What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-20 · 189 added, 250 removed, 669 unchanged (40% of the section changed)

7 unchanged sentences

• Operations Review — an analysis of our consolidated results of operations for 2025 and 2024 and year-to-year comparisons between 2025 and 2024.

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

An analysis of our consolidated results of operations for 2024 and 2023 and year-to-year comparisons between 2024 and 2023 can be found in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on June 26, 2025.

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

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Our concentrate operations typically generate net operating revenues by selling beverage concentrates, sometimes referred to as “beverage bases,” syrups, including fountain syrups, and certain finished beverages to authorized bottling operations (to which we typically refer as our “bottlers” or our “bottling partners”).

Our bottling partners either combine concentrates with still or sparkling water and sweeteners (depending on the product), or combine syrups with still or sparkling water, to produce finished beverages.

Our bottling partners combine concentrates with still or sparkling water and sweeteners (depending on the product), or combine syrups with still or sparkling water, to produce finished beverages.

The finished beverages are packaged in authorized containers, such as cans and refillable and nonrefillable glass and plastic bottles, bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers.

In addition, outside the United States, our bottling partners are typically authorized to manufacture fountain syrups, using our concentrates, which they sell to fountain retailers for use in producing beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.

Our concentrate operations are included in our geographic operating segments and our Global Ventures operating segment.

Our concentrate operations are included in our geographic operating segments.

Our finished product operations generate net operating revenues by selling sparkling soft drinks and a variety of other finished beverages to retailers, or to distributors and wholesalers who in turn sell the beverages to retailers.

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In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners.

These operations are generally included in one of our geographic operating segments or our Global Ventures operating segment.

These operations are generally included in our geographic operating segments.

Additionally, we sell directly to consumers through retail stores operated by Costa.

These sales are included in our Global Ventures operating segment.

These sales are included in our EMEA operating segment, regardless of the physical location of the retail stores.

In the United States, we manufacture fountain syrups and sell them to fountain retailers, who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who in turn sell and distribute the fountain syrups to fountain retailers.

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In an effort to support our future growth, we are continuing to invest in our portfolio of brands, our strategic capabilities and our people.

We are focused on the following strategic priorities:

We are focused on the following growth pillars:

shaping a portfolio of loved brands;

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building talent and capabilities;

and enhancing our license to operate.

and enhancing our license to win.

Challenges and Risks

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Of these, six key strategic business challenges and risks are discussed below.

Obesity continues to impact individuals, communities and countries worldwide.

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

Obesity and Health-Related Concerns

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

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

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• market responsibly, including no advertising targeted to children under 13.

The heritage of our Company is to lead, and innovation is critical for leadership.

As such, we are resolute in continuing to innovate and are committed to partnering with suppliers to invest in research and development of new noncaloric sweeteners and flavors that help us create the best tasting beverages, including options with low or no calories.

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

We remain committed to innovation and to partnering with suppliers to invest in research and development of new noncaloric sweeteners and flavors that help us create great tasting beverages, including options with low or no calories.

Evolving Consumer Product Preferences

We are impacted by shifting consumer demographics and needs, on-the-go lifestyles and consumers who are empowered with more information than ever.

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

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

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

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

investing in innovative and sustainable packaging;

and including easy-to-access information about our beverages on our website.

investing in innovative and more sustainable packaging;

and providing easy-to-access information about our beverages on our website.

Evolving Competitive Landscape and Competing in the Digital Marketplace

Our Company faces strong competition from well-established global companies as well as numerous regional and local companies.

Additionally, the rapidly evolving digital landscape and growth of e-commerce in many markets has led to dramatic shifts in consumer shopping habits and patterns.

The rapidly evolving digital landscape and growth of e-commerce in many markets has led to dramatic shifts in consumer shopping habits and patterns.

The increasing use of data analytics, automation and artificial intelligence across digital platforms is further reshaping how consumers discover, evaluate and engage with brands.

Consumers are rapidly embracing shopping via mobile device applications, e-commerce retailers and e-commerce websites or platforms, which presents new challenges to maintain the competitiveness and relevancy of our brands.

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

The Coca-Cola system works every day to produce high-quality, safe and refreshing beverages for consumers around the world.

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

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

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

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

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

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

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

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

We, our contract manufacturers and bottling partners are expected to manufacture and distribute our products according to strict policies, requirements and specifications set forth in an integrated quality management program.

Our quality management program is designed to identify and mitigate risks and drive improvement.

In our quality laboratories, we measure the quality attributes of ingredients, and we perform due diligence to help ensure that product and ingredient safety and quality standards are maintained.

We regularly assess the relevance of our requirements and standards and continually work to improve and refine them across our entire supply chain.

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These estimates require significant management judgment and include inherent uncertainties.

Factors that management must estimate include, among others, the economic lives of the assets, sales volume, pricing, royalty rates, cost of raw materials, delivery costs, long-term growth rates, discount rates, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets.

The variability of these factors

depends on a number of conditions, and thus our accounting estimates may change from period to period.

Factors that management must estimate include, among others, the economic lives of the assets, revenues, royalty rates, cost of raw materials, delivery costs, long-term growth rates, discount rates, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets.

The variability of these factors depends on a number of conditions, and thus our accounting estimates may change from period to period.

These factors are even more difficult to estimate when global financial markets are highly volatile.

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For investments in nonpublicly traded companies, management’s assessment of fair value is based on various valuation methodologies, including discounted cash flows, estimates of sales proceeds, and appraisals, as appropriate.

We consider the assumptions that we believe a market participant would use in evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies.

We consider the assumptions that we believe a market participant would use in

evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies.

The ability to accurately predict future cash flows, especially in emerging and developing markets, may impact the determination of fair value.

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Our operating segments are primarily based on geographic responsibility, which is consistent with the way management runs our business.

Our geographic operating segments are generally subdivided into smaller geographic regions.

These geographic regions are our reporting units.

Our Global Ventures operating segment includes the results of our Costa, innocent and doğadan businesses, as well as fees earned pursuant to distribution coordination agreements between the Company and Monster, each of which is its own reporting unit.

Our geographic operating segments are generally subdivided into smaller geographic regions, which are reporting units.

The Bottling Investments operating segment includes all of our consolidated bottling operations, regardless of geographic location.

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

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

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

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

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

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

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

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

During the three months ended March 29, 2024, the Company recorded an impairment charge of $760 million due to revised projections of future operating results as well as higher discount rates resulting from changes in macroeconomic conditions since the acquisition date.

During the three months ended December 31, 2025, the operating results related to the trademark, combined with lower expectations of future performance compared to the original forecasts, triggered the need to update the Company’s impairment analysis, including a reassessment of the business projections for the trademark.

Based on this assessment, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an additional impairment charge of

$960 million.

The decrease in fair value was primarily driven by the revised projections of future operating results, including a slowing of the projected long-term growth rate for the category, an intensifying competitive environment, and more focused innovation and international rollout plans.

The remaining carrying value of the trademark is $2,440 million.

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

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In 2026, we expect our net periodic pension cost to be approximately $87 million.

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

The decrease in net periodic pension cost is primarily due to special termination benefits and curtailment charges in 2025.

As of December 31, 2025, the U.S.

qualified pension plan represented 63% and 60% of the Company’s consolidated projected benefit obligation and pension plan assets, respectively.

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

For this plan, we estimate that a 50 basis-point decrease in the discount rate would result in a $9 million increase in our 2026 net periodic pension cost, and we estimate that a 50 basis-point decrease in the expected long-term rate of return on plan assets would result in a $19 million increase in our 2026 net periodic pension cost.

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

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Under this model, the concentrate price we charge is impacted by a number of factors, including, but not limited to, bottler pricing, the channels in which the finished products produced from the concentrates are sold, and package mix.

The amounts associated with the arrangements described above represent variable consideration, an estimate of which is included in the transaction price as a component of net operating revenues in our consolidated statement of income upon completion of our performance obligations.

The amounts associated with the arrangements described above represent variable consideration, an

estimate of which is included in the transaction price as a component of net operating revenues in our consolidated statement of income upon completion of our performance obligations.

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

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

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

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

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

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

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The Company also evaluates its expected cash requirements in the United States.

Other factors that can influence that determination are local restrictions on remittances (for example, in some countries a central bank application and approval are required in order for the Company’s local country subsidiary to pay a dividend), economic stability and asset risk.

Other factors that can influence that determination are local restrictions on remittances (for example, in some countries a central bank application and approval are required in order for the

Company’s local country subsidiary to pay a dividend), economic stability and asset risk.

Refer to Note 15 of Notes to Consolidated Financial Statements.

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Our organizational structure consists of the following operating segments:

Europe, Middle East and Africa;

Latin America;

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Asia Pacific;

Global Ventures;

and Bottling Investments.

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(1) volume growth (concentrate sales volume or unit case volume, as applicable);

(2) changes in price, product and geographic mix;

(2) changes in price/mix;

(3) foreign currency exchange rate fluctuations;

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Typically, the Company has not reported unit case volume or recognized concentrate sales volume related to a licensed brand in periods prior to the beginning of the term of a license agreement.

Therefore, in the year that a license agreement is entered into, the unit case volume and concentrate sales volume related to a licensed brand are incremental to prior year volume.

Therefore, in the year that a license agreement is entered into, the unit case

volume and concentrate sales volume related to a licensed brand are incremental to prior year volume.

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

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

The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.

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

In January, February and December 2024, as well as May 2025, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines.

The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.

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

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

Additionally, in October 2025, the Company sold our finished product operations in Nigeria.

The impact of this sale has been included as a divestiture in our analysis of net operating revenues on a consolidated basis as well as for the EMEA operating segment.

Beverage Volume

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In addition, unit case volume includes sales by certain joint ventures in which the Company has an ownership interest.

We believe unit case volume is one of the indicators of the underlying strength of the Coca-Cola system because it measures demand for our products at the consumer level.

Although a significant portion of our Company’s net operating revenues is not based directly on unit case volume, we believe unit case volume is one of the indicators of the underlying strength of the Coca-Cola system because it measures demand for our products at the consumer level.

The unit case volume numbers used in this report are derived based on estimates received by the Company from its bottling partners and distributors.

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Worldwide — %

Europe, Middle East & Africa — (1)

Latin America — (1)

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Asia Pacific — — 5

Global Ventures 2

Bottling Investments (8) 3

1 Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only.

2 Geographic and Global Ventures operating segment data reflect unit case volume growth for all bottlers, both consolidated and unconsolidated, and distributors in the applicable geographic areas.

Global Ventures operating segment data also reflects unit case volume growth for Costa retail stores.

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

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

2 Geographic operating segment data reflects unit case volume growth for all bottlers, both consolidated and unconsolidated, and distributors in the applicable geographic areas.

Unit case volume growth for Costa retail stores is reflected in the EMEA operating segment data.

3 After considering the impact of structural changes, unit case volume for Bottling Investments was even.

4 After considering the impact of divestitures, concentrate sales volume for EMEA grew 4%.

5 After considering the impact of structural changes, concentrate sales volume for Asia Pacific grew 1%.

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The Coca-Cola system sold 33.8 billion and 33.7 billion unit cases of our products in 2025 and 2024, respectively.

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

Unit case volume in sparkling flavors was even.

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

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

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

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

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

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

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

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

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

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

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

Unit case volume in EMEA increased 3%, which included 2% growth in Trademark Coca-Cola, 3% growth in sparkling flavors, 2% growth in water, sports, coffee and tea as well as growth in energy drinks, partially offset by a 4% decline in juice, value-added dairy and plant-based beverages.

The operating segment reported growth in unit case volume of 7% in the Eurasia and Middle East operating unit, growth of 3% in the Africa operating unit and growth in energy drinks, partially offset by a decline of 1% in the Europe operating unit.

In Latin America, unit case volume was even, which included 1% growth in both water, sports, coffee and tea, and juice, value-added dairy and plant-based beverages as well as growth in energy drinks, offset by a 1% decline in Trademark Coca-Cola and a 2% decline in sparkling flavors.

The operating segment’s volume performance included 2% growth in Brazil and 6% growth in Argentina, offset by a decline of 4% in Mexico.

Unit case volume in North America decreased 1%, which included a 1% decline in Trademark Coca-Cola, a 2% decline in juice, value-added dairy and plant-based beverages and a 1% decline in sparkling flavors, partially offset by growth in energy drinks.

Unit case volume in water, sports, coffee and tea was even.

In Asia Pacific, unit case volume was even, which included 3% growth in water, sports, coffee and tea, 1% growth in Trademark Coca-Cola and growth in energy drinks, offset by a 3% decline in sparkling flavors and a 6% decline in juice, value-added dairy and plant-based beverages.

The operating segment reported growth in unit case volume of 1% in the Greater China and Mongolia operating unit and growth in energy drinks, offset by a decline of 3% in the ASEAN and South Pacific operating unit.

Unit case volume in both the India and Southwest Asia and the Japan and South Korea operating units was even.

Unit case volume for Bottling Investments decreased 8%, which primarily reflects the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.

Concentrate Sales Volume

In 2024, worldwide concentrate sales volume and unit case volume both grew 1% compared to 2023.

The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments and the impact of unit case volume from certain joint ventures in which the Company has an ownership interest, but to which the Company does not sell concentrates, syrups, source waters or powders/minerals.

In 2025, worldwide concentrate sales volume grew 1% and unit case volume was even compared to 2024.

The difference between concentrate sales volume and unit case volume growth rates for our Latin America operating segment was primarily due to the timing of concentrate shipments.

Net Operating Revenues

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Percent Change 2025 versus 2024

Price, Product & Geographic Mix Foreign Currency Exchange Rate Fluctuations Acquisitions & Divestitures 2

Price/Mix Foreign Currency Exchange Rate Fluctuations Acquisitions & Divestitures 2

Consolidated 1 % 4 % (2) % (1) % 2 %

Europe, Middle East & Africa (1) 17 (16) — 1

EMEA 4 2 — (1) 5

Latin America (1) 11 (12) — (2)

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Asia Pacific 1 4 (3) (1) 1

Global Ventures 4 (3) 2 — 2

Bottling Investments — 2 (2) (7) (8)

Certain rows may not add due to rounding.

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments and our Global Ventures operating segment (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any.

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any.

For our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the increase (decrease) in unit case volume after considering the impact of structural changes, if any.

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

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

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

the mix of categories, products and packages sold;

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

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

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

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

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

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

Price, product and geographic mix had an 11% favorable impact on our consolidated net operating revenues.

Price, product and geographic mix was impacted by a variety of factors and events, including, but not limited to, the following:

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

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

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

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

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

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

Price/mix had a 4% favorable impact on our consolidated net operating revenues.

Price/mix was impacted by a variety of factors and events, including, but not limited to, the following:

• EMEA — favorable pricing initiatives, including inflationary pricing, partially offset by unfavorable mix;

• Latin America — favorable pricing initiatives, including inflationary pricing in Argentina, and favorable mix;

• North America — favorable pricing initiatives and favorable mix;

• Asia Pacific — favorable mix and favorable pricing initiatives;

• Bottling Investments — favorable pricing initiatives, partially offset by unfavorable mix.

The favorable pricing initiatives for the year ended December 31, 2025 in all operating segments included both new and carryover pricing increases from the prior year.

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

Fluctuations in foreign currency exchange rates, including the effects of our hedging activities, unfavorably impacted our consolidated net operating revenues by 2%.

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

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

Europe, Middle East and Africa;

and Asia Pacific operating segments.

dollar compared to certain foreign currencies, including the Mexican peso, Argentine peso, Ethiopian Birr and Turkish lira, which had an unfavorable impact on our Latin America, Bottling Investments and EMEA operating segments.

The unfavorable impact of a stronger U.S.

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

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

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

dollar compared to certain other foreign currencies, including the euro, British pound, South African rand and Japanese yen, which had a favorable impact on our EMEA, Bottling Investments and Asia Pacific operating segments.

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

“Acquisitions and divestitures” generally refers to acquisitions and divestitures of brands or businesses, some of which the Company considers to be structural changes.

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Net operating revenue growth rates are impacted by sales volume;

price, product and geographic mix;

foreign currency exchange rate fluctuations;

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The size and timing of acquisitions and divestitures are not consistent from period to period.

Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on our full year 2025 net operating revenues.

Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have a favorable impact on our full year 2026 net operating revenues.

Information about our net operating revenues by operating segment and Corporate as a percentage of Company net operating revenues is as follows:

Year Ended December 31, 2025 2024

Europe, Middle East & Africa 15.8 % 16.2 %

EMEA 22.6 % 21.8 %

Latin America 13.2 13.8

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Asia Pacific 11.1 10.9

Global Ventures 6.7 6.7

Bottling Investments 12.0 13.2

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Our gross profit margin increased to 61.6% in 2025 from 61.1% in 2024.

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

Selling, General and Administrative Expenses

The following table sets forth the components of selling, general and administrative expenses (in millions):

Year Ended December 31, 2024 2023

Selling and distribution expenses $ 2,525 $ 2,599

Advertising expenses 5,146 5,010

Stock-based compensation expense 286 254

Other operating expenses 6,625 6,109

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

Selling, General and Administrative Expenses

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

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

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

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

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

Selling, general and administrative expenses were $14,521 million in 2025, compared to $14,582 million in 2024, a decrease of $61 million.

This decrease was primarily due to lower contributions to The Coca-Cola Foundation and lower annual incentive expense, partially offset by higher severance costs in 2025 associated with ongoing initiatives to optimize our organization, higher advertising expenses and an asset impairment charge related to certain prototypes in the prior year.

Advertising expenses for 2025 and 2024 were $5.4 billion and $5.1 billion, respectively.

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

As of December 31, 2024, we had $234 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.6 years as stock-based compensation expense.

This expected cost does not include the impact of any future stock-based compensation awards.

Refer to Note 13 of Notes to Consolidated Financial Statements.

Other Operating Charges

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Year Ended December 31, 2025 2024

Europe, Middle East & Africa $ — $ —

Latin America 44 126

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Asia Pacific 41 —

Global Ventures — —

Bottling Investments — —

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In 2025, the Company recorded other operating charges of $1,261 million.

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

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

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

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

These charges consisted of $960 million related to the impairment of our BodyArmor trademark, $97 million related to the Company’s productivity and reinvestment program, and $47 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife in 2020, which brought the total liability to $6,173 million and was paid in March 2025.

Additionally, other operating charges included $44 million related to the impairment of a trademark in Latin America, $41 million related to the impairment of a trademark and property, plant and equipment in Asia Pacific and $35 million related to an indemnification

agreement entered into as a part of the refranchising of certain of our bottling operations.

In addition, other operating charges included $15 million for the amortization of noncompete agreements related to the BodyArmor acquisition in 2021, $12 million of transaction costs related to our divestiture activities and $10 million related to tax litigation expense.

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

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

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

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

Refer to Note 12 of Notes to Consolidated Financial

Statements for additional information related to the tax litigation.

These charges consisted of $3,109 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, $133 million related to the Company’s productivity and reinvestment program and $126 million related to the impairment of a trademark in Latin America.

In addition, other operating charges included $15 million for the amortization of noncompete agreements related to the BodyArmor acquisition, $13 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations and $9 million of transaction costs related to our divestiture activities.

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

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

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

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

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

Refer to Note 18 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.

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

Operating Income and Operating Margin

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Year Ended December 31, 2025 2024

Europe, Middle East & Africa 41.3 % 37.2 %

EMEA 31.2 % 42.6 %

Latin America 27.2 38.0

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Asia Pacific 14.9 21.5

Global Ventures 3.6 2.9

Bottling Investments 3.1 5.0

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Consolidated 28.7 % 21.2 %

Europe, Middle East & Africa 55.4 56.8

EMEA 39.7 41.4

Latin America 59.1 58.6

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Asia Pacific 38.3 42.1

Global Ventures 11.5 10.7

Bottling Investments 7.4 8.0

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* Calculation is not meaningful.

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

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

higher selling, general and administrative expenses;

higher other operating charges;

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

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

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

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

higher selling, general and administrative expenses;

higher other operating charges;

and an unfavorable foreign currency exchange rate impact.

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

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

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

Europe, Middle East and Africa;

and Asia Pacific operating segments.

Operating income was $13,762 million in 2025, compared to $9,992 million in 2024, an increase of $3,770 million, or 38%.

The increases in operating income and operating margin were primarily driven by lower other operating charges, due to the prior year remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, concentrate sales volume growth of 1% and favorable pricing initiatives.

These items were partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact.

In 2025, fluctuations in foreign currency exchange rates, including the effects of our hedging activities, unfavorably impacted consolidated operating income by 12% due to a stronger U.S.

dollar compared to certain foreign currencies, including the Mexican peso, Argentine peso, Brazilian real and Turkish lira, which had an unfavorable impact on our Latin America and EMEA operating segments.

The unfavorable impact of a stronger U.S.

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

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

dollar compared to certain other foreign currencies, including the euro and British pound, which had a favorable impact on our EMEA operating segment.

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

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

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

The Company’s EMEA operating segment reported operating income of $4,298 million and $4,255 million for the years ended December 31, 2025 and 2024, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 4% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses, an unfavorable foreign currency exchange rate impact of 5% and the impact of divestiture activity.

Latin America reported operating income of $3,742 million and $3,792 million for the years ended December 31, 2025 and 2024, respectively.

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

The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 1%, increased marketing spending and an unfavorable foreign currency exchange rate impact of 21%, partially offset by favorable pricing initiatives, lower commodity costs and lower other operating charges.

Operating income for North America for the years ended December 31, 2025 and 2024 was $5,070 million and $4,556 million, respectively.

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

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

Asia Pacific’s operating income for the years ended December 31, 2025 and 2024 was $2,042 million and $2,156 million, respectively.

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

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

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

The decrease in operating income was primarily driven by higher commodity costs, higher other operating charges, an unfavorable foreign currency exchange rate impact of 8% and the impact of structural changes, partially offset by concentrate sales volume growth of 1% and favorable pricing initiatives and mix.

Bottling Investments’ operating income for the years ended December 31, 2025 and 2024 was $426 million and $496 million, respectively.

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

The decrease in operating income was primarily driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India, higher commodity costs and an unfavorable foreign currency exchange rate impact of 2%, partially offset by favorable pricing initiatives and lower operating expenses.

Corporate’s operating loss for the years ended December 31, 2025 and 2024 was $1,816 million and $5,263 million, respectively.

Operating loss in 2024 increased primarily as a result of higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition and higher operating expenses, partially offset by decreased marketing spending.

Operating loss in 2025 decreased primarily as a result of lower other operating charges due to the prior year remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, lower commodity costs, lower marketing expenses and lower contributions to The Coca-Cola Foundation.

Refer to Note 18 of Notes to Consolidated Financial Statements for additional information on the fairlife contingent consideration.

Interest Income

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

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

Interest income was $786 million in 2025, compared to $988 million in 2024, a decrease of $202 million, or 20%.

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

Interest Expense

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

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

Interest expense was $1,654 million in 2025, compared to $1,656 million in 2024, a decrease of $2 million.

This decrease was primarily due to the impact of lower average short-term debt balances compared to the prior year.

Refer to Note 11 of Notes to Consolidated Financial Statements.

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In 2025, equity income was $2,031 million, compared to equity income of $1,770 million in 2024, an increase of $261 million, or 15%.

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

The increase reflects, among other items, the impact of more favorable operating results reported by certain of our equity method investees in 2025, partially offset by the impact of the sale of our ownership interests in certain equity method investees and an unfavorable foreign currency exchange rate impact.

In addition, the Company recorded net charges of $21 million and $92 million during the years ended December 31, 2025 and 2024, respectively, which represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

1 unchanged sentence

In 2025, other income (loss) — net was income of $1,073 million.

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

The Company also recognized a net gain of $338 million related to the sale of a portion of our interest in Coke Consolidated, a net gain of $303 million related to the refranchising of our bottling operations in certain territories in India, including the impact of post-closing adjustments, and a net gain of $290 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.

The Company recognized a gain of $1,952 million related to the sale of our ownership interest in Coca-Cola Consolidated, Inc.

(“Coke Consolidated”), an equity method investee, a net gain of $409 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, a gain of $331 million related to the sale of a portion of our ownership interest in CCEP, dividend income of $159 million, a gain of $102 million related to the refranchising of our bottling operations in certain territories in India and a gain of $31 million related to the substantial liquidation of a joint venture in China.

The Company also recorded a charge of $1,274 million related to our bottling operations in Africa that became held for sale, a charge of $393 million related to the sale of our finished product operations in Nigeria, and other-than-temporary impairment charges of $40 million related to an equity method investee in Latin America and $25 million related to a joint venture in Latin America.

Additionally, the Company recorded a charge of $36 million related to the refranchising of certain bottling operations in Ghana, and expense of $22 million related to the non-service cost components of net periodic benefit cost, which included charges of $27 million and $11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S.

pension activity.

Other income (loss) — net also included net foreign currency exchange losses of $48 million and $60 million of costs related to our trade accounts receivable factoring program.

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

The Company recorded a gain of $595 million related to the refranchising of our bottling operations in the Philippines and recognized a gain of $506 million related to the sale of our ownership interest in an equity method investee in Thailand.

The Company also recognized a gain of $338 million related to the sale of a portion of our ownership interest in Coke Consolidated, a gain of $303 million related to the refranchising of our bottling operations in certain territories in India, and a net gain of $290 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.

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

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

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

The Company recorded a net gain of $439 million related to the refranchising of our bottling operations in Vietnam, a net gain of $289 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, and dividend income of $208 million.

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

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

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

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

1 unchanged sentence

Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on pension and other postretirement benefit plan activity.

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

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

Refer to Note 17 of Notes to Consolidated Financial Statements for additional information on the impairment charges and the bottling operations in Ghana.

The Company recorded income taxes of $2,861 million (17.9% effective tax rate) and $2,437 million (18.6% effective tax rate) for the years ended December 31, 2025 and 2024, respectively.

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

federal tax rate.

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In addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method.

A reconciliation of the statutory U.S.

federal tax rate and our effective tax rate is as follows:

Year Ended December 31, 2024 2023

Statutory U.S.

federal tax rate 21.0 % 21.0 %

State and local income taxes — net of federal benefit 1.1 1.1

Earnings in jurisdictions taxed at rates different from the statutory U.S.

federal tax rate 1.0 (0.3)

Equity income or loss (2.6) (2.1)

Excess tax benefits on stock-based compensation (0.5) (0.3)

Other — net (1.4) (2.0)

Effective tax rate 18.6 % 17.4 %

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

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

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

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

Refer to Note 12 of Notes to Consolidated Financial Statements.

Also included in our effective tax rate is the tax impact associated with several countries enacting global minimum tax regulations.

We are currently in litigation with the IRS for tax years 2007 through 2009.

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

As of December 31, 2025, the gross amount of unrecognized tax benefits was $857 million.

1 unchanged sentence

The remaining $276 million primarily represents tax benefits that would be received in different tax jurisdictions in the event the Company did not prevail on all uncertain tax positions.

A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions):

Year Ended December 31, 2024 2023

Balance of unrecognized tax benefits at beginning of year $ 929 $ 926

Increase related to prior period tax positions 33 2

Decrease related to prior period tax positions (52) (25)

Increase related to current period tax positions 30 32

Decrease related to settlements with taxing authorities (57) —

Decrease due to lapse of the applicable statute of limitations — (2)

Effect of foreign currency translation (3) (4)

Balance of unrecognized tax benefits at end of year $ 880 $ 929

The Company recognizes interest and penalties related to unrecognized tax benefits in the line item income taxes in our consolidated statement of income.

The Company had $631 million and $544 million in interest and penalties related to unrecognized tax benefits accrued as of December 31, 2024 and 2023, respectively.

Of these amounts, expense of $87 million and $48 million was recognized in 2024 and 2023, respectively.

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

Refer to Note 15 of Notes to Consolidated Financial Statements for additional information.

Based on current tax laws, including the impact of several countries enacting global minimum tax regulations, the Company’s effective tax rate in 2026 is expected to be approximately 20.9%, before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate.

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

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

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

Numerous countries have enacted legislation that implemented certain aspects of Pillar Two effective January 1, 2024, or adopted legislation that became effective in 2025, while additional jurisdictions may enact similar legislation in the future.

In June 2025, the G7 released a statement announcing an understanding of a potential side-by-side system approach to the Pillar Two framework that would exclude U.S.-parented groups from certain Pillar Two provisions in recognition of existing U.S.

minimum tax rules.

In January 2026, the OECD issued further administrative guidance introducing a side‑by‑side framework under Pillar Two, largely exempting U.S.-headquartered companies from the application of Pillar Two.

The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance intended to adopt this side-by-side framework into law in each of the member countries.

The Company will continue to monitor developments to determine any potential impact in the countries in which we operate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States.

The Company continues to evaluate the future impact of these tax law changes on its financial statements.

The OBBBA did not materially impact the Company’s effective tax rate for 2025, and we do not expect it to have a material impact in 2026.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

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

Certain financial institutions offer a voluntary supply chain finance program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.

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.

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

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

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

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

On October 1, 2025, the U.S.

Court of Appeals for the Eighth Circuit issued an opinion reversing the judgment of the Tax Court in the 3M case.

In its decision, the court concluded that the blocked-income regulation was inconsistent with IRC Section 482 and that the IRS therefore could not reallocate income from 3M’s subsidiary in Brazil to 3M in contravention of Brazilian restrictions on the payment of royalties.

Further, the U.S.

Court of Appeals for the Eighth Circuit specifically rejected the IRS’ argument that the ability of 3M’s subsidiary in Brazil to pay dividends, rather than royalties, meant that royalty income should not be treated as blocked.

Both of these conclusions are highly supportive of the Company’s position in its case and reinforce its prior conclusions.

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.

2 unchanged sentences

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

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

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

For the years ended December 31, 2025 and 2024, the Company recorded net interest income of $217 million and $77 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.

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 December 31, 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.

The IRS filed its appellate brief on July 7, 2025.

The Company filed its reply brief on August 27, 2025.

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

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The Company estimates that the potential aggregate remaining incremental tax and interest liability for the tax years 2010 through 2025 could be approximately $14 billion as of December 31, 2025.

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.

Additional income tax and interest on any unpaid potential liabilities for the 2010 through 2025 tax years would continue to accrue until the time any such potential liability, or portion thereof, were to be paid.

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

2 unchanged sentences

Cash Flows from Operating Activities

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

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

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

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

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

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

Net cash provided by operating activities for the years ended December 31, 2025 and 2024 was $7,408 million and $6,805 million, respectively, an increase of $603 million, or 9%.

This increase was primarily driven by strong cash operating results, lower tax payments, the timing of changes in working capital and lower contributions to The Coca-Cola Foundation compared to the prior year.

These items were partially offset by the prior year benefit of the trade accounts receivable factoring program and higher transfers of surplus non-U.S.

plan assets from pension trusts to general assets of the Company in the prior year.

The increase was also partially offset by unfavorable hedging activity, higher marketing payments, tax deposits related to Israel and Vietnam, and higher net interest payments.

Additionally, the activity in 2025 included $6.1 billion of the $6.2 billion final milestone payment for fairlife.

The activity in 2024 included the $6.0 billion IRS Tax Litigation Deposit.

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

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

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

Refer to Note 18 of Notes to Consolidated Financial Statements for additional information on our milestone payment for fairlife.

Cash Flows from Investing Activities

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

Net cash used in investing activities was $67 million in 2025 and net cash provided by investing activities was $2,524 million in 2024.

Purchases of Investments and Proceeds from Disposals of Investments

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

In 2025, purchases of investments were $6,160 million and proceeds from disposals of investments were $4,665 million, resulting in a net cash outflow of $1,495 million.

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

This activity primarily represents the purchases of, and proceeds from the disposals of, investments in marketable securities and short-term investments that were made as part of the Company’s overall cash management strategy.

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In 2025 and 2024, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $461 million and $315 million, respectively.

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

Proceeds from Disposals of Businesses, Equity Method Investments and Nonmarketable Securities

In 2025 and 2024, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $3,567 million and $3,485 million, respectively.

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

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

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

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Capital expenditures $ 2,112 $ 2,064

Europe, Middle East & Africa 0.8 % 2.3 %

EMEA 11.2 % 10.7 %

Latin America 0.1 —

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Asia Pacific 3.4 0.9

Global Ventures 9.9 10.4

Bottling Investments 25.9 35.6

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Other Investing Activities

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

During the years ended December 31, 2025 and 2024, the total cash inflow from other investing activities was $91 million and $194 million, respectively.

The activity during 2025 included $139 million related to the reimbursement of advance payments made to finance the construction of leased assets and $74 million related to interest and dividends received from our captive insurance companies’ solvency capital funds, partially offset by an advance payment of $184 million to acquire additional shares in an equity method investee.

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

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

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

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

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

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If our credit ratings were to be downgraded as a result of changes in our capital structure, our major bottlers’ financial performance, changes in the credit rating agencies’ methodology in assessing our credit strength, or for any other reason, our cost of borrowing could increase.

Additionally, if certain bottlers’ credit ratings were to decline, the Company’s equity income could be reduced as a result of the potential increase in interest expense for those bottlers.

Additionally, if the credit ratings of certain bottlers in which we have equity method investments were to decline, the Company’s equity income could be reduced as a result of the potential increase in interest expense for those bottlers.

We monitor our financial ratios and, as indicated above, the rating agencies consider these ratios in assessing our credit ratings.

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

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

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

During 2025, the Company had issuances of debt of $4,980 million, which consisted of $865 million of net payments of commercial paper and short-term debt with maturities of 90 days or less, $3,442 million of issuances of commercial paper and short-term debt with maturities greater than 90 days and long-term debt issuances of $673 million, net of related discounts and issuance costs.

During 2025, the Company made payments of debt of $4,967 million, which consisted of $4,132 million of payments related to commercial paper and short-term debt with maturities greater than 90 days, and payments of long-term debt of $835 million.

Refer to Note 11 of Notes to Consolidated Financial Statements.

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

paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $2,988 million.

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

Refer to Note 11 of Notes to Consolidated Financial Statements.

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

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

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

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

dollar overnight, 1-month, 3-month, 6-month and 12-month maturities, continued to be published through June 2023.

As a result of the discontinuation of LIBOR, we have amended our LIBOR-referencing agreements to either reference the Secured Overnight Financing Rate or include mechanics for selecting an alternative rate.

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

Issuances of Stock

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Purchases of Stock for Treasury

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

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

During 2025, the total cash outflow for treasury stock purchases was $746 million.

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Since the inception of our share repurchase program in 1984, we have repurchased 3.6 billion shares of our common stock at an average price per share of $18.43.

In addition to shares repurchased under the share repurchase plans authorized by our Board of Directors, the Company’s treasury stock activity also includes shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees.

In addition to shares repurchased under the share repurchase plans authorized by our Board of Directors, the Company’s treasury stock activity also includes shares surrendered to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees.

The Company paid dividends of $8,779 million and $8,359 million during the years ended December 31, 2025 and 2024, respectively.

At its February 2026 meeting, our Board of Directors increased our regular quarterly dividend to $0.53 per share, equivalent to a full year dividend of $2.12 per share in 2026.

This is our 63 rd consecutive annual increase.

This is our 64 th consecutive annual increase.

Our annualized common stock dividend was $2.04 per share and $1.94 per share in 2025 and 2024, respectively.

Proceeds from Sale of a Noncontrolling Interest

During 2025, the Company received proceeds of $1,338 million from the sale of a noncontrolling interest.

Refer to Note 1 of Notes to Consolidated Financial Statements for additional information.

Other Financing Activities

During the years ended December 31, 2025 and 2024, the total cash outflow for other financing activities was $279 million and $31 million, respectively.

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

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

The activities during 2025 included $157 million of withholding taxes and other direct costs related to the sale of a noncontrolling interest.

Refer to Note 1 of Notes to Consolidated Financial Statements for additional information.

Additionally, the cash outflow during 2025 included $104 million of the $6.2 billion final milestone payment for fairlife.

Contractual Obligations

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Lease obligations 2,866 503 814 580 969

Acquisition obligations 7

6,172 6,172 — — —

Held-for-sale and related obligations 7

1,437 1,008 287 132 10

Total contractual obligations $ 100,252 $ 26,858 $ 15,062 $ 11,425 $ 46,907

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4 Refer to Note 15 of Notes to Consolidated Financial Statements for additional information regarding income taxes.

Accrued income taxes include $1,185 million related to the one-time transition tax required by the Tax Reform Act.

Liabilities of $1,570 million for unrecognized tax benefits, plus accrued interest and penalties, are not included in the total above.

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6 We expect to fund these marketing obligations with cash flows from operating activities.

7 Primarily represents our contingent consideration liability related to our acquisition of fairlife.

Refer to Note 17 of Notes to Consolidated Financial Statements.

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

7 Represents liabilities and contractual obligations that were classified as held for sale related to our bottling operations in Africa.

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

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

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

qualified pension plan was $2,321 million, and the fair value of the plans’ assets was $2,627 million.

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

nonqualified pension plans provide benefits that are not permitted to be funded through a qualified plan because of limits imposed by the Internal Revenue Code of 1986.

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

The expected benefit payments for these unfunded pension

plans are not included in the table above.

However, we anticipate benefit payments for these unfunded pension plans will be approximately $66 million for 2026.

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The percentages in the table above do not include the effects of our hedging activities and, therefore, do not reflect the actual impact of fluctuations in foreign currency exchange rates on our operating results.

Our hedging activities are designed to mitigate, over time, a portion of the potentially unfavorable impact of exchange rate fluctuations on our net income.

Our hedging activities are designed to mitigate, over time, a portion of the impact of exchange rate fluctuations on our net income.

The total impact of foreign currency exchange rate fluctuations on net operating revenues, including the effect of our hedging activities, was a decrease of 2% and 5% in 2025 and 2024, respectively.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis