COCA COLA CO 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Table of Contents Page Consolidated Statements of Income 61 Consolidated Statements of Comprehensive Income 62 Consolidated Balance Sheets 63 Consolidated Statements of Cash Flows 64 Consolidated Statements of Shareowners’ Equity 65 Notes to Consolidated Financial Statements 66 Note 1 Business and Summary of Significant Accounting Policies 66 Note 2 Acquisitions and Divestitures 73 Note 3 Net Operating Revenues 74 Note 4 Investments 76 Note 5 Hedging Transactions and Derivative Financial Instruments 78 Note 6 Equity Method Investments 85 Note 7 Goodwill 86 Note 8 Accounts Payable and Accrued Expenses 86 Note 9 Supply Chain Finance Program 87 Note 10 Leases 87 Note 11 Debt and Borrowing Arrangements 88 Note 12 Commitments and Contingencies 89 Note 13 Stock-Based Compensation Plans 92 Note 14 Pension and Other Postretirement Benefit Plans 95 Note 15 Income Taxes 101 Note 16 Other Comprehensive Income 106 Note 17 Fair Value Measurements 109 Note 18 Significant Operating and Nonoperating Items 114 Note 19 Restructuring 115 Note 20 Operating Segments 116 Note 21 Net Change in Operating Assets and Liabilities 118 Report of Management 119 Report of Independent Registered Public Accounting Fir m (PCAOB ID: 42 ) 121 Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 123 60 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions except per share data) Year Ended December 31, 2025 2024 2023 Net Operating Revenues $ 47,941 $ 47,061 $ 45,754 Cost of goods sold 18,397 18,324 18,520 Gross Profit 29,544 28,737 27,234 Selling, general and administrative expenses 14,521 14,582 13,972 Other operating charges 1,261 4,163 1,951 Operating Income 13,762 9,992 11,311 Interest income 786 988 907 Interest expense 1,654 1,656 1,527 Equity income (loss) — net 2,031 1,770 1,691 Other income (loss) — net 1,073 1,992 570 Income Before Income Taxes 15,998 13,086 12,952 Income taxes 2,861 2,437 2,249 Consolidated Net Income 13,137 10,649 10,703 Less: Net income (loss) attributable to noncontrolling interests 30 18 ( 11 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 13,107 $ 10,631 $ 10,714 Basic Net Income Per Share 1 $ 3.05 $ 2.47 $ 2.48 Diluted Net Income Per Share 1 $ 3.04 $ 2.46 $ 2.47 Average Shares Outstanding — Basic 4,303 4,309 4,323 Effect of dilutive securities 10 11 16 Average Shares Outstanding — Diluted 4,313 4,320 4,339 1 Calculated based on net income attributable to shareowners of The Coca-Cola Company. Refer to Notes to Consolidated Financial Statements. 61 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2025 2024 2023 Consolidated Net Income $ 13,137 $ 10,649 $ 10,703 Other Comprehensive Income: Net foreign currency translation adjustments 2,868 ( 2,893 ) 736 Net gains (losses) on derivatives ( 360 ) 270 ( 178 ) Net change in unrealized gains (losses) on available-for-sale debt securities 38 ( 63 ) 24 Net change in pension and other postretirement benefit liabilities 94 109 ( 109 ) Total Comprehensive Income 15,777 8,072 11,176 Less: Comprehensive income (loss) attributable to noncontrolling interests ( 42 ) 9 ( 158 ) Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company $ 15,819 $ 8,063 $ 11,334 Refer to Notes to Consolidated Financial Statements. 62 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions except par value) December 31, 2025 2024 ASSETS Current Assets Cash and cash equivalents $ 10,270 $ 10,828 Short-term investments 3,602 2,020 Total Cash, Cash Equivalents and Short-Term Investments 13,872 12,848 Marketable securities 1,934 1,723 Trade accounts receivable, less allowances of $ 495 and $ 506 , respectively 3,038 3,569 Inventories 4,425 4,728 Prepaid expenses and other current assets 2,433 2,998 Assets held for sale 5,342 131 Total Current Assets 31,044 25,997 Equity method investments 20,235 18,087 Deferred income tax assets 1,206 1,319 Property, plant and equipment — net 9,613 10,303 Trademarks with indefinite lives 12,531 13,301 Goodwill 15,491 18,139 Other noncurrent assets 14,696 13,403 Total Assets $ 104,816 $ 100,549 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses $ 14,813 $ 21,712 Loans and notes payable 1,551 1,499 Current maturities of long-term debt 1,822 648 Accrued income taxes 525 1,387 Liabilities held for sale 2,570 3 Total Current Liabilities 21,281 25,249 Long-term debt 42,119 42,375 Other noncurrent liabilities 4,735 4,084 Deferred income tax liabilities 2,406 2,469 The Coca-Cola Company Shareowners’ Equity Common stock, $ 0.25 par value; authorized — 11,200 shares; issued — 7,040 shares 1,760 1,760 Capital surplus 20,581 19,801 Reinvested earnings 80,382 76,054 Accumulated other comprehensive income (loss) ( 14,131 ) ( 16,843 ) Treasury stock, at cost — 2,738 and 2,738 shares, respectively ( 56,423 ) ( 55,916 ) Equity Attributable to Shareowners of The Coca-Cola Company 32,169 24,856 Equity attributable to noncontrolling interests 2,106 1,516 Total Equity 34,275 26,372 Total Liabilities and Equity $ 104,816 $ 100,549 Refer to Notes to Consolidated Financial Statements. 63 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Year Ended December 31, 2025 2024 2023 Operating Activities Consolidated net income $ 13,137 $ 10,649 $ 10,703 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 1,050 1,075 1,128 Stock-based compensation expense 279 286 254 Deferred income taxes 517 ( 11 ) ( 2 ) Equity (income) loss — net of dividends ( 1,038 ) ( 802 ) ( 1,019 ) Foreign currency adjustments 191 ( 110 ) 175 Significant (gains) losses — net ( 713 ) ( 1,737 ) ( 492 ) Other operating charges 1,052 4,000 1,741 Other items 141 ( 311 ) ( 43 ) Net change in operating assets and liabilities ( 7,208 ) ( 6,234 ) ( 846 ) Net Cash Provided by Operating Activities 7,408 6,805 11,599 Investing Activities Purchases of investments ( 6,160 ) ( 5,640 ) ( 6,698 ) Proceeds from disposals of investments 4,665 6,589 4,354 Acquisitions of businesses, equity method investments and nonmarketable securities ( 461 ) ( 315 ) ( 62 ) Proceeds from disposals of businesses, equity method investments and nonmarketable securities 3,567 3,485 430 Purchases of property, plant and equipment ( 2,112 ) ( 2,064 ) ( 1,852 ) Proceeds from disposals of property, plant and equipment 13 40 74 Collateral (paid) received associated with hedging activities — net 330 235 366 Other investing activities 91 194 39 Net Cash Provided by (Used in) Investing Activities ( 67 ) 2,524 ( 3,349 ) Financing Activities Issuances of loans, notes payable and long-term debt 4,980 12,061 6,891 Payments of loans, notes payable and long-term debt ( 4,967 ) ( 9,533 ) ( 5,034 ) Issuances of stock 313 747 539 Purchases of stock for treasury ( 746 ) ( 1,795 ) ( 2,289 ) Dividends ( 8,779 ) ( 8,359 ) ( 7,952 ) Proceeds from sale of a noncontrolling interest 1,338 — — Other financing activities ( 279 ) ( 31 ) ( 465 ) Net Cash Provided by (Used in) Financing Activities ( 8,140 ) ( 6,910 ) ( 8,310 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents 321 ( 623 ) ( 73 ) Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the year ( 478 ) 1,796 ( 133 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of year 11,488 9,692 9,825 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Year 11,010 11,488 9,692 Less: Restricted cash and restricted cash equivalents at end of year 740 660 326 Cash and Cash Equivalents at End of Year $ 10,270 $ 10,828 $ 9,366 Refer to Notes to Consolidated Financial Statements. 64 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS’ EQUITY (In millions except per share data) 2025 2024 2023 Equity Attributable to Shareowners of The Coca-Cola Company Number of Common Shares Outstanding Balance at beginning of year 4,302 4,308 4,328 Treasury stock issued to employees related to stock-based compensation plans 9 21 17 Purchases of stock for treasury ( 9 ) ( 27 ) ( 37 ) Balance at end of year 4,302 4,302 4,308 Common Stock $ 1,760 $ 1,760 $ 1,760 Capital Surplus Balance at beginning of year 19,801 19,209 18,822 Stock issued to employees related to stock-based compensation plans 94 319 177 Stock-based compensation expense 266 273 233 Sale of subsidiary shares 420 — — Acquisition of interests held by noncontrolling owners — — ( 20 ) Other activities — — ( 3 ) Balance at end of year 20,581 19,801 19,209 Reinvested Earnings Balance at beginning of year 76,054 73,782 71,019 Net income attributable to shareowners of The Coca-Cola Company 13,107 10,631 10,714 Dividends (per share — $ 2.04 , $ 1.94 and $ 1.84 in 2025, 2024 and 2023, respectively) ( 8,779 ) ( 8,359 ) ( 7,951 ) Balance at end of year 80,382 76,054 73,782 Accumulated Other Comprehensive Income (Loss) Balance at beginning of year ( 16,843 ) ( 14,275 ) ( 14,895 ) Net other comprehensive income (loss) 2,712 ( 2,568 ) 620 Balance at end of year ( 14,131 ) ( 16,843 ) ( 14,275 ) Treasury Stock Balance at beginning of year ( 55,916 ) ( 54,535 ) ( 52,601 ) Treasury stock issued to employees related to stock-based compensation plans 127 321 255 Purchases of stock for treasury ( 634 ) ( 1,702 ) ( 2,189 ) Balance at end of year ( 56,423 ) ( 55,916 ) ( 54,535 ) Total Equity Attributable to Shareowners of The Coca-Cola Company $ 32,169 $ 24,856 $ 25,941 Equity Attributable to Noncontrolling Interests Balance at beginning of year $ 1,516 $ 1,539 $ 1,721 Sale of subsidiary shares 644 — — Net income attributable to noncontrolling interests 30 18 ( 11 ) Net foreign currency translation adjustments ( 69 ) ( 9 ) ( 147 ) Dividends paid to noncontrolling interests ( 25 ) ( 28 ) ( 25 ) Contributions by noncontrolling interests 13 — — Net change in pension and other postretirement benefit liabilities ( 3 ) — — Divestitures — ( 4 ) — Acquisition of interests held by noncontrolling owners — — ( 2 ) Other activities — — 3 Total Equity Attributable to Noncontrolling Interests $ 2,106 $ 1,516 $ 1,539 Refer to Notes to Consolidated Financial Statements. 65 THE COCA-COLA COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES When used in these notes, the terms “The Coca-Cola Company,” “Company,” “we,” “us” and “our” mean The Coca-Cola Company and all entities included in our consolidated financial statements. Description of Business The Coca-Cola Company is a total beverage company. We own or license and market numerous beverage brands, which we group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. We own and market several of the world’s largest nonalcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Coca-Cola Zero Sugar, Fanta and Diet Coke/Coca-Cola Light. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries and territories. We make our branded beverage products available to consumers throughout the world through our network of independent bottling partners, distributors, wholesalers and retailers as well as the Company’s consolidated bottling and distribution operations. Beverages bearing trademarks owned by or licensed to us account for 2.2 billion of the estimated 65 billion servings of all beverages consumed worldwide every day. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements and accompanying notes. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different conditions occur, impairment charges may result. Certain other amounts in the prior years’ consolidated financial statements and notes have been revised to conform to the current year presentation. Principles of Consolidation Our Company consolidates all entities that we control by ownership of a majority voting interest. Additionally, there are situations in which consolidation is required even though the usual condition of consolidation (i.e., ownership of a majority voting interest) does not apply. Generally, this occurs when an entity holds an interest in another business enterprise that was achieved through arrangements that do not involve voting interests, which results in a disproportionate relationship between such entity’s voting interests in, and its exposure to the economic risks and potential rewards of, the other business enterprise. This disproportionate relationship results in what is known as a variable interest, and the entity in which another entity holds a variable interest is referred to as a “VIE.” An enterprise must consolidate a VIE if it is determined to be the primary beneficiary of the VIE. The primary beneficiary has both (1) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance, and (2) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Our Company holds interests in certain VIEs, primarily bottling operations, for which we were not determined to be the primary beneficiary. Our variable interests in these VIEs primarily relate to equity investments, profit guarantees or subordinated financial support. Refer to Note 12. Although these financial arrangements resulted in our holding variable interests in these entities, they did not empower us to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. Our Company’s investments, plus any loans and guarantees, and other subordinated financial support related to these VIEs totaled $ 1,676 million and $ 1,680 million as of December 31, 2025 and 2024, respectively, representing our maximum exposures to loss. The Company’s investments, plus any loans and guarantees, related to these VIEs were not individually significant to the Company’s consolidated financial statements. In addition, our Company holds interests in certain VIEs, primarily bottling operations, for which we were determined to be the primary beneficiary. As a result, we have consolidated these entities. Our Company’s investments, plus any loans and guarantees, related to these VIEs totaled $ 89 million and $ 87 million as of December 31, 2025 and 2024, respectively, representing our maximum exposures to loss. The assets and liabilities of VIEs for which we are the primary beneficiary were not significant to the Company’s consolidated financial statements. 66 Creditors of our VIEs do not have recourse against the general credit of the Company, regardless of whether the VIEs are accounted for as consolidated entities. We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence over the operating and financial policies of the investee. Our consolidated net income includes our Company’s proportionate share of the net income or loss of these companies. Our judgment regarding the level of influence over each equity method investee includes considering key factors, such as our ownership interest, representation on the board of directors, participation in policy-making decisions, other commercial arrangements and material intercompany transactions. We eliminate from our financial results all significant intercompany transactions, including the intercompany transactions with consolidated VIEs and the intercompany portion of transactions with equity method investees. Revenue Recognition Our Company recognizes revenue when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell concentrates, syrups or finished products to our bottling partners, wholesalers, distributors or retailers. Refer to Note 3. Advertising Costs Our Company expenses production costs of print, radio, television and other advertisements as of the first date the advertisements take place. All other marketing expenditures are expensed in the annual period in which the expenditure is incurred. Advertising costs included in the line item selling, general and administrative expenses in our consolidated statements of income were $ 5.4 billion, $ 5.1 billion and $ 5.0 billion in 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, advertising and production costs of $ 14 million and $ 25 million, respectively, were primarily recorded in the line item prepaid expenses and other current assets in our consolidated balance sheets. Shipping and Handling Costs Shipping and handling costs related to the movement of goods from our manufacturing locations to our sales distribution centers are included in the line item cost of goods sold in our consolidated statement of income. Shipping and handling costs incurred to move goods from our manufacturing locations or sales distribution centers to our customers are also included in the line item cost of goods sold in our consolidated statement of income, except for costs incurred to distribute goods sold by our consolidated bottlers to our customers, which are included in the line item selling, general and administrative expenses in our consolidated statement of income. Our customers generally do not pay us separately for shipping and handling costs. We recognize the cost of shipping and handling activities that are performed after a customer obtains control of the goods as costs to fulfill our promise to provide goods to the customer. As a result of this election, the Company does not evaluate whether shipping and handling activities are services promised to customers. If revenue is recognized for the related goods before the shipping and handling activities occur, the related costs of those shipping and handling activities are accrued. Sales, Use, Value-Added and Excise Taxes The Company collects taxes imposed directly on its customers related to sales, use, value-added, excise and other similar taxes. The Company then remits such taxes on behalf of its customers to the applicable governmental authorities. We exclude from net operating revenues the tax amounts imposed on revenue-producing transactions that were collected from our customers to be remitted to governmental authorities. Accordingly, such tax amounts are recorded in the line item trade accounts receivable in our consolidated balance sheet when collection of taxes from the customer has not yet occurred and are recorded in the line item accounts payable and accrued expenses in our consolidated balance sheet until they are remitted to the applicable governmental authorities. Taxes imposed directly on the Company, whether based on receipts from sales, inventory procurement costs or manufacturing activities, are recorded in the line item cost of goods sold in our consolidated statement of income. Net Income Per Share Basic net income per share is computed by dividing net income attributable to shareowners of The Coca-Cola Company by the weighted-average number of common shares outstanding during the reporting period. Diluted net income per share is computed similarly to basic net income per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. We excluded 3 million, 3 million and 8 million stock options from the computation of diluted net income per share in 2025, 2024 and 2023, respectively, because the stock options would have been antidilutive. Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents or restricted cash equivalents, as applicable. Restricted cash and restricted cash equivalents 67 generally consist of amounts held by our captive insurance companies, which are included in the line item other noncurrent assets in our consolidated balance sheet. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor our concentrations of credit risk. The following table provides a summary of cash, cash equivalents, restricted cash and restricted cash equivalents that constitute the total amounts shown in our consolidated statements of cash flows (in millions): December 31, 2025 2024 2023 Cash and cash equivalents $ 10,270 $ 10,828 $ 9,366 Restricted cash and restricted cash equivalents 1,2 740 660 326 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 11,010 $ 11,488 $ 9,692 1 Amounts include cash and cash equivalents in our solvency capital portfolio, which are included in the line item other noncurrent assets in our consolidated balance sheets. Refer to Note 4. 2 Amounts include cash and cash equivalents related to assets held for sale. Refer to Note 2. Investments We classify time deposits and other investments that have maturities of greater than three months but less than one year as short-term investments. We measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value with the change in fair value included in net income. We use quoted market prices to determine the fair value of equity securities with readily determinable fair values. For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management assesses each of these investments on an individual basis. Our investments in debt securities are carried at either amortized cost or fair value. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Refer to Note 4 for additional information on our policy for investments, which includes our assessment of impairments. We invest in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. Investments of this nature are included in the line item other noncurrent assets in our consolidated balance sheet. We generate a return through the receipt of tax credits, other tax benefits and cash distributions. We have elected to apply the proportional amortization method (“PAM”) of accounting to these investments. In accordance with PAM accounting, the Company amortizes the cost of its investments in the line item income taxes in our consolidated statement of income based on the proportion of the income tax benefits received during the period to the total income tax benefits expected to be received over the life of the investments. The income tax credits and other income tax benefits earned reduce our income tax payments and are recorded in the line item net change in operating assets and liabilities in our consolidated statement of cash flows. Refer to Note 15 for additional information on these investments. Trade Accounts Receivable We record trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts, which is charged to the provision for doubtful accounts, to reflect any expected loss on the trade accounts receivable balances. We calculate this allowance based on available relevant information, in addition to historical loss information, the level of past-due accounts based on the contractual terms of the receivables, and our relationships with, and the economic status of, our bottling partners and customers. We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations. The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $ 14,710 million and $ 21,873 million of trade accounts receivables under this program during the years ended December 31, 2025 and 2024, respectively. The costs of factoring such receivables were $ 60 million and $ 114 million for the years ended December 31, 2025 and 2024, respectively. The Company accounts for this program as a sale, and accordingly, the trade receivables sold are excluded from the line item trade accounts receivable in our consolidated balance sheet. The cash received from the financial institutions is classified within the operating activities section in our consolidated statement of cash flows. 68 Inventories Inventories consist primarily of raw materials and packaging (which include ingredients and supplies) and finished goods (which include concentrates and syrups in our concentrate operations and finished beverages in our finished product operations). Inventories are valued at the lower of cost or net realizable value. We determine cost on the basis of the average cost or first-in, first-out methods. Inventories consisted of the following (in millions): December 31, 2025 2024 Raw materials and packaging $ 2,708 $ 2,794 Finished goods 1,375 1,524 Other 342 410 Total inventories $ 4,425 $ 4,728 Derivative Instruments When deemed appropriate, our Company uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk. All derivatives are carried at fair value in our consolidated balance sheet in the following line items, as applicable: prepaid expenses and other current assets; other noncurrent assets; accounts payable and accrued expenses; and other noncurrent liabilities. The cash flow impact of the Company’s derivative instruments is primarily included in our consolidated statement of cash flows in net cash provided by operating activities. Refer to Note 5. Leases We determine if a contract contains a lease at its inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances. We are the lessee in a lease contract when we obtain the right to control the asset. Operating lease right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and are included in the line item other noncurrent assets in our consolidated balance sheet. Operating lease liabilities represent our obligation to make lease payments arising from the lease and are included in the line items accounts payable and accrued expenses and other noncurrent liabilities in our consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. When determining the lease term, we include renewal or termination options that we are reasonably certain to exercise. Leases with a lease term of 12 months or less at inception are not recorded in our consolidated balance sheet. Operating lease expense is recognized on a straight-line basis over the lease term in our consolidated statement of income. As the rates implicit in our leases are not readily determinable, we use our local incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. When our contracts contain lease and non-lease components, we account for both components as a single lease component. Refer to Note 10. We have various contracts for certain fountain equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. Property, Plant and Equipment Property, plant and equipment are stated at cost. Repair and maintenance costs that do not improve service potential or extend economic life are expensed as incurred. Depreciation is recorded principally by the straight-line method over the estimated useful lives of our assets, which are reviewed periodically and generally have the following ranges: buildings and improvements: 40 years or less; and machinery and equipment: 20 years or less. Land is not depreciated, and construction in progress is not depreciated until ready for service. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term, including renewal options that we are reasonably certain to exercise, or the estimated useful life of the improvement. Depreciation is not recorded during the period in which a long-lived asset or disposal group is classified as held for sale, even if the asset or disposal group continues to generate revenue during the period. Depreciation expense, including the depreciation expense of assets under finance leases, totaled $ 978 million, $ 997 million and $ 1,018 million in 2025, 2024 and 2023, respectively. 69 The following table summarizes our property, plant and equipment (in millions): December 31, 2025 2024 Land $ 265 $ 226 Buildings and improvements 4,967 5,143 Machinery and equipment 13,500 14,504 Property, plant and equipment — cost 18,732 19,873 Less: Accumulated depreciation 9,119 9,570 Property, plant and equipment — net $ 9,613 $ 10,303 Certain events or changes in circumstances may indicate that the recoverability of the carrying amount of property, plant and equipment should be assessed, including, among others, a significant decrease in market value, a significant change in the business climate in a particular market, or a current period operating or cash flow loss combined with historical losses or projected future losses. When such events or changes in circumstances are present and a recoverability test is performed, we estimate the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment charge. The impairment charge recognized is the amount by which the carrying amount of the asset or asset group exceeds the fair value. We use a variety of methodologies to determine the fair value of property, plant and equipment, including appraisals and discounted cash flow models. These appraisals and models include assumptions we believe are consistent with those a market participant would use. Goodwill, Trademarks and Other Intangible Assets We classify intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their useful lives, which is less than 20 years. When events or circumstances indicate that the carrying value of definite-lived intangible assets may not be recoverable, management performs a recoverability test of the carrying value by preparing estimates of sales volume and the resulting profit and cash flows expected to result from the use of the asset or asset group and its eventual disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment charge. The impairment charge recognized is the amount by which the carrying amount of the asset or asset group exceeds the fair value. We use a variety of methodologies to determine the fair value of these assets, including discounted cash flow models, which include assumptions we believe are consistent with those a market participant would use. We test intangible assets determined to have indefinite useful lives, including trademarks, franchise rights and goodwill, for impairment annually, or more frequently if events or circumstances indicate that assets might be impaired. Our Company performs these annual impairment tests as of the first day of our third fiscal quarter. We perform impairment tests using various valuation methodologies, including discounted cash flow models and a market approach, to determine the fair value of the indefinite-lived intangible asset or the reporting unit, as applicable. We believe our assumptions are consistent with those a market participant would use. For indefinite-lived intangible assets, other than goodwill, if the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. The Company has the option to perform a qualitative assessment of indefinite-lived intangible assets, other than goodwill, rather than completing the impairment test. The Company must assess whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount. If the Company concludes that this is the case, it must perform the impairment testing described above. Otherwise, the Company does not need to perform any further assessment. We perform impairment tests of goodwill at our reporting unit level, which is generally one level below our operating segments. 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, which are reporting units. The Bottling Investments operating segment includes all of our consolidated bottling operations, regardless of geographic location. Generally, each consolidated bottling operation within our Bottling Investments operating 70 segment is its own reporting unit. Goodwill is assigned to the reporting unit or units that benefit from the synergies arising from each business combination. In order to test for goodwill impairment, the Company compares the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is less than its carrying amount, goodwill is written down for the amount by which the carrying amount exceeds the fair value. However, the impairment charge recognized cannot exceed the carrying amount of goodwill. The Company has the option to perform a qualitative assessment of goodwill in order to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company concludes that this is the case, it must perform the impairment testing discussed above. Otherwise, the Company does not need to perform any further assessment. Impairment charges related to intangible assets, including goodwill, are generally recorded in the line item other operating charges in our consolidated statement of income. Contingencies Our Company is involved in various legal proceedings and tax matters. Due to their nature, such legal proceedings and tax matters involve inherent uncertainties, including, but not limited to, court rulings, negotiations between affected parties and governmental actions. Management assesses the probability of loss for such contingencies and accrues a liability and/or discloses the relevant circumstances, as appropriate. Refer to Note 12. Noncontrolling Interests In July 2025, we sold a 40 % noncontrolling interest in our bottling operations in India to a local partner for approximately $ 1.3 billion, which, net of direct costs, resulted in an increase to total equity of $ 1.1 billion. As a result, 40 % of the subsidiary’s equity was allocated to the noncontrolling interest and the remaining amount was recorded in capital surplus. Additionally, $ 226 million of foreign currency translation adjustments included in accumulated other comprehensive income (loss) (“AOCI”) were allocated to the noncontrolling interest. Stock-Based Compensation Our Company grants long-term equity awards under its stock-based compensation plans to certain employees of the Company. These awards include stock options, performance share units, restricted stock and restricted stock units. The fair value of stock option awards is estimated using a Black-Scholes-Merton option-pricing model. The Company recognizes compensation expense on a straight-line basis over the vesting period, which is generally four years . The fair value of restricted stock, restricted stock units and certain performance share units is the closing market price per share of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period. The Company included a relative total shareowner return (“TSR”) modifier for performance share unit awards granted to executives from 2020 through 2022 as well as for performance share unit awards granted to all participants starting in 2023. For these awards, the number of performance share units earned based on the certified achievement of the predefined performance criteria will be reduced or increased if the Company’s total shareowner return over the performance period relative to a predefined group of companies falls outside of a predefined range. The fair value of performance share units that include a TSR modifier is determined using a Monte Carlo valuation model. In the reporting period it becomes probable that the minimum performance threshold specified in the performance share unit award will be achieved, we recognize compensation expense for the proportionate share of the total fair value of the performance share units related to the vesting period that has already lapsed for the performance share units expected to vest. The remaining fair value of the performance share units expected to vest is expensed on a straight-line basis over the remainder of the vesting period. In the event the Company determines it is no longer probable that the minimum performance threshold specified in the award will be achieved, we reverse all of the previously recognized compensation expense in the reporting period such a determination is made. The Company has made a policy election to estimate the number of stock-based compensation awards that will ultimately vest to determine the amount of compensation expense recognized each reporting period. Forfeiture estimates are trued-up at the end of each quarter in order to ensure that compensation expense is recognized only for those awards that ultimately vest. Refer to Note 13. Income Taxes Income tax expense includes U.S., state, local and international income taxes. Deferred tax assets and liabilities are recognized for the tax consequences of temporary differences between the book basis and the tax basis of assets and liabilities. The tax rate used to determine the deferred tax assets and liabilities is the enacted tax rate for the year and manner in which the differences 71 are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not “more likely than not” to be sustained; (2) the tax position is “more likely than not” to be sustained, but for a lesser amount; or (3) the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and caselaw and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally resolved or when a tax assessment is raised. The number of years subject to tax assessments varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the “more likely than not” recognition threshold would be recognized in income tax expense in the first interim period when the uncertainty disappears under any one of the following conditions: (1) the tax position is “more likely than not” to be sustained; (2) the tax position, amount and/or timing is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the tax position has expired. Refer to Note 12 and Note 15. Translation and Remeasurement We translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars at the appropriate spot rates as of the balance sheet date. Generally, our foreign subsidiaries use the local currency as their functional currency. Changes in the carrying values of these assets and liabilities attributable to fluctuations in spot rates are recognized in net foreign currency translation adjustments, a component of AOCI. Refer to Note 16. Accounts in our consolidated statement of income are translated using the monthly average exchange rates during the year. Monetary assets and liabilities denominated in a currency that is different from a reporting entity’s functional currency must be remeasured from the applicable currency to the reporting entity’s functional currency. The effects of the remeasurement of these assets and liabilities are recognized in the line item other income (loss) — net in our consolidated statement of income and are partially offset by the impact of our economic hedging program for certain exposures on our consolidated balance sheet. Refer to Note 5. Recently Issued Accounting Guidance In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ended December 31, 2025 and will be applied prospectively. Refer to Note 15. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , which requires additional disclosures around specific expense categories in the notes to the financial statements. The additional annual disclosures are effective for our year ending December 31, 2027, and the additional interim disclosures are effective in 2028. These disclosures will be applied prospectively. The Company is currently evaluating the impact that ASU 2024-03 will have on our consolidated financial statements. 72 NOTE 2: ACQUISITIONS AND DIVESTITURES Acquisitions Our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 461 million, $ 315 million and $ 62 million during 2025, 2024 and 2023, respectively. The activity during 2025 included additional investments of $ 120 million in an equity method investee in Japan. The activity during 2025 and 2024 included $ 306 million and $ 226 million, respectively, of investments in alternative energy limited partnerships. Refer to Note 15 for additional information on these investments. Divestitures During 2025, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $ 3,567 million. In March 2025, the Company sold a portion of our ownership interest in CCEP, an equity method investee, for which we received cash proceeds of $ 741 million and recognized a gain of $ 331 million. In May 2025, the Company refranchised our bottling operations in certain territories in India that were held for sale as of December 31, 2024, for which we received cash proceeds of $ 218 million and recognized a gain of $ 102 million. In October 2025, we sold our finished product operations in Nigeria, which were classified as held for sale, for which we received cash proceeds of $ 106 million. In November 2025, we sold our ownership interest in Coke Consolidated, an equity method investee, to Coke Consolidated, for which we received cash proceeds of $ 2,392 million and recognized a gain of $ 1,952 million. In December 2025, we received cash proceeds of $ 84 million from the substantial liquidation of a joint venture in China, resulting in a gain of $ 31 million. During 2024, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $ 3,485 million. The Company refranchised our bottling operations in certain territories in India in January and February 2024, for which we received cash proceeds of $ 474 million and recognized a gain of $ 290 million. In February 2024, the Company refranchised our bottling operations in the Philippines to CCEP and a local business partner, for which we received cash proceeds of $ 1,652 million and recognized a gain of $ 595 million. We also sold our ownership interest in an equity method investee in Thailand, for which we received cash proceeds of $ 718 million and recognized a gain of $ 506 million. Additionally, the Company refranchised our bottling operations in Bangladesh to Coca-Cola İçecek A.Ş., an equity method investee, for which we received cash proceeds of $ 27 million and a note receivable of $ 29 million and recognized a loss of $ 18 million, primarily due to the related reclassification of net foreign currency translation adjustments to income. During 2025, the Company recognized an additional loss of $ 14 million related to post-closing adjustments and a corresponding reduction in the outstanding note receivable balance. In July 2024, we sold a portion of our ownership interest in Coke Consolidated to Coke Consolidated, for which we received cash proceeds of $ 554 million and recognized a gain of $ 338 million. In December 2024, we refranchised our bottling operations in additional territories in India, for which we received cash proceeds of $ 17 million and recognized a gain of $ 13 million. During 2023, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $ 430 million, which primarily related to the sale of our ownership interest in an equity method investee in Indonesia to CCEP, for which we received cash proceeds of $ 302 million and recognized a gain of $ 12 million. Also included was the sale of our ownership interest in an equity method investee in Pakistan, for which we received cash proceeds of $ 100 million and a note receivable of $ 200 million. We recognized a gain of $ 82 million as a result of the sale. In December 2022, the Company received cash proceeds of $ 823 million in advance of refranchising its bottling operations in Vietnam, which were refranchised in January 2023 and for which we recognized a gain of $ 439 million. All of the gains and losses discussed above were recorded in the line item other income (loss) — net in our consolidated statements of income. Assets and Liabilities Held for Sale In August 2025, the Company’s finished product operations in Nigeria, which were included in the EMEA operating segment, met the criteria to be classified as held for sale. As a result, we were required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the estimated proceeds. As there were significant negative net foreign currency translation adjustments that would be reclassified to income upon sale, the carrying amount of the assets held for sale (including the net foreign currency translation adjustments) exceeded the estimated proceeds, which required us to record an impairment loss in excess of the carrying amount of the assets held for sale (excluding the net foreign currency translation adjustments). As a result, the Company recorded a charge of $ 393 million, which consisted of a $ 235 million charge to write off the carrying amount of the assets held for sale (excluding the net foreign currency translation adjustments) and a $ 158 million charge to accrue the remaining difference between the carrying amount (including the net foreign currency translation adjustments) and the estimated proceeds. These charges were recorded in the line item other income (loss) — net in our consolidated statement of income. The sale of these operations was completed in October 2025. 73 In October 2025, the Company entered into a definitive agreement to sell a portion of our interest in our bottling operations in Africa to CCHBC, an equity method investee. Closing is subject to various regulatory approvals and is expected by the end of 2026, upon which we will deconsolidate these bottling operations. We have also agreed to a separate option arrangement for CCHBC to acquire the Company’s remaining 25% ownership interest within a six-year period from closing. As these operations met the criteria to be classified as held for sale, we were required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the estimated proceeds. Due to the negative net foreign currency translation adjustments that will be reclassified to income upon sale, we were required to reduce the carrying amount of the assets held for sale, which resulted in an impairment charge of $ 1,274 million, which was recorded in the line item other income (loss) — net in our consolidated statement of income. As of December 31, 2024, the Company’s bottling operations in certain territories in India met the criteria to be classified as held for sale. As the fair values less any costs to sell exceeded the carrying values, the related assets and liabilities were recorded at their carrying values. The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in our consolidated balance sheets (in millions): December 31, 2025 2024 Cash, cash equivalents and short-term investments $ 178 $ — Trade accounts receivable, less allowances 389 — Inventories 466 23 Prepaid expenses and other current assets 147 — Equity method investments 5 — Deferred income tax assets 46 — Property, plant and equipment — net 1,964 108 Trademarks with indefinite lives 2 — Goodwill 3,350 — Other noncurrent assets 60 — Allowance for reduction of assets held for sale ( 1,265 ) — Assets held for sale $ 5,342 $ 131 Accounts payable and accrued expenses $ 816 $ 2 Loans and notes payable 187 — Current maturities of long-term debt 398 — Accrued income taxes 5 — Long-term debt 850 — Other noncurrent liabilities 154 1 Deferred income tax liabilities 160 — Liabilities held for sale $ 2,570 $ 3 NOTE 3: NET OPERATING REVENUES Our Company operates in two lines of business: concentrate operations and finished product operations. 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 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. 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. Generally, finished product 74 operations generate higher net operating revenues but lower gross profit margins than concentrate operations. These operations consist primarily of our consolidated bottling and distribution operations, which are included in our Bottling Investments operating segment. 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 our geographic operating segments. Additionally, we sell directly to consumers through retail stores operated by Costa. 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. These fountain syrup sales are included in our North America operating segment. Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell concentrates, syrups or finished products to our bottling partners, wholesalers, distributors or retailers. Control of the concentrates, syrups or finished products is transferred upon shipment to, or receipt at, our customers’ locations, as determined by the specific terms of the contract. Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. Our sales terms generally do not allow for a right of return except for matters related to any manufacturing defects on our part. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables will generally be collected in less than six months, in accordance with the underlying payment terms. All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less. Our customers and bottling partners may be entitled to cash discounts, funds for promotional and marketing activities, volume-based incentive programs, support for infrastructure programs and other similar programs. In most markets, in an effort to allow our Company and our bottling partners to grow together through shared value, aligned financial objectives and the flexibility necessary to meet consumers’ always changing needs and tastes, we have implemented an incidence-based concentrate pricing model. Under this model, the price we charge bottlers for concentrates they use to prepare and package finished products is impacted by a number of factors, including, but not limited to, the prices charged by the bottlers for such finished products, the channels in which they 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 total revenue recorded, including any variable consideration, cannot exceed the amount for which it is probable that a significant reversal will not occur when uncertainties related to variability are resolved. As a result, we are recognizing revenue based on our best estimate of the consideration that we expect to receive. In making our estimates of variable consideration, we consider past results and make assumptions related to: (1) customer sales volumes; (2) customer ending inventories; (3) customer selling price per unit; (4) selling channels; and (5) discount rates, rebates and other pricing allowances, as applicable. In gathering data to estimate our variable consideration, we generally calculate our estimates using a portfolio approach at the country and product line level rather than at the individual contract level. The result of making these estimates will impact the line items trade accounts receivable or accounts payable and accrued expenses in our consolidated balance sheet, as applicable. The actual amounts ultimately paid and/or received may be different from our estimates. The change in the amount of variable consideration recognized during the year ended December 31, 2025 related to performance obligations satisfied in prior periods was immaterial. 75 The following table presents net operating revenues disaggregated between the United States and International and further by line of business (in millions): United States International Total Year Ended December 31, 2025 Concentrate operations $ 8,956 $ 19,506 $ 28,462 Finished product operations 10,171 9,308 19,479 Total $ 19,127 $ 28,814 $ 47,941 Year Ended December 31, 2024 Concentrate operations $ 8,813 $ 18,912 $ 27,725 Finished product operations 9,549 9,787 19,336 Total $ 18,362 $ 28,699 $ 47,061 Year Ended December 31, 2023 Concentrate operations $ 8,780 $ 17,759 $ 26,539 Finished product operations 7,770 11,445 19,215 Total $ 16,550 $ 29,204 $ 45,754 Refer to Note 20 for additional revenue disclosures by operating segment and Corporate. NOTE 4: INVESTMENTS We measure all equity investments that do not result in consolidation and are not accounted for under the equity method at fair value, with the change in fair value included in net income. We use quoted market prices to determine the fair values of equity securities with readily determinable fair values. For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management assesses each of these investments on an individual basis. Our investments in debt securities are carried at either amortized cost or fair value. The cost basis is determined by the specific identification method. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on trading debt securities as well as realized gains and losses on available-for-sale debt securities are included in net income. Unrealized gains and losses, net of tax, on available-for-sale debt securities are included in our consolidated balance sheet as a component of AOCI, except for the changes in fair values attributable to the currency risk being hedged, if applicable, which are included in net income. Refer to Note 5 for additional information related to the Company’s fair value hedges of available-for-sale debt securities. Equity securities with readily determinable fair values that are not accounted for under the equity method and debt securities classified as trading are not assessed for impairment, since they are carried at fair value with the change in fair value included in net income. Equity method investments, equity securities without readily determinable fair values and debt securities classified as available-for-sale or held-to-maturity are reviewed each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared to our cost basis in the investment. We also perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair value. The fair values of most of our Company’s investments in publicly traded companies are readily available based on quoted market prices. 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. The ability to accurately predict future cash flows, especially in emerging and developing markets, may impact the determination of fair value. In the event the fair value of an investment declines below our cost basis, management is required to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. Management’s assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis; the financial condition and near-term prospects of the issuer; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. 76 Equity Securities The carrying values of our equity securities were included in the following line items in our consolidated balance sheets (in millions): Fair Value with Changes Recognized in Income Measurement Alternative — No Readily Determinable Fair Value December 31, 2025 Marketable securities $ 489 $ — Other noncurrent assets 2,100 44 Total equity securities $ 2,589 $ 44 December 31, 2024 Marketable securities $ 418 $ — Other noncurrent assets 1,616 40 Total equity securities $ 2,034 $ 40 The calculation of net unrealized gains and losses recognized during the year related to equity securities still held at the end of the year is as follows (in millions): Year Ended December 31, 2025 2024 Net gains (losses) recognized during the year related to equity securities $ 431 $ 323 Less: Net gains (losses) recognized during the year related to equity securities sold during the year 54 106 Net unrealized gains (losses) recognized during the year related to equity securities still held at the end of the year $ 377 $ 217 Debt Securities Our debt securities consisted of the following (in millions): Gross Unrealized Estimated Fair Value Cost Gains Losses December 31, 2025 Trading securities $ 49 $ 1 $ — $ 50 Available-for-sale securities 1,816 23 ( 65 ) 1,774 Total debt securities $ 1,865 $ 24 $ ( 65 ) $ 1,824 December 31, 2024 Trading securities $ 45 $ 1 $ ( 1 ) $ 45 Available-for-sale securities 1,728 21 ( 118 ) 1,631 Total debt securities $ 1,773 $ 22 $ ( 119 ) $ 1,676 The carrying values of our debt securities were included in the following line items in our consolidated balance sheets (in millions): December 31, 2025 December 31, 2024 Trading Securities Available-for-Sale Securities Trading Securities Available-for-Sale Securities Marketable securities $ 50 $ 1,395 $ 45 $ 1,260 Other noncurrent assets — 379 — 371 Total debt securities $ 50 $ 1,774 $ 45 $ 1,631 77 The contractual maturities of these available-for-sale debt securities as of December 31, 2025 were as follows (in millions): Cost Estimated Fair Value Within 1 year $ 417 $ 415 After 1 year through 5 years 1,182 1,147 After 5 years through 10 years 38 46 After 10 years 179 166 Total $ 1,816 $ 1,774 The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations. The sale and/or maturity of available-for-sale debt securities resulted in the following realized activity (in millions): Year Ended December 31, 2025 2024 2023 Gross gains $ 4 $ 14 $ 3 Gross losses ( 6 ) ( 12 ) ( 10 ) Proceeds 657 709 361 Captive Insurance Companies In accordance with local insurance regulations, our consolidated captive insurance companies are required to meet and maintain minimum solvency capital requirements. The Company elected to invest a majority of its solvency capital in a portfolio of marketable equity and debt securities. These securities are included in the disclosures above. The Company uses one of our consolidated captive insurance companies to reinsure group annuity insurance contracts that cover the obligations of certain of our European and Canadian pension plans. This captive’s solvency capital funds included total equity and debt securities of $ 2,356 million and $ 1,883 million as of December 31, 2025 and 2024, respectively, which were classified in the line item other noncurrent assets in our consolidated balance sheets because the assets were not available to satisfy our current obligations. NOTE 5: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company’s financial performance and are referred to as “market risks.” When deemed appropriate, our Company uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative and non-derivative financial instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk. The Company uses various types of derivative instruments, including, but not limited to, forward contracts, commodity futures contracts, option contracts, collars and swaps. Forward contracts and commodity futures contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date and at a predetermined rate or price. An option contract is an agreement that conveys the purchaser the right, but not the obligation, to buy or sell a quantity of a currency or commodity at a predetermined rate or price during a period or at a time in the future. A collar is a strategy that uses a combination of options to limit the range of possible positive or negative returns on an underlying asset or liability to a specific range, or to protect expected future cash flows. To do this, an investor simultaneously buys a put option and sells (writes) a call option, or alternatively buys a call option and sells (writes) a put option. A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. We do not enter into derivative financial instruments for trading purposes. The Company may also designate certain non-derivative instruments, such as our foreign currency denominated third-party debt, in hedging relationships. All derivative instruments are carried at fair value in our consolidated balance sheet, primarily in the following line items, as applicable: prepaid expenses and other current assets; other noncurrent assets; accounts payable and accrued expenses; and other noncurrent liabilities. The carrying values of the derivatives reflect the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. These master netting agreements allow the Company to net settle positive and negative positions (assets and liabilities) arising from different transactions with the same counterparty. The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationships. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The changes in the fair 78 values of derivatives that have been designated and qualify for fair value hedge accounting are recorded in the same line item in our consolidated statement of income as the changes in the fair values of the hedged items attributable to the risk being hedged. The changes in the fair values of derivatives that have been designated and qualify as cash flow hedges or hedges of net investments in foreign operations are recorded in AOCI and are reclassified into the line item in our consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the values of the derivative instruments are generally offset by changes in the fair values or cash flows of the underlying exposures being hedged. The changes in the fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses, both at inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. The Company determines the fair values of its derivatives based on quoted market prices or pricing models using current market rates. Refer to Note 17. The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates, commodity rates or other financial indices. The Company does not view the fair values of its derivatives in isolation but rather in relation to the fair values or cash flows of the underlying hedged transactions or other exposures. Virtually all of our derivatives are straightforward over-the-counter instruments with liquid markets. The following table presents the fair values of the Company’s derivative instruments that were designated and qualified as part of a hedging relationship (in millions): Fair Value 1,2 Derivatives Designated as Hedging Instruments Financial Statement Line Item Impacted 1 December 31, 2025 December 31, 2024 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 125 $ 311 Foreign currency contracts Other noncurrent assets 31 82 Commodity contracts Prepaid expenses and other current assets — 2 Interest rate contracts Other noncurrent assets 142 27 Total assets $ 298 $ 422 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 205 $ 14 Foreign currency contracts Other noncurrent liabilities 28 39 Commodity contracts Accounts payable and accrued expenses 9 — Interest rate contracts Accounts payable and accrued expenses 17 — Interest rate contracts Other noncurrent liabilities 700 922 Total liabilities $ 959 $ 975 1 All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 17 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 17 for additional information related to the estimated fair value. 79 The following table presents the fair values of the Company’s derivative instruments that were not designated as hedging instruments (in millions): Fair Value 1,2 Derivatives Not Designated as Hedging Instruments Financial Statement Line Item Impacted 1 December 31, 2025 December 31, 2024 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 115 $ 152 Foreign currency contracts Other noncurrent assets 18 8 Commodity contracts Prepaid expenses and other current assets 7 7 Commodity contracts Assets held for sale 3 — Total assets $ 143 $ 167 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 66 $ 86 Foreign currency contracts Other noncurrent liabilities 5 12 Foreign currency contracts Liabilities held for sale 5 — Commodity contracts Accounts payable and accrued expenses 10 40 Commodity contracts Other noncurrent liabilities 1 — Commodity contracts Liabilities held for sale 1 — Other derivative instruments Accounts payable and accrued expenses 2 6 Total liabilities $ 90 $ 144 1 All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 17 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 17 for additional information related to the estimated fair value. Credit Risk Associated with Derivatives We have established strict counterparty credit guidelines and enter into transactions only with financial institutions of investment grade or better. We monitor counterparty exposures regularly and review any downgrade in credit rating immediately. If a downgrade in the credit rating of a counterparty were to occur, we have provisions requiring collateral for substantially all of our transactions. To mitigate presettlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. In addition, the Company’s master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Furthermore, for certain derivative financial instruments, the Company has agreements with counterparties that require collateral to be exchanged based on changes in the fair value of the instruments. The Company classifies collateral payments and receipts as investing cash flows when the collateral account is in an asset position and as financing cash flows when the collateral account is in a liability position. As a result of these factors, we consider the risk of counterparty default to be minimal. Cash Flow Hedging Strategy The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The changes in the fair values of derivatives designated as cash flow hedges are recorded in AOCI and are reclassified into the line item in our consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. The changes in fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into income. The maximum length of time for which the Company hedges its exposure to the variability in future cash flows is typically three years . The Company maintains a foreign currency cash flow hedging program to reduce the risk that our U.S. dollar net cash inflows from sales outside the United States and U.S. dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange rates. We enter into forward contracts and purchase foreign currency options and collars (principally euro, British pound and Japanese yen) to hedge certain portions of forecasted cash flows denominated in foreign currencies. When the U.S. dollar strengthens against the foreign currencies, the decline in the present value of future foreign currency cash flows is partially offset by gains in the fair value of the derivative instruments. Conversely, when the U.S. 80 dollar weakens, the increase in the present value of future foreign currency cash flows is partially offset by losses in the fair value of the derivative instruments. The total notional values of derivatives that were designated and qualified for the Company’s foreign currency cash flow hedging program were $ 9,760 million and $ 9,206 million as of December 31, 2025 and 2024, respectively. The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency denominated debt and other monetary assets or liabilities due to fluctuations in foreign currency exchange rates. For this hedging program, the Company recognizes in earnings each period the changes in carrying values of these foreign currency denominated assets and liabilities due to fluctuations in exchange rates. The changes in fair values of the cross-currency swap derivatives are recorded in AOCI with an immediate reclassification into income for the changes in fair values attributable to fluctuations in foreign currency exchange rates. The total notional value of derivatives that were designated as cash flow hedges for the Company’s foreign currency denominated assets and liabilities was $ 557 million as of both December 31, 2025 and December 31, 2024. The Company has entered into commodity futures contracts and other derivative instruments on various commodities to mitigate the price risk associated with forecasted purchases of materials used in our manufacturing process. These derivative instruments were designated as part of the Company’s commodity cash flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of certain commodities. The total notional values of derivatives that were designated and qualified for this program were $ 53 million and $ 58 million as of December 31, 2025 and 2024, respectively. Our Company monitors our mix of short-term debt and long-term debt regularly. We manage our risk to interest rate fluctuations through the use of derivative financial instruments. From time to time, the Company has entered into interest rate swap agreements and has designated these instruments as part of the Company’s interest rate cash flow hedging program. The objective of this hedging program is to mitigate the risk of adverse changes in benchmark interest rates on the Company’s future interest payments. The total notional value of derivatives that was designated and qualified for the Company’s interest rate cash flow hedging program was $ 1,786 million as of December 31, 2025. As of December 31, 2024, we did not have any interest rate swaps designated as a cash flow hedge. 81 The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income (“OCI”), AOCI and income (in millions): Gain (Loss) Recognized in OCI Financial Statement Line Item Impacted Gain (Loss) Reclassified from AOCI into Income 2025 Foreign currency contracts $ ( 729 ) Net operating revenues $ ( 247 ) Foreign currency contracts ( 2 ) Cost of goods sold 7 Foreign currency contracts — Interest expense ( 4 ) Foreign currency contracts 28 Other income (loss) — net 70 Interest rate contracts 16 Interest expense ( 3 ) Commodity contracts ( 17 ) Cost of goods sold ( 6 ) Total $ ( 704 ) $ ( 183 ) 2024 Foreign currency contracts $ 457 Net operating revenues $ 84 Foreign currency contracts 37 Cost of goods sold 16 Foreign currency contracts — Interest expense ( 4 ) Foreign currency contracts ( 18 ) Other income (loss) — net ( 45 ) Interest rate contracts ( 54 ) Interest expense ( 2 ) Commodity contracts 6 Cost of goods sold 1 Total $ 428 $ 50 2023 Foreign currency contracts $ ( 128 ) Net operating revenues $ ( 3 ) Foreign currency contracts 19 Cost of goods sold 14 Foreign currency contracts — Interest expense ( 4 ) Foreign currency contracts 35 Other income (loss) — net 17 Commodity contracts ( 15 ) Cost of goods sold ( 14 ) Total $ ( 89 ) $ 10 As of December 31, 2025, the Company estimates that it will reclassify into income during the next 12 months net losses of $ 184 million from the pretax amount recorded in AOCI as the anticipated cash flows occur. Fair Value Hedging Strategy The Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The Company also uses cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debt relating to fluctuations in foreign currency exchange rates and benchmark interest rates. The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes in the fair values of the hedged items are recognized in earnings. As a result, any difference is reflected in earnings as ineffectiveness. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if the hedged item has matured or has been extinguished. The total notional values of derivatives that were designated and qualified as fair value hedges of this type were $ 13,674 million and $ 12,628 million as of December 31, 2025 and 2024, respectively. 82 The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on income (in millions): Hedging Instruments and Hedged Items Financial Statement Line Item Impacted Gain (Loss) Recognized in Income 2025 Interest rate contracts Interest expense $ 303 Fixed-rate debt Interest expense ( 292 ) Net impact of fair value hedging instruments $ 11 2024 Interest rate contracts Interest expense $ 173 Fixed-rate debt Interest expense ( 170 ) Net impact of fair value hedging instruments $ 3 2023 Interest rate contracts Interest expense $ 609 Fixed-rate debt Interest expense ( 591 ) Net impact of fair value hedging instruments $ 18 The following table summarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships (in millions): Cumulative Amount of Fair Value Hedging Adjustments 1 Carrying Values of Hedged Items Included in the Carrying Values of Hedged Items Remaining for Which Hedge Accounting Has Been Discontinued Balance Sheet Location of Hedged Items December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Current maturities of long-term debt $ 1,491 $ — $ ( 10 ) $ — $ — $ — Long-term debt 11,648 11,824 ( 705 ) ( 915 ) 97 130 1 Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations. In June 2023, the Company amended the terms of its interest rate swap agreements to implement a forward-looking interest rate based on the Secured Overnight Financing Rate in place of the London Interbank Offered Rate. Since the interest rate swap agreements were affected by reference rate reform, the Company applied the expedients and exceptions provided to preserve the past presentation of its derivatives without de-designating the existing hedging relationships. All amendments to interest rate swap agreements were executed with the existing counterparties and did not change the notional amounts, maturity dates or other critical terms of the hedging relationships. Hedges of Net Investments in Foreign Operations Strategy The Company uses forward contracts and a portion of its foreign currency denominated debt, a non-derivative financial instrument, to protect the value of our net investments in a number of foreign operations. In 2025, the Company changed its method for assessing the effectiveness of derivative financial instruments designated as net investment hedges to include only the changes in fair value attributable to changes in foreign currency spot rates. The changes in the fair values of the effective portion of the derivative financial instruments are recognized in net foreign currency translation adjustments, a component of AOCI, to offset the changes in the values of the net investments being hedged. The initial value, and subsequent changes in fair value of the excluded component, are amortized into earnings over the life of the hedging instrument. For non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations, the changes in the carrying values of the designated portions of the non-derivative financial instruments due to fluctuations in foreign currency exchange rates are recorded in net foreign currency translation adjustments. Any ineffective portions of net investment hedges are reclassified from AOCI into income during the period of change. 83 The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions): Notional Values Gain (Loss) Recognized in OCI as of December 31, Year Ended December 31, 2025 2024 2025 2024 2023 Foreign currency contracts $ 1,067 $ 59 $ 8 $ 19 $ ( 6 ) Foreign currency denominated debt 14,998 13,221 ( 1,778 ) 825 ( 376 ) Total $ 16,065 $ 13,280 $ ( 1,770 ) $ 844 $ ( 382 ) The Company reclassified gains of $ 3 million related to net investment hedges from AOCI into income during the year ended December 31, 2024. The Company did not reclassify any gains or losses related to net investment hedges from AOCI into income during the years ended December 31, 2025 and 2023. In addition, the Company did not have any ineffectiveness related to net investment hedges during the years ended December 31, 2025, 2024 and 2023. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in the line item other investing activities in our consolidated statement of cash flows. Economic (Non-Designated) Hedging Strategy In addition to derivative instruments that have been designated and qualify for hedge accounting, the Company also uses certain derivatives as economic hedges of foreign currency, interest rate and commodity exposure. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in the fair values of economic hedges are immediately recognized in earnings. The Company uses foreign currency economic hedges to offset the earnings impact that fluctuations in foreign currency exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. The changes in the fair values of economic hedges used to offset those monetary assets and liabilities are immediately recognized in earnings in the line item other income (loss) — net in our consolidated statement of income. In addition, we use foreign currency economic hedges to minimize the variability in cash flows associated with fluctuations in foreign currency exchange rates, including those related to certain acquisition and divestiture activities. The changes in the fair values of economic hedges used to offset the variability in U.S. dollar net cash flows are immediately recognized in earnings in the line items net operating revenues, cost of goods sold or other income (loss) — net in our consolidated statement of income, as applicable. The total notional values of derivatives related to our foreign currency economic hedges were $ 9,744 million and $ 8,620 million as of December 31, 2025 and 2024, respectively. The Company uses interest rate contracts as economic hedges to minimize exposure to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. There were no interest rate contracts used as economic hedges as of December 31, 2025 and 2024. The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process and vehicle fuel. The changes in the fair values of these economic hedges are immediately recognized in earnings in the line items net operating revenues, cost of goods sold, or selling, general and administrative expenses in our consolidated statement of income, as applicable. The total notional values of derivatives related to our economic hedges of this type were $ 482 million and $ 328 million as of December 31, 2025 and 2024, respectively. The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on income (in millions): Derivatives Not Designated as Hedging Instruments Financial Statement Line Item Impacted Gain (Loss) Recognized in Income Year Ended December 31, 2025 2024 2023 Foreign currency contracts Net operating revenues $ ( 204 ) $ 211 $ ( 74 ) Foreign currency contracts Cost of goods sold 123 ( 44 ) 66 Foreign currency contracts Other income (loss) — net 192 ( 107 ) ( 10 ) Commodity contracts Cost of goods sold ( 13 ) ( 97 ) ( 137 ) Other derivative instruments Selling, general and administrative expenses 23 17 5 Total $ 121 $ ( 20 ) $ ( 150 ) 84 NOTE 6: EQUITY METHOD INVESTMENTS Our consolidated net income includes our Company’s proportionate share of the net income or loss of our equity method investees. When we record our proportionate share of net income, it increases equity income (loss) — net in our consolidated statement of income and our carrying value of that investment. Conversely, when we record our proportionate share of a net loss, it decreases equity income (loss) — net in our consolidated statement of income and our carrying value of that investment. The Company’s proportionate share of the net income or loss of our equity method investees includes our proportionate share of significant operating and nonoperating items recorded by our equity method investees. These items can have a significant impact on the amount of equity income (loss) — net in our consolidated statement of income and our carrying value of those investments. Refer to Note 18 for additional information related to significant operating and nonoperating items recorded by our equity method investees. The carrying values of our equity method investments are also impacted by our proportionate share of items impacting the equity method investees’ AOCI. We eliminate from our financial results all significant intercompany transactions to the extent of our ownership interest, including the intercompany portion of transactions with equity method investees. The Company’s equity method investments include, but are not limited to, our ownership interests in CCEP; Monster; AC Bebidas, S. de R.L. de C.V.; Coca-Cola FEMSA; CCHBC; and Coca-Cola Bottlers Japan Holdings Inc. As of December 31, 2025, we owned 18 %, 21 %, 20 %, 28 %, 22 % and 24 %, respectively, of these companies’ outstanding shares. As of December 31, 2025, our investments in our equity method investees in the aggregate exceeded our proportionate share of the net assets of these equity method investees by $ 8,744 million. This difference is not amortized. A summary of financial information for our equity method investees in the aggregate is as follows (in millions): Year Ended December 31, 1 2025 2024 2023 Net operating revenues $ 102,800 $ 99,043 $ 93,862 Cost of goods sold 60,622 58,527 55,780 Gross profit $ 42,178 $ 40,516 $ 38,082 Operating income $ 13,426 $ 12,536 $ 11,868 Consolidated net income $ 9,355 $ 8,439 $ 7,657 Less: Net income attributable to noncontrolling interests 153 98 75 Net income attributable to common shareowners $ 9,202 $ 8,341 $ 7,582 Company equity income (loss) — net $ 2,031 $ 1,770 $ 1,691 1 The financial information represents the results of the equity method investees during the Company’s period of ownership. December 31, 2025 2024 Current assets $ 35,272 $ 33,720 Noncurrent assets 79,826 72,039 Total assets $ 115,098 $ 105,759 Current liabilities $ 29,933 $ 26,959 Noncurrent liabilities 34,406 33,004 Total liabilities $ 64,339 $ 59,963 Equity attributable to shareowners of investees $ 48,967 $ 44,295 Equity attributable to noncontrolling interests 1,792 1,501 Total equity $ 50,759 $ 45,796 Company equity method investments $ 20,235 $ 18,087 Net sales to equity method investees, the majority of which are located outside the United States, were $ 19,044 million, $ 18,278 million and $ 17,736 million in 2025, 2024 and 2023, respectively. Total payments, primarily related to marketing, made to equity method investees were $ 271 million, $ 331 million and $ 294 million in 2025, 2024 and 2023, respectively. In addition, purchases of beverage products from equity method investees were $ 648 million, $ 635 million and $ 579 million in 2025, 2024 and 2023, respectively. 85 The following table presents the difference between calculated fair value, based on quoted closing prices of publicly traded shares, and our Company’s carrying value in investments in publicly traded companies accounted for under the equity method (in millions): December 31, 2025 Fair Value Carrying Value Difference Monster Beverage Corporation $ 15,659 $ 5,593 $ 10,066 Coca-Cola Europacific Partners plc 7,163 3,926 3,237 Coca-Cola FEMSA, S.A.B. de C.V. 5,543 2,236 3,307 Coca-Cola HBC AG 4,051 1,391 2,660 Coca-Cola Bottlers Japan Holdings Inc. 822 459 363 Coca-Cola İçecek A.Ş. 770 288 482 Embotelladora Andina S.A. 278 106 172 Total $ 34,286 $ 13,999 $ 20,287 Net Receivables and Dividends from Equity Method Investees Total net receivables due from equity method investees were $ 1,413 million and $ 1,357 million as of December 31, 2025 and 2024, respectively. The total amount of dividends received from equity method investees was $ 993 million, $ 968 million and $ 672 million for the years ended December 31, 2025, 2024 and 2023, respectively. The amount of consolidated reinvested earnings that represents undistributed earnings of investments accounted for under the equity method as of December 31, 2025 was $ 9,067 million. NOTE 7: GOODWILL The following table provides information related to the carrying value of our goodwill by operating segment (in millions): EMEA Latin America North America Asia Pacific Bottling Investments Total 2024 Balance at beginning of year $ 3,647 $ 226 $ 10,978 $ 417 $ 3,090 $ 18,358 Effect of foreign currency translation ( 107 ) ( 11 ) — ( 10 ) ( 84 ) ( 212 ) Impairment charges — — — — ( 6 ) ( 6 ) Divestitures — — — — ( 1 ) ( 1 ) Balance at end of year $ 3,540 $ 215 $ 10,978 $ 407 $ 2,999 $ 18,139 2025 Balance at beginning of year $ 3,540 $ 215 $ 10,978 $ 407 $ 2,999 $ 18,139 Effect of foreign currency translation 311 12 — 2 396 721 Divestitures and assets held for sale 1 ( 8 ) — — — ( 3,361 ) ( 3,369 ) Balance at end of year $ 3,843 $ 227 $ 10,978 $ 409 $ 34 $ 15,491 1 The decrease in the Bottling Investments segment was a result of the Company’s bottling operations in Africa being classified as held for sale. Refer to Note 2. NOTE 8: ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following (in millions): December 31, 2025 2024 Accounts payable $ 5,649 $ 5,468 Accrued marketing expenses 2,925 3,092 Accrued compensation 1,506 1,391 Contingent consideration liability 1 — 6,126 Other accrued expenses 4,733 5,635 Accounts payable and accrued expenses $ 14,813 $ 21,712 1 Represents the fairlife contingent consideration liability. Refer to Note 17. 86 NOTE 9: SUPPLY CHAIN FINANCE PROGRAM Our current payment terms with the majority of our suppliers are 120 days. Certain financial institutions offer a voluntary SCF program, which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them. The SCF program is available to suppliers of goods and services included in cost of goods sold and selling, general and administrative expenses in our consolidated statement of income. The Company and our suppliers agree on contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers sell their invoices to the financial institutions. Our suppliers’ voluntary participation in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line items accounts payable and accrued expenses and liabilities held for sale in our consolidated balance sheet, as applicable. All activity related to amounts due to suppliers that elected to participate in the SCF program is reflected within the operating activities section of our consolidated statement of cash flows. The summary of the Company’s outstanding obligations confirmed as valid under the SCF program is as follows (in millions): 2025 2024 Confirmed obligations outstanding at beginning of year $ 1,330 $ 1,421 Invoices confirmed 5,019 5,105 Confirmed invoices paid ( 4,974 ) ( 5,196 ) Translation and other ( 12 ) — Confirmed obligations outstanding at end of year $ 1,363 1 $ 1,330 1 Includes $ 37 million of confirmed obligations outstanding at end of year related to our bottling operations in Africa that are currently held for sale. Refer to Note 2. NOTE 10: LEASES We have operating leases primarily for real estate, manufacturing and other equipment, aircraft and vehicles. Balance sheet information related to operating leases is as follows (in millions): December 31, 2025 2024 Operating lease ROU assets 1 $ 1,697 $ 1,182 Current portion of operating lease liabilities 2 $ 321 $ 290 Noncurrent portion of operating lease liabilities 3 1,401 923 Total operating lease liabilities $ 1,722 $ 1,213 1 Operating lease ROU assets are included in the line item other noncurrent assets in our consolidated balance sheets. 2 The current portion of operating lease liabilities is included in the line item accounts payable and accrued expenses in our consolidated balance sheets. 3 The noncurrent portion of operating lease liabilities is included in the line item other noncurrent liabilities in our consolidated balance sheets. We had operating lease costs of $ 405 million, $ 362 million and $ 397 million for the years ended December 31, 2025, 2024 and 2023, respectively. During 2025, 2024 and 2023, cash paid for amounts included in the measurement of operating lease liabilities was $ 404 million, $ 359 million and $ 389 million, respectively. Operating lease ROU assets obtained in exchange for operating lease obligations were $ 867 million, $ 313 million and $ 328 million for the years ended December 31, 2025, 2024 and 2023, respectively. Information associated with the measurement of our operating lease liabilities as of December 31, 2025 is as follows: Weighted-average remaining lease term 9 years Weighted-average discount rate 3.9 % Our leases have remaining lease terms of up to 44 years, inclusive of renewal or termination options that we are reasonably certain to exercise. 87 The following table summarizes the maturities of our operating lease liabilities as of December 31, 2025 (in millions): Maturities of Operating Lease Liabilities 2026 $ 381 2027 317 2028 259 2029 213 2030 170 Thereafter 679 Total operating lease payments 2,019 Less: Imputed interest 297 Total operating lease liabilities $ 1,722 NOTE 11: DEBT AND BORROWING ARRANGEMENTS Loans and Notes Payable Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2025 and 2024, we had $ 1,495 million and $ 1,139 million, respectively, in outstanding commercial paper borrowings. Our weighted-average interest rates for commercial paper outstanding were 3.9 % and 5.0 % as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company also had $ 56 million and $ 360 million, respectively, in lines of credit, short-term credit facilities and other short-term borrowings. In addition, we had $ 7,227 million in unused lines of credit and other short-term credit facilities as of December 31, 2025, of which $ 6,150 million was in corporate backup lines of credit for general purposes. These backup lines of credit expire at various times through 2030. There were no borrowings under these corporate backup lines of credit during 2025. These credit facilities are subject to normal banking terms and conditions. Some of the financial arrangements require compensating balances, none of which was significant to our Company. 88 Long-Term Debt The Company’s long-term debt consisted of the following (in millions except average rate data): December 31, 2025 December 31, 2024 Amount Average Rate 1 Amount Average Rate 1 Fixed interest rate long-term debt: U.S. dollar notes due 2027-2093 $ 26,945 3.6 % $ 26,931 3.1 % U.S. dollar debentures due 2026-2098 767 4.8 778 4.8 Euro notes due 2026-2053 15,470 2.4 13,619 3.1 Swiss franc notes due 2028 726 5.1 635 6.7 Other, due through 2098 2 651 4.9 1,845 7.1 Fair value adjustments 3 ( 618 ) N/A ( 785 ) N/A Total 4,5 43,941 3.3 % 43,023 3.4 % Less: Current portion 1,822 648 Long-term debt $ 42,119 $ 42,375 1 Rates represent the weighted-average effective interest rate on the balances outstanding as of year end, as adjusted for the effective amount of interest rate swap agreements and cross-currency swap agreements, if applicable. Refer to Note 5 for a more detailed discussion on interest rate management. 2 As of December 31, 2024, the amount includes $ 1,249 million of debt instruments related to our bottling operations in Africa. As of December 31, 2025, the Company’s bottling operations in Africa met the criteria to be classified as held for sale. As a result, the related debt balance as of December 31, 2025 was recorded in the line item liabilities held for sale in our consolidated balance sheet. Refer to Note 2. 3 Amounts represent the changes in fair values due to changes in benchmark interest rates. Refer to Note 5 for additional information about our fair value hedging strategy. 4 As of December 31, 2025 and 2024, the fair value of our long-term debt, including the current portion, was $ 39,385 million and $ 38,052 million, respectively. 5 The above notes and debentures include various restrictions, none of which was significant to our Company. Total interest paid was $ 1,724 million, $ 1,669 million and $ 1,415 million in 2025, 2024 and 2023, respectively. During 2024, the Company extinguished prior to maturity long-term debt of $ 485 million, resulting in a gain of $ 22 million recorded in the line item interest expense in our consolidated statement of income. The following table summarizes the maturities of long-term debt for the five years succeeding December 31, 2025 (in millions): Maturities of Long-Term Debt 2026 $ 1,822 2027 4,817 2028 2,923 2029 2,955 2030 3,411 NOTE 12: COMMITMENTS AND CONTINGENCIES Guarantees As of December 31, 2025, we were contingently liable for guarantees of indebtedness owed by third parties of $ 786 million, of which $ 61 million was related to VIEs. Refer to Note 1 for additional information related to the Company’s maximum exposure to loss due to our involvement with VIEs. Our guarantees are primarily related to third-party customers, bottlers and vendors and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant. These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is remote. Concentrations of Credit Risk We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations. 89 Legal Contingencies The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings (excluding tax audit claims) will not have a material adverse effect on the Company taken as a whole. Indemnifications At the time we acquire or divest an ownership interest in an entity, we sometimes agree to indemnify the seller or buyer for specific contingent liabilities. Management believes that any liability to the Company that may arise as a result of any such indemnification agreements will not have a material adverse effect on the Company taken as a whole. Tax Audits The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These uncertain tax matters may result in the assessment of additional taxes. Refer to Note 15. On September 17, 2015, the Company received a Notice from the IRS seeking approximately $ 3.3 billion of additional federal income tax for years 2007 through 2009. In the Notice, the IRS stated its intent to reallocate over $ 9 billion of income to the U.S. parent company from certain of its foreign affiliates that the U.S. parent company licensed to manufacture, distribute, sell, market and promote its products in certain non-U.S. markets. The Notice concerned the Company’s transfer pricing between its U.S. parent company and certain of its foreign affiliates. IRS rules governing transfer pricing require arm’s-length pricing of transactions between related parties such as the Company’s U.S. parent and its foreign affiliates. To resolve the same transfer pricing issue for the tax years 1987 through 1995, the Company and the IRS had agreed in 1996 on an arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as compensation from its foreign licensees. The Company and the IRS memorialized this accord in the Closing Agreement resolving that dispute. The Closing Agreement provided that, absent a change in material facts or circumstances or relevant federal tax law, in calculating the Company’s income taxes going forward, the Company would not be assessed penalties by the IRS for using the agreed-upon tax calculation methodology that the Company and the IRS agreed would be used for the 1987 through 1995 tax years. The IRS audited and confirmed the Company’s compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006. The September 17, 2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favor of an entirely different methodology, without prior notice to the Company. Using the new tax calculation methodology, the IRS reallocated over $ 9 billion of income to the U.S. parent company from its foreign licensees for tax years 2007 through 2009. Consistent with the Closing Agreement, the IRS did not assert penalties, and it has yet to do so. The IRS designated the Company’s matter for litigation on October 15, 2015. Litigation designation is an IRS determination that forecloses to a company any and all alternative means for resolution of a tax dispute. As a result of the IRS’ designation of the Company’s matter for litigation, the Company was forced to either accept the IRS’ newly imposed tax assessment and pay the full amount of the asserted tax or litigate the matter in the federal courts. The matter remains subject to the IRS’ litigation designation, preventing the Company from any attempt to settle or otherwise mutually resolve the matter with the IRS. The Company consequently initiated litigation by filing a petition in the Tax Court in December 2015, challenging the tax adjustments enumerated in the Notice. Prior to trial, the IRS increased its transfer pricing adjustment by $ 385 million, resulting in an additional tax adjustment of $ 135 million. The Company obtained a summary judgment in its favor on a different matter related to Mexican foreign tax credits, which thereafter effectively reduced the IRS’ potential tax adjustment by $ 138 million. The trial was held in the Tax Court from March through May 2018, and final post-trial briefs were filed and exchanged in April 2019. 90 On November 18, 2020, the Tax Court issued the Opinion in which it predominantly sided with the IRS but agreed with the Company that dividends previously paid by the foreign licensees to the U.S. parent company in reliance upon the Closing Agreement should continue to be allowed to offset royalties, including those that would become payable to the Company in accordance with the Opinion. On November 8, 2023, the Tax Court issued a supplemental opinion, 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 the 3M case 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. The Company believes that the IRS and the Tax Court misinterpreted and misapplied the applicable regulations in reallocating income earned by the Company’s foreign licensees to increase the Company’s U.S. tax. Moreover, the Company believes that the retroactive imposition of such tax liability using a calculation methodology different from that previously agreed upon by the IRS and the Company, and audited by the IRS for over a decade, is unconstitutional. The Company intends to assert its claims on appeal and vigorously defend its positions. In addition, for its litigation with the IRS and for purposes of its appeal of the Tax Court decision, the Company continues to evaluate the implications of several significant administrative law cases recently decided by the U.S. Supreme Court, most notably Loper Bright v. Raimondo , which overruled the Chevron case. Since 1984, the Chevron case had required that courts defer to agency interpretations of statutes and agency action. In Ohio v. EPA and Garland v. Cargill , two of the recent decisions, the U.S. Supreme Court demonstrated how courts are to rule on agency interpretations and actions without the deference previously required by the Chevron case. On August 2, 2024, the Tax Court entered a decision reflecting additional federal income tax of $ 2.7 billion for the 2007 through 2009 tax years. With applicable interest, the total liability for the 2007 through 2009 tax years resulting from the Tax Court’s decision is $ 6.0 billion, for which the IRS issued the Company invoices on September 3, 2024. The Company paid the IRS Tax Litigation Deposit on September 10, 2024, which stopped interest from accruing on the additional tax due for the 2007 through 2009 tax years. That amount, plus interest earned, would be refunded in full or in part if the Company’s tax positions are ultimately sustained on appeal. For the 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. In determining the amount of tax reserve to be recorded as of December 31, 2020, the Company completed the required two-step evaluation process prescribed by Accounting Standards Codification 740, Accounting for Income Taxes . In doing so, we consulted with outside advisors, and we reviewed and considered relevant laws, rules, and regulations, including, but not limited to, the Opinions and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal. We concluded, based on the technical and legal merits of the Company’s tax positions, that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal. In addition, we considered a number of alternative transfer pricing methodologies, including the Tax Court Methodology, that could be applied by the courts upon final resolution of the litigation. Based on the required probability analysis, we determined the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s tax. As a result of this analysis, we recorded a tax reserve of $ 438 million during the year ended December 31, 2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinions and the Company’s analysis. The Company’s conclusion that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal is unchanged as of December 31, 2025. However, based on the required probability analysis and the accrual of interest through the current reporting period, we updated our tax reserve as of December 31, 2025 to $ 512 million. While the Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions, it is possible that some portion or all of the adjustments proposed by the IRS and sustained by the Tax Court could ultimately be upheld. In that event, the Company would not receive a refund of the applicable portion or all of the $ 6.0 billion it paid in 91 response to the IRS invoices issued in September 2024 and the related accrued interest receivable of $ 385 million as of December 31, 2025. Additionally, the Company would likely be subject to significant additional liabilities for subsequent years, which could have a material adverse impact on the Company’s financial position, results of operations and cash flows. The Company calculated the potential impact of applying the Tax Court Methodology to reallocate income from foreign licensees potentially covered within the scope of the Opinions for the 2010 through 2025 tax years, assuming such methodology were to be ultimately upheld by the courts, and the IRS were to decide to apply that methodology to subsequent years, with consent of the federal courts. This impact would include taxes and interest accrued through December 31, 2025. The calculations incorporated the estimated impact of correlative adjustments to the previously accrued transition tax payable under the Tax Reform Act. 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 2025 tax years would continue to accrue until the time any such potential liability, or portion thereof, were to be paid. We currently project the continued application of the Tax Court Methodology in 2026, assuming similar facts and circumstances as of December 31, 2025, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5 %. Risk Management Programs The Company has numerous global insurance programs in place to help protect the Company from the risk of loss. In general, we are self-insured for large portions of many different types of claims; however, we do use commercial insurance above our self-insured retentions to reduce the Company’s risk of catastrophic loss. Our reserves for the Company’s self-insured losses are estimated using actuarial methods and assumptions of the insurance industry, adjusted for our specific expectations based on our claims history. Our self-insurance reserves totaled $ 155 million and $ 168 million as of December 31, 2025 and 2024, respectively. NOTE 13: STOCK-BASED COMPENSATION PLANS Our Company grants long-term equity awards under its stock-based compensation plans to certain employees of the Company. Effective May 1, 2024, shareowners approved The Coca-Cola Company 2024 Equity Plan (“2024 Plan”). The 2024 Plan allows for grants of stock options, stock appreciation rights, performance share units, restricted stock, restricted stock units and other equity compensation awards. Under the 2024 Plan, up to 240 million shares of our common stock may be issued through the grant of equity awards. In addition to the shares under the 2024 Plan, certain shares of our common stock subject to certain outstanding awards under predecessor stock plans that expire, are canceled, or are forfeited, are available for issuance. As of December 31, 2025, there were 230 million shares available to be granted under the 2024 Plan. Effective May 1, 2024, shareowners approved the Global Employee Stock Purchase Plan (“GESPP”). The GESPP provides for grants of matching share awards. Under the GESPP, up to 15 million shares of our common stock may be issued through the grant of matching share awards. As of December 31, 2025, there were 14 million shares available to be issued under the GESPP. Total stock-based compensation expense was $ 279 million, $ 286 million and $ 251 million in 2025, 2024 and 2023, respectively. Stock-based compensation expense in 2025 and 2024 was recorded in the line item selling, general and administrative expenses in our consolidated statements of income. In 2023, the Company recorded stock-based compensation expense of $ 254 million in the line item selling, general and administrative expenses in our consolidated statement of income. This was partially offset by $ 3 million related to the revision of management’s estimates arising from the settlement of the estimated cash payments recognized in 2022, which was recorded in the line item other operating charges in our consolidated statement of income. The total income tax benefit recognized in our consolidated statements of income related to total stock-based compensation expense was $ 47 million, $ 47 million and $ 40 million in 2025, 2024 and 2023, respectively. As of December 31, 2025, we had $ 236 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 1.7 years as stock‑based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards. 92 Stock Option Awards Stock option awards are generally granted with an exercise price equal to the average of the high and low market prices per share of the Company’s stock on the grant date. The fair value of each stock option award is estimated using a Black-Scholes-Merton option-pricing model and is expensed on a straight-line basis over the vesting period, which is generally four years . The weighted-average fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023, and the weighted-average assumptions used in the Black-Scholes-Merton option-pricing model for such grants were as follows: Year Ended December 31, 2025 2024 2023 Fair value of stock options on grant date $ 11.97 $ 10.28 $ 9.84 Dividend yield 1 3.1 % 3.2 % 3.0 % Expected volatility 2 17.0 % 17.0 % 17.5 % Risk-free interest rate 3 4.2 % 4.3 % 4.1 % Expected term of stock options 4 7 years 6 years 6 years 1 The dividend yield is the calculated yield on the closing market price per share of the Company’s stock on the grant date. 2 The expected volatility is based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors. 3 The risk-free interest rate for the period matching the expected term of the stock options is based on the U.S. Treasury yield curve in effect on the grant date. 4 The expected term of the stock options represents the period of time that stock options are expected to be outstanding and is derived by analyzing historical exercise behavior. Stock option awards generally expire 10 years after the grant date. The shares of common stock to be issued and/or sold upon the exercise of stock options are made available from either authorized and unissued common stock or from treasury shares. Since 2007, the Company has issued common stock under its stock-based compensation plans from treasury shares. Stock option activity during the year ended December 31, 2025 was as follows: Shares (In millions) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In millions) Outstanding on January 1, 2025 31 $ 52.81 Granted 3 70.98 Exercised ( 7 ) 47.87 Outstanding on December 31, 2025 27 $ 55.74 5.3 years $ 377 Vested and expected to vest 26 $ 55.62 5.3 years $ 375 Exercisable on December 31, 2025 20 $ 52.69 4.4 years $ 336 The total intrinsic value of the stock options exercised was $ 144 million, $ 356 million and $ 268 million in 2025, 2024 and 2023, respectively. The total number of stock options exercised was 7 million, 18 million and 14 million in 2025, 2024 and 2023, respectively. Performance-Based Share Unit Awards Performance share unit awards require achievement of certain performance criteria over a performance period of three years, which are predefined by the Talent and Compensation Committee of our Board of Directors at the time of grant. Performance share unit awards will generally vest at the end of the respective performance period. Performance share unit awards do not entitle participants to vote or receive dividends until the performance share units are settled in stock. For performance share unit awards granted from 2020 through 2022, the performance criteria were equally weighted among net operating revenues, earnings per share and free cash flow. For performance share unit awards granted to executives in 2022, and for performance share unit awards granted to all participants in 2023 and 2024, the performance criteria were weighted 30% for net operating revenues, 30% for earnings per share, 30% for free cash flow and 10% for environmental sustainability. For performance share unit awards granted to all participants in 2025, the performance criteria were equally weighted among net operating revenues, earnings per share and free cash flow. For purposes of these performance criteria, earnings per share is diluted net income per share; free cash flow is net cash provided by operating activities less purchases of property, plant and equipment; and environmental sustainability is composed of predefined goals related to the Company’s packaging and water security strategies in place at the time of grant. These performance criteria are adjusted for certain items, if applicable, which are subject to Audit Committee approval. The purpose of these adjustments is to ensure a consistent year-to-year comparison of the specific 93 performance criteria. Performance share unit awards granted to executives in 2020 through 2022 and performance share unit awards granted to all participants in 2023 through 2025 include a relative TSR modifier to determine the final number of performance share units earned. For these awards, the number of performance share units earned based on the certified achievement of the predefined performance criteria will be reduced or increased if the Company’s total shareowner return over the performance period relative to a predefined group of companies falls outside of a predefined range. The fair value of performance share units is the closing market price of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period. The fair value of performance share units that include a TSR modifier is determined based on a Monte Carlo valuation model for the TSR modifier component, which also takes into account the closing market price of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period. For performance share unit awards, in the event the certified results equal the predefined performance criteria, the number of performance share units earned will be equal to the target award. In the event the certified results exceed the predefined performance criteria, additional performance share units up to the maximum award will be earned. In the event the certified results fall below the predefined performance criteria but are at or above the minimum threshold, a reduced number of performance share units will be earned. If the certified results fall below the minimum threshold, no performance share units will be earned. In the reporting period it becomes probable that the minimum performance threshold specified in the performance share unit award will be achieved, we recognize compensation expense for the proportionate share of the total fair value of the performance share units related to the vesting period that has already lapsed for the performance share units expected to vest. The remaining fair value of the performance share units expected to vest is expensed on a straight-line basis over the remainder of the vesting period. In the event the Company determines it is no longer probable that the minimum performance threshold specified in the award will be achieved, we reverse all previously recognized compensation expense in the reporting period such a determination is made. Performance share units earned are generally settled in stock, ex cept for certain circumstances such as death or disability, in which case beneficiaries or employees are provided cash payments. As of December 31, 2025, nonvested performance share units of approximately 1,245,000 and 1,376,000 were outstanding for the 2024-2026 and 2025-2027 performance periods, respectively, based on the target award amounts. The following table summarizes information about outstanding nonvested performance share units based on the target award levels: Performance Share Units (In thousands) Weighted-Average Grant Date Fair Value Nonvested on January 1, 2025 2,539 $ 56.91 Granted 1,413 72.35 Vested 1 ( 1,167 ) 56.63 Forfeited ( 165 ) 60.46 Nonvested on December 31, 2025 2 2,620 $ 65.13 1 Represents the target level of performance share units vested as of December 31, 2025 for the 2023-2025 performance period. Upon certification in February 2026 of the financial results for the performance period, the final number of shares earned will be determined and released. 2 The outstanding nonvested performance share units as of December 31, 2025 at the threshold award and maximum award levels were approximately 996,000 and 6,551,000 , respectively. The weighted-average grant date fair value of performance share unit awards granted in 2025, 2024 and 2023 was $ 72.35 , $ 57.16 and $ 56.63 , respectively. 94 The following table summarizes information about vested performance share units based on the certified award level: 2022-2024 Annual Award Performance Share Units (In thousands) Weighted- Average Grant Date Fair Value Certified 2,851 $ 60.08 Released during 2025 ( 2,840 ) 60.08 Forfeited during 2025 ( 11 ) 60.08 The total intrinsic value of performance share units that were released was $ 199 million, $ 214 million and $ 244 million in 2025, 2024 and 2023, respectively. Time-Based Restricted Stock, Time-Based Restricted Stock Unit Awards and Matching Share Awards Restricted stock and restricted stock unit awards generally vest over three years. Matching share awards vest over one year. Restricted stock, restricted stock unit awards and matching share awards do not entitle recipients to vote or receive dividends during the vesting period and will be forfeited in the event of the recipient’s termination of employment, except for certain circumstances such as death or disability. The fair value of restricted stock, restricted stock units and matching share awards is the closing market price per share of the Company’s stock on the grant date less the present value of the expected dividends not received during the vesting period. The fair value of the restricted stock, restricted stock units and matching share awards expected to vest and be released is expensed on a straight-line basis over the vesting period. The following table summarizes information about outstanding nonvested restricted stock, restricted stock units and matching share awards: Restricted Stock, Restricted Stock Units and Matching Share Awards (In thousands) Weighted-Average Grant Date Fair Value Nonvested on January 1, 2025 4,210 $ 55.75 Granted 1,988 65.34 Vested and released ( 1,297 ) 57.72 Forfeited ( 365 ) 57.62 Nonvested on December 31, 2025 4,536 $ 59.24 NOTE 14: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Our Company sponsors a qualified pension plan covering substantially all U.S. employees as well as unfunded nonqualified pension plans covering certain U.S. employees. Our Company also sponsors postretirement health care and life insurance benefit plans covering certain U.S. employees. In addition, our Company and its subsidiaries have various pension plans and other forms of postretirement benefit arrangements outside the United States. 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. 95 Obligations and Funded Status The following table sets forth the changes in the benefit obligations and the fair value of plan assets for our pension and other postretirement benefit plans (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, 2025 2024 2025 2024 Benefit obligation at beginning of year 1 $ 6,045 $ 6,544 $ 185 $ 297 Service cost 103 105 3 3 Interest cost 300 306 11 17 Participant contributions 6 6 16 18 Foreign currency exchange rate changes 117 ( 124 ) 3 ( 3 ) Amendments 14 ( 2 ) — — Net actuarial loss (gain) 106 2 ( 213 ) 2 — 11 Benefits paid ( 473 ) ( 478 ) ( 38 ) ( 65 ) Divestitures ( 1 ) ( 78 ) — ( 1 ) Settlements ( 13 ) ( 22 ) ( 1 ) ( 92 ) 3 Curtailments ( 3 ) 4 ( 1 ) — — Special termination benefits 27 4 1 — — Other — 1 — — Benefit obligation at end of year 1 $ 6,228 $ 6,045 $ 179 $ 185 Fair value of plan assets at beginning of year $ 6,435 $ 7,260 $ 69 $ 176 Actual return on plan assets 591 345 9 6 Employer contributions 29 31 — — Participant contributions 6 6 — 12 Foreign currency exchange rate changes 206 ( 203 ) — — Transfers ( 332 ) 5 ( 523 ) 5 — — Benefits paid ( 400 ) ( 410 ) ( 14 ) ( 33 ) Divestitures — ( 62 ) — — Settlements ( 12 ) ( 9 ) — ( 92 ) 3 Other — — 3 — Fair value of plan assets at end of year $ 6,523 $ 6,435 $ 67 $ 69 Net asset (liability) recognized $ 295 $ 390 $ ( 112 ) $ ( 116 ) 1 For pension plans, the benefit obligation is the projected benefit obligation. For other postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. The accumulated benefit obligation for our pension plans was $ 6,187 million and $ 6,008 million as of December 31, 2025 and 2024, respectively. 2 A change in the weighted-average discount rate assumption was the primary driver of net actuarial loss (gain) during 2025 and 2024. For our U.S. qualified pension plan, a decrease in the discount rate resulted in an actuarial loss of $ 112 million during 2025, and an increase in the discount rate resulted in an actuarial gain of $ 178 million during 2024. Additional drivers of net actuarial loss (gain) included other assumption updates and plan experience. 3 In 2024, the Company settled its U.S. other postretirement benefit obligations such that core life insurance benefits will be funded by an insurance company beginning September 11, 2024 for the lifetime of certain retirees. The transaction resulted in no change to underlying benefits or plan administration, only a change to the future financing of the benefits. Pursuant to the settlement, the Company transferred $ 92 million of plan assets and liabilities to an insurer and recognized a $ 19 million net settlement gain related to the acceleration of existing unrecognized gains. 4 The curtailment loss and special termination benefits were primarily related to the benefit uplifts provided by the Company to active participants pursuant to the group annuity purchase (“buy-in”) for a non-U.S. defined benefit plan. The Company intends to convert the buy-in to a buy-out in the future, at which time the insurer would assume full responsibility for the plan obligations. 5 Transfers represent $ 332 million and $ 523 million of surplus international plan assets transferred from pension trusts to general assets of the Company as of December 31, 2025 and 2024, respectively. 96 Pension and other postretirement benefit plan amounts recognized in our consolidated balance sheets were as follows (in millions): Pension Plans Other Postretirement Benefit Plans December 31, 2025 2024 2025 2024 Other noncurrent assets $ 1,046 $ 1,219 $ — $ — Accounts payable and accrued expenses ( 70 ) ( 68 ) ( 8 ) ( 6 ) Other noncurrent liabilities ( 681 ) ( 761 ) ( 104 ) ( 110 ) Net asset (liability) recognized $ 295 $ 390 $ ( 112 ) $ ( 116 ) Certain of our pension plans have a projected benefit obligation in excess of the fair value of plan assets. For these plans, the projected benefit obligation and the fair value of plan assets were as follows (in millions): December 31, 2025 2024 Projected benefit obligation $ 4,829 $ 4,902 Fair value of plan assets 4,078 4,072 Certain of our pension plans have an accumulated benefit obligation in excess of the fair value of plan assets. For these plans, the accumulated benefit obligation and the fair value of plan assets were as follows (in millions): December 31, 2025 2024 Accumulated benefit obligation $ 4,770 $ 4,882 Fair value of plan assets 4,045 4,072 All of our other postretirement benefit plans have an accumulated postretirement benefit obligation in excess of the fair value of plan assets. Pension Plan Assets The following table presents total assets by asset class for our U.S. and non-U.S. pension plans (in millions): U.S. Pension Plans Non-U.S. Pension Plans December 31, 2025 2024 2025 2024 Cash and cash equivalents $ 171 $ 160 $ 958 $ 419 Equity securities: U.S.-based companies 471 469 61 582 International-based companies 325 248 56 455 Fixed-income securities: Government bonds 906 626 444 383 Corporate bonds and debt securities 210 442 174 104 Mutual, pooled and commingled funds 1 297 210 375 477 Hedge funds/limited partnerships 883 1,004 16 19 Real assets 343 341 — — Derivative financial instruments ( 2 ) — ( 7 ) ( 63 ) Other 292 261 550 298 Total pension plan assets 2 $ 3,896 $ 3,761 $ 2,627 $ 2,674 1 Mutual, pooled and commingled funds include investments in equity securities, fixed-income securities and combinations of both. There are a significant number of mutual, pooled and commingled funds from which investors can choose. The selection of the type of fund is dictated by the specific investment objectives and needs of a given plan. These objectives and needs vary greatly between plans. 2 Fair value disclosures related to our pension plan assets are included in Note 17. Fair value disclosures include, but are not limited to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall; a reconciliation of the beginning and ending balances of Level 3 assets; and information about the valuation techniques and inputs used to measure the fair value of our pension plan assets. 97 Investment Strategy for U.S. Pension Plan The Company utilizes the s ervices of investment managers to actively manage the assets of our U.S. qualified pension plan. We have established asset allocation targets and investment guidelines with each investment manager. Our asset allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for fulfilling the obligations of the plan. Selection of the targeted asset allocation for U.S. pension plan assets is based upon a review of the expected return and risk characteristics of each asset class, as well as the correlation of returns among asset classes. Our target allocation is a mix of 32 % equity securities, 37 % fixed-income securities and 31 % alternative investments. We believe this target allocation will enable us to achieve the following long-term investment objectives: (1) optimize the long-term return on plan assets at an acceptable level of risk; (2) maintain a broad diversification across asset classes and among investment managers; and (3) maintain careful control of the risk level within each asset class. The investment guidelines that have been established with each investment manager provide parameters within which the investment managers agree to operate, including criteria that determine eligible and ineligible securities, diversification requirements and credit quality standards, where applicable. Investment managers agree to obtain written approval for deviations from stated investment style or guidelines. As of December 31, 2025, no investment manager was responsible for more than 24 % of total U.S. pension plan assets. Our target allocation of 32 % equity securities is primarily composed of public equities. Optimal returns are achieved through security selection as well as country and sector diversification. As of December 31, 2025, investments in our common stock accounted for 14 % of total equity securities and 3 % of total U.S. pension plan assets. Our investments in public equities are intended to provide diversified exposure to both U.S. and non-U.S. equity markets. Our target allocation of 37 % fixed-income securities is composed of 57 % long-duration bonds and 43 % with multi-strategy alternative credit managers. Long-duration bonds are intended to provide a stable rate of return through investments in high-quality publicly traded debt securities. Our investments in long-duration bonds are diversified in order to mitigate duration and credit exposure. Multi-strategy alternative credit managers invest in a combination of high-yield bonds, bank loans, structured credit and emerging market debt. These investments are in lower-rated and non-rated debt securities, which generally produce higher returns compared to long-duration bonds and also help diversify our overall fixed-income portfolio. Our target allocation for alternative investments is 31 %. These alternative investments include hedge funds, reinsurance, private equity limited partnerships and real assets. The objective of investing in alternative investments is to provide a higher rate of return than that which is typically available from publicly traded equity securities. Alternative investments are inherently illiquid and require a long-term perspective in evaluating investment performance. Investment Strategy for Non-U.S. Pension Plans For our non-U.S. plans, the investment strategies vary greatly and are subject to the asset/liability profiles and local regulations of the plans in individual countries. In 2025, due to changes in market conditions and needs of the plans, the Company modified the investment strategy for certain plans in Europe and Canada to reduce our funded status risk. The plans represent 62 % of the Company’s international subsidiaries’ pension plan assets and consisted of 57 % cash and cash equivalents; 24 % fixed-income securities; 13 % insurance contracts; and 6 % equity securities as of December 31, 2025. The target allocation for the remaining 38 % of our non-U.S. plans is broadly characterized as a mix of approximately 74 % fixed-income securities (including insurance contracts); 18 % mutual, pooled and commingled funds; 6 % equity securities; and 2 % other investments as of December 31, 2025. None of our pension plans outside the United States is individually significant for separate disclosure. 98 Components of Net Periodic Benefit Cost (Income) Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of the following (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, 2025 2024 2023 2025 2024 2023 Service cost $ 103 $ 105 $ 94 $ 3 $ 3 $ 4 Interest cost 300 306 322 11 17 27 Expected return on plan assets 1 ( 420 ) ( 469 ) ( 475 ) ( 4 ) ( 7 ) ( 14 ) Amortization of prior service cost (credit) 1 1 1 ( 2 ) ( 3 ) ( 3 ) Amortization of net actuarial loss (gain) 2 102 103 96 ( 1 ) ( 4 ) ( 5 ) Settlement loss (gain) ( 3 ) ( 2 ) 81 4 — ( 19 ) 5 ( 14 ) 6 Curtailment loss (gain) 11 3 ( 1 ) — — — — Special termination benefits 27 3 1 1 — — — Other — 1 — — — — Net periodic benefit cost (income) $ 121 $ 45 $ 120 $ 7 $ ( 13 ) $ ( 5 ) 1 The Company has elected to use the actual fair value of plan assets as the market-related value of plan assets in the determination of the expected return on plan assets. 2 Actuarial gains and losses are amortized using a corridor approach. The gain/loss corridor is equal to 10 % of the greater of the benefit obligation and the market-related value of assets. Gains and losses in excess of the corridor are generally amortized over the average future working lifetime of the plan participants. 3 The curtailment loss and special termination benefits were primarily related to the benefit uplifts provided by the Company to active participants pursuant to the group annuity purchase (“buy-in”) for a non-U.S. defined benefit plan. The Company intends to convert the buy-in to a buy-out in the future, at which time the insurer would assume full responsibility for the plan obligations. 4 Settlements primarily related to the U.S. qualified pension plan, which was amended in 2023 to provide lump sum payment options to all former employees. The U.S. qualified pension plan made $ 259 million of lump sum payments in 2023, causing a plan settlement, which resulted in recognition of a $ 76 million settlement loss related to the acceleration of existing unrecognized losses. 5 In 2024, the Company settled its U.S. other postretirement benefit obligations such that core life insurance benefits will be funded by an insurance company beginning September 11, 2024 for the lifetime of certain retirees. The transaction resulted in no change to underlying benefits or plan administration, only a change to the future financing of the benefits. Pursuant to the settlement, the Company transferred $ 92 million of plan assets and liabilities to an insurer and recognized a $ 19 million net settlement gain related to the acceleration of existing unrecognized gains. 6 In 2023, the Company settled its U.S. post-65 other postretirement benefit obligations such that retiree reimbursement accounts will be funded by an insurance company beginning January 1, 2025 for the lifetime of certain retirees and their eligible dependents. The transaction resulted in no change to underlying benefits or plan administration, only a change to the future financing of the benefits. Pursuant to the settlement, the Company transferred $ 187 million of plan assets and liabilities to an insurer and recognized a $ 14 million net settlement gain related to the acceleration of existing unrecognized gains. All of the amounts in the table above, other than service cost, were recorded in the line item other income (loss) — net in our consolidated statements of income. 99 Impact on Accumulated Other Comprehensive Income The following table sets forth the pretax changes in AOCI for our pension and other postretirement benefit plans (in millions): Pension Plans Other Postretirement Benefit Plans Year Ended December 31, 2025 2024 2025 2024 Balance in AOCI at beginning of year $ ( 1,694 ) $ ( 1,906 ) $ 21 $ 61 Recognized prior service cost (credit) 11 1 ( 2 ) ( 3 ) Recognized net actuarial loss (gain) 99 100 ( 1 ) ( 23 ) Prior service credit (cost) occurring during the year ( 14 ) 2 — — Net actuarial gain (loss) occurring during the year 68 90 5 ( 12 ) Divestitures — ( 6 ) — — Other — — 3 — Net foreign currency translation adjustments ( 32 ) 25 1 ( 2 ) Balance in AOCI at end of year $ ( 1,562 ) $ ( 1,694 ) $ 27 $ 21 The following table sets forth the pretax amounts in AOCI for our pension and other postretirement benefit plans (in millions): Pension Plans Other Postretirement Benefit Plans December 31, 2025 2024 2025 2024 Prior service credit (cost) $ ( 16 ) $ ( 14 ) $ 14 $ 15 Net actuarial gain (loss) ( 1,546 ) ( 1,680 ) 13 6 Balance in AOCI at end of year $ ( 1,562 ) $ ( 1,694 ) $ 27 $ 21 Assumptions Certain weighted-average assumptions used in computing the benefit obligations for our pension and other postretirement benefit plans were as follows: Pension Plans Other Postretirement Benefit Plans December 31, 2025 2024 2025 2024 Discount rate 5.25 % 5.50 % 6.25 % 6.75 % Interest crediting rate 4.00 % 4.25 % N/A N/A Rate of increase in compensation levels 4.75 % 4.00 % N/A N/A Certain weighted-average assumptions used in computing net periodic benefit cost or income were as follows: Pension Plans Other Postretirement Benefit Plans Year Ended December 31, 2025 2024 2023 2025 2024 2023 Discount rate 5.50 % 5.00 % 5.50 % 6.75 % 6.25 % 6.00 % Interest crediting rate 4.25 % 3.75 % 4.00 % N/A N/A N/A Rate of increase in compensation levels 4.00 % 4.00 % 3.75 % N/A N/A N/A Expected long-term rate of return on plan assets 6.75 % 7.00 % 6.75 % 6.75 % 4.50 % 3.75 % The discount rate assumption used to account for pension and other postretirement benefit plans reflects the rate at which the benefit obligations could be effectively settled. The discount rate for U.S. and certain non-U.S. plans is determined using a yield curve, developed from high-quality debt securities. Plan obligations are determined by applying projected cash flows to the individual spot rates from the yield curve. The disclosed discount rate is the rate that would produce the same obligation as the applicable yield curve. For other non-U.S. plans, we base the discount rate assumption on comparable indices within each of the countries. The Company measures the service cost and interest cost components of net periodic benefit cost or income for pension and other postretirement benefit plans by applying the specific spot rates along the yield curve to the plans’ projected benefit cash flows, or for other non-U.S. plans referenced above, this is measured using the discount rate derived from appropriate indices. The rate of compensation increase assumption is determined by the Company based upon annual reviews. 100 The cash balance interest crediting rate for the U.S. qualified pension plan is based on the yield on six-month U.S. Treasury bills on the last day of September of the previous plan year, plus 150 basis points, with a minimum interest crediting rate of 3.80 % for all active employees and certain former employees. The Company assumes that the ultimate interest crediting rate is 140 basis points lower than the plan’s year-end discount rate and that the current interest crediting rate will converge with the ultimate interest crediting rate after a period of 10 years. The expected long-term rate of return assumption for U.S. pension plan assets is based upon the target asset allocation and is determined using forward-looking assumptions in the context of historical returns and volatilities for each asset class, as well as correlations among asset classes. We evaluate the expected long-term rate of return assumption on an annual basis. The expected long-term rate of return assumption used in computing 2025 net periodic benefit income for the U.S. pension plans was 6.75 %. As of December 31, 2025, the 5-year, 10-year and 15-year annualized return for the U.S. pension plan assets was 3.8 %, 7.0 % and 6.9 %, respectively. The annualized return since inception was 9.8 %. We review external data and our own historical trends for health care costs to determine the trend rate assumptions, where applicable. Given the design of our retiree health benefit plans, healthcare-cost trend rates no longer have a material impact on our financial condition or results of operations. Cash Flows The expected benefit payments for our pension and other postretirement benefit plans for the 10 years succeeding December 31, 2025 are as follows (in millions): 2026 2027 2028 2029 2030 2031-2035 Benefit payments for pension plans $ 447 $ 449 $ 459 $ 452 $ 479 $ 2,496 Benefit payments for other postretirement benefit plans 21 18 17 15 14 65 Total $ 468 $ 467 $ 476 $ 467 $ 493 $ 2,561 The Company anticipates making contributions of approximately $ 27 million to our pension trusts in 2026, all of which will be allocated to our international plans. These contributions are made in accordance with local laws and tax regulations. Defined Contribution Plans Our Company sponsors qualified defined contribution plans covering substantially all U.S. employees. Under the largest U.S. defined contribution plan, we match participants’ contributions up to a maximum of 3.5 % of compensation, subject to an IRS limit on compensation. The Company’s expense for the U.S. plans totaled $ 48 million, $ 52 million and $ 44 million in 2025, 2024 and 2023, respectively. We also sponsor defined contribution plans in certain locations outside the United States. The Company’s expense for these plans totaled $ 89 million, $ 85 million and $ 82 million in 2025, 2024 and 2023, respectively. NOTE 15: INCOME TAXES Income before income taxes consisted of the following (in millions): Year Ended December 31, 2025 2024 1 2023 1 United States $ 5,678 $ 2,499 $ 1,991 International 10,320 10,587 10,961 Total $ 15,998 $ 13,086 $ 12,952 1 The Company reclassified income before income taxes related to its Puerto Rico operations in 2024 and 2023 from United States to International to align with the jurisdictional disaggregation requirements of ASU 2023‑09. 101 Income taxes consisted of the following (in millions): United States State and Local International Total 2025 Current $ 86 $ 178 $ 2,080 $ 2,344 Deferred 220 123 174 517 2024 Current $ 324 $ 143 $ 1,981 $ 2,448 Deferred ( 254 ) ( 134 ) 377 ( 11 ) 2023 Current $ 83 $ 129 $ 2,039 $ 2,251 Deferred ( 135 ) ( 78 ) 211 ( 2 ) Net income tax payments after the prospective adoption of ASU 2023-09, as described in Note 1, consisted of the following (in millions): Year Ended December 31, 2025 United States — federal 1 $ 1,291 United States — state and local 127 International: Brazil 238 India 265 Mexico 280 Other foreign 672 Total income taxes paid, net of refunds $ 2,873 1 The Company’s U.S. federal payments were reduced by foreign tax credits, general business credits and prior year overpayments. These general business credits include tax credits related to the Company’s investments in limited partnerships constructing, owning and operating alternative energy generation facilities in 2025. We made income tax payments of $ 3,262 million and $ 2,580 million in 2024 and 2023, respectively, which included $ 964 million and $ 723 million, respectively, of the one-time transition tax required by the Tax Reform Act. The 2024 amount does not include $ 6.0 billion paid in relation to invoices the IRS issued for the 2007 through 2009 tax years resulting from the Tax Court’s decision. Refer to Note 12. In 2025, the Company invested $ 306 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During 2025, the Company received tax credits and other income tax benefits of $ 241 million and recognized amortization expense of $ 224 million related to these investments. The amount of non-income tax-related activity and other returns related to these investments was not material during 2025. As of December 31, 2025, the carrying value of these investments was $ 32 million. The Company expects to fulfill $ 32 million of unfunded commitments related to these investments in the first quarter of 2026. In 2024, the Company invested $ 226 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During 2024, the Company received tax credits and other income tax benefits of $ 323 million and recognized amortization expense of $ 308 million related to these investments. The amount of non-income tax-related activity and other returns related to these investments was not material during 2024. As of December 31, 2024, the carrying value of these investments was $ 41 million. The Company recorded $ 123 million of unfunded commitments related to these investments in the line item accounts payable and accrued expenses in our consolidated balance sheet as of December 31, 2024. 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. As a result of employment actions and capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants, including Brazil, Costa Rica, Singapore and Eswatini. The terms of these grants expire from 2031 to 2045. We anticipate that we will be able to extend or renew the grants in these locations. The decision of whether we decide to pursue the renewal of these grants and the impact of the grants going forward is dependent on various factors. Tax incentive grants favorably impacted our income tax expense by $ 383 million, $ 346 million and $ 332 million for the years ended December 31, 2025, 2024 and 2023, respectively. In addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method. 102 Also included in our effective tax rate is the tax impact associated with several countries enacting global minimum tax regulations. The following table reconciles the income tax provision with the amount calculated using the 21.0% U.S. federal statutory rate applied to pretax income, reflecting the adoption of ASU 2023-09 (amounts in millions): Year Ended December 31, 2025 Amount Percent Statutory U.S. federal tax rate $ 3,360 21.0 % State and local income taxes — net of federal benefit 1 203 1.3 Foreign tax effects: Ireland Tax rate differential ( 172 ) ( 1.1 ) Other 192 1.2 Puerto Rico Tax rate differential 2 ( 253 ) ( 1.6 ) Other 30 0.2 Other jurisdictions 320 2.0 Effect of cross-border tax laws: U.S. tax on foreign branches 2 167 1.1 Subpart F ( 315 ) ( 2.0 ) Other ( 92 ) ( 0.6 ) Tax credits ( 176 ) ( 1.1 ) Change in unrecognized tax benefits ( 204 ) ( 1.3 ) Other: Equity income or loss ( 222 ) ( 1.4 ) Other 23 0.2 Effective tax rate $ 2,861 17.9 % 1 State taxes in California, Florida and Minnesota comprised greater than 50% of the tax effect in this category. 2 This tax rate differential is offset in the U.S. tax on foreign branches line item, which reflects the full U.S. income tax expense of the same amount on income earned in Puerto Rico. The U.S. tax on foreign branches line item also includes impacts for other U.S. branches. The following table provides the disclosures required before adopting ASU 2023-09 and reconciles our effective tax rate with the U.S. federal tax rate: 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 1 ( 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 ) 2 Effective tax rate 18.6 % 17.4 % 1 Includes net tax expense of $ 161 million (or a 1.2 % impact on our effective tax rate) related to agreed-upon tax issues with certain foreign jurisdictions. 2 Includes a net tax benefit of $ 118 million (or a 0.9 % impact on our effective tax rate) related to domestic provision to return adjustments, as well as for various discrete tax items. Also includes a tax benefit of $ 88 million (or a 0.7 % impact on our effective tax rate) associated with the change in the Company’s indefinite reinvestment assertion for our Philippines and Bangladesh bottling operations. As of December 31, 2025, we have not recorded incremental income taxes for additional outside basis differences in our investments in foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Reform Act require the Company to include in its U.S. income tax return each foreign subsidiary’s earnings in excess of an allowable return on the foreign subsidiary’s tangible 103 assets. An accounting policy election is available to either account for the tax effects of GILTI in the period that is subject to such taxes or to provide deferred taxes for book and tax basis differences that upon reversal may be subject to such taxes. We have elected to account for the tax effects of these provisions in the period that is subject to such tax and the impact is reflected in our full year provision. The Company and its subsidiaries file income tax returns in all applicable jurisdictions, including the U.S. federal jurisdiction, U.S. state jurisdictions and foreign jurisdictions. U.S. tax authorities have completed their federal income tax examinations for all years prior to 2007. With respect to U.S. state jurisdictions and foreign jurisdictions, with limited exceptions, the Company and its subsidiaries are no longer subject to income tax audits for years prior to 2007. For U.S. federal and state tax purposes, the net operating losses and tax credit carryovers that were acquired in connection with our acquisition of Coca‑Cola Enterprises Inc.’s former North America business and that were generated from 1990 through 2010 are subject to adjustments until the year in which they are utilized is no longer subject to examination. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, including interest and penalties, have been provided for in accordance with the applicable accounting guidance. We are currently in litigation with the IRS for tax years 2007 through 2009. Refer to Note 12. As of December 31, 2025, the gross amount of unrecognized tax benefits was $ 857 million. If the Company were to prevail on all uncertain tax positions, the net effect would be a benefit of $ 581 million, exclusive of any benefits related to interest and penalties. 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, 2025 2024 2023 Balance of unrecognized tax benefits at beginning of year $ 880 $ 929 $ 926 Increase related to prior period tax positions 19 33 2 Decrease related to prior period tax positions ( 46 ) ( 52 ) ( 25 ) Increase related to current period tax positions 31 30 32 Decrease related to settlements with taxing authorities — ( 57 ) — Decrease due to lapse of the applicable statute of limitations ( 13 ) — ( 2 ) Effect of foreign currency translation ( 14 ) ( 3 ) ( 4 ) Balance of unrecognized tax benefits at end of year $ 857 $ 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 $ 708 million, $ 631 million and $ 544 million in interest and penalties related to unrecognized tax benefits accrued as of December 31, 2025, 2024 and 2023, respectively. Of these amounts, expense of $ 77 million, $ 87 million and $ 48 million was recognized in 2025, 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. 104 The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities consisted of the following (in millions): December 31, 2025 2024 Deferred tax assets: Property, plant and equipment $ 28 $ 23 Goodwill and intangible assets 2,204 1,133 Equity method investments (including net foreign currency translation adjustments) 293 503 Derivative financial instruments 403 332 Other liabilities 1,020 2,650 Benefit plans 428 483 Net operating loss, and other carryforwards 534 874 Other 604 325 Gross deferred tax assets 5,514 6,323 Valuation allowances ( 388 ) ( 485 ) Total deferred tax assets $ 5,126 $ 5,838 Deferred tax liabilities: Property, plant and equipment $ ( 869 ) $ ( 777 ) Goodwill and intangible assets ( 1,571 ) ( 1,750 ) Equity method investments (including net foreign currency translation adjustments) ( 1,649 ) ( 1,649 ) Derivative financial instruments ( 459 ) ( 877 ) Other liabilities ( 228 ) ( 443 ) Benefit plans ( 454 ) ( 441 ) Other 1 ( 1,096 ) ( 1,051 ) Total deferred tax liabilities $ ( 6,326 ) $ ( 6,988 ) Net deferred tax assets (liabilities) $ ( 1,200 ) $ ( 1,150 ) 1 Includes deferred tax associated with timing differences related to the IRS Tax Litigation Deposit. Refer to Note 12. As of December 31, 2025, we had $ 1,600 million of loss carryforwards available to reduce future taxable income. Loss carryforwards of $ 340 million must be utilized within the next five years, and the remainder can be utilized over a period greater than five years. In addition, we had $ 1,096 million of Internal Revenue Code 163(j) interest carryforwards, which will carry forward indefinitely. As of December 31, 2025, we also had foreign tax credit carryforwards of $ 34 million, which must be utilized within the next ten years. An analysis of our deferred tax asset valuation allowances is as follows (in millions): Year Ended December 31, 2025 2024 2023 Balance at beginning of year $ 485 $ 396 $ 424 Additions 42 141 28 Deductions ( 139 ) ( 52 ) ( 56 ) Balance at end of year $ 388 $ 485 $ 396 The Company’s deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards and foreign tax credit carryforwards from operations in various jurisdictions and basis differences in certain equity investments. Current evidence does not suggest that we will realize sufficient taxable income of the appropriate character within the carryforward period to allow us to realize these deferred tax benefits. If we were to identify and implement tax planning strategies to recover these deferred tax assets or generate sufficient income of the appropriate character in these jurisdictions in the future, it could lead to the reversal of these valuation allowances and a reduction of income tax expense. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated balance sheet. In 2025, the Company recognized a net decrease of $ 97 million in its valuation allowances, primarily due to decreases in the deferred tax assets and related valuation allowances associated with the utilization of excess foreign tax credits. The decrease 105 was partially offset by increases in the deferred tax assets and related valuation allowances on a certain equity method investment and the changes in net operating losses in the normal course of business. In 2024, the Company recognized a net increase of $ 89 million in its valuation allowances, primarily due to significant negative evidence on the utilization of excess foreign tax credits. The increase was partially offset by decreases in the deferred tax assets and related valuation allowances on a certain equity method investment and the changes in net operating losses in the normal course of business. In 2023, the Company recognized a net decrease of $ 28 million in its valuation allowances, primarily due to net decreases in the deferred tax assets and related valuation allowances on a certain equity method investment, certain excess foreign tax credit carryforwards and the changes in net operating losses in the normal course of business. NOTE 16: OTHER COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of The Coca-Cola Company’s shareowners’ equity, which also includes our proportionate share of equity method investees’ AOCI. OCI attributable to noncontrolling interests is allocated to, and included in, our consolidated balance sheet as part of the line item equity attributable to noncontrolling interests. AOCI attributable to shareowners of The Coca-Cola Company consisted of the following, net of tax (in millions): December 31, 2025 2024 Net foreign currency translation adjustments $ ( 12,673 ) $ ( 15,610 ) Accumulated net gains (losses) on derivatives ( 244 ) 116 Unrealized net gains (losses) on available-for-sale debt securities ( 26 ) ( 64 ) Adjustments to pension and other postretirement benefit liabilities ( 1,188 ) ( 1,285 ) Accumulated other comprehensive income (loss) $ ( 14,131 ) $ ( 16,843 ) The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests (in millions): Year Ended December 31, 2025 Shareowners of The Coca-Cola Company Noncontrolling Interests Total Consolidated net income $ 13,107 $ 30 $ 13,137 Other comprehensive income: Net foreign currency translation adjustments 1 2,937 ( 69 ) 2,868 Net gains (losses) on derivatives 2 ( 360 ) — ( 360 ) Net change in unrealized gains (losses) on available-for-sale debt securities 3 38 — 38 Net change in pension and other postretirement benefit liabilities 4 97 ( 3 ) 94 Total comprehensive income $ 15,819 $ ( 42 ) $ 15,777 1 Includes reclassification of $ 226 million of foreign currency translation adjustments from shareowners of The Coca-Cola Company to noncontrolling interests related to our bottling operations in India. Refer to Note 1. 2 Refer to Note 5 for additional information related to the net gains or losses on derivative instruments. 3 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 4 Refer to Note 14 for additional information related to the Company’s pension and other postretirement benefit liabilities. 106 The following tables present OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees’ OCI (in millions): Before-Tax Amount Income Tax After-Tax Amount 2025 Foreign currency translation adjustments: Translation adjustments arising during the year $ 786 $ ( 209 ) $ 577 Reclassification adjustments recognized in net income 506 ( 2 ) 504 Gains (losses) on intra-entity transactions that are of a long-term investment nature 2,966 — 2,966 Gains (losses) on net investment hedges arising during the year 1 ( 1,770 ) 434 ( 1,336 ) Reclassification to noncontrolling interests 2 226 — 226 Net foreign currency translation adjustments $ 2,714 $ 223 $ 2,937 Derivatives: Gains (losses) arising during the year $ ( 666 ) $ 167 $ ( 499 ) Reclassification adjustments recognized in net income 183 ( 44 ) 139 Net gains (losses) on derivatives 1 $ ( 483 ) $ 123 $ ( 360 ) Available-for-sale debt securities: Unrealized gains (losses) arising during the year $ 53 $ ( 17 ) $ 36 Reclassification adjustments recognized in net income 2 — 2 Net change in unrealized gains (losses) on available-for-sale debt securities 3 $ 55 $ ( 17 ) $ 38 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the year $ 36 $ ( 21 ) $ 15 Reclassification adjustments recognized in net income 106 ( 24 ) 82 Net change in pension and other postretirement benefit liabilities 4 $ 142 $ ( 45 ) $ 97 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 2,428 $ 284 $ 2,712 2024 Foreign currency translation adjustments: Translation adjustments arising during the year $ ( 2,427 ) $ 263 $ ( 2,164 ) Reclassification adjustments recognized in net income 103 — 103 Gains (losses) on intra-entity transactions that are of a long-term investment nature ( 1,455 ) — ( 1,455 ) Gains (losses) on net investment hedges arising during the year 1 844 ( 212 ) 632 Net foreign currency translation adjustments $ ( 2,935 ) $ 51 $ ( 2,884 ) Derivatives: Gains (losses) arising during the year $ 405 $ ( 98 ) $ 307 Reclassification adjustments recognized in net income ( 50 ) 13 ( 37 ) Net gains (losses) on derivatives 1 $ 355 $ ( 85 ) $ 270 Available-for-sale debt securities: Unrealized gains (losses) arising during the year $ ( 93 ) $ 31 $ ( 62 ) Reclassification adjustments recognized in net income ( 2 ) 1 ( 1 ) Net change in unrealized gains (losses) on available-for-sale debt securities 3 $ ( 95 ) $ 32 $ ( 63 ) Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the year $ 83 $ ( 25 ) $ 58 Reclassification adjustments recognized in net income 69 ( 18 ) 51 Net change in pension and other postretirement benefit liabilities 4 $ 152 $ ( 43 ) $ 109 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ ( 2,523 ) $ ( 45 ) $ ( 2,568 ) 107 Before-Tax Amount Income Tax After-Tax Amount 2023 Foreign currency translation adjustments: Translation adjustments arising during the year $ 366 $ ( 131 ) $ 235 Reclassification adjustments recognized in net income 223 — 223 Gains (losses) on intra-entity transactions that are of a long-term investment nature 712 — 712 Gains (losses) on net investment hedges arising during the year 1 ( 382 ) 95 ( 287 ) Net foreign currency translation adjustments $ 919 $ ( 36 ) $ 883 Derivatives: Gains (losses) arising during the year $ ( 194 ) $ 23 $ ( 171 ) Reclassification adjustments recognized in net income ( 10 ) 3 ( 7 ) Net gains (losses) on derivatives 1 $ ( 204 ) $ 26 $ ( 178 ) Available-for-sale debt securities: Unrealized gains (losses) arising during the year $ 28 $ ( 10 ) $ 18 Reclassification adjustments recognized in net income 7 ( 1 ) 6 Net change in unrealized gains (losses) on available-for-sale debt securities 3 $ 35 $ ( 11 ) $ 24 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the year $ ( 314 ) $ 80 $ ( 234 ) Reclassification adjustments recognized in net income 157 ( 32 ) 125 Net change in pension and other postretirement benefit liabilities 4 $ ( 157 ) $ 48 $ ( 109 ) Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 593 $ 27 $ 620 1 Refer to Note 5 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 1 for additional information related to the noncontrolling interest in our bottling operations in India. 3 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 4 Refer to Note 14 for additional information related to the Company’s pension and other postretirement benefit liabilities. 108 The following table presents the reclassifications from AOCI into income recorded during the year ended December 31, 2025 (in millions): Description of AOCI Component Financial Statement Line Item Impacted Amount Reclassified from AOCI Foreign currency translation adjustments: Divestitures 1,2 Other income (loss) — net $ 506 Income before income taxes 506 Income taxes ( 2 ) Consolidated net income $ 504 Derivatives: Foreign currency contracts Net operating revenues $ 247 Foreign currency and commodity contracts Cost of goods sold ( 1 ) Foreign currency and interest rate contracts Interest expense 7 Foreign currency contracts Other income (loss) — net ( 70 ) Income before income taxes 183 Income taxes ( 44 ) Consolidated net income $ 139 Available-for-sale debt securities: Sale of debt securities Other income (loss) — net $ 2 Income before income taxes 2 Income taxes — Consolidated net income $ 2 Pension and other postretirement benefit liabilities: Divestitures 1 Other income (loss) — net $ ( 2 ) Settlement loss (gain) Other income (loss) — net ( 3 ) Curtailment loss (gain) Other income (loss) — net 11 Amortization of net actuarial loss (gain) Other income (loss) — net 101 Amortization of prior service cost (credit) Other income (loss) — net ( 1 ) Income before income taxes 106 Income taxes ( 24 ) Consolidated net income $ 82 1 Related to the sale of a portion of our ownership interest in CCEP. Refer to Note 2. 2 Related primarily to the sale of our finished product operations in Nigeria. Refer to Note 2 . NOTE 17: FAIR VALUE MEASUREMENTS U.S. GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. 109 Recurring Fair Value Measurements In accordance with U.S. GAAP, certain assets and liabilities are required to be recorded at fair value on a recurring basis. For our Company, the only assets and liabilities that are adjusted to fair value on a recurring basis are investments in equity securities with readily determinable fair values, debt securities classified as trading or available-for-sale, derivative financial instruments and our contingent consideration liability. Additionally, the Company adjusts the carrying value of certain long-term debt as a result of the Company’s fair value hedging strategy. Investments in Debt and Equity Securities The fair values of our investments in debt and equity securities using quoted market prices from daily exchange traded markets are based on the closing price as of the balance sheet date and are classified as Level 1. The fair values of our investments in debt and equity securities classified as Level 2 are priced using quoted market prices for similar instruments or nonbinding market prices that are corroborated by observable market data. Inputs into these valuation techniques include actual trade data, benchmark yields, broker/dealer quotes and other similar data. These inputs are obtained from quoted market prices, independent pricing vendors or other sources. Derivative Financial Instruments The fair values of our futures contracts are primarily determined using quoted contract prices on futures exchange markets. The fair values of these instruments are based on the closing contract prices as of the balance sheet date and are classified as Level 1. The fair values of our derivative instruments other than futures are determined using standard valuation models. The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2. Inputs used in these standard valuation models for derivative instruments other than futures include the applicable exchange rates, forward rates, interest rates, discount rates and commodity prices. The standard valuation model for options also uses implied volatility as an additional input. The discount rates are based on the historical U.S. Deposit or U.S. Treasury rates, and the implied volatility specific to options is based on quoted rates from financial institutions. Included in the fair values of derivative instruments is an adjustment for nonperformance risk. The adjustment is based on current credit default swap (“CDS”) rates applied to each contract, by counterparty. We use our counterparty’s CDS rate when we are in an asset position and our own CDS rate when we are in a liability position. The adjustment for nonperformance risk did not have a significant impact on the estimated fair values of our derivative instruments. 110 The following tables summarize those assets and liabilities measured at fair value on a recurring basis (in millions): December 31, 2025 Level 1 Level 2 Level 3 Other 3 Netting Adjustment 4 Fair Value Measurements Assets: Equity securities with readily determinable values 1 $ 2,148 $ 237 $ 61 $ 143 $ — $ 2,589 Debt securities 1 — 1,824 — — — 1,824 Derivatives 2 — 441 — — ( 403 ) 5 38 7 Total assets $ 2,148 $ 2,502 $ 61 $ 143 $ ( 403 ) $ 4,451 Liabilities: Derivatives 2 $ 9 $ 1,040 $ — $ — $ ( 954 ) 6 $ 95 7 Total liabilities $ 9 $ 1,040 $ — $ — $ ( 954 ) $ 95 1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 5 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 5. 5 The Company is obligated to return $ 48 million in cash collateral it has netted against its derivative position. 6 The Company has the right to reclaim $ 597 million in cash collateral it has netted against its derivative position. 7 The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $ 3 million in the line item assets held for sale, $ 35 million in the line item other noncurrent assets, $ 5 million in the line item liabilities held for sale, and $ 90 million in the line item other noncurrent liabilities. Refer to Note 5 for additional information related to the composition of our derivatives portfolio. December 31, 2024 Level 1 Level 2 Level 3 Other 3 Netting Adjustment 4 Fair Value Measurements Assets: Equity securities with readily determinable values 1 $ 1,790 $ 137 $ 13 $ 94 $ — $ 2,034 Debt securities 1 — 1,676 — — — 1,676 Derivatives 2 2 587 — — ( 370 ) 6 219 8 Total assets $ 1,792 $ 2,400 $ 13 $ 94 $ ( 370 ) $ 3,929 Liabilities: Contingent consideration liability $ — $ — $ 6,126 5 $ — $ — $ 6,126 Derivatives 2 — 1,119 — — ( 1,097 ) 7 22 8 Total liabilities $ — $ 1,119 $ 6,126 $ — $ ( 1,097 ) $ 6,148 1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 5 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 5. 5 Represents the fair value of the remaining milestone payment related to our acquisition of fairlife, which is contingent on fairlife achieving certain financial targets through 2024 and is payable in 2025. This milestone payment is based on agreed-upon formulas related to fairlife’s operating results, the resulting value of which is not subject to a ceiling. The fair value was determined using discounted cash flow analyses. We are required to remeasure this liability to fair value quarterly, with any changes in the fair value recorded in income until the final milestone payment is made. 111 6 The Company is obligated to return $ 12 million in cash collateral it had netted against its derivative position. 7 The Company had the right to reclaim $ 735 million in cash collateral it had netted against its derivative position. 8 The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $ 102 million in the line item prepaid expenses and other current assets, $ 117 million in the line item other noncurrent assets and $ 22 million in the line item other noncurrent liabilities . Refer to Note 5 for additional information related to the composition of our derivatives portfolio. Gross realized and unrealized gains and losses on Level 3 assets and liabilities, excluding the contingent consideration liability in 2024, were not significant for the years ended December 31, 2025 and 2024. The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the years ended December 31, 2025 and 2024. Nonrecurring Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges or as a result of observable changes in equity securities using the measurement alternative. The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the following table (in millions): Gains (Losses) Year Ended December 31, 2025 2024 Assets held for sale $ ( 1,537 ) 1 $ — Impairment of intangible assets ( 1,033 ) 2,3,4 ( 886 ) 2,3 Other-than-temporary impairment charges ( 65 ) 5,6 ( 34 ) 5 Impairment of property, plant and equipment ( 12 ) 4 ( 63 ) 7 Total $ ( 2,647 ) $ ( 983 ) 1 The Company is required to record assets and liabilities that are held for sale at the lower of carrying value or fair value less any costs to sell based on the estimated proceeds. During the year ended December 31, 2025, the Company recorded a charge of $ 1,274 million due to the impairment of assets related to our bottling operations in Africa becoming held for sale and was calculated based on Level 3 inputs. Refer to Note 2. The Company also recorded a charge of $ 235 million due to the write-off of assets related to the sale of our finished product operations in Nigeria and was calculated based on Level 3 inputs. Refer to Note 2. Additionally, the Company recorded a charge of $ 28 million due to the write-down of assets held for sale related to the refranchising of certain bottling operations in Ghana. This charge, which was calculated based on Level 3 inputs, primarily related to property, plant and equipment. These operations were sold in July 2025, resulting in an additional loss of $ 8 million. These impairment charges were recorded in the line item other income (loss) — net in our consolidated statement of income. 2 During the years ended December 31, 2025 and 2024, the Company recorded asset impairment charges of $ 44 million and $ 126 million, respectively, related to a trademark in Latin America. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results and changes in macroeconomic conditions. These charges were recorded in the line item other operating charges in our consolidated statements of income. The remaining carrying value of the trademark is $ 42 million. 3 During the years ended December 31, 2025 and 2024, the Company recorded asset impairment charges of $ 960 million and $ 760 million, respectively, related to our BodyArmor trademark in North America. The 2025 impairment charge was primarily driven by 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 2024 impairment charge was primarily driven by revised projections of future operating results and higher discount rates resulting from changes in macroeconomic conditions since the acquisition date. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs. These charges were recorded in the line item other operating charges in our consolidated statements of income. The remaining carrying value of the trademark is $ 2,440 million. 4 During the year ended December 31, 2025, the Company recorded an asset impairment charge of $ 29 million related to a trademark in Asia Pacific and an asset impairment charge of $ 12 million related to the fixed assets of this business. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results. These charges were recorded in the line item other operating charges in our consolidated statement of income. 5 During the years ended December 31, 2025 and 2024, the Company recorded other-than-temporary impairment charges of $ 40 million and $ 34 million, respectively, related to an equity method investee in Latin America. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results. These charges were recorded in the line item other income (loss) — net in our consolidated statements of income. 112 6 During the year ended December 31, 2025, the Company recorded an other-than-temporary impairment charge of $ 25 million related to a joint venture in Latin America. This impairment charge was derived using Level 3 inputs and was due to the joint venture’s restructuring and planned liquidation. This charge was recorded in the line item other income (loss) — net in our consolidated statement of income. 7 The Company recorded an asset impairment charge of $ 63 million during the year ended December 31, 2024 related to certain prototypes. This impairment charge, which was calculated based on Level 3 inputs, was driven by management’s strategic decision to cease use of the assets. This charge was recorded in the line item selling, general and administrative expenses in our consolidated statement of income. Fair Value Measurements for Pension Plan Assets The fair value hierarchy discussed above is not only applicable to assets and liabilities that are included in our consolidated balance sheet but is also applied to certain other assets that impact our consolidated financial statements. For example, our Company sponsors a number of pension plans. Assets contributed to these plans by the Company become the property of the individual plans. Even though the Company no longer has control over these assets, our consolidated financial statements are impacted by subsequent fair value adjustments to these assets. The actual return on these assets impacts the Company’s future net periodic benefit cost or income as well as amounts recognized in our consolidated balance sheet. Refer to Note 14. The Company uses the fair value hierarchy to measure the fair value of assets held by our pension plans. The following table summarizes the levels within the fair value hierarchy for our pension plan assets (in millions): December 31, 2025 December 31, 2024 Level 1 Level 2 Level 3 Other 1 Total Level 1 Level 2 Level 3 Other 1 Total Cash and cash equivalents $ 446 $ 683 $ — $ — $ 1,129 $ 203 $ 376 $ — $ — $ 579 Equity securities: U.S.-based companies 505 — 27 — 532 1,022 1 28 — 1,051 International-based companies 379 — 2 — 381 691 10 2 — 703 Fixed-income securities: Government bonds 92 1,258 — — 1,350 79 930 — — 1,009 Corporate bonds and debt securities — 375 9 — 384 — 529 17 — 546 Mutual, pooled and commingled funds 29 184 — 459 4 672 24 277 — 386 8 687 Hedge funds/limited partnerships — — — 899 5 899 — — — 1,023 5 1,023 Real assets — — — 343 6 343 — — — 341 6 341 Derivative financial instruments — ( 9 ) 2 — — ( 9 ) — ( 63 ) 2 — — ( 63 ) Other — — 576 3 266 7 842 — — 311 3 248 7 559 Total $ 1,451 $ 2,491 $ 614 $ 1,967 $ 6,523 $ 2,019 $ 2,060 $ 358 $ 1,998 $ 6,435 1 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 14. 2 This class of assets includes investments in interest rate contracts, credit contracts and foreign exchange contracts. 3 Includes purchased annuity insurance contracts. 4 This class of assets primarily includes alternative investment funds and collective trust funds for qualified plans. These funds can be subject to monthly redemption restrictions, with a redemption notice period of up to 10 days prior to month end. 5 This class of assets includes hedge funds that can be subject to redemption restrictions, ranging from monthly to semiannually, with a redemption notice period of up to one year and/or initial lock-up periods of up to three years, and private equity funds that are primarily closed-end funds in which the Company’s investments are generally not eligible for redemption. Distributions from these private equity funds will be received as the underlying assets are liquidated or distributed. 6 This class of assets includes funds invested in real assets, including a privately held real estate investment trust, a real estate commingled pension trust fund, infrastructure limited partnerships and commingled investment funds. These funds seek current income and capital appreciation and can be subject to quarterly redemption restrictions, with a redemption notice period of up to 90 days. 7 Primarily includes segregated portfolios of private investment funds that are invested in a portfolio of insurance-linked securities. These assets can be subject to a semiannual redemption, with a redemption notice period of 90 days, subject to certain gate restrictions. 8 This class of assets primarily includes a mortgage-related fixed income securities fund, alternative investment funds and collective trust funds for qualified plans. There are no liquidity restrictions on these investments. 113 The following table provides a reconciliation of the beginning and ending balance of our Level 3 pension plan assets (in millions): Equity Securities Fixed-Income Securities Other 1 Total Balance as of January 1, 2024 $ 32 $ 27 $ 323 $ 382 Actual return on plan assets 1 2 8 11 Purchases, sales and settlements — net ( 3 ) ( 12 ) ( 2 ) ( 17 ) Net foreign currency translation adjustments — — ( 18 ) ( 18 ) Balance as of December 31, 2024 $ 30 $ 17 $ 311 $ 358 Actual return on plan assets ( 1 ) 1 7 7 Purchases, sales and settlements — net — ( 7 ) 216 209 Transfers into (out of) Level 3 — net — ( 2 ) — ( 2 ) Net foreign currency translation adjustments — — 42 42 Balance as of December 31, 2025 $ 29 $ 9 $ 576 $ 614 1 Includes purchased annuity insurance contracts. Other Fair Value Disclosures The carrying values of cash and cash equivalents; short-term investments; trade accounts receivable; accounts payable and accrued expenses; and loans and notes payable approximate their fair values because of the relatively short-term maturities of these financial instruments. As of December 31, 2025, the carrying value and fair value of our long-term debt, including the current portion, were $ 43,941 million and $ 39,385 million, respectively. As of December 31, 2024, the carrying value and fair value of our long-term debt, including the current portion, were $ 43,023 million and $ 38,052 million, respectively. NOTE 18: SIGNIFICANT OPERATING AND NONOPERATING ITEMS Other Operating Charges In 2025, the Company recorded other operating charges of $ 1,261 million. These charges consisted of $ 960 million related to the impairment of our BodyArmor trademark which impacted our North America operating segment, $ 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 our Latin America operating segment, $ 41 million related to the impairment of a trademark and property, plant and equipment in our Asia Pacific operating segment 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 $ 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 which impacted our North America operating segment, $ 133 million related to the Company’s productivity and reinvestment program and $ 126 million related to the impairment of a trademark that impacted our Latin America operating segment. 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. In 2023, the Company recorded other operating charges of $ 1,951 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 that impacted our Asia Pacific operating segment. 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. 114 Refer to Note 2 for additional information on our divestiture activities. Refer to Note 12 for additional information related to the tax litigation. Refer to Note 17 for additional information on fairlife and the impairment charges. Refer to Note 19 for additional information on the Company’s productivity and reinvestment program. Other Nonoperating Items Equity Income (Loss) — Net The Company recorded net charges of $ 21 million, $ 92 million and $ 159 million in equity income (loss) — net during the years ended December 31, 2025, 2024 and 2023, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Other Income (Loss) — Net During 2025, the Company recognized a gain of $ 1,952 million related to the sale of our ownership interest in Coke Consolidated, 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, 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 charges of $ 27 million and $ 11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S. pension activity. During 2024, the Company recognized 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. These gains were partially offset by an other-than-temporary impairment charge of $ 34 million related to an equity method investee in Latin America. During 2023, the Company recognized a 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 a gain of $ 94 million related to the sale of our ownership interests in our equity method investees in Pakistan and Indonesia. Additionally, the Company recorded charges of $ 67 million due to pension and other postretirement benefit plan settlement losses, 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 for additional information on our divestiture activities and on our bottling operations held for sale in Africa. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 14 for additional information on pension and other postretirement benefit plan activity. Refer to Note 17 for additional information on the impairment charges and the bottling operations in Ghana. NOTE 19: RESTRUCTURING Productivity and Reinvestment Program In February 2012, the Company announced a productivity and reinvestment program designed to strengthen our brands and reinvest our resources to drive long-term profitable growth. This program was expanded multiple times, with the last expansion occurring in April 2017. As of December 31, 2025, we have substantially completed this program. The Company incurred pretax expenses of $ 97 million, $ 133 million and $ 164 million during the years ended December 31, 2025, 2024 and 2023, respectively, related to this program. These expenses primarily included internal and external costs associated with the implementation of the program’s initiatives and were recorded in the line item other operating charges in our consolidated statements of income. The Company has incurred total pretax expenses of $ 4,523 million related to this program since it commenced. These expenses were recorded in the line items other operating charges and other income (loss) — net in our consolidated statements of income. 115 NOTE 20: OPERATING SEGMENTS Our organizational structure consists of the following five operating segments: EMEA, Latin America, North America, Asia Pacific, and Bottling Investments. Our operating structure also includes Corporate, which consists of two components: (1) a center focusing on strategic initiatives, policy, governance and scaling global initiatives, and (2) a platform services organization supporting operating units, global marketing category leadership teams and the center by providing efficient and scaled global services and capabilities, including, but not limited to, transactional work, data management, consumer analytics, digital commerce and social/digital hubs. Segment Products and Services The business of our Company is primarily nonalcoholic beverages. Our geographic operating segments (EMEA, Latin America, North America and Asia Pacific) derive a majority of their revenues from the manufacture and sale of beverage concentrates and syrups and, in some cases, the sale of finished beverages. Our EMEA operating segment also includes the results of the Costa business (excluding the ready-to-drink business), regardless of the location of the retail stores. The results of Costa’s ready-to-drink business and the fees related to Monster are reported within the applicable geographic operating segments. Our Bottling Investments operating segment is composed of our consolidated bottling operations, regardless of the geographic location of the bottler. Our consolidated bottling operations derive the majority of their revenues from the manufacture and sale of finished beverages. Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. Refer to Note 3. The following table sets forth the percentage of total net operating revenues attributable to concentrate operations and finished product operations: Year Ended December 31, 2025 2024 2023 Concentrate operations 59 % 59 % 58 % Finished product operations 41 41 42 Total 100 % 100 % 100 % Chief Operating Decision Maker and Method of Determining Segment Income or Loss Our Company’s chief operating decision maker (“CODM”) is the Chairman of the Board of Directors and Chief Executive Officer. The CODM evaluates operating segment performance based primarily on net operating revenues and operating income (loss) to make strategic operating and resource allocation decisions for the Company. Segment operating income is calculated on a consistent basis as our consolidated operating income. The type of decisions made at this level include, but are not limited to, annual business plan targets and allocation of capital expenditures, which are aligned with our long-term growth objectives. Our Company manages income taxes and certain treasury-related items, such as interest income and interest expense, on a global basis within Corporate. Information about total assets by segment is not disclosed because such information is not regularly provided to, or used by, our CODM. Geographic and Customer Data The following table provides information related to our net operating revenues (in millions): Year Ended December 31, 2025 2024 2023 United States $ 19,127 $ 18,362 $ 16,550 International 28,814 28,699 29,204 Net operating revenues $ 47,941 $ 47,061 $ 45,754 For the year ended December 31, 2025, one bottler accounted for 10 % of our net operating revenues, which are reflected in our EMEA and Asia Pacific operating segments. No bottlers or customers represented 10% or more of our net operating revenues for the years ended December 31, 2024 and 2023. The following table provides information related to our property, plant and equipment — net (in millions): December 31, 2025 2024 United States $ 4,825 $ 4,364 International 4,788 5,939 Property, plant and equipment — net 1 $ 9,613 $ 10,303 1 Property, plant and equipment — net in India represented 17 % and 13 % of consolidated property, plant and equipment — net as of December 31, 2025 and 2024, respectively. 116 Information about our Company’s operations by operating segment and Corporate is as follows (in millions): EMEA Latin America North America Asia Pacific Bottling Investments Operating Segments Total Corporate Eliminations Consolidated Year Ended December 31, 2025 Net operating revenues: Third party $ 10,833 $ 6,331 $ 19,579 $ 5,328 $ 5,726 $ 47,797 $ 144 $ — $ 47,941 Intersegment 680 3 7 310 9 1,009 — ( 1,009 ) — Total net operating revenues 11,513 6,334 19,586 5,638 5,735 48,806 144 ( 1,009 ) 47,941 Cost of goods sold 3,294 1,109 9,438 1,788 3,948 19,577 ( 171 ) ( 1,009 ) 18,397 Selling, general and administrative expenses 3,921 1,439 4,118 1,767 1,361 12,606 1,915 — 14,521 Other operating charges — 44 960 41 — 1,045 216 — 1,261 Operating income (loss) $ 4,298 $ 3,742 $ 5,070 $ 2,042 $ 426 $ 15,578 $ ( 1,816 ) $ — $ 13,762 Interest income 786 Interest expense 1,654 Equity income (loss) — net 2,031 Other income (loss) — net 1,073 Income before income taxes $ 15,998 Other segment information: Capital expenditures $ 237 $ 2 $ 669 $ 72 $ 547 $ 1,527 $ 585 $ — $ 2,112 Depreciation and amortization 173 32 326 47 313 891 159 — 1,050 Year Ended December 31, 2024 Net operating revenues: Third party $ 10,278 $ 6,471 $ 18,860 $ 5,127 $ 6,215 $ 46,951 $ 110 $ — $ 47,061 Intersegment 680 — 9 467 8 1,164 — ( 1,164 ) — Total net operating revenues 10,958 6,471 18,869 5,594 6,223 48,115 110 ( 1,164 ) 47,061 Cost of goods sold 3,083 1,099 9,595 1,689 4,251 19,717 ( 229 ) ( 1,164 ) 18,324 Selling, general and administrative expenses 3,620 1,454 3,958 1,749 1,476 12,257 2,325 — 14,582 Other operating charges — 126 760 — — 886 3,277 — 4,163 Operating income (loss) $ 4,255 $ 3,792 $ 4,556 $ 2,156 $ 496 $ 15,255 $ ( 5,263 ) $ — $ 9,992 Interest income 988 Interest expense 1,656 Equity income (loss) — net 1,770 Other income (loss) — net 1,992 Income before income taxes $ 13,086 Other segment information: Capital expenditures $ 222 $ 1 $ 602 $ 18 $ 734 $ 1,577 $ 487 $ — $ 2,064 Depreciation and amortization 181 29 325 45 319 899 176 — 1,075 117 EMEA Latin America North America Asia Pacific Bottling Investments Operating Segments Total Corporate Eliminations Consolidated Year Ended December 31, 2023 Net operating revenues: Third party $ 10,152 $ 5,834 $ 16,965 $ 4,811 $ 7,852 $ 45,614 $ 140 $ — $ 45,754 Intersegment 686 — 8 731 8 1,433 — ( 1,433 ) — Total net operating revenues 10,838 5,834 16,973 5,542 7,860 47,047 140 ( 1,433 ) 45,754 Cost of goods sold 2,970 1,040 8,791 1,644 5,615 20,060 ( 107 ) ( 1,433 ) 18,520 Selling, general and administrative expenses 3,545 1,358 3,522 1,806 1,667 11,898 2,074 — 13,972 Other operating charges — — 26 35 — 61 1,890 — 1,951 Operating income (loss) $ 4,323 $ 3,436 $ 4,634 $ 2,057 $ 578 $ 15,028 $ ( 3,717 ) $ — $ 11,311 Interest income 907 Interest expense 1,527 Equity income (loss) — net 1,691 Other income (loss) — net 570 Income before income taxes $ 12,952 Other segment information: Capital expenditures $ 235 $ 1 $ 412 $ 23 $ 843 $ 1,514 $ 338 $ — $ 1,852 Depreciation and amortization 187 48 310 50 389 984 144 — 1,128 During 2025, 2024 and 2023, our operating segments and Corporate were impacted by acquisition and divestiture activities. Refer to Note 2. Additionally, during 2025, 2024 and 2023, our operating segments and Corporate were impacted by certain significant operating and nonoperating items. Refer to Note 18. NOTE 21: NET CHANGE IN OPERATING ASSETS AND LIABILITIES Net cash provided by (used in) operating activities attributable to the net change in operating assets and liabilities was composed of the following (in millions): Year Ended December 31, 2025 2024 2023 (Increase) decrease in trade accounts receivable $ 334 $ ( 295 ) $ ( 2 ) (Increase) decrease in inventories ( 154 ) ( 520 ) ( 597 ) (Increase) decrease in prepaid expenses and other current assets and other noncurrent assets 1 ( 388 ) ( 5,667 ) ( 323 ) Increase (decrease) in accounts payable and accrued expenses 2 ( 6,612 ) 1,134 841 Increase (decrease) in accrued income taxes ( 558 ) ( 823 ) ( 578 ) Increase (decrease) in other noncurrent liabilities 170 ( 63 ) ( 187 ) Net change in operating assets and liabilities $ ( 7,208 ) $ ( 6,234 ) $ ( 846 ) 1 The increase in prepaid expenses and other current assets and other noncurrent assets in 2024 was primarily due to the IRS Tax Litigation Deposit. Refer to Note 12. 2 The decrease in accounts payable and accrued expenses in 2025 was primarily due to the payment of the contingent consideration liability in conjunction with our acquisition of fairlife in 2020. Refer to Note 18. 118 REPORT OF MANAGEMENT Management’s Responsibility for the Financial Statements Management of the Company is responsible for the preparation and integrity of the consolidated financial statements appearing in our Annual Report on Form 10-K. The financial statements were prepared in conformity with accounting principles generally accepted in the United States appropriate in the circumstances and, accordingly, include certain amounts based on our best judgments and estimates. Financial information in this report is consistent with that in the financial statements. Management of the Company is responsible for establishing and maintaining a system of internal controls and procedures to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements. Our internal control system is supported by a program of internal audits and appropriate reviews by management, written policies and guidelines, careful selection and training of qualified personnel, and a written Code of Business Conduct adopted by our Company’s Board of Directors, applicable to all officers and employees of our Company and subsidiaries. In addition, our Company’s Board of Directors adopted a written Code of Business Conduct for Non-Employee Directors which reflects the same principles and values as our Code of Business Conduct for officers and employees but focuses on matters of relevance to non-employee Directors. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements and, even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management’s Report on Internal Control Over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a-15(f) under the Exchange Act. Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”) in Internal Control — Integrated Framework . Based on this assessment, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2025. The Company’s independent auditors, Ernst & Young LLP, a registered public accounting firm, are appointed by the Audit Committee of our Company’s Board of Directors. Ernst & Young LLP has audited and reported on the consolidated financial statements of The Coca-Cola Company and subsidiaries and the Company’s internal control over financial reporting. The reports of the independent auditors are contained in this report. Audit Committee’s Responsibility The Audit Committee of our Company’s Board of Directors, composed solely of Directors who are independent in accordance with the requirements of the New York Stock Exchange listing standards, the Exchange Act, and the Company’s Corporate Governance Guidelines, meets with the independent auditors, management and internal auditors periodically to discuss internal controls along with auditing and financial reporting matters. The Audit Committee reviews with the independent auditors the scope and results of the audit effort. The Audit Committee also meets periodically with the independent auditors and the chief internal auditor without management present to ensure that the independent auditors and the chief internal auditor have free access to the Audit Committee. Our Audit Committee’s Report can be found in the Company’s 2026 Proxy Statement. 119 James Quincey John Murphy Chairman of the Board of Directors and Chief Executive Officer February 20, 2026 President and Chief Financial Officer February 20, 2026 Erin L. May Senior Vice President, Controller and Chief Accounting Officer February 20, 2026 120 Report of Independent Registered Public Accounting Firm To the Shareowners and the Board of Directors of The Coca-Cola Company Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The Coca-Cola Company and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareowners' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Accounting for uncertain tax positions Description of the Matter As described in Note 12 and Note 15 to the Company’s consolidated financial statements, the Company is involved in various income tax matters for which the ultimate outcomes are uncertain. As of December 31, 2025, the gross amount of unrecognized tax benefits was $857 million. Auditing the amount of unrecognized tax benefits associated with some of management’s uncertain tax positions was especially challenging due to the level of subjectivity and significant judgment associated with the recognition and measurement of the tax position. 121 How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the effectiveness of controls over the Company’s accounting process for uncertain tax positions. Our procedures included testing controls addressing the completeness of uncertain tax positions, controls relating to the identification and recognition of the uncertain tax positions, controls over the measurement of the unrecognized tax benefit, and controls over the identification of developments related to existing uncertain tax positions. Our audit procedures included, among others, evaluating the assumptions the Company used to assess some of its uncertain tax positions and related unrecognized tax benefit amounts by jurisdiction. We also tested the completeness and accuracy of the underlying data used in the identification and measurement of uncertain tax positions. We evaluated evidence of management’s assessment of specific uncertain tax positions, including inquiries of tax counsel, inspection of technical memos, and written representations of management. For certain assessments, we involved professionals with specialized skill and knowledge to assist in our evaluation of the tax technical merits of the Company’s assessments, including the assessments of whether the tax positions are more likely than not to be sustained, the amount of the potential benefits to be realized, and the application of relevant tax law. We also assessed the Company’s disclosures of uncertain tax positions included in Note 12 and Note 15. Valuation of trademarks with indefinite lives Description of the Matter Included in the Company’s consolidated financial statements are trademarks with indefinite lives of $12.5 billion as of December 31, 2025. As described in Note 1, management performs an annual impairment test of its indefinite-lived intangible assets, including trademarks with indefinite lives. Each impairment test may be qualitative or quantitative. Management performs their annual impairment tests as of June 28, 2025, and more frequently if events or circumstances indicate that assets might be impaired. The Company recorded an asset impairment charge of $960 million during the year ended December 31, 2025, related to their BodyArmor trademark in North America. Auditing the valuation of certain indefinite-lived trademarks with indefinite lives involved complex judgment due to the significant estimation required by management in determining the fair value of the trademarks with indefinite lives. Significant assumptions used in certain of the Company’s trademark fair value estimates included revenues, royalty rates, long-term growth rates, and discount rates, as applicable. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s interim review of impairment indicators, interim impairment tests, and annual impairment tests for certain trademarks with indefinite lives. For example, we tested management’s risk assessment process to determine whether to perform a quantitative or qualitative test, management’s control over the evaluation of interim impairment indicators, and management’s review controls over certain of the valuation models and underlying assumptions used to develop such estimates. We tested certain of the Company’s trademarks with indefinite lives based on our risk assessments. Our audit procedures included, among others, comparing significant judgmental inputs to observable third party and industry sources, and evaluating the reasonableness of management’s projected financial information by comparing to third party industry projections, third party economic growth projections, and other internal and external data. We performed sensitivity analyses of certain significant assumptions to evaluate the change in the fair value of certain of the Company’s trademarks with indefinite lives and also assessed the historical accuracy of management’s estimates. In addition, we involved specialists to assist in our evaluation of certain significant assumptions used in the Company’s valuation models. We also assessed the Company’s related disclosures of its valuation of trademarks with indefinite lives. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1921. Atlanta, Georgia February 20, 2026 122 Report of Independent Registered Public Accounting Firm To the Shareowners and the Board of Directors of The Coca-Cola Company Opinion on Internal Control Over Financial Reporting We have audited The Coca-Cola Company and subsidiaries’ internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Coca-Cola Company and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareowners' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 20, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Atlanta, Georgia February 20, 2026 123 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.