What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-20 · 172 added, 162 removed, 747 unchanged (31% of the section changed)

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• Operations Review — an analysis of our consolidated results of operations for 2024 and 2023 and year-to-year comparisons between 2024 and 2023.

An analysis of our consolidated results of operations for 2022 and 2021 and year-

to-year comparisons between 2022 and 2021 can be found in MD&A in Part II, Item 7 of the Company’s Form 10-K for the year ended December 31, 2022.

An analysis of our consolidated results of operations for 2023 and 2022 and year-to-year comparisons between 2023 and 2022 can be found in MD&A in Part II, Item 7 of the Company’s Form 10-K for the year ended December 31, 2023.

• Liquidity, Capital Resources and Financial Position — an analysis of cash flows, contractual obligations, foreign exchange, and the impact of inflation and changing prices.

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and emerging beverages.

We own and market several of the world’s largest nonalcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.

We own and market several of the world’s largest nonalcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Coca-Cola Zero Sugar, Fanta and Diet Coke/Coca-Cola Light.

We make our branded beverage products available to consumers throughout the world through our network of independent bottling partners, distributors, wholesalers and retailers as well as the Company’s consolidated bottling and distribution operations.

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We are focused on the following strategic priorities:

unlocking the potential of our portfolio of strong global, regional and scaled local brands;

developing a robust innovation pipeline focusing on scalable initiatives;

increasing consumer-centric marketing effectiveness and efficiency;

winning in the marketplace with aligned data-driven revenue growth management and execution capabilities;

and further embedding sustainability goals into our operations.

shaping a portfolio of loved brands;

transforming our marketing and innovation agenda;

optimizing the Coca-Cola ecosystem;

building talent and capabilities;

and enhancing our license to operate.

Challenges and Risks

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Obesity continues to impact individuals, communities and countries worldwide.

There is concern among consumers, public health professionals and governments about the health problems associated with obesity.

This concern represents a significant challenge to our industry.

There is concern among consumers, public health professionals and governments about the health problems associated with obesity, which may present a challenge to our industry.

We understand that obesity is a complex public health challenge, and we are committed to being a part of the solution.

We recognize the uniqueness of consumers’ lifestyles and dietary choices.

Therefore, we continue to:

Therefore, we continue to do the following:

• offer an expanded portfolio of beverage choices, including reduced-, low- and no-calorie beverage options;

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We want to be a helpful and credible partner in the fight against obesity.

Across the Coca-Cola system, we are mobilizing our assets in marketing and in community outreach to increase awareness and spur action.

Evolving Consumer Product Preferences

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As a consequence of these changes, many consumers want more beverage choices, personalization, a focus on sustainability, and transparency related to our products and packaging.

We are committed to meeting changing consumer needs and to generating growth through our evolving portfolio of beverage brands and products (including numerous

low- and no-calorie products);

We are committed to meeting changing consumer needs and to generating growth through our evolving portfolio of beverage brands and products (including numerous low- and no-calorie products);

selectively expanding into other profitable categories of the commercial beverage industry;

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We strive to meet the highest standards in both product safety and product quality.

We are aware that some consumers have concerns and negative viewpoints regarding certain ingredients used in our products.

We are aware that some consumers have concerns regarding certain ingredients used in our products.

We only use ingredients that are authorized for use by regulatory authorities in each of the markets in which we operate.

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We have rigorous product and ingredient safety and quality standards designed to ensure safety and quality in each of our products, and we drive innovation that provides new beverage options to satisfy consumers’ evolving needs and preferences.

We work to ensure consistent safety and quality through strong governance and compliance with applicable regulations and standards.

We work to ensure consistent product safety and quality through strong governance and compliance with applicable regulations and standards.

We stay current with new regulations, industry best practices and marketplace conditions, and we engage with standard-setting and industry organizations.

Additionally, we manufacture and distribute our products according to strict policies, requirements and specifications set forth in an integrated quality management program that continually measures all operations within the Coca-Cola system against the same stringent standards.

Additionally, our operations, contract manufacturers and bottling partners manufacture and distribute our products according to strict policies, requirements and specifications set forth in an integrated quality management program that continually measures all operations within the Coca-Cola system against the same stringent standards.

Our quality management program also identifies and mitigates risks and drives improvement.

In our quality laboratories, we stringently measure the quality attributes of ingredients as well as samples of finished products collected from the marketplace.

In our quality laboratories, we stringently measure the quality attributes of ingredients as well as samples of our finished products.

We perform due diligence to ensure that product and ingredient safety and quality standards are maintained in the more than 200 countries and territories where our products are sold.

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We acknowledge that we have a role to play in developing and implementing solutions that help build resilience across our business.

We report our sustainability progress in the following areas:

circular economy of packaging;

water stewardship;

sustainable agriculture;

human and workplace rights and diversity, equity and inclusion.

Our ability to achieve our sustainability goals is dependent on many factors, including, but not limited to, our actions along with the actions of various stakeholders, such as our bottling partners, suppliers, governments, nongovernmental organizations, communities, and other third parties, some of which are outside of our control.

Our ability to achieve our sustainability goals and aspirations is dependent on many factors, including, but not limited to, our actions along with the actions of various stakeholders, such as our bottling partners, suppliers, governments, nongovernmental organizations, communities, and other third parties, some of which are outside of our control.

Talent Acquisition and Retention

Competition for existing and prospective personnel has increased, especially in light of changing worker expectations and talent marketplace variability regarding flexible work models.

In addition, the broader labor market is experiencing a shortage of qualified workers, which has further increased competition for qualified employees that we want and may require for our future business needs.

Competition for existing and prospective talent has increased, especially considering changing worker expectations and talent marketplace variability.

In addition, the broader labor market is experiencing a shortage of qualified talent, which has further increased competition for specialized talent that we want and may require for our future business needs.

Our people and our culture are critical business priorities, and we strive to be a global employer of choice that attracts and retains high-performing talent with the passion, skills and mindsets to drive us on our purpose to refresh the world and make a difference.

We are committed to building an equitable and inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a strong and more sustainable business.

We are committed to building an inclusive culture that inspires and supports the growth of our employees, serves our communities and shapes a strong and more sustainable business.

See “Item 1A.

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Refer to Note 2 of Notes to Consolidated Financial Statements for a discussion of recent acquisitions, if applicable.

In November 2021, the Company acquired the remaining 85% ownership interest in, and now owns 100% of BodyArmor, which offers a line of sports performance and hydration beverages.

The Company allocated $4.2 billion of the purchase price to the BodyArmor trademark.

In November 2021, the Company acquired the remaining 85% ownership interest in, and now owns 100% of BA Sports Nutrition, LLC (“BodyArmor”), which offers a line of sports performance and hydration beverages.

During 2021, in conjunction with acquiring the remaining ownership interest, we recognized a noncash gain of $834 million resulting from the remeasurement of our previously held equity interest in BodyArmor to fair value.

The Company allocated $4.2 billion of the $5.6 billion purchase price to the BodyArmor trademark.

During the three months ended March 29, 2024, the operating results related to the trademark were lower than expected.

Therefore, the Company revised its projections of the future operating results related to the trademark, which triggered the need to update its impairment analysis.

As a result, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an impairment charge of $760 million.

The decrease in fair value was primarily driven by the revised projections of future operating results as well as higher discount rates resulting from changes in macroeconomic conditions since the acquisition date.

As of December 31, 2024, the fair value of this trademark approximates its carrying value.

If the near-term operating results of this trademark do not achieve our current financial projections, or if the macroeconomic conditions change causing the discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an impairment charge.

If the near-term operating results of this trademark do not achieve our revised financial projections, or if the macroeconomic conditions change, causing the discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an additional impairment charge.

Management will continue to monitor the fair value of this trademark in future periods.

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As a result, the Company periodically revises asset allocations, where appropriate, to seek to improve returns and manage risk.

In 2023, the Company’s total cost related to pension plans was $120 million, which included $38 million of net periodic pension cost and net charges of $82 million, primarily due to settlements and special termination benefits.

In 2024, the Company’s total net periodic pension cost was $45 million.

In 2025, we expect our net periodic pension cost to be approximately $81 million.

The increase in net periodic pension cost is primarily due to the net impact of the decrease in the weighted-average discount rate at December 31, 2023 compared to December 31, 2022.

The increase in net periodic pension cost is primarily due to a lower expected return on assets resulting from a transfer of $523 million of surplus international plan assets from pension trusts to general assets of the Company in 2024.

As of December 31, 2024, the U.S.

qualified pension plan represented 64% and 58% of the Company’s consolidated projected benefit obligation and pension plan assets, respectively.

For this plan, we estimate that a 50 basis-point decrease in the discount rate would result in an $8 million increase in our 2024 net periodic pension cost, and we estimate that a 50 basis-point decrease in the expected long-term rate of return on plan assets would result in a $19 million increase in our 2024 net periodic pension cost.

For this plan, we estimate that a 50 basis-point decrease in the discount rate would result in a $7 million increase in our 2025 net periodic pension cost, and we estimate that a 50 basis-point decrease in the expected long-term rate of return on plan assets would result in an $18 million increase in our 2025 net periodic pension cost.

Refer to Note 14 of Notes to Consolidated Financial Statements for additional information about our pension plans and related actuarial assumptions.

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Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized.

Our sales terms generally do not allow for

a right of return except for matters related to any manufacturing defects on our part.

Our sales terms generally do not allow for a right of return except for matters related to any manufacturing defects on our part.

After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract.

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The total revenue recorded, including any variable consideration, cannot exceed the amount for which it is probable that a significant reversal will not occur when uncertainties related to variability are resolved.

As a result, we are recognizing revenue based on our faithful depiction of the consideration that we expect to receive.

In making our estimates of variable consideration, we consider past results and make significant assumptions related to:

As a result, we are recognizing revenue based on our best estimate of the consideration that we expect to receive.

In making our estimates of variable consideration, we consider past results and make assumptions related to:

(1) customer sales volumes;

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The tax rates used to determine deferred tax assets or liabilities are the enacted tax rates in effect for the year and for the manner in which the differences are expected to reverse.

Based on the evaluation of all available information, the Company recognizes future tax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.

Based on the evaluation of all available information, the Company recognizes

future tax benefits, such as net operating loss carryforwards, to the extent that realizing these benefits is considered more likely than not.

We evaluate our ability to realize the tax benefits associated with deferred tax assets by analyzing our forecasted taxable income using both historical and projected future operating results;

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and the availability of tax planning strategies.

A valuation allowance is required

to be established unless management determines that it is more likely than not that the Company will ultimately realize the tax benefit associated with a deferred tax asset.

A valuation allowance is required to be established unless management determines that it is more likely than not that the Company will ultimately realize the tax benefit associated with a deferred tax asset.

The Company does not record a U.S.

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We generally refer to acquisitions and divestitures of bottling operations as “structural changes,” which are a component of acquisitions and divestitures.

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.

Typically, structural changes do not impact the Company’s unit case volume on a consolidated basis or at the geographic operating segment level.

We recognize 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.

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.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s acquisitions and divestitures.

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We generally do not consider the licensing of a brand to be a structural change.

In August 2022, the Company acquired a controlling interest in a bottling operation in Malawi.

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 and Europe, Middle East and Africa operating segments.

Additionally, the Company refranchised our bottling operations in Cambodia and Vietnam in November 2022 and January 2023, respectively, the impact of which 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.

In May 2023 and July 2022, the Company acquired certain brands in Asia Pacific.

The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net revenues on a consolidated basis as well as for the Asia Pacific operating segment.

In January 2023, the Company refranchised our bottling operations in Vietnam.

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.

In January, February and December 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines.

The impact of each of these refranchisings 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.

In May 2023, the Company acquired certain brands in Asia Pacific.

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.

Beverage Volume

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3 After considering the impact of structural changes, unit case volume for Bottling Investments grew 5%.

4 After considering the impact of structural changes, worldwide concentrate sales volume grew 2%.

5 After considering the impact of structural changes, concentrate sales volume for Asia Pacific grew 2%.

Unit Case Volume

The Coca-Cola system sold 33.7 billion and 33.3 billion unit cases of our products in 2024 and 2023, respectively.

Unit case volume in Europe, Middle East and Africa decreased 2%, which included a 3% decline in sparkling flavors, a 14% decline in juice, value-added dairy and plant-based beverages, a 1% decline in Trademark Coca-Cola, and a 2% decline in water, sports, coffee and tea.

The operating segment reported declines in unit case volume of 6% in the Europe operating unit and 1% in the Eurasia and Middle East operating unit, partially offset by growth in unit case volume of 3% in the Africa operating unit.

The decline in unit case volume in Europe, Middle East and Africa was primarily due to the suspension of the Company’s business in Russia in March 2022.

In Latin America, unit case volume increased 5%, which included 5% growth in Trademark Coca-Cola, 9% growth in water, sports, coffee and tea, 2% growth in sparkling flavors and 3% growth in juice, value-added dairy and plant-based beverages.

The operating segment’s volume performance included 5% growth in both Mexico and Brazil.

Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, partially offset by 3% growth in juice, value-added dairy and plant-based beverages and 1% growth in sparkling flavors.

Trademark Coca-Cola performance was even.

In Asia Pacific, unit case volume increased 3%, which included 4% growth in both sparkling flavors and Trademark Coca-Cola, 10% growth in juice, value-added dairy and plant-based beverages, and 1% growth in water, sports, coffee and tea.

The operating segment reported growth in unit case volume of 11% in the India and Southwest Asia operating unit, 2% in the Greater China and Mongolia operating unit, and 1% in both the ASEAN and South Pacific and the Japan and South Korea operating units.

Unit case volume for Global Ventures increased 4%, driven by growth in energy drinks, partially offset by a 1% decline in both water, sports, coffee and tea as well as juice, value-added dairy and plant-based beverages.

Unit case volume for Bottling Investments decreased 1%, which primarily reflects the impact of refranchising our bottling operations in Vietnam and Cambodia, partially offset by growth in India and South Africa.

Unit case volume in Europe, Middle East and Africa was even, which included 4% growth in water, sports, coffee and tea, offset by a 1% decline in Trademark Coca-Cola and a 5% decline in juice, value-added dairy and plant-based beverages.

Unit case volume in sparkling flavors was even.

The operating segment reported growth in unit case volume of 2% in the Africa operating unit, offset by a decline of 2% in the Eurasia and Middle East operating unit.

Unit case volume performance in the Europe operating unit was even.

In Latin America, unit case volume increased 3%, which included 5% growth in Trademark Coca-Cola and 2% growth in water, sports, coffee and tea, partially offset by a 1% decline in sparkling flavors.

Unit case volume in juice, value-added dairy and plant-based beverages was even.

The operating segment’s volume performance included 8% growth in Brazil and 2% growth in Mexico, partially offset by a decline of 12% in Argentina.

Unit case volume in North America was even, which included 3% growth in juice, value-added dairy and plant-based beverages and 1% growth in both Trademark Coca-Cola and sparkling flavors, offset by a 4% decline in water, sports, coffee and tea.

In Asia Pacific, unit case volume increased 1%, which included 4% growth in sparkling flavors and 3% growth in Trademark Coca-Cola, partially offset by a 4% decline in water, sports, coffee and tea.

Unit case volume in juice, value-added dairy and plant-based beverages was even.

The operating segment reported growth in unit case volume of 7% in the India and Southwest Asia operating unit and 4% in both the ASEAN and South Pacific and the Japan and South Korea operating units, partially offset by a decline of 5% in the Greater China and Mongolia operating unit.

Unit case volume for Global Ventures increased 2%, driven by growth in energy drinks, partially offset by a 6% decline in water, sports, coffee and tea.

Unit case volume in juice, value-added dairy and plant-based beverages was even.

Unit case volume for Bottling Investments decreased 23%, which primarily reflects the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.

Concentrate Sales Volume

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Refer to the heading “Beverage Volume” above for additional information related to changes in our unit case and concentrate sales volumes.

“Price, product and geographic mix” refers to the change in net operating revenues caused by factors such as price changes, the mix of products and packages sold, and the mix of channels and geographic territories where the sales occurred.

“Price, product and geographic mix” refers to the change in net operating revenues caused by factors such as pricing actions taken by the Company and, where applicable, our bottling partners;

the mix of categories, products and packages sold;

and the mix of channels and geographic territories where the sales occurred.

Management believes that providing investors with price, product and geographic mix enhances their understanding about the combined impact that these items had on the Company’s net operating revenues.

The impact of price, product and geographic mix is calculated by subtracting the change in net operating revenues resulting from volume increases or decreases, fluctuations in foreign currency exchange rates, and acquisitions and divestitures from the total change in net operating revenues.

Management believes that providing investors with price, product and geographic mix enhances their understanding about the combined impact that the following items had on the Company’s net operating revenues:

(1) pricing actions taken by the Company and, where applicable, our bottling partners;

(2) changes in the mix of products and packages sold;

(3) changes in the mix of channels where products were sold;

and (4) changes in the mix of geographic territories where products were sold.

Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.

Price, product and geographic mix had a 10% favorable impact on our consolidated net operating revenues.

Price, product and geographic mix had an 11% 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:

• Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing in Türkiye and Zimbabwe, partially offset by unfavorable geographic mix;

• Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, along with favorable channel and product mix, partially offset by increased funding for promotional and marketing support;

• North America — favorable pricing initiatives and favorable channel, package and product mix;

• Asia Pacific — favorable pricing initiatives, partially offset by unfavorable geographic mix and increased funding for promotional and marketing support;

• Global Ventures — favorable pricing initiatives and favorable channel mix, primarily due to the favorable performance of Costa in the United Kingdom, offset by unfavorable product mix and the impact of no longer receiving COVID-related incentives in the current year;

• Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing in Türkiye and Zimbabwe, and favorable geographic mix, partially offset by increased funding for promotional and marketing support;

• Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, partially offset by increased funding for promotional and marketing support;

• North America — favorable pricing initiatives and package and category mix, partially offset by unfavorable channel mix and increased funding for promotional and marketing support;

• Asia Pacific — favorable pricing initiatives and favorable geographic mix, partially offset by unfavorable channel, category and package mix and increased funding for promotional and marketing support;

• Global Ventures — unfavorable product mix, partially offset by favorable pricing initiatives;

• Bottling Investments — favorable pricing initiatives across most markets, partially offset by unfavorable geographic mix.

The favorable pricing initiatives for the year ended December 31, 2023 in all operating segments included carryover pricing increases from the prior year.

The favorable pricing initiatives for the year ended December 31, 2024 in all operating segments included both new and carryover pricing increases from the prior year.

Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 5%.

This unfavorable impact was primarily due to a stronger U.S.

dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar, South African rand, Nigerian naira, Turkish lira, Japanese yen, Indian rupee and Chinese yuan, which had an unfavorable impact on our Latin America;

dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar, Turkish lira and Japanese yen, which had an unfavorable impact on our Latin America;

Europe, Middle East and Africa;

Asia Pacific;

and Bottling Investments operating segments.

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.

dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment.

dollar compared to certain other foreign currencies, including the British pound and euro, which had a favorable impact on our Europe, Middle East and Africa and Global Ventures operating segments.

Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below for additional information about the impact of foreign currency exchange rate fluctuations.

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Our gross profit margin increased to 61.1% in 2024 from 59.5% in 2023.

This increase was primarily due to the impact of favorable pricing initiatives, favorable channel and package mix, and structural changes.

The impact of these items was partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and increased commodity costs.

This increase was primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Selling, General and Administrative Expenses

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Selling, general and administrative expenses increased $610 million, or 4%, in 2024.

This increase was primarily due to higher advertising and other operating expenses, partially offset by decreases in selling and distribution expenses and stock-based compensation expense.

The increase in other operating expenses was primarily due to higher other marketing expenses and increased charitable donations, as well as higher annual incentive expense and other employee benefit costs.

The decrease in selling and distribution expenses was primarily a result of the refranchising of our bottling operations in Vietnam and Cambodia.

The decrease in stock-based compensation expense was primarily due to the cumulative expense that was recorded in 2022 resulting from the impact a more favorable financial outlook had on the outstanding nonvested performance share units.

This increase was primarily due to higher advertising expenses, stock-based compensation expense and other operating expenses, partially offset by a decrease in selling and distribution expenses.

The increase in other operating expenses was primarily due to increased charitable donations, higher employee costs, higher other marketing expenses and an asset impairment charge related to certain prototypes.

The decrease in selling and distribution expenses was primarily due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by increases in Costa expenses.

In 2024, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 4%.

Refer to Note 17 of Notes to Consolidated Financial Statements for more information on the impairment charge.

As of December 31, 2024, we had $234 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 1.6 years as stock-based compensation expense.

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In 2024, the Company recorded other operating charges of $4,163 million.

These charges consisted of $1,702 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife in 2020, $164 million related to the Company’s productivity and reinvestment program and $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific.

In addition, other operating charges included $27 million related to the restructuring of our North America operating unit, $15 million for the amortization of noncompete agreements related to the BodyArmor acquisition in 2021 and $8 million related to tax litigation expense.

These charges consisted of $3,109 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife in 2020, $760 million related to the impairment of our BodyArmor trademark, $133 million related to the Company’s productivity and reinvestment program and $126 million related to the impairment of a trademark in Latin America.

In addition, other operating charges included $15 million for the amortization of noncompete agreements related to the BodyArmor acquisition in 2021, $13 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $2 million of transaction costs related to the sale of a portion of our interest in Coca-Cola Consolidated, Inc.

(“Coke Consolidated”), an equity method investee.

These charges were partially offset by a net benefit of $2 million related to a revision of management’s estimates for tax litigation expense.

In 2023, the Company recorded other operating charges of $1,951 million.

These charges primarily consisted of $1,000 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $85 million related to the Company’s productivity and reinvestment program and $57 million related to the impairment of a trademark in Asia Pacific.

In addition, other operating charges included $38 million related to the restructuring of our North America operating unit and $38 million related to the BodyArmor acquisition, 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 2021.

These charges were partially offset by a net gain of $6 million due to revisions of management’s estimates related to the Company’s strategic realignment initiatives.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the BodyArmor acquisition.

Refer to Note 12 of Notes to Consolidated Financial Statements for additional information related to the tax litigation.

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the fairlife contingent consideration and the impairment charge.

Refer to Note 19 of Notes to Consolidated Financial Statements for additional information on the

Company’s restructuring initiatives.

These charges consisted of $1,702 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $164 million related to the Company’s productivity and reinvestment program and $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations and the sale of a portion of our interest in Coke Consolidated.

Refer to Note 12 of Notes to Consolidated Financial

Statements for additional information related to the tax litigation.

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the fairlife contingent consideration and the impairment charges.

Refer to Note 19 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives.

Refer to Note 20 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.

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* Calculation is not meaningful.

Operating income was $11,311 million in 2023, compared to $10,909 million in 2022, an increase of $402 million, or 4%.

The increase in operating income was primarily driven by concentrate sales volume growth of 2% and favorable pricing initiatives.

These items were partially offset by higher commodity costs;

Operating income was $9,992 million in 2024, compared to $11,311 million in 2023, a decrease of $1,319 million, or 12%.

The decrease in operating income was primarily driven by higher commodity costs;

higher selling, general and administrative expenses;

higher other operating charges;

the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India;

and an unfavorable foreign currency exchange rate impact of 11%.

These items were partially offset by concentrate sales volume growth of 2% and favorable pricing initiatives.

The decrease in our operating margin on a consolidated basis was primarily due to higher commodity costs;

higher selling, general and administrative expenses;

higher other operating charges;

and an unfavorable foreign currency exchange rate impact.

The decrease in our operating margin on a consolidated basis was primarily due to higher commodity costs, increased marketing spending, higher other operating charges and the unfavorable impact of foreign currency exchange rate fluctuations.

The impact of these items was partially offset by favorable pricing initiatives.

The impact of these items was partially offset by favorable pricing initiatives and the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.

In 2024, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 11% due to a stronger U.S.

dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar, Turkish lira, euro, South African rand, and Japanese yen, which had an unfavorable impact on our Latin America;

dollar compared to certain foreign currencies, including the Argentine peso, Mexican peso, Brazilian real, Zimbabwean dollar, Turkish lira, Nigerian naira and Japanese yen, which had an unfavorable impact on our Latin America;

Europe, Middle East and Africa;

Bottling Investments;

and Asia Pacific operating segments.

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dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S.

dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment.

dollar compared to certain other foreign currencies, including the euro and British pound, which had a favorable impact on our Europe, Middle East and Africa and Global Ventures operating segments.

Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

The Company’s Europe, Middle East and Africa operating segment reported operating income of $4,125 million and $4,202 million for the years ended December 31, 2024 and 2023, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 14%.

The decrease in operating income was primarily driven by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 15%, partially offset by favorable pricing initiatives.

Latin America reported operating income of $3,780 million and $3,432 million for the years ended December 31, 2024 and 2023, respectively.

The increase in operating income was primarily driven by concentrate sales volume growth of 6% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 5%.

The increase in operating income was primarily driven by concentrate sales volume growth of 3% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses, higher other operating charges and an unfavorable foreign currency exchange rate impact of 17%.

Operating income for North America for the years ended December 31, 2024 and 2023 was $4,336 million and $4,435 million, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending, higher operating expenses and higher other operating charges.

The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, higher operating expenses and higher other operating charges, partially offset by concentrate sales volume growth of 1% and favorable pricing initiatives.

Asia Pacific’s operating income for the years ended December 31, 2024 and 2023 was $2,148 million and $2,040 million, respectively.

The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending and an unfavorable foreign currency exchange rate impact of 7%, partially offset by favorable pricing initiatives, lower other operating charges and the impact of acquired brands.

The increase in operating income was primarily driven by concentrate sales volume growth of 2%, favorable pricing initiatives, lower other operating charges and the impact of acquired brands and structural changes, partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact of 2%.

Global Ventures’ operating income for the years ended December 31, 2024 and 2023 was $359 million and $329 million, respectively.

The increase in operating income was primarily driven by concentrate sales volume growth of 5%, favorable pricing initiatives, decreased marketing spending and a favorable foreign currency exchange rate impact of 3%, partially offset by higher operating expenses and the impact of no longer receiving COVID-related incentives in the current year.

The increase in operating income was primarily driven by concentrate sales volume growth of 4%, lower commodity costs and a favorable foreign currency exchange rate impact of 1%, partially offset by increased marketing spending and higher operating expenses.

Bottling Investments’ operating income for the years ended December 31, 2024 and 2023 was $496 million and $578 million, respectively.

The increase in operating income was primarily driven by unit case volume growth of 6% and favorable pricing initiatives, partially offset by higher commodity costs, higher operating expenses, an unfavorable foreign currency exchange rate impact of 7% and the refranchising of our bottling operations in Vietnam and Cambodia.

The decrease in operating income was primarily driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India, higher commodity costs, increased marketing spending, higher operating expenses, and an unfavorable foreign currency exchange rate impact of 1%, partially offset by unit case volume growth of 5% and favorable pricing initiatives.

Corporate’s operating loss for the years ended December 31, 2024 and 2023 was $5,252 million and $3,705 million, respectively.

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, higher operating expenses and increased marketing spending.

Operating loss in 2024 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 higher operating expenses, partially offset by decreased marketing spending.

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the fairlife contingent consideration.

1 unchanged sentence

Interest income was $988 million in 2024, compared to $907 million in 2023, an increase of $81 million, or 9%.

This increase was primarily driven by higher returns on our Corporate and certain international investments and higher average investment balances.

This increase was primarily driven by higher average investment balances on our Corporate and certain international investments.

Interest Expense

Interest expense was $1,656 million in 2024, compared to $1,527 million in 2023, an increase of $129 million, or 8%.

This increase was primarily due to the impact of higher interest rates on short-term borrowings and derivative instruments compared to the prior year.

This increase was primarily due to the impact of higher average long-term debt balances compared to the prior year.

Refer to Note 11 of Notes to Consolidated Financial Statements.

2 unchanged sentences

In 2024, equity income was $1,770 million, compared to equity income of $1,691 million in 2023, an increase of $79 million, or 5%.

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 and a favorable foreign currency exchange rate impact.

These favorable impacts were partially offset by a $125 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 increase reflects, among other items, the impact of more favorable operating results reported by certain of our equity method investees in the current year, partially offset by the impact of the sale of our ownership interests in certain of our equity method investees and an unfavorable foreign currency exchange rate impact.

In addition, the Company recorded net charges of $92 million and $159 million during the years ended December 31, 2024 and 2023, respectively, which represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Other Income (Loss) — Net

In 2024, other income (loss) — net was income of $1,992 million.

The Company recorded a net gain of $595 million related to the refranchising of our bottling operations in the Philippines, including the impact of post-closing adjustments, and recognized a net gain of $506 million related to the sale of our ownership interest in an equity method investee in Thailand, including the impact of post-closing adjustments.

The Company also recognized a net gain of $338 million related to the sale of a portion of our interest in Coke Consolidated, a net gain of $303 million related to the refranchising of our bottling operations in certain territories in India, including the impact of post-closing adjustments, and a net gain of $290 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.

Additionally, the Company recognized dividend income of $205 million and net income of $76 million related to the non-service cost components of net periodic benefit cost, of which $21 million was due to pension and other postretirement benefit plan settlement gains.

Other income (loss) — net also included net foreign currency exchange losses of $180 million, $114 million of costs related to our trade accounts receivable factoring program and an other-than-temporary impairment charge of $34 million related to an equity method investee in Latin America.

In 2023, other income (loss) — net was income of $570 million.

The Company recorded a net gain of $439 million related to the refranchising of our bottling operations in Vietnam, a net gain of $289 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 dividend income of $208 million.

Other income (loss) — net also included a net gain of $94 million related to the sale of our ownership interests in our equity method investees in Pakistan and Indonesia and net income of $51 million related to the non-service cost components of net periodic benefit cost.

The Company also recorded net foreign currency exchange losses of $312 million, $83 million of costs related to our trade accounts receivable factoring program and $67 million due to pension and other postretirement benefit plan settlement charges.

Additionally, the Company recorded an other-than-temporary

impairment charge of $39 million related to an equity method investee in Latin America and charges of $32 million related to the restructuring of our manufacturing operations in the United States.

In 2022, other income (loss) — net was a loss of $262 million.

The Company recorded a net loss of $371 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 $236 million, 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.

Additionally, other income (loss) — net included net income of $219 million related to the non-service cost components of net periodic benefit income, a net gain of $153 million related to the refranchising of our bottling operations in Cambodia and dividend income of $111 million.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the sale of our ownership interests in Pakistan and Indonesia and the refranchising of our bottling operations in Vietnam and Cambodia.

Other income (loss) — net also included a net gain of $94 million related to the sale of our ownership interests in our equity method investees in Pakistan and Indonesia and a net loss of $17 million related to the non-service cost components of net periodic benefit cost, of which $67 million was due to pension and other postretirement benefit plan settlement losses.

The Company also recorded net foreign currency exchange losses of $312 million and $83 million of costs related to our trade accounts receivable factoring program.

Additionally, the Company recorded an other-than-temporary impairment charge of $39 million related to an equity method investee in Latin America and charges of $32 million related to the restructuring of our manufacturing operations in the United States.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on our divestitures.

Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities.

1 unchanged sentence

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the restructuring of our manufacturing operations in the United States and the impairment charges.

Refer to Note 20 of Notes to Consolidated Financial Statements for the impact these items had on our operating segments and Corporate.

Our effective tax rate reflects the tax benefits of having significant operations outside the United States, which are generally taxed at rates lower than the statutory U.S.

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We anticipate that we will be able to extend or renew the grants in these locations.

The decision of whether we decide to pursue the renewal of these grants and the impact of the grants going forward is dependent on various factors.

Tax incentive grants favorably impacted our income tax expense by $346 million and $332 million for the years ended December 31, 2024 and 2023, respectively.

12 unchanged sentences

Effective tax rate 18.6 % 17.4 %

On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which the court predominantly sided with the IRS.

On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which it predominantly sided with the IRS.

On November 8, 2023, the Tax Court issued a supplemental opinion, siding with the IRS in concluding both that the blocked-income regulations apply to the Company’s operations and that the Tax Court opinion in 3M Co.

Commissioner (February 9, 2023) controlled as to the validity of those regulations.

The Company strongly disagrees with the Opinions and intends to vigorously defend its position.

The Company strongly disagrees with the Opinions and intends to vigorously defend its positions.

Refer to Note 12 of Notes to Consolidated Financial Statements.

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If the Company were to prevail on all uncertain tax positions, the reversal of this accrual would be a benefit to the Company’s effective tax rate.

Based on current tax laws, the Company’s effective tax rate in 2024 is expected to be approximately 19.2% before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate.

Based on current tax laws, including the impact of several countries enacting global minimum tax regulations, the Company’s effective tax rate in 2025 is expected to be approximately 20.8% before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate.

This rate does not include the impact of the ongoing tax litigation with the IRS, if the Company were not to prevail.

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In December 2021, the OECD issued Pillar Two model rules which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws.

The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023.

While it is uncertain whether the United States will enact legislation to adopt Pillar Two, numerous countries have enacted legislation, or have indicated their intent to adopt legislation, to implement certain aspects of Pillar Two effective January 1, 2024, with general implementation of the remaining global minimum tax rules by January 1, 2025.

The directive requires, with certain limited exceptions, the rules to initially become effective for fiscal years starting on or after December 31, 2023.

Numerous countries have enacted legislation that implemented certain aspects of Pillar Two effective January 1, 2024, while many others have indicated their intent to adopt, or have adopted, legislation effective in 2025.

The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance.

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Our current payment terms with the majority of our suppliers are 120 days.

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.

Certain 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.

We do not believe there is a risk that our payment terms will be shortened in the near future.

12 unchanged sentences

On November 18, 2020, the Tax Court issued the Opinion in which it predominantly sided with the IRS.

On November 8, 2023, the Tax Court issued a supplemental opinion, siding with the IRS in concluding both that certain U.S.

tax regulations (known as the blocked-income regulations) that address the effect of certain Brazilian legal restrictions on royalty payments by the Company’s licensee in Brazil apply to the Company’s operations and that the Tax Court opinion in 3M Co.

Commissioner (February 9, 2023) controlled as to the validity of those regulations.

On August 2, 2024, the Tax Court entered a decision reflecting additional federal income tax of $2.7 billion for the 2007 through 2009 tax years.

With applicable interest, the total liability for the 2007 through 2009 tax years resulting from the Tax Court’s decision is $6.0 billion, for which the IRS issued the Company invoices on September 3, 2024.

The Company paid the IRS Tax Litigation Deposit on September 10, 2024, which stopped interest from accruing on the additional tax due for the 2007 through 2009 tax years.

That amount, plus interest earned, would be refunded in full or in part if the Company’s tax positions are ultimately sustained on appeal.

For the year ended December 31, 2024, the Company recorded net interest income of $77 million related to this tax payment in the line item income taxes in our consolidated statement of income, in accordance with our accounting policy.

The payment of the IRS invoices and the related accrued interest were recorded in the line item other noncurrent assets in our consolidated balance sheet as of December 31, 2024.

On October 22, 2024, the Company appealed the Tax Court’s decision to the U.S.

Court of Appeals for the Eleventh Circuit.

The Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions and intends to vigorously defend our positions utilizing every available avenue of appeal.

While the Company believes that it is more likely than not that we will ultimately prevail in this litigation upon appeal, it is possible that all, or some portion of, the adjustments proposed by the IRS and sustained by the Tax Court could ultimately be upheld.

In the event that all of the adjustments proposed by the IRS were to be ultimately upheld for tax years 2007 through 2009 and the IRS, with the consent of the federal courts, were to decide to apply the Tax Court Methodology to the subsequent years up to and including 2023, the Company currently estimates that the potential aggregate incremental tax and interest liability could be approximately $16 billion as of December 31, 2023.

Additional income tax and interest would continue to accrue until the time any such potential liability, or portion thereof, were to be paid.

The Company and the IRS are now in the process of agreeing on the tax impacts of the Opinions.

Subsequent to the completion of this process, the Tax Court will render a decision in the case.

The Company will have 90 days thereafter to file a notice of appeal to the U.S.

Court of Appeals for the Eleventh Circuit.

The IRS can then seek to collect, and the Company expects to pay, any additional tax related to the 2007 through 2009 tax years reflected in the Tax Court decision (and interest thereon).

The Company currently estimates that the payment to be made at that time related to the 2007 through 2009 tax years, which is included in the above estimate of the potential aggregate incremental tax and interest liability, would be approximately $5.8 billion (including interest accrued through December 31, 2023), plus any additional interest accrued through the time of payment.

Some or all of this amount, plus accrued interest, would be refunded if the Company were to prevail on appeal.

In that event, the Company would not receive a refund of the applicable portion or all of the $6.0 billion it paid in response to the IRS invoices issued in September 2024 and the related accrued interest receivable of $103 million as of December 31, 2024.

Additionally, the Company would likely be subject to significant additional liabilities for subsequent years, which could have a material adverse impact on the Company’s financial position, results of operations and cash flows.

The Company estimates that the potential aggregate remaining incremental tax and interest liability for the tax years 2010 through 2024 could be approximately $12 billion as of December 31, 2024.

Additional income tax and interest on any unpaid potential liabilities for the 2010 through 2024 tax years would continue to

accrue until the time any such potential liability, or portion thereof, were to be paid.

Refer to Note 12 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

2 unchanged sentences

Cash Flows from Operating Activities

Net cash provided by operating activities for the years ended December 31, 2023 and 2022 was $11,599 million and $11,018 million, respectively, an increase of $581 million, or 5%.

This increase was primarily driven by strong operating results and lower marketing payments resulting from year-end accruals.

These items were partially offset by an unfavorable impact due to foreign currency exchange rate fluctuations, higher interest and tax payments in the current year, the unfavorable impact from the extension of certain vendor payment terms in the prior year, payments resulting from the buildup of inventory in the prior year to manage potential supply chain disruptions, payments related to our restructuring initiatives and $167 million of the $275 million milestone payment for fairlife.

Net cash provided by operating activities for the years ended December 31, 2024 and 2023 was $6,805 million and $11,599 million, respectively, a decrease of $4,794 million, or 41%.

This decrease was primarily driven by the $6.0 billion IRS Tax Litigation Deposit, an unfavorable impact due to foreign currency exchange rate fluctuations, higher other tax payments, increased charitable donations, and the reduced operating cash flows resulting from the refranchising of our bottling operations.

The decrease was also impacted by additional annual incentive payments in the current year due to improved business performance in the prior year.

These items were partially offset by strong cash operating results, the transfer of surplus international plan assets from pension trusts to general assets of the Company, payments in the prior year resulting from the buildup of inventory to manage potential supply chain disruptions, increased dividend payments from our equity method investees, and $167 million of the $275 million milestone payment for fairlife in the prior year.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations.

Refer to Note 12 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on the pension transfer.

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the milestone payment for fairlife.

Cash Flows from Investing Activities

Net cash used in investing activities was $3,349 million and $763 million in 2023 and 2022, respectively.

Net cash provided by investing activities was $2,524 million in 2024 and net cash used in investing activities was $3,349 million in 2023.

Purchases of Investments and Proceeds from Disposals of Investments

In 2023, purchases of investments were $6,698 million and proceeds from disposals of investments were $4,354 million, resulting in a net cash outflow of $2,344 million.

In 2024, purchases of investments were $5,640 million and proceeds from disposals of investments were $6,589 million, resulting in a net cash inflow of $949 million.

In 2023, purchases of investments were $6,698 million and proceeds from disposals of investments were $4,354 million, resulting in a net cash outflow of $2,344 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.

4 unchanged sentences

In 2024 and 2023, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $3,485 million and $430 million, respectively.

The activity during 2024 primarily related to the refranchising of certain of our bottling operations and sales of our ownership interests in certain equity method investees.

The activity during 2023 primarily related to sales of our ownership interests in certain equity method investees.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information.

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Collateral (Paid) Received Associated with Hedging Activities — Net

Collateral received associated with our hedging activities during the year ended December 31, 2023 was $366 million and collateral paid associated with our hedging activities during the year ended December 31, 2022 was $1,465 million.

Collateral received associated with our hedging activities during the years ended December 31, 2024 and 2023 was $235 million and $366 million, respectively.

Refer to Note 5 of Notes to Consolidated Financial Statements for additional information on our hedging activities.

1 unchanged sentence

During the years ended December 31, 2024 and 2023, the total cash inflow for other investing activities was $194 million and $39 million, respectively.

The activities during 2022 included cash proceeds of $823 million received in advance of the refranchising of our bottling operations in Vietnam.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on this transaction.

The activity during 2024 included the receipt of a $100 million installment payment on the note receivable related to the sale of our ownership interest in an equity method investee in Pakistan in 2023 and the collection of $69 million of deferred proceeds related to the refranchising of our bottling operations in Vietnam.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on these transactions.

Cash Flows from Financing Activities

8 unchanged sentences

In assessing our credit strength, both rating agencies consider our capital structure (including the amount and maturity dates of our debt) and financial policies as well as the consolidated balance sheet and other financial information of the Company.

In addition, certain rating agencies also consider the financial information of certain bottlers, including CCEP, Coca-Cola Consolidated, Inc., Coca-Cola FEMSA and Coca-Cola Hellenic.

In addition, certain rating agencies also consider the financial information of certain bottlers, including CCEP, Coke Consolidated, Coca-Cola FEMSA and Coca-Cola Hellenic.

While the Company has no legal obligation for the debt of these bottlers, the rating agencies believe the strategic importance of the bottlers to the Company’s business model provides the Company with an incentive to keep these bottlers viable.

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Our debt management policies, in conjunction with our share repurchase program and investment activity, can result in current liabilities exceeding current assets.

During 2023, the Company had issuances of debt of $6,891 million, which included $6,436 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, $222 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, and long-term debt issuances of $233 million, net of related discounts and issuance costs.

During 2023, the Company made payments of debt of $5,034 million, which consisted of $4,591 million of payments related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $443 million.

During 2024, the Company had issuances of debt of $12,061 million, which included $3,309 million of issuances of commercial paper and short-term debt with maturities greater than 90 days and long-term debt issuances of $8,752 million, net of related discounts and issuance costs.

During 2024, the Company made payments of debt of $9,533 million, which consisted of $1,269 million of net payments of commercial paper and short-term debt with maturities of 90 days or less, $5,276 million of payments related to commercial paper and short-term debt with maturities greater than 90 days, and payments of long-term debt of $2,988 million.

During 2024, the Company extinguished $485 million of long-term debt prior to maturity.

Refer to Note 11 of Notes to Consolidated Financial Statements.

On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating LIBOR, ceased to publish certain LIBOR reference rates.

On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating the London Interbank Offered Rate (“LIBOR”), ceased to publish certain LIBOR reference rates.

However, other LIBOR reference rates, including U.S.

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In 2019, our Board of Directors authorized a share repurchase plan of up to 150 million shares (“2019 Plan”) of the Company’s common stock.

In May 2022, the Company reached the maximum number of shares that could be repurchased under the 2012 Plan and thereby completed the plan.

In 2019, our Board of Directors authorized a new share repurchase plan of up to 150 million shares (“2019 Plan”) of the Company’s common stock.

During 2024, the total cash outflow for treasury stock purchases was $1,795 million.

The Company repurchased 36.9 million shares of common stock under the 2019 Plan authorized by our Board of Directors.

The Company repurchased 26.5 million shares of common stock under the 2019 Plan.

These shares were repurchased at an average price per share of $63.91, for a total cost of $1,694 million.

1 unchanged sentence

During 2023, the total cash outflow for treasury stock purchases was $2,289 million.

The Company repurchased 21.3 million shares of common stock under the share repurchase plans authorized by our Board of Directors.

The Company repurchased 36.9 million shares of common stock under the 2019 Plan.

These shares were repurchased at an average price per share of $59.08, for a total cost of $2,177 million.

4 unchanged sentences

At its February 2025 meeting, our Board of Directors increased our regular quarterly dividend to $0.51 per share, equivalent to a full year dividend of $2.04 per share in 2025.

This is our 62 nd consecutive annual increase.

This is our 63 rd consecutive annual increase.

Our annualized common stock dividend was $1.94 per share and $1.84 per share in 2024 and 2023, respectively.

1 unchanged sentence

During the years ended December 31, 2024 and 2023, the total cash outflow for other financing activities was $31 million and $465 million, respectively.

The activities during 2023 included $108 million of the $275 million milestone payment for fairlife.

The activities during 2023 and 2022 also included payments totaling $311 million and $637 million, respectively, related to the BodyArmor acquisition, which included amounts originally held back for indemnification obligations.

Additionally, other financing activities during 2022 included repayments of collateral related to our hedging programs of $403 million.

The activities during 2023 included $108 million of the $275 million milestone payment for fairlife and payments totaling $311 million related to the BodyArmor acquisition, which included amounts originally held back for indemnification obligations.

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the milestone payment for fairlife.

22 unchanged sentences

Held-for-sale and related obligations 8

903 809 64 21 9

Total contractual obligations $ 105,906 $ 28,779 $ 16,531 $ 10,593 $ 50,003

19 unchanged sentences

Refer to Note 17 of Notes to Consolidated Financial Statements.

8 Represents liabilities and contractual obligations that were classified as held for sale related to the Company’s bottling operations in the Philippines and Bangladesh and certain bottling operations in India.

8 Represents liabilities and contractual obligations that were classified as held for sale related to certain bottling operations in India.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information.

11 unchanged sentences

The projected benefit obligation of all pension plans other than the U.S.

qualified pension plan was $2,450 million, and the fair value of the plans’ assets was $3,204 million.

pension plan was $2,176 million, and the fair value of the plans’ assets was $2,674 million.

The Company sponsors various unfunded pension plans outside the United States as well as unfunded nonqualified pension plans covering certain U.S.

1 unchanged sentence

The expected benefit payments for these unfunded pension plans are not included in the table above.

However, we anticipate benefit payments for these unfunded pension plans will be approximately $64 million annually for 2024 and 2025.

However, we anticipate benefit payments for these unfunded pension plans will be approximately $65 million for 2025.

Thereafter, the expected annual benefit payments will gradually decline.

22 unchanged sentences

Due to the geographic diversity of our operations, weakness in some currencies may be offset by strength in other currencies over time.

In 2023 and 2022, the weighted-average exchange rates for foreign currencies in which the Company conducted operations (all operating currencies), and for certain individual currencies, strengthened (weakened) against the U.S.

In 2024 and 2023, our operating income was impacted by the weighted-average fluctuations in exchange rates for foreign currencies in which the Company conducted operations (all operating currencies) and for certain individual currencies.

These currencies strengthened (weakened) against the U.S.

dollar as follows:

13 unchanged sentences

The total impact of foreign currency exchange rate fluctuations on net operating revenues, including the effect of our hedging activities, was a decrease of 5% and 4% in 2024 and 2023, respectively.

The total impact of foreign currency exchange rate fluctuations on income before income taxes, including the effect of our hedging activities, was a decrease of 8% and 6% in 2023 and 2022, respectively.

The total impact of foreign currency exchange rate fluctuations on operating income, including the effect of our hedging activities, was a decrease of 11% and 8% in 2024 and 2023, respectively.

Foreign currency exchange gains and losses are primarily the result of the remeasurement of monetary assets and liabilities from certain currencies into functional currencies.

8 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis