What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 289 added, 161 removed, 393 unchanged (53% of the section changed)

6 unchanged sentences

The condensed consolidated financial statements presented are:

• 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.

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

• The results of operations, comprehensive income and changes in stockholders’ (deficit) equity for the three-month periods ended July 3, 2026 (the “second quarter” of fiscal 2026 (“2026”)) and June 27, 2025 (the “second quarter” of fiscal 2025 (“2025”)) and the six-month periods ended July 3, 2026 (the “first half” of 2026) and June 27, 2025 (the “first half” of 2025).

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

Our Business and the Nonalcoholic Beverage Industry

31 unchanged sentences

Executive Summary

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.

Volume was up 7.6% in the second quarter of 2026 and up 10.3% in the first half of the year, or 7.1% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section, for the first half of 2026.

Our Sparkling category volume increased 7.0% in the second quarter of 2026 and 9.4% in the first half of 2026, or 6.2% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section.

Sparkling volume growth reflected broad-based gains across the portfolio, led by our zero-sugar and flavor offerings.

Still category volume increased 9.4% in the second quarter of 2026 and 12.9% in the first half of 2026, or 9.8% on an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section.

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

Dasani casepack water, which carries a lower net selling price as compared to other Still products, also contributed to a portion of the growth within our Still category.

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

Net sales increased 10.6% to $2.1 billion in the second quarter of 2026.

The growth in net sales was primarily the result of our volume growth and annual pricing actions, as well as a shift in the timing of the Fourth of July holiday.

Sparkling and Still net sales increased 9.7% and 11.5%, respectively, in the second quarter of 2026 compared to the second 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.

Net sales of our Still products were especially strong in our convenience and value store channels.

Gross profit in the second quarter of 2026 was $778.4 million, an increase of $35.9 million, or 4.8%.

On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, gross profit increased $47.3 million, or 6.4%.

Gross margin in the second quarter of 2026 decreased 210 basis points to 37.9%.

Adjusted gross margin in the second quarter of 2026, as presented in the “Adjusted Results (Non-GAAP)” section, decreased 150 basis points to 38.4%.

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 tariffs.

These elevated aluminum costs resulted in approximately $45 million in additional input costs compared to the second quarter of 2025, which outpaced our annual pricing actions.

Selling, delivery and administrative (“SD&A”) expenses in the second quarter of 2026 increased $36.7 million, or 7.8%.

SD&A expenses as a percentage of net sales decreased to 24.7% in the second quarter of 2026 from 25.4% in the second quarter of 2025.

The increase in 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 growth in SD&A expenses was also driven by an increase in labor costs related to annual wage adjustments, higher employee benefit costs and elevated fuel costs.

In addition, increased volume in the second quarter was also a driver of variable expenses during the quarter.

SD&A expenses in the first half of 2026 increased $88.9 million or 9.8%.

Approximately $25.0 million of the increase was related to the six additional days in the first half of 2026.

Income from operations in the second quarter of 2026 was $271.3 million, compared to $272.1 million in the second quarter of 2025, a decrease of $0.7 million, or 0.3%.

On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, income from operations in the second quarter of 2026 was $284.9 million, an increase of $14.9 million.

Operating margin for the second quarter of 2026 was 13.2% as compared to 14.7% for the second quarter of 2025, a decrease of 150 basis points.

Adjusted operating margin for the second quarter of 2026, as presented in the “Adjusted Results (Non-GAAP)” section, was 13.9% as compared to 14.6% for the second quarter of 2025, a decrease of 70 basis points.

For the first half of 2026, income from operations increased $47.0 million, or 10.2%.

The six additional selling days in the first half of 2026 accounted for approximately $30.0 million of the increase in income from operations.

Net income in the second quarter of 2026 was $158.8 million, compared to $187.4 million in the second quarter of 2025, a decline of $28.6 million, or 15.2%.

On an adjusted basis, as defined in the “Adjusted Results (Non-GAAP)” section, net income in the second quarter of 2026 was $187.7 million, compared to $195.2 million in the second quarter of 2025, a decrease of $7.5 million,

Net income in the second quarter of 2026 was adversely impacted by non-cash, fair value adjustments to both our acquisition related contingent consideration and commodity hedging instruments, as well as an increase in net interest expense.

Net income for the first half of 2026 was $270.4 million, compared to $291.0 million in the first half of 2025, a decline of $20.6 million, or 7.1%.

Net income for the first half of 2026 was adversely impacted by an increase in net interest expense and non-cash, fair value adjustments to our acquisition related contingent consideration.

These decreases in net income were offset by the six additional days in the first half of 2026, which increased net income by approximately $22.6 million during the period.

Income tax expense in the first half of 2026 was $96.0 million, compared to $101.5 million in the first half of 2025, resulting in an effective income tax rate of approximately 26% for both periods.

Cash flows from operations for the first half of 2026 were $420.6 million, compared to $406.2 million for the first half of 2025.

During the first half of 2026, we invested approximately $147 million in capital expenditures.

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

During the second quarter of 2026, we made early repayments of $125 million of principal on one of our term loans, for total year-to-date early term loan repayments of $275 million.

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

22 unchanged sentences

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, beginning in 2024 and intend to continue using ARTM at similar rates for the foreseeable future.

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.

4 unchanged sentences

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.

During the first half 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 half of 2025.

Digitally Enabled Selling Platform :

3 unchanged sentences

Results of Operations

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

Second Quarter Results

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

Second Quarter

(in thousands) 2026 2025 Change

13 unchanged sentences

$ 159,981 $ 187,355 $ (27,374)

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 increased $196.9 million, or 10.6%, to $2.05 billion in the second quarter of 2026, as compared to $1.86 billion in the second quarter of 2025.

The growth in net sales was primarily the result of increased case sales volume during the second quarter of 2026, which was up 7.6% as compared to the second quarter of 2025.

The growth in net sales was also attributable to higher average bottle/can sales price per unit charged to retail customers, largely as a result of annual pricing actions, as well as a shift in the timing of the Fourth of July holiday.

Net sales by product category were as follows:

First Quarter

Second Quarter

(in thousands) 2026 2025 % Change

8 unchanged sentences

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

First Quarter

Second Quarter

(in thousands) 2026 2025 % Change

9 unchanged sentences

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, 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.

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

Cost of Sales

3 unchanged sentences

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% to 25% of total annual cost of sales.

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.

Cost of sales increased $161.0 million, or 14.5%, to $1.27 billion in the second quarter of 2026, as compared to $1.11 billion in the second quarter of 2025.

The increase in cost of sales was largely driven by the increase in case sales volume as compared to the second quarter of 2025.

Cost of sales also continued to be impacted by higher input costs, specifically aluminum costs, which reflected the uncertainty surrounding geopolitical conflicts, supply constraints and the impact of elevated tariffs, and resulted in approximately $45 million in additional input costs compared to the second quarter of 2025.

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

2 unchanged sentences

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 $47.8 million in the first quarter of 2026 and $45.2 million in the first quarter of 2025.

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 $58.0 million in the second quarter of 2026 and $52.4 million in the second quarter of 2025.

Selling, Delivery and Administrative Expenses

2 unchanged sentences

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.

SD&A expenses increased $36.7 million, or 7.8%, to $507.1 million in the second quarter of 2026, as compared to $470.4 million in the second quarter of 2025.

SD&A expenses increased due to 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 increase in SD&A expenses was also driven by an increase in labor costs related to annual wage adjustments, higher employee benefit costs and elevated fuel costs during the quarter.

In addition, increased volume in the second quarter was also a driver of variable expense during the quarter.

SD&A expenses as a percentage of net sales decreased to 24.7% in the second quarter of 2026 from 25.4% in the second quarter of 2025.

Shipping and handling costs included in SD&A expenses were approximately $219 million in the second quarter of 2026 and approximately $207 million in the second quarter of 2025.

Interest Expense, Net

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.

Interest expense, net increased $24.5 million to $30.5 million in the second quarter of 2026, as compared to $5.9 million in the second quarter of 2025.

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

The increase in interest expense, net was also driven by an increase in interest expense on higher debt balances in the second quarter of 2026 as compared to the second 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 $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.

Mark-to-market on acquisition related contingent consideration was an increase of $24.7 million in the second quarter of 2026 and an increase of $12.4 million in the second quarter of 2025.

During the second quarter of 2026, the $24.7 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 an increase in the WACC used to calculate the fair value of the liability.

During the second quarter of 2025, the $12.4 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 and changes in projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.

Other Expense, Net

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.

Other expense, net was $1.0 million in the second quarter of 2026, as compared to $0.8 million in the second quarter of 2025.

Income Tax Expense

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.

The Company’s effective income tax rate was 26.2% for the second quarter of 2026 and 25.9% for the second quarter of 2025.

The Company’s income tax expense decreased $9.3 million, or 14.2%, to $56.3 million for the second quarter of 2026, as compared to $65.6 million for the second quarter of 2025.

The decrease in income tax expense was primarily attributable to lower income before taxes during the second quarter of 2026 as compared to the second 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.

Other comprehensive income (loss), net of tax was income of $1.2 million in the second quarter of 2026 and $0.0 million in the second quarter of 2025.

The primary driver of the other comprehensive income, net of tax during the second quarter of 2026 was the mark-to-market adjustments recorded to the Company’s interest rate swap instruments during the period.

First Half Results

Our results of operations for the first half of 2026 and the first half of 2025 are highlighted in the table below and discussed in the following paragraphs.

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

(in thousands)

2026 2025 Change

Net sales $ 3,899,088 $ 3,435,496 $ 463,592

Cost of sales 2,393,595 2,065,896 327,699

Gross profit 1,505,493 1,369,600 135,893

Selling, delivery and administrative expenses 996,630 907,696 88,934

Income from operations 508,863 461,904 46,959

Interest expense, net 62,544 12,822 49,722

Mark-to-market on acquisition related contingent consideration 78,114 55,118 22,996

Other expense, net 1,866 1,499 367

Income before taxes 366,339 392,465 (26,126)

Income tax expense 95,962 101,467 (5,505)

Net income 270,377 290,998 (20,621)

Other comprehensive income (loss), net of tax 2,498 (46) 2,544

Comprehensive income

$ 272,875 $ 290,952 $ (18,077)

Net sales increased $463.6 million, or 13.5%, to $3.90 billion in the first half of 2026, as compared to $3.44 billion in the first half of 2025.

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

Additionally, the increase in net sales was driven by higher case sales volume during the first half of 2026 as compared to the first half of 2025.

On an adjusted basis, as presented in the “Adjusted Results (Non-GAAP)” section, sales volume increased by 7.1% in the first half of 2026.

The increase in net sales was also attributable to higher average bottle/can sales price per unit charged to retail customers, largely as a result of annual pricing actions.

Net sales by product category were as follows:

(in thousands) 2026 2025 % Change

Bottle/can sales:

Sparkling beverages $ 2,274,114 $ 2,013,792 12.9 %

Still beverages 1,303,012 1,135,235 14.8 %

Total bottle/can sales 3,577,126 3,149,027 13.6 %

Sales to other Coca‑Cola bottlers 187,756 181,309 3.6 %

Post-mix sales and other 134,206 105,160 27.6 %

Total other sales 321,962 286,469 12.4 %

Total net sales $ 3,899,088 $ 3,435,496 13.5 %

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

(in thousands) 2026 2025 % Change

Bottle/can sales volume:

Sparkling beverages 137,982 126,116 9.4 %

Still beverages 46,666 41,317 12.9 %

Total bottle/can sales volume 184,648 167,433 10.3 %

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

Cost of sales increased $327.7 million, or 15.9%, to $2.39 billion in the first half of 2026, as compared to $2.07 billion in the first half of 2025.

The increase in cost of sales was largely driven by an increase in case sales volume as compared to the first half of 2025, including the impact of six additional days in the first half of 2026, which accounted for approximately $77 million of the increase in cost of sales during the first half of 2026.

Cost of sales was also impacted throughout the first half of 2026 by higher input costs, specifically aluminum costs, which reflected the uncertainty surrounding geopolitical conflicts, supply constraints and the impact of elevated tariffs, and resulted in approximately $80 million in additional input costs compared to the first half of 2025.

Total funding support from The Coca‑Cola Company and other beverage companies was $105.8 million in the first half of 2026, as compared to $97.6 million in the first half of 2025.

Selling, Delivery and Administrative Expenses

SD&A expenses increased $88.9 million, or 9.8%, to $1.00 billion in the first half of 2026, as compared to $907.7 million in the first half of 2025.

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

Additionally, SD&A expenses increased due to an additional investment in the base wages of our front-line teammates, which became effective at the beginning of the third quarter of 2025, an increase in labor costs related to annual wage adjustments and higher employee benefit costs.

SD&A expenses as a percentage of net sales decreased to 25.6% in the first half of 2026 from 26.4% in the first half of 2025.

Shipping and handling costs included in SD&A expenses were approximately $435 million in the first half of 2026 and approximately $401 million in the first half of 2025.

The increase in shipping and handling costs was also impacted by the six additional days in the first half of 2026.

Interest Expense, Net

Interest expense, net increased $49.7 million to $62.5 million in the first half of 2026, as compared to $12.8 million in the first half of 2025.

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

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

Mark-to-Market on Acquisition Related Contingent Consideration

Mark-to-market on acquisition related contingent consideration was an increase of $78.1 million in the first half of 2026 compared to an increase of $55.1 million in the first half of 2025.

During the first half of 2026, the $78.1 million increase in the fair value of the acquisition related contingent consideration liability was driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments and a decrease in the WACC used to calculate the fair value of the liability.

During the first half of 2025, the $55.1 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 and changes in projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments.

Other Expense, Net

Other expense, net was $1.9 million in the first half of 2026 and $1.5 million in the first half of 2025.

Income Tax Expense

The Company’s effective income tax rate was 26.2% for the first half of 2026 and 25.9% for the first half of 2025.

The Company’s income tax expense decreased $5.5 million, or 5.4%, to $96.0 million for the first half of 2026, as compared to $101.5 million for the first half of 2025.

The decrease in income tax expense was primarily attributable to lower income before taxes during the first half of 2026 as compared to the first half of 2025.

Other Comprehensive Income (Loss), Net of Tax

Other comprehensive income (loss), net of tax was $2.5 million in the first half of 2026 and $0.0 million in the first half of 2025.

The primary driver of the other comprehensive income, net of tax during the first half of 2026 was the mark-to-market adjustments recorded to the Company’s interest rate swap instruments during the period.

Segment Operating Results

4 unchanged sentences

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

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 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.”

2 unchanged sentences

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.

operating segment was liquidated, 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.

4 unchanged sentences

The Company’s segment results are as follows:

First Quarter 2026

Second Quarter 2026

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

15 unchanged sentences

$ 52,634 $ 5,517 $ — $ 58,151

First Quarter 2025

Second Quarter 2025

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

15 unchanged sentences

$ 49,387 $ 5,378 $ — $ 54,765

First Half 2026

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

Net sales $ 3,872,764 $ 181,823 $ (155,499) $ 3,899,088

Cost of goods sold 2,401,711 111,392 (119,508) 2,393,595

Gross profit 1,471,053 70,431 (35,991) 1,505,493

Selling, delivery and administrative expenses:

Payroll costs (2)

$ 633,446 $ 27,458 $ — $ 660,904

Fleet costs (3)

41,760 16,089 — 57,849

Depreciation and amortization expense (4)

61,687 1,163 — 62,850

All other segment items (5)

236,675 14,343 (35,991) 215,027

Total selling, delivery and administrative expenses 973,568 59,053 (35,991) 996,630

Income from operations $ 497,485 $ 11,378 $ — $ 508,863

Total depreciation and amortization expense (4)

$ 104,224 $ 10,829 $ — $ 115,053

First Half 2025

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

Net sales $ 3,414,158 $ 155,512 $ (134,174) $ 3,435,496

Cost of goods sold 2,076,336 90,173 (100,613) 2,065,896

Gross profit 1,337,822 65,339 (33,561) 1,369,600

Selling, delivery and administrative expenses:

Payroll costs (2)

$ 562,318 $ 24,477 $ — $ 586,795

Fleet costs (3)

47,089 14,373 — 61,462

Depreciation and amortization expense (4)

57,384 1,081 — 58,465

All other segment items (5)

219,924 14,611 (33,561) 200,974

Total selling, delivery and administrative expenses 886,715 54,542 (33,561) 907,696

Income from operations $ 451,107 $ 10,797 $ — $ 461,904

Total depreciation and amortization expense (4)

$ 97,437 $ 10,701 $ — $ 108,138

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

11 unchanged sentences

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

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

The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP) for the second quarter of 2026 and the second quarter of 2025:

Second 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) $ 2,052,420 $ 778,413 $ 507,074 $ 271,339 $ 215,120 $ 158,821 $ 2.39

Fair value adjustment of acquisition related contingent consideration (1)

— — — — 24,723 18,617 0.28

Fair value adjustments for commodity derivative instruments (2)

— 10,086 (3,523) 13,609 13,609 10,248 0.16

Total reconciling items — 10,086 (3,523) 13,609 38,332 28,865 0.44

Adjusted results (non-GAAP) $ 2,052,420 $ 788,499 $ 503,551 $ 284,948 $ 253,452 $ 187,686 $ 2.83

Reported margin percentage (3)

37.9 % 13.2 %

Adjusted margin percentage (3)

38.4 % 13.9 %

Second 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

Reported results (GAAP) $ 1,855,519 $ 742,496 $ 470,412 $ 272,084 $ 252,992 $ 187,387 $ 2.15

Fair value adjustment of acquisition related contingent consideration (1)

— — — — 12,390 9,275 0.11

Fair value adjustments for commodity derivative instruments (2)

— (1,320) 689 (2,009) (2,009) (1,511) (0.02)

Total reconciling items — (1,320) 689 (2,009) 10,381 7,764 0.09

Adjusted results (non-GAAP) $ 1,855,519 $ 741,176 $ 471,101 $ 270,075 $ 263,373 $ 195,151 $ 2.24

Reported margin percentage (3)

40.0 % 14.7 %

Adjusted margin percentage (3)

39.9 % 14.6 %

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

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

First Half 2026

(in millions) Sparkling Still Total

2 unchanged sentences

Adjusted volume 133.9 45.4 179.3

First Quarter 2025

First Half 2025

(in millions) Sparkling Still Total

1 unchanged sentence

Reported % Change vs.

First Quarter 2025

First Half 2025

9.4 % 12.9 % 10.3 %

Adjusted % Change vs.

First Quarter 2025

First Half 2025

6.2 % 9.8 % 7.1 %

First Quarter 2026

First Half 2026

(in millions) Sparkling Still Total

2 unchanged sentences

Adjusted bottle/can beverage sales $ 2,198.3 $ 1,260.9 $ 3,459.2

First Quarter 2025

First Half 2025

(in millions) Sparkling Still Total

1 unchanged sentence

Reported % Change vs.

First Quarter 2025

First Half 2025

12.9 % 14.8 % 13.6 %

Adjusted % Change vs.

First Quarter 2025

First Half 2025

9.2 % 11.1 % 9.8 %

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

The following tables reconcile reported results (GAAP) to adjusted results (non-GAAP) for the first half of 2026 and the first half of 2025:

First Half 2026

(in thousands, except per share data) Net sales Gross

expenses Income from

operations Income before taxes Net

income Basic net income per share

Reported results (GAAP) $ 3,899,088 $ 1,505,493 $ 996,630 $ 508,863 $ 366,339 $ 270,377 $ 4.06

7 unchanged sentences

Adjusted results (non-GAAP) $ 3,767,088 $ 1,458,081 $ 978,484 $ 479,597 $ 415,187 $ 307,160 $ 4.61

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)

First Half 2025

(in thousands, except per share data) Net sales Gross

expenses Income from

operations Income before taxes Net

income Basic net income per share

Reported results (GAAP) $ 3,435,496 $ 1,369,600 $ 907,696 $ 461,904 $ 392,465 $ 290,998 $ 3.34

9 unchanged sentences

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.

(3) Reported gross margin and reported operating margin are calculated as gross profit and operating income, respectively, as a percentage of net sales.

Adjusted gross margin and adjusted operating margin are calculated as adjusted gross profit and adjusted operating income, respectively, which adjust for the impact of fair value changes to our commodity derivative instruments, as a percentage of net sales.

(4) Due to the shift in the fiscal calendar, the first half of 2026 contained six extra days when compared to the first half 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 $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.

Total assets were $4.43 billion as of July 3, 2026, which was an increase of $129.5 million from December 31, 2025.

Net working capital, defined as current assets less current liabilities, was $266.4 million as of July 3, 2026, which was a decrease of $31.6 million from December 31, 2025.

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

• A decrease in cash and cash equivalents of $110.2 million, primarily as a result of the repayment of $275 million on the Five-Year Term Loan Facility (as defined below) and additions to property, plant and equipment of approximately $147 million during the first half of 2026, partially offset by the Company’s strong operating performance.

• An increase in accounts receivable, trade of $123.2 million and an increase in accounts receivable from The Coca-Cola Company of $56.1 million due to strong sales performance and the timing of cash receipts.

• An increase in inventories of $34.8 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.

• An increase in accounts payable, trade of $66.0 million and an increase in accounts payable to The Coca-Cola Company of $116.8 million, primarily driven by the timing of cash payments.

• A decrease in accrued compensation of $41.1 million, primarily as a result of the timing of bonus and incentive payments in the first half 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 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.

As of July 3, 2026, the Company had $171.7 million in cash and cash equivalents.

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

As of July 3, 2026, the Company did not have any short-term investments.

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

8 unchanged sentences

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.

As a result, the Company was in a deficit position as of July 3, 2026.

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

11 unchanged sentences

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

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

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

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

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

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

Senior notes (1)

18 unchanged sentences

Total long-term debt $ 2,413,112 $ 2,686,009

(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.

(1) As of July 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.

8 unchanged sentences

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.

As of July 3, 2026, the Company has repaid $275 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 $175 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.

1 unchanged sentence

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 April 3, 2026.

The Company was in compliance with these covenants as of July 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).

Over the next 12 months, the Company expects approximately $2 million related to these interest rate swaps to be released from accumulated other comprehensive 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.

Changes in the fair values of these interest rate swaps were classified as accumulated other comprehensive 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.

3 unchanged sentences

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

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

Credit Rating Rating Outlook

11 unchanged sentences

Following is a summary of the Level 3 activity:

First Quarter

Second Quarter

(in thousands) 2026 2025

6 unchanged sentences

A summary of cash-based activity is as follows:

First Quarter

(in thousands) 2026 2025

13 unchanged sentences

Purchases of short-term investments — 270,144

Payments related to share repurchases 27,972 34,410

Total cash uses $ 531,212 $ 552,882

Net (decrease) increase in cash and cash equivalents during period $ (110,231) $ 84,101

(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.

(1) Net cash provided by operating activities in the first half of 2026 included net income tax payments of $89.5 million and net interest payments of $66.1 million.

Net cash provided by operating activities in the first half of 2025 included net income tax payments of $111.3 million and net interest payments of $43.7 million.

Cash Flows from Operating Activities

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.

During the first half of 2026, cash provided by operating activities was $420.6 million, which was an increase of $14.4 million as compared to the first half of 2025.

Cash Flows from Investing Activities

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.

During the first half of 2026, cash used in investing activities was $156.9 million, which was a decrease of $50.4 million as compared to the first half of 2025.

The decline in cash used in investing activities was primarily a result of the net outflow related to purchases and disposals of short-term investments of $45.7 million in the first half of 2025, as compared to no activity in the first half of 2026.

Additions to property, plant and equipment were $147.4 million during the first half of 2026 and $157.4 million during the first half of 2025.

There were $27.4 million and $34.8 million of additions to property, plant and equipment accrued in accounts payable, trade as of July 3, 2026 and June 27, 2025, respectively.

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

1 unchanged sentence

Cash Flows from Financing Activities

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.

During the first half of 2026, cash used in financing activities was $373.9 million, which was an increase of $259 million as compared to the first half of 2025.

The increase in cash used in financing activities was primarily driven by the repayment of $275 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility during the first half of 2026.

The Company had cash payments for acquisition related contingent consideration of $37.1 million during the first half of 2026 and $35.2 million during the first half of 2025.

For 2026, the Company estimates the annual sub-bottling payments will be in the

range of approximately $70 million to $80 million.

For the next five future years (beginning with fiscal year 2027), the Company anticipates that the amount it could pay annually will be in the range of approximately $50 million to $70 million.

Commodity Hedging Activities

5 unchanged sentences

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

First Quarter

Second Quarter First Half

(in thousands) 2026 2025 2026 2025

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

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

Increase (decrease) in cost of sales $ 6,447 $ (565) $ 2,135 $ 428

Increase (decrease) in SD&A expenses 5 (330) (11,948) (263)

Net impact $ 6,452 $ (895) $ (9,813) $ 165

8 unchanged sentences

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 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;

19 unchanged sentences

changes in legal contingencies;

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;

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.

4 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis