COCA COLA CO 10-Q

Item 1. Financial Statements THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions except per share data) Three Months Ended March 28, 2025 March 29, 2024 Net Operating Revenues $ 11,129 $ 11,300 Cost of goods sold 4,163 4,235 Gross Profit 6,966 7,065 Selling, general and administrative expenses 3,234 3,351 Other operating charges 73 1,573 Operating Income 3,659 2,141 Interest income 180 246 Interest expense 387 382 Equity income (loss) — net 351 354 Other income (loss) — net 254 1,513 Income Before Income Taxes 4,057 3,872 Income taxes 722 687 Consolidated Net Income 3,335 3,185 Less: Net income (loss) attributable to noncontrolling interests 5 8 Net Income Attributable to Shareowners of The Coca-Cola Company $ 3,330 $ 3,177 Basic Net Income Per Share 1 $ 0.77 $ 0.74 Diluted Net Income Per Share 1 $ 0.77 $ 0.74 Average Shares Outstanding — Basic 4,302 4,310 Effect of dilutive securities 11 12 Average Shares Outstanding — Diluted 4,313 4,322 1 Calculated based on net income attributable to shareowners of The Coca-Cola Company. Refer to Notes to Consolidated Financial Statements. 2 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Three Months Ended March 28, 2025 March 29, 2024 Consolidated Net Income $ 3,335 $ 3,185 Other Comprehensive Income: Net foreign currency translation adjustments 619 ( 303 ) Net gains (losses) on derivatives ( 257 ) 49 Net change in unrealized gains (losses) on available-for-sale debt securities 13 5 Net change in pension and other postretirement benefit liabilities 19 ( 4 ) Total Comprehensive Income 3,729 2,932 Less: Comprehensive income (loss) attributable to noncontrolling interests 38 ( 16 ) Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company $ 3,691 $ 2,948 Refer to Notes to Consolidated Financial Statements. 3 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions except par value) March 28, 2025 December 31, 2024 ASSETS Current Assets Cash and cash equivalents $ 8,417 $ 10,828 Short-term investments 3,579 2,020 Total Cash, Cash Equivalents and Short-Term Investments 11,996 12,848 Marketable securities 1,791 1,723 Trade accounts receivable, less allowances of $ 509 and $ 506 , respectively 4,091 3,569 Inventories 5,102 4,728 Prepaid expenses and other current assets 3,198 3,129 Total Current Assets 26,178 25,997 Equity method investments 18,369 18,087 Deferred income tax assets 1,311 1,319 Property, plant and equipment, less accumulated depreciation of $ 9,809 and $ 9,570 , respectively 10,431 10,303 Trademarks with indefinite lives 13,425 13,301 Goodwill 18,333 18,139 Other noncurrent assets 13,669 13,403 Total Assets $ 101,716 $ 100,549 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses $ 16,499 $ 21,715 Loans and notes payable 5,418 1,499 Current maturities of long-term debt 163 648 Accrued income taxes 1,728 1,387 Total Current Liabilities 23,808 25,249 Long-term debt 43,530 42,375 Other noncurrent liabilities 4,313 4,084 Deferred income tax liabilities 2,311 2,469 The Coca-Cola Company Shareowners’ Equity Common stock, $ 0.25 par value; authorized — 11,200 shares; issued — 7,040 shares 1,760 1,760 Capital surplus 19,873 19,801 Reinvested earnings 77,189 76,054 Accumulated other comprehensive income (loss) ( 16,482 ) ( 16,843 ) Treasury stock, at cost — 2,736 and 2,738 shares, respectively ( 56,138 ) ( 55,916 ) Equity Attributable to Shareowners of The Coca-Cola Company 26,202 24,856 Equity attributable to noncontrolling interests 1,552 1,516 Total Equity 27,754 26,372 Total Liabilities and Equity $ 101,716 $ 100,549 Refer to Notes to Consolidated Financial Statements. 4 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Three Months Ended March 28, 2025 March 29, 2024 Operating Activities Consolidated net income $ 3,335 $ 3,185 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 267 262 Stock-based compensation expense 63 68 Deferred income taxes 95 ( 173 ) Equity (income) loss — net of dividends ( 264 ) ( 58 ) Foreign currency adjustments 50 17 Significant (gains) losses — net ( 331 ) ( 1,401 ) Other operating charges — 1,532 Other items 104 ( 59 ) Net change in operating assets and liabilities ( 8,521 ) ( 2,845 ) Net Cash Provided by (Used in) Operating Activities ( 5,202 ) 528 Investing Activities Purchases of investments ( 2,507 ) ( 2,552 ) Proceeds from disposals of investments 1,005 444 Acquisitions of businesses, equity method investments and nonmarketable securities ( 42 ) ( 8 ) Proceeds from disposals of businesses, equity method investments and nonmarketable securities 748 2,893 Purchases of property, plant and equipment ( 309 ) ( 370 ) Proceeds from disposals of property, plant and equipment 8 14 Collateral (paid) received associated with hedging activities — net ( 15 ) ( 105 ) Other investing activities 45 14 Net Cash Provided by (Used in) Investing Activities ( 1,067 ) 330 Financing Activities Issuances of loans, notes payable and long-term debt 5,436 2,285 Payments of loans, notes payable and long-term debt ( 1,599 ) ( 1,366 ) Issuances of stock 159 290 Purchases of stock for treasury ( 370 ) ( 702 ) Dividends ( 89 ) ( 99 ) Other financing activities ( 105 ) ( 2 ) Net Cash Provided by (Used in) Financing Activities 3,432 406 Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents 163 ( 138 ) Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period ( 2,674 ) 1,126 Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 11,488 9,692 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Period 8,814 10,818 Less: Restricted cash and restricted cash equivalents at end of period 397 375 Cash and Cash Equivalents at End of Period $ 8,417 $ 10,443 Refer to Notes to Consolidated Financial Statements. 5 THE COCA-COLA COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31, 2024. When used in these notes, the terms “The Coca-Cola Company,” “Company,” “we,” “us” and “our” mean The Coca-Cola Company and all entities included in our consolidated financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 28, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. Sales of our ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters typically accounting for the highest sales volumes. The volume of sales in the beverage business may be affected by weather conditions. Each of our quarterly reporting periods, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The first quarter of 2025 and the first quarter of 2024 ended on March 28, 2025 and March 29, 2024, respectively. Our fourth quarter and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls. Advertising Costs The Company’s accounting policy related to advertising costs for annual reporting purposes is to expense production costs of print, radio, television and other advertisements as of the first date the advertisements take place. All other marketing expenditures are expensed in the annual period in which the expenditure is incurred. For quarterly reporting purposes, we allocate our estimated full year marketing expenditures that benefit multiple quarters to each of those quarters. We use the proportion of each quarter’s actual unit case volume to the estimated full year unit case volume as the basis for the allocation. This methodology results in our marketing expenditures being recognized at a standard rate per unit case. At the end of each quarter, we review our estimated full year unit case volume and our estimated full year marketing expenditures that benefit multiple quarters in order to evaluate if a change in estimate is necessary. The impact of any change in the full year estimate is recognized in the quarter in which the change in estimate occurs. Our full year marketing expenditures are not impacted by this interim accounting policy. Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents or restricted cash equivalents, as applicable. Restricted cash and restricted cash equivalents generally consist of amounts held by our captive insurance companies, which are included in the line item other noncurrent assets in our consolidated balance sheet, and when applicable, cash and cash equivalents related to assets held for sale are included in the line item prepaid expenses and other current assets in our consolidated balance sheet. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor our concentrations of credit risk. Refer to Note 2 for additional information on our assets held for sale and Note 4 for additional information on our captive insurance companies. The following tables provide a summary of cash, cash equivalents, restricted cash and restricted cash equivalents that constitute the total amounts shown in our consolidated statements of cash flows (in millions): March 28, 2025 December 31, 2024 Cash and cash equivalents $ 8,417 $ 10,828 Restricted cash and restricted cash equivalents 397 660 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 8,814 $ 11,488 6 March 29, 2024 December 31, 2023 Cash and cash equivalents $ 10,443 $ 9,366 Restricted cash and restricted cash equivalents 375 326 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 10,818 $ 9,692 NOTE 2: ACQUISITIONS AND DIVESTITURES Acquisitions Our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 42 million during the three months ended March 28, 2025, which included $ 30 million of investments in alternative energy limited partnerships. Refer to Note 15 for additional information on these investments. Our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 8 million during the three months ended March 29, 2024. Divestitures Proceeds from disposals of businesses, equity method investments and nonmarketable securities during the three months ended March 28, 2025 totaled $ 748 million, which primarily related to the sale of a portion of our ownership interest in Coca-Cola Europacific Partners plc, an equity method investee (“CCEP”), for which we received cash proceeds of $ 741 million and recognized a net gain of $ 331 million. Proceeds from disposals of businesses, equity method investments and nonmarketable securities during the three months ended March 29, 2024 totaled $ 2,893 million. The Company refranchised its bottling operations in certain territories in India in January and February 2024, for which we received net cash proceeds of $ 476 million and recognized a net gain of $ 293 million. The Company refranchised its bottling operations in Bangladesh to Coca-Cola İçecek A.Ş., an equity method investee, in February 2024, for which we received net cash proceeds of $ 27 million and a note receivable of $ 29 million and recognized a net loss of $ 18 million, primarily due to the related reversal of cumulative translation adjustments. During the three months ended March 28, 2025, the Company recognized an additional loss of $ 14 million related to post-closing adjustments and a corresponding reduction in the outstanding note receivable balance. Additionally, in February 2024, the Company refranchised its bottling operations in the Philippines to CCEP and a local business partner, for which we received net cash proceeds of $ 1,656 million and recognized a net gain of $ 599 million. We also sold our ownership interest in an equity method investee in Thailand, for which we received net cash proceeds of $ 728 million and recognized a net gain of $ 516 million. These gains and losses were recorded in the line item other income (loss) — net in our consolidated statements of income. Assets and Liabilities Held for Sale As of March 28, 2025 and December 31, 2024, the Company’s bottling operations in certain territories in India met the criteria to be classified as held for sale. As a result, we were required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to sell. As the fair values less any costs to sell exceeded the carrying values, the related assets and liabilities were recorded at their carrying values. These assets and liabilities were included in the Bottling Investments operating segment. The following table presents information related to the major classes of assets and liabilities that were classified as held for sale and were included in the line items prepaid expenses and other current assets and accounts payable and accrued expenses, respectively, in our consolidated balance sheet (in millions): March 28, 2025 December 31, 2024 Inventories $ 12 $ 23 Property, plant and equipment — net 107 108 Assets held for sale $ 119 $ 131 Accounts payable and accrued expenses $ 2 $ 2 Other noncurrent liabilities — 1 Liabilities held for sale $ 2 $ 3 7 NOTE 3 : NET OPERATING REVENUES The following table presents net operating revenues disaggregated between the United States and International and further by line of business (in millions): United States International Total Three Months Ended March 28, 2025 Concentrate operations $ 1,927 $ 5,256 $ 7,183 Finished product operations 2,326 1,620 3,946 Total $ 4,253 $ 6,876 $ 11,129 Three Months Ended March 29, 2024 Concentrate operations $ 2,125 $ 4,530 $ 6,655 Finished product operations 1,993 2,652 4,645 Total $ 4,118 $ 7,182 $ 11,300 Refer to Note 17 for disclosures of net operating revenues by operating segment and Corporate. NOTE 4: INVESTMENTS Equity Securities The carrying values of our equity securities were included in the following line items in our consolidated balance sheets (in millions): Fair Value with Changes Recognized in Income Measurement Alternative — No Readily Determinable Fair Value March 28, 2025 Marketable securities $ 405 $ — Other noncurrent assets 1,651 42 Total equity securities $ 2,056 $ 42 December 31, 2024 Marketable securities $ 418 $ — Other noncurrent assets 1,616 40 Total equity securities $ 2,034 $ 40 The calculation of net unrealized gains and losses recognized during the period related to equity securities still held at the end of the period is as follows (in millions): Three Months Ended March 28, 2025 March 29, 2024 Net gains (losses) recognized during the period related to equity securities $ ( 15 ) $ 183 Less: Net gains (losses) recognized during the period related to equity securities sold during the period 8 49 Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period $ ( 23 ) $ 134 8 Debt Securities Our debt securities consisted of the following (in millions): Gross Unrealized Estimated Fair Value Cost Gains Losses March 28, 2025 Trading securities $ 47 $ 1 $ — $ 48 Available-for-sale securities 1,795 21 ( 101 ) 1,715 Total debt securities $ 1,842 $ 22 $ ( 101 ) $ 1,763 December 31, 2024 Trading securities $ 45 $ 1 $ ( 1 ) $ 45 Available-for-sale securities 1,728 21 ( 118 ) 1,631 Total debt securities $ 1,773 $ 22 $ ( 119 ) $ 1,676 The carrying values of our debt securities were included in the following line items in our consolidated balance sheets (in millions): March 28, 2025 December 31, 2024 Trading Securities Available-for-Sale Securities Trading Securities Available-for-Sale Securities Marketable securities $ 48 $ 1,338 $ 45 $ 1,260 Other noncurrent assets — 377 — 371 Total debt securities $ 48 $ 1,715 $ 45 $ 1,631 The contractual maturities of these available-for-sale debt securities as of March 28, 2025 were as follows (in millions): Cost Estimated Fair Value Within 1 year $ 333 $ 331 After 1 year through 5 years 1,245 1,174 After 5 years through 10 years 38 45 After 10 years 179 165 Total $ 1,795 $ 1,715 The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations. The sale and/or maturity of available-for-sale debt securities resulted in the following realized activity (in millions): Three Months Ended March 28, 2025 March 29, 2024 Gross gains $ 1 $ 1 Gross losses ( 2 ) ( 7 ) Proceeds 137 383 Captive Insurance Companies In accordance with local insurance regulations, our consolidated captive insurance companies are required to meet and maintain minimum solvency capital requirements. The Company elected to invest a majority of its solvency capital in a portfolio of marketable equity and debt securities. These securities are included in the disclosures above. The Company uses one of our consolidated captive insurance companies to reinsure group annuity insurance contracts that cover the obligations of certain of our European and Canadian pension plans. This captive’s solvency capital funds included total equity and debt securities of $ 1,923 million and $ 1,883 million as of March 28, 2025 and December 31, 2024, respectively, which were classified in the line item other noncurrent assets in our consolidated balance sheets because the assets were not available to satisfy our current obligations. 9 NOTE 5: INVENTORIES Inventories consisted of the following (in millions): March 28, 2025 December 31, 2024 Raw materials and packaging $ 3,044 $ 2,794 Finished goods 1,641 1,524 Other 417 410 Total inventories $ 5,102 $ 4,728 NOTE 6: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the fair values of the Company’s derivative instruments that were designated and qualified as part of a hedging relationship (in millions): Fair Value 1,2 Derivatives Designated as Hedging Instruments Financial Statement Line Item Impacted 1 March 28, 2025 December 31, 2024 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 99 $ 311 Foreign currency contracts Other noncurrent assets 32 82 Commodity contracts Prepaid expenses and other current assets 3 2 Interest rate contracts Other noncurrent assets 45 27 Total assets $ 179 $ 422 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 41 $ 14 Foreign currency contracts Other noncurrent liabilities 61 39 Interest rate contracts Accounts payable and accrued expenses 1 — Interest rate contracts Other noncurrent liabilities 859 922 Total liabilities $ 962 $ 975 1 All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 16 for additional information related to the estimated fair value. 10 The following table presents the fair values of the Company’s derivative instruments that were not designated as hedging instruments (in millions): Fair Value 1,2 Derivatives Not Designated as Hedging Instruments Financial Statement Line Item Impacted 1 March 28, 2025 December 31, 2024 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 58 $ 152 Foreign currency contracts Other noncurrent assets 12 8 Commodity contracts Prepaid expenses and other current assets 6 7 Other derivative instruments Prepaid expenses and other current assets 7 — Total assets $ 83 $ 167 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 90 $ 86 Foreign currency contracts Other noncurrent liabilities 4 12 Commodity contracts Accounts payable and accrued expenses 32 40 Other derivative instruments Accounts payable and accrued expenses — 6 Total liabilities $ 126 $ 144 1 All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 16 for additional information related to the estimated fair value. Credit Risk Associated with Derivatives We have established strict counterparty credit guidelines and enter into transactions only with financial institutions of investment grade or better. We monitor counterparty exposures regularly and review any downgrade in credit rating immediately. If a downgrade in the credit rating of a counterparty were to occur, we have provisions requiring collateral for substantially all of our transactions. To mitigate pre-settlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. In addition, the Company’s master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Furthermore, for certain derivative financial instruments, the Company has agreements with counterparties that require collateral to be exchanged based on changes in the fair value of the instruments. The Company classifies collateral payments and receipts as investing cash flows when the collateral account is in an asset position and as financing cash flows when the collateral account is in a liability position. As a result of these factors, we consider the risk of counterparty default to be minimal. Cash Flow Hedging Strategy The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The changes in the fair values of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into the line item in our consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. The changes in the fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into earnings. The maximum length of time for which the Company hedges its exposure to the variability in future cash flows is typically three years . The Company maintains a foreign currency cash flow hedging program to reduce the risk that our U.S. dollar net cash inflows from sales outside the United States and U.S. dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange rates. We enter into forward contracts and purchase foreign currency options and collars (principally euro, British pound and Japanese yen) to hedge certain portions of forecasted cash flows denominated in foreign currencies. When the U.S. dollar strengthens against the foreign currencies, the decline in the present value of future foreign currency cash flows is partially offset by gains in the fair value of the derivative instruments. Conversely, when the U.S. dollar weakens, the increase in the present value of future foreign currency cash flows is partially offset by losses in the fair value of the derivative instruments. The total notional values of derivatives that were designated and qualified for the Company’s foreign currency cash flow hedging program were $ 11,971 million and $ 9,206 million as of March 28, 2025 and December 31, 2024, respectively. 11 The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency denominated debt and other monetary assets or liabilities due to fluctuations in foreign currency exchange rates. For this hedging program, the Company recognizes in earnings each period the changes in carrying values of these foreign currency denominated assets and liabilities due to fluctuations in exchange rates. The changes in fair values of the cross-currency swap derivatives are recorded in AOCI with an immediate reclassification into earnings for the changes in fair values attributable to fluctuations in foreign currency exchange rates. The total notional value of derivatives that were designated as cash flow hedges for the Company’s foreign currency denominated assets and liabilities was $ 557 million as of both March 28, 2025 and December 31, 2024. The Company has entered into commodity futures contracts and other derivative instruments on various commodities to mitigate the price risk associated with forecasted purchases of materials used in our manufacturing process. These derivative instruments were designated as part of the Company’s commodity cash flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of certain commodities. The total notional values of derivatives that were designated and qualified for this program were $ 87 million and $ 58 million as of March 28, 2025 and December 31, 2024, respectively. Our Company monitors our mix of short-term debt and long-term debt regularly. We manage our risk related to interest rate fluctuations through the use of derivative financial instruments. From time to time, the Company has entered into interest rate swap agreements and has designated these instruments as part of the Company’s interest rate cash flow hedging program. The objective of this hedging program is to mitigate the risk of adverse changes in benchmark interest rates on the Company’s future interest payments. The total notional value of derivatives that were designated and qualified for this program was $ 1,000 million as of March 28, 2025. There were no derivatives that were designated as part of the Company’s interest rate cash flow hedging program as of December 31, 2024. The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income (“OCI”), AOCI and earnings (in millions): Gain (Loss) Recognized in OCI Financial Statement Line Item Impacted Gain (Loss) Reclassified from AOCI into Income Three Months Ended March 28, 2025 Foreign currency contracts $ ( 269 ) Net operating revenues $ 41 Foreign currency contracts ( 7 ) Cost of goods sold 3 Foreign currency contracts — Interest expense ( 1 ) Foreign currency contracts ( 4 ) Other income (loss) — net 24 Commodity contracts 3 Cost of goods sold 3 Interest rate contracts — Interest expense ( 1 ) Total $ ( 277 ) $ 69 Three Months Ended March 29, 2024 Foreign currency contracts $ 48 Net operating revenues $ ( 17 ) Foreign currency contracts 11 Cost of goods sold 3 Foreign currency contracts — Interest expense ( 1 ) Foreign currency contracts ( 15 ) Other income (loss) — net ( 28 ) Commodity contracts 1 Cost of goods sold ( 1 ) Interest rate contracts 1 Interest expense — Total $ 46 $ ( 44 ) As of March 28, 2025, the Company estimates that it will reclassify into earnings during the next 12 months net gains of $ 4 million from the pretax amount recorded in AOCI as the anticipated cash flows occur. Fair Value Hedging Strategy The Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The Company also uses cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debt relating to fluctuations in foreign currency exchange rates and benchmark interest rates. The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the fair values of the hedged items are recognized in earnings. As a result, any difference is reflected in earnings as ineffectiveness. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately 12 if the hedged item has matured or has been extinguished. The total notional values of derivatives that were designated and qualified as fair value hedges of this type were $ 12,984 million and $ 12,628 million as of March 28, 2025 and December 31, 2024, respectively. The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions): Hedging Instruments and Hedged Items Financial Statement Line Item Impacted Gain (Loss) Recognized in Income Three Months Ended March 28, 2025 March 29, 2024 Interest rate contracts Interest expense $ 80 $ ( 145 ) Fixed-rate debt Interest expense ( 76 ) 147 Net impact of fair value hedging instruments $ 4 $ 2 The following table summarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships (in millions): Cumulative Amount of Fair Value Hedging Adjustments 1 Carrying Values of Hedged Items Included in the Carrying Values of Hedged Items Remaining for Which Hedge Accounting Has Been Discontinued Balance Sheet Location of Hedged Items March 28, 2025 December 31, 2024 March 28, 2025 December 31, 2024 March 28, 2025 December 31, 2024 Long-term debt $ 12,251 $ 11,824 $ ( 858 ) $ ( 915 ) $ 122 $ 130 1 Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations. Hedges of Net Investments in Foreign Operations Strategy The Company uses forward contracts and a portion of its foreign currency denominated debt, a non-derivative financial instrument, to protect the value of our net investments in a number of foreign operations. For derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations, the changes in the fair values of the derivative financial instruments are recognized in net foreign currency translation adjustments, a component of AOCI, to offset the changes in the values of the net investments being hedged. For non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations, the changes in the carrying values of the designated portions of the non-derivative financial instruments due to fluctuations in foreign currency exchange rates are recorded in net foreign currency translation adjustments. Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change. The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions): Notional Values Gain (Loss) Recognized in OCI as of Three Months Ended March 28, 2025 December 31, 2024 March 28, 2025 March 29, 2024 Foreign currency contracts $ — $ 59 $ ( 1 ) $ 2 Foreign currency denominated debt 13,826 13,221 ( 605 ) 272 Total $ 13,826 $ 13,280 $ ( 606 ) $ 274 The Company reclassified a gain of $ 3 million related to net investment hedges from AOCI into earnings during the three months ended March 29, 2024. The Company did not reclassify any gains or losses during the three months ended March 28, 2025. In addition, the Company did not have any ineffectiveness related to net investment hedges during the three months ended March 28, 2025 and March 29, 2024. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in the line item other investing activities in our consolidated statement of cash flows. 13 Economic (Non-Designated) Hedging Strategy In addition to derivative instruments that have been designated and qualify for hedge accounting, the Company also uses certain derivatives as economic hedges of foreign currency, interest rate and commodity exposure. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in the fair values of economic hedges are immediately recognized in earnings. The Company uses foreign currency economic hedges to offset the earnings impact that fluctuations in foreign currency exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. The changes in the fair values of economic hedges used to offset those monetary assets and liabilities are immediately recognized in earnings in the line item other income (loss) — net in our consolidated statement of income. In addition, we use foreign currency economic hedges to minimize the variability in cash flows associated with fluctuations in foreign currency exchange rates, including those related to certain acquisition and divestiture activities. The changes in the fair values of economic hedges used to offset the variability in U.S. dollar net cash flows are immediately recognized in earnings in the line items net operating revenues, cost of goods sold or other income (loss) — net in our consolidated statement of income, as applicable. The total notional values of derivatives related to our foreign currency economic hedges were $ 9,694 million and $ 8,620 million as of March 28, 2025 and December 31, 2024, respectively. The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process and vehicle fuel. The changes in the fair values of these economic hedges are immediately recognized in earnings in the line items net operating revenues, cost of goods sold, or selling, general and administrative expenses in our consolidated statement of income, as applicable. The total notional values of derivatives related to our economic hedges of this type were $ 619 million and $ 328 million as of March 28, 2025 and December 31, 2024, respectively. The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions): Derivatives Not Designated as Hedging Instruments Financial Statement Line Item Impacted Gain (Loss) Recognized in Income Three Months Ended March 28, 2025 March 29, 2024 Foreign currency contracts Net operating revenues $ ( 71 ) $ 61 Foreign currency contracts Cost of goods sold 21 14 Foreign currency contracts Other income (loss) — net 29 38 Commodity contracts Cost of goods sold 4 ( 19 ) Other derivative instruments Selling, general and administrative expenses 1 6 Total $ ( 16 ) $ 100 NOTE 7: SUPPLY CHAIN FINANCE PROGRAM Our current payment terms with the majority of our suppliers are 120 days. Certain 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. The SCF program is available to suppliers of goods and services included in cost of goods sold and selling, general and administrative expenses in our consolidated statement of income. 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. 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. Then, if they are participating in the SCF program, our suppliers sell their invoices to the financial institutions. Our suppliers’ voluntary participation in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. 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. 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. 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. As of March 28, 2025 and December 31, 2024, the amount of obligations outstanding that the Company has confirmed as valid to the financial institutions under the SCF program was $ 1,231 million and $ 1,330 million, respectively. 14 NOTE 8: DEBT AND BORROWING ARRANGEMENTS Loans and notes payable consist primarily of commercial paper issued in the United States. As of March 28, 2025 and December 31, 2024, we had $ 5,045 million and $ 1,139 million, respectively, in outstanding commercial paper borrowings. During the three months ended March 28, 2025, our bottling operations in Africa refinanced $ 485 million of current maturities of long-term debt into long-term debt . NOTE 9: COMMITMENTS AND CONTINGENCIES Guarantees As of March 28, 2025, we were contingently liable for guarantees of indebtedness owed by third parties of $ 726 million, of which $ 56 million was related to variable interest entities. Our guarantees are primarily related to third-party customers, bottlers and vendors and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant. These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is remote. Concentrations of Credit Risk We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations. Legal Contingencies The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings (excluding tax audit claims) will not have a material adverse effect on the Company taken as a whole. Tax Audits The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These uncertain tax matters may result in the assessment of additional taxes. On September 17, 2015, the Company received a Statutory Notice of Deficiency (“Notice”) from the United States Internal Revenue Service (“IRS”) seeking approximately $ 3.3 billion of additional federal income tax for years 2007 through 2009. In the Notice, the IRS stated its intent to reallocate over $ 9 billion of income to the U.S. parent company from certain of its foreign affiliates that the U.S. parent company licensed to manufacture, distribute, sell, market and promote its products in certain non-U.S. markets. The Notice concerned the Company’s transfer pricing between its U.S. parent company and certain of its foreign affiliates. IRS rules governing transfer pricing require arm’s-length pricing of transactions between related parties such as the Company’s U.S. parent and its foreign affiliates. To resolve the same transfer pricing issue for the tax years 1987 through 1995, the Company and the IRS had agreed in 1996 on an arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as compensation from its foreign licensees. The Company and the IRS memorialized this accord in a closing agreement resolving that dispute (“Closing Agreement”). The Closing Agreement provided that, absent a change in material facts or circumstances or relevant federal tax law, in calculating the Company’s income taxes going forward, the Company would not be assessed penalties by the IRS for using the agreed-upon tax calculation methodology that the Company and the IRS agreed would be used for the 1987 through 1995 tax years. The IRS audited and confirmed the Company’s compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006. The September 17, 2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favor of an entirely different methodology, without prior notice to the Company. Using the new tax calculation methodology, the IRS reallocated over $ 9 billion of income to the U.S. parent company from its foreign licensees for tax years 2007 through 2009. Consistent with the Closing Agreement, the IRS did not assert penalties, and it has yet to do so. The IRS designated the Company’s matter for litigation on October 15, 2015. Litigation designation is an IRS determination that forecloses to a company any and all alternative means for resolution of a tax dispute. As a result of the IRS’ designation of 15 the Company’s matter for litigation, the Company was forced to either accept the IRS’ newly imposed tax assessment and pay the full amount of the asserted tax or litigate the matter in the federal courts. The matter remains subject to the IRS’ litigation designation, preventing the Company from any attempt to settle or otherwise mutually resolve the matter with the IRS. The Company consequently initiated litigation by filing a petition in the U.S. Tax Court (“Tax Court”) in December 2015, challenging the tax adjustments enumerated in the Notice. Prior to trial, the IRS increased its transfer pricing adjustment by $ 385 million, resulting in an additional tax adjustment of $ 135 million. The Company obtained a summary judgment in its favor on a different matter related to Mexican foreign tax credits, which thereafter effectively reduced the IRS’ potential tax adjustment by $ 138 million. The trial was held in the Tax Court from March through May 2018, and final post-trial briefs were filed and exchanged in April 2019. On November 18, 2020, the Tax Court issued an opinion (“Opinion”) in which it predominantly sided with the IRS but agreed with the Company that dividends previously paid by the foreign licensees to the U.S. parent company in reliance upon the Closing Agreement should continue to be allowed to offset royalties, including those that would become payable to the Company in accordance with the Opinion. On November 8, 2023, the Tax Court issued a supplemental opinion (together with the original Tax Court opinion, “Opinions”), 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. & Subs. v. Commissioner (February 9, 2023) controlled as to the validity of those regulations. The Company believes that the IRS and the Tax Court misinterpreted and misapplied the applicable regulations in reallocating income earned by the Company’s foreign licensees to increase the Company’s U.S. tax. Moreover, the Company believes that the retroactive imposition of such tax liability using a calculation methodology different from that previously agreed upon by the IRS and the Company, and audited by the IRS for over a decade, is unconstitutional. The Company intends to assert its claims on appeal and vigorously defend its positions. In addition, for its litigation with the IRS and for purposes of its appeal of the Tax Court decision, the Company continues to evaluate the implications of several significant administrative law cases recently decided by the U.S. Supreme Court, most notably Loper Bright v. Raimondo , which overruled Chevron U.S.A., Inc. v. NRDC (“ Chevron case”). Since 1984, the Chevron case had required that courts defer to agency interpretations of statutes and agency action. In Ohio v. EPA and Garland v. Cargill , two of the recent decisions, the U.S. Supreme Court demonstrated how courts are to rule on agency interpretations and actions without the deference previously required by the Chevron case . 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 those invoices (“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 three months ended March 28, 2025, the Company recorded net interest income of $ 53 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 sheets as of March 28, 2025 and 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 filed its principal appellate brief with the U.S. Court of Appeals for the Eleventh Circuit on March 12, 2025. In determining the amount of tax reserve to be recorded as of December 31, 2020, the Company completed the required two-step evaluation process prescribed by Accounting Standards Codification 740, Accounting for Income Taxes . In doing so, we consulted with outside advisors, and we reviewed and considered relevant laws, rules, and regulations, including, but not limited to, the Opinions and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal. We concluded, based on the technical and legal merits of the Company’s tax positions, that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal. In addition, we considered a number of alternative transfer pricing methodologies, including the methodology asserted by the IRS and affirmed in the Opinions (“Tax Court Methodology”), that could be applied by the courts upon final resolution of the litigation. Based on the required probability analysis, we determined the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s tax. As a result of this analysis, we recorded a tax reserve of $ 438 million during the year ended December 31, 2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinions and the Company’s analysis. 16 The Company’s conclusion that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal is unchanged as of March 28, 2025. However, based on the required probability analysis and the accrual of interest through the current reporting period, we updated our tax reserve as of March 28, 2025 to $ 483 million. While the Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions, it is possible that some portion or all of the adjustments proposed by the IRS and sustained by the Tax Court could ultimately be upheld. 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 $ 171 million as of March 28, 2025. 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 calculated the potential impact of applying the Tax Court Methodology to reallocate income from foreign licensees potentially covered within the scope of the Opinions for the 2010 through 2024 tax years, assuming such methodology were to be ultimately upheld by the courts, and the IRS were to decide to apply that methodology to subsequent years, with consent of the federal courts. This impact would include taxes and interest accrued through December 31, 2024. The calculations incorporated the estimated impact of correlative adjustments to the previously accrued transition tax payable under the 2017 Tax Cuts and Jobs Act. 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. The Company estimates the impact of the continued application of the Tax Court Methodology for the three months ended March 28, 2025 would increase the potential aggregate incremental tax and interest liability by approximately $ 400 million. We currently project the continued application of the Tax Court Methodology in 2025, assuming similar facts and circumstances as of December 31, 2024, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5 %. Risk Management Programs The Company has numerous global insurance programs in place to help protect the Company from the risk of loss. In general, we are self-insured for large portions of many different types of claims; however, we do use commercial insurance above our self-insured retentions to reduce the Company’s risk of catastrophic loss. Our reserves for the Company’s self-insured losses are estimated using actuarial methods and assumptions of the insurance industry, adjusted for our specific expectations based on our claims history. Our self-insurance reserves totaled $ 168 million as of both March 28, 2025 and December 31, 2024 . NOTE 10: OTHER COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of shareowners’ equity, which also includes our proportionate share of equity method investees’ AOCI. OCI attributable to noncontrolling interests is allocated to, and included in, our consolidated balance sheet as part of the line item equity attributable to noncontrolling interests. AOCI attributable to shareowners of The Coca-Cola Company consisted of the following, net of tax (in millions): March 28, 2025 December 31, 2024 Net foreign currency translation adjustments $ ( 15,024 ) $ ( 15,610 ) Accumulated net gains (losses) on derivatives ( 141 ) 116 Unrealized net gains (losses) on available-for-sale debt securities ( 51 ) ( 64 ) Adjustments to pension and other postretirement benefit liabilities ( 1,266 ) ( 1,285 ) Accumulated other comprehensive income (loss) $ ( 16,482 ) $ ( 16,843 ) 17 The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests (in millions): Three Months Ended March 28, 2025 Shareowners of The Coca-Cola Company Noncontrolling Interests Total Consolidated net income $ 3,330 $ 5 $ 3,335 Other comprehensive income: Net foreign currency translation adjustments 586 33 619 Net gains (losses) on derivatives 1 ( 257 ) — ( 257 ) Net change in unrealized gains (losses) on available-for-sale debt securities 2 13 — 13 Net change in pension and other postretirement benefit liabilities 19 — 19 Total comprehensive income (loss) $ 3,691 $ 38 $ 3,729 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. The following tables present OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees’ OCI (in millions): Three Months Ended March 28, 2025 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 8 $ ( 9 ) $ ( 1 ) Reclassification adjustments recognized in net income 34 ( 2 ) 32 Gains (losses) on intra-entity transactions that are of a long-term investment nature 1,010 — 1,010 Gains (losses) on net investment hedges arising during the period 1 ( 606 ) 151 ( 455 ) Net foreign currency translation adjustments $ 446 $ 140 $ 586 Derivatives: Gains (losses) arising during the period $ ( 274 ) $ 69 $ ( 205 ) Reclassification adjustments recognized in net income ( 69 ) 17 ( 52 ) Net gains (losses) on derivatives 1 $ ( 343 ) $ 86 $ ( 257 ) Available-for-sale debt securities: Unrealized gains (losses) arising during the period $ 16 $ ( 4 ) $ 12 Reclassification adjustments recognized in net income 1 — 1 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ 17 $ ( 4 ) $ 13 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ ( 17 ) $ 10 $ ( 7 ) Reclassification adjustments recognized in net income 33 ( 7 ) 26 Net change in pension and other postretirement benefit liabilities $ 16 $ 3 $ 19 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 136 $ 225 $ 361 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 18 Three Months Ended March 29, 2024 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ ( 34 ) $ ( 35 ) $ ( 69 ) Reclassification adjustments recognized in net income 103 — 103 Gains (losses) on intra-entity transactions that are of a long-term investment nature ( 518 ) — ( 518 ) Gains (losses) on net investment hedges arising during the period 1 274 ( 69 ) 205 Net foreign currency translation adjustments $ ( 175 ) $ ( 104 ) $ ( 279 ) Derivatives: Gains (losses) arising during the period $ 27 $ ( 11 ) $ 16 Reclassification adjustments recognized in net income 44 ( 11 ) 33 Net gains (losses) on derivatives 1 $ 71 $ ( 22 ) $ 49 Available-for-sale debt securities: Reclassification adjustments recognized in net income $ 6 $ ( 1 ) $ 5 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ 6 $ ( 1 ) $ 5 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ ( 13 ) $ ( 8 ) $ ( 21 ) Reclassification adjustments recognized in net income 22 ( 5 ) 17 Net change in pension and other postretirement benefit liabilities $ 9 $ ( 13 ) $ ( 4 ) Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ ( 89 ) $ ( 140 ) $ ( 229 ) 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 19 The following table presents the amounts and line items in our consolidated statement of income where adjustments reclassified from AOCI into income were recorded (in millions): Amount Reclassified from AOCI into Income Description of AOCI Component Financial Statement Line Item Impacted Three Months Ended March 28, 2025 Foreign currency translation adjustments: Divestitures 1 Other income (loss) — net $ 34 Income before income taxes 34 Income taxes ( 2 ) Consolidated net income $ 32 Derivatives: Foreign currency contracts Net operating revenues $ ( 41 ) Foreign currency and commodity contracts Cost of goods sold ( 6 ) Foreign currency and interest rate contracts Interest expense 2 Foreign currency contracts Other income (loss) — net ( 24 ) Income before income taxes ( 69 ) Income taxes 17 Consolidated net income $ ( 52 ) Available-for-sale debt securities: Sale of debt securities Other income (loss) — net $ 1 Income before income taxes 1 Income taxes — Consolidated net income $ 1 Pension and other postretirement benefit liabilities: Divestitures 1 Other income (loss) — net $ ( 2 ) Curtailment loss (gain) Other income (loss) — net 11 Amortization of net actuarial loss (gain) Other income (loss) — net 25 Amortization of prior service cost (credit) Other income (loss) — net ( 1 ) Income before income taxes 33 Income taxes ( 7 ) Consolidated net income $ 26 1 Related to the sale of a portion of our ownership interest in CCEP. Refer to Note 2. 20 NOTE 11: CHANGES IN EQUITY The following tables provide a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to shareowners of The Coca-Cola Company and equity attributable to noncontrolling interests (in millions): Shareowners of The Coca-Cola Company Three Months Ended March 28, 2025 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests December 31, 2024 4,302 $ 26,372 $ 76,054 $ ( 16,843 ) $ 1,760 $ 19,801 $ ( 55,916 ) $ 1,516 Comprehensive income (loss) — 3,729 3,330 361 — — — 38 Dividends paid/payable to shareowners of The Coca-Cola Company ($ 0.51 per share) — ( 2,195 ) ( 2,195 ) — — — — — Dividends paid to noncontrolling interests — ( 2 ) — — — — — ( 2 ) Purchases of treasury stock ( 4 ) ( 279 ) — — — — ( 279 ) — Impact related to stock-based compensation plans 6 129 — — — 72 57 — March 28, 2025 4,304 $ 27,754 $ 77,189 $ ( 16,482 ) $ 1,760 $ 19,873 $ ( 56,138 ) $ 1,552 Shareowners of The Coca-Cola Company Three Months Ended March 29, 2024 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests December 31, 2023 4,308 $ 27,480 $ 73,782 $ ( 14,275 ) $ 1,760 $ 19,209 $ ( 54,535 ) $ 1,539 Comprehensive income (loss) — 2,932 3,177 ( 229 ) — — — ( 16 ) Dividends paid/payable to shareowners of The Coca-Cola Company ($ 0.485 per share) — ( 2,091 ) ( 2,091 ) — — — — — Dividends paid to noncontrolling interests — ( 2 ) — — — — — ( 2 ) Divestitures — ( 4 ) — — — — — ( 4 ) Purchases of treasury stock ( 10 ) ( 621 ) — — — — ( 621 ) — Impact related to stock-based compensation plans 10 252 — — — 112 140 — March 29, 2024 4,308 $ 27,946 $ 74,868 $ ( 14,504 ) $ 1,760 $ 19,321 $ ( 55,016 ) $ 1,517 NOTE 12: SIGNIFICANT OPERATING AND NONOPERATING ITEMS Other Operating Charges During the three months ended March 28, 2025, the Company recorded other operating charges of $ 73 million. These charges consisted of $ 47 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, which brought the total liability to $ 6,173 million and was paid in March 2025. Additionally, other operating charges included $ 11 million related to the Company’s productivity and reinvestment program, $ 9 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $ 3 million for the amortization of noncompete agreements related to the BA Sports Nutrition, LLC (“BodyArmor”) acquisition in 2021 and $ 3 million related to tax litigation expense. During the three months ended March 29, 2024, the Company recorded other operating charges of $ 1,573 million. These charges consisted of $ 765 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $ 760 million related to the impairment of our BodyArmor trademark and $ 36 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $ 7 million for transaction costs related to the refranchising of our bottling operations in certain territories in India, $ 4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $ 1 million related to tax litigation expense. 21 Refer to Note 2 for additional information on the refranchising of our bottling operations in certain territories in India. Refer to Note 9 for additional information on the tax litigation. Refer to Note 13 for additional information on the Company’s restructuring initiatives. Refer to Note 16 for additional information on the fairlife acquisition and the BodyArmor impairment. Refer to Note 17 for the impact these charges had on our operating segments and Corporate. Other Nonoperating Items Equity Income (Loss) — Net During the three months ended March 28, 2025 and March 29, 2024, the Company recorded net charges of $ 8 million and $ 25 million, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Other Income (Loss) — Net During the three months ended March 28, 2025, the Company recognized a net gain of $ 331 million related to the sale of a portion of our ownership interest in CCEP, an impairment charge of $ 25 million related to an equity method investee in Latin America and a net loss of $ 19 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. The Company also recorded charges of $ 25 million and $ 11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S. pension activity. During the three months ended March 29, 2024, the Company recognized net gains of $ 599 million and $ 293 million related to the refranchising of our bottling operations in the Philippines and certain territories in India, respectively. The Company also recognized a net gain of $ 516 million related to the sale of our ownership interest in an equity method investee in Thailand. Additionally, the Company recognized a net gain of $ 178 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. Refer to Note 2 for additional information on the sale of our ownership interest in CCEP, the sale of our ownership interest in an equity method investee in Thailand and the refranchising of our bottling operations. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 14 for additional information on the non-U.S. pension curtailment and special termination benefits. Refer to Note 16 for additional information on the impairment charge. NOTE 13: RESTRUCTURING Productivity and Reinvestment Program In February 2012, the Company announced a productivity and reinvestment program designed to strengthen our brands and reinvest our resources to drive long-term profitable growth. The program was expanded multiple times, with the last expansion occurring in April 2017. While most of the initiatives included in this program were substantially completed by the end of 2024, certain initiatives, which are primarily designed to further simplify and standardize our organization, have been delayed and will be completed during 2025. During the three months ended March 28, 2025 and March 29, 2024, the Company incurred expenses of $ 11 million and $ 36 million, respectively, related to our productivity and reinvestment program. These expenses primarily included internal and external costs associated with the implementation of the program’s initiatives and were recorded in the line item other operating charges in our consolidated statements of income. Refer to Note 17 for the impact these expenses had on our operating segments and Corporate. The Company has incurred total pretax expenses of $ 4,437 million related to this program since it commenced. 22 NOTE 14: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of the following (in millions): Pension Plans Other Postretirement Benefit Plans Three Months Ended March 28, 2025 March 29, 2024 March 28, 2025 March 29, 2024 Service cost $ 26 $ 27 $ 1 $ 1 Interest cost 75 77 3 4 Expected return on plan assets 1 ( 104 ) ( 118 ) ( 1 ) ( 2 ) Amortization of prior service cost (credit) — — ( 1 ) ( 1 ) Amortization of net actuarial loss (gain) 25 26 — ( 1 ) Curtailment loss (gain) 2 11 — — — Special termination benefits 2 25 — — — Net periodic benefit cost (income) $ 58 $ 12 $ 2 $ 1 1 The weighted-average expected long-term rates of return on plan assets used in computing 2025 net periodic benefit cost (income) were 7.00 % for pension plans and 6.75 % for other postretirement benefit plans. 2 The curtailment loss and special termination benefits were related to the group annuity purchase (“buy-in”) for a non-U.S. defined benefit plan. The Company intends to convert the buy-in to a buy-out in the future, at which time the insurer would assume full responsibility for the plan obligations. All of the amounts in the table above, other than service cost, were recorded in the line item other income (loss) — net in our consolidated statements of income. During the three months ended March 28, 2025, the Company contributed $ 11 million to our pension trusts, offset by a $ 61 million transfer of surplus non-U.S. plan assets from pension trusts to general assets of the Company. We anticipate making additional contributions of approximately $ 18 million during the remainder of 2025. The Company contributed $ 6 million to our pension trusts, offset by a $ 44 million transfer of surplus non-U.S. plan assets from pension trusts to general assets of the Company during the three months ended March 29, 2024. NOTE 15: INCOME TAXES The Company recorded income taxes of $ 722 million ( 17.8 % effective tax rate) and $ 687 million ( 17.7 % effective tax rate) during the three months ended March 28, 2025 and March 29, 2024, respectively. The Company’s effective tax rates for the three months ended March 28, 2025 and March 29, 2024 vary from the statutory U.S. federal tax rate of 21.0 %, primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12, 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. federal tax rate. The Company’s effective tax rate for the three months ended March 28, 2025 included $ 143 million of net tax benefits related to various discrete tax items, including net interest income of $ 53 million related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statement of income, in accordance with our accounting policy, and a tax benefit of $ 85 million related to a change in the Company’s indefinite reinvestment assertion for certain foreign entities. During the three months ended March 28, 2025, the Company invested $ 30 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During the three months ended March 28, 2025, the Company received tax credits and other income tax benefits of $ 9 million and recognized amortization expense of $ 7 million related to all of our investments of this nature. The amount of non-income tax-related activity and other returns related to these investments was not material during the three months ended March 28, 2025. As of March 28, 2025, the carrying value of these investments was $ 65 million. The Company recorded $ 123 million of unfunded commitments related to these investments in the line item accounts payable and accrued expenses in our consolidated balance sheet as of March 28, 2025 and December 31, 2024. The Company expects to fulfill these unfunded commitments in 2025. 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. & Subs. v. 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 23 $ 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. 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 filed its principal appellate brief with the U.S. Court of Appeals for the Eleventh Circuit on March 12, 2025. The Company strongly disagrees with the Opinions and intends to vigorously defend its positions. Refer to Note 9. NOTE 16: FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions): March 28, 2025 Level 1 Level 2 Level 3 Other 3 Netting Adjustment 4 Fair Value Measurements Assets: Equity securities with readily determinable values 1 $ 1,778 $ 166 $ 17 $ 95 $ — $ 2,056 Debt securities 1 — 1,763 — — — 1,763 Derivatives 2 2 260 — — ( 234 ) 5 28 7 Total assets $ 1,780 $ 2,189 $ 17 $ 95 $ ( 234 ) $ 3,847 Liabilities: Derivatives 2 $ 2 $ 1,086 $ — $ — $ ( 1,051 ) 6 $ 37 7 Total liabilities $ 2 $ 1,086 $ — $ — $ ( 1,051 ) $ 37 1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 The Company is obligated to return $ 18 million in cash collateral it has netted against its derivative position. 6 The Company has the right to reclaim $ 832 million in cash collateral it has netted against its derivative position. 7 The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $ 28 million in the line item other noncurrent assets and $ 37 million in the line item other noncurrent liabilities . Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 24 December 31, 2024 Level 1 Level 2 Level 3 Other 3 Netting Adjustment 4 Fair Value Measurements Assets: Equity securities with readily determinable values 1 $ 1,790 $ 137 $ 13 $ 94 $ — $ 2,034 Debt securities 1 — 1,676 — — — 1,676 Derivatives 2 2 587 — — ( 370 ) 6 219 8 Total assets $ 1,792 $ 2,400 $ 13 $ 94 $ ( 370 ) $ 3,929 Liabilities: Contingent consideration liability $ — $ — $ 6,126 5 $ — $ — $ 6,126 Derivatives 2 — 1,119 — — ( 1,097 ) 7 22 8 Total liabilities $ — $ 1,119 $ 6,126 $ — $ ( 1,097 ) $ 6,148 1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 Represents the fair value of the remaining milestone payment related to our acquisition of fairlife, which is contingent on fairlife achieving certain financial targets through 2024 and is payable in 2025. This milestone payment is based on agreed-upon formulas related to fairlife’s operating results, the resulting value of which is not subject to a ceiling. The fair value was determined using discounted cash flow analyses. We are required to remeasure this liability to fair value quarterly, with any changes in the fair value recorded in income until the final milestone payment is made. 6 The Company was obligated to return $ 12 million in cash collateral it had netted against its derivative position. 7 The Company had the right to reclaim $ 735 million in cash collateral it had netted against its derivative position. 8 The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $ 102 million in the line item prepaid expenses and other current assets, $ 117 million in the line item other noncurrent assets, and $ 22 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio. Gross realized and unrealized gains and losses on Level 3 assets and liabilities, excluding the contingent consideration liability, were not significant for the three months ended March 28, 2025 and March 29, 2024. The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the three months ended March 28, 2025 and March 29, 2024. Nonrecurring Fair Value Measurements During the three months ended March 28, 2025, the Company recorded an other-than-temporary impairment charge of $ 25 million related to a joint venture in Latin America. This impairment charge was derived using Level 3 inputs and was due to the joint venture’s restructuring and planned liquidation. This charge was recorded in the line item other income (loss) — net in our consolidated statement of income. During the three months ended March 29, 2024, the Company recorded an asset impairment charge of $ 760 million related to our BodyArmor trademark in North America, which was primarily driven by revised projections of future operating results and higher discount rates resulting from changes in macroeconomic conditions since the acquisition date. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs. This charge was recorded in the line item other operating charges in our consolidated statement of income. The remaining carrying value of the trademark is $ 3,400 million. Other Fair Value Disclosures The carrying values of cash and cash equivalents, short-term investments, trade accounts receivable, accounts payable and accrued expenses, and loans and notes payable approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted prices are not available, the fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk and the contractual terms of the debt instruments. As of March 28, 2025, the carrying value and fair value of our long-term debt, including the current portion, were $ 43,693 million and $ 38,736 million, respectively. As of December 31, 2024, the carrying value and fair value of our long-term debt, including the current portion, were $ 43,023 million and $ 38,052 million, respectively. 25 NOTE 17: OPERATING SEGMENTS The Global Ventures operating segment was established primarily to oversee the Company’s ownership of Costa Limited (“Costa”), innocent and doğadan, as well as the fees earned pursuant to distribution coordination agreements between the Company and Monster Beverage Corporation (“Monster”). In November 2024, we announced plans to sunset our Global Ventures operating segment to streamline and simplify our operating structure. Effective January 1, 2025, the results of our Costa (excluding the ready-to-drink business), innocent and doğadan businesses are reported within the Company’s Europe, Middle East and Africa operating segment. Costa’s ready-to-drink business and the fees related to Monster are reported in the respective geographic operating segments. Our historical operating segment reporting disclosed below has been recast to reflect our current organizational structure. I nformation about our Company’s operations by operating segment and Corporate is as follows (in millions): Europe, Middle East & Africa Latin America North America Asia Pacific Bottling Investments Corporate Eliminations Consolidated Three Months Ended March 28, 2025 Net operating revenues: Third party $ 2,481 $ 1,477 $ 4,359 $ 1,325 $ 1,461 $ 26 $ — $ 11,129 Intersegment 176 — 2 96 2 — ( 276 ) — Total net operating revenues 2,657 1,477 4,361 1,421 1,463 26 ( 276 ) 11,129 Cost of goods sold 759 274 2,106 390 1,010 ( 100 ) ( 276 ) 4,163 Selling, general and administrative expenses 833 299 914 407 334 447 — 3,234 Other operating charges — — — — — 73 — 73 Operating income (loss) $ 1,065 $ 904 $ 1,341 $ 624 $ 119 $ ( 394 ) $ — $ 3,659 Interest income 180 Interest expense 387 Equity income (loss) — net 351 Other income (loss) — net 254 Income before income taxes $ 4,057 Other segment information: Capital expenditures $ 41 $ — $ 115 $ 1 $ 105 $ 47 $ — $ 309 Depreciation and amortization 44 7 81 12 76 47 — 267 Three Months Ended March 29, 2024 Net operating revenues: Third party $ 2,435 $ 1,530 $ 4,224 $ 1,265 $ 1,815 $ 31 $ — $ 11,300 Intersegment 197 — 2 216 2 — ( 417 ) — Total net operating revenues 2,632 1,530 4,226 1,481 1,817 31 ( 417 ) 11,300 Cost of goods sold 733 249 2,110 399 1,265 ( 104 ) ( 417 ) 4,235 Selling, general and administrative expenses 819 336 859 425 396 516 — 3,351 Other operating charges — — 760 — — 813 — 1,573 Operating income (loss) $ 1,080 $ 945 $ 497 $ 657 $ 156 $ ( 1,194 ) $ — $ 2,141 Interest income 246 Interest expense 382 Equity income (loss) — net 354 Other income (loss) — net 1,513 Income before income taxes $ 3,872 Other segment information: Capital expenditures $ 38 $ — $ 101 $ 4 $ 177 $ 50 $ — $ 370 Depreciation and amortization 45 7 77 11 91 31 — 262 26 Information about total assets by segment is not disclosed because such information is not regularly provided to, or used by, our Chief Operating Decision Maker. During the three months ended March 28, 2025 and March 29, 2024, our operating segments and Corporate were impacted by acquisition and divestiture activities. Refer to Note 2. Additionally, during the three months ended March 28, 2025, the results of our operating segments and Corporate were impacted by the following items: • Operating income (loss) was reduced by $ 47 million for Corporate due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. • Operating income (loss) was reduced by $ 11 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 13. • Operating income (loss) was reduced by $ 9 million for Corporate due to a payment under an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations. • Operating income (loss) was reduced by $ 3 million for Corporate due to charges related to our acquisition of BodyArmor. Refer to Note 12. During the three months ended March 29, 2024, the results of our operating segments and Corporate were impacted by the following items: • Operating income (loss) was reduced by $ 765 million for Corporate due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 16. • Operating income (loss) was reduced by $ 760 million for North America due to the impairment of our BodyArmor trademark. Refer to Note 16. • Operating income (loss) was reduced by $ 36 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 13. • Operating income (loss) was reduced by $ 7 million for Corporate due to transaction costs related to the refranchising of our bottling operations in certain territories in India. Refer to Note 2. • Operating income (loss) was reduced by $ 4 million for Corporate due to charges related to our acquisition of BodyArmor. Refer to Note 12. 27