What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-10-29 · 248 added, 305 removed, 306 unchanged (64% of the section changed)

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The condensed consolidated financial statements presented are:

• The financial position as of September 26, 2025 and December 31, 2024.

• The results of operations, comprehensive income and changes in stockholders’ equity for the three-month periods ended September 26, 2025 (the “third quarter” of fiscal 2025 (“2025”)) and September 27, 2024 (the “third quarter” of fiscal 2024 (“2024”)) and the nine-month periods ended September 26, 2025 (the “first nine months” of 2025) and September 27, 2024 (the “first nine months” of 2024).

• The changes in cash flows for the first nine months of 2025 and the first nine months of 2024.

• The financial position as of April 3, 2026 and December 31, 2025.

• The results of operations, comprehensive income and changes in stockholders’ (deficit) equity for the three-month periods ended April 3, 2026 (the “first quarter” of fiscal 2026 (“2026”)) and March 28, 2025 (the “first quarter” of fiscal 2025 (“2025”)).

• The changes in cash flows for the first quarter of 2026 and the first quarter of 2025.

Our Business and the Nonalcoholic Beverage Industry

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Approximately 85% of our total bottle/can sales volume to retail customers consists of products of The Coca‑Cola Company, which include some of the most recognized and popular beverage brands in the world.

We also distribute products for several other beverage companies, including Keurig Dr Pepper Inc.

(“Dr Pepper”) and Monster Energy Company.

We also distribute products for several other beverage companies, including Monster Energy Company and Keurig Dr Pepper Inc.

(“Dr Pepper”).

Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably.

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The Company’s products are sold and distributed in the United States through various channels, which include selling directly to customers, including grocery stores, mass merchandise stores, club stores, convenience stores and drug stores, selling to on-premise locations, where products are typically consumed immediately, such as restaurants, schools, amusement parks and recreational facilities, and selling through other channels such as vending machine outlets.

The Company also distributes its products using alternative routes to market (“ARTM”), which include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure.

The Company also distributes its products using alternative routes to market (“ARTM”), which include distribution by third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure.

The nonalcoholic beverage industry is highly competitive for both sparkling and still beverages.

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Executive Summary

Volume was up 3.3% in the third quarter of 2025 and down 1.2% in the first nine months of the year.

The first nine months of 2025 had two fewer selling days compared to the first nine months of 2024, which accounted for approximately 0.7% of the first nine-month volume decline, as discussed in the “Comparable and Adjusted Results (Non-GAAP)” section.

Our Sparkling category volume increased by 1.4% in the third quarter of 2025.

The strong Sparkling volume performance was driven primarily by growth within zero-sugar and flavor offerings, while we continued to experience moderating headwinds in demand for Coca-Cola Original Taste.

Still volume increased 8.9% in the third quarter of 2025 as a result of strong performance across many brands.

Monster, Powerade, smartwater, Core Power, Dasani and Topo Chico all achieved volume growth in the third quarter of 2025, reflecting the strength of the brands and strong consumer demand.

Net sales increased 6.9% to $1.9 billion in the third quarter of 2025 and increased 3.3% to $5.3 billion in the first nine months of 2025.

The growth in net sales was primarily the result of annual price increases executed during the first quarter of 2025 and strong volume performance during the third quarter.

Sparkling and Still net sales increased 4.7% and 9.9% in the third quarter of 2025, respectively, compared to the third quarter of 2024.

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 of numerous brands across the category sold within large retail and convenience stores.

Gross profit in the third quarter of 2025 was $748.5 million, an increase of $50.5 million, or 7.2%.

Gross margin in the third quarter of 2025 improved 10 basis points to 39.6%.

Gross profit in the first nine months of 2025 was $2.1 billion, an increase of $62.8 million, or 3.1%.

The annual price increases we executed earlier this year across our portfolio have been effective in offsetting the net impact of increased commodity costs, including the continued volatility of import tariffs on aluminum, across our portfolio.

Selling, delivery and administrative (“SD&A”) expenses in the third quarter of 2025 increased $30.9 million, or 6.6%.

The increase in SD&A expenses in the third quarter of 2025 as compared to the third quarter of 2024 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.

SD&A expenses as a percentage of net sales in the third quarter of 2025 decreased 10 basis points to 26.6% as compared to the third quarter of 2024.

SD&A expenses in the first nine months of 2025 increased $55.9 million, or 4.1%.

SD&A expenses as a percentage of net sales in the first nine months of 2025 increased 20 basis points to 26.5% as compared to the first nine months of 2024.

Income from operations in the third quarter of 2025 was $246.6 million, compared to $227.1 million in the third quarter of 2024, an increase of 8.6%.

Operating margin for the third quarter of 2025 was 13.1% as compared to 12.9% for the third quarter of 2024, an increase of 20 basis points.

For the first nine months of 2025, income from operations improved $6.9 million to $708.5 million, an increase of 1.0%.

The two fewer selling days in the first nine months of 2025 accounted for an approximately $10 million decrease in income from operations.

Net income in the third quarter of 2025 was $142.3 million, compared to $115.6 million in the third quarter of 2024, an increase of $26.7 million, or 23.1%.

On an adjusted basis, as defined in the “Comparable and Adjusted Results (Non-GAAP)” section, net income in the third quarter of 2025 was $179.2 million, compared to $166.7 million in the third quarter of 2024, an increase of $12.5 million, or 7.5%.

Income tax expense for the third quarter of 2025 was $49.9 million, compared to $39.9 million for the third quarter of 2024, resulting in an effective income tax rate of approximately 26% for both periods.

Net income in the first nine months of 2025 was $433.3 million, compared to $454.2 million in the first nine months of 2024, a decline of $20.8 million, or 4.6%.

On an adjusted basis, as defined in the “Comparable and Adjusted Results (Non-GAAP)” section, net income in the first nine months of 2025 was $510.6 million, compared to $521.9 million in the first nine months of 2024, a decrease of $11.3 million, or 2.2%.

Net income for both the first nine months of 2025 and 2024 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.

Cash flows from operations for the first nine months of 2025 were $722.9 million, compared to $707.9 million for the first nine months of 2024.

In the first nine months of 2025, we invested approximately $210 million in capital expenditures as we continue to optimize our supply chain and invest for future growth.

Results for the first quarter of 2026 included six additional days compared to the first quarter of 2025.

For comparison purposes, the estimated impact of the six additional days in the first quarter of 2026 compared to the first quarter of 2025 has been excluded from our adjusted results, as presented in the “Adjusted Results (Non-GAAP)” section.

The Company estimates the impact of the six additional days to be as follows:

First Quarter

(in millions) 2026

Net sales $ 132.0

Gross profit $ 55.0

SD&A expenses $ 25.0

Income from operations $ 30.0

Volume was up 13.4% in the first quarter of 2026, or 6.4% on an adjusted basis.

Our Sparkling category volume increased 12.2% in the first quarter of 2026, or 5.3% on an adjusted basis.

The strong Sparkling volume performance was driven by growth across the entire portfolio, led by our zero-sugar offerings.

In addition, Coca-Cola Original Taste volume grew in the quarter.

Still category volume increased 17.5% in the first quarter of 2026, or 10.2% on an adjusted basis.

Dasani casepack water accounted for a significant portion of the growth within our Still category.

The remaining Still category volume growth was driven by strong performance across many brands, including Monster, Powerade, BODYARMOR and smartwater.

In addition, volume in the first quarter of 2026 was also higher as compared to the first quarter of 2025 due to the timing of the Easter holiday, which we estimate impacted total volume by 0.5% to 1.0%.

Net sales increased 16.9% to $1.8 billion in the first quarter of 2026, or 8.5% on an adjusted basis.

The growth in net sales was primarily the result of strong volume performance and annual pricing actions executed during the first quarter of 2026, as well as a shift in the Easter holiday.

Sparkling and Still net sales increased 16.7% and 18.9%, respectively, in the first quarter of 2026 compared to the first quarter of 2025.

Sparkling and Still adjusted net sales increased 8.6% and 10.6%, respectively, in the first quarter of 2026 compared to the first quarter of 2025.

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

Net sales of our single-serve Still products were especially strong in our Energy category for convenience and value store customers.

Price/mix in the Still category was unfavorably impacted by the increased Dasani casepack volume, as well as slowing volume in the Protein category due to supply constraints.

Gross profit in the first quarter of 2026 was $727.1 million, an increase of $100.0 million, or 15.9%.

On an adjusted basis, gross profit increased $41.7 million, or 6.6%.

Gross margin in the first quarter of 2026 decreased 30 basis points to 39.4%.

Adjusted gross margin in the first quarter of 2026 decreased 70 basis points to 39.1%.

The reduction in gross margin resulted primarily from an increase in aluminum costs, which was caused by geopolitical conflicts, supply constraints and the impact of elevated import tariffs.

This heightened volatility resulted in approximately $35 million in additional input costs compared to the first quarter of 2025, which outpaced our pricing actions executed during the first quarter.

Selling, delivery and administrative (“SD&A”) expenses in the first quarter of 2026 increased $52.3 million, or 12.0%.

Approximately $25 million of the increase was related to the six additional days in the first quarter of 2026.

Additionally, during the first quarter of 2026, we had a favorable, non-cash fair value adjustment to our fuel hedging positions of $10.0 million.

On an adjusted basis, SD&A expenses in the first quarter of 2026 increased $37.5 million, or 8.6%.

SD&A expenses as a percentage of net sales decreased to 26.5% in the first quarter of 2026 from 27.7% in the first quarter of 2025.

On an adjusted basis, SD&A expenses as a percentage of net sales in the first quarter of 2026 were 27.7%, consistent with the first quarter of 2025.

The increase in adjusted SD&A expenses was primarily driven by an additional investment in the base wages of our front-line

teammates, which became effective at the beginning of the third quarter of 2025.

The remaining increase in adjusted SD&A expenses was primarily driven by an increase in labor costs related to annual wage adjustments and higher medical benefits.

Income from operations in the first quarter of 2026 was $237.5 million, compared to $189.8 million in the first quarter of 2025, an increase of $47.7 million, or 25.1%.

On an adjusted basis, income from operations in the first quarter of 2026 was $194.6 million, an increase of $4.2 million, most of which was due to the timing of the Easter holiday.

Operating margin for the first quarter of 2026 was 12.9% as compared to 12.0% for the first quarter of 2025, an increase of 90 basis points.

Adjusted operating margin for the first quarter of 2026 was 11.4% as compared to 12.1% for the first quarter of 2025, a decrease of 70 basis points.

Net income in the first quarter of 2026 was $111.6 million, compared to $103.6 million in the first quarter of 2025, an increase of $7.9 million, or 7.7%.

On an adjusted basis, net income in the first quarter of 2026 was $119.5 million, compared to $136.3 million in the first quarter of 2025, a decrease of $16.8 million, or 12.3%.

The six additional days in the first quarter of 2026 increased net income by approximately $23 million during the quarter.

Income tax expense in the first quarter of 2026 was $39.7 million, compared to $35.9 million in the first quarter of 2025, resulting in an effective income tax rate of approximately 26% for the first quarter of 2026.

Cash flows from operations for the first quarter of 2026 were $205.3 million, compared to $198.2 million for the first quarter of 2025.

During the first quarter of 2026, we repaid $150.0 million of principal on one of our term loans.

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

In the third quarter of 2025, we returned over $133 million to stockholders through approximately $111 million of share repurchases and approximately $22 million of dividends.

Through the first nine months of 2025, we have returned approximately $211 million to stockholders through repurchases and dividends.

As noted above, the first quarter of 2026 included six extra days as compared to the first quarter of 2025.

The fourth quarter of 2026 will include six fewer days as compared to the fourth quarter of 2025.

The full fiscal years of 2026 and 2025 have the same number of days.

Areas of Emphasis

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We are continually focused on optimizing our supply chain, which includes identifying nearby warehousing and distribution operations that can be consolidated into new facilities to increase capacity, expand production capabilities, reduce overall production costs and add automation to allow the Company to better serve its customers and consumers.

The Company has made, and expects to continue to make, significant capital investments to optimize our supply chain and to invest for future growth.

The Company expects to continue to make significant capital investments to optimize our supply chain and to invest for future growth during 2026.

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.

Direct store delivery (“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, or ARTM, during 2024 and continued to use ARTM during the first nine months of 2025.

Our typical DSD method uses Company-owned

vehicles and warehouses, but we increasingly shifted to alternative methods of distribution, or ARTM, beginning in 2024 and intend to continue using ARTM at similar rates for the foreseeable future.

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.

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.

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 territory, we receive fees from our brand partners for the delivery of qualified product in our territory.

These fees are reported in net sales.

During the first nine months of 2025, nearly two-thirds of our post-mix gallons and less than 10% of our bottle/can volume was delivered through ARTM.

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 the first quarter of 2026, approximately two-thirds of our post-mix gallons and less than 10% of our bottle/can volume were delivered through ARTM.

These ratios are consistent with the first quarter of 2025.

Digitally Enabled Selling Platform :

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Results of Operations

Third Quarter Results

The Company’s results of operations for the third quarter of 2025 and the third quarter of 2024 are highlighted in the table below and discussed in the following paragraphs.

Third Quarter

First Quarter Results

The Company’s results of operations for the first quarter of 2026 and the first quarter of 2025 are highlighted in the table below and discussed in the following paragraphs.

Results for the first quarter of 2026 include six additional days compared to the first quarter of 2025.

First Quarter

(in thousands) 2026 2025 Change

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Net income 111,556 103,611 7,945

Other comprehensive income, net of tax 60 451 (391)

Other comprehensive income (loss), net of tax 1,338 (14) 1,352

Comprehensive income

$ 112,894 $ 103,597 $ 9,297

Net sales increased $122.7 million, or 6.9%, to $1.89 billion in the third quarter of 2025, as compared to $1.77 billion in the third quarter of 2024.

The increase in net sales was driven by higher average bottle/can sales price per unit charged to retail customers, which increased net sales by approximately $60 million during the third quarter of 2025.

The increase in net sales was also positively impacted by higher case sales volume, which increased net sales by approximately $60 million during the third quarter of 2025 as compared to the third quarter of 2024.

Net sales increased $266.7 million, or 16.9%, to $1.85 billion in the first quarter of 2026, as compared to $1.58 billion in the first quarter of 2025.

The six additional days in the first quarter of 2026 as compared to the first quarter of 2025 accounted for approximately $132 million of the increase in net sales during the first quarter of 2026.

The remaining growth in net sales was primarily the result of increased sales volume and annual pricing actions during the first quarter of 2026, as well as a shift in the Easter holiday.

Net sales by product category were as follows:

Third Quarter

First Quarter

(in thousands) 2026 2025 % Change

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

Third Quarter

First Quarter

(in thousands) 2026 2025 % Change

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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 using Company-owned vehicles and warehouses.

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.

Changes in the delivery of our products to our customers impacted our reported volume and net sales during 2024 and the first nine months of 2025.

As a result, these cases are not included in our reported case sales volume for the first quarter of 2026 or the first quarter of 2025.

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:

First Quarter

Approximate percent of the Company’s total bottle/can sales volume:

The Kroger Co.

Total approximate percent of the Company’s total bottle/can sales volume 36 % 36 %

Approximate percent of the Company’s total net sales:

The Kroger Co.

Total approximate percent of the Company’s total net sales 30 % 29 %

(1) Includes bottle/can sales volume related to the Walmart, Sam’s Club and Walmart Neighborhood Market chains.

(2) Includes bottle/can sales volume related to the Kroger and Harris Teeter chains.

Cost of Sales

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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 our brand partners.

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 annual cost of sales.

Cost of sales increased $72.2 million, or 6.8%, to $1.14 billion in the third quarter of 2025, as compared to $1.07 billion in the third quarter of 2024.

The increase in cost of sales was driven by higher case sales volume, which increased cost of sales by approximately $35 million during the third quarter of 2025 as compared to the third quarter of 2024.

The increase in cost of sales was also impacted by higher input costs, which increased cost of sales by approximately $25 million during the third quarter of 2025.

Cost of sales increased $166.7 million, or 17.5%, to $1.12 billion in the first quarter of 2026, as compared to $952.9 million in the first quarter of 2025.

The six additional days in the first quarter of 2026 as compared to the first quarter of 2025 accounted for approximately $77 million of the increase in cost of sales during the first quarter of 2026.

The increase in cost of sales was also impacted by higher input costs, specifically aluminum costs, which included the uncertainty surrounding geopolitical conflicts and the impact of elevated import tariffs.

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.

Total funding support from The Coca‑Cola Company and other beverage companies, which includes both direct payments to the Company and payments to customers for marketing programs, was $56.9 million in the third quarter of 2025 and $48.5 million in the third quarter of 2024.

Total funding support from The Coca‑Cola Company and other beverage companies, which includes both direct payments to the Company and payments to customers for marketing programs, was $47.8 million in the first quarter of 2026 and $45.2 million in the first quarter of 2025.

Selling, Delivery and Administrative Expenses

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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 annual SD&A expenses.

SD&A expenses increased $30.9 million, or 6.6%, to $501.9 million in the third quarter of 2025, as compared to $471.0 million in the third quarter of 2024.

The increase in SD&A expenses was primarily driven by an increase in labor costs related to annual wage adjustments 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.

SD&A expenses as a percentage of net sales decreased to 26.6% in the third quarter of 2025 from 26.7% in the third quarter of 2024.

Shipping and handling costs included in SD&A expenses were approximately $221 million in the third quarter of 2025 and approximately $206 million in the third quarter of 2024.

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

SD&A expenses increased $52.3 million, or 12.0%, to $489.6 million in the first quarter of 2026, as compared to $437.3 million in the first quarter of 2025.

The increase in SD&A expenses was primarily attributable to the six additional days in the first quarter of 2026 as compared to the first quarter of 2025, which accounted for approximately $25 million of the increase in SD&A expenses during the first quarter of 2026.

Additionally, SD&A expenses increased due to an increase in labor costs related to annual wage adjustments 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.

SD&A expenses as a percentage of net sales decreased to 26.5% in the first quarter of 2026 from 27.7% in the first quarter of 2025.

Shipping and handling costs included in SD&A expenses were approximately $216 million in the first quarter of 2026 and approximately $194 million in the first quarter of 2025.

The increase in shipping and handling costs was primarily driven by the six additional days in the first quarter of 2026.

Interest Expense, Net

Interest expense, net increased $2.5 million to $4.7 million in the third quarter of 2025, as compared to $2.2 million in the third quarter of 2024.

The increase in interest expense, net was primarily driven by lower interest income on average cash, cash equivalent and short-term investment balances in the third quarter of 2025 as compared to the third quarter of 2024.

Interest expense, net increased $25.2 million to $32.1 million in the first quarter of 2026, as compared to $6.9 million in the first quarter of 2025.

The increase in interest expense, net was driven by a reduction in interest income related to lower cash and short-term investment balances and lower interest rates in the first quarter of 2026 as compared to the first quarter of 2025.

The increase was also driven by an increase in interest expense on higher debt balances in the first quarter of 2026 as compared to the first quarter of 2025.

Mark-to-Market on Acquisition Related Contingent Consideration

Each reporting period, the Company adjusts its acquisition related contingent consideration liability to fair value, which is determined by discounting future expected acquisition related sub-bottling payments using the Company’s estimated weighted average cost of capital (“WACC”) and future cash flow projections, and records the fair value adjustment as mark-to-market on acquisition related contingent consideration in the condensed consolidated statement of operations.

Mark-to-market on acquisition related contingent consideration was an increase of $49.4 million in the third quarter of 2025 and an increase of $68.6 million in the third quarter of 2024.

During the third quarter of 2025, the $49.4 million increase in the fair value of the acquisition related contingent consideration liability was driven by a decrease 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 the third quarter of 2024, the $68.6 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 a decrease in the WACC used to calculate the fair value of the liability.

Other Expense, Net

Other expense, net was $0.4 million in the third quarter of 2025, as compared to $0.7 million in the third quarter of 2024.

Income Tax Expense

The Company’s effective income tax rate was 26.0% for the third quarter of 2025 and 25.7% for the third quarter of 2024.

The Company’s income tax expense increased $10.0 million, or 24.9%, to $49.9 million for the third quarter of 2025, as compared to $39.9 million for the third quarter of 2024.

The increase in income tax expense was primarily attributable to higher income before taxes during the third quarter of 2025 as compared to the third quarter of 2024.

Other Comprehensive Income, Net of Tax

Other comprehensive income, net of tax was $0.1 million in the third quarter of 2025 and $0.5 million in the third quarter of 2024.

First Nine Months Results

Our results of operations for the first nine months of 2025 and the first nine months of 2024 are highlighted in the table below and discussed in the following paragraphs.

First Nine Months

(in thousands)

2025 2024 Change

Net sales $ 5,323,813 $ 5,153,221 $ 170,592

Cost of sales 3,205,697 3,097,916 107,781

Gross profit 2,118,116 2,055,305 62,811

Selling, delivery and administrative expenses 1,409,578 1,353,704 55,874

Income from operations 708,538 701,601 6,937

Interest expense (income), net 17,509 (2,149) 19,658

Mark-to-market on acquisition related contingent consideration 104,468 90,877 13,591

Other expense, net 1,866 2,250 (384)

Income before taxes 584,695 610,623 (25,928)

Income tax expense 151,363 156,446 (5,083)

Net income 433,332 454,177 (20,845)

Other comprehensive income, net of tax 14 324 (310)

Comprehensive income

$ 433,346 $ 454,501 $ (21,155)

Net sales increased $170.6 million, or 3.3%, to $5.32 billion in the first nine months of 2025, as compared to $5.15 billion in the first nine months of 2024.

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 $160 million during the first nine months of 2025.

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

These improvements were offset by lower case sales volume, which decreased net sales by approximately $60 million, as well as the impact of two fewer selling days in the first nine months of 2025 as compared to the first nine months of 2024.

Net sales by product category were as follows:

First Nine Months

(in thousands) 2025 2024 % Change

Bottle/can sales:

Sparkling beverages $ 3,096,931 $ 3,025,902 2.3 %

Still beverages 1,778,522 1,694,676 4.9 %

Total bottle/can sales 4,875,453 4,720,578 3.3 %

Sales to other Coca‑Cola bottlers 278,931 259,459 7.5 %

Post-mix sales and other 169,429 173,184 (2.2) %

Total other sales 448,360 432,643 3.6 %

Total net sales $ 5,323,813 $ 5,153,221 3.3 %

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

First Nine Months

(in thousands) 2025 2024 % Change

Bottle/can sales volume:

Sparkling beverages 193,811 196,212 (1.2) %

Still beverages 66,439 67,211 (1.1) %

Total bottle/can sales volume 260,250 263,423 (1.2) %

First Nine Months

Approximate percent of the Company’s total bottle/can sales volume:

The Kroger Co.

Total approximate percent of the Company’s total bottle/can sales volume 36 % 36 %

Approximate percent of the Company’s total net sales:

The Kroger Co.

Total approximate percent of the Company’s total net sales 29 % 29 %

(1) Includes bottle/can sales volume related to the Walmart, Sam’s Club and Walmart Neighborhood Market chains.

(2) Includes bottle/can sales volume related to the Kroger and Harris Teeter chains.

Cost of Sales

Cost of sales increased $107.8 million, or 3.5%, to $3.21 billion in the first nine months of 2025, as compared to $3.10 billion in the first nine months of 2024.

The increase in cost of sales was primarily driven by higher input costs, which increased cost of sales by approximately $105 million during the first nine months of 2025.

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

The increase in cost of sales was partially offset by lower case sales volume, which decreased cost of sales by approximately $35 million as compared to the first nine months of 2024.

Total funding support from The Coca‑Cola Company and other beverage companies was $154.5 million in the first nine months of 2025, as compared to $143.1 million in the first nine months of 2024.

Selling, Delivery and Administrative Expenses

SD&A expenses increased $55.9 million, or 4.1%, to $1.41 billion in the first nine months of 2025, as compared to $1.35 billion in the first nine months of 2024.

SD&A expenses as a percentage of net sales increased to 26.5% in the first nine months of 2025 from 26.3% in the first nine months of 2024.

Shipping and handling costs included in SD&A expenses were approximately $622 million in the first nine months of 2025 and approximately $599 million in the first nine months of 2024.

Interest Expense (Income), Net

Interest expense (income), net changed $19.7 million to $17.5 million of interest expense, net in the first nine months of 2025, as compared to $2.1 million of interest income, net in the first nine months of 2024.

The change in interest expense (income), net was primarily due to an increase in interest expense on higher average debt balances in the first nine months of 2025 as compared to the first nine months of 2024, partially offset by an increase in interest income due to higher average cash, cash equivalent and short-term investment balances.

Mark-to-Market on Acquisition Related Contingent Consideration

Mark-to-market on acquisition related contingent consideration was an increase of $104.5 million in the first nine months of 2025 compared to an increase of $90.9 million in the first nine months of 2024.

During the first nine months of 2025, the $104.5 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by a decrease in the WACC used to calculate the fair value of the liability, as well as higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.

During the first nine months of 2024, the $90.9 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.

Mark-to-market on acquisition related contingent consideration was an increase of $53.4 million in the first quarter of 2026 and an increase of $42.7 million in the first quarter of 2025.

During the first quarter of 2026, the $53.4 million increase in the fair value of the acquisition related contingent consideration liability was driven by a decrease 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 the first quarter of 2025, the $42.7 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by a decrease in the WACC used to calculate the fair value of the liability.

Other Expense, Net

Other expense, net was $1.9 million in the first nine months of 2025 and $2.3 million in the first nine months of 2024.

Other expense, net was $0.9 million in the first quarter of 2026, as compared to $0.7 million in the first quarter of 2025.

Income Tax Expense

The Company’s effective income tax rate was 25.9% for the first nine months of 2025 and 25.6% for the first nine months of 2024.

The Company’s income tax expense decreased $5.1 million, or 3.2%, to $151.4 million for the first nine months of 2025, as compared to $156.4 million for the first nine months of 2024.

The decrease in income tax expense was primarily attributable to lower income before taxes during the first nine months of 2025 as compared to the first nine months of 2024.

Other Comprehensive Income, Net of Tax

Other comprehensive income, net of tax was $0.0 million in the first nine months of 2025 and $0.3 million in the first nine months of 2024.

The Company’s effective income tax rate was 26.2% for the first quarter of 2026 and 25.7% for the first quarter of 2025.

The Company’s income tax expense increased $3.8 million, or 10.6%, to $39.7 million for the first quarter of 2026, as compared to $35.9 million for the first quarter of 2025.

The increase in income tax expense was primarily attributable to higher income before taxes during the first quarter of 2026 as compared to the first quarter of 2025.

Other Comprehensive Income (Loss), Net of Tax

Other comprehensive income (loss), net of tax was income of $1.3 million in the first quarter of 2026 and $0.0 million in the first quarter of 2025.

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.

The Company has two operating segments, each identified by its unique 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 presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2024.

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 included in the Company’s Annual Report on Form 10-K for 2025.

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 dissolved and merged into the Nonalcoholic Beverages operating segment.

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

operating segment within the All Other operating segment 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 Company’s segment results are as follows:

Third Quarter 2025

(in thousands) Nonalcoholic Beverages All Other Eliminations (1)

Net sales $ 1,876,999 $ 85,702 $ (74,384) $ 1,888,317

Cost of goods sold 1,147,875 47,168 (55,242) 1,139,801

Gross profit 729,124 38,534 (19,142) 748,516

Selling, delivery and administrative expenses:

Payroll costs (2)

$ 314,529 $ 13,689 $ — $ 328,218

Fleet costs (3)

25,723 8,281 — 34,004

Depreciation and amortization expense (4)

29,137 552 — 29,689

All other segment items (5)

121,374 7,739 (19,142) 109,971

Total selling, delivery and administrative expenses 490,763 30,261 (19,142) 501,882

Income from operations $ 238,361 $ 8,273 $ — $ 246,634

Total depreciation and amortization expense (4)

$ 49,993 $ 5,093 $ — $ 55,086

Third Quarter 2024

(in thousands) Nonalcoholic Beverages All Other Eliminations (1)

Net sales $ 1,751,495 $ 86,230 $ (72,073) $ 1,765,652

Cost of goods sold 1,066,387 54,656 (53,427) 1,067,616

Gross profit 685,108 31,574 (18,646) 698,036

Selling, delivery and administrative expenses:

Payroll costs (2)

$ 297,420 $ 13,165 $ — $ 310,585

Fleet costs (3)

26,210 7,801 — 34,011

Depreciation and amortization expense (4)

25,859 497 — 26,356

All other segment items (5)

111,547 7,128 (18,646) 100,029

Total selling, delivery and administrative expenses 461,036 28,591 (18,646) 470,981

Income from operations $ 224,072 $ 2,983 $ — $ 227,055

Total depreciation and amortization expense (4)

$ 44,511 $ 4,259 $ — $ 48,770

First Nine Months 2025

First Quarter 2026

(in thousands) Nonalcoholic Beverages All Other Eliminations (1)

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$ 51,590 $ 5,312 $ — $ 56,902

First Nine Months 2024

First Quarter 2025

(in thousands) Nonalcoholic Beverages All Other Eliminations (1)

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$ 48,050 $ 5,323 $ — $ 53,373

(1) The entire net sales elimination represents net sales from the All Other segment to the Nonalcoholic Beverages segment.

The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other segment in the generation of net sales to the Nonalcoholic Beverages segment.

(1) The entire net sales elimination represents net sales from the All Other operating segment to the Nonalcoholic Beverages operating segment.

The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other operating segment in the generation of net sales to the Nonalcoholic Beverages operating segment.

(2) Payroll costs includes compensation, incentive plans, defined contribution plans, healthcare benefits and tax-advantaged spending accounts.

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(5) All other segment items includes information technology costs, stewardship, insurance and other costs incurred in the selling and delivery of the Company’s products.

Comparable and Adjusted Results (Non-GAAP)

Adjusted Results (Non-GAAP)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”).

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The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.

The following tables reconcile reported results (GAAP) to comparable and adjusted results (non-GAAP):

Third Quarter 2025

(in thousands, except per share data) Gross profit SD&A expenses Income from operations Income before taxes Net income Basic net income per share (1)

Reported results (GAAP) $ 748,516 $ 501,882 $ 246,634 $ 192,230 $ 142,334 $ 1.64

Fair value adjustment of acquisition related contingent consideration (2)

Results for the first quarter of 2026 include six additional days compared to the first quarter of 2025.

For comparison purposes, the estimated impact of the additional selling days in the first quarter of 2026 has been excluded from our adjusted volume results and adjusted net sales results.

First Quarter 2026

(in millions) Sparkling Still Total

Volume 65.7 21.3 87.0

Volume related to extra days in fiscal period (4.1) (1.3) (5.4)

Adjusted volume 61.6 20.0 81.6

First Quarter 2025

(in millions) Sparkling Still Total

Volume 58.6 18.1 76.7

Reported % Change vs.

First Quarter 2025

12.2 % 17.5 % 13.4 %

Fair value adjustments for commodity derivative instruments (3)

Adjusted % Change vs.

First Quarter 2025

5.3 % 10.2 % 6.4 %

Total reconciling items (378) (84) (294) 49,056 36,890 0.42

Adjusted results (non-GAAP) $ 748,138 $ 501,798 $ 246,340 $ 241,286 $ 179,224 $ 2.06

Third Quarter 2024

(in thousands, except per share data) Gross profit SD&A expenses Income from operations Income before taxes Net income Basic net income per share (1)

Reported results (GAAP) $ 698,036 $ 470,981 $ 227,055 $ 155,563 $ 115,624 $ 1.32

Fair value adjustment of acquisition related contingent consideration (2)

First Quarter 2026

(in millions) Sparkling Still Total

Bottle/can beverage sales $ 1,089.8 $ 605.1 $ 1,694.9

Bottle/can beverage sales related to extra days in fiscal period (75.8) (42.1) (117.9)

Adjusted bottle/can beverage sales $ 1,014.0 $ 563.0 $ 1,577.0

First Quarter 2025

(in millions) Sparkling Still Total

Bottle/can beverage sales $ 933.8 $ 509.2 $ 1,443.0

Reported % Change vs.

First Quarter 2025

16.7 % 18.9 % 17.5 %

Fair value adjustments for commodity derivative instruments (3)

Adjusted % Change vs.

First Quarter 2025

8.6 % 10.6 % 9.3 %

Total reconciling items (1,426) (631) (795) 67,797 51,053 0.56

Adjusted results (non-GAAP) $ 696,610 $ 470,350 $ 226,260 $ 223,360 $ 166,677 $ 1.88

Results for the first nine months of 2024 include two additional selling days compared to the first nine months of 2025.

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

First Nine Months

(in thousands) 2025 2024 Change

Standard physical case volume 260,250 263,423 (1.2) %

Volume related to extra days in fiscal period — (1,760)

Comparable standard physical case volume 260,250 261,663 (0.5) %

First Nine Months 2025

(in thousands, except per share data) Gross

expenses Income from

operations Income before taxes Net

income Basic net income per share (1)

The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP):

First Quarter 2026

(in thousands, except per share data) Net sales Gross profit SD&A expenses Income from operations Income before taxes Net income Basic net income per share

Reported results (GAAP) $ 1,846,668 $ 727,080 $ 489,556 $ 237,524 $ 151,219 $ 111,556 $ 1.68

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— (2,498) 10,377 (12,875) (12,875) (9,695) (0.15)

Results of extra days in fiscal period (3)

(132,000) (55,000) (25,000) (30,000) (30,000) (22,590) (0.34)

Total reconciling items (132,000) (57,498) (14,623) (42,875) 10,516 7,918 0.11

Adjusted results (non-GAAP) $ 1,714,668 $ 669,582 $ 474,933 $ 194,649 $ 161,735 $ 119,474 $ 1.79

First Nine Months 2024

(in thousands, except per share data) Gross

expenses Income from

operations Income before taxes Net

income Basic net income per share (1)

First Quarter 2025

(in thousands, except per share data) Net sales Gross profit SD&A expenses Income from operations Income before taxes Net income Basic net income per share (4)

Reported results (GAAP) $ 1,579,977 $ 627,104 $ 437,284 $ 189,820 $ 139,473 $ 103,611 $ 1.19

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Following is an explanation of non-GAAP adjustments:

(1) 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 the second quarter of 2025.

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

(1) This non-cash, fair value adjustment of acquisition related contingent consideration fluctuates based on factors such as long-term interest rates and future cash flow projections of the distribution territories subject to acquisition related sub-bottling payments.

(3) The Company enters into commodity derivative instruments from time to time to hedge some or all of its projected purchases of aluminum, PET resin, diesel fuel and unleaded gasoline in order to mitigate commodity price risk.

(2) The Company enters into commodity derivative instruments from time to time to hedge some of its projected purchases of aluminum, as well as some or all of its projected purchases of PET resin, diesel fuel and unleaded gasoline in order to mitigate commodity price risk.

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

(3) Due to the shift in the fiscal calendar, the first quarter of 2026 contained six extra days when compared to the first quarter of 2025.

The fourth quarter of 2026 will include six fewer days as compared to the fourth quarter of 2025.

The full fiscal years of 2026 and 2025 have the same number of days.

(4) 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 the second quarter of 2025.

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

Financial Condition

Total assets were $5.67 billion as of September 26, 2025, which was an increase of $355.4 million from December 31, 2024.

Net working capital, defined as current assets less current liabilities, was $1.45 billion as of September 26, 2025, which was an increase of $220.0 million from December 31, 2024.

Significant changes in net working capital as of September 26, 2025 as compared to December 31, 2024 were as follows:

• An increase in cash and cash equivalents of $396.6 million, primarily as a result of strong operating performance and net proceeds from the purchases, sales and maturities of short-term investments during the first nine months of 2025, partially offset by additions to property, plant and equipment and payments related to share repurchases.

• A decrease in short-term investments of $152.1 million, primarily due to the sales and maturities of short-term investments in the third quarter of 2025.

• An increase in accounts payable, trade of $27.5 million and an increase in accounts payable to The Coca-Cola Company of $40.4 million, primarily due to the timing of cash payments.

• An increase in other accrued liabilities of $46.2 million, primarily driven by an increase in accrued interest on debt balances and an increase in the liability related to the acquisition related contingent consideration.

• A decrease in accrued compensation of $33.0 million, primarily as a result of the timing of bonus and incentive payments in the first nine months of 2025.

Total assets were $4.39 billion as of April 3, 2026, which was an increase of $89.7 million from December 31, 2025.

Net working capital, defined as current assets less current liabilities, was $285.3 million as of April 3, 2026, which was a decrease of $12.7 million from December 31, 2025.

Significant changes in net working capital as of April 3, 2026 as compared to December 31, 2025 were as follows:

• A decrease in cash and cash equivalents of $49.0 million, primarily as a result of the repayment of $150 million on the Five-Year Term Loan Facility (as defined below) and additions to property, plant and equipment during the first quarter of 2026, partially offset by the Company’s strong operating performance during the first quarter of 2026.

• An increase in accounts receivable from The Coca-Cola Company of $47.4 million due to the timing of cash receipts.

• An increase in inventories of $52.3 million, primarily driven by the timing of seasonal inventory levels.

• An increase in accounts payable, trade of $61.2 million, primarily driven by the timing of cash payments.

• An increase in accounts payable to The Coca-Cola Company of $97.4 million, primarily driven by the timing of cash payments.

• A decrease in accrued compensation of $84.0 million, primarily as a result of the timing of bonus and incentive payments in the first quarter of 2026.

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 September 26, 2025, the Company had $1.53 billion in cash and cash equivalents.

The Company’s cash

equivalent balance as of September 26, 2025 consisted predominantly of investments in money market funds, time deposits and commercial paper with maturities of 90 days or less.

As of September 26, 2025, the Company had $149.1 million in short-term investments, which consisted primarily of U.S.

As of April 3, 2026, the Company had $232.9 million in cash and cash equivalents.

The Company’s cash equivalent balance as of April 3, 2026 consisted predominantly of investments in money market funds.

As of April 3, 2026, 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 condensed consolidated financial statements.

In the third quarter of 2025, the Company retired 31,488,535 shares of Common Stock and 6,281,140 shares of the Company’s Class B Common Stock, par value $1.00 per share (“Class B Common Stock”), included in treasury stock.

The retired treasury stock had a carrying value of approximately $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 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.

On November 7, 2025, the Company entered into a purchase agreement (the “Repurchase Agreement”) with Carolina Coca-Cola Bottling Investments, Inc.

(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 $2.40 billion (the “Repurchase”).

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 was in a deficit position as of April 3, 2026.

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

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 its Class B Common Stock, par value $1.00 per share (“Class B Common Stock”).

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

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

The Company is authorized to repurchase up to $1.00 billion of Common Stock through the share repurchase program approved by the Company’s Board of Directors and announced by the Company on August 20, 2024 (the “Share Repurchase Program”).

On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program (the “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.

During the third quarter of 2025, the Company repurchased and retired 961,379 shares of Common Stock under the Share Repurchase Program for an aggregate purchase price of $113.8 million, excluding fees and expenses related to the share repurchases.

As of September 26, 2025, the total remaining share repurchase authorization was $800.1 million.

The Company’s debt as of September 26, 2025 and December 31, 2024 was as follows:

(in thousands) Maturity Date September 26, 2025 December 31, 2024

Senior bonds (the “2025 Senior Bonds”) (1)

11/25/2025 $ 350,000 $ 350,000

During the first quarter of 2026, the Company did not repurchase any shares of Common Stock under the Share Repurchase Program.

As of April 3, 2026, the total remaining authorization under the Share Repurchase Program was $136.3 million.

The Company’s debt as of April 3, 2026 and December 31, 2025 was as follows:

(in thousands) Maturity Date April 3, 2026 December 31, 2025

Senior notes (1)

10/10/2026 $ 100,000 $ 100,000

Term loan facility (the “Three-Year Term Loan Facility”) (2)

12/8/2028 900,000 900,000

Senior bonds (the “2029 Senior Bonds”) (3)

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

Term loan facility (the “Five-Year Term Loan Facility”) (2)

12/6/2030 300,000 450,000

Senior bonds (the “2034 Senior Bonds”) (5)

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Total long-term debt $ 2,537,148 $ 2,686,009

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

As of September 26, 2025 and December 31, 2024, the 2025 Senior Bonds, net of debt issuance costs and unamortized discount, were classified as current portion of debt in the condensed consolidated balance sheets.

The Company intends to use cash on hand to repay the 2025 Senior Bonds at maturity.

(1) As of April 3, 2026 and December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the condensed consolidated balance sheets.

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

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

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

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 its revolving credit facility, was issued include two financial covenants:

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 the 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.

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, bringing the aggregate principal balance outstanding to $300 million.

Subsequent to the end of the first quarter of 2026, on April 9, 2026, the Company repaid $75 million of the $300 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand, bringing the aggregate principal balance outstanding to $225 million.

The indenture under which the 2029 Senior Bonds and the 2034 Senior Bonds were issued does not include financial covenants, but does 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 its 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).

The Company was in compliance with these covenants as of September 26, 2025.

These covenants have not restricted, and are not expected to restrict, the Company’s liquidity or capital resources.

The Company was in compliance with these covenants as of April 3, 2026.

These covenants have not restricted the Company’s liquidity or capital resources.

On February 12, 2026, the Company entered into three $150 million fixed rate swap agreements, maturing on February 8, 2027, August 8, 2027 and February 8, 2028 to hedge a portion of the interest rate risk on the Three-Year Term Loan Facility and the Five-Year Term Loan Facility.

Over the next 12 months, the Company expects approximately $1 million related to these interest rate swaps to be released from accumulated other comprehensive income (loss).

These interest rate swaps are designated as cash flow hedging instruments and changes in their fair values are not expected to be material to the condensed consolidated balance sheets.

Changes in the fair values of these interest rate swaps were classified as accumulated other comprehensive income (loss) on the condensed consolidated balance sheets and included in the condensed consolidated statements of comprehensive income.

All outstanding debt has been issued by the Company and none has been issued by any of its subsidiaries.

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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 September 26, 2025, the Company’s credit ratings and outlook for its debt were as follows:

As of April 3, 2026, the Company’s credit ratings and outlook for its debt were as follows:

Credit Rating Rating Outlook

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.

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Following is a summary of the Level 3 activity:

Third Quarter First Nine Months

First Quarter

(in thousands) 2026 2025

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A summary of cash-based activity is as follows:

First Nine Months

First Quarter

(in thousands) 2026 2025

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$ 205,273 $ 198,171

Proceeds from the disposal of short-term investments 506,646 72,232

Proceeds from the sale of property, plant and equipment 113 157

Proceeds from bond issuance — 1,200,000

Proceeds from the disposal of short-term investments — 112,755

Total cash sources $ 205,386 $ 311,083

Purchases of short-term investments $ 350,003 $ 283,488

Payments on term loan facility $ 150,000 $ —

Additions to property, plant and equipment 63,112 97,866

Payments related to share repurchases 145,698 574,009

Cash dividends paid 65,310 163,733

Payments of acquisition related contingent consideration 19,070 19,819

Cash dividends paid 16,641 21,794

Investment in equity method investees 5,339 4,584

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Debt issuance fees 58 232

Purchases of short-term investments — 150,157

Total cash uses $ 254,357 $ 295,102

Net increase in cash and cash equivalents during period $ 396,649 $ 600,737

(1) Net cash provided by operating activities in the first nine months of 2025 included net income tax payments of $150.3 million, net interest payments of $46.3 million and pension plan contributions of $5.0 million.

Net cash provided by operating activities in the first nine months of 2024 included net income tax payments of $171.2 million, net interest payments of $14.4 million and pension plan contributions of $2.0 million.

Net (decrease) increase in cash and cash equivalents during period $ (48,971) $ 15,981

(1) Net cash provided by operating activities in the first quarter of 2026 included net income tax payments of $2.0 million and net interest payments of $18.3 million.

Net cash provided by operating activities in the first quarter of 2025 included net income tax payments of $1.9 million and net interest payments of $2.5 million.

Cash Flows from Operating Activities

During the first nine months of 2025, cash provided by operating activities was $722.9 million, as compared to $707.9 million during the first nine months of 2024, which was an increase of $15.0 million.

During the first quarter of 2026, cash provided by operating activities was $205.3 million, which was an increase of $7.1 million as compared to the first quarter of 2025.

Cash Flows from Investing Activities

During the first nine months of 2025, cash used in investing activities was $61.7 million, which was a decrease of $446.3 million as compared to the first nine months of 2024.

The decline in cash used in investing activities was primarily a result of an increase in net proceeds from the purchases, sales and maturities of short-term investments of approximately $368 million as compared to the first nine months of 2024.

Additions to property, plant and equipment were $210.0 million during the first nine months of 2025 and $287.3 million during the first nine months of 2024.

The decrease in additions to property, plant and equipment was largely due to the purchase of our leased Nashville, Tennessee production facility for approximately $56 million during the third quarter of 2024.

There were $24.0 million and $34.8 million of additions to property, plant and equipment accrued in accounts payable, trade as of September 26, 2025 and September 27, 2024, respectively.

During the first quarter of 2026, cash used in investing activities was $68.3 million, which was a decrease of $71.4 million as compared to the first quarter of 2025.

The decline in cash used in investing activities was primarily a result of the disposal of short-term investments during 2025.

There were no purchases of short-term investments in the first quarter of 2026 compared to purchases of short-term investments of $150.2 million in the first quarter of 2025.

Additions to property, plant and equipment were $63.1 million during the first quarter of 2026 and $97.9 million during the first quarter of 2025.

There were $44.4 million and $28.0 million of additions to property, plant and equipment accrued in accounts payable, trade as of April 3, 2026 and March 28, 2025, respectively.

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

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Cash Flows from Financing Activities

During the first nine months of 2025, cash used in financing activities was $264.6 million, as compared to cash provided by financing activities of $400.8 million during the first nine months of 2024.

The primary driver of the change was the cash received from the issuance of $1.20 billion of bonds during the first nine months of 2024.

Cash used in financing activities related to payments for share repurchases decreased from $574.0 million during the first nine months of 2024 to $145.7 million during the first nine months of 2025.

Dividend payments decreased from $163.7 million during the first nine months of 2024 to

$65.3 million during the first nine months of 2025.

Dividend payments during the first nine months of 2024 included special dividend payments of approximately $150 million.

During the first nine months of 2025, we have returned approximately $211 million to stockholders through share repurchases and dividends.

The Company had cash payments for acquisition related contingent consideration of $51.6 million during the first nine months of 2025 and $44.2 million during the first nine months of 2024.

During the first quarter of 2026, cash used in financing activities was $185.9 million, which was an increase of $143 million as compared to the first quarter of 2025.

The increase in cash used in financing activities was primarily driven by the repayment of $150 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility.

The Company had cash payments for acquisition related contingent consideration of $19.1 million during the first quarter of 2026 and $19.8 million during the first quarter of 2025.

For the next five future 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 $65 million.

Hedging Activities

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.

Commodity Hedging Activities

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

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

The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.

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

Third Quarter First Nine Months

First Quarter

(in thousands) 2026 2025

(Decrease) increase in cost of sales $ (4,312) $ 993

Increase in SD&A expenses 273 1,267 10 1,885

(Decrease) increase in SD&A expenses (11,953) 67

Net impact $ (16,265) $ 1,060

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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;

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, 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;

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changes in trade policies, including the imposition of, or increase in, tariffs on imported goods;

the concentration risks among our

customers and suppliers;

the concentration risks among our customers and suppliers;

lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition;

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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-Q

Item 2. Management’s Discussion and Analysis