HERSHEY CO

Historically, our primary source of liquidity has been cash generated from operations. Domestic seasonal working capital needs, which typically peak during the summer months, are generally met by utilizing cash on hand, bank borrowings or the issuance of commercial paper. Commercial paper may also be issued, from time to time, to finance ongoing business transactions, such as the repayment of long-term debt, business acquisitions and for other general corporate purposes.

At September 27, 2026, our cash and cash equivalents totaled $676.7 million, a decrease of $249.2 million compared to the 2025 year-end balance. Additional detail regarding the net uses of cash are outlined in the following discussion. Additionally, at September 27, 2026, we had outstanding short- and long-term debt totaling $5.1 billion, of which $197.8 million was classified as the current portion of long-term debt. Of the $197.8 million, $193.6 million represents the aggregate principal amount of our 7.200% Debentures due upon maturity on August 15, 2027. We believe we can satisfy these debt obligations with cash generated from our operations, issuing new debt, and/or by borrowing on our unsecured credit facility.

A substantial majority of our cash and cash equivalents at September 27, 2026 was held by subsidiaries domiciled outside of the United States. A majority of our cash and cash equivalents balance is distributable to the United States without material tax implications, such as withholding tax. We intend to continue to reinvest the remainder of this balance outside of the United States for which there would be a material tax implication to distributing for the foreseeable future and, therefore, have not recognized additional tax expense on these earnings. We believe that our existing sources of liquidity are adequate to meet anticipated funding needs at comparable risk-based interest rates for the foreseeable future. Acquisition spending and/or share repurchases could potentially increase our debt. Operating cash flow and access to capital markets are expected to satisfy our various short- and long-term cash flow requirements, including acquisitions and capital expenditures.

Cash Flow Summary

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

Operating activities

We generated cash of $1,638.8 million from operating activities in the first nine months of 2026, an increase of $288.0 million compared to $1,350.8 million in the same period of 2025. This increase in net cash provided by operating activities was mainly driven by the following factors:

•Net income adjusted for non-cash charges to operations (including depreciation, amortization, stock-based compensation, deferred income taxes, unrealized gains and losses on derivative contracts, contingent consideration adjustments and other charges) resulted in $486.2 million of higher cash flow in 2026 relative to 2025.

•Other assets and liabilities consumed cash of $31.1 million in 2026, compared to $287.1 million in 2025. This $255.9 million fluctuation was primarily driven by the timing of certain prepaid expenses and other current assets.

•The variance in operating cash flows related to income taxes reflects timing differences between actual tax expense and quarterly estimated tax payments. We paid cash of $403.9 million for income taxes during 2026, compared to $110.6 million in the same period of 2025.

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

◦In the aggregate, select net working capital items, specifically, trade accounts receivable, inventory, accounts payable and accrued liabilities, consumed cash of $428.7 million in 2026, compared to consuming cash of $148.4 million in 2025. This $280.3 million fluctuation was mainly driven by an increase in trade accounts receivable, as a result of timing of sales and collections, partially offset by a decrease in accounts payable and accrued liabilities, due to the timing of vendor and supplier payments, and lower inventory levels.

Investing activities

We used cash of $294.1 million for investing activities in the first nine months of 2026, a decrease of $88.1 million compared to $382.2 million in the same period of 2025. This decrease in net cash used in investing activities was mainly driven by the following factors:

•Capital spending. Capital expenditures, including capitalized software, capacity expansion, innovation and cost savings, were $305.0 million in the first nine months of 2026 compared to $316.5 million in the same period of 2025. The decrease in our 2026 capital expenditures is largely driven by the wind down of our key strategic initiatives, as we expect 2026 capital expenditures, including capitalized software, to be in the range of approximately $425 million to $475 million, reflecting a trend towards historical levels. We intend to use our existing cash and internally generated funds to meet our 2026 capital requirements.

•Investments in partnerships qualifying for tax credits. We make investments in partnership entities that in turn make equity investments in projects eligible to receive federal historic and renewable energy tax credits. We received payments of approximately $14.4 million in the first nine months of 2026, which is consistent with the same period of 2025 of approximately $14.3 million.

•Intangible assets. We had no purchases of intangible assets in 2026. In 2025, we purchased the Fulfil brand in North America for $73.6 million.

•Other investing activities. In the first nine months of 2026 and 2025, our other investing activities were minimal.

Financing activities

We used cash of $1,600.8 million for financing activities in the first nine months of 2026, an increase of $1,064.4 million compared to $536.4 million in the same period of 2025. This increase in net cash used in financing activities was mainly driven by the following factors:

•Short-term borrowings, net. In addition to utilizing cash on hand, we use short-term borrowings (commercial paper and bank borrowings) to fund seasonal working capital requirements and ongoing business needs. During the first nine months of 2026, we generated cash of $220.4 million predominately through the issuance of short-term commercial paper, partially offset by a decrease in short-term foreign bank borrowings. During the first nine months of 2025, we used cash of $1.1 billion predominately to reduce outstanding short-term commercial paper borrowings.

•Long-term debt borrowings and repayments. During the first nine months of 2026, we repaid $500 million of 2.300% Notes due in August 2026. We had no long-term borrowings during the first nine months of 2026. During the first nine months of 2025, we issued $500 million of 4.550% Notes due in February 2028, $500 million of 4.750% Notes due in February 2030, $500 million of 4.950% Notes due in February 2032 and $500 million of 5.100% Notes due in February 2035 (together, the “2025 Notes”). Proceeds from the issuance of the 2025 Notes, net of discounts and issuance costs, totaled $2.0 billion. Additionally, we repaid $300 million of 0.900% Notes due upon maturity and $300 million of 3.200% Notes due upon maturity in June and August 2025, respectively.

•Dividend payments. Total dividend payments to holders of our Common Stock and Class B Common Stock were $859.2 million during the first nine months of 2026, an increase of $45.3 million compared to $814.0 million in the same period of 2025. Details regarding our 2026 cash dividends paid to stockholders are as follows:

•Share repurchases. We repurchase shares of Common Stock to offset the dilutive impact of treasury shares issued under our equity compensation plans. The value of these share repurchases in a given period varies based on the volume of stock options exercised and our market price. In addition, we periodically repurchase shares of Common Stock pursuant to Board-authorized programs intended to drive additional stockholder value. Details regarding our share repurchases are as follows:

(1) In December 2023, our Board of Directors approved a $500 million share repurchase authorization. As a result of the share repurchase authorization, approximately $270 million remains available for repurchases under our December 2023 share repurchase authorization. In June 2026, our Board of Directors approved an additional $500 million share repurchase authorization. This program is to commence after the existing 2023 authorization is completed and is to be utilized at management’s discretion. 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.

•Proceeds from exercised stock options and employee tax withholding. During the first nine months of 2026, we received $16.9 million from employee exercises of stock options and paid $18.2 million of employee taxes withheld from share-based awards. During the first nine months of 2025, we received $17.3 million from employee exercises of stock options and paid $17.2 million of employee taxes withheld from share-based awards. Variances are driven primarily by the number of shares exercised and the share price at the date of grant.

•Contingent consideration paid. During the first nine months of 2026, we paid $16.6 million of contingent consideration related to previous business combination activity. During the first nine months of 2025, there was no contingent consideration paid.

Recent Accounting Pronouncements

Information on recently adopted and issued accounting standards is included in Note 1 to the Unaudited Consolidated Financial Statements.

Critical Accounting Estimates

For information regarding the Company’s critical accounting estimates, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2025 Annual Report on Form 10-K. There have been no material changes to the Company’s critical accounting estimates since December 31, 2025.