | | | | $ | [removed: 1.03] [added: 1.11] | |

| High | | | | | | [removed: 1.90] [added: 4.75] | | | | | | [removed: 1.22] [added: 1.90] | | | | | | [removed: 1.27] [added: 1.22] | | | | | | [removed: 1.29] [added: 1.27] | | | | | | [removed: 1.14] [added: 1.29] | | |

| Low | | | | | | [removed: 1.19] [added: 1.99] | | | | | | [removed: 1.06] [added: 1.19] | | | | | | [removed: 1.04] [added: 1.06] | | | | | | [removed: 1.00] [added: 1.04] | | | | | | [removed: 0.90] [added: 1.00] | | |

The U.S. delivered east coast refined sugar prices traded in a range [removed: from $0.62] [added: of $0.56] to [removed: $0.68] [added: $0.62] per pound during [removed: 2023.][added: 2024.]

Corn prices traded in the range from [removed: $4.74] [added: $3.90] to [removed: $6.83] [added: $4.85] per bushel during [removed: 2023.][added: 2024.]

Corn sweetener prices remained [removed: elevated] [added: consistent] due to tight capacity utilization throughout the industry.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 45 | | | [removed: ] [added: ] | | |

During [removed: 2023] [added: 2024,] prices for fluid dairy milk ranged from a low of [removed: $0.176] [added: $0.194] per pound to a high of [removed: $0.214] [added: $0.223] per pound, on a Class IV milk basis.

In [removed: 2023] [added: 2024] we continued utilizing soft and hard wheat futures as a risk management tool for our flour purchasing.

Hard wheat prices traded in the range of [removed: $6.20] [added: $5.35] to [removed: $8.94] [added: $7.45] per bushel during [removed: 2023,] [added: 2024,] while soft wheat prices traded in the range of [removed: $5.78] [added: $5.25] to [removed: $7.86] [added: $7.21] per bushel during [removed: 2023.][added: 2024.]

Peanut prices in the U.S. ranged from a low of [removed: $0.59] [added: $0.57] per pound to a high of $0.71 per pound during [removed: 2023.][added: 2024.]

Almond prices traded in the range of [removed: $1.75] [added: $2.15] per pound to [removed: $2.15] [added: $2.90] per pound during [removed: 2023.][added: 2024.]

Prices [removed: increased towards the end of] [added: in 2024 averaged higher than] 2023, driven by [added: a] smaller [removed: than expected] crop [added: size] and lower availability of small sized almonds.

Our open commodity derivative contracts had a notional value of [removed: $94.9] [added: $667.4] million as of December 31, [removed: 2023] [added: 2024] and [removed: $243.0] [added: $94.9] million as of December 31, [removed: 2022.][added: 2023.]

At the end of [removed: 2023,] [added: 2024,] the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses in [removed: 2023] [added: 2024] by [removed: $5.4] [added: $1.0] million, generally offset by a reduction in the cost of the underlying commodity purchases.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 46 | | | [removed: ] [added: ] | | |

Higher cocoa prices to the consumer has lowered consumption and a return to a surplus production environment is expected in the 2024 - 2025 growing season.

Source: The Cocoa Merchants Association of America Inc.

Prices softened in 2024, driven by large domestic beet and cane crops, as well as overall healthy supply.

A projected record yield for the 2024 U.S. crop kept U.S. supplies healthy and drove prices down compared to 2023.

Fluid dairy milk prices were higher than 2023 due to decreases in global milk production linked to HPAI avian flu virus and blue tongue virus which impacted herd in the U.S. and Europe, respectively.

Improved U.S. wheat production across the aggregate classes combined with weak global demand has resulted in lower prices across the calendar year.

Prices in 2024 averaged slightly higher than 2023, primarily driven by increased export demand in the first half of the year.

Despite higher cocoa prices to consumers, consumption remained consistent, leading to predictions of a large deficit, the third consecutive one by some accounts.

Source: International Cocoa Organization Quarterly Bulletin of Cocoa Statistics

Prices were historically high throughout 2023 due to lack of imports by the U.S. government resulting in an extremely tight domestic raw sugar market and continued strong demand which resulted in a scarcity market for much of the year.

A record crop from both Brazil and the U.S. in 2023 drove prices down throughout the year.

Fluid dairy milk prices were lower than 2022, driven by increases in global milk production linked to improved farmer margins, and exacerbated by a decline in U.S. dairy ingredient exports.

For the second year in a row, the conflict between Russia and Ukraine, in addition to poor U.S. weather, continued to result in volatility in the wheat market and impacted global availability of supplies.

Despite annual volatility, U.S. wheat remains uncompetitive in the world market, anchoring prices to their historical 5-year averages.

Prices increased in 2023 due to higher export demand in the latter half of the year and a smaller peanut crop.

We market, sell and distribute our products under more than 90 brand names in approximately [removed: 80] [added: 70] countries worldwide.

Financial and other information regarding our segments is provided in our Management’s Discussion and Analysis and [Note [removed: 13](#i4548f14c535242b19fed9e6fe5606926_136)] [added: 13](#ibc2a376758d74fd1b63dc3bee1604694_139)] to the Consolidated Financial Statements.

Business [removed: Acquisitions and Divestitures][added: Acquisitions]

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 2 | | | [removed: ] [added: ] | | |

- Within our North America Confectionery segment, our product portfolio includes a wide variety of chocolate offerings marketed and sold under the renowned brands of *Hershey’s*, *Reese’s* and *Kisses*, along with other popular chocolate and non-chocolate confectionery brands such as *Jolly Rancher*, *Almond Joy*, *Brookside, barkTHINS*, *Cadbury,* *Good & Plenty*, *Heath*, *Kit Kat®*, *Payday*, *Rolo®*, *Twizzlers*, [removed: *Whoppers* and *York*.][added: *Sour Strips, Whoppers*]

In [removed: 2023,] [added: 2024,] approximately [removed: 28%] [added: 27%] of our consolidated net sales were made to McLane Company, Inc., one of the largest wholesale distributors in the United States (“U.S.”) to convenience stores, drug stores, wholesale clubs and mass merchandisers and the primary distributor of our products to Wal-Mart Stores, Inc.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 3 | | | [removed: ] [added: ] | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 4 | | | [removed: ] [added: ] | | |

| Cadbury UK Limited | | | | | | *Cadbury Caramello* | | | | | | United States | | | | | | Minimum sales requirement exceeded in [removed: 2023] [added: 2024] | | |

| Société des Produits Nestlé SA | | | | | | *Kit Kat®* *Rolo®* | | | | | | United States | | | | | | Minimum unit volume sales exceeded in [removed: 2023] [added: 2024] | | |

Information concerning our research and development expense is contained in [Note [removed: 1](#i4548f14c535242b19fed9e6fe5606926_97)] [added: 1](#ibc2a376758d74fd1b63dc3bee1604694_100)] to the Consolidated Financial Statements.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 5 | | | [removed: ] [added: ] | | |

Beyond ordinary operating and capital expenditures that we make to comply with government regulations, including environmental laws and regulations, [removed: we have] [added: Hershey has] made [removed: a number of] [added: several] voluntary commitments to drive long-term growth and business resilience and reduce our environmental impacts, including efforts to eliminate commodity-driven deforestation and reduce greenhouse gas (“GHG”) emissions across our own operations and supply chain.

The annual operating and capital expenditures associated with [removed: these] ordinary course payments and additional climate change commitments are not material with respect to our results of operations, capital expenditures or competitive position.

To learn more about our [removed: ESG-related] [added: Sustainability-related] goals, progress and initiatives, as well as review our annual ESG Report and accompanying suite of [removed: ESG] [added: Environmental, Social and Governance (“ESG”)] reporting frameworks, policies, and disclosures, access the Sustainability section of our website at: https://www.thehersheycompany.com/en_us/sustainability.html.

The percentage of total consolidated net sales for our businesses outside of the United States was [removed: 12.7%] [added: 12.8%] for [removed: 2023, 12.5%] [added: 2024, 12.7%] for [removed: 2022] [added: 2023] and [removed: 13.0%] [added: 12.5%] for [removed: 2021.][added: 2022.]

The percentage of total long-lived assets outside of the United States was [removed: 17.4%] [added: 15.4%] as of December 31, [removed: 2023] [added: 2024] and [removed: 17.9%] [added: 17.4%] as of December 31, [removed: 2022.][added: 2023.]

As of December 31, [removed: 2023,] [added: 2024,] the Company employed approximately [removed: 18,650] [added: 18,540] full-time and [removed: 1,855] [added: 1,490] part-time employees worldwide.

Collective bargaining agreements covered approximately [removed: 6,295] [added: 6,525] employees, or approximately [removed: 31%] [added: 33%] of the Company’s employees worldwide.

During [removed: 2024,] [added: 2025,] agreements are expected to be negotiated for certain employees at [removed: five] [added: seven] facilities, [removed: four] [added: none] of which are [removed: outside of] [added: within] the United States, comprising approximately [removed: 72%] [added: 69%] of total employees under collective bargaining agreements.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 6 | | | [removed: ] [added: ] | | |

[added: These surveys are further] supplemented with quarterly and informative enterprise [added: summits] and team [removed: town halls,] [added: “Ask Me Anything” meetings,] which, in conjunction with the continuous listening surveys, generate stronger employee engagement with the Company’s strategy, initiatives and leadership.

Through individual development plans, learning opportunities, feedback and coaching, employees can build careers at The Hershey Company, as evidenced by the fact that the majority of our [removed: ten] executive officers were promoted from within the organization (see [Information about Our Executive [removed: Officers](#i4548f14c535242b19fed9e6fe5606926_31)).][added: Officers](#ibc2a376758d74fd1b63dc3bee1604694_34)).]

Additionally, [removed: five] [added: four] of our [removed: 11] [added: 10] Board members are women [removed: (45%] [added: (40%] representation).

In [removed: 2023,] [added: 2024,] we maintained fair and equitable pay achievements, including [removed: 1:1] aggregate [removed: people of color] [added: salary U.S. gender] pay equity [removed: (2021)] and [removed: 1:1] aggregate [removed: gender] [added: U.S. salary people of color] pay [removed: (2020) for salaried employees in the United States.][added: equity.]

Further, our eight employee-led Business Resource Groups, which include Abilities First, Black Heritage, Asian and Pacific Islander, GenH (Generations), Latino, Prism (LGBTQ), [removed: Veteran’s] [added: Veterans] and Women’s, [added: are open to all and] play a critical role in [removed: attracting diverse talent,] providing mentoring and career development [removed: opportunities,] [added: opportunities for all,] delivering commercial business [removed: insights] [added: insights,] and connecting people to the Company and the communities where we do business.

[removed: Additionally,] [added: In 2024,] the Company [removed: also ranked as a top 30 company on Wall Street Journal’s Top 250 Best-Managed] [added: was recognized among the World’s Most Ethical] Companies [removed: of 2023,] [added: as rated by Ethisphere, achieved global Great Place to Work certifications,] and was recognized as a Best Place to Work for Disability Inclusion based on our Disability Equality Index score.

Our philanthropy and volunteerism efforts reflect how we live out the Company’s value of [added: making a difference and our purpose of] Making More Moments of Goodness, from supporting causes our employees care about to investing in the long-term success of the communities where we live and work.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 7 | | | [removed: ] [added: ] | | |

[removed: Further to such goal,] [added: In 2023,] we completed our International Optimization [removed: Program in 2023,] [added: Program,] an initiative which began in the fourth quarter of 2020 and was designed to increase our operating effectiveness and efficiency, to reduce our costs and/or to generate savings that can be reinvested in other areas of our business.

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

Costs associated with business realignment activities are classified in our Consolidated Statements of Income as described in [Note [removed: 9](#i4548f14c535242b19fed9e6fe5606926_124)] [added: 9](#ibc2a376758d74fd1b63dc3bee1604694_127)] to the Consolidated Financial Statements.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 8 | | | [removed: ] [added: ] | | |

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

Sour Strips is

an emerging sour candy brand and is available in a wide range of food distribution channels in the United States.

and *York*.

Our climate change related investments and expenditures primarily focus on our Scope 1 and 2 GHG emissions, Forest Land and Agriculture (“FLAG”) emissions and non-FLAG emissions consistent with global environmental standards.

- *Togetherness*.

We believe our business is stronger when we practice our Company value of Togetherness.

Our people-focused programs help advance innovation, business growth and create a strong company culture that is fair, which enables us to delight consumers with beloved snacking brands.

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 in December 2021, 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, which 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.

In January 2021, we completed the divestiture of Lotte Shanghai Foods Co., Ltd. (“LSFC”), 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.

Our climate change related investments and expenditures primarily focus on achieving a 50% absolute reduction in our Scope 1 and 2 GHG emissions and a 25% absolute reduction in our Scope 3 GHG emissions by 2030 (compared to a 2018 baseline), as well as having 100% of plastic packaging be recyclable, reusable or compostable and eliminating 25 million pounds of packaging by 2030.

All of our climate-related investments are in progress or on track as outlined in our Environmental, Social and Governance (“ESG”) Report.

These surveys are further

- *Diversity, Equity and Inclusion*.

Our diverse and inclusive culture makes the difference across all areas of the business around the world.

In 2023, the Company was ranked #3 on DiversityInc’s Top 50 Companies for Diversity and was ranked as a top 50 company on Forbes Top Companies for Women.

Information on legal proceedings is included in [Note [removed: 15](#i4548f14c535242b19fed9e6fe5606926_145)] [added: 15](#ibc2a376758d74fd1b63dc3bee1604694_148)] to the Consolidated Financial Statements.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

][added: logo.jpg](https://www.sec.gov/Archives/edgar/data/47111/000004711125000014/hsy-20241231_g1.jpg)]

As of June [removed: 30, 2023] [added: 28, 2024] (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the voting and non-voting common equity held by non-affiliates was [removed: $36,849,433,110.][added: $26,717,916,357.]

Determination of aggregate market value assumes all outstanding shares of Class B Common Stock held by non-affiliates were converted to Common Stock as of June [removed: 30, 2023.][added: 28, 2024.]

The market value indicated is calculated based on the closing price of the Common Stock on the New York Stock Exchange on June [removed: 30, 2023 ($249.70] [added: 28, 2024 ($183.83] per share).

Common Stock, one dollar par [removed: value—149,336,442] [added: value—147,797,121] shares, as of February [removed: 16, 2024.][added: 10, 2025.]

Class B Common Stock, one dollar par value—54,613,514 shares, as of February [removed: 16, 2024.][added: 10, 2025.]

Portions of the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

| [Item [removed: 1.](#i4548f14c535242b19fed9e6fe5606926_13)] [added: 1.](#ibc2a376758d74fd1b63dc3bee1604694_13)] | | | | | | [removed: [Business](#i4548f14c535242b19fed9e6fe5606926_13)] [added: [Business](#ibc2a376758d74fd1b63dc3bee1604694_13)] | | | | | | [removed: [2](#i4548f14c535242b19fed9e6fe5606926_13)] [added: [2](#ibc2a376758d74fd1b63dc3bee1604694_13)] | | |

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| [Item [removed: 16.](#i4548f14c535242b19fed9e6fe5606926_193)] [added: 16.](#ibc2a376758d74fd1b63dc3bee1604694_199)] | | | | | | [Form 10-K [removed: Summary](#i4548f14c535242b19fed9e6fe5606926_193)] [added: Summary](#ibc2a376758d74fd1b63dc3bee1604694_199)] | | | | | | [removed: [106](#i4548f14c535242b19fed9e6fe5606926_193)] [added: [105](#ibc2a376758d74fd1b63dc3bee1604694_199)] | | |

| | | | | | | [Schedule II—Valuation and Qualifying [removed: Accounts](#i4548f14c535242b19fed9e6fe5606926_199)] [added: Accounts](#ibc2a376758d74fd1b63dc3bee1604694_205)] | | | | | | [removed: [108](#i4548f14c535242b19fed9e6fe5606926_199)] [added: [107](#ibc2a376758d74fd1b63dc3bee1604694_205)] | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 1 | | | [removed: ] [added: ] | | |

For the Fiscal Year Ended December 31, 2024

| | | | | | | [Signatures](#ibc2a376758d74fd1b63dc3bee1604694_202) | | | | | | [106](#ibc2a376758d74fd1b63dc3bee1604694_202) | | |

| | | | | | | [Signatures](#i4548f14c535242b19fed9e6fe5606926_196) | | | | | | [107](#i4548f14c535242b19fed9e6fe5606926_196) | | |

The Company has a comprehensive cybersecurity program in place for assessing, identifying and managing cybersecurity risks that is designed to protect its systems and data from unauthorized access, use or other security [removed: impact.][added: impact, that is aligned with the National Institute of Standards and Technology (“NIST”).]

While we are regularly subject to cybersecurity attacks, ransomware and other security breaches, the Company has not experienced any material cybersecurity incidents or a series of related unauthorized occurrences for the year ended December 31, [removed: 2023.][added: 2024.]

The Company does not believe that there are currently any known risks from cybersecurity threats that [added: have materially affected or] are reasonably likely to materially affect the Company or its business strategy, results of operations or financial condition.

Risk [removed: Factors](#i4548f14c535242b19fed9e6fe5606926_16),”] [added: Factors](#ibc2a376758d74fd1b63dc3bee1604694_16),”] specifically the risks titled “Disruptions, failures or security breaches of our information technology infrastructure could have a negative impact on our operations,” the sophistication of cyber, ransomware and other security threats continues to increase, and the preventative actions we take to reduce the risk of these incidents and protect our systems and information may be insufficient.

The F&RM Committee is responsible for reviewing key enterprise risks identified through our Enterprise Risk Management and [added: Resiliency process, which includes information security strategies and risks, as well as data privacy and protection risks and mitigation strategies (collectively, “Information Security”).]

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 16 | | | [removed: ] [added: ] | | |

Additional experience held by the CTO is described further under [Information about Our Executive [removed: Officers](#i4548f14c535242b19fed9e6fe5606926_31).][added: Officers](#ibc2a376758d74fd1b63dc3bee1604694_34).]

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 17 | | | [removed: ] [added: ] | | |

The Chief Information Officer (“CIO”), who also reports to the CTO, focuses on our technology modernization priorities, integrating innovative technology solutions to support our business goals, and leading enterprise-wide IT transformation initiatives.

The Company’s CIO has over twenty years of experience, including leading digital transformation and global information technology governance.

Additional training mechanisms we may use to assess, identify, and manage risks from cybersecurity threats, include simulations, tabletop exercises and response readiness tests to test our preparedness and incident response process.

Resiliency process, which includes information security strategies and risks, as well as data privacy and protection risks and mitigation strategies (collectively, “Information Security”).

| United States | | | | | | Hershey, Pennsylvania [removed: (2] [added: (3] principal plants) | | | | | | Manufacturing—confectionery products and pantry items | | | | | | Own | | |

As discussed in [Note [removed: 13](#i4548f14c535242b19fed9e6fe5606926_136)] [added: 13](#ibc2a376758d74fd1b63dc3bee1604694_139)] to the Consolidated Financial Statements, we do not manage our assets on a segment basis given the integration of certain manufacturing, warehousing, distribution and other activities in support of our global operations.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 18 | | | [removed: ] [added: ] | | |

The executive officers of the Company, their positions and, as of February [removed: 16, 2024,] [added: 10, 2025,] their ages are set forth below.

| Deepak Bhatia [removed: (1)] [added: (2)] | | | | | | [removed: 50] [added: 51] | | | | | | Senior Vice President, Chief Technology Officer (October 2023) | | |

| Michele G. Buck | | | | | | [removed: 62] [added: 63] | | | | | | Chairman of the Board, President and Chief Executive Officer (October [removed: 2019); President and Chief Executive Officer (March 2017)] [added: 2019)] | | |

| Rohit Grover | | | | | | [removed: 51] [added: 52] | | | | | | President, International (April [removed: 2019); Vice President, General Manager, General China (January 2017)] [added: 2019)] | | |

| Jennifer L. McCalman [removed: (2)] [added: (3)] | | | | | | [removed: 46] [added: 47] | | | | | | Vice President, Chief Accounting Officer (February 2021); Senior Director, Global Controller (March 2019) | | |

| Jason R. Reiman | | | | | | [removed: 52] [added: 53] | | | | | | Senior Vice President, Chief Supply Chain Officer (June [removed: 2019); Vice President, Supply Chain Operations (August 2018)] [added: 2019)] | | |

| Christopher M. Scalia | | | | | | [removed: 48] [added: 49] | | | | | | Senior Vice President, Chief Human Resources Officer (January 2020); Vice President, Global Human Resources (March 2018) | | |

| James Turoff | | | | | | [removed: 47] [added: 48] | | | | | | Senior Vice President, General Counsel and Secretary (May 2021); Acting General Counsel (December 2020); Vice President, Deputy General Counsel (March [removed: 2019); Vice President, SEC, Corporate Governance & Compliance (March 2018)] [added: 2019)] | | |

| Steven E. Voskuil [removed: (3)] | | | | | | [removed: 55] [added: 56] | | | | | | Senior Vice President, Chief Financial Officer (February 2021); Senior Vice President, Chief Financial Officer and Chief Accounting Officer (November [removed: 2019); Senior Vice President, Chief Financial Officer (May] 2019) | | |

[removed: (1)] [added: (2)] Mr. Bhatia was appointed Senior Vice President, Chief Technology Officer effective October 23, 2023.

Prior to joining our Company he was the Vice President of Supply Chain Optimization Technologies (August [removed: 2021),] [added: 2021) and] Vice President of Technology, Inventory Planning & Control in Supply Chain Optimization Technologies (March [removed: 2019), and Director, Inventory Optimization, Simulations, S&OP in Inventory Planning & Control (April 2014)] [added: 2019)] at Amazon.com, Inc., a multinational technology company.

[removed: (2)] [added: (3)] Ms. McCalman was appointed Vice President, Chief Accounting Officer effective February 23, 2021.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 19 | | | [removed: ] [added: ] | | |

| Andrew Archambault (1) | | | | | | 51 | | | | | | President, U.S. Confection (February 2025) | | |

| Veronica Villasenor | | | | | | 45 | | | | | | President, Salty Snacks (February 2025); Vice President, General Manager Salty Snacks (April 2023); Vice President, General Manager Dot’s and Pretzels, Inc. (August 2022); Vice President, Marketing US Confection (July 2021); Vice President, Marketing Chocolate (February 2020) | | |

(1) Mr. Archambault was appointed President, U.S. Confection effective February 3, 2025.

Prior to joining our Company he was President, U.S. Refreshment Beverages (November 2023), President, Commercial & Beverage Concentrates (August 2022), Chief Customer Officer (October 2018), and Senior Vice President of Commercial Strategy (December 2017) for Keurig Dr. Pepper (formerly Keurig Green Mountain), a beverage and coffeemaker company.

| Charles R. Raup | | | | | | 56 | | | | | | President, U.S. Confection (November 2022); President, U.S. (January 2020); Vice President, U.S. CMG (June 2018) | | |

| Kristen J. Riggs | | | | | | 45 | | | | | | President, Salty Snacks (November 2022); Senior Vice President, Chief Growth Officer (January 2020); Vice President, Innovation and Strategic Growth Platforms (September 2019); Vice President, Commercial Planning (June 2018) | | |

(3) Mr. Voskuil was appointed Senior Vice President, Chief Financial Officer effective May 13, 2019.

Prior to joining our Company he was Senior Vice President and Chief Financial Officer at Avanos Medical, Inc. (November 2014), a medical technology company.

The closing price of our Common Stock on December [removed: 29, 2023] [added: 31, 2024] (the last business day of the of the fiscal year) was [removed: $186.44.][added: $169.35.]

There were [removed: 23,327] [added: 23,068] stockholders of record of our Common Stock and 5 stockholders of record of our Class B Stock as of December 31, [removed: 2023.][added: 2024.]

We paid [removed: $889.1] [added: $1,084.8] million in cash dividends on our Common Stock and Class B Stock in [removed: 2023] [added: 2024] and [removed: $775.0] [added: $889.1] million in [removed: 2022.][added: 2023.]

The annual dividend rate on our Common Stock in [removed: 2023] [added: 2024] was [removed: $4.456] [added: $5.480] per share.

On February [removed: 7, 2024,] [added: 5, 2025,] our Board declared a quarterly dividend of $1.370 per share of Common Stock payable on March [removed: 15, 2024,] [added: 14, 2025,] to stockholders of record as of February [removed: 20, 2024.][added: 17, 2025.]

It is the Company’s [removed: 376th] [added: 380th] consecutive quarterly Common Stock dividend.

[removed: The following table shows the] [added: There were no] purchases of shares of Common Stock made by or on behalf of Hershey, or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended) of Hershey, for each fiscal month in the three months ended December 31, [removed: 2023:][added: 2024.]

[removed: (2)] In July 2018, our Board of Directors approved a $500 million share repurchase [removed: authorization.][added: authorization to repurchase shares of our Common Stock.]

In May 2021, our Board of Directors approved an additional $500 million share repurchase [removed: authorization.][added: authorization, which was completed as of March 31, 2024.]

As a result of the February 2023 Stock Purchase Agreement with Hershey Trust Company, as trustee for the Milton Hershey School Trust (the “School Trust”), the July 2018 share repurchase authorization was [removed: completed and as of December 31, 2023, approximately $370 million remained available for repurchases of our Common Stock under our May 2021 share repurchase authorization.][added: completed.]

This program [removed: is to commence] [added: commenced] after the existing [added: May] 2021 authorization [removed: is] [added: was] completed and is to be utilized at management’s discretion.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 20 | | | [removed: ] [added: ] | | |

[removed: ][added: ]

| Company/Index | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | |

Approximately $470 million remains available for repurchases under our December 2023 share repurchase authorization.

We are authorized to purchase our outstanding shares in open market and privately negotiated transactions.

The program has no expiration date and acquired shares of Common Stock will be held as treasury shares.

Purchases under approved share repurchase authorizations are in addition to our practice of buying back shares sufficient to offset those issued under incentive compensation plans.

| The Hershey Company | | | | | | $ | 100 | | | | | $ | 106 | | | | | $ | 137 | | | | | $ | 167 | | | | | $ | 137 | | | | | $ | 128 | |

| S&P 500 Index | | | | | | $ | 100 | | | | | $ | 118 | | | | | $ | 152 | | | | | $ | 125 | | | | | $ | 157 | | | | | $ | 197 | |

| S&P 500 Packaged Foods Index | | | | | | $ | 100 | | | | | $ | 105 | | | | | $ | 118 | | | | | $ | 129 | | | | | $ | 120 | | | | | $ | 113 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | | | | | Total Number of Shares Purchased (1) | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | (in thousands of dollars) | | |

| October 2 through October 29 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 370,073 | |

| October 30 through November 26 | | | | | | 127,609 | | | | | | $ | 196.33 | | | | | — | | | | | | $ | 370,073 | |

| November 27 through December 31 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 370,073 | |

| Total | | | | | | 127,609 | | | | | | $ | — | | | | | — | | | | | | | | |

(1) During the three months ended December 31, 2023, 127,609 shares of Common Stock were purchased in open market transactions in connection with our standing authorization to buy back shares sufficient to offset those issued under incentive compensation plans, which authorization does not have a dollar or share limit and is not included in our share repurchase authorizations described in the following note (2).

The May 2021 and December 2023 share repurchase programs do not have an expiration date.

| The Hershey Company | | | | | | $ | 100 | | | | | $ | 140 | | | | | $ | 148 | | | | | $ | 192 | | | | | $ | 234 | | | | | $ | 193 | |

| S&P 500 Index | | | | | | $ | 100 | | | | | $ | 131 | | | | | $ | 156 | | | | | $ | 200 | | | | | $ | 164 | | | | | $ | 207 | |

| S&P 500 Packaged Foods Index | | | | | | $ | 100 | | | | | $ | 131 | | | | | $ | 137 | | | | | $ | 155 | | | | | $ | 169 | | | | | $ | 156 | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 21 | | | [removed: ] [added: ] | | |

| [Report of Independent Registered Public Accounting Firm (PCAOB [removed: ID:](#i4548f14c535242b19fed9e6fe5606926_70) 42[)](#i4548f14c535242b19fed9e6fe5606926_70)] [added: ID:](#ibc2a376758d74fd1b63dc3bee1604694_73) 42[)](#ibc2a376758d74fd1b63dc3bee1604694_73)] | | | | | | [removed: [48](#i4548f14c535242b19fed9e6fe5606926_70)] [added: [48](#ibc2a376758d74fd1b63dc3bee1604694_73)] | | |

| [Report of Independent Registered Public Accounting Firm on Internal Control Over Financial [removed: Reporting](#i4548f14c535242b19fed9e6fe5606926_73)] [added: Reporting](#ibc2a376758d74fd1b63dc3bee1604694_76)] | | | | | | [removed: [50](#i4548f14c535242b19fed9e6fe5606926_73)] [added: [50](#ibc2a376758d74fd1b63dc3bee1604694_76)] | | |

| [Consolidated Statements of Income for the years ended December 31, [removed: 202](#i4548f14c535242b19fed9e6fe5606926_76)[3](#i4548f14c535242b19fed9e6fe5606926_76)[, 202](#i4548f14c535242b19fed9e6fe5606926_76)[2](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[4](#ibc2a376758d74fd1b63dc3bee1604694_79)[, 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[3](#ibc2a376758d74fd1b63dc3bee1604694_79)] [and [removed: 202](#i4548f14c535242b19fed9e6fe5606926_76)[1](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[2](#ibc2a376758d74fd1b63dc3bee1604694_79)] | | | | | | [removed: [52](#i4548f14c535242b19fed9e6fe5606926_76)] [added: [52](#ibc2a376758d74fd1b63dc3bee1604694_79)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December [removed: 31,](#i4548f14c535242b19fed9e6fe5606926_79) [202](#i4548f14c535242b19fed9e6fe5606926_76)[3](#i4548f14c535242b19fed9e6fe5606926_76)[, 202](#i4548f14c535242b19fed9e6fe5606926_76)[2](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 31,](#ibc2a376758d74fd1b63dc3bee1604694_82) [202](#ibc2a376758d74fd1b63dc3bee1604694_79)[4](#ibc2a376758d74fd1b63dc3bee1604694_79)[, 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[3](#ibc2a376758d74fd1b63dc3bee1604694_79)] [and [removed: 202](#i4548f14c535242b19fed9e6fe5606926_76)[1](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[2](#ibc2a376758d74fd1b63dc3bee1604694_79)] | | | | | | [removed: [53](#i4548f14c535242b19fed9e6fe5606926_79)] [added: [53](#ibc2a376758d74fd1b63dc3bee1604694_82)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 202](#i4548f14c535242b19fed9e6fe5606926_82)[3](#i4548f14c535242b19fed9e6fe5606926_82)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_85)[4](#ibc2a376758d74fd1b63dc3bee1604694_85)] [and [removed: 202](#i4548f14c535242b19fed9e6fe5606926_82)[2](#i4548f14c535242b19fed9e6fe5606926_82)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_85)[3](#ibc2a376758d74fd1b63dc3bee1604694_85)] | | | | | | [removed: [54](#i4548f14c535242b19fed9e6fe5606926_82)] [added: [54](#ibc2a376758d74fd1b63dc3bee1604694_85)] | | |

| [Consolidated Statements of Cash Flows for the years ended December [removed: 31,](#i4548f14c535242b19fed9e6fe5606926_88) [202](#i4548f14c535242b19fed9e6fe5606926_76)[3](#i4548f14c535242b19fed9e6fe5606926_76)[, 202](#i4548f14c535242b19fed9e6fe5606926_76)[2](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 31,](#ibc2a376758d74fd1b63dc3bee1604694_91) [202](#ibc2a376758d74fd1b63dc3bee1604694_79)[4](#ibc2a376758d74fd1b63dc3bee1604694_79)[, 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[3](#ibc2a376758d74fd1b63dc3bee1604694_79)] [and [removed: 202](#i4548f14c535242b19fed9e6fe5606926_76)[1](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 20](#ibc2a376758d74fd1b63dc3bee1604694_79)[2](#ibc2a376758d74fd1b63dc3bee1604694_79)[2](#ibc2a376758d74fd1b63dc3bee1604694_79)] | | | | | | [removed: [55](#i4548f14c535242b19fed9e6fe5606926_88)] [added: [55](#ibc2a376758d74fd1b63dc3bee1604694_91)] | | |

| [Consolidated Statements of Stockholders’ Equity for the years ended December [removed: 31,](#i4548f14c535242b19fed9e6fe5606926_91) [202](#i4548f14c535242b19fed9e6fe5606926_76)[3](#i4548f14c535242b19fed9e6fe5606926_76)[, 202](#i4548f14c535242b19fed9e6fe5606926_76)[2](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 31,](#ibc2a376758d74fd1b63dc3bee1604694_94) [202](#ibc2a376758d74fd1b63dc3bee1604694_79)[4](#ibc2a376758d74fd1b63dc3bee1604694_79)[, 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[3](#ibc2a376758d74fd1b63dc3bee1604694_79)] [and [removed: 202](#i4548f14c535242b19fed9e6fe5606926_76)[1](#i4548f14c535242b19fed9e6fe5606926_76)] [added: 202](#ibc2a376758d74fd1b63dc3bee1604694_79)[2](#ibc2a376758d74fd1b63dc3bee1604694_79)] | | | | | | [removed: [56](#i4548f14c535242b19fed9e6fe5606926_91)] [added: [56](#ibc2a376758d74fd1b63dc3bee1604694_94)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i4548f14c535242b19fed9e6fe5606926_94)] [added: Statements](#ibc2a376758d74fd1b63dc3bee1604694_97)] | | | | | | [removed: [57](#i4548f14c535242b19fed9e6fe5606926_94)] [added: [57](#ibc2a376758d74fd1b63dc3bee1604694_97)] | | |

| [Note 1 - Summary of Significant Accounting [removed: Policies](#i4548f14c535242b19fed9e6fe5606926_97)] [added: Policies](#ibc2a376758d74fd1b63dc3bee1604694_100)] | | | | | | [removed: [57](#i4548f14c535242b19fed9e6fe5606926_97)] [added: [57](#ibc2a376758d74fd1b63dc3bee1604694_100)] | | |

| [Note 3 - Goodwill and Intangible [removed: Assets](#i4548f14c535242b19fed9e6fe5606926_103)] [added: Assets](#ibc2a376758d74fd1b63dc3bee1604694_106)] | | | | | | [removed: [66](#i4548f14c535242b19fed9e6fe5606926_103)] [added: [64](#ibc2a376758d74fd1b63dc3bee1604694_106)] | | |

| [Note 4 - Short and Long-Term [removed: Debt](#i4548f14c535242b19fed9e6fe5606926_106)] [added: Debt](#ibc2a376758d74fd1b63dc3bee1604694_109)] | | | | | | [removed: [67](#i4548f14c535242b19fed9e6fe5606926_106)] [added: [65](#ibc2a376758d74fd1b63dc3bee1604694_109)] | | |

| [Note 5 - Derivative [removed: Instruments](#i4548f14c535242b19fed9e6fe5606926_112)] [added: Instruments](#ibc2a376758d74fd1b63dc3bee1604694_115)] | | | | | | [removed: [69](#i4548f14c535242b19fed9e6fe5606926_112)] [added: [67](#ibc2a376758d74fd1b63dc3bee1604694_115)] | | |

| [Note 6 - Fair Value [removed: Measurements](#i4548f14c535242b19fed9e6fe5606926_115)] [added: Measurements](#ibc2a376758d74fd1b63dc3bee1604694_118)] | | | | | | [removed: [71](#i4548f14c535242b19fed9e6fe5606926_115)] [added: [69](#ibc2a376758d74fd1b63dc3bee1604694_118)] | | |

| [Note 8 - Investments in Unconsolidated [removed: Affiliates](#i4548f14c535242b19fed9e6fe5606926_121)] [added: Affiliates](#ibc2a376758d74fd1b63dc3bee1604694_124)] | | | | | | [removed: [75](#i4548f14c535242b19fed9e6fe5606926_121)] [added: [73](#ibc2a376758d74fd1b63dc3bee1604694_124)] | | |

| [Note 9 - Business Realignment [removed: Activities](#i4548f14c535242b19fed9e6fe5606926_124)] [added: Activities](#ibc2a376758d74fd1b63dc3bee1604694_127)] | | | | | | [removed: [75](#i4548f14c535242b19fed9e6fe5606926_124)] [added: [74](#ibc2a376758d74fd1b63dc3bee1604694_127)] | | |

| [Note 10 - Income [removed: Taxes](#i4548f14c535242b19fed9e6fe5606926_127)] [added: Taxes](#ibc2a376758d74fd1b63dc3bee1604694_130)] | | | | | | [removed: [77](#i4548f14c535242b19fed9e6fe5606926_127)] [added: [75](#ibc2a376758d74fd1b63dc3bee1604694_130)] | | |

| [Note 11 - Pension and Other Post-Retirement Benefit [removed: Plans](#i4548f14c535242b19fed9e6fe5606926_130)] [added: Plans](#ibc2a376758d74fd1b63dc3bee1604694_133)] | | | | | | [removed: [80](#i4548f14c535242b19fed9e6fe5606926_130)] [added: [78](#ibc2a376758d74fd1b63dc3bee1604694_133)] | | |

| [Note 12 - Stock Compensation [removed: Plans](#i4548f14c535242b19fed9e6fe5606926_133)] [added: Plans](#ibc2a376758d74fd1b63dc3bee1604694_136)] | | | | | | [removed: [86](#i4548f14c535242b19fed9e6fe5606926_133)] [added: [84](#ibc2a376758d74fd1b63dc3bee1604694_136)] | | |

| [Note 13 - Segment [removed: Information](#i4548f14c535242b19fed9e6fe5606926_136)] [added: Information](#ibc2a376758d74fd1b63dc3bee1604694_139)] | | | | | | [removed: [89](#i4548f14c535242b19fed9e6fe5606926_136)] [added: [88](#ibc2a376758d74fd1b63dc3bee1604694_139)] | | |

| [Note 14 - Equity and Treasury Stock [removed: Activity](#i4548f14c535242b19fed9e6fe5606926_139)] [added: Activity](#ibc2a376758d74fd1b63dc3bee1604694_142)] | | | | | | [removed: [92](#i4548f14c535242b19fed9e6fe5606926_139)] [added: [90](#ibc2a376758d74fd1b63dc3bee1604694_142)] | | |

| [Note 15 - Commitments and [removed: Contingencies](#i4548f14c535242b19fed9e6fe5606926_145)] [added: Contingencies](#ibc2a376758d74fd1b63dc3bee1604694_148)] | | | | | | [removed: [94](#i4548f14c535242b19fed9e6fe5606926_145)] [added: [92](#ibc2a376758d74fd1b63dc3bee1604694_148)] | | |

| [Note 16 - Earnings Per [removed: Share](#i4548f14c535242b19fed9e6fe5606926_148)] [added: Share](#ibc2a376758d74fd1b63dc3bee1604694_151)] | | | | | | [removed: [94](#i4548f14c535242b19fed9e6fe5606926_148)] [added: [94](#ibc2a376758d74fd1b63dc3bee1604694_151)] | | |

| [Note 17 - Other (Income) Expense, [removed: Net](#i4548f14c535242b19fed9e6fe5606926_151)] [added: Net](#ibc2a376758d74fd1b63dc3bee1604694_154)] | | | | | | [removed: [96](#i4548f14c535242b19fed9e6fe5606926_151)] [added: [95](#ibc2a376758d74fd1b63dc3bee1604694_154)] | | |

| [Note 18 - Related Party [removed: Transactions](#i4548f14c535242b19fed9e6fe5606926_154)] [added: Transactions](#ibc2a376758d74fd1b63dc3bee1604694_157)] | | | | | | [removed: [96](#i4548f14c535242b19fed9e6fe5606926_154)] [added: [95](#ibc2a376758d74fd1b63dc3bee1604694_157)] | | |

| [Note 19 - Supplemental Balance Sheet [removed: Information](#i4548f14c535242b19fed9e6fe5606926_157)] [added: Information](#ibc2a376758d74fd1b63dc3bee1604694_160)] | | | | | | [removed: [97](#i4548f14c535242b19fed9e6fe5606926_157)] [added: [96](#ibc2a376758d74fd1b63dc3bee1604694_160)] | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 47 | | | [removed: ] [added: ] | | |

We have audited the accompanying consolidated balance sheets of The Hershey Company (the Company) as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] 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, [removed: 2023,] [added: 2024,] and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal [removed: Control–Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 20, 2024] [added: 18, 2025] expressed an unqualified opinion thereon.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 48 | | | [removed: ] [added: ] | | |

| *Description of the Matter* | | | | | | The unsettled portion of the Company’s obligation for trade promotion activities at December 31, [removed: 2023] [added: 2024] was [removed: $194.0] [added: $221.3] million. As discussed in Note 1 of the consolidated financial statements, the Company promotes its products through programs such as, but not limited to, discounts, coupons, rebates, in-store display incentives, and volume-based incentives. The Company recognizes the estimated costs of these trade promotion activities as a component of variable consideration when determining the transaction price. The unsettled portion of the Company’s obligation for trade promotion activities is included in accrued liabilities in the consolidated balance sheet. Auditing management’s calculation of the unsettled portion of the Company’s obligation for trade promotion activities was subjective and required judgment as a result of the nature of the required estimates and assumptions. In particular, the estimates required an analysis of the programs offered, expectations regarding customer and consumer participation, and experience with historical payment patterns. | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 49 | | | [removed: ] [added: ] | | |

We have audited The Hershey Company’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal [removed: Control–Integrated] [added: Control—Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, The Hershey Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] 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 [removed: certain assets that provide additional manufacturing capacity] [added: the Sour Strips brand] from [removed: Weaver Popcorn Manufacturing, Inc. (“Weaver”)] [added: Actual Candy, LLC (“Sour Strips”)] on [removed: May 31, 2023,] [added: November 8, 2024,] which is included in the [removed: 2023] [added: 2024] consolidated financial statements of the Company and constituted [removed: 1.4%] [added: less than 1%] of total assets as of December 31, [removed: 2023.][added: 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 [removed: Weaver.][added: Sour Strips.]

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, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] 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, [removed: 2023,] [added: 2024,] and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated February [removed: 20, 2024] [added: 18, 2025] expressed an unqualified opinion thereon.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 50 | | | [removed: ] [added: ] | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page 51 | | | [removed: ] [added: ] | | |

| For the years ended December 31, | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| [Note 2 - Business Acquisitions](#ibc2a376758d74fd1b63dc3bee1604694_103) | | | | | | [63](#ibc2a376758d74fd1b63dc3bee1604694_103) | | |

| [Note 7 - Leases](#ibc2a376758d74fd1b63dc3bee1604694_121) | | | | | | [71](#ibc2a376758d74fd1b63dc3bee1604694_121) | | |

| February 18, 2025 | | |

| February 18, 2025 | | |

| Cash and cash equivalents | | | | | | $ | 730,746 | | | | | $ | 401,902 | |

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

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

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

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance, December 31, 2024 | | | | | | $ | — | | | | | $ | 166,939 | | | | | $ | 54,614 | | | | | $ | 1,377,226 | | | | | $ | 5,698,316 | | | | | $ | (2,278,551) | | | | | $ | (303,890) | | | | | | | | | | | $ | 4,714,654 | |

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

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

In 2024, the Company recorded a reclassification related to foreign currency between additional paid-in capital and other comprehensive income (loss).

This adjustment did not have a material impact on our consolidated financial statements.

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.

31, 2022 on a prospective basis.

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

In November 2024, the FASB issued ASU No. 2024-03, *Income Statement—Reporting Comprehensive*

*Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.* This ASU requires entities to disclose certain additional expense information including, among other items, purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each Consolidated Statement of Income expense caption.

2024 Activity

Sour Strips

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

Sour Strips is

an emerging sour candy brand and is available in a wide range of food distribution channels in the United States.

The initial cash consideration paid for Sour Strips was deemed immaterial and consisted of cash on hand and short-term borrowings; however, the Company may be required to pay additional contingent consideration if certain defined targets are met over a multi-year period.

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.

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

| Goodwill | | | | | | $ | 2,023,403 | | | | | $ | 571,770 | | | | | $ | 374,131 | | | | | $ | 2,969,304 | |

| Acquired during the period (see [Note 2](#ibc2a376758d74fd1b63dc3bee1604694_103)) | | | | | | 20,723 | | | | | | — | | | | | | — | | | | | | 20,723 | | |

| Foreign currency translation | | | | | | (8,697) | | | | | | — | | | | | | (2,323) | | | | | | (11,020) | | |

| Balance at December 31, 2024 | | | | | | $ | 2,032,857 | | | | | $ | 657,001 | | | | | $ | 15,895 | | | | | $ | 2,705,753 | |

| Trademarks | | | | | | $ | 1,721,159 | | | | | $ | (282,819) | | | | | $ | 1,703,029 | | | | | $ | (249,947) | |

| [Note 2 - Business Acquisitions and Divestitures](#i4548f14c535242b19fed9e6fe5606926_100) | | | | | | [63](#i4548f14c535242b19fed9e6fe5606926_100) | | |

| [Note 7 - Leases](#i4548f14c535242b19fed9e6fe5606926_118) | | | | | | [73](#i4548f14c535242b19fed9e6fe5606926_118) | | |

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| February 20, 2024 | | |

THE HERSHEY COMPANY

| Less: Net gain attributable to noncontrolling interest | | | | | | — | | | | | | — | | | | | | 5,307 | | |

| Reclassification to earnings due to the sale of businesses | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,249 | | | | | | — | | | | | | 5,249 | | |

| Comprehensive gain attributable to noncontrolling interest | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | 10,556 | | |

| Comprehensive income attributable to The Hershey Company | | | | | | | | | | | | | | | | | | $ | 1,884,042 | | | | | | | | | | | | | | | | | $ | 1,641,699 | | | | | | | | | | | | | | | | | $ | 1,566,379 | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net income including noncontrolling interest | | | | | | $ | 1,861,787 | | | | | $ | 1,644,817 | | | | | $ | 1,482,819 | |

| Less: Decrease in cash and cash equivalents classified as held for sale | | | | | | — | | | | | | — | | | | | | 11,434 | | |

| Net (decrease) increase in cash and cash equivalents | | | | | | (61,987) | | | | | | 134,623 | | | | | | (814,721) | | |

| Cash and cash equivalents, beginning of period | | | | | | 463,889 | | | | | | 329,266 | | | | | | 1,143,987 | | |

| Balance, January 1, 2021 | | | | | | $ | — | | | | | $ | 160,939 | | | | | $ | 60,614 | | | | | $ | 1,191,200 | | | | | $ | 1,928,673 | | | | | $ | (768,992) | | | | | $ | (338,082) | | | | | $ | 3,531 | | | | | $ | 2,237,883 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,477,512 | | | | | | | | | | | | | | | | | | 5,307 | | | | | | 1,482,819 | | |

| Divestiture of noncontrolling interest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,436) | | | | | | (1,436) | | |

| Distributions to joint venture partner | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (8,750) | | | | | | (8,750) | | |

| Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (3,901) | | | | | | (3,901) | | |

| Other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 22,255 | | | | | | — | | | | | | 22,255 | | |

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

required.

This ASU should be applied

This new standard was not applicable to our May 2023 acquisition of Weaver Popcorn Manufacturing, Inc. (“Weaver”) due to no contract assets or liabilities (as discussed in [Note 2](#i4548f14c535242b19fed9e6fe5606926_100)); however, will be applied in relevant future acquisitions.

In March 2023, the FASB issued ASU No. 2023-02, *Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in tax credit structures using the proportional amortization method.* This ASU allows entities to elect the proportional amortization method for all tax equity investments, regardless of how the tax credits are received as long as certain criteria are met.

This ASU may be applied in a modified retrospective or retrospective basis and an entity must evaluate the investments in which it still expects to receive tax credits or other income tax benefits as of the beginning of the earliest period presented.

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 2024.

2021 Activity

Pretzels Inc.

On December 14, 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 with deep pretzel category and product expertise and the manufacturing capabilities to support brand growth and future pretzel innovation.

The cash consideration paid for Pretzels totaled $304,334 and consisted of cash on hand and short-term borrowings.

The purchase consideration was allocated to assets acquired and liabilities assumed based on their respective fair values as follows:

| | | | | | |

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of December 31, [removed: 2023.][added: 2024.]

Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, [removed: 2023.][added: 2024.]

[removed: We are in] [added: During] the [added: second quarter of 2024, we completed the] process of [removed: a] [added: our] multi-year implementation of a new global enterprise resource planning (“ERP”) system, which [removed: replaces] [added: replaced] our [removed: existing] [added: then-existing] operating and financial systems.

In July 2023, we completed the transition to [removed: the] [added: our] new [removed: ERP system as the] consolidated [added: financial reporting] book of record.

[removed: Other than the implementation of the new ERP system in North America Salty Snacks and the ongoing integration of the Weaver acquisition, there] [added: There] have been no changes to the Company’s internal control over financial reporting during the fourth quarter of [removed: 2023] [added: 2024] that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

The implementation [removed: will result] [added: of the new ERP system resulted] in [added: material] changes to our internal controls over financial reporting.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page [removed: 99] [added: 98] | | | [removed: ] [added: ] | | |

The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

Based on this assessment, management concluded that, as of December 31, [removed: 2023,] [added: 2024,] the Company’s internal control over financial reporting was effective based on those criteria.

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 [removed: certain assets that provide additional manufacturing capacity] [added: the Sour Strips brand] from [removed: Weaver,] [added: Actual Candy, LLC (“Sour Strips”) on November 8, 2024,] which is included in the [removed: 2023] [added: 2024] consolidated financial statements of the Company and constituted [removed: 1.4%] [added: less than 1%] of total assets as of December 31, [removed: 2023.][added: 2024 and less than 1% of net sales for the year then ended.]

The Company’s independent auditors have audited, and reported on, the Company’s internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

We completed the implementation of our new ERP system in the North America Confectionery segment and select operating segments included in our International segment in April 2024.

The Company has updated the internal controls as appropriate and will continue to monitor the impact of the implementation on our financial reporting business processes.

We updated our internal controls to reflect changes to the financial reporting business processes impacted by the implementation.

Additionally, the Company acquired certain assets that provide additional manufacturing capacity from Weaver Popcorn Manufacturing, Inc. (“Weaver”) (May 2023).

Further, the final implementation phase will occur in 2024 for the remainder of the business.

As implementation occurs, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.

[removed: The following table describes the contracts, instructions or written plans for] [added: During] the [removed: purchase or sale of securities adopted by our] [added: three months ended December 31, 2024, no] directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) [removed: during] [added: adopted or terminated any contract, instruction or written plan for] the [removed: three months ended December 31, 2023,] [added: purchase or sale of securities] that are intended to satisfy the affirmative defense conditions of Rule [removed: 10b5-1(c).][added: 10b5-1(c) or any other Rule 10b5-1 trading arrangements or “non-Rule 10b5–1 trading arrangements” (as defined by S-K Item 408(c)).]

No other Rule 10b5-1 trading arrangements or “non-Rule 10b5–1 trading arrangements” (as defined by S-K Item 408(c)) were entered into or terminated by our directors or officers during such period.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name and Title | | | | | | Date of Adoption of 10b5-1 Plan | | | | | | Duration of 10b5-1 Plan(1) | | | | | | Aggregate Number of Securities to be Sold or Purchased | | |

| Jennifer L. McCalman VP, Chief Accounting Officer | | | | | | 11/3/2023 | | | | | | 2/24/2024 | | | | | | Sell 453 shares | | |

(1) The plan duration is until the date listed in this column or such earlier date upon the completion of all trades under the plan (or the expiration of the orders relating to such trades without execution) or the occurrence of such other termination events as specified in the plan.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page [removed: 100] [added: 99] | | | [removed: ] [added: ] | | |

The information required by Item 401 of SEC Regulation S-K concerning the directors and nominees for director of the Company, together with a discussion of the specific experience, qualifications, attributes and skills that led the Board to conclude that the director or nominee should serve as a director at this time, will be located in the [added: Company’s] Proxy Statement [added: for the 2025 Annual Meeting of Stockholders (the “Proxy Statement”)] in the section entitled “Proposal No. 1 – Election of Directors,” which information is incorporated herein by reference.

Information regarding the Company’s Insider Trading Policy required by Item 408(b) of SEC Regulation S-K will be located in the Proxy Statement in the section entitled “Other Compensation Policies and Practices”, which information is incorporated herein by reference.

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page [removed: 101] [added: 100] | | | [removed: ] [added: ] | | |

| [Table of [removed: Contents](#i4548f14c535242b19fed9e6fe5606926_7)] [added: Contents](#ibc2a376758d74fd1b63dc3bee1604694_7)] | | | The Hershey Company \| [removed: 2023] [added: 2024] Form 10-K \| Page [removed: 102] [added: 101] | | | [removed: ] [added: ] | | |