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Information regarding reportable legal proceedings is contained in Part I, “Item 3.
−Removed: Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2024.
+Added: Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated in Part II, “Item 1.
+Added: Legal Proceedings” in our Quarterly Report on Form 10-Q for the quarter ended March 28, 2025.
The following updates and restates the description of the previously reported U.S.
−Removed: Federal Income Tax Dispute matter and describes a new environmental matter.
+Added: Federal Income Tax Dispute matter and provides updates to a previously reported environmental matter.
Management believes that, except as disclosed in “U.S.
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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.
−Removed: Moreover, the Company believes that
−Removed: 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.
+Added: 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.
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That amount, plus interest earned, would be refunded in full or in part if the Company’s tax positions are ultimately sustained on appeal.
−Removed: 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.
−Removed: 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.
+Added: For the three and six months ended June 27, 2025, the Company recorded net interest income of $54 million and $107 million, respectively, related to this tax payment in the line item income taxes in our consolidated statements of income, in accordance with our accounting policy.
+Added: 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 June 27, 2025 and December 31, 2024.
On October 22, 2024, the Company appealed the Tax Court’s decision to the U.S.
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Court of Appeals for the Eleventh Circuit on March 12, 2025.
+Added: The IRS filed its appellate brief on July 7, 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 .
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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.
−Removed: 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.
−Removed: 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.
+Added: 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 June 27, 2025.
+Added: However, based on the required probability analysis and the accrual of interest through the current reporting period, we updated our tax reserve as of June 27, 2025 to $493 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.
−Removed: 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.
+Added: 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 $241 million as of June 27, 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.
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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.
−Removed: 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.
−Removed: 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%.
+Added: The Company estimates the impact of the continued application of the Tax Court Methodology for the three and six months ended June 27, 2025 would increase the potential aggregate incremental tax and interest liability by approximately $400 million and $800 million, respectively.
+Added: We currently project the continued application of the Tax Court Methodology in 2025, assuming similar facts and circumstances as of December 31,
+Added: 2024, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5%.
Environmental Matter
−Removed: On April 11, 2025, the Commissioner of the Department of Licensing and Consumer Affairs and the Government of the United States Virgin Islands (“USVI”) filed a lawsuit against the Company, CC One Virgin Islands as well as other unrelated parties in the Superior Court of the Virgin Islands, Division of St.
−Removed: Croix, concerning the environmental impacts of plastic packaging in the USVI.
−Removed: The complaint asserts claims for (1) violations of USVI consumer protection statutes and (2) public nuisance.
−Removed: The complaint seeks injunctive relief, restitution and civil penalties but does not specify an amount of damages sought.
+Added: On June 20, 2024, the Mayor and City Council of Baltimore filed a lawsuit against the Company and several unrelated parties in the Circuit Court for Baltimore City, Maryland (“Baltimore Circuit Court”), concerning the environmental impacts of plastic packaging on the city’s lands and waterways.
The Company believes it has strong defenses to the claims.
+Added: On July 21, 2025, the Baltimore Circuit Court granted in part the Company’s Motion to Dismiss, dismissing with prejudice all claims except the public nuisance claim.
+Added: Proceedings on the public nuisance claim have been stayed pending the outcome of informative Maryland Supreme Court cases.
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.