What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-18 compared with 2025-02-20 · 161 added, 154 removed, 451 unchanged (41% of the section changed)

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10‑K for 2024, filed with the SEC on February 20, 2025.

The Company manages its business on the basis of three operating segments.

The Company manages its business on the basis of two operating segments.

Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations.

The additional two operating segments do not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, and, therefore, have been combined into “All Other.”

The additional operating segment, which includes the Red Classic subsidiaries, does not meet the quantitative threshold for separate reporting and, therefore, has been reported as “All Other.”

Executive Summary

Net sales increased 3.7% to $6.90 billion in 2024, with standard physical case volume down 0.6% when compared to the prior year.

In the second quarter of 2024, we shifted the distribution of casepack Dasani water sold in Walmart stores to a non-direct store delivery (“DSD”) method of distribution.

As a result, these cases are not included in our 2024 reported case volume.

The impact of this distribution change reduced our reported case volume by 0.8% for the fiscal year.

Sparkling and Still net sales increased 5.5% and 3.6%, respectively, compared to 2023.

The net sales improvement was driven by the continued strength in Sparkling volume growth and pricing actions taken at the beginning of 2024.

In addition, several brands within our Still portfolio, including Monster, Powerade and smartwater, had strong volume performance, which also fueled the overall growth in net sales in 2024.

Lastly, sales to our large retail customers, including club and value stores, outpaced other selling channels as consumer demand for multi-serve, value-oriented packages remained strong throughout the year.

Gross profit in 2024 increased $154.5 million, or 5.9%, while gross margin increased 80 basis points to 39.9%.

The improvement in gross profit resulted primarily from higher prices for our products and a continued moderation of costs on certain commodities.

Compared to 2023, gross margin also benefited from the increased mix of Sparkling beverages, which generally carry higher gross margins than Still products.

Net sales increased 4.8% to $7.23 billion in 2025, with standard physical case volume up 0.3% when compared to the prior year.

The growth in net sales was primarily the result of annual pricing actions executed during the first quarter of 2025.

For 2025, Sparkling and Still net sales increased 3.5% and 6.1%, respectively.

The increase in Sparkling category net sales was driven primarily by sales of multi-pack, take-home packages sold within our large store, club and value channels.

The increase in Still category net sales was driven primarily by the solid performance across our Still portfolio sold within large retail and convenience stores.

Fiscal year 2025 had one fewer selling day compared to fiscal year 2024, which negatively impacted the annual volume comparison by approximately 0.3%, as further discussed in the “Comparable and Adjusted Results (Non-GAAP)” section.

For fiscal year 2025, Sparkling volume was flat while Still volume increased 1.0%.

The steady Sparkling volume performance was driven by growth within zero-sugar and flavor offerings, offset by slower sales of Coca-Cola Original Taste during 2025.

Within the Still portfolio, Monster, Powerade, BODYARMOR, Topo Chico and Core Power all achieved volume growth during the year, reflecting strength across our entire portfolio of brands and driving growth in net sales in 2025.

Gross profit in 2025 increased $119.2 million, or 4.3%, while gross margin decreased 20 basis points to 39.7%.

Aluminum costs, including the impact of elevated import tariffs, adversely affected our gross margin in 2025, particularly in the back half of the year.

The reduction in gross margin also resulted from a shift in sales toward our Still portfolio, which generally have lower gross margins compared to Sparkling beverages.

Selling, delivery and administrative (“SD&A”) expenses in 2025 increased $88.9 million, or 4.8%.

SD&A expenses as a percentage of net sales in 2024 increased 10 basis points to 26.6% as compared to 2023.

The increase in SD&A expenses related primarily to annual wage and benefits adjustments.

Income from operations in 2024 increased $85.9 million to $920.4 million and net income in 2024 increased $224.8 million to $633.1 million, as compared to 2023.

The Company’s income tax expense increased $74.4 million to $223.5 million in 2024, as compared to $149.1 million in 2023, primarily as a result of higher income before taxes.

Net income in the prior year was adversely impacted by the settlement of our primary pension plan benefit liabilities, which resulted in a non-cash charge of $112.8 million in 2023.

Additionally, net income for both 2024 and 2023 was adversely impacted by routine, non-cash fair value adjustments to our acquisition related contingent consideration liability, driven by changes in the discount rate and future cash flow projections used to compute the fair value of the liability.

SD&A expenses as a percentage of net sales in 2025 remained stable as compared to 2024.

The increase in SD&A expenses was primarily driven by the cost of labor, which includes annual wage adjustments made earlier this year and an additional investment in the base wages of our front-line teammates, which became effective at the beginning of the third quarter of 2025.

Income from operations in 2025 increased $30.3 million to $950.7 million and net income in 2025 declined $62.5 million to $570.6 million, as compared to 2024.

On an adjusted basis, as defined in the “Comparable and Adjusted Results (Non-GAAP)” section, net income in 2025 was $668.5 million, compared to $678.6 million in 2024, a decrease of $10.1 million, or 1.5%.

As compared to 2024, net income for 2025 was more adversely impacted by routine, non-cash fair value adjustments to our acquisition related contingent consideration liability, primarily driven by changes in the discount rate and future cash flow projections used to compute the fair value of the liability, and by increased interest expense.

Income tax expense for 2025 was $202.3 million, compared to $223.5 million for 2024, resulting in an effective income tax rate of approximately 26% for both periods.

Cash flows from operations for 2025 were $931.9 million, compared to $876.4 million for 2024.

Cash flows from operations reflected our strong operating performance during 2025.

In 2024, we invested $371.0 million in capital expenditures as we continue to enhance our supply chain and invest for future growth.

In 2025, we invested $312.3 million in capital expenditures as we continue to optimize our supply chain and invest for future growth.

In fiscal year 2026, we expect capital expenditures to be approximately $300 million.

In the fourth quarter of 2025, we repurchased all of the remaining shares of our Common Stock previously owned by The Coca-Cola Company for approximately $2.4 billion.

Throughout 2025, we have returned approximately $2.7 billion to stockholders through share repurchases and dividends.

Areas of Emphasis

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Our ability to obtain shelf space within stores and remain in-stock across our portfolio of brands and packages in a profitable manner will have a significant impact on our results.

We are focused on execution at every step in our supply chain, including raw material and finished product procurement, manufacturing conversion, transportation, warehousing and distribution, to ensure in-store

execution can occur.

We continue to invest in tools and technology to enable our teammates to operate more effectively and efficiently with our customers and to drive long-term value in our business.

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The Company undertook significant capital expenditures to optimize our supply chain and to invest for future growth during 2025, and expects to continue to make significant investments during fiscal year 2026.

During 2024, we purchased our Nashville, Tennessee production facility, which was previously leased, for approximately $56 million.

Over the past five years, the Company made capital expenditures of approximately $200 million related to fleet, $125 million related to automation and $470 million related to supply chain improvements.

During the first quarter of 2025, the Company began operations in a new 430,000-square foot automated distribution center in Columbus, Ohio.

Cash Flow Generation:

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Optimal Route to Market:

We are focused on implementing optimal methods of distribution of our products within our territory.

We are focused on implementing optimal methods of distribution of our products within our territories.

DSD is our preferred and primary route to market.

Our typical DSD method uses Company-owned vehicles and warehouses, but we increasingly shifted to alternative methods of distribution in 2024 as compared to 2023.

Our typical DSD method uses Company-owned vehicles and warehouses, but we increasingly shifted to alternative methods of distribution, or ARTM, during 2024 and continued to use ARTM during 2025.

For example, in instances of post-mix delivery for use in fountain machines, we have shifted and continue to shift our delivery method towards alternative distributors in order to enhance profitability and customer service.

In instances of bottle/can delivery, we have shifted certain products for certain customers and channels of business to alternative routes to market.

These alternative routes to market include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure.

These bottle/can arrangements generally come with favorable commercial terms for the Company.

During 2024, nearly two-thirds of our post-mix gallons and less than 10% of our bottle/can volume was delivered through alternative routes to market.

We expect to continue to use alternative methods of distribution to deliver post-mix and bottle/can products in future years and, where beneficial, to seek out additional opportunities to shift to alternative methods of distribution.

We receive a fee from our brand partners on these post-mix gallons delivered to locally managed customers in our territories, which is recorded as a reduction to cost of sales.

In instances of bottle/can delivery, we have shifted certain products for certain customers and channels of business to ARTM.

These ARTM include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure.

These bottle/can arrangements generally come with favorable commercial terms for the Company, and, because we have the exclusive distribution rights for nonalcoholic beverages within our franchise territories, we receive fees from our brand partners for the delivery of qualified product in our territories.

These fees are reported in net sales but not our reported volume metrics.

During 2025, approximately two-thirds of our post-mix gallons and less than 10% of our bottle/can volume were delivered through ARTM.

Digitally Enabled Selling Platform:

Through our investment in CONA, we, along with other Coca-Cola bottlers, have built a digitally enabled selling platform called MyCoke that we believe has and will continue to enable us to better serve our customers.

Through our investment in CONA Services LLC, we, along with other Coca-Cola bottlers, have built a digitally enabled selling platform called MyCoke that we believe has enabled, and will continue to enable, us to better serve our customers.

This platform creates a more seamless order and payment platform for certain customers and we expect this platform will continue to enable us to enhance customer service and create more selling opportunities for our teammates.

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Income from operations 950,656 920,350 30,306

Interest expense (income), net 1,848 (918) 2,766

Interest expense, net 42,678 1,848 40,830

Mark-to-market on acquisition related contingent consideration 131,901 59,166 72,735

Pension plan settlement expense — 112,796 (112,796)

Other expense, net 3,159 2,682 477

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Net income 570,582 633,125 (62,543)

Other comprehensive income, net of tax 6,161 80,561 (74,400)

Other comprehensive (loss) income, net of tax (7,890) 6,161 (14,051)

Comprehensive income $ 562,692 $ 639,286 $ (76,594)

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The largest driver of the increase in net sales was higher average bottle/can sales price per unit charged to retail customers, which increased net sales by approximately $215 million.

Net sales was also positively impacted by shifts in product mix in 2025, as certain of the Company’s higher-priced brands, including energy, enhanced water and protein products, had strong sales during the period.

Net sales by product category were as follows:

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Total net sales $ 7,228,055 $ 6,899,716 4.8 %

The decline in post-mix sales and other in 2024 as compared to 2023 was related primarily to a shift in how we deliver post-mix products to our customers in order to enhance profitability and customer service.

During 2024, the Company shifted to a broader use of alternative distributors, rather than Company-owned vehicles and warehouses, to deliver post-mix products to customers in our territory.

We receive a fee from our brand partners on these post-mix gallons delivered to locally managed customers in our territory, which is recorded as a reduction to cost of sales.

This transition has occurred over the past several years and accelerated throughout 2024.

Nearly two-thirds of the post-mix gallons sold to local customers in our franchise territory in 2024 were delivered using these alternative methods of distribution.

We expect to continue to shift to a broader use of alternative distributors to deliver post-mix products to customers in our territory in future years.

Product category sales volume of standard physical cases (as defined below) and the percentage change by product category were as follows:

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As the Company evaluates its volume metrics, it reassesses the way in which physical case volume is measured, which may lead to differences from previously presented results in order to conform with current period standard volume measurement techniques, as used by management.

Additionally, as the Company introduces new products, it reassesses the category assigned to its products at the SKU level, therefore categorization could differ from previously presented results in order to conform with current period categorization.

Additionally, as the Company introduces new products, it reassesses the category

assigned to its products at the SKU level, therefore categorization could differ from previously presented results in order to conform with current period categorization.

Any differences are not material.

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In order to serve our customers in the most efficient way, respond to customer demands and increase profitability, the Company has, in certain circumstances, shifted the delivery of our products to third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure, rather than through Company-owned vehicles and warehouses.

We have shifted the distribution of casepack Dasani water sold in Walmart stores to a non-DSD method of distribution.

As a result, these cases are not included in our 2024 reported case sales.

The impact of this distribution change reduced our reported case sales by 0.8% during 2024.

As a result of not physically delivering the product, the sales volume delivered using these alternative methods of distribution is not reflected in our volume metrics.

However, because we have the exclusive distribution rights for nonalcoholic beverages within our franchise territory, we receive fees from our brand partners for the delivery of qualified product in our territory.

These fees are reported in net sales.

Changes in the delivery of our products to our customers impacted our reported volume and net sales in 2024 as compared to 2023 as we accelerated the transition of bottle/can sales volume to alternative methods of distribution.

Less than 10% of the bottle/can volume sold in our franchise territory in 2024 was delivered using these alternative methods of distribution.

We expect to continue to use alternative methods of distribution to deliver bottle/can products in future years and, where beneficial, to seek out additional opportunities to shift to alternative methods of distribution.

As a result, these cases are not included in our 2025 or 2024 reported case sales volume.

The following table summarizes the percentage of the Company’s total bottle/can sales volume to its largest customers, as well as the percentage of the Company’s total net sales that such volume represents:

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(i) purchases of finished products, (ii) raw material costs, including aluminum cans, plastic bottles, carbon dioxide and sweetener, (iii) concentrate costs and (iv) manufacturing costs, including labor, overhead and warehouse costs.

distribution fees of certain products and marketing credits and post-mix funding from brand companies.

Input costs, including underlying commodity costs for aluminum cans, plastic bottles, carbon dioxide and sweetener, as well as labels and other packaging materials, and excluding concentrate, represent approximately 20% of total cost of sales on an annual basis.

In addition, cost of sales includes shipping, handling and fuel costs related to the movement of finished products from manufacturing plants to distribution centers, amortization expense of distribution rights, distribution fees of certain products and marketing credits and post-mix funding from brand companies.

Input costs for products we produce, including underlying commodity costs for aluminum cans, plastic bottles, carbon dioxide and sweetener, as well as labels and other packaging materials, and excluding concentrate, represent approximately 20% of total cost of sales on an annual basis.

Cost of sales increased $209.2 million, or 5.0%, to $4.36 billion in 2025, as compared to $4.15 billion in 2024.

The increase in cost of sales was primarily driven by higher input costs, including concentrate and manufacturing costs, which increased cost of sales by approximately $120 million.

The increase in cost of sales was primarily driven by higher input costs, which increased cost of sales by approximately $135 million.

Higher input costs included an increase in aluminum costs, which were impacted by elevated import tariffs during 2025.

Cost of sales also increased due to shifts in product mix to higher cost Still products as compared to 2024.

The Company relies extensively on advertising and sales promotions in the marketing of its products.

The Coca‑Cola Company and other beverage companies that supply concentrates, syrups and finished products to the Company make substantial marketing and advertising expenditures, including national advertising programs, to develop their brand identities and to promote sales in the Company’s territories.

Our brand partners also provide funding related to the delivery of post-mix gallons to locally managed customers within the Company’s territory.

Our brand partners also provide funding related to the delivery of post-mix gallons to locally managed customers within the Company’s territories.

Certain of these marketing, advertising and other funding expenditures are made pursuant to annual arrangements.

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sales management labor costs, distribution costs resulting from transporting finished products from distribution centers to customer locations, distribution center overhead including depreciation expense, distribution center warehousing costs, delivery vehicles and cold drink equipment, point-of-sale expenses, advertising expenses, cold drink equipment repair costs, amortization of intangible assets and administrative support labor and operating costs.

Labor costs represent approximately 60% of total SD&A expenses on an annual basis.

Labor costs represent approximately two-thirds of total SD&A expenses on an annual basis.

SD&A expenses increased $88.9 million, or 4.8%, to $1.92 billion in 2025, as compared to $1.83 billion in 2024.

SD&A expenses as a percentage of net sales increased to 26.6% in 2024 from 26.5% in 2023.

Of the increase in SD&A expenses, approximately $48 million was related to an increase in labor costs, mostly related to annual wage adjustments and increased incentive compensation expense reflecting the strong operating performance in 2024.

The increase in SD&A expenses was primarily driven by an increase in labor and benefits costs related to annual wage adjustments, medical benefit trends and an additional investment in the base wages of our front-line teammates, which became effective beginning in the third quarter of 2025.

SD&A expenses as a percentage of net sales was 26.6% in both 2025 and 2024.

Shipping and handling costs included in SD&A expenses were approximately $842 million in 2025 and approximately $806 million in 2024.

Interest Expense (Income), Net

Interest expense (income), net changed $2.8 million to $1.8 million of interest expense, net in 2024, as compared to $0.9 million of interest income, net in 2023.

The change in interest expense (income), net was primarily due to an increase in interest expense on higher debt balances in 2024 as compared to 2023, partially offset by an increase in interest income due to higher cash, cash equivalent and short-term investment balances.

Interest Expense, Net

Interest expense, net increased $40.8 million to $42.7 million in 2025, as compared to $1.8 million in 2024.

The increase in interest expense, net was primarily driven by higher average debt balances during 2025 as compared to 2024.

In 2025, the Company had $102.9 million of interest expense and $60.2 million of interest income.

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Mark-to-market on acquisition related contingent consideration was an increase of $131.9 million in 2025 and an increase of $59.2 million in 2024.

During 2025, the $131.9 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by decreases in the WACC used to calculate the fair value of the liability and higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.

During 2024, the $59.2 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments, partially offset by increases in the WACC used to calculate the fair value of the liability.

During 2023, the $159.4 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments, as well as decreases in the WACC used to calculated the fair value of the liability.

Other Expense, Net

Other expense, net decreased $3.1 million to $2.7 million in 2024, as compared to $5.7 million in 2023.

The decrease in other expense, net was primarily driven by changes in the actuarial assumptions related to our pension and postretirement medical benefit plan liabilities.

Other expense, net was $3.2 million in 2025 and $2.7 million in 2024.

Income Tax Expense

The Company’s effective income tax rate was 26.2% for 2025 and 26.1% for 2024.

The Company’s income tax expense increased $74.4 million, or 49.9%, to $223.5 million in 2024, as compared to $149.1 million in 2023.

The decrease in the effective income tax rate was primarily attributable to higher income before taxes.

Other Comprehensive Income, Net of Tax

Other comprehensive income, net of tax was $6.2 million in 2024 and $80.6 million in 2023.

The decrease was primarily related to the settlement of the primary Company-sponsored pension plan (the “Primary Plan”) benefit liabilities during 2023, which resulted in the reclassification of the gross actuarial losses associated with the Primary Plan out of accumulated other comprehensive income (loss) during that period.

The Company’s income tax expense decreased $21.2 million, or 9.5%, to $202.3 million in 2025, as compared to $223.5 million in 2024.

The increase in the effective income tax rate was primarily attributable to lower income before taxes.

Other Comprehensive (Loss) Income, Net of Tax

Other comprehensive (loss) income, net of tax was a loss of $7.9 million in 2025 and income of $6.2 million in 2024.

The change was primarily related to changes in the actuarial assumptions related to the Company’s pension and postretirement plan liabilities.

Segment Operating Results

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Segment asset information is not provided to the CODM.

The Company has three operating segments, each identified by its unique products and services.

As of December 31, 2025, the Company has two operating segments, each identified by its products and services.

Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations.

The additional two operating segments, which include Data Ventures, Inc.

and the Red Classic subsidiaries, do not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, and, therefore, have been combined into “All Other.” The accounting policies of the Nonalcoholic Beverages segment are the same as those described in the summary of significant accounting policies.

The accounting policies of the Nonalcoholic Beverages operating segment are the same as those described in the summary of significant accounting policies presented in Note 1 to the consolidated financial statements.

The additional operating segment, which includes the Red Classic subsidiaries, does not meet the quantitative threshold for separate reporting and, therefore, has been reported as “All Other.”

Previously, the Company had three operating segments, Nonalcoholic Beverages and two additional operating segments, which included Data Ventures, Inc.

and the Red Classic subsidiaries.

Since the two additional operating segments did not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, they were combined into “All Other.” As of December 31, 2025, the Data Ventures, Inc.

operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment.

For reporting purposes, all periods presented have been retroactively adjusted to reflect the liquidation and dissolution of the Data Ventures, Inc.

operating segment within the “All Other” bucket and the merger of the Data Ventures, Inc.

operating segment with the Nonalcoholic Beverages operating segment.

The CODM uses net sales, gross profit and income from operations in the annual budgeting and forecasting process.

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The tables below reconcile reported results (GAAP) to comparable and adjusted results (non-GAAP).

Results for 2024 include one additional selling day compared to 2023.

Results for 2025 include one fewer selling day compared to 2024.

For comparison purposes, the estimated impact of the additional selling day in 2024 has been excluded from our comparable volume results.

All share or per share amounts impacting the basic net income per share amounts have been retroactively adjusted to reflect the effects of the Stock Split (as defined below) executed by the Company during 2025.

Refer to the discussion in “Liquidity and Capital Resources” below for further details related to the Stock Split.

(in thousands) 2025 2024 Change

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728 (547) 1,275 1,275 959 0.01

Pension plan settlement expense (3)

— — — 112,796 84,823 9.05

Total reconciling items 728 (547) 1,275 60,441 45,452 0.50

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The Company accounts for its commodity derivative instruments on a mark-to-market basis.

(3) This non-cash settlement expense relates to the settlement of the Primary Plan benefit liabilities during 2023.

Financial Condition

Total assets increased $1.02 billion to $5.31 billion on December 31, 2024, as compared to $4.29 billion on December 31, 2023.

Net working capital, defined as current assets less current liabilities, was $1.23 billion on December 31, 2024, which was an increase of $620.3 million from December 31, 2023.

Total assets decreased $1.01 billion to $4.30 billion on December 31, 2025, as compared to $5.31 billion on December 31, 2024.

Net working capital, defined as current assets less current liabilities, was $298.0 million on December 31, 2025, which was a decrease of $936.1 million from December 31, 2024.

Significant changes in net working capital as of December 31, 2025 as compared to December 31, 2024 were as follows:

• An increase in cash and cash equivalents of $500.6 million, primarily as a result of bond proceeds received of $1.20 billion and strong operating performance, partially offset by share repurchases and related fee payments totaling $625.7 million, as further discussed below.

• An increase in short-term investments of $301.2 million, primarily due to the purchase of short-term investments during 2024.

• An increase in accounts receivable from The Coca-Cola Company of $37.9 million, primarily driven by the timing of cash receipts.

• An increase in current portion of debt of $349.7 million due to the Company’s senior bonds maturing on November 25, 2025.

• A decrease in accounts payable, trade of $48.7 million, primarily due to the timing of cash payments.

• An increase in accounts payable to The Coca‑Cola Company of $47.8 million, primarily due to the timing of cash payments and increases in certain raw material and concentrate input costs, higher payments related to certain marketing programs and increases in our acquisition related sub-bottling payments.

• A decrease in dividends payable of $154.7 million, due to the payment of a special cash dividend declared in 2023 during the first quarter of 2024.

• A decrease in cash and cash equivalents of $853.9 million and a decrease in short-term investments of $301.2 million, primarily as a result of share repurchases and related fee payments totaling $2.61 billion, which were funded through cash on hand, liquidation of short-term investments and additional borrowings, as further discussed below.

The Company also used cash to repay $350 million of senior bonds and to invest in capital expenditures totaling approximately $312 million.

These decreases to cash were partially offset by the Company’s strong operating performance during 2025.

• A decrease in current portion of debt of $249.7 million due to the repayment of $350 million of senior bonds, net of issuance costs, which matured on November 25, 2025, offset by the reclassification to current portion of debt of $100 million of senior notes maturing on October 10, 2026.

• An increase in other accrued liabilities of $60.6 million, primarily as a result of accrued excise taxes on share repurchases of $28.0 million, an increase in the current portion of the liability related to the acquisition related contingent consideration and an increase in accrued insurance costs.

Liquidity and Capital Resources

The Company’s sources of capital include cash flows from operations, available credit facilities and the issuance of debt and equity securities.

As of December 31, 2024, the Company had $1.14 billion in cash and cash equivalents.

The Company’s cash equivalent

balance at December 31, 2024 consisted predominantly of investments in money market funds, time deposits and commercial paper with maturities of 90 days or less.

As of December 31, 2024, the Company had $301.2 million in short-term investments, which consisted primarily of U.S.

As of December 31, 2025, the Company had $281.9 million in cash and cash equivalents.

The Company’s cash equivalent balance at December 31, 2025 consisted predominantly of investments in money market funds.

As of December 31, 2025, the Company did not have any short-term investments.

Historically, short-term investments have consisted primarily of U.S.

Treasury securities and investment-grade corporate bonds with maturities of one year or less.

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Management believes the Company has sufficient sources of capital available to finance its business plan, to meet its working capital requirements and to maintain an appropriate level of capital spending for at least the next 12 months from the issuance of the consolidated financial statements.

On May 6, 2024, the Company announced its intention to purchase up to $3.10 billion in value of Common Stock through both a modified “Dutch auction” tender offer (the “Tender Offer”) for up to $2.00 billion of Common Stock and a separate share purchase agreement (the “Purchase Agreement”) with Carolina Coca-Cola Bottling Investments, Inc., an indirect wholly owned subsidiary of The Coca‑Cola Company (“CCCBI”).

On May 20, 2024, the Company launched its offer to purchase, for cash, shares of Common Stock at prices specified by the tendering stockholders of not less than $850 nor greater than $925 per share, with shares having an aggregate purchase price of no more than $2.00 billion.

In accordance with the terms and conditions of the Tender Offer, the Company repurchased 14,391.5 shares of Common Stock at a purchase price of $925 per share, for an aggregate purchase price of $13.3 million, excluding fees and expenses relating to the Tender Offer.

The shares repurchased represented 0.2% of the shares of Common Stock that were issued and outstanding as of June 18, 2024.

Pursuant to the Purchase Agreement entered into on May 6, 2024 with CCCBI, the Company agreed to purchase and CCCBI agreed to sell, at the purchase price in the Tender Offer, a number of shares of Common Stock (the “Share Repurchase”) such that CCCBI would beneficially own shares of Common Stock representing 21.5% of the total outstanding shares of Common Stock and Class B Common Stock immediately following the closing of the Share Repurchase (calculated assuming all issued and outstanding shares of Class B Common Stock were converted into Common Stock and taking into account the shares of Common Stock purchased in the Tender Offer).

On July 5, 2024, the Company repurchased and retired 598,619 shares of Common Stock in the Share Repurchase at a purchase price of $925 per share, for an aggregate purchase price of $553.7 million.

On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program under which the Company is authorized to repurchase up to $1.00 billion of Common Stock.

On November 7, 2025, the Company entered into the Repurchase Agreement with the Seller, an indirect wholly owned subsidiary of The Coca-Cola Company, The Coca‑Cola Company and J.

Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, pursuant to which the Company agreed to purchase and the Seller agreed to sell all of the Seller’s shares of Common Stock for a cash payment in the aggregate amount of approximately $2.4 billion.

The closing of the Repurchase also occurred on November 7, 2025.

The Company funded the purchase price for the Repurchase with cash on hand and a term loan obtained under a certain bridge loan agreement (the “Bridge Facility”), as further discussed below.

Upon completion of the Repurchase, the 18,835,460 shares of Common Stock repurchased from the Seller were retired and recorded as a reduction to Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings.

As a result, the Company is in a deficit position as of December 31, 2025.

This deficit position does not impact the Company’s ability to pay dividends.

In the third quarter of 2025, the Company retired 31,488,535 shares of Common Stock and 6,281,140 shares of Class B Common Stock included in treasury stock.

The retired treasury stock had a carrying value of $162.6 million.

The retirement of treasury stock was recorded as a reduction to Common Stock and Class B Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings.

On March 4, 2025, the Company announced that its Board of Directors had approved a 10-for-1 forward stock split (the “Stock Split”) of Common Stock and Class B Common Stock.

The Stock Split was effected through an amendment to the Company’s Restated Certificate of Incorporation (the “Amendment”).

The Amendment also effected a proportionate increase in the number of authorized shares of Common Stock and Class B Common Stock.

The Amendment obtained stockholder approval at the Company’s 2025 Annual Meeting of Stockholders, which took place on May 13, 2025.

Each stockholder of record as of the close of business on May 16, 2025 received nine additional shares for each share of Common Stock or Class B Common Stock held as of such date reflected in the stockholder’s account on May 23, 2025.

Trading began on a split-adjusted basis on May 27, 2025.

The par value per share of Common Stock and Class B Common Stock remains unchanged.

On August 20, 2024, the Company announced that its Board of Directors had approved a Share Repurchase Program under which the Company was initially authorized to repurchase up to $1.00 billion of Common Stock.

On November 7, 2025, the Company’s Board of Directors reduced the total authorization under the Share Repurchase Program from $1.00 billion to $400.0 million.

The Company expects share repurchases to be made from time to time in the open market or through private transactions or block trades.

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The share repurchase authorization is discretionary and has no expiration date.

As of December 31, 2024, the Company had repurchased 42,895 shares of Common Stock under the share repurchase program for an aggregate purchase price of $51.6 million, excluding fees and expenses relating to the share repurchases.

During 2025, the Company repurchased 1,778,081 shares of Common Stock under the Share Repurchase Program for an aggregate purchase price of $212.0 million, excluding fees and expenses related to the share repurchases.

As of December 31, 2025, the total remaining share repurchase authorization was $136.3 million.

The Company’s debt as of December 31, 2025 and December 31, 2024 was as follows:

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Senior notes (2)

10/10/2026 100,000 100,000

Term loan facility (the “Three-Year Term Loan Facility”) (3)

12/8/2028 900,000 —

Senior bonds (the “2029 Senior Bonds”) (4)

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Senior notes 3/21/2030 150,000 150,000

Term loan facility (the “Five-Year Term Loan Facility”) (3)

12/6/2030 450,000 —

Senior bonds (the “2034 Senior Bonds”) (6)

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Current portion of debt (1)(2)

100,000 349,699

Total long-term debt $ 2,686,009 $ 1,436,649

(1) The 2025 Senior Bonds were issued at 99.975% of par.

As of December 31, 2024, the 2025 Senior Bonds, net of debt issuance costs and unamortized discount, were classified as current portion of debt in the consolidated balance sheets.

The 2025 Senior Bonds were fully repaid during the fourth quarter of 2025.

(2) As of December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the consolidated balance sheets.

(3) The Term Loan Facilities (as defined below) were issued in connection with the financing of the Repurchase, as further discussed above.

(4) The 2029 Senior Bonds were issued at 99.843% of par.

(3) The 2029 Senior Bonds and the 2034 Senior Bonds were issued in connection with the financing of the Tender Offer and the Share Repurchase, as discussed above.

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

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(6) The 2034 Senior Bonds were issued at 99.893% of par.

On May 29, 2024, the Company completed the issuance and sale of $700 million aggregate principal amount of the 2029 Senior Bonds and $500 million aggregate principal amount of the 2034 Senior Bonds.

The 2029 Senior Bonds and the 2034 Senior Bonds are the Company’s senior unsecured obligations and rank equally with the Company’s existing and future senior unsecured and unsubordinated indebtedness.

The 2029 Senior Bonds mature on June 1, 2029 and the 2034 Senior Bonds mature on June 1, 2034, in each case, unless earlier redeemed or repurchased by the Company.

The 2029 Senior Bonds bear interest at a rate of 5.250% per annum and the 2034 Senior Bonds bear interest at a rate of 5.450% per annum.

The Company pays interest on the 2029 Senior Bonds and the 2034 Senior Bonds semi-annually in arrears on June 1 and December 1 of each year.

On June 10, 2024, the Company entered into an amended and restated credit agreement (the “Revolving Credit Facility Agreement”), providing for a five-year unsecured revolving credit facility with an aggregate maximum borrowing capacity of $500 million (the “Revolving Credit Facility”), maturing on June 10, 2029.

The Revolving Credit Facility Agreement replaced the Company’s previous credit agreement, dated as of July 9, 2021.

Subject to obtaining commitments from lenders and satisfying other conditions specified therein, at the Company’s option, the Revolving Credit Facility may be increased by up to $250 million.

Borrowings under the Revolving Credit Facility bear interest at a per annum rate equal to, at the Company’s option, either (i) the Base Rate (as defined in the Revolving Credit Facility Agreement) plus an applicable rate or (ii) Term SOFR (as defined in the Revolving Credit Facility Agreement) plus the SOFR Adjustment (as defined in the Revolving Credit Facility Agreement) and an applicable rate, depending on the rating for the Company’s long-term senior unsecured, non-credit-enhanced debt (“Debt Rating”).

In addition, the Company must pay a facility fee on the lenders’ aggregate commitments under the Revolving Credit Facility ranging from 0.060% to 0.175% per annum, depending on the Company’s Debt Rating.

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.

The Company entered into the Bridge Facility, dated as of November 7, 2025, providing for a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of $1.20 billion to fund the Repurchase.

Also on November 7, 2025, the Company borrowed $1.20 billion under the Bridge Facility, the full amount available under the Bridge Facility.

On December 8, 2025, the Company entered into a term loan agreement, providing for (i) the Three-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $900 million, maturing on December 8, 2028, and (ii) the Five-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $450 million, maturing on December 6, 2030 (collectively, the “Term Loan Facilities”).

Also on December 8, 2025, the Company borrowed $1.35 billion under the Term Loan Facilities, the full amount available under the Term Loan Facilities.

In conjunction with the borrowings under the Term Loan Facilities, the Company modified and extinguished the Bridge Facility discussed above, fully repaying the $1.20 billion outstanding under the Bridge Facility through a net cash settlement with the lender.

Subsequent to the end of 2025, on February 9, 2026, the Company repaid $150 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand.

The indentures under which the 2025 Senior Bonds, the 2029 Senior Bonds and the 2034 Senior Bonds were issued do not include financial covenants, but do limit the incurrence of certain liens and encumbrances as well as indebtedness by the Company’s subsidiaries in excess of certain amounts.

The agreements under which the Company’s nonpublic debt, including the Revolving Credit Facility, was issued include two financial covenants:

The agreements under which the Company’s nonpublic debt, including the Revolving Credit Facility and the Term Loan Facilities, was issued include two financial covenants:

a consolidated cash flow/fixed charges ratio and a consolidated funded indebtedness/cash flow ratio, each as defined in the respective agreement.

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Changes in the Company’s operating results or financial position could result in changes in the Company’s credit ratings.

Lower credit ratings could result in higher borrowing costs for the Company or reduced access to capital markets, which could have a material adverse impact on the Company’s operating results or financial position.

Lower credit ratings could result in

higher borrowing costs for the Company or reduced access to capital markets, which could have a material adverse impact on the Company’s operating results or financial position.

As of December 31, 2025, the Company’s credit ratings and outlook for its debt were as follows:

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Moody’s Baa1 Stable

Standard & Poor’s BBB+ Stable

Standard & Poor’s BBB+ Negative

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 for more than 30 years.

The amount and frequency of future dividends will be determined by the Company’s Board of Directors in light of the earnings and financial condition of the Company at such time, and no assurance can be given that dividends will be declared or paid in the future.

On August 20, 2024, the Company announced that its Board of Directors had approved an increase in the regular quarterly cash dividend from $0.50 per share to $2.50 per share on the Common Stock and the Class B Common Stock.

We review supplier terms and conditions on an ongoing basis, and we have negotiated payment term extensions in recent years in connection with our efforts to improve cash flow and working capital.

Separate from those term extension actions, the Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (“SCF program”), which allows qualifying suppliers to sell their receivables from the Company to the financial institution in order to negotiate shorter payment terms on their outstanding receivable arrangements.

Separate from those term extension actions, the Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (the “SCF program”), which allows qualifying suppliers to sell their receivables from the Company to the financial institution in order to negotiate shorter payment terms on their outstanding receivable arrangements.

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.

See Note 13 to the consolidated financial statements for additional information related to the Company’s SCF program.

See Note 13 to the consolidated financial statements for additional information related to the SCF program.

The Company’s only Level 3 asset or liability is the acquisition related contingent consideration liability.

There were no transfers from Level 1 or Level 2 in any period presented.

There were no transfers of assets or liabilities from Level 1 or Level 2 in any period presented.

Fair value adjustments were non-cash and, therefore, did not impact the Company’s liquidity or capital resources.

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Cash Sources:

Proceeds from bond issuance $ 1,200,000 $ —

Proceeds from bridge loan $ 1,200,000 $ —

Proceeds from term loan facility upon modification 950,000 —

Net cash provided by operating activities (1)

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Proceeds from the sale of property, plant and equipment 6,594 569

Proceeds from bond issuance — 1,200,000

Total cash sources $ 3,784,913 $ 2,227,200

Payments related to share repurchases $ 2,606,031 $ 625,654

Repayment of bridge loan upon extinguishment 800,000 —

Purchases of short-term investments 390,111 446,309

Repayment of senior bonds 350,000 —

Additions to property, plant and equipment 312,315 371,015

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Total cash uses $ 4,638,819 $ 1,726,645

Net increase in cash during period $ 500,555 $ 437,621

(1) Net cash provided by operating activities in 2024 included net income tax payments of $224.0 million, interest payments of $56.1 million and pension plan contributions of $2.0 million.

Net cash provided by operating activities in 2023 included net income tax payments of $200.8 million, interest payments of $24.0 million and pension plan contributions of $16.3 million.

Net (decrease) increase in cash and cash equivalents during period $ (853,906) $ 500,555

(1) Net cash provided by operating activities in 2025 included net income tax payments of $196.6 million, net interest payments of $92.8 million and pension plan contributions of $5.0 million.

Net cash provided by operating activities in 2024 included net income tax payments of $224.0 million, net interest payments of $56.1 million and pension plan contributions of $2.0 million.

Cash Flows From Operating Activities

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Cash Flows From Investing Activities

During 2024, cash used in investing activities was $682.2 million, which was an increase of $386.9 million as compared to 2023.

The increase was partially a result of higher additions to property, plant and equipment, which were $371.0 million during 2024 and $282.3 million during 2023.

During 2025, cash used in investing activities was $19.0 million, which was a decrease of $663.2 million as compared to 2024.

The Company had net proceeds from short-term investments of $306.3 million during 2025, as compared to net purchases of short-term investments of $296.0 million during 2024, representing a net change of approximately $602 million.

The decrease in cash used in investing activities was also partially a result of fewer additions to property, plant and equipment, which were $312.3 million during 2025 and $371.0 million during 2024.

Additions to property, plant and equipment in 2024 included the purchase of the Company’s Nashville, Tennessee production facility for approximately $56 million.

There were $33.2 million and $44.9 million of additions to property, plant and equipment accrued in accounts payable, trade as of December 31, 2025 and December 31, 2024, respectively.

The Company also had purchases of short-term investments, net of proceeds, of $296.0 million during 2024, as compared to no net activity during 2023.

The additions to property, plant and equipment reflect the Company’s focus on optimizing its supply chain and investing for future growth.

During 2024, the Company purchased its Nashville, Tennessee production facility, which was previously leased, for approximately $56 million.

The Company expects additions to property, plant and equipment in 2025 to be approximately

$300 million.

The Company anticipates additions to property, plant and equipment over the next five years will be in the range of approximately $250 million to $300 million annually.

The additions to property, plant and equipment reflect the Company’s continued focus on optimizing its supply chain and investing for future growth.

The Company expects additions to property, plant and equipment in 2026 to be approximately $300 million.

Cash Flows From Financing Activities

During 2024, cash provided by financing activities was $306.4 million, as compared to cash used in financing activities of $77.7 million during 2023, a change of $384.1 million.

The change was primarily the result of bond proceeds of $1.20 billion, offset by share repurchases and related fee payments of $625.7 million and dividend payments of $185.6 million during 2024.

The dividend payments of $185.6 million during 2024 included a special cash dividend of $16.00 per share, as compared to dividend payments of $46.9 million during 2023 (which included a special cash dividend of $3.00 per share).

During 2025, cash used in financing activities was $1.77 billion, as compared to cash provided by financing activities of $306.4 million during 2024, a change of $2.07 billion.

The cash used in financing activities during 2025 was primarily related to share repurchases of $2.61 billion and dividend payments of $86.7 million, offset by net debt proceeds of $1.00 billion.

The Company had cash payments for acquisition related contingent consideration of $68.9 million during 2025 and $64.3 million during 2024.

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The Company had a number of contractual obligations and commercial obligations as of December 31, 2025 that are material to an assessment of the Company’s short- and long-term cash requirements.

The Company has outstanding debt of $1.80 billion, approximately $350 million of which is contractually due in fiscal year 2025 and classified as current debt on the consolidated balance sheets.

The Company has outstanding debt of $2.80 billion, $100.0 million of which is contractually due in fiscal year 2026 and classified as current debt on the consolidated balance sheets.

The remaining interest payments on the Company’s debt obligations are $622.2 million determined in reference to the contractual terms of such debt, of which $138.7 million is due in fiscal year 2026.

All of the Company’s debt instruments have fixed interest rates, and, thus, are not impacted by fluctuations in interest rates, with the exception of the Company’s revolving credit facility, which did not have any outstanding borrowings as of December 31, 2024.

Several of the Company’s debt instruments have variable interest rates and, thus, are impacted by fluctuations in interest rates, which could cause changes in the amount of estimated interest payments reported above.

The Company’s acquisition related contingent consideration liability relates to acquisition related sub-bottling payments required in certain distribution territories under the CBA and totaled $717.9 million as of December 31, 2025.

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Hedging Activities

The Company uses commodity derivative instruments to manage its exposure to fluctuations in certain commodity prices.

The Company uses commodity derivative instruments to manage its exposure to fluctuations in certain commodity prices where practicable.

Fees paid by the Company for commodity derivative instruments are amortized over the corresponding period of the instrument.

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The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk.

The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net settlement of derivative transactions.

The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net

settlement of derivative transactions.

The net impact of the commodity derivative instruments on the consolidated statements of operations was as follows:

(in thousands) 2025 2024

(Decrease) increase in cost of sales $ (590) $ 1,656

Decrease in cost of sales $ (2,002) $ (590)

Increase in SD&A expenses 1,443 2,647

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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.

The Company estimates a 10-basis point change in the underlying risk-free interest rate used to estimate the Company’s WACC would result in a change of approximately $7 million to the Company’s acquisition related contingent consideration liability.

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Pension and Postretirement Benefit Obligations

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.

During 2023, the Primary Plan was fully settled.

There were no remaining benefit liabilities or associated estimates related to the Primary Plan as of December 31, 2023 or December 31, 2024.

The second Company-sponsored pension plan (the “Bargaining Plan”) is for certain employees under collective bargaining agreements.

The Company sponsors a pension plan (the “Bargaining Plan”) for certain employees under collective bargaining agreements.

Benefits under the Bargaining Plan are determined in accordance with negotiated formulas for the respective participants.

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

The Company also sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria.

Several statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the Bargaining Plan.

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See Note 18 to the consolidated financial statements for additional information.

Pension costs for the Bargaining Plan were $3.7 million in both 2024 and 2023.

Pension costs for the Bargaining Plan were $3.2 million in 2025 and $3.7 million in 2024.

A 0.25% increase or decrease in the discount rate assumption would have impacted the projected benefit obligation and the net periodic pension cost for the Bargaining Plan as follows:

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The Company sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria.

Several statistical and other factors, which attempt to anticipate future events, are used in calculating the net periodic postretirement benefit cost and the postretirement benefit obligation for this plan.

Several statistical and other factors, which attempt to anticipate future events, are used in calculating the net periodic postretirement benefit cost and the

postretirement benefit obligation for this plan.

These factors include assumptions about the discount rate and the expected growth rate for the cost of healthcare benefits.

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Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to:

increased costs (including due to inflation) or disruption, unavailability or shortages of raw materials, fuel and other supplies;

increased costs (including due to inflation or uncertainty around tariffs) or disruption, unavailability or shortages of raw materials, fuel and other supplies;

the reliance on purchased finished products from external sources;

changes in public and consumer perception and preferences, including concerns related to product safety and sustainability, artificial ingredients, brand reputation and obesity;

changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients, recycling, sustainability and product safety;

decreases from historic levels of marketing funding support provided to us by

The Coca‑Cola Company and other beverage companies;

changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients, recycling, sustainability, product safety and benefit programs, including SNAP;

decreases from historic levels of marketing funding support provided to us by The Coca‑Cola Company and other beverage companies;

material changes in the performance requirements for marketing funding support or our inability to meet such requirements;

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our use of estimates and assumptions;

changes in tax laws, disagreements with tax authorities or additional tax liabilities;

changes in tax laws, disagreements

with tax authorities or additional tax liabilities;

changes in legal contingencies;

natural disasters, changing weather patterns and unfavorable weather;

climate change or legislative or regulatory responses to such change;

natural disasters, changing weather patterns and unfavorable weather, or the increased frequency of any such events due to climate change, and public expectations around combatting climate change;

or legislative or regulatory responses to such change;

and the risks discussed in “Item 1A.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis