What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-21 compared with 2023-02-22 · 195 added, 229 removed, 1247 unchanged (25% of the section changed)

8 unchanged sentences

Income from operations 834,451 641,047 439,171

Interest expense, net 24,792 33,449 36,735

Interest (income) expense, net ( 918 ) 24,792 33,449

Mark-to-market on acquisition related contingent consideration 159,354 32,301 146,308

Pension plan settlement expense 112,796 — —

Other expense, net 5,738 8,867 4,265

2 unchanged sentences

Net income $ 408,375 $ 430,158 $ 189,580

Net income attributable to noncontrolling interest — — 9,604

Net income attributable to Coca‑Cola Consolidated, Inc.

$ 430,158 $ 189,580 $ 172,493

Basic net income per share based on net income attributable to Coca‑Cola Consolidated, Inc.:

Basic net income per share:

Common Stock $ 43.56 $ 45.88 $ 20.23

2 unchanged sentences

Weighted average number of Class B Common Stock shares outstanding 1,005 1,257 2,232

Diluted net income per share based on net income attributable to Coca‑Cola Consolidated, Inc.:

Diluted net income per share:

Common Stock $ 43.48 $ 45.74 $ 20.17

7 unchanged sentences

Net income $ 408,375 $ 430,158 $ 189,580

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Defined benefit plans reclassification including pension costs:

Actuarial gain (loss) 7,742 14,965 ( 673 )

Actuarial gain 3,762 7,742 14,965

Prior service credits (costs) 8 ( 116 ) 3

Pension plan settlement 82,822 — —

Postretirement benefits reclassification including benefit costs:

Actuarial gain (loss) 7,991 3,089 ( 3,137 )

Actuarial (loss) gain ( 6,031 ) 7,991 3,089

Interest rate swap — — 556

Foreign currency translation adjustment — 9 ( 23 )

Other comprehensive income (loss), net of tax 15,626 18,590 ( 4,051 )

Other comprehensive income, net of tax 80,561 15,626 18,590

Comprehensive income $ 488,936 $ 445,784 $ 208,170

Comprehensive income attributable to noncontrolling interest — — 9,604

Comprehensive income attributable to Coca‑Cola Consolidated, Inc.

$ 445,784 $ 208,170 $ 168,442

See accompanying notes to consolidated financial statements.

10 unchanged sentences

Prepaid expenses and other current assets 88,585 94,263

Assets held for sale — 6,880

Total current assets 1,705,128 1,245,801

15 unchanged sentences

Accrued compensation 146,932 126,921

Accrued interest payable 2,677 4,096

Dividends payable 154,666 32,808

19 unchanged sentences

authorized - 30,000,000 shares;

issued - 11,431,367 and 10,203,821 shares, respectively

issued - 11,431,367 shares

11,431 11,431

1 unchanged sentence

authorized - 10,000,000 shares;

issued - 1,632,810 and 2,860,356 shares, respectively

issued - 1,632,810 shares

Class C Common Stock, $ 1.00 par value:

22 unchanged sentences

Fair value adjustment of acquisition related contingent consideration 159,354 32,301 146,308

Deferred payroll taxes under CARES Act ( 18,739 ) ( 18,739 ) 37,412

Pension plan settlement expense 112,796 — —

Deferred income taxes ( 49,021 ) 8,977 ( 9,183 )

1 unchanged sentence

Amortization of debt costs 991 1,012 1,256

Deferred payroll taxes under CARES Act — ( 18,739 ) ( 18,739 )

Impairment and abandonment of property, plant and equipment — — 3,200

2 unchanged sentences

Change in other noncurrent liabilities ( 47,798 ) ( 33,430 ) ( 23,751 )

Other — ( 23 ) 1,065

Total adjustments 402,315 124,348 332,175

2 unchanged sentences

Additions to property, plant and equipment $ ( 282,304 ) $ ( 298,611 ) $ ( 155,693 )

Acquisition of distribution rights ( 30,649 ) ( 8,993 ) —

Investment in equity method investees ( 13,741 ) ( 3,094 ) ( 2,531 )

Proceeds from the sale of property, plant and equipment 695 7,369 5,274

Investment in CONA Services LLC ( 3,094 ) ( 2,531 ) ( 1,770 )

Acquisition of distribution rights — ( 30,649 ) ( 8,993 )

Net cash used in investing activities $ ( 295,350 ) $ ( 324,985 ) $ ( 161,943 )

Cash Flows from Financing Activities:

Payments on term loan facility and senior notes $ ( 125,000 ) $ ( 287,500 ) $ ( 45,000 )

Payments of acquisition related contingent consideration ( 36,515 ) ( 39,097 ) ( 43,400 )

Cash dividends paid $ ( 46,868 ) $ ( 9,374 ) $ ( 9,374 )

Payments of acquisition related contingent consideration ( 28,208 ) ( 36,515 ) ( 39,097 )

Payments on financing lease obligations ( 2,303 ) ( 2,988 ) ( 4,778 )

Debt issuance fees ( 340 ) ( 310 ) ( 1,542 )

Payments on term loan facility and senior notes — ( 125,000 ) ( 287,500 )

Borrowings under term loan facility — — 70,000

1 unchanged sentence

Borrowings under revolving credit facility — — 55,000

Purchase of noncontrolling interest in Piedmont Coca-Cola Bottling Partnership — — ( 100,000 )

Net cash used in financing activities $ ( 77,719 ) $ ( 174,187 ) $ ( 272,291 )

12 unchanged sentences

Stock Treasury

Consolidated,

Interest Total

Balance on December 31, 2020 $ 10,204 $ 2,860 $ 135,953 $ 544,280 $ ( 119,053 ) $ ( 60,845 ) $ ( 409 ) $ 512,990

Net income — — — 189,580 — — — 189,580

Other comprehensive loss, net of tax — — — — ( 4,051 ) — — ( 4,051 ) — ( 4,051 )

Other comprehensive income, net of tax — — — — 18,590 — — 18,590

Dividends declared:

1 unchanged sentence

— — — ( 7,141 ) — — — ( 7,141 )

Class B Common Stock

($ 1.00 per share)

Class B Common Stock ($ 1.00 per share)

— — — ( 2,233 ) — — — ( 2,233 )

Purchase of noncontrolling interest in Piedmont Coca-Cola Bottling Partnership — — 6,970 — — — — 6,970 ( 113,768 ) ( 106,798 )

Balance on December 31, 2021 $ 10,204 $ 2,860 $ 135,953 $ 724,486 $ ( 100,463 ) $ ( 60,845 ) $ ( 409 ) $ 711,786

4 unchanged sentences

— — — ( 37,354 ) — — — ( 37,354 )

Class B Common Stock

($ 1.00 per share)

Class B Common Stock ($ 4.50 per share)

— — — ( 4,828 ) — — — ( 4,828 )

Conversion of 1,227,546 shares of Class B Common Stock

1,227 ( 1,227 ) — — — — — —

Balance on December 31, 2022 $ 11,431 $ 1,633 $ 135,953 $ 1,112,462 $ ( 84,837 ) $ ( 60,845 ) $ ( 409 ) $ 1,115,388

4 unchanged sentences

— — — ( 150,642 ) — — — ( 150,642 )

Class B Common Stock

($ 4.50 per share)

— — — ( 4,828 ) — — — ( 4,828 ) — ( 4,828 )

Conversion of 1,227,546 shares of Class B Common Stock

Class B Common Stock ($ 18.00 per share)

— — — ( 18,084 ) — — — ( 18,084 )

24 unchanged sentences

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks and cash equivalents, which are highly liquid debt instruments with maturities of less than 90 days.

The Company maintains cash deposits with major banks, which, from time to time, may exceed federally insured limits.

Cash and cash equivalents include cash on hand, cash in banks and cash equivalents, which are highly liquid money market funds and debt instruments with maturities of 90 days or less.

The Company maintains cash deposits with major banks, which may exceed federally insured limits.

The Company periodically assesses the financial condition of the institutions and believes the risk of any loss is minimal.

Investments in debt securities with maturities of 90 days or less that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity.

Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale.

Accounts Receivable, Trade

5 unchanged sentences

The Company’s allowance for doubtful accounts in the consolidated balance sheets includes a reserve for customer returns and an allowance for credit losses.

The Company experiences customer returns primarily as a result of damaged or out-of-date product.

The Company experiences customer returns primarily as a

result of damaged or out-of-date product.

At any given time, the Company estimates less than 1 % of bottle/can sales and post-mix sales could be at risk for return by customers.

79 unchanged sentences

Pension and Postretirement Benefit Plans

There are two Company-sponsored pension plans.

The Company has historically sponsored two pension plans.

The primary Company-sponsored pension plan (the “Primary Plan”) was frozen as of June 30, 2006 and no benefits accrued to participants after that date.

4 unchanged sentences

The expense and liability amounts recorded for the benefit plans reflect estimates related to interest rates, investment returns, employee turnover and age at retirement, mortality rates and healthcare costs.

Given the anticipated termination of the Primary Plan, the Company determined an appropriate discount rate for the Primary Plan in 2022 based on lump sum segment interest rates, expected lump sum election rates and estimated annuity purchase rates.

See Note 16 for additional discussion of the anticipated termination of the Primary Plan.

The Primary Plan was fully settled in 2023.

The Company recognized a non-cash charge related to the full settlement of the Primary Plan benefit liabilities, which was recorded as pension plan settlement expense in the consolidated statement of operations for 2023, and there are no remaining benefit liabilities related to the Primary Plan as of December 31, 2023.

See Note 17 for additional discussion of the termination of the Primary Plan.

The Company determines an appropriate discount rate annually for the Bargaining Plan and the postretirement healthcare plan based on the Aon AA Above Median yield curve as of the measurement date and reviews the discount rate assumption at the end of each year.

50 unchanged sentences

While the Company would be exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these counterparties.

Commodity derivative instruments held by the Company are marked to market on a monthly basis and recognized in earnings consistent with the expense classification of the underlying hedged item.

Commodity derivative instruments held by the Company are marked to market on a quarterly basis and recognized in earnings consistent with the expense classification of the underlying hedged item.

The Company generally pays a fee for these commodity derivative instruments, which is amortized over the corresponding period of each commodity derivative instrument.

17 unchanged sentences

Shipping and handling costs related to the movement of finished products from manufacturing plants to distribution centers are included in cost of sales.

Shipping and handling costs related to the movement of finished products from distribution centers to customer locations, including distribution center warehousing costs, are included in SD&A expenses and totaled $ 756.9 million in 2022, $ 674.3 million in 2021 and $ 622.1 million in 2020.

Shipping and handling costs directly related to the movement of finished products from distribution centers to customer locations, including distribution center warehousing costs, are included in SD&A expenses.

Stock Compensation

The Company has a long-term performance equity plan (the “Long-Term Performance Equity Plan”) under which awards are earned and granted to Mr.

Harrison based on the Company’s attainment during a performance period of performance measures specified by the Compensation Committee of the Company’s Board of Directors.

The Company has a long-term performance equity plan (the “Long-Term Performance Equity Plan”) under which awards are earned and granted to J.

Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, based on the Company’s attainment during a performance period of performance measures specified by the Compensation Committee of the Company’s Board of Directors.

Harrison may elect to have awards earned under the Long‑Term Performance Equity Plan settled in cash and/or shares of the Company’s Class B Common Stock.

2 unchanged sentences

The Company has two classes of common stock outstanding, Common Stock and Class B Common Stock.

The Common Stock is traded on The Nasdaq Global Select Market under the symbol COKE.

There is no established public trading market for the Class B Common Stock.

The Common Stock is traded on The Nasdaq Global Select Market under the symbol “COKE.” There is no established public trading market for the Class B Common Stock.

Shares of Class B Common Stock are convertible on a share-for-share basis into shares of Common Stock at any time at the option of the holder.

7 unchanged sentences

Notwithstanding this provision, the Class B Common Stock has voting and conversion rights that allow the Class B Common Stock to participate equally on a per share basis with the Common Stock.

The Board of Directors has declared, and the Company has paid, dividends on the Common Stock and the Class B Common Stock and each class of common stock has participated equally in all dividends declared by the Board of Directors and paid by the Company since 1994.

The Company’s Board of Directors has declared, and the Company has paid, dividends on the Common Stock and the Class B Common Stock and each class of common stock has participated equally in all dividends declared by the Board of Directors and paid by the Company since 1994.

During 2023, dividends of $ 18.00 per share were declared and dividends of $ 5.00 per share were paid on both the Common Stock and the Class B Common Stock.

The remaining $ 3.50 per share of dividends declared but not yet paid as of December 31, 2022 were paid on February 10, 2023 to stockholders of record of the Common Stock and the Class B Common Stock as of the close of business on January 27, 2023.

During 2021 and 2020, dividends of $ 1.00 per share were declared and paid on both the Common Stock and the Class B Common Stock.

Total cash dividends paid were $ 9.4 million per year in 2022, 2021 and 2020.

Of the dividends declared in 2023, $ 16.50 per share of dividends declared but not yet paid as of December 31, 2023 were paid on February 9, 2024 to stockholders of record of the Common Stock and the Class B Common Stock as of the close of business on January 26, 2024.

During 2022, dividends of $ 4.50 per share were declared and dividends of $ 1.00 per share were paid on both the Common Stock and the Class B Common Stock.

During 2021, dividends of $ 1.00 per share were declared and paid on both the Common Stock and the Class B Common Stock.

Total cash dividends paid were $ 46.9 million in 2023 and $ 9.4 million in both 2022 and 2021.

Net Income Per Share

14 unchanged sentences

The Company does no t have anti-dilutive shares.

Recently Issued Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities-Supplier Finance Programs,” which requires additional quantitative and qualitative disclosures related to a Company’s supplier finance programs to enhance the transparency of these programs.

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2022-04, “Liabilities-Supplier Finance Programs,” which requires additional quantitative and qualitative disclosures related to a company’s supply chain finance programs to enhance the transparency of these programs.

The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023.

The Company evaluated the impact ASU 2022-04 will have on its consolidated financial statements and does not expect a material impact upon adoption in 2023.

The Company adopted ASU 2022-04 in the first quarter of 2023, with the exception of the amendment on rollforward information, and the adoption did not have a material impact on its consolidated financial statements.

See Note 12 for disclosures related to the Company’s supply chain finance program.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which requires additional disclosure of significant segment expenses included in the reported measure of segment profit or loss and regularly provided to the Chief Operating Decision Maker (the “CODM”).

It also requires disclosure and a description of the composition of other amounts by reportable segment, disclosure of a reportable segment’s profit or loss and assets currently

required by Topic 280 in interim periods and disclosure of the CODM’s title and process for assessing a reportable segment’s profit or loss.

The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years beginning after December 15, 2024.

The Company evaluated the impact ASU 2023-07 will have on its consolidated financial statements and does not expect a material impact upon adoption.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires disclosure of specific categories in the rate reconciliation, including additional information for reconciling items that meet a quantitative threshold, and specific disaggregation of income taxes paid and tax expense.

The amendment is effective for annual periods beginning after December 15, 2024.

The Company has evaluated the impact ASU 2023-09 will have on its consolidated financial statements and does not expect a material impact upon adoption.

Related Party Transactions

The Coca‑Cola Company

The Company’s business consists primarily of the distribution, marketing and manufacture of nonalcoholic beverages of The Coca‑Cola Company, which is the sole owner of the formulas under which the primary components of its soft drink products, either concentrate or syrup, are manufactured.

On March 17, 2022, the Company entered into a stockholder conversion agreement (the “Stockholder Conversion Agreement”) with the JFH Family Limited Partnership—SW1, the Anne Lupton Carter Trust f/b/o Sue Anne H.

Wells, the JFH Family Limited Partnership—DH1 and the Anne Lupton Carter Trust f/b/o Deborah S.

Harrison (collectively, the “Converting Stockholders”), pursuant to which the Company and the Converting Stockholders agreed upon the process for converting an aggregate of 1,227,546 shares of the Company’s Class B Common Stock owned by the Converting Stockholders on a one share for one share basis into shares of the Company’s Common Stock, effective as of March 17, 2022 (the “Converted Shares”).

In the Stockholder Conversion Agreement, the Company agreed to cause the Converted Shares to be registered for resale pursuant to the Company’s existing automatic shelf registration statement and the Converting Stockholders agreed to certain restrictions on their resale of the Converted Shares, including a trade volume limitation that prohibits the sale of more than 175,000 of the Converted Shares in the aggregate during any three -consecutive month period.

On June 21, 2022, the Company filed a prospectus supplement with the SEC pursuant to the Company’s existing automatic shelf registration statement, registering the Converted Shares for resale by the Converting Stockholders.

The Company will not receive any proceeds from any resale of the Converted Shares by the Converting Stockholders.

The Company’s business consists primarily of the distribution, marketing and manufacture of nonalcoholic beverages of The Coca‑Cola Company, which is the sole owner of the formulas under which the primary components of the Company’s soft drink products, either concentrate or syrup, are manufactured.

As of December 31, 2023, J.

11 unchanged sentences

Payments made by The Coca-Cola Company to the Company 253,972 256,333 207,073

(1) This excludes acquisition related sub-bottling payments made by the Company to Coca-Cola Refreshments USA, Inc., a wholly owned subsidiary of The Coca‑Cola Company, but includes the purchase price of certain additional BODYARMOR distribution rights, each as discussed below.

(1) This excludes acquisition related sub-bottling payments made by the Company to CCR, a wholly owned subsidiary of The Coca‑Cola Company, but includes the purchase price of certain additional BODYARMOR distribution rights, each as discussed below.

On January 1, 2022, the Company entered into an agreement to acquire $ 30.1 million of additional BODYARMOR distribution rights with an estimated useful life of 40 years.

3 unchanged sentences

Payments made by The Coca‑Cola Company to the Company included annual funding in connection with the Company’s agreement to support certain business initiatives developed by The Coca‑Cola Company and funding associated with the delivery of post-mix products to various customers, both of which were recorded as a reduction to cost of sales in the consolidated statements of operations.

Payments made by The Coca‑Cola Company to the Company also included transportation services and fountain product delivery and equipment repair services performed by the Company on The Coca‑Cola Company’s equipment, all of which were recorded in net sales in the consolidated statements of operations.

Payments made by The Coca‑Cola Company to the Company also included fountain product delivery and equipment repair services performed by the Company on The Coca‑Cola Company’s equipment, all of which were recorded in net sales in the consolidated statements of operations.

Coca‑Cola Refreshments USA, Inc.

The CBA requires the Company to make quarterly acquisition related sub-bottling payments to CCR on a continuing basis in exchange for the grant of exclusive rights to distribute, promote, market and sell the authorized brands of The Coca‑Cola Company and related products in certain distribution territories the Company acquired from CCR.

These acquisition related sub-bottling

payments are based on gross profit derived from the Company’s sales of certain beverages and beverage products that are sold under the same trademarks that identify a covered beverage, a beverage product or certain cross-licensed brands applicable to the System Transformation.

These acquisition related sub-bottling payments are based on gross profit derived from the Company’s sales of certain beverages and beverage products that are sold under the same trademarks that identify a covered beverage, a beverage product or certain cross-licensed brands applicable to the System Transformation.

Acquisition related sub-bottling payments to CCR were $ 28.2 million in 2023, $ 36.5 million in 2022 and $ 39.1 million in 2021.

12 unchanged sentences

The Company accounts for SAC as an equity method investment.

The Company’s investment in SAC, which was classified as other assets in the consolidated balance sheets, was $ 8.2 million as of both December 31, 2022 and December 31, 2021.

The Company’s investment in SAC, which was classified as other assets in the consolidated balance sheets, was $ 17.2 million as of December 31, 2023 and $ 8.2 million as of December 31, 2022.

The Company also guarantees a portion of SAC’s debt;

23 unchanged sentences

The principal balance outstanding under this lease was $ 22.5 million on December 31, 2023 and $ 25.5 million on December 31, 2022.

The Company previously leased the Snyder Production Center and an adjacent sales facility in Charlotte, North Carolina (together, the “Snyder Production Center”) from Harrison Limited Partnership One (“HLP”), which is directly and indirectly owned by trusts of which J.

Frank Harrison, III and Sue Anne H.

Wells, a former director of the Company, are trustees and beneficiaries and of which Morgan H.

Everett is a permissible, discretionary beneficiary.

On March 17, 2022, CCBCC Operations, LLC (“Operations”), a wholly owned subsidiary of the Company, entered into a definitive purchase and sale agreement with HLP, pursuant to which Operations purchased the Snyder Production Center from HLP on such date for a purchase price of $ 60.0 million.

This lease, which was scheduled to expire on December 31, 2035, was terminated in connection with the purchase of the Snyder Production Center by Operations.

There was no principal balance outstanding under this lease on December 31, 2022 and there was a principal balance outstanding under this lease of $ 59.1 million on December 31, 2021.

A summary of rental payments for these leases related to 2022, 2021 and 2020 is as follows:

A summary of rental payments for related party leases for 2023, 2022 and 2021 is as follows:

(in thousands) 2023 2022 2021

1 unchanged sentence

Snyder Production Center (1)

(1) The lease for the Snyder Production Center and an adjacent sales facility in Charlotte, North Carolina (together, the “Snyder Production Center”) was terminated during 2022 in connection with the purchase of the Snyder Production Center by CCBCC Operations, LLC, a wholly owned subsidiary of the Company.

Long-Term Performance Equity Plan

17 unchanged sentences

Bottle/can sales, sales to other Coca‑Cola bottlers and post-mix sales are recognized when control transfers to a customer, which is generally upon delivery and is considered a single point in time.

Point in time sales accounted for approximately 97 % of the Company’s net sales in each of 2022, 2021 and 2020.

Point in time sales accounted for approximately 98 % of the Company’s net sales in 2023 and approximately 97 % of the Company’s net sales in both 2022 and 2021.

Other sales, which include revenue for service fees related to the repair of cold drink equipment and delivery fees for freight hauling and brokerage services, are recognized over time.

18 unchanged sentences

Returned product is recognized as a reduction to net sales.

The Company’s reserve for customer returns was $ 3.0 million as of both December 31, 2022 and December 31, 2021.

The Company’s reserve for customer returns was $ 4.5 million as of December 31, 2023 and $ 3.0 million as of December 31, 2022.

The Company estimates an allowance for credit losses, based on historic days’ sales outstanding trends, aged customer balances, previously written-off balances and expected recoveries up to balances previously written off, in order to present the net amount expected to be collected.

6 unchanged sentences

Ending balance - allowance for credit losses $ 11,560 $ 13,119 $ 14,336

The Company evaluates segment reporting in accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting, each reporting period, including evaluating the reporting package reviewed by the Chief Operating Decision Maker (the “CODM”).

The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM.

26 unchanged sentences

Numerator for basic and diluted net income per Common Stock and Class B Common Stock share:

Net income attributable to Coca-Cola Consolidated, Inc.

$ 430,158 $ 189,580 $ 172,493

Net income $ 408,375 $ 430,158 $ 189,580

Less dividends:

48 unchanged sentences

(5) The Company did no t have anti-dilutive shares for any periods presented.

(6) 1,227,546 shares of the Company’s Class B Common Stock were converted on a one share for one share basis into shares of the Company’s Common Stock, effective as of March 17, 2022.

See Note 2 for additional information on the Stockholder Conversion Agreement.

Inventories consisted of the following:

8 unchanged sentences

Repair parts $ 35,256 $ 35,088

Prepaid taxes 7,829 4,079

Prepaid software 9,427 7,398

Commodity hedges at fair market value 4,808 7,714

Prepaid taxes 9,020 7,829

Prepaid marketing 4,703 4,303

Commodity hedges at fair market value 3,747 4,808

Other prepaid expenses and other current assets 26,432 34,837

24 unchanged sentences

Financing leases 5.2 % 5.2 %

On March 17, 2022, the Company terminated its financing lease for the Snyder Production Center, which was scheduled to expire on December 31, 2035.

See Note 2 for additional information on the lease termination.

Following is a summary of the Company’s leases within the consolidated statements of operations:

43 unchanged sentences

Distribution Agreements, Net

Distribution agreements, net, which are amortized on a straight-line basis and have an estimated useful life of 20 to 40 years, consisted of the following:

Distribution agreements, net, which are amortized on a straight-line basis and have estimated useful lives of 20 to 40 years, consisted of the following:

(in thousands) December 31, 2023 December 31, 2022

8 unchanged sentences

Ending balance - distribution agreements, net $ 817,143 $ 842,035

Assuming no impairment of distribution agreements, net, amortization expense in future years based upon recorded amounts as of December 31, 2022 will be approximately $ 25 million for each fiscal year 2023 through 2027.

Assuming no impairment of distribution agreements, net, amortization expense in future years based upon recorded amounts as of December 31, 2023 will be $ 24.9 million for each fiscal year 2024 through 2028.

Customer Lists, Net

Customer lists, net, which are amortized on a straight-line basis and have an estimated useful life of five to 12 years, consisted of the following:

Customer lists, net, which are amortized on a straight-line basis and have estimated useful lives of five to 12 years, consisted of the following:

(in thousands) December 31, 2023 December 31, 2022

2 unchanged sentences

Customer lists, net $ 7,499 $ 9,165

Assuming no impairment of customer lists, net, amortization expense in future years based upon recorded amounts as of December 31, 2022 will be approximately $ 2 million for each fiscal year 2023 through 2027.

Assuming no impairment of customer lists, net, amortization expense in future years based upon recorded amounts as of December 31, 2023 will, on average, be $ 1.4 million for each fiscal year 2024 through 2028.

Supply Chain Finance Program

The Company has an agreement with a third-party financial institution to facilitate a supply chain finance (“SCF”) program, which allows qualifying suppliers to sell their receivables from the Company to the financial institution.

The participating suppliers negotiate their outstanding receivable arrangements and associated fees directly with the financial institution, and the Company is not party to those agreements.

Once a qualifying supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices it sells to the financial institution.

The supplier invoices that have been confirmed as valid under the SCF program require payment in full by the financial institution to the supplier by the original maturity date of the invoice, or discounted payment at an earlier date as agreed upon with the supplier.

The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the SCF program.

All outstanding amounts related to suppliers participating in the SCF program are recorded in accounts payable, trade in the consolidated balance sheets, and associated payments are included in operating activities in the consolidated statements of cash flows.

The Company’s outstanding confirmed obligations included in accounts payable, trade in the consolidated balance sheets were $ 55.1 million as of December 31, 2023 and $ 44.2 million as of December 31, 2022.

Other Accrued Liabilities

1 unchanged sentence

(in thousands) December 31, 2023 December 31, 2022

Accrued insurance costs $ 54,180 $ 51,645

Current portion of acquisition related contingent consideration $ 64,528 $ 40,060

Accrued marketing costs 55,799 33,375

Accrued insurance costs 54,040 54,180

Employee and retiree benefit plan accruals 34,203 31,711

Accrued taxes (other than income taxes) 7,474 7,127

Current portion of deferred payroll taxes under CARES Act — 18,739

Accrued interest payable 2,520 2,677

All other accrued expenses 19,430 31,847

Total other accrued liabilities $ 237,994 $ 200,977

The Company took advantage of certain provisions of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), which allowed an employer to defer the deposit and payment of the employer’s portion of social security taxes that would otherwise have been due on or after March 27, 2020 and before January 1, 2021.

The law permits an employer to deposit half of these deferred payments by December 31, 2021 and the other half by December 31, 2022.

The Company repaid a portion of the deferred payroll taxes during 2021 and repaid the remaining portion of the deferred payroll taxes during 2022.

Commodity Derivative Instruments

5 unchanged sentences

While the Company would be exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these counterparties.

Commodity derivative instruments held by the Company are marked to market on a monthly basis and are recognized in earnings consistent with the expense classification of the underlying hedged item.

Commodity derivative instruments held by the Company are marked to market on a quarterly basis and are recognized in earnings consistent with the expense classification of the underlying hedged item.

The Company generally pays a fee for these commodity derivative instruments, which is amortized over the corresponding period of each commodity derivative instrument.

4 unchanged sentences

Selling, delivery and administrative expenses ( 2,281 ) 427 1,772

Total gain (loss) $ ( 2,906 ) $ 5,241 $ 2,787

Total (loss) gain $ ( 1,061 ) $ ( 2,906 ) $ 5,241

All commodity derivative instruments are recorded at fair value as either assets or liabilities in the consolidated balance sheets.

56 unchanged sentences

The acquisition related contingent consideration was valued using a probability weighted discounted cash flow model based on internal forecasts and the WACC derived from market data, which are considered Level 3 inputs.

Each reporting period, the Company adjusts its acquisition related contingent consideration liability related to the distribution territories subject to acquisition related sub-

bottling payments to fair value by discounting future expected acquisition related sub-bottling payments required under the CBA using the Company’s estimated WACC.

Each reporting period, the Company adjusts its acquisition related contingent consideration liability related to the distribution territories subject to acquisition related sub-bottling payments to fair value by discounting future expected acquisition related sub-bottling payments required under the CBA using the Company’s estimated WACC.

The future expected acquisition related sub-bottling payments extend through the life of the related distribution assets acquired in each distribution territory, which is generally 40 years.

As a result, the fair value of the acquisition related contingent consideration liability is impacted by the Company’s WACC, management’s estimate of acquisition related sub-bottling payments that will be made in the future under the CBA, and current acquisition related sub-bottling payments (all Level 3 inputs).

As a result, the fair value of the acquisition related contingent consideration liability is impacted by the Company’s WACC, management’s estimate of the acquisition related sub-bottling payments that will be made in the future under the CBA, and current acquisition related sub-bottling payments (all Level 3 inputs).

Changes in any of these Level 3 inputs, particularly the underlying risk-free interest rate used to estimate the Company’s WACC, could result in material changes to the fair value of the acquisition related contingent consideration liability and could materially impact the amount of non-cash expense (or income) recorded each reporting period.

8 unchanged sentences

As of December 31, 2023 and December 31, 2022, discount rates of 8.5 % and 9.1 %, respectively, were utilized in the valuation of the Company’s acquisition related contingent consideration liability.

The increase in the fair value of the acquisition related contingent consideration liability in 2022 was primarily driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments, partially offset by an increase in the discount rate used to calculate fair value.

This fair value adjustment was recorded in other expense, net in the consolidated statement of operations for 2022.

The Company anticipates that the amount it could pay annually under the acquisition related contingent consideration arrangements for the distribution territories subject to acquisition related sub-bottling payments will be in the range of $ 42 million to $ 74 million.

The increase in the fair value of the acquisition related contingent consideration liability in 2023 was driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments as well as a decrease in the discount rate used to calculate the fair value of the liability.

This fair value adjustment was recorded in mark-to-market on acquisition related contingent consideration in the consolidated statement of operations for 2023.

For the next five years , the Company anticipates that the amount it could pay annually under the acquisition related contingent consideration arrangements for the distribution territories subject to acquisition related sub-bottling payments will be in the range of approximately $ 50 million to $ 70 million.

The current income tax provision represents the estimated amount of income taxes paid or payable for the year, as well as changes in estimates from prior years.

The deferred income tax provision represents the change in deferred tax liabilities and assets.

The deferred income tax (benefit) provision represents the change in deferred tax liabilities and assets.

The following table presents the significant components of the provision for income taxes:

5 unchanged sentences

State ( 8,363 ) 1,499 ( 4,217 )

Total deferred provision (benefit) $ 8,977 $ ( 9,183 ) $ 8,737

Total deferred (benefit) provision $ ( 49,021 ) $ 8,977 $ ( 9,183 )

Income tax expense $ 149,106 $ 144,929 $ 65,569

The Company’s effective income tax rate, calculated by dividing income tax expense by income before taxes, was 25.2 % for 2022, 25.7 % for 2021 and 24.5 % for 2020.

The Company’s effective income tax rate was 26.7 % for 2023, 25.2 % for 2022 and 25.7 % for 2021.

The following table provides a reconciliation of income tax expense at the statutory federal rate to actual income tax expense:

10 unchanged sentences

Meals, entertainment and travel expense 3,336 0.6 1,694 0.3 2,028 0.8

Adjustment for uncertain tax positions ( 1,351 ) ( 0.2 ) ( 984 ) ( 0.4 ) 114 —

Valuation allowance change 701 0.1 ( 932 ) ( 0.2 ) ( 902 ) ( 0.4 )

Noncontrolling interest – Piedmont — — — — ( 2,447 ) ( 1.0 )

Adjustment for uncertain tax positions 52 — ( 1,351 ) ( 0.2 ) ( 984 ) ( 0.4 )

Other, net ( 427 ) ( 0.1 ) ( 827 ) ( 0.2 ) ( 1,221 ) ( 0.4 )

Income tax expense $ 149,106 26.7 % $ 144,929 25.2 % $ 65,569 25.7 %

The Company’s effective income tax rate, calculated by dividing income tax expense by income before taxes minus net income attributable to noncontrolling interest, was 25.5 % for 2020.

The Company had no net income attributable to noncontrolling interest during 2022 or 2021.

The Company records liabilities for uncertain tax positions related to income tax positions.

17 unchanged sentences

Acquisition related contingent consideration $ 163,827 $ 132,535

Operating lease liabilities 35,832 35,382

Accrued liabilities 32,516 30,064

Deferred revenue 27,976 26,852

Operating lease liabilities 31,443 35,832

Deferred compensation 27,017 23,102

Deferred revenue 26,750 27,976

Postretirement benefits 13,601 11,511

Transactional costs 3,101 3,532

Pension 808 4,617

Financing lease agreements 470 614

Net operating loss carryforwards 437 532

Pension 427 808

Other 3,084 3,875

23 unchanged sentences

Participants are immediately vested in all deferred contributions they make and become fully vested in Company contributions upon completion of five years of service with the Company, termination of employment due to death or retirement or a change in control.

Participant deferrals and Company

contributions made in years prior to 2006 are invested in either a fixed benefit option or certain investment funds determined by the participant.

Participant deferrals and Company contributions made in years prior to 2006 are invested in either a fixed benefit option or certain investment funds determined by the participant.

Beginning in 2010, the Company may elect at its discretion to match up to 50 % of the first 6 % of salary, excluding bonuses, deferred by the participant.

10 unchanged sentences

Amounts awarded may earn an investment return based on certain investment funds specified by the Company.

Benefits under the Long-Term Retention Plan are 50 % vested until age 51 .

Beginning at age 51 , the vesting percentage increases by 5 % each year until the benefits are fully vested at age 60 .

Accrued benefits under the Long-Term Retention Plan are 50 % vested until age 51 .

Beginning at age 51 , the vesting percentage increases by 5 % each year until the accrued benefit is fully vested at age 60 .

Participants receive payments from the plan upon retirement or, in certain instances, upon termination of employment.

7 unchanged sentences

The benefits under the Officer Retention Plan increase with each year of participation as set forth in an agreement between the participant and the Company.

Benefits under the Officer Retention Plan are 50 % vested until age 51 .

Beginning at age 51 , the vesting percentage increases by 5 % each year until the benefits are fully vested at age 60 .

Accrued benefits under the Officer Retention Plan are 50 % vested until age 51 .

Beginning at age 51 , the vesting percentage increases by 5 % each year until the accrued benefit is fully vested at age 60 .

The liability under this plan was as follows:

4 unchanged sentences

Under the Long-Term Performance Plan, as amended and restated effective January 1, 2018, and as further amended thereafter, the Compensation Committee of the Company’s Board of Directors establishes dollar amounts to which a participant shall be entitled upon attainment of the applicable performance measures.

Bonus awards under the Long-Term Performance Plan are made based on the relative achievement of performance measures in terms of the Company-sponsored objectives or objectives related to the performance of the individual participant or of the subsidiary, division, department, region or function in which the participant is employed.

Bonus awards under the Long-Term Performance Plan are made based on the relative achievement of performance measures in terms of the Company-sponsored objectives or objectives related to the

performance of the individual participant or of the subsidiary, division, department, region or function in which the participant is employed.

The liability under this plan was as follows:

4 unchanged sentences

Pension Plans

There are two Company-sponsored pension plans.

The Company has historically sponsored two pension plans.

The Primary Plan was frozen as of June 30, 2006 and no benefits accrued to participants after that date.

2 unchanged sentences

Contributions to the plans are based on actuarially determined amounts and are limited to the amounts currently deductible for income tax purposes.

updates its mortality assumptions used in the calculation of its pension liability each year using The Society of Actuaries’ latest mortality tables and mortality projection scales.

During 2022, the Company began the process of terminating the Primary Plan.

During 2023, the Company expects to offer a lump sum benefit payout option to certain plan participants prior to completing the purchase of group annuity contracts that will transfer the pension benefit obligation to an insurance company.

The assumptions used to estimate the fair value during the annual measurement reflect the incremental cost to terminate the Primary Plan.

The following tables set forth pertinent information for the two Company-sponsored pension plans:

The Company updates its mortality assumptions used in the calculation of its pension liability each year using The Society of Actuaries’ latest mortality tables and mortality projection scales.

In 2022, the Company began the process of terminating the Primary Plan.

In connection with the termination process, the Company offered a lump sum benefit payout option to certain plan participants.

The remaining assets of the Primary Plan were used to purchase a group annuity contract that transferred the remaining Primary Plan benefit liabilities to an insurance company.

During 2023, the Company contributed $ 12.0 million to fund the termination of the Primary Plan.

The Company recognized settlement expense of $ 112.8 million during 2023 in conjunction with the full settlement of the Primary Plan benefit liabilities, including final premium adjustments.

This settlement expense related primarily to the reclassification of the gross actuarial losses associated with the Primary Plan out of accumulated other comprehensive loss and was recorded as pension plan settlement expense in the consolidated statement of operations for 2023.

As of December 31, 2023, there was no remaining projected benefit obligation, plan assets or net unfunded liability related to the Primary Plan.

As of December 31, 2022, the projected benefit obligation and plan assets related to the Primary Plan were $ 231.0 million and $ 223.3 million, respectively.

The projected benefit obligation and the accumulated benefit obligation for the Primary Plan were in excess of plan assets as of December 31, 2022.

The net unfunded status of the Primary Plan as of December 31, 2022 was $ 7.7 million, which was classified as a noncurrent liability in the consolidated balance sheets.

Net Periodic Pension Cost

(in thousands) 2023 2022 2021

Beginning balance - projected benefit obligation $ 359,475 $ 368,245

Service cost $ — $ — $ —

Interest cost 5,982 8,978 8,479

Expected return on plan assets ( 4,608 ) ( 6,320 ) ( 11,799 )

Recognized net actuarial loss 1,946 3,588 4,090

Net periodic pension cost - Primary Plan 3,320 6,246 770

Settlement expense 112,796 — —

Total pension expense - Primary Plan $ 116,116 $ 6,246 $ 770

Bargaining Plan

The following tables set forth pertinent information for the Bargaining Plan:

(in thousands) 2023 2022

Beginning balance - Bargaining Plan projected benefit obligation $ 39,177 $ 50,427

Service cost 3,996 6,586

Interest cost 2,079 1,664

Plan amendments 5 154

Actuarial gain ( 93,626 ) ( 12,735 )

Actuarial loss (gain) 1,652 ( 19,012 )

Benefits paid ( 786 ) ( 642 )

Ending balance - projected benefit obligation $ 270,143 $ 359,475

Ending balance - Bargaining Plan projected benefit obligation $ 46,123 $ 39,177

Changes in Projected Benefit Obligation

The projected benefit obligation and the accumulated benefit obligation for both Company-sponsored pension plans were in excess of plan assets as of December 31, 2022 and December 31, 2021.

The accumulated benefit obligation was $ 270.1 million on December 31, 2022 and $ 359.5 million on December 31, 2021.

The increase in the discount rates for both the Primary Plan and the Bargaining Plan, as compared to the previous years, was the primary driver of the actuarial gains in both 2022 and 2021.

The actuarial gains, net of tax, were recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The plan assets of the Bargaining Plan were in excess of the projected benefit obligation and the accumulated benefit obligation as of December 31, 2023.

The projected benefit obligation and the accumulated benefit obligation for the Bargaining Plan were in excess of plan assets as of December 31, 2022.

The accumulated benefit obligation associated with the Bargaining Plan was $ 46.1 million on December 31, 2023 and $ 39.2 million on December 31, 2022.

The decrease in the discount rate for the Bargaining Plan, as compared to the previous year, was the primary driver of the actuarial loss in 2023.

The increase in the discount rate for the Bargaining Plan, as compared to the previous year, was the primary driver of the actuarial gain in 2022.

The actuarial loss (gain), net of tax, was recorded in accumulated other comprehensive loss in the consolidated balance sheets.

Change in Plan Assets

(in thousands) 2023 2022

Beginning balance - plan assets at fair value $ 328,250 $ 319,699

Beginning balance - Bargaining Plan assets at fair value $ 38,635 $ 36,944

Actual return on plan assets 5,495 ( 9,314 )

1 unchanged sentence

Benefits and expenses paid ( 1,109 ) ( 995 )

Ending balance - plan assets at fair value $ 261,942 $ 328,250

Ending balance - Bargaining Plan assets at fair value $ 47,321 $ 38,635

Funded Status

2 unchanged sentences

Plan assets at fair value 47,321 38,635

Net funded status $ ( 8,201 ) $ ( 31,225 )

Net funded status - Bargaining Plan $ 1,198 $ ( 542 )

Amounts Recognized in the Consolidated Balance Sheets

2 unchanged sentences

Noncurrent liabilities — ( 542 )

Total liability - pension plans $ ( 8,201 ) $ ( 31,225 )

Total liability - Bargaining Plan $ — $ ( 542 )

Noncurrent assets $ 1,198 $ —

Total asset - Bargaining Plan $ 1,198 $ —

Net Periodic Pension Cost

5 unchanged sentences

Amortization of prior service costs 16 — 3

Net periodic pension cost $ 13,075 $ 9,332 $ 8,309

Net periodic pension cost - Bargaining Plan $ 3,653 $ 6,829 $ 8,562

Significant Assumptions

1 unchanged sentence

Projected benefit obligation at the measurement date:

Discount rate - Primary Plan 5.33 % 2.97 % 2.66 %

Discount rate - Bargaining Plan 5.16 % 5.34 % 3.31 %

1 unchanged sentence

Net periodic pension cost for the fiscal year:

Discount rate - Primary Plan 2.97 % 2.66 % 3.36 %

Discount rate - Bargaining Plan 5.34 % 3.31 % 3.12 %

Weighted average expected long-term rate of return of plan assets - Primary Plan (1)

3.00 % 4.75 % 5.50 %

Weighted average expected long-term rate of return of plan assets - Bargaining Plan (1)

1 unchanged sentence

Weighted average rate of compensation increase N/A N/A N/A

(1) The weighted average expected long-term rate of return assumption for the pension plan assets, which was used to compute net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions set at the beginning of each fiscal year.

(in thousands) Anticipated Future Pension Benefit

Payments for the Fiscal Years

2023 $ 237,899

(1) The weighted average expected long-term rate of return assumption for the Bargaining Plan assets, which was used to compute net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions set at the beginning of each fiscal year.

The anticipated future pension benefit payments as of December 31, 2023 were as follows:

(in thousands) Anticipated Future Payment

2029 - 2033 13,335

The anticipated future pension benefit payments for 2023 include the payments associated with the termination of the Primary Plan, which will be made from the related plan assets.

The remaining anticipated future pension benefit payments for 2023, and all anticipated future pension benefit payments beyond 2023, relate to the Bargaining Plan.

The Company expects to make cash contributions of approximately $ 5 million to $ 10 million to the Primary Plan during 2023 to fund the termination of the Primary Plan.

The Company also expects to make cash contributions of approximately $ 5 million to $ 10 million to the Bargaining Plan during 2023 to fund the ongoing projected benefit obligation of the Bargaining Plan.

All assets in the Company’s pension plans are invested in institutional investment funds managed by professional investment advisors which hold U.S.

All anticipated future pension benefit payments relate to the Bargaining Plan.

The Company does not expect cash contributions to the Bargaining Plan to exceed $ 2 million during 2024.

All assets in the Company’s Bargaining Plan are invested in institutional investment funds managed by professional investment advisors which hold U.S.

equities, international equities and debt securities.

The objective of the Company’s investment philosophy is to earn the plans’ targeted rate of return over longer periods without assuming excess investment risk.

The weighted average expected long-term rate of return assumption for the pension plan assets, which will be used to compute 2023 net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions in the context of historical returns and volatilities for each asset class.

The weighted average expected long-term rate of return assumption for the Bargaining Plan assets, which will be used to compute 2024 net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions in the context of historical returns and volatilities for each asset class.

The Company evaluates the rate of return assumption on an annual basis.

The Company’s

actual asset allocation at December 31, 2022 and December 31, 2021 and target asset allocation for 2023 by asset category for the Primary Plan were as follows:

Percentage of Plan

Assets at Fiscal Year-End Target Asset

2022 2021 2023

debt securities 84 % 87 % 64 %

equity securities — % — % — %

International debt securities 10 % 10 % — %

International equity securities — % — % — %

Cash and cash equivalents 6 % 3 % 36 %

Total 100 % 100 % 100 %

The Company’s actual asset allocation at December 31, 2023 and December 31, 2022 and target asset allocation for 2024 by asset category for the Bargaining Plan were as follows:

Percentage of Plan

Percentage of Bargaining Plan

Assets at Fiscal Year-End Target Asset

6 unchanged sentences

Total 100 % 100 % 100 %

The expected long-term rate of return on assets for the Primary Plan and the Bargaining Plan as of December 31, 2022 were 5.00 % and 7.00 %, respectively.

Debt securities as of December 31, 2022 were comprised primarily of investments in government and corporate bonds with a weighted average maturity of approximately 12 years for the Primary Plan and approximately 19 years for the Bargaining Plan.

The expected long-term rate of return on assets for the Bargaining Plan as of December 31, 2023 was 7.00 %.

Debt securities in the Bargaining Plan as of December 31, 2023 were comprised primarily of investments in government and corporate bonds with a weighted average maturity of approximately 19 years.

equity securities in the Bargaining Plan as of December 31, 2023 included:

3 unchanged sentences

The following table summarizes the Company’s pension plan assets, which are classified as Level 1 and Level 2 for fair value measurement.

As of December 31, 2023, the below values include Bargaining Plan assets only, as there were no remaining Primary Plan assets after the termination of the plan.

As of December 31, 2022, the below values include both Bargaining Plan and Primary Plan assets.

The Company does not have any Level 3 pension plan assets.

22 unchanged sentences

Plan participants’ contributions 767 657

Actuarial gain ( 10,138 ) ( 3,414 )

Actuarial loss (gain) 7,986 ( 10,138 )

Benefits paid ( 4,070 ) ( 3,757 )

Benefit obligation at end of year $ 63,828 $ 55,299

The increase in the discount rate for the postretirement benefit plan, as compared to the previous years, was the primary driver of the actuarial gain in both 2022 and 2021.

The actuarial gain, net of tax, was recorded in accumulated other comprehensive loss in the consolidated balance sheets.

The decrease in the discount rate for the postretirement benefit plan, as compared to the previous year, was the primary driver of the actuarial loss in 2023.

The increase in the discount rate for the postretirement benefit plan, as compared to the previous year, was the primary driver of the actuarial gain in 2022.

The actuarial loss (gain), net of tax, was recorded in accumulated other comprehensive loss in the consolidated balance sheets.

Reconciliation of Plan Assets Fair Value

31 unchanged sentences

Ultimate rate year 2032 2029 2029

(in thousands) Anticipated Future Postretirement Benefit

Payments Reflecting Expected Future Service

The anticipated future postretirement benefit payments reflecting expected future service as of December 31, 2023 were as follows:

(in thousands) Anticipated Future Payment

2029 - 2033 24,857

A reconciliation of the gross amounts in accumulated other comprehensive loss not yet recognized as components of net periodic benefit cost is as follows:

Accumulated Other Comprehensive Loss

A reconciliation of the gross amounts in accumulated other comprehensive loss not yet recognized as components of net periodic benefit cost associated with the plans discussed above is as follows:

(in thousands) December 31,

4 unchanged sentences

Prior service costs ( 158 ) ( 5 ) 16 ( 147 )

Pension plan settlement — — 112,796 112,796

Postretirement Medical:

1 unchanged sentence

Total within accumulated other comprehensive loss $ ( 116,948 ) $ ( 4,955 ) $ 114,758 $ ( 7,145 )

As of December 31, 2023, there were no gross actuarial losses included in accumulated other comprehensive loss associated with the Primary Plan.

As of December 31, 2022, there were approximately $ 117 million of gross actuarial losses included in accumulated other comprehensive loss associated with the Primary Plan.

Multiemployer Pension Plans

40 unchanged sentences

2023 December 31,

Senior notes (1)

2/27/2023 3.28 % Semi-annually Nonpublic $ — $ 125,000

Senior bonds (1)

11/25/2025 3.80 % Semi-annually Public $ 350,000 $ 350,000

Revolving Credit Facility 7/9/2026 Variable Varies Nonpublic — —

Revolving credit facility (2)(3)

7/9/2026 Variable Varies Nonpublic — —

Senior notes 10/10/2026 3.93 % Quarterly Nonpublic 100,000 100,000

4 unchanged sentences

Total long-term debt $ 599,159 $ 598,817

(1) On September 13, 2022, the Company used cash on hand to repay the $ 125 million of senior notes with a stated maturity date of February 27, 2023.

There was no penalty for the early repayment of the senior notes.

(1) The senior bonds due in 2025 were issued at 99.975 % of par.

(2) The Company’s revolving credit facility has an aggregate maximum borrowing capacity of $ 500 million.

The Company currently believes all banks participating in the revolving credit facility have the ability to and will meet any funding requests from the Company.

(3) During 2023, the Company amended its revolving credit facility to complete the transition of the interest rate index from the London InterBank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR), as contemplated in the revolving credit facility.

The principal maturities of debt outstanding on December 31, 2023 were as follows:

25 unchanged sentences

The Company does not anticipate SAC will fail to fulfill its commitments related to the debt.

The Company further believes SAC has sufficient assets, including production equipment, facilities and working capital, and the ability to adjust the selling prices of its products to adequately mitigate the risk of material loss from the Company’s guarantee.

The Company holds no assets as collateral against the SAC guarantee, the fair value of which is immaterial to the consolidated financial statements.

39 unchanged sentences

Further, the Company is exposed to commodity price risk on crude oil, which impacts the Company’s cost of fuel used in the movement and delivery of the Company’s products.

The Company participates in commodity hedging and risk mitigation programs, including programs administered by CCBSS and programs we administer.

The Company participates in commodity hedging and risk mitigation programs, including programs administered by CCBSS and programs the Company administers.

Certain liabilities of the Company, including retirement benefit obligations and the Company’s pension liability, are subject to risk of changes in both long-term and short-term interest rates.

The Company’s contingent consideration liability resulting from the acquisition of certain distribution territories is subject to risk as a result of changes in the Company’s probability weighted discounted cash flow model, which is based on internal forecasts, and changes in the Company’s WACC, which is derived from market data.

The Company’s acquisition related contingent consideration liability related to the distribution territories subject to acquisition related sub-bottling payments is subject to risk as a result of changes in the Company’s probability weighted discounted cash flow model, which is based on internal forecasts, and changes in the Company’s WACC, which is derived from market data.

Approximately 15 % of the Company’s workforce is covered by collective bargaining agreements.

2 unchanged sentences

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) (“AOCI(L)”) is comprised of adjustments to the Company’s pension and postretirement medical benefit plans and the foreign currency translation for a subsidiary of the Company that performs data analysis and provides consulting services outside the United States.

Accumulated other comprehensive income (loss) (“AOCI(L)”) is comprised of adjustments to the Company’s pension and postretirement medical benefit plans and the foreign currency translation for a subsidiary of the Company that performs data analysis and formerly provided consulting services outside the United States.

Following is a summary of AOCI(L) for 2023, 2022 and 2021:

5 unchanged sentences

Actuarial loss $ ( 71,140 ) $ 3,036 $ ( 744 ) $ 1,946 $ ( 476 ) $ ( 67,378 )

Prior service credits (costs) 11 ( 154 ) 38 — — ( 105 )

Prior service costs ( 105 ) ( 5 ) 1 16 ( 4 ) ( 97 )

Pension plan settlement (1)

— — — 112,796 ( 44,885 ) 67,911

Net postretirement benefits activity:

Actuarial gain (loss) ( 1,239 ) 10,138 ( 2,481 ) 444 ( 110 ) 6,752

Actuarial gain 6,752 ( 7,986 ) 1,955 — — 721

Prior service costs ( 624 ) — — — — ( 624 )

Foreign currency translation adjustment ( 9 ) — — 11 ( 2 ) —

Reclassification of stranded tax effects (1)

( 19,720 ) — — — 14,911 ( 4,809 )

Total AOCI(L) $ ( 84,837 ) $ ( 4,955 ) $ 1,212 $ 114,758 $ ( 30,454 ) $ ( 4,276 )

5 unchanged sentences

Actuarial loss $ ( 78,882 ) $ 6,263 $ ( 1,533 ) $ 3,990 $ ( 978 ) $ ( 71,140 )

Prior service credits 8 — — 3 — 11

Prior service credits (costs) 11 ( 154 ) 38 — — ( 105 )

Net postretirement benefits activity:

Actuarial loss ( 4,328 ) 3,414 ( 838 ) 682 ( 169 ) ( 1,239 )

Actuarial (loss) gain ( 1,239 ) 10,138 ( 2,481 ) 444 ( 110 ) 6,752

Prior service costs ( 624 ) — — — — ( 624 )

Interest rate swap (1)

( 556 ) — — 739 ( 183 ) —

Foreign currency translation adjustment ( 9 ) — — 11 ( 2 ) —

1 unchanged sentence

Total AOCI(L) $ ( 100,463 ) $ 16,247 $ ( 3,976 ) $ 4,445 $ ( 1,090 ) $ ( 84,837 )

(1) In 2019, the Company entered into a $ 100 million fixed rate swap to hedge a portion of the interest rate risk on its previous term loan facility, both of which matured on June 7, 2021.

This interest rate swap was designated as a cash flow hedging instrument and changes in its fair value were not material to the consolidated balance sheets.

Gains (Losses) During the Period Reclassification to Income

4 unchanged sentences

Actuarial loss $ ( 93,847 ) $ 14,897 $ ( 3,658 ) $ 4,954 $ ( 1,228 ) $ ( 78,882 )

Prior service credits (costs) ( 7 ) — — 19 ( 4 ) 8

Prior service credits 8 — — 3 — 11

Net postretirement benefits activity:

2 unchanged sentences

Interest rate swap (2)

( 556 ) — — 739 ( 183 ) —

Foreign currency translation adjustment 14 — — ( 32 ) 9 ( 9 )

1 unchanged sentence

Total AOCI(L) $ ( 119,053 ) $ 18,311 $ ( 4,496 ) $ 6,346 $ ( 1,571 ) $ ( 100,463 )

Following is a summary of the impact of AOCI(L) on the consolidated statements of operations:

Fiscal Year 2022

(in thousands) Net Pension

Activity Net Postretirement

Benefits Activity Foreign Currency

Translation Adjustment Total

Cost of sales $ 1,364 $ 276 $ — $ 1,640

Selling, delivery and administrative expenses 2,626 168 11 2,805

Subtotal pre-tax 3,990 444 11 4,445

Income tax expense 978 110 2 1,090

Total after tax effect $ 3,012 $ 334 $ 9 $ 3,355

Fiscal Year 2021

(in thousands) Net Pension

Activity Net Postretirement

Benefits Activity Interest Rate

Swap Foreign Currency

Translation Adjustment Total

Cost of sales $ 1,341 $ 496 $ — $ — $ 1,837

Selling, delivery and administrative expenses 3,616 186 739 ( 32 ) 4,509

Subtotal pre-tax 4,957 682 739 ( 32 ) 6,346

Income tax expense 1,228 169 183 ( 9 ) 1,571

Total after tax effect $ 3,729 $ 513 $ 556 $ ( 23 ) $ 4,775

Fiscal Year 2020

(in thousands) Net Pension

Activity Net Postretirement

Benefits Activity Interest Rate

Swap Foreign Currency

Translation Adjustment Total

Cost of sales $ 1,393 $ 146 $ — $ — $ 1,539

Selling, delivery and administrative expenses 3,245 237 ( 378 ) 41 3,145

Subtotal pre-tax 4,638 383 ( 378 ) 41 4,684

Income tax expense 1,144 94 ( 92 ) 11 1,157

Total after tax effect $ 3,494 $ 289 $ ( 286 ) $ 30 $ 3,527

(1) The stranded tax effect activity for 2023 is associated with the full settlement of the Primary Plan benefit liabilities.

(2) In 2019, the Company entered into a $ 100 million fixed rate swap to hedge a portion of the interest rate risk on its previous term loan facility, both of which matured on June 7, 2021.

This interest rate swap was designated as a cash flow hedging instrument and changes in its fair value were not material to the consolidated balance sheets.

Supplemental Disclosures of Cash Flow Information

11 unchanged sentences

Accrued compensation 20,011 16,027 23,286

Accrued interest payable ( 1,419 ) 152 ( 1,002 )

Change in current assets less current liabilities $ 29,138 $ ( 74,784 ) $ 30,595

The Company had the following net cash payments during the period for interest and income taxes:

The change in other accrued liabilities includes fluctuations in accrued interest payable for all years presented.

The Company had the following net cash payments during the period for income taxes and interest:

(in thousands) 2023 2022 2021

1 unchanged sentence

Interest 23,960 28,086 29,142

The Company had the following significant non-cash investing and financing activities:

The Company had the following significant non-cash financing and investing activities:

(in thousands) 2023 2022 2021

Additions (reductions) to leased property under financing leases $ ( 55,465 ) $ — $ 61,121

Additions to property, plant and equipment accrued and recorded in accounts payable, trade 44,775 35,809 17,025

Dividends declared but not yet paid $ 154,666 $ 32,808 $ —

Additions to property, plant and equipment accrued and recorded in accounts payable, trade 59,014 44,775 35,809

Right-of-use assets obtained in exchange for operating lease obligations 10,215 25,130 26,907

Reductions to leased property under financing leases — 55,465 —

Management’s Report on Internal Control over Financial Reporting

69 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data