4 unchanged sentences
Given the rapidly changing conditions, the Company will continue to monitor and assess the situation as circumstances evolve.
−Removed: As a point of reference, in 2021, the Company’s business in Russia and Ukraine contributed approximately 2 percent of the Company’s unit case volume and approximately 1 percent and 2 percent of the Company’s consolidated net operating revenues and operating income, respectively.
−Removed: During the nine months ended September 30, 2022, the effects of the COVID-19 pandemic, including the resurgence of the virus in certain countries and the related actions by governments to attempt to contain the spread of the virus, continued to negatively impact our business.
−Removed: While uncertainties caused by the COVID-19 pandemic remain, and factors such as the state of the supply chain, labor shortages and the inflationary environment are likely to impact the pace of the economic recovery, we are focused on executing for growth with a goal of operating at a higher level through these challenges.
+Added: As a point of reference, during the three months ended April 1, 2022, the Company’s business in Russia and Ukraine contributed approximately 2 percent of the Company’s unit case volume and approximately 1 percent of both the Company’s consolidated net operating revenues and operating income.
+Added: During the three months ended March 31, 2023, the effects of the COVID-19 pandemic continued to negatively impact our business.
+Added: While uncertainties caused by the COVID-19 pandemic remain, and factors such as the state of the supply chain, labor shortages and the inflationary environment are likely to impact the pace of the economic recovery, we are focused on executing for growth.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Recoverability of Current and Noncurrent Assets
−Removed: Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries in which we operate, particularly in developing and emerging markets.
+Added: Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries and territories in which we operate, particularly in developing and emerging markets.
Refer to the headings “Item 1A.
−Removed: Risk Factors” in Part I and “Our Business — Challenges and Risks” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2021, as well as “Item 1A.
−Removed: Risk Factors” in Part II of our Quarterly Report on Form 10-Q for the quarter ended April 1, 2022.
+Added: Risk Factors” in Part I and “Our Business — Challenges and Risks” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2022.
As a result, management must make numerous assumptions, which involve a significant amount of judgment, when performing recoverability and impairment tests of current and noncurrent assets in various regions around the world.
7 unchanged sentences
The variability of these factors depends on a number of conditions, and thus our accounting estimates may change from period to period.
−Removed: These factors are even more difficult to estimate as a result of uncertainties associated with the conflict in Ukraine and the scope, severity and duration of the global COVID-19 pandemic.
+Added: These factors are even more difficult to estimate as a result of uncertainties associated with the scope, severity and duration of the COVID-19 pandemic.
The estimates we use when performing recoverability tests of assets are consistent with those we use in our internal planning.
When performing impairment tests, we estimate the fair values of the assets using management’s best assumptions, which we believe are consistent with those a market participant would use.
−Removed: While pandemic-related uncertainties still exist, we expect to see continued improvements in our business as consumers return to many of their previous work routines as well as socializing and traveling.
The Company has certain intangible and other long-lived assets that are more dependent on cash flows generated in away-from-home channels and/or that generate cash flows in geographic areas which are more heavily impacted by the COVID-19 pandemic, and therefore these assets are more susceptible to impairment.
3 unchanged sentences
The total future impairment charges we may be required to record could be material.
−Removed: During the nine months ended September 30, 2022, the Company recorded an other-than-temporary impairment charge of $96 million related to an equity method investee in Russia.
−Removed: As of September 30, 2022, the remaining carrying value of the Company’s assets related to Russia and Ukraine was less than 0.5 percent of the Company’s total assets.
−Removed: In addition, as of September 30, 2022, the Company had an approximate 21 percent ownership interest in Coca-Cola HBC AG, the Company’s bottling and distribution partner in the region.
−Removed: As of September 30, 2022, the carrying value of our investment in Coca-Cola Bottlers Japan Holdings Inc.
+Added: As of March 31, 2023, the carrying value of our investment in Coca-Cola Bottlers Japan Holdings Inc.
exceeded the fair value by $8 million, or 2 percent.
15 unchanged sentences
Concentrate sales volume represents the amount of concentrates, syrups, source waters and powders/minerals (in all instances expressed in unit case equivalents) sold by, or used in finished products sold by, the Company to its bottling partners or other customers.
−Removed: For Costa Limited (“Costa”) non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.
+Added: For Costa non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.
Refer to the heading “Beverage Volume” below.
14 unchanged sentences
Typically, structural changes do not impact the Company’s unit case volume or concentrate sales volume on a consolidated basis or at the geographic operating segment level.
−Removed: We recognize unit case volume for all sales of Company beverage products, regardless of our ownership interest in the bottling partner, if any.
+Added: We report unit case volume for all sales of Company beverage products, regardless of our ownership interest in the bottling partner, if any.
However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations.
+Added: Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s divestitures.
“Acquired brands” refers to brands acquired during the past 12 months.
6 unchanged sentences
We generally do not consider the licensing of a brand to be a structural change.
−Removed: In August 2022, the Company acquired a controlling interest in a bottling operation in Malawi.
−Removed: The impact of this acquisition has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment.
−Removed: Additionally, in November 2021, the Company acquired the remaining ownership interest in BA Sports Nutrition, LLC (“BodyArmor”).
−Removed: The impact of this acquisition has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the North America operating segment.
+Added: In July 2022, the Company acquired certain brands in Asia Pacific.
+Added: The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Asia Pacific operating segment.
+Added: Also, in August 2022, the Company acquired a controlling interest in a bottling operation in Malawi.
+Added: impact of this acquisition has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment.
+Added: Additionally, in November 2022, the Company refranchised our bottling operations in Cambodia.
+Added: The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.
+Added: In January 2023, the Company refranchised our bottling operations in Vietnam.
+Added: The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.
Beverage Volume
17 unchanged sentences
Three Months Ended
−Removed: September 30, 2022 Nine Months Ended
−Removed: September 30, 2022
−Removed: Unit Cases 1,2,3
−Removed: Concentrate Sales 4
+Added: March 31, 2023
Unit Cases 1,2,3
6 unchanged sentences
Global Ventures 7 8
−Removed: Bottling Investments 16 N/A 16 N/A
+Added: Bottling Investments (1) 5
1 Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only.
8 unchanged sentences
As a result, the first quarter of 2023 had one less day when compared to the first quarter of 2022, and the fourth quarter of 2023 will have one additional day when compared to the fourth quarter of 2022.
+Added: 5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three months ended March 31, 2023 grew 4 percent.
+Added: 6 After considering the impact of acquisitions and structural changes, concentrate sales volume for Asia Pacific for the three months ended March 31, 2023 declined 2 percent.
Unit Case Volume
Although a significant portion of our Company’s net operating revenues is not based directly on unit case volume, we believe unit case volume performance is one of the indicators of the underlying strength of the Coca-Cola system because it measures demand for our products at the consumer level.
−Removed: Three Months Ended September 30, 2022 versus Three Months Ended October 1, 2021
−Removed: Unit case volume in Europe, Middle East and Africa decreased 1 percent, which included a 23 percent decline in nutrition, juice, dairy and plant-based beverages, a 2 percent decline in sparkling flavors and a 1 percent decline in hydration, sports, coffee and tea, partially offset by 2 percent growth in Trademark Coca-Cola.
−Removed: The operating segment reported declines in unit case volume of 4 percent in the Africa operating unit and 1 percent in the Europe operating unit, partially offset by growth of 3 percent in the Eurasia and Middle East operating unit.
−Removed: The decline in the Africa operating unit included the impact of transitioning certain territories to new franchise bottling partners, and the decline in the Europe operating unit was primarily due to the suspension of the Company’s business in Russia.
−Removed: Unit case volume in Latin America increased 5 percent, which included 4 percent growth in Trademark Coca-Cola, 8 percent growth in hydration, sports, coffee and tea, and 5 percent growth in both sparkling flavors and nutrition, juice, dairy and plant-based beverages.
−Removed: The operating segment’s volume performance included 6 percent growth in both Mexico and Brazil.
−Removed: Unit case volume in North America increased 1 percent, which included 2 percent growth in Trademark Coca-Cola, 2 percent growth in nutrition, juice, dairy and plant-based beverages, and even performance in sparkling flavors, partially offset by a 1 percent decline in hydration, sports, coffee and tea.
−Removed: Unit case volume in Asia Pacific increased 9 percent, which included 11 percent growth in hydration, sports, coffee and tea, 8 percent growth in sparkling flavors, 7 percent growth in Trademark Coca-Cola, and 12 percent growth in nutrition, juice, dairy and plant-based beverages.
−Removed: The operating segment reported growth in unit case volume of 25 percent in the India and Southwest Asia operating unit, 5 percent in the Greater China and Mongolia operating unit, 9 percent in the ASEAN and South Pacific operating unit, and 4 percent in the Japan and South Korea operating unit.
−Removed: Unit case volume for Global Ventures increased 8 percent, driven by 3 percent growth in hydration, sports, coffee and tea along with growth in energy drinks, partially offset by a 15 percent decline in nutrition, juice, dairy and plant-based beverages.
−Removed: Unit case volume for Bottling Investments increased 16 percent, driven by growth in most markets, led by India and Vietnam.
−Removed: Nine Months Ended September 30, 2022 versus Nine Months Ended October 1, 2021
−Removed: Unit case volume in Europe, Middle East and Africa increased 5 percent, which included 6 percent growth in Trademark Coca-Cola, 8 percent growth in hydration, sports, coffee and tea, and 4 percent growth in sparkling flavors, partially offset by a decline of 5 percent in nutrition, juice, dairy and plant-based beverages.
−Removed: The operating segment reported growth in unit case volume of 5 percent in the Europe operating unit, 7 percent in the Eurasia and Middle East operating unit, and 2 percent in the Africa operating unit.
−Removed: Unit case volume in Latin America increased 8 percent, which included 6 percent growth in Trademark Coca-Cola, 11 percent growth in hydration, sports, coffee and tea, 8 percent growth in sparkling flavors, and 12 percent growth in nutrition, juice, dairy and plant-based beverages.
+Added: Unit case volume in Europe, Middle East and Africa decreased 3 percent, which included a 30 percent decline in juice, value-added dairy and plant-based beverages, a 4 percent decline in sparkling flavors, and a 7 percent decline in water, sports, coffee and tea, partially offset by growth of 2 percent in Trademark Coca-Cola.
+Added: The operating segment reported a decline in unit case volume of 7 percent in the Europe operating unit and a decline of 4 percent in the Africa operating unit, partially offset by growth of 7 percent in the Eurasia and Middle East operating unit.
+Added: The decline in the Europe operating unit was due to the suspension of the Company’s business in Russia.
+Added: Unit case volume in Latin America increased 5 percent, which included 10 percent growth in water, sports, coffee and tea, 3 percent growth in both Trademark Coca-Cola and sparkling flavors, and 5 percent growth in juice, value-added dairy and plant-based beverages.
The operating segment’s volume performance included 5 percent growth in Mexico and 6 percent growth in Brazil.
−Removed: Unit case volume in North America increased 2 percent, which included 2 percent growth in Trademark Coca-Cola, 3 percent growth in both sparkling flavors and nutrition, juice, dairy and plant-based beverages, and 1 percent growth in hydration, sports, coffee and tea.
−Removed: Unit case volume in Asia Pacific increased 8 percent, which included 11 percent growth in sparkling flavors, 6 percent growth in both Trademark Coca-Cola and hydration, sports, coffee and tea, and 13 percent growth in nutrition, juice, dairy and plant-based beverages.
−Removed: The operating segment reported growth in unit case volume of 41 percent in the India and Southwest Asia operating unit, 8 percent in the ASEAN and South Pacific operating unit, and 4 percent in the Japan and South Korea operating unit, partially offset by a decline in unit case volume of 2 percent in the Greater China and Mongolia operating unit.
−Removed: Unit case volume for Global Ventures increased 15 percent, driven by 16 percent growth in hydration, sports, coffee and tea along with growth in energy drinks, partially offset by a 9 percent decline in nutrition, juice, dairy and plant-based beverages.
−Removed: Unit case volume for Bottling Investments increased 16 percent, which reflects growth in all of our consolidated bottling operations.
+Added: Unit case volume in North America was even, which included 3 percent growth in juice, value-added dairy and plant-based beverages and 1 percent growth in both Trademark Coca-Cola and sparkling flavors, offset by a 4 percent decline in water, sports, coffee and tea.
+Added: Unit case volume in Asia Pacific increased 10 percent, which included 11 percent growth in sparkling flavors, 8 percent growth in Trademark Coca-Cola, 10 percent growth in water, sports, coffee and tea, and 16 percent growth in juice, value-added dairy and plant-based beverages.
+Added: The operating segment reported growth in unit case volume of 13 percent in the Greater China and Mongolia operating unit, 23 percent in the India and Southwest Asia operating unit and 1 percent in the ASEAN and South Pacific operating unit.
+Added: Unit case volume in the Japan and South Korea operating unit was even.
+Added: Unit case volume for Global Ventures increased 7 percent, driven by 2 percent growth in water, sports, coffee and tea along with growth in energy drinks, partially offset by a 4 percent decline in juice, value-added dairy and plant-based beverages.
+Added: Unit case volume for Bottling Investments decreased 1 percent, which included the impact of refranchising our bottling operations in Cambodia and Vietnam and a decline in unit case volume in the Philippines, partially offset by growth in unit case volume in India.
Concentrate Sales Volume
−Removed: During the three months ended September 30, 2022, worldwide concentrate sales volume and unit case volume both increased 4 percent compared to the three months ended October 1, 2021.
−Removed: During the nine months ended September 30, 2022, worldwide concentrate sales volume and unit case volume both increased 6 percent compared to the nine months ended October 1, 2021.
+Added: During the three months ended March 31, 2023, worldwide concentrate sales volume increased 1 percent and unit case volume increased 3 percent compared to the three months ended April 1, 2022.
Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days.
Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods.
−Removed: The first quarter of 2022 had one less day when compared to the first quarter of 2021.
+Added: The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments.
+Added: In addition, the first quarter of 2023 had one less day when compared to the first quarter of 2022, which also contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments during the three months ended March 31, 2023.
+Added: We expect the differences between concentrate sales volume and unit case volume growth rates to lessen over the remainder of the year.
Net Operating Revenues
−Removed: Three Months Ended September 30, 2022 versus Three Months Ended October 1, 2021
−Removed: During the three months ended September 30, 2022, net operating revenues were $11,063 million, compared to $10,042 million during the three months ended October 1, 2021, an increase of $1,021 million, or 10 percent.
+Added: During the three months ended March 31, 2023, net operating revenues were $10,980 million, compared to $10,491 million during the three months ended April 1, 2022, an increase of $489 million, or 5 percent.
The following table illustrates, on a percentage basis, the estimated impact of the factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments:
24 unchanged sentences
Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.
−Removed: Price, product and geographic mix had a 12 percent favorable impact on our consolidated net operating revenues.
+Added: Price, product and geographic mix had an 11 percent favorable impact on our consolidated net operating revenues.
Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:
−Removed: • Europe, Middle East and Africa — favorable channel and package mix and favorable pricing initiatives, including inflationary pricing in Turkey, partially offset by unfavorable geographic mix;
+Added: • Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing in Türkiye, partially offset by unfavorable geographic mix;
• Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, along with favorable channel and package mix;
• North America — favorable pricing initiatives and favorable channel, package and product mix;
−Removed: • Asia Pacific — favorable pricing initiatives along with favorable channel and package mix, partially offset by unfavorable geographic mix;
−Removed: • Global Ventures — unfavorable impact of no longer receiving COVID-related incentives in the current year and unfavorable product mix, partially offset by favorable channel mix, primarily due to the timing of Costa retail store reopenings in the United Kingdom in the prior year;
−Removed: • Bottling Investments — favorable pricing initiatives across most markets.
−Removed: The favorable channel and package mix in all applicable operating segments was primarily a result of the continued recovery from the COVID-19 pandemic in away-from-home channels in many markets in the current year and the impact of social distancing measures in the prior year.
+Added: • Asia Pacific — favorable pricing initiatives, partially offset by unfavorable geographic mix;
+Added: • Global Ventures — unfavorable impact of no longer receiving COVID-related incentives in the current year, partially offset by favorable channel mix, primarily due to the favorable performance of Costa in the United Kingdom and China;
+Added: • Bottling Investments — favorable pricing initiatives across most markets, partially offset by unfavorable geographic mix.
+Added: The favorable channel and package mix in all applicable operating segments was primarily a result of the continued recovery from the COVID-19 pandemic in away-from-home channels in many markets in the current year.
Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 6 percent.
This unfavorable impact was primarily due to a stronger U.S.
−Removed: dollar compared to certain foreign currencies, including the Japanese yen, British pound sterling, Turkish lira, euro and South African rand, which had an unfavorable impact on our Asia Pacific;
+Added: dollar compared to certain foreign currencies, including the Argentine peso, British pound sterling, South African rand, Indian rupee and Japanese yen, which had an unfavorable impact on our Latin America;
Global Ventures;
Europe, Middle East and Africa;
−Removed: and Bottling Investments operating segments.
+Added: Bottling Investments;
+Added: and Asia Pacific operating segments.
+Added: The unfavorable impact of a stronger U.S.
+Added: dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S.
+Added: dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment.
Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
4 unchanged sentences
Refer to the heading “Structural Changes, Acquired Brands and Newly Licensed Brands” above for additional information related to acquisitions and divestitures.
−Removed: Nine Months Ended September 30, 2022 versus Nine Months Ended October 1, 2021
−Removed: During the nine months ended September 30, 2022, net operating revenues were $32,879 million, compared to $29,191 million during the nine months ended October 1, 2021, an increase of $3,688 million, or 13 percent.
−Removed: The following table illustrates, on a percentage basis, the estimated impact of the factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments:
−Removed: Percent Change 2022 versus 2021
−Removed: Price, Product & Geographic Mix Foreign Currency Fluctuations Acquisitions & Divestitures 2
−Removed: Consolidated 6 % 10 % (6) % 2 % 13 %
−Removed: Europe, Middle East & Africa 5 % 16 % (13) % — % 8 %
−Removed: Latin America 7 14 (4) — 16
−Removed: North America 2 12 — 7 21
−Removed: Asia Pacific 8 3 (8) — 3
−Removed: Global Ventures 16 (2) (11) — 4
−Removed: Bottling Investments 16 4 (8) — 12
−Removed: Certain rows may not add due to rounding.
−Removed: 1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments and our Global Ventures operating segment (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any.
−Removed: For our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the increase (decrease) in unit case volume computed by comparing the total sales (rather than the average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any.
−Removed: Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only after considering the impact of structural changes, if any.
−Removed: Refer to the heading “Beverage Volume” above.
−Removed: 2 Includes structural changes, if any.
−Removed: Refer to the heading “Structural Changes, Acquired Brands and Newly Licensed Brands” above.
−Removed: Refer to the heading “Beverage Volume” above for additional information related to changes in our unit case and concentrate sales volumes.
−Removed: Price, product and geographic mix had a 10 percent favorable impact on our consolidated net operating revenues.
−Removed: Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:
−Removed: • Europe, Middle East and Africa — favorable channel and package mix and favorable pricing initiatives, including inflationary pricing in Turkey, partially offset by unfavorable geographic mix;
−Removed: • Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, along with favorable channel and package mix;
−Removed: • North America — favorable pricing initiatives, including a benefit resulting from the timing of price increases in the prior year, and favorable channel, package and product mix;
−Removed: • Asia Pacific — favorable pricing initiatives along with favorable channel and package mix, partially offset by unfavorable geographic mix;
−Removed: • Global Ventures — unfavorable impact of no longer receiving COVID-related incentives in the current year, partially offset by favorable channel mix, primarily due to the timing of Costa retail store reopenings in the United Kingdom in the prior year;
−Removed: • Bottling Investments — favorable pricing initiatives across most markets, partially offset by unfavorable geographic mix.
−Removed: The favorable channel and package mix in all applicable operating segments was primarily a result of the continued recovery from the COVID-19 pandemic in away-from-home channels in many markets in the current year and the impact of social distancing measures in the prior year.
−Removed: Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 6 percent.
−Removed: This unfavorable impact was primarily due to a stronger U.S.
−Removed: dollar compared to certain foreign currencies, including the Turkish lira, euro, British pound sterling, Japanese yen, Philippine peso and South African rand, which had an unfavorable impact on our Europe, Middle East and Africa;
−Removed: Global Ventures;
−Removed: Asia Pacific;
−Removed: and Bottling Investments operating segments.
−Removed: Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
Net operating revenue growth rates are impacted by sales volume;
8 unchanged sentences
Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.
−Removed: Our gross profit margin decreased to 58.7 percent for the three months ended September 30, 2022, compared to 60.4 percent for the three months ended October 1, 2021.
−Removed: Our gross profit margin decreased to 59.0 percent for the nine months ended September 30, 2022, compared to 61.4 percent for the nine months ended October 1, 2021.
−Removed: These decreases were primarily due to the unfavorable impact of foreign currency exchange rate fluctuations, the impact of increased commodity and transportation costs, the impact of operating segment mix due to the relative outperformance of the lower margin Bottling Investments operating segment versus our geographic operating segments, and the acquisition of BodyArmor.
−Removed: These unfavorable impacts were partially offset by the impact of favorable pricing initiatives as well as favorable channel and package mix.
−Removed: We expect commodity and transportation costs to continue to have an unfavorable impact on our gross profit margin during the remainder of 2022, and we will continue to proactively take actions in an effort to mitigate the impact of these incremental costs.
+Added: Our gross profit margin decreased to 60.7 percent for the three months ended March 31, 2023, compared to 61.0 percent for the three months ended April 1, 2022.
+Added: The decrease was primarily due to the unfavorable impact of foreign currency exchange rate fluctuations and increased commodity costs, partially offset by the impact of favorable pricing initiatives, favorable channel and package mix, and structural changes.
+Added: We expect commodity costs to continue to have an unfavorable impact on our gross profit margin during the remainder of 2023, and we will continue to proactively take actions in an effort to mitigate the impact of these incremental costs.
Selling, General and Administrative Expenses
The following table sets forth the components of selling, general and administrative expenses (in millions):
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30,
−Removed: 2022 October 1,
−Removed: 2021 September 30,
−Removed: 2022 October 1,
+Added: Three Months Ended
+Added: 2023 April 1,
Selling and distribution expenses $ 654 $ 655
3 unchanged sentences
Selling, general and administrative expenses $ 3,185 $ 2,967
−Removed: During the three months ended September 30, 2022, selling, general and administrative expenses increased $157 million, or 5 percent, versus the prior year.
−Removed: The increase was primarily due to increased marketing spending, partially offset by lower selling and distribution expenses as well as lower annual incentive and stock-based compensation expense as a result of the timing of cumulative adjustments in the prior year for annual incentive and stock-based compensation expense due to increased estimates of payouts.
−Removed: During the three months ended September 30, 2022, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 8 percent.
−Removed: During the nine months ended September 30, 2022, selling, general and administrative expenses increased $641 million, or 7 percent, versus the prior year.
−Removed: The increase was primarily due to higher annual incentive and stock-based compensation expense, increased marketing spending, and increased selling and distribution expenses.
−Removed: The increase in annual incentive and stock-based compensation expense was due to a more favorable outlook for our financial performance in the current year.
−Removed: The increase in selling and distribution expenses was primarily due to the continued recovery from the COVID-19 pandemic.
−Removed: During the nine months ended September 30, 2022, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 6 percent.
−Removed: As of September 30, 2022, we had $385 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.9 y ears as stock-based compensation expense.
+Added: During the three months ended March 31, 2023, selling, general and administrative expenses increased $218 million, or 7 percent, versus the prior year.
+Added: The increase was primarily due to increased marketing spending and operating expenses, partially offset by a decrease in stock-based compensation expense.
+Added: During the three months ended March 31, 2023, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 5 percent.
+Added: As of March 31, 2023, we had $428 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 2.1 y ears as stock-based compensation expense.
This expected cost does not include the impact of any future stock-based compensation awards.
1 unchanged sentence
Other operating charges incurred by operating segment and Corporate were as follows (in millions):
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30,
−Removed: 2022 October 1,
−Removed: 2021 September 30,
−Removed: 2022 October 1,
+Added: Three Months Ended
+Added: 2023 April 1,
Europe, Middle East & Africa $ — $ (1)
6 unchanged sentences
Total $ 111 $ 28
−Removed: During the three months ended September 30, 2022, the Company recorded other operating charges of $130 million.
−Removed: These charges primarily consisted of $57 million related to the impairment of a trademark in Asia Pacific, $32 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $27 million related to the Company’s productivity and reinvestment program and $15 million related to the BodyArmor acquisition in the prior year, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements.
−Removed: During the nine months ended September 30, 2022, the Company recorded other operating charges of $1,109 million.
−Removed: These charges primarily consisted of $971 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $57 million related to the impairment of a trademark in Asia Pacific and $56 million related to the Company’s productivity and reinvestment program.
−Removed: In addition, other operating charges included $23 million related to the BodyArmor acquisition in the prior year, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, net of the reimbursement of distributor termination fees recorded in the prior year.
−Removed: During the three months ended October 1, 2021, the Company recorded other operating charges of $45 million.
−Removed: These charges included $31 million related to the Company’s productivity and reinvestment program, $12 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $4 million related to the Company’s strategic realignment initiatives and $1 million related to tax litigation.
−Removed: Other operating charges also included a net gain of $3 million related to the restructuring of our manufacturing operations in the United States.
−Removed: During the nine months ended October 1, 2021, the Company recorded other operating charges of $478 million.
−Removed: These charges primarily consisted of $263 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $126 million related to the Company’s strategic realignment initiatives and $71 million related to the Company’s productivity and reinvestment program.
−Removed: In addition, other operating charges included $14 million related to tax litigation and a net charge of $4 million related to the restructuring of our manufacturing operations in the United States.
−Removed: Refer to Note 8 of Notes to Consolidated Financial Statements for additional information related to the tax litigation.
−Removed: Refer to Note 12 of Notes to Consolidated Financial Statements for additional information on the Company’s productivity and reinvestment program.
−Removed: Refer to Note 15 of Notes to Consolidated Financial Statements for additional information on the impairment charge and the fairlife acquisition.
+Added: During the three months ended March 31, 2023, the Company recorded other operating charges of $111 million.
+Added: These charges primarily consisted of $62 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $27 million related to the Company’s productivity and reinvestment program and $18 million related to the restructuring of our North America operating unit.
+Added: In addition, other operating charges included $4 million for the amortization of noncompete agreements related to the BA Sports Nutrition, LLC (“BodyArmor”) acquisition in 2021.
+Added: During the three months ended April 1, 2022, the Company recorded other operating charges of $28 million.
+Added: These charges primarily consisted of $22 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $10 million related to the Company’s productivity and reinvestment program and $2 million related to the restructuring of our manufacturing operations in the United States.
+Added: These charges were partially offset by a net gain of $5 million, which included the reimbursement of distributor termination fees for BodyArmor recorded in 2021 partially offset by various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, and income of $1 million related to the Company’s strategic realignment initiatives primarily as a result of a revision to estimated severance costs accrued in 2021.
+Added: Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives.
+Added: Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.
Refer to Note 17 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.
1 unchanged sentence
Information about our operating income contribution by operating segment and Corporate on a percentage basis is as follows:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30,
−Removed: 2022 October 1,
−Removed: 2021 September 30,
−Removed: 2022 October 1,
+Added: Three Months Ended
+Added: 2023 April 1,
Europe, Middle East & Africa 33.7 % 29.6 %
7 unchanged sentences
Operating margin is a ratio calculated by dividing operating income by net operating revenues.
−Removed: Management believes operating margin provides investors with useful information related to the profitability of our business after considering all of the operating costs incurred.
+Added: Management believes operating margin provides investors with useful information related to the profitability of our business after considering all of the selling, general and administrative expenses and other operating charges incurred.
Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.
Information about our operating margin on a consolidated basis and for each of our operating segments and Corporate is as follows:
−Removed: Three Months Ended Nine Months Ended
−Removed: September 30,
−Removed: 2022 October 1,
−Removed: 2021 September 30,
−Removed: 2022 October 1,
+Added: Three Months Ended
+Added: 2023 April 1,
Consolidated 30.7 % 32.5 %
7 unchanged sentences
* Calculation is not meaningful.
−Removed: Three Months Ended September 30, 2022 versus Three Months Ended October 1, 2021
−Removed: During the three months ended September 30, 2022, operating income was $3,088 million, compared to $2,898 million during the three months ended October 1, 2021, an increase of $190 million, or 7 percent.
−Removed: The increase was driven by concentrate sales volume growth of 4 percent, favorable pricing initiatives, and favorable channel and package mix, partially offset by higher other operating charges;
−Removed: higher selling, general and administrative expenses;
−Removed: and an unfavorable foreign currency exchange rate impact.
−Removed: During the three months ended September 30, 2022, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 10 percent due to a stronger U.S.
−Removed: dollar compared to certain foreign currencies, including the Japanese yen, Turkish lira, Zimbabwean dollar, British pound sterling and Argentine peso, which had an unfavorable impact on our Asia Pacific;
−Removed: Europe, Middle East and Africa;
−Removed: Global Ventures;
−Removed: and Latin America operating segments.
−Removed: Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
−Removed: The Europe, Middle East and Africa operating segment reported operating income of $1,046 million and $1,028 million for the three months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: The increase in operating income was primarily driven by favorable pricing initiatives as well as favorable channel and package mix, partially offset by an unfavorable foreign currency exchange rate impact of 18 percent, higher commodity costs and increased marketing spending.
−Removed: Latin America reported operating income of $712 million and $712 million for the three months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: Operating income for the three months ended September 30, 2022 was impacted by concentrate sales volume growth of 6 percent, favorable pricing initiatives, and favorable channel and package mix.
−Removed: These favorable
−Removed: impacts were offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 7 percent.
−Removed: Operating income for North America for the three months ended September 30, 2022 and October 1, 2021 was $1,082 million and $868 million, respectively.
−Removed: The increase in operating income was primarily driven by favorable pricing initiatives as well as favorable channel and product mix, partially offset by higher commodity costs, increased marketing spending and higher annual incentive expense.
−Removed: Asia Pacific’s operating income for the three months ended September 30, 2022 and October 1, 2021 was $589 million and $594 million, respectively.
−Removed: The decrease in operating income was primarily driven by an unfavorable foreign currency exchange rate impact of 9 percent, higher other operating charges related to the impairment of a trademark, higher commodity costs, and increased marketing spending, partially offset by concentrate sales volume growth of 9 percent, favorable pricing initiatives, and favorable channel and package mix.
−Removed: Global Ventures’ operating income for the three months ended September 30, 2022 and October 1, 2021 was $67 million and $114 million, respectively.
−Removed: The decrease in operating income was primarily driven by the impact of no longer receiving COVID-related incentives in the current year, higher commodity costs, higher selling and distribution expenses, and an unfavorable foreign currency exchange rate impact of 6 percent, partially offset by concentrate sales volume growth of 17 percent.
−Removed: Bottling Investments’ operating income for the three months ended September 30, 2022 and October 1, 2021 was $46 million and $81 million, respectively.
−Removed: The decrease in operating income was primarily driven by higher commodity costs and an unfavorable foreign currency exchange rate impact of 5 percent, partially offset by unit case volume growth of 16 percent and favorable pricing initiatives.
−Removed: Corporate’s operating loss for the three months ended September 30, 2022 and October 1, 2021 was $454 million and $499 million, respectively.
−Removed: Operating loss in 2022 decreased primarily as a result of lower marketing spending as well as the timing of cumulative adjustments in the prior year for annual incentive and stock-based compensation expense due to increased estimates of payouts, partially offset by higher other operating charges and higher operating expenses.
−Removed: Nine Months Ended September 30, 2022 versus Nine Months Ended October 1, 2021
−Removed: During the nine months ended September 30, 2022, operating income was $8,834 million, compared to $8,636 million during the nine months ended October 1, 2021, an increase of $198 million, or 2 percent.
−Removed: The increase was driven by concentrate sales volume growth of 6 percent, favorable pricing initiatives, and favorable channel and package mix, partially offset by higher other operating charges;
−Removed: higher selling, general and administrative expenses;
−Removed: and an unfavorable foreign currency exchange rate impact.
−Removed: During the nine months ended September 30, 2022, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 8 percent due to a stronger U.S.
−Removed: dollar compared to certain foreign currencies, including the Japanese yen, Turkish lira, British pound sterling and Argentine peso, which had an unfavorable impact on our Asia Pacific;
+Added: During the three months ended March 31, 2023, operating income was $3,367 million, compared to $3,405 million during the three months ended April 1, 2022, a decrease of $38 million, or 1 percent.
+Added: The decrease was driven by an unfavorable foreign currency exchange rate impact;
+Added: higher other operating charges;
+Added: and higher selling, general and administrative expenses.
+Added: These items were partially offset by favorable pricing initiatives, concentrate sales volume growth of 1 percent, and favorable channel and package mix.
+Added: During the three months ended March 31, 2023, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 8 percent due to a stronger U.S.
+Added: dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar, Turkish lira, euro and Japanese yen, which had an unfavorable impact on our Latin America;
Europe, Middle East and Africa;
−Removed: Global Ventures;
−Removed: and Latin America operating segments.
+Added: and Asia Pacific operating segments.
The unfavorable impact of a stronger U.S.
dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S.
−Removed: dollar compared to certain other foreign currencies, including the Brazilian real, which had a favorable impact on our Latin America operating segment.
+Added: dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment.
Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.
−Removed: The Europe, Middle East and Africa operating segment reported operating income of $3,344 million and $2,990 million for the nine months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: The increase in operating income was primarily driven by concentrate sales volume growth of 5 percent, favorable pricing initiatives, favorable channel and package mix, and lower other operating charges, partially offset by an unfavorable foreign currency exchange rate impact of 14 percent, higher commodity costs and increased marketing spending.
−Removed: Latin America reported operating income of $2,146 million and $1,942 million for the nine months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: The increase in operating income was primarily driven by concentrate sales volume growth of 7 percent, favorable pricing initiatives and lower other operating charges, partially offset by increased marketing spending, higher commodity costs and an unfavorable foreign currency exchange rate impact of 5 percent.
−Removed: Operating income for North America for the nine months ended September 30, 2022 and October 1, 2021 was $2,978 million and $2,610 million, respectively.
−Removed: The increase in operating income was primarily driven by concentrate sales volume growth of 2 percent, favorable pricing initiatives, and favorable channel and product mix, partially offset by higher commodity costs, higher annual incentive expense and increased marketing spending.
−Removed: Asia Pacific’s operating income for the nine months ended September 30, 2022 and October 1, 2021 was $2,006 million and $2,046 million, respectively.
−Removed: The decrease in operating income was primarily driven by an unfavorable foreign currency exchange rate impact of 7 percent, higher other operating charges related to the impairment of a trademark, higher commodity
−Removed: costs and increased marketing spending, partially offset by concentrate sales volume growth of 8 percent, favorable pricing initiatives, and favorable channel and package mix.
−Removed: Global Ventures’ operating income for the nine months ended September 30, 2022 and October 1, 2021 was $162 million and $215 million, respectively.
−Removed: The decrease in operating income was primarily driven by the impact of no longer receiving COVID-related incentives in the current year, higher commodity costs, higher selling and distribution expenses, and an unfavorable foreign currency exchange rate impact of 4 percent, partially offset by concentrate sales volume growth of 16 percent.
−Removed: Bottling Investments’ operating income for the nine months ended September 30, 2022 and October 1, 2021 was $352 million and $314 million, respectively.
−Removed: The increase in operating income was primarily driven by unit case volume growth of 16 percent and favorable pricing initiatives, partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact of 9 percent.
−Removed: Corporate’s operating loss for the nine months ended September 30, 2022 and October 1, 2021 was $2,154 million and $1,481 million, respectively.
−Removed: Operating loss in 2022 increased primarily as a result of higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition as well as higher annual incentive and stock-based compensation expense, partially offset by lower marketing spending.
+Added: The Europe, Middle East and Africa operating segment reported operating income of $1,135 million and $1,007 million for the three months ended March 31, 2023 and April 1, 2022, respectively.
+Added: The increase in operating income was primarily driven by concentrate sales volume growth of 2 percent and favorable pricing initiatives, partially offset by an unfavorable foreign currency exchange rate impact of 16 percent and higher commodity costs.
+Added: Latin America reported operating income of $853 million and $760 million for the three months ended March 31, 2023 and April 1, 2022, respectively.
+Added: The increase in operating income was primarily driven by concentrate sales volume growth of 1 percent, favorable pricing initiatives, and favorable channel and package mix, partially offset by increased marketing spending, higher commodity costs and an unfavorable foreign currency exchange rate impact of 6 percent.
+Added: Operating income for North America for the three months ended March 31, 2023 and April 1, 2022 was $1,033 million and $1,056 million, respectively.
+Added: The decrease in operating income was primarily driven by a decline in concentrate sales volume of 2 percent, higher other operating charges, higher commodity costs and increased marketing spending, partially offset by favorable pricing initiatives and favorable channel, package and product mix.
+Added: Asia Pacific’s operating income for the three months ended March 31, 2023 and April 1, 2022 was $563 million and $664 million, respectively.
+Added: The decrease in operating income was primarily driven by an unfavorable foreign currency exchange rate impact of 8 percent, a decline in concentrate sales volume of 2 percent, higher commodity costs and higher operating expenses, partially offset by favorable pricing initiatives and the impact of structural changes.
+Added: Global Ventures’ operating income for the three months ended March 31, 2023 and April 1, 2022 was $51 million and $51 million, respectively.
+Added: Operating income for the three months ended March 31, 2023 was impacted by concentrate sales volume growth of 8 percent and lower operating expenses.
+Added: These favorable impacts were offset by the impact of higher commodity costs and an unfavorable foreign currency exchange rate impact of 1 percent.
+Added: Bottling Investments’ operating income for the three months ended March 31, 2023 and April 1, 2022 was $139 million and $193 million, respectively.
+Added: The decrease in operating income was primarily driven by an unfavorable foreign currency exchange rate impact of 7 percent and the refranchising of our bottling operations in Vietnam and Cambodia, partially offset by unit case volume growth of 3 percent and favorable pricing initiatives.
+Added: Corporate’s operating loss for the three months ended March 31, 2023 and April 1, 2022 was $407 million and $326 million, respectively.
+Added: Operating loss in 2023 increased primarily as a result of higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition and an unfavorable foreign currency exchange rate impact of 1 percent.
Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on our full year 2023 operating income.
Interest Income
−Removed: During the three months ended September 30, 2022, interest income was $128 million, compared to $68 million during the three months ended October 1, 2021, an increase of $60 million, or 87 percent.
−Removed: During the nine months ended September 30, 2022, interest income was $306 million, compared to $205 million during the nine months ended October 1, 2021, an increase of $101 million, or 49 percent.
−Removed: The increases were primarily driven by higher returns in certain of our international locations.
+Added: During the three months ended March 31, 2023, interest income was $168 million, compared to $78 million during the three months ended April 1, 2022, an increase of $90 million, or 114 percent.
+Added: The increase was primarily driven by higher returns in certain of our international locations.
Interest Expense
−Removed: During the three months ended September 30, 2022, interest expense was $198 million, compared to $210 million during the three months ended October 1, 2021, a decrease of $12 million, or 6 percent.
−Removed: The decrease was primarily due to lower average debt balances and certain hedging activities that occurred during the prior year, partially offset by the impact of higher interest rates.
−Removed: During the nine months ended September 30, 2022, interest expense was $578 million, compared to $1,432 million during the nine months ended October 1, 2021, a decrease of $854 million, or 60 percent.
−Removed: The decrease was primarily due to charges in the prior year of $650 million associated with the extinguishment of long-term debt and certain hedging activities that occurred during the prior year.
+Added: During the three months ended March 31, 2023, interest expense was $372 million, compared to $182 million during the three months ended April 1, 2022, an increase of $190 million, or 105 percent.
+Added: The increase was primarily due to higher interest rates on short-term borrowings and derivative instruments compared to the prior year.
Equity Income (Loss) — Net
−Removed: Three Months Ended September 30, 2022 versus Three Months Ended October 1, 2021
−Removed: During the three months ended September 30, 2022, equity income was $479 million, compared to equity income of $455 million during the three months ended October 1, 2021, an increase of $24 million, or 5 percent.
−Removed: The increase was primarily due to more favorable operating results reported by several of our equity method investees in the current year, partially offset by an unfavorable foreign currency exchange rate impact and the sale of all or a portion of our ownership interest in certain equity method investees.
−Removed: In addition, the Company recorded a net charge of $14 million and a net gain of $18 million during the three months ended September 30, 2022 and October 1, 2021, respectively, resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.
−Removed: Nine Months Ended September 30, 2022 versus Nine Months Ended October 1, 2021
−Removed: During the nine months ended September 30, 2022, equity income was $1,133 million, compared to equity income of $1,136 million during the nine months ended October 1, 2021, a decrease of $3 million.
−Removed: The decrease was primarily due to a $39 million increase in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees, the sale of all or a portion of our ownership interest in certain equity method investees, and an unfavorable foreign currency exchange rate impact.
−Removed: These unfavorable impacts were partially offset by more favorable operating results reported by several of our equity method investees in the current year.
+Added: During the three months ended March 31, 2023, equity income was $275 million, compared to equity income of $262 million during the three months ended April 1, 2022, an increase of $13 million, or 5 percent.
+Added: The increase reflects, among other items, the impact of more favorable operating results reported by some of our equity method investees in the current year, partially offset by an $87 million increase in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.
Other Income (Loss) — Net
−Removed: Three Months Ended September 30, 2022 versus Three Months Ended October 1, 2021
−Removed: Other income (loss) — net includes, among other things, dividend income;
−Removed: gains and losses related to the disposal of property, plant and equipment;
−Removed: gains and losses related to acquisitions and divestitures;
−Removed: non-service cost components of net periodic benefit cost or income for pension and other postretirement benefit plans;
−Removed: other charges and credits related to pension and other postretirement benefit plans;
−Removed: realized and unrealized gains and losses on equity securities and trading debt securities;
−Removed: realized gains and losses on available-for-sale debt securities;
−Removed: other-than-temporary impairment charges;
−Removed: and net foreign currency exchange gains and losses.
−Removed: The foreign currency exchange gains and losses are primarily the result of the remeasurement of monetary assets and liabilities from certain currencies into functional currencies.
−Removed: The effects of the remeasurement of these assets and liabilities are partially offset by the impact of our economic hedging program for certain exposures on our consolidated balance sheet.
−Removed: Refer to Note 6 of Notes to Consolidated Financial Statements.
−Removed: During the three months ended September 30, 2022, other income (loss) — net was a loss of $53 million.
−Removed: The Company recognized a net loss of $78 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, and recognized net foreign currency exchange losses of $36 million.
−Removed: Additionally, other income (loss) — net included income of $41 million related to the non-service cost components of net periodic benefit income and dividend income of $25 million.
−Removed: None of the other items included in other income (loss) — net was individually significant.
−Removed: During the three months ended October 1, 2021, other income (loss) — net was a loss of $127 million.
−Removed: Other income (loss) — net included charges of $266 million related to the restructuring of our manufacturing operations in the United States and pension settlement charges of $21 million related to the Company’s strategic realignment initiatives.
−Removed: These charges were partially offset by income of $73 million related to the non-service cost components of net periodic benefit income, a gain of $63 million related to the sale of a portion of our ownership interest in one of our equity method investments and dividend income of $18 million.
−Removed: None of the other items included in other income (loss) — net was individually significant.
−Removed: Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities.
−Removed: Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on net periodic benefit income.
−Removed: Refer to Note 15 of Notes to Consolidated Financial Statements for additional information on the charges related to the restructuring of our manufacturing operations in the United States.
−Removed: Refer to Note 16 of Notes to Consolidated Financial Statements for the impact that certain of these items had on our operating segments and Corporate.
−Removed: Nine Months Ended September 30, 2022 versus Nine Months Ended October 1, 2021
−Removed: During the nine months ended September 30, 2022, other income (loss) — net was a loss of $509 million.
−Removed: The Company recognized a net loss of $449 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, and recognized net foreign currency exchange losses of $190 million.
−Removed: The Company also recorded an other-than-temporary impairment charge of $96 million related to an equity method investee in Russia and a net loss of $24 million as a result of one of our equity method investees issuing additional shares of its stock.
−Removed: Additionally, other income (loss) — net included income of $178 million related to the non-service cost components of net periodic benefit income and dividend income of $73 million.
−Removed: None of the other items included in other income (loss) — net was individually significant.
−Removed: During the nine months ended October 1, 2021, other income (loss) — net was income of $920 million.
−Removed: The Company recognized a net gain of $695 million related to the sale of our ownership interest in Coca-Cola Amatil Limited (“CCA”), an equity method investee, to Coca-Cola Europacific Partners plc, also an equity method investee;
−Removed: a net gain of $341 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities;
−Removed: and a gain of $63 million related to the sale of a portion of our ownership interest in one of our equity method investments.
+Added: During the three months ended March 31, 2023, other income (loss) — net was income of $615 million.
+Added: The Company recognized a gain of $439 million related to the refranchising of our bottling operations in Vietnam.
+Added: The Company recognized a net gain of $113 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, and recognized net foreign currency exchange losses of $24 million.
+Added: Additionally, other income (loss) — net included income of $13 million related to the non-service cost components of net periodic benefit cost and dividend income of $66 million.
+Added: During the three months ended April 1, 2022, other income (loss) — net was a loss of $105 million.
+Added: The Company recognized a net loss of $104 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, net foreign currency exchange losses of $73 million and a net loss of $24 million as a result of one of our equity method investees issuing additional shares of its stock.
Additionally, other income (loss) — net included income of $70 million related to the non-service cost components of net periodic benefit income and dividend income of $12 million.
−Removed: Other income (loss) — net also included charges of $266 million related to the restructuring of our manufacturing operations in the United States, pension settlement charges of $104 million related to our strategic realignment initiatives and net foreign currency exchange losses of $47 million.
−Removed: None of the other items included in other income (loss) — net was individually significant.
−Removed: Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the sale of our ownership interest in CCA.
+Added: Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations in Vietnam.
Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities.
−Removed: Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on net periodic benefit income.
−Removed: Refer to Note 15 of Notes to Consolidated Financial Statements for additional information on the impairment charge, one of our equity method investees issuing additional shares of its stock, and the charges related to the restructuring of our manufacturing operations in the United States.
+Added: Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income.
+Added: Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on one of our equity method investees issuing additional shares of its stock.
Refer to Note 17 of Notes to Consolidated Financial Statements for the impact that certain of these items had on our operating segments and Corporate.
−Removed: The Company recorded income taxes of $622 million (18.1 percent effective tax rate) and $609 million (19.7 percent effective tax rate) during the three months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: The Company recorded income taxes of $1,671 million (18.2 percent effective tax rate) and $2,111 million (22.3 percent effective tax rate) during the nine months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: The Company’s effective tax rates for the three and nine months ended September 30, 2022 and October 1, 2021 vary from the statutory U.S.
−Removed: federal income tax rate of 21.0 percent primarily due to the tax impact of significant operating and nonoperating items, as described in Note 11 of Notes to Consolidated Financial Statements, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S.
−Removed: The Company’s effective tax rates for the three and nine months ended October 1, 2021 included $75 million and $251 million, respectively, of net tax expense related to various discrete tax items, including changes in tax laws in certain foreign jurisdictions and the net tax impact of agreed-upon audit issues.
+Added: The Company recorded income taxes of $940 million (23.2 percent effective tax rate) and $665 million (19.2 percent effective tax rate) during the three months ended March 31, 2023 and April 1, 2022, respectively.
+Added: The Company’s effective tax rates for the three months ended March 31, 2023 and April 1, 2022 vary from the statutory U.S.
+Added: federal tax rate of 21.0 percent primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12 of Notes to Consolidated Financial Statements, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S.
+Added: federal tax rate.
On November 18, 2020, the U.S.
Tax Court (“Tax Court”) issued an opinion (“Opinion”) regarding the Company’s 2015 litigation with the U.S.
−Removed: Internal Revenue Service (“IRS”) involving transfer pricing tax adjustments in which the Tax Court predominantly sided with the IRS.
+Added: Internal Revenue Service (“IRS”) involving transfer pricing tax adjustments in which the Tax Court
+Added: predominantly sided with the IRS.
The Company strongly disagrees with the Opinion and intends to vigorously defend its position.
−Removed: Refer to Note 8 of Notes to Consolidated Financial Statements for additional information on the litigation.
+Added: Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.
At the end of each quarter, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year.
1 unchanged sentence
Based on enacted tax laws, as well as our current interpretation of recently issued regulations, the Company’s effective tax rate in 2023 is expected to be 20.2 percent before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate.
−Removed: This rate does not include the impact of the ongoing tax litigation with the IRS, if the Company were not to prevail.
+Added: However, we currently anticipate the enactment of pending tax legislation outside of the United States during the second quarter of 2023, which, if enacted, is expected to reduce our full year 2023 effective tax rate to approximately 19.5 percent before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate.
+Added: These rates do not include the impact of the ongoing tax litigation with the IRS, if the Company were not to prevail.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION
8 unchanged sentences
The Company regularly reviews its optimal mix of short-term and long-term debt.
−Removed: The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $13.2 billion as of September 30, 2022.
−Removed: In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $7.8 billion in unused backup lines of credit for general corporate purposes as of September 30, 2022.
−Removed: These backup lines of credit expire at various times from 2022 through 2027.
+Added: The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $14.3 billion as of March 31, 2023.
+Added: In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $4.2 billion in unused backup lines of credit for general corporate purposes as of March 31, 2023.
+Added: These backup lines of credit expire at various times through 2028.
+Added: Our current payment terms with the majority of our suppliers are 120 days.
+Added: Two global financial institutions offer a voluntary supply chain finance program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.
+Added: We do not believe there is a risk that our payment terms will be shortened in the near future.
+Added: Refer to Note 7 of Notes to Consolidated Financial Statements for additional information.
Our current capital allocation priorities are as follows:
−Removed: investing wisely to support our business operations, continuing to grow our dividend payment, enhancing our beverage portfolio and capabilities through opportunistic and disciplined acquisitions, and using excess cash to repurchase shares over time.
+Added: investing wisely to support our business operations, continuing to grow our dividend payment, enhancing our beverage portfolio and capabilities through consumer-centric acquisitions, and using excess cash to repurchase shares over time.
We currently expect 2023 capital expenditures to be approximately $1.9 billion.
−Removed: During 2022, we also expect to repurchase approximately $500 million of shares in addition to repurchasing shares equivalent to the proceeds from the issuances of stock under our stock-based compensation plans.
+Added: During 2023, we also expect to repurchase shares to offset dilution resulting from employee stock-based compensation plans.
We are currently in litigation with the IRS for tax years 2007 through 2009.
On November 18, 2020, the Tax Court issued the Opinion in which it predominantly sided with the IRS;
−Removed: however, a final decision is still pending and the timing of such decision is not currently known.
+Added: however, a decision is still pending and the timing of such decision is not currently known.
The Company strongly disagrees with the IRS’ positions and the portions of the Opinion affirming such positions and intends to vigorously defend our positions utilizing every available avenue of appeal.
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Additional income tax and interest would continue to accrue until the time any such potential liability, or portion thereof, were to be paid.
−Removed: The Company estimates the
−Removed: impact of the continued application of the Tax Court Methodology for the nine months ended September 30, 2022 would increase the potential aggregate incremental tax and interest liability by approximately $750 million.
−Removed: Once the Tax Court renders a final decision, the Company will have 90 days to file a notice of appeal and pay the portion of the potential aggregate incremental tax and interest liability related to the 2007 through 2009 tax years, which we currently estimate to be approximately $5.1 billion (including interest accrued through September 30, 2022), plus any additional interest accrued through the time of payment.
+Added: The Company estimates the impact of the continued application of the Tax Court Methodology for the three months ended March 31, 2023 would increase the potential aggregate incremental tax and interest liability by approximately $400 million.
+Added: Once the Tax Court renders a decision, the Company will have 90 days to file a notice of appeal and pay the portion of the potential aggregate incremental tax and interest liability related to the 2007 through 2009 tax years, which we currently estimate to be approximately $5.4 billion (including interest accrued through March 31, 2023), plus any additional interest accrued through the time of payment.
Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.
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Cash Flows from Operating Activities
−Removed: As part of our continued efforts to improve our working capital efficiency, we have worked with our suppliers over the past several years to revisit terms and conditions, including the extension of payment terms.
−Removed: Our current payment terms with the majority of our suppliers are 120 days.
−Removed: Additionally, two global financial institutions offer a voluntary supply chain finance (“SCF”) program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.
−Removed: The SCF program is available to suppliers of goods and services included in cost of goods sold as well as suppliers of goods and services included in selling, general and administrative expenses in our consolidated statement of income.
−Removed: The Company and our suppliers agree on contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program.
−Removed: The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms.
−Removed: Then, if they are participating in the SCF program, our suppliers, at their sole discretion, determine which invoices, if any, they want to sell to the financial institutions.
−Removed: Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on our payment terms.
−Removed: No guarantees are provided by the Company or any of our subsidiaries under the SCF program.
−Removed: We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program.
−Removed: Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in our consolidated balance sheet.
−Removed: All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected within the operating activities section of our consolidated statement of cash flows.
−Removed: We have been informed by the financial institutions that as of September 30, 2022 and December 31, 2021, suppliers had elected to sell $1,199 million and $882 million, respectively, of our outstanding payment obligations to the financial institutions.
−Removed: The amounts settled through the SCF program were $3,315 million and $2,339 million during the nine months ended September 30, 2022 and October 1, 2021, respectively.
−Removed: We do not believe there is a risk that our payment terms will be shortened in the near future.
The Company has a trade accounts receivable factoring program in certain countries.
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In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions.
−Removed: The Company sold $7,097 million and $4,595 million of trade accounts receivables under this program during the nine months ended September 30, 2022 and October 1, 2021, respectively, and the costs of factoring such receivables were not material.
+Added: The Company sold $2,709 million and $1,597 million of trade accounts receivables under this program during the three months ended March 31, 2023 and April 1, 2022, respectively.
+Added: The costs of factoring such receivables were $11 million and $1 million for the three months ended March 31, 2023 and April 1, 2022, respectively.
The cash received from the financial institutions is reflected within the operating activities section of our consolidated statement of cash flows.
−Removed: Net cash provided by operating activities during the nine months ended September 30, 2022 and October 1, 2021 was $8,068 million and $9,231 million, respectively, a decrease of $1,163 million, or 13 percent.
−Removed: This decrease was primarily driven by higher annual incentive payments in 2022, higher marketing payments resulting from year-end accruals, higher tax payments, and an unfavorable impact due to foreign currency exchange rate fluctuations.
−Removed: These items were partially offset by increased operating income, lower payments related to our strategic realignment initiatives and increased benefits from the extension of certain vendor payment terms and our trade accounts receivable factoring program.
+Added: Net cash provided by operating activities during the three months ended March 31, 2023 and April 1, 2022 was $160 million and $623 million, respectively, a decrease of $463 million, or 74 percent.
+Added: This decrease was primarily driven by the timing of working capital initiatives, payments resulting from the buildup of inventory in the prior year to manage potential supply chain disruptions, an unfavorable impact due to foreign currency exchange rate fluctuations, and $167 million of the $275 million milestone payment for fairlife.
+Added: These items were partially offset by lower marketing payments resulting from year-end accruals.
+Added: Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the milestone payment for fairlife.
Cash Flows from Investing Activities
−Removed: Net cash used in investing activities during the nine months ended September 30, 2022 was $2,189 million and net cash provided by investing activities during the nine months ended October 1, 2021 was $1,919 million.
+Added: Net cash provided by investing activities during the three months ended March 31, 2023 and April 1, 2022 was $117 million and $146 million, respectively.
Purchases of Investments and Proceeds from Disposals of Investments
−Removed: During the nine months ended September 30, 2022, purchases of investments were $3,169 million and proceeds from disposals of investments were $3,049 million, resulting in a net cash outflow of $120 million.
−Removed: During the nine months ended October 1, 2021, purchases of investments were $4,732 million and proceeds from disposals of investments were $5,294 million, resulting in a net cash inflow of $562 million.
+Added: During the three months ended March 31, 2023, purchases of investments were $739 million and proceeds from disposals of investments were $815 million, resulting in a net cash inflow of $76 million.
+Added: During the three months ended April 1, 2022, purchases of investments were $835 million and proceeds from disposals of investments were $1,323 million, resulting in a net cash inflow of $488 million.
This activity primarily represents the purchases of, and proceeds from the disposals of, investments in marketable securities and short-term investments that were made as part of the Company’s overall cash management strategy.
Also included in this activity are purchases of, and proceeds from the disposals of, investments held by our captive insurance companies.
−Removed: Refer to Note 4 of Notes to Consolidated Financial Statements for additional information.
−Removed: Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities
−Removed: During the nine months ended September 30, 2022 and October 1, 2021, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $40 million and $11 million, respectively.
+Added: Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on our investments.
Proceeds from Disposals of Businesses, Equity Method Investments and Nonmarketable Securities
−Removed: During the nine months ended September 30, 2022, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $229 million, which primarily related to the sale of our ownership interest in one of our equity method investments.
−Removed: During the nine months ended October 1, 2021, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $1,950 million, which primarily related to the sale of our ownership interest in CCA and the sale of a portion of our ownership interest in one of our equity method investments.
−Removed: Refer to Note 2 of Notes to Consolidated Financial Statements for additional information.
+Added: During the three months ended March 31, 2023 and April 1, 2022, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $319 million and $218 million, respectively, which primarily related to the sales of our ownership interests in certain equity method investees.
Purchases of Property, Plant and Equipment
−Removed: Purchases of property, plant and equipment during the nine months ended September 30, 2022 and October 1, 2021 were $776 million and $728 million, respectively.
+Added: Purchases of property, plant and equipment during the three months ended March 31, 2023 and April 1, 2022 were $276 million and $217 million, respectively.
Collateral (Paid) Received Associated with Hedging Activities — Net
−Removed: Collateral paid associated with our hedging activities during the nine months ended September 30, 2022 was $1,449 million.
+Added: Collateral received associated with our hedging activities during the three months ended March 31, 2023 was $18 million, and collateral paid associated with our hedging activities during the three months ended April 1, 2022 was $341 million.
Refer to Note 6 of Notes to Consolidated Financial Statements for additional information on our hedging activities.
Cash Flows from Financing Activities
−Removed: Net cash used in financing activities during the nine months ended September 30, 2022 and October 1, 2021 was $5,078 million and $6,591 million, respectively.
+Added: Net cash provided by financing activities during the three months ended March 31, 2023 was $2,065 million, and net cash used in financing activities during the three months ended April 1, 2022 was $2,975 million.
Debt Financing
Issuances and payments of debt included both short-term and long-term financing activities.
−Removed: During the nine months ended September 30, 2022, the Company had issuances of debt of $4,351 million, which included $2,163 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, $1,402 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, and long-term debt issuances of $786 million, net of related discounts and issuance costs.
−Removed: The Company made payments of debt of $3,761 million during the nine months ended September 30, 2022, which included payments of $3,022 million related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $739 million.
−Removed: During the nine months ended September 30, 2022, the Company retired upon maturity U.S.
−Removed: dollar-denominated debentures of $410 million.
−Removed: Refer to Note 7 of Notes to Consolidated Financial Statements for additional information.
+Added: During the three months ended March 31, 2023, the Company had issuances of debt of $4,074 million, which included $2,725 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, $1,346 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, and long-term debt issuances of $3 million, net of related discounts and issuance costs.
+Added: The Company made payments of debt of $1,174 million during the three months ended March 31, 2023, which included payments of $1,011 million related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $163 million.
+Added: During the three months ended April 1, 2022, the Company had issuances of debt of $1,052 million, which included $1,026 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, $5 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, and long-term debt issuances of $21 million, net of related discounts and issuance costs.
+Added: The Company made payments of debt of $1,045 million during the three months ended April 1, 2022, which included payments of $750 million related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $295 million.
Issuances of Stock
−Removed: During the nine months ended September 30, 2022, the Company received cash proceeds from issuances of stock of $707 million, an increase of $214 million when compared to cash proceeds from issuances of stock of $493 million during the nine months ended October 1, 2021.
−Removed: The issuances of stock during the nine months ended September 30, 2022 and October 1, 2021 were related to the exercise of stock options by employees.
+Added: The issuances of stock during the three months ended March 31, 2023 and April 1, 2022 were related to the exercise of stock options by employees.
Share Repurchases
−Removed: During the nine months ended September 30, 2022, the total cash outflow for treasury stock purchases was $1,412 million.
−Removed: The Company repurchased 21.3 million shares of common stock under the share repurchase plans authorized by our Board of Directors.
+Added: During the three months ended March 31, 2023, the total cash outflow for treasury stock purchases was $848 million.
+Added: The Company repurchased 12.4 million shares of common stock under the share repurchase plan authorized by our Board of Directors.
These shares were repurchased at an average cost of $60.52 per share, for a total cost of $749 million.
−Removed: In addition to shares repurchased, the Company’s treasury stock activity included shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees.
−Removed: The net impact of the Company’s issuances of stock and share repurchases during the nine months ended September 30, 2022 resulted in a net cash outflow of $705 million.
−Removed: During the nine months ended September 30, 2022 and October 1, 2021, the Company paid dividends of $3,910 million and $5,437 million, respectively.
−Removed: As a result of the timing of dividend payment dates, the Company made two regular quarterly dividend payments during the nine months ended September 30, 2022, compared to three regular quarterly dividend payments during the nine months ended October 1, 2021.
−Removed: In 2022, the Company made its third regular quarterly dividend payment on October 3.
−Removed: Our Board of Directors approved the Company’s regular quarterly dividend of $0.44 per share at its October 2022 meeting.
−Removed: This dividend is payable on December 15, 2022 to shareowners of record as of the close of business on December 1, 2022.
+Added: In addition to shares repurchased under the share repurchase plan, the Company’s treasury stock activity included shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees.
+Added: The net impact of the Company’s issuances of stock and share repurchases during the three months ended March 31, 2023 resulted in a net cash outflow of $619 million.
+Added: During the three months ended April 1, 2022, the total cash outflow for treasury stock purchases was $546 million.
+Added: The Company repurchased 7.7 million shares of common stock under the share repurchase plan authorized by our Board of Directors.
+Added: These shares were repurchased at an average cost of $61.48 per share, for a total cost of $471 million.
+Added: In addition to shares repurchased under the share repurchase plan, the Company’s treasury stock activity included shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees.
+Added: The net impact of the Company’s issuances of stock and share repurchases during the three months ended April 1, 2022 resulted in a net cash outflow of $97 million.
+Added: During the three months ended March 31, 2023 and April 1, 2022, the Company paid dividends of $101 million and $1,906 million, respectively.
+Added: As a result of the timing of our quarterly reporting periods as well as our dividend payment dates, the Company paid substantially all of the first quarterly dividend of 2023 in the second quarter and paid all of the first quarterly dividend of 2022 in the first quarter.
+Added: Our Board of Directors approved the Company’s regular quarterly dividend of $0.46 per share at its April 2023 meeting.
+Added: This dividend is payable on July 3, 2023 to shareowners of record as of the close of business on June 16, 2023.
Other Financing Activities
−Removed: During the nine months ended September 30, 2022 and October 1, 2021, the total cash outflow for other financing activities was $1,053 million and $354 million, respectively.
−Removed: The activities during the nine months ended September 30, 2022 included payments totaling $548 million of the remaining $860 million of the purchase price of BodyArmor, which was originally held back related to indemnification obligations.
−Removed: The remainder of the activities during the nine months ended September 30, 2022 primarily included repayments of collateral related to our hedging programs.
+Added: During the three months ended March 31, 2023 and April 1, 2022, the total cash outflow for other financing activities was $115 million and $979 million, respectively.
+Added: The cash outflow during the three months ended March 31, 2023 included $108 million of the $275 million milestone payment for fairlife.
+Added: The cash outflow during the three months ended April 1, 2022 included payments totaling $568 million of the purchase price of BodyArmor, which included amounts originally held back for indemnification obligations.
+Added: Additionally, the cash outflow during the three months ended April 1, 2022 included repayments of collateral related to our hedging programs.
+Added: Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the milestone payment for fairlife.
Foreign Exchange
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We closely monitor our operations in each country and seek to adopt appropriate strategies that are responsive to changing economic and political environments as well as to fluctuations in currencies.
−Removed: Due to the geographic diversity of our operations, weakness in some currencies may be offset by strength in others.
−Removed: Our foreign currency management program is designed to mitigate, over time, a portion of the potentially unfavorable impact of exchange rate fluctuations on our net income and earnings per share.
−Removed: Taking into account the effects of our hedging activities, the impact of fluctuations in foreign currency exchange rates decreased our operating income for the three and nine months ended September 30, 2022 by 10 percent and 8 percent, respectively.
+Added: Due to the geographic diversity of our operations, weakness in some currencies may be offset by strength in other currencies over time.
+Added: Our foreign currency management program is designed to mitigate, over time, a portion of the potentially
+Added: unfavorable impact of exchange rate fluctuations on our net income.
+Added: Taking into account the effects of our hedging activities, the impact of fluctuations in foreign currency exchange rates decreased our operating income for the three months ended March 31, 2023 by 8 percent.
Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on operating income and cash flows from operating activities through the end of the year.
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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.