What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-23 · 154 added, 312 removed, 257 unchanged (64% of the section changed)

13 unchanged sentences

As these factors are often interdependent and may not change in isolation, we do not believe it is practicable or meaningful to present the impact of changing a single factor.

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

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

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

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

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

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

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

As of September 26, 2025, the fair value of this trademark approximates its carrying value.

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

Based on this assessment, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an impairment charge of $960 million.

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

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

As of April 3, 2026, the fair value of this trademark approximates its carrying value.

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

9 unchanged sentences

Unit case volume growth is a key metric used by management to evaluate the Company’s performance because it measures demand for our products at the consumer level.

The Company’s unit case volume represents the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners to customers or consumers and, therefore, reflects unit case volume for both consolidated and unconsolidated bottlers.

The Company’s unit case volume represents the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners (“Coca-Cola system”) to customers or consumers and, therefore, reflects unit case volume for both consolidated and unconsolidated bottlers.

Refer to the heading “Beverage Volume” below.

Concentrate sales volume represents the amount of concentrates, syrups, source waters and powders/minerals (in all instances expressed in unit case equivalents) sold by, or used in finished products sold by, the Company to its bottling partners or other

For Costa Limited (“Costa”) non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.

For our Costa non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.

Refer to the heading “Beverage Volume” below.

1 unchanged sentence

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

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

(2) changes in price/mix;

(3) foreign currency exchange rate fluctuations;

21 unchanged sentences

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

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

The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three and nine months ended September 26, 2025, as applicable.

In May 2025, the Company refranchised our bottling operations in certain territories in India.

The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three months ended April 3, 2026.

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

The impact of this sale has been included as a divestiture in our analysis of net operating revenues on a consolidated basis as well as for the EMEA operating segment for the three months ended April 3, 2026.

Beverage Volume

8 unchanged sentences

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

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

The unit case volume numbers used in this report are derived based on estimates received by the

Company from its bottling partners and distributors.

Concentrate sales volume represents the amount of concentrates, syrups, source waters and powders/minerals (in all instances expressed in unit case equivalents) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.

For Costa non-ready-to-drink beverage products, concentrate

sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.

For Costa non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers.

Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period.

4 unchanged sentences

Three Months Ended

September 26, 2025 Nine Months Ended

September 26, 2025

Unit Cases 1,2,3

Concentrate Sales 4

April 3, 2026

Unit Cases 1,2,3

1 unchanged sentence

Worldwide 3 % 8 %

Europe, Middle East & Africa 4 3 3 2

Latin America 1 7

4 unchanged sentences

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

Unit case volume growth for Costa retail stores is reflected in the Europe, Middle East and Africa operating segment data.

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

3 Unit case volume percent change is based on average daily sales.

4 unchanged sentences

Each of our quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period.

As a result, the first quarter of 2025 had two fewer days when compared to the first quarter of 2024, and the fourth quarter of 2025 will have one additional day when compared to the fourth quarter of 2024.

5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three and nine months ended September 26, 2025 increased 5% and 1%, respectively.

6 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the nine months ended September 26, 2025 was even.

As a result, the first quarter of 2026 had six additional days when compared to the first quarter of 2025, and the fourth quarter of 2026 will have six fewer days when compared to the fourth quarter of 2025.

5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three months ended April 3, 2026 increased 4%.

Unit Case Volume

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

Three Months Ended September 26, 2025 versus Three Months Ended September 27, 2024

Unit case volume in Europe, Middle East and Africa increased 4%, which included 3% growth in Trademark Coca-Cola, 5% growth in sparkling flavors, 4% growth in water, sports, coffee and tea, as well as growth in energy drinks, partially offset by a 1% decline in juice, value-added dairy and plant-based beverages.

The operating segment’s volume performance included an increase in unit case volume of 8% in the Eurasia and Middle East operating unit, 7% in the Africa operating unit and growth in energy drinks, partially offset by a decline of 1% in the Europe operating unit.

Unit case volume in Latin America was even, which included 3% growth in water, sports, coffee and tea, 2% growth in juice, value-added dairy and plant-based beverages and growth in energy drinks, offset by a 1% decline in both Trademark Coca-Cola and sparkling flavors.

The operating segment’s volume performance included 3% growth in Brazil, offset by a decline of 3% in Mexico.

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

Unit case volume in sparkling flavors was even.

Unit case volume in Asia Pacific decreased 1%, which included a 6% decline in sparkling flavors and a 9% decline in juice, value-added dairy and plant-based beverages, partially offset by 2% growth in Trademark Coca-Cola, 1% growth in water, sports, coffee and tea, as well as growth in energy drinks.

The operating segment’s volume performance included a decline of 4% in the India and Southwest Asia operating unit as well as a decline of 1% in the Greater China and Mongolia, ASEAN and South Pacific, and Japan and South Korea operating units.

These declines were partially offset by growth in energy drinks.

Unit case volume for Bottling Investments increased 2%, driven by growth in unit case volume in Africa and India, partially offset by the impact of refranchising our bottling operations in certain territories in India.

Nine Months Ended September 26, 2025 versus Nine Months Ended September 27, 2024

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

The operating segment’s volume performance included an increase in unit case volume of 8% in the Eurasia and Middle East operating unit, 4% in the Africa operating unit and growth in energy drinks.

Unit case volume in the Europe operating unit was even.

Unit case volume in Latin America decreased 1%, which included a 3% decline in sparkling flavors and a 1% decline in Trademark Coca-Cola, partially offset by 1% growth in juice, value-added dairy and plant-based beverages, as well as growth in energy drinks.

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

The operating segment’s volume performance included a decline of 4% in Mexico, partially offset by 2% growth in Brazil and 9% growth in Argentina.

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

Unit case volume in sparkling flavors was even.

Unit case volume in Asia Pacific was even, which included 3% growth in water, sports, coffee and tea, 1% growth in Trademark Coca-Cola, as well as growth in energy drinks, offset by a decline of 2% in sparkling flavors and a decline of 5% in juice, value-added dairy and plant-based beverages.

The operating segment’s volume performance included 2% growth in the Greater China and Mongolia operating unit, 1% growth in the India and Southwest Asia operating unit, and growth in energy drinks, offset by a decline of 3% in the ASEAN and South Pacific operating unit and a decline of 1% in the Japan and South Korea operating unit.

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

Unit case volume in EMEA increased 2%, which included 4% growth in both sparkling flavors and water, sports, coffee and tea, as well as growth in energy drinks, partially offset by a 15% decline in juice, value-added dairy and plant-based beverages, which was primarily driven by the impact of the sale of our finished product operations in Nigeria.

Unit case volume in Trademark Coca-Cola was even.

The operating segment’s volume performance included an increase in unit case volume of 3% in the Africa operating unit, 2% in the Eurasia and Middle East operating unit and 1% in the Europe operating unit.

Unit case volume in Latin America increased 1%, which included 3% growth in water, sports, coffee and tea, 2% growth in sparkling flavors, as well as growth in energy drinks.

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

The operating segment’s volume performance included 2% growth in Brazil, partially offset by declines of 5% in Argentina and 1% in Mexico.

Unit case volume in North America increased 4%, which included 5% growth in both Trademark Coca-Cola and water, sports, coffee and tea, 2% growth in sparkling flavors, as well as growth in energy drinks.

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

Unit case volume in Asia Pacific increased 5%, which included 8% growth in water, sports, coffee and tea, 5% growth in Trademark Coca-Cola, 4% growth in sparkling flavors, 2% growth in juice, value-added dairy and plant-based beverages, as well as growth in energy drinks.

The operating segment’s volume performance included 8% growth in the Greater China and Mongolia operating unit, 5% growth in both the India and Southwest Asia operating unit and the Japan and South Korea operating unit and 3% growth in the ASEAN and South Pacific operating unit.

Unit case volume for Bottling Investments increased 1%, primarily driven by growth in Africa, partially offset by the impact of refranchising certain territories of our bottling operations in India.

Concentrate Sales Volume

During both the three and nine months ended September 26, 2025, worldwide concentrate sales volume was even and unit case volume increased 1% compared to the three and nine months ended September 27, 2024.

During the three months ended April 3, 2026, worldwide concentrate sales volume increased 8% and unit case volume increased 3% compared to the three months ended March 28, 2025.

Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days.

Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods.

The first quarter of 2025 had two fewer days when compared to the first quarter of 2024, which contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments during the nine months ended September 26, 2025.

The first quarter of 2026 had six additional days when compared to the first quarter of 2025, which contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments.

Additionally, the differences between concentrate sales volume and unit case volume growth rates for the operating segments were impacted by the timing of concentrate shipments.

1 unchanged sentence

Net Operating Revenues

Three Months Ended September 26, 2025 versus Three Months Ended September 27, 2024

During the three months ended September 26, 2025, net operating revenues were $12,455 million, compared to $11,854 million during the three months ended September 27, 2024, an increase of $601 million, or 5%.

During the three months ended April 3, 2026, net operating revenues were $12,472 million, compared to $11,129 million during the three months ended March 28, 2025, an increase of $1,343 million, or 12%.

The following table illustrates, on a percentage basis, the estimated impact of the factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments:

Percent Change 2026 versus 2025

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

Price/Mix Foreign Currency Fluctuations Acquisitions & Divestitures 2

Consolidated 8 % 2 % 3 % (1) % 12 %

Europe, Middle East & Africa 3 4 3 — 10

EMEA 5 5 6 (3) 13

Latin America 7 1 5 — 14

10 unchanged sentences

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

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

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

the mix of categories, products and packages sold;

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

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

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

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

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

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

Price, product and geographic mix had a 6% favorable impact on our consolidated net operating revenues.

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

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

• Latin America — favorable pricing initiatives and favorable mix;

• North America — favorable pricing initiatives and favorable mix;

• Asia Pacific — favorable pricing initiatives and favorable mix;

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

The impact of foreign currency exchange rate fluctuations on our consolidated net operating revenues, including the effects of our hedging activities, was even.

Price/mix had a 2% favorable impact on our consolidated net operating revenues.

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

• EMEA — favorable pricing initiatives, including inflationary pricing, and favorable mix;

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

• North America — favorable pricing initiatives, partially offset by unfavorable mix;

• Asia Pacific — unfavorable mix and affordability initiatives;

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

Fluctuations in foreign currency exchange rates, including the effects of our hedging activities, favorably impacted our consolidated net operating revenues by 3%.

Net operating revenues were favorably impacted by a weaker U.S.

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

dollar compared to certain foreign currencies, including the euro, Mexican peso, South African rand and British pound, which had a favorable impact on our EMEA, Latin America and Bottling Investments operating segments.

The favorable impact of a weaker U.S.

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

dollar compared to certain other foreign currencies, including the Ethiopian birr, Turkish lira, and Argentine peso, which had an unfavorable impact on our Europe, Middle East and Africa, Latin America and Bottling Investments operating segments.

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

dollar compared to certain other foreign currencies, including the Argentine peso, Turkish lira and Indian rupee, which had an unfavorable impact on our Latin America, EMEA, Asia Pacific and Bottling Investments operating segments.

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

4 unchanged sentences

Refer to the heading “Structural Changes, Acquired Brands and Newly Licensed Brands” above for additional information related to acquisitions and divestitures.

Nine Months Ended September 26, 2025 versus Nine Months Ended September 27, 2024

During the nine months ended September 26, 2025, net operating revenues were $36,119 million, compared to $35,517 million during the nine months ended September 27, 2024, an increase of $602 million, or 2%.

Percent Change 2025 versus 2024

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

Consolidated — % 6 % (3) % (1) % 2 %

Europe, Middle East & Africa 2 4 (1) — 5

Latin America (2) 12 (14) — (4)

North America (2) 6 — — 4

Asia Pacific — 6 (1) (2) 3

Bottling Investments — 2 (3) (9) (10)

Certain rows may not add due to rounding.

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

For our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the increase (decrease) in unit case volume computed by comparing the total sales (rather than the average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any.

Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only after considering the impact of structural changes, if any.

Refer to the heading “Beverage Volume” above.

2 Includes structural changes, if any.

Refer to the heading “Structural Changes, Acquired Brands and Newly Licensed Brands” above.

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

Price, product and geographic mix had a 6% favorable impact on our consolidated net operating revenues.

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

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

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

• North America — favorable pricing initiatives and favorable mix;

• Asia Pacific — favorable pricing initiatives and favorable mix;

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

Fluctuations in foreign currency exchange rates, including the effects of our hedging activities, unfavorably impacted our consolidated net operating revenues by 3%.

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

dollar compared to certain foreign currencies, including the Mexican peso, Brazilian real, Argentine peso, Ethiopian birr and Turkish lira, which had an unfavorable impact on our Latin America;

Europe, Middle East and Africa;

and Bottling Investments operating segments.

The unfavorable impact of a stronger U.S.

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

dollar compared to certain other foreign currencies, including the British pound, euro, South African rand and Japanese yen, which had a favorable impact on our Europe, Middle East and Africa;

Asia Pacific;

and Bottling Investments operating segments.

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

Net operating revenue growth rates are impacted by sales volume;

price, product and geographic mix;

foreign currency exchange rate fluctuations;

1 unchanged sentence

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

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

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

Gross Profit Margin

2 unchanged sentences

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

Our gross profit margin increased to 61.5% for the three months ended September 26, 2025, compared to 60.7% for the three months ended September 27, 2024.

Our gross profit margin increased to 62.1% for the nine months ended September 26, 2025, compared to 61.4% for the nine months ended September 27, 2024.

The increases were primarily due to the impact of favorable pricing initiatives and the refranchising of certain of our bottling operations, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Our gross profit margin increased to 63.0% for the three months ended April 3, 2026, compared to 62.6% for the three months ended March 28, 2025.

The increase was primarily due to the favorable impact of pricing initiatives and foreign currency exchange rate fluctuations, as well as the impact of the sale of our finished product operations in Nigeria, partially offset by higher commodity costs.

Selling, General and Administrative Expenses

During the three months ended September 26, 2025, selling, general and administrative expenses were $3,618 million, compared to $3,636 million during the three months ended September 27, 2024, a decrease of $18 million.

This decrease was primarily due to lower annual incentive expense, partially offset by increased advertising expense.

During the nine months ended September 26, 2025, selling, general and administrative expenses were $10,322 million, compared to $10,536 million during the nine months ended September 27, 2024, a decrease of $214 million, or 2%.

The decrease was primarily due to the refranchising of certain of our bottling operations and lower annual incentive expense.

During the three months ended September 26, 2025, foreign currency exchange rate fluctuations increased selling, general and administrative expenses by 1%, and during the nine months ended September 26, 2025, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 1%.

Advertising expenses for the three months ended September 26, 2025 and September 27, 2024 were $1,523 million and $1,376 million, respectively.

Advertising expenses for the nine months ended September 26, 2025 and September 27, 2024 were $3,940 million and $3,937 million, respectively.

As of September 26, 2025, we had $296 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.

During the three months ended April 3, 2026, selling, general and administrative expenses were $3,472 million, compared to $3,234 million during the three months ended March 28, 2025, an increase of $238 million, or 7%.

The increase was primarily due to increased marketing spending, partially offset by lower annual incentive expense and the impact of the sale of our finished product operations in Nigeria.

During the three months ended April 3, 2026, foreign currency exchange rate fluctuations increased selling, general and administrative expenses by 4%.

Advertising expenses for the three months ended April 3, 2026 and March 28, 2025 were $1,377 million and $1,089 million, respectively.

Other Operating Charges

Other operating charges incurred by our operating segments and Corporate were as follows (in millions):

Three Months Ended Nine Months Ended

September 26,

2025 September 27,

2024 September 26,

2025 September 27,

Europe, Middle East & Africa $ — $ — $ — $ —

Three Months Ended

2026 March 28,

Latin America — —

4 unchanged sentences

Total $ 21 $ 73

During the three months ended September 26, 2025, the Company recorded other operating charges of $58 million.

These charges included $27 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $24 million related to the Company’s productivity and reinvestment program, $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $3 million related to tax litigation expense.

During the nine months ended September 26, 2025, the Company recorded other operating charges of $202 million.

During the three months ended April 3, 2026, the Company recorded other operating charges of $21 million.

These charges consisted of $10 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $4 million related to North America modernization initiatives, $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $3 million related to tax litigation expense.

During the three months ended March 28, 2025, the Company recorded other operating charges of $73 million.

These charges consisted of $47 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife in 2020, which brought the total liability to $6,173 million and was paid in March 2025.

Additionally, other operating charges included $63 million related to the Company’s productivity and reinvestment

program, $35 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $31 million related to the impairment of a trademark in Latin America, $11 million for the amortization of noncompete agreements related to the BodyArmor acquisition, $8 million related to tax litigation expense and $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India.

During the three months ended September 27, 2024, the Company recorded other operating charges of $1,044 million.

These charges consisted of $919 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $87 million related to the impairment of a trademark in Latin America and $34 million related to the Company’s productivity and reinvestment program.

In addition, other operating charges included $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $2 million of transaction costs related to the sale of a portion of our interest in Coke Consolidated.

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

During the nine months ended September 27, 2024, the Company recorded other operating charges of $3,987 million.

These charges consisted of $3,021 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $760 million related to the impairment of our BodyArmor trademark, $102 million related to the Company’s productivity and reinvestment program and $87 million related to the impairment of a trademark in Latin America.

In addition, other operating charges included $11 million for the amortization of noncompete agreements related to the BodyArmor acquisition, $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $2 million of transaction costs related to the sale of a portion of our interest in Coke Consolidated.

These charges were partially offset by a net benefit of $3 million related to a revision of management’s estimates for tax litigation expense.

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

Additionally, other operating charges included $11 million related to the Company’s productivity and reinvestment program, $9 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $3 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $3 million related to tax litigation expense.

Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

Refer to Note 12 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.

Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition and the impairments.

Operating Income and Operating Margin

Information about our operating income contribution by operating segment and Corporate on a percentage basis is as follows:

Three Months Ended Nine Months Ended

September 26,

2025 September 27,

2024 September 26,

2025 September 27,

Europe, Middle East & Africa 27.5 % 39.8 % 29.3 % 46.1 %

Three Months Ended

2026 March 28,

EMEA 28.9 % 29.1 %

Latin America 23.8 24.7

8 unchanged sentences

Information about our operating margin on a consolidated basis and for each of our operating segments and Corporate is as follows:

Three Months Ended Nine Months Ended

September 26,

2025 September 27,

2024 September 26,

2025 September 27,

Three Months Ended

2026 March 28,

Consolidated 35.0 % 32.9 %

Europe, Middle East & Africa 38.9 39.0 42.0 42.7

EMEA 44.8 42.9

Latin America 61.9 61.2

4 unchanged sentences

* Calculation is not meaningful.

Three Months Ended September 26, 2025 versus Three Months Ended September 27, 2024

During the three months ended September 26, 2025, operating income was $3,982 million, compared to $2,510 million during the three months ended September 27, 2024, an increase of $1,472 million, or 59%.

The increase was driven by lower other operating charges and favorable pricing initiatives, partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact of 4%.

Fluctuations in foreign currency exchange rates, including the effects of our hedging activities, unfavorably impacted consolidated operating income by 4% due to a stronger U.S.

dollar compared to certain foreign currencies, including the Argentine peso and Turkish lira, which had an unfavorable impact on our Latin America and Europe, Middle East and Africa operating segments.

The unfavorable impact of a stronger U.S.

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

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

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

The Europe, Middle East and Africa operating segment reported operating income of $1,097 million and $998 million for the three months ended September 26, 2025 and September 27, 2024, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 3% and favorable pricing initiatives, partially offset by increased marketing spending due to timing and an unfavorable foreign currency exchange rate impact of 2%.

Latin America reported operating income of $897 million and $937 million for the three months ended September 26, 2025 and September 27, 2024, respectively.

The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 3%, higher commodity costs, increased marketing spending due to timing, and an unfavorable foreign currency exchange rate impact of 16%, partially offset by favorable pricing initiatives and lower other operating charges.

Operating income for North America for the three months ended September 26, 2025 and September 27, 2024 was $1,681 million and $1,456 million, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decrease in concentrate sales volume of 2% and higher commodity costs.

Asia Pacific’s operating income for the three months ended September 26, 2025 and September 27, 2024 was $521 million and $462 million, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives and mix as well as a favorable foreign currency exchange rate impact of 11%, partially offset by a decrease in concentrate sales volume of 1%, higher commodity costs and increased marketing spending due to timing.

Bottling Investments’ operating income for the three months ended September 26, 2025 and September 27, 2024 was $57 million and $43 million, respectively.

The increase in operating income was primarily driven by an increase in unit case volume of 5%, favorable pricing initiatives and a favorable foreign currency exchange rate impact of 12%, partially offset by the impact of refranchising our bottling operations in certain territories in India and higher commodity costs.

Corporate’s operating loss for the three months ended September 26, 2025 and September 27, 2024 was $271 million and $1,386 million, respectively.

Operating loss in 2025 decreased primarily as a result of lower other operating charges, primarily due to the prior year remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, as well as marketing efficiencies and lower operating expenses.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.

Nine Months Ended September 26, 2025 versus Nine Months Ended September 27, 2024

During the nine months ended September 26, 2025, operating income was $11,921 million, compared to $7,283 million during the nine months ended September 27, 2024, an increase of $4,638 million, or 64%.

The increase was driven by lower other operating charges and favorable pricing initiatives, partially offset by higher commodity costs and an unfavorable foreign currency exchange rate impact of 12%.

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

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

The unfavorable impact of a stronger U.S.

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

During the three months ended April 3, 2026, operating income was $4,359 million, compared to $3,659 million during the three months ended March 28, 2025, an increase of $700 million, or 19%.

The increase was driven by an increase in concentrate sales volume of 8%, favorable price/mix, lower operating expenses, lower other operating charges and a favorable foreign currency exchange rate impact of 4%, partially offset by increased marketing spending and higher commodity costs.

Fluctuations in foreign currency exchange rates, including the effects of our hedging activities, favorably impacted consolidated operating income by 4% due to a weaker U.S.

dollar compared to certain foreign currencies, including the Mexican peso and euro, which had a favorable impact on our Latin America and EMEA operating segments.

The favorable impact of a weaker U.S.

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

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

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

The Europe, Middle East and Africa operating segment reported operating income of $3,487 million and $3,360 million for the nine months ended September 26, 2025 and September 27, 2024, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 2% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending and an unfavorable foreign currency exchange rate impact of 5%.

Latin America reported operating income of $2,758 million and $2,803 million for the nine months ended September 26, 2025 and September 27, 2024, respectively.

The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 2% and an unfavorable foreign currency exchange rate impact of 23%, partially offset by favorable pricing initiatives, lower commodity costs, lower marketing spending due to timing and lower other operating charges.

Operating income for North America for the nine months ended September 26, 2025 and September 27, 2024 was $4,643 million and $3,329 million, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives and lower other operating charges due to the impairment of our BodyArmor trademark in the prior year, partially offset by a decrease in concentrate sales volume of 2%, higher commodity costs and increased marketing spending.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment of our BodyArmor trademark.

Asia Pacific’s operating income for the nine months ended September 26, 2025 and September 27, 2024 was $1,792 million and $1,765 million, respectively.

The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by the impact of structural changes, higher commodity costs, increased marketing spending and an unfavorable foreign currency exchange rate impact of 4%.

Bottling Investments’ operating income for the nine months ended September 26, 2025 and September 27, 2024 was $235 million and $297 million, respectively.

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

Corporate’s operating loss for the nine months ended September 26, 2025 and September 27, 2024 was $994 million and $4,271 million, respectively.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.

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

The EMEA operating segment reported operating income of $1,259 million and $1,065 million for the three months ended April 3, 2026 and March 28, 2025, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 5%, favorable price/mix and a favorable foreign currency exchange rate impact of 6%, partially offset by increased marketing spending and higher operating expenses.

Latin America reported operating income of $1,038 million and $904 million for the three months ended April 3, 2026 and March 28, 2025, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 7%, favorable price/mix, lower commodity costs and a favorable foreign currency exchange rate impact of 5%, partially offset by increased marketing spending.

Operating income for North America for the three months ended April 3, 2026 and March 28, 2025 was $1,606 million and $1,341 million, respectively.

The increase in operating income was primarily driven by an increase in concentrate sales volume of 11%, favorable price/mix and lower operating expenses, partially offset by increased marketing spending and higher commodity costs.

Asia Pacific’s operating income for the three months ended April 3, 2026 and March 28, 2025 was $536 million and $624 million, respectively.

The decrease in operating income was primarily driven by unfavorable price/mix, higher commodity costs and increased marketing spending, partially offset by an increase in concentrate sales volume of 10% and a favorable foreign currency exchange rate impact of 3%.

Bottling Investments’ operating income for the three months ended April 3, 2026 and March 28, 2025 was $191 million and $119 million, respectively.

The increase in operating income was primarily driven by an increase in unit case volume of 11%, lower commodity costs, lower operating expenses and a favorable foreign currency exchange rate impact of 12%, partially offset by unfavorable price/mix and the impact of refranchising certain territories of our bottling operations in India.

Corporate’s operating loss for the three months ended April 3, 2026 and March 28, 2025 was $271 million and $394 million, respectively.

This decrease is primarily a result of lower annual incentive expense and lower other operating charges.

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

Interest Income

During the three months ended September 26, 2025, interest income was $185 million, compared to $263 million during the three months ended September 27, 2024, a decrease of $78 million, or 30%.

During the nine months ended September 26, 2025, interest income was $553 million, compared to $784 million during the nine months ended September 27, 2024, a decrease of $231 million, or 30%.

The decreases were primarily driven by lower average investment balances on our Corporate and certain international investments.

During the three months ended April 3, 2026, interest income was $222 million, compared to $180 million during the three months ended March 28, 2025, an increase of $42 million, or 23%.

The increase was primarily driven by higher average investment balances.

Interest Expense

During the three months ended September 26, 2025, interest expense was $391 million, compared to $425 million during the three months ended September 27, 2024, a decrease of $34 million, or 8%.

During the nine months ended September 26, 2025,

interest expense was $1,223 million, compared to $1,225 million during the nine months ended September 27, 2024, a decrease of $2 million.

The decreases were primarily due to the impact of lower rates on derivative instruments compared to the prior year, partially offset by higher debt balances.

During the three months ended April 3, 2026, interest expense was $375 million, compared to $387 million during the three months ended March 28, 2025, a decrease of $12 million, or 3%.

The decrease was primarily due to lower average short-term debt balances.

Equity Income (Loss) — Net

Three Months Ended September 26, 2025 versus Three Months Ended September 27, 2024

During the three months ended September 26, 2025, equity income was $644 million, compared to equity income of $541 million during the three months ended September 27, 2024, an increase of $103 million, or 19%.

This increase reflects, among other items, the impact of more favorable operating results reported by certain of our equity method investees in the current year, a favorable foreign currency exchange rate impact and a $3 million increase in net gains resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

These favorable impacts were partially offset by the impact of the sale of our ownership interests in certain of our equity method investees.

Nine Months Ended September 26, 2025 versus Nine Months Ended September 27, 2024

During the nine months ended September 26, 2025, equity income was $1,556 million, compared to equity income of $1,432 million during the nine months ended September 27, 2024, an increase of $124 million, or 9%.

This increase reflects, among other items, the impact of more favorable operating results reported by certain of our equity method investees in the current year and a $24 million decrease in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

These favorable impacts were partially offset by the impact of the sale of our ownership interests in certain of our equity method investees and an unfavorable foreign currency exchange rate impact.

During the three months ended April 3, 2026, equity income was $384 million, compared to equity income of $351 million during the three months ended March 28, 2025, an increase of $33 million, or 9%.

This increase reflects, among other items, the impact of more favorable operating results reported by certain of our equity method investees in the current year and a favorable foreign currency exchange rate impact.

These favorable impacts were partially offset by the impact of the sale of our ownership interests in certain equity method investees in 2025, and a $25 million increase in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Other Income (Loss) — Net

Three Months Ended September 26, 2025 versus Three Months Ended September 27, 2024

During the three months ended September 26, 2025, other income (loss) — net was a loss of $237 million.

The Company recorded a charge of $393 million related to certain operations held for sale in Nigeria, $13 million of costs related to our trade accounts receivable factoring program, net foreign currency exchange losses of $11 million and a charge of $8 million related to the refranchising of certain bottling operations in Ghana.

Additionally, the Company recognized a net gain of $151 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, and dividend income of $36 million.

Other income (loss) — net also included income of $4 million related to the non-service cost components of net periodic benefit cost.

During the three months ended September 27, 2024, other income (loss) — net was income of $491 million.

The Company recognized a net gain of $338 million related to the sale of a portion of our interest in Coke Consolidated, a net gain of $103 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, dividend income of $74 million and income of $34 million related to the non-service cost components of net periodic benefit cost.

Other income (loss) — net also included $34 million of costs related to our trade accounts receivable factoring program, a charge of $10 million related to post-closing adjustments for the sale of our ownership interest in an equity method investee in Thailand, net foreign currency exchange losses of $7 million and a charge of $4 million related to post-closing adjustments for the refranchising of our bottling operations in the Philippines.

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

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

Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the bottling operations in Ghana.

Nine Months Ended September 26, 2025 versus Nine Months Ended September 27, 2024

During the nine months ended September 26, 2025, other income (loss) — net was income of $229 million.

The Company recognized a net gain of $331 million related to the sale of a portion of our ownership interest in CCEP, a net gain of $295 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, dividend income of $127 million and a net gain of $102 million related to the refranchising of our bottling operations in certain territories in India.

Additionally, the Company recorded a charge of $393 million related to certain operations held for sale in Nigeria as well as 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.

Other income (loss) — net also included $49 million of costs related to our trade accounts receivable factoring program, a charge of $36 million related to the refranchising of certain bottling operations in Ghana, net foreign currency

exchange losses of $31 million and expense of $26 million related to the non-service cost components of net periodic benefit cost, which included charges of $25 million and $11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S.

During the three months ended April 3, 2026, other income (loss) — net was income of $21 million.

The Company recognized a net loss of $19 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, dividend income of $33 million and net foreign currency exchange gains of $30 million.

Other income (loss) — net also included $13 million of costs related to our trade accounts receivable factoring program and an impairment charge of $10 million related to our bottling operations in Africa, which are held for sale.

During the three months ended March 28, 2025, other income (loss) — net was income of $254 million.

The Company recognized a gain of $331 million related to the sale of a portion of our ownership interest in CCEP, an impairment charge of $25 million related to an equity method investee in Latin America and a net loss of $19 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.

Additionally, the Company recognized net foreign currency exchange losses of $16 million, $24 million of costs related to our trade accounts receivable factoring program and dividend income of $55 million.

Other income (loss) — net also included expense of $33 million related to the non-service cost components of net periodic benefit cost, which included charges of $25 million and $11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S.

pension activity.

During the nine months ended September 27, 2024, other income (loss) — net was income of $2,006 million.

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

The Company also recognized a net gain of $338 million related to the sale of a portion of our interest in Coke Consolidated, a net gain of $331 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 net gain of $290 million related to the refranchising of our bottling operations in certain territories in India, including the impact of post-closing adjustments.

Additionally, the Company recognized dividend income of $147 million and income of $62 million related to the non-service cost components of net periodic benefit cost.

Other income (loss) — net also included net foreign currency exchange losses of $139 million, $85 million of costs related to our trade accounts receivable factoring program, an other-than-temporary impairment charge of $34 million related to an equity method investee in Latin America and a loss of $7 million related to post-closing adjustments for the refranchising of our bottling operations in Vietnam in 2023.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on our divestiture activities and on our operations held for sale in Nigeria.

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the sale of our ownership interest in CCEP.

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

Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income.

Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment charges and the bottling operations in Ghana.

The Company recorded income taxes of $500 million (11.9% effective tax rate) and $530 million (15.7% effective tax rate) during the three months ended September 26, 2025 and September 27, 2024, respectively.

The Company recorded income taxes of $2,215 million (17.0% effective tax rate) and $1,844 million (17.9% effective tax rate) during the nine months ended September 26, 2025 and September 27, 2024, respectively.

The Company’s effective tax rates for the three and nine months ended September 26, 2025 and September 27, 2024 vary from the statutory U.S.

Refer to Note 15 of Notes to Consolidated Financial Statements for additional information on the impairment charges.

The Company recorded income taxes of $645 million (14.0% effective tax rate) and $722 million (17.8% effective tax rate) during the three months ended April 3, 2026 and March 28, 2025, respectively.

The Company’s effective tax rates for the three months ended April 3, 2026 and March 28, 2025 vary from the statutory U.S.

federal tax rate of 21.0%, primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12 of Notes to Consolidated Financial Statements, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S.

federal tax rate.

The Company’s effective tax rates for the three and nine months ended September 26, 2025 included $442 million and $597 million, respectively, of net tax benefits related to various discrete tax items, including net interest income of $55 million and $162 million, respectively, related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statements of income, in accordance with our accounting policy.

Also included were tax benefits of $258 million and $344 million, respectively, related to changes in the Company’s indefinite reinvestment assertion and reassessments of the realizability of deferred tax assets for certain foreign entities.

The Company’s effective tax rates for the three and nine months ended September 27, 2024 included $45 million of net tax benefit and $15 million of net tax expense, respectively, related to various discrete tax items, including the resolution of certain foreign tax matters, certain return to provision adjustments and the net tax impact of agreed-upon audit issues.

The Company’s effective tax rate for the three months ended April 3, 2026 included $279 million of net tax benefits related to various discrete tax items, including net interest income of $55 million related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statement of income, in accordance with our accounting policy, and a tax benefit of $194 million, primarily related to return to provision adjustments.

The Company’s effective tax rate for the three months ended March 28, 2025 included $143 million of net tax benefits related to various discrete tax items, including net interest income of $53 million related to the IRS Tax Litigation Deposit recorded in

the line item income taxes in our consolidated statement of income, in accordance with our accounting policy, and a tax benefit of $85 million related to a change in the Company’s indefinite reinvestment assertion for certain foreign entities.

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

6 unchanged sentences

The OECD is currently coordinating a two-pillared project on behalf of the Group of Twenty (G20) and other participating countries which would grant additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered.

Pillar One would allow countries to reallocate a portion of profits earned by multinational businesses with an annual global

revenue exceeding €20 billion and a profit margin of over 10% to applicable market jurisdictions.

Pillar One would allow countries to reallocate a portion of profits earned by multinational businesses with an annual global revenue exceeding €20 billion and a profit margin of over 10% to applicable market jurisdictions.

While the OECD issued draft language for the international implementation of Pillar One in October 2023, both the substantive rules and implementation process remain under discussion at the OECD, so the timetable for any implementation remains uncertain.

1 unchanged sentence

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

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

On June 28, 2025, the Group of Seven (G7) released a statement announcing an understanding of a potential “side-by-side system” approach to the Pillar Two framework that would exclude U.S.-parented groups from certain Pillar Two provisions in recognition of existing U.S.

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

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

minimum tax rules.

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

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

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

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

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

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

The OBBBA is not currently expected to materially impact the Company’s effective tax rate for 2025.

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

8 unchanged sentences

The Company regularly reviews its optimal mix of short-term and long-term debt.

The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $15.8 billion as of September 26, 2025.

In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $4.6 billion in unused backup lines of credit for general corporate purposes as of September 26, 2025.

The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $13.8 billion as of April 3, 2026.

In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $6.6 billion in unused backup lines of credit for general corporate purposes as of April 3, 2026.

These backup lines of credit expire at various times through 2031.

6 unchanged sentences

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 $11,822 million and $16,015 million of trade accounts receivables under this program during the nine months ended September 26, 2025 and September 27, 2024, respectively.

The costs of factoring such receivables were $49 million and $85 million for the nine months ended September 26, 2025 and September 27, 2024, respectively.

The Company sold $3,271 million and $5,034 million of trade accounts receivables under this program during the three months ended April 3, 2026 and March 28, 2025, respectively.

The costs of factoring such receivables were $13 million and $24 million for the three months ended April 3, 2026 and March 28, 2025, respectively.

The cash received from the financial institutions is reflected within the operating activities section of our consolidated statement of cash flows.

9 unchanged sentences

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.

5 unchanged sentences

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

For the three and nine months ended September 26, 2025, the Company recorded net interest income of $55 million and $162 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 September 26, 2025 and December 31, 2024.

For the three months ended April 3, 2026 and March 28, 2025, the Company recorded net interest income of $55 million and $53 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 April 3, 2026 and December 31, 2025.

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

6 unchanged sentences

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

In that event, the Company would not receive a refund of the applicable portion or all of the $6.0 billion it paid in response to the IRS invoices issued in September 2024 and the related accrued interest receivable of $313 million as of September 26, 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.

1 unchanged sentence

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.

The Company estimates the impact of the continued application of the methodology asserted by the IRS and affirmed in the Opinions for the three and nine months ended September 26, 2025 would increase the potential aggregate incremental tax and interest liability by approximately $400 million and $1.2 billion, respectively.

The Company estimates the impact of the continued application of the methodology asserted by the IRS and affirmed in the Opinions for the three months ended April 3, 2026 would increase the potential aggregate incremental tax and interest liability by approximately $450 million.

Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

2 unchanged sentences

Cash Flows from Operating Activities

Net cash provided by operating activities during the nine months ended September 26, 2025 and September 27, 2024 was $3,652 million and $2,854 million, respectively, an increase of $798 million or 28%.

The increase was primarily driven by strong cash operating results, lower tax payments, the transfer of surplus non-U.S.

plan assets from pension trusts to general assets of the Company and the timing of changes in working capital.

These items were partially offset by the prior year benefits of both the trade accounts receivable factoring program and the dividend payment from an equity method investee in Thailand, higher marketing payments, unfavorable hedging activity and higher net interest payments, as well as the unfavorable impact due to foreign currency exchange rate fluctuations.

Additionally, the activity in 2025 included $6.1 billion of the $6.2 billion final milestone payment for fairlife that was made during the nine months ended September 26, 2025.

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

Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax payment to the IRS.

Net cash provided by operating activities during the three months ended April 3, 2026 was $2,021 million, and net cash used in operating activities during the three months ended March 28, 2025 was $5,202 million.

The increase was primarily driven by strong cash operating results, a benefit of the trade accounts receivable factoring program in the current year, a favorable impact due to foreign currency exchange rate fluctuations, lower net interest payments and lower annual incentive payments.

These items were partially offset by higher tax payments and unfavorable hedging activity.

Additionally, the activity in 2025 included $6,069 million of the $6,173 million final milestone payment for fairlife that was made during the three months ended March 28, 2025.

Refer to Note 12 of Notes to Consolidated Financial Statements for additional information on our milestone payment for fairlife.

Cash Flows from Investing Activities

Net cash provided by investing activities during the nine months ended September 26, 2025 and September 27, 2024 was $977 million and $3,307 million, respectively.

Net cash provided by investing activities during the three months ended April 3, 2026 was $1,746 million, and net cash used in investing activities during the three months ended March 28, 2025 was $1,067 million.

Purchases of Investments and Proceeds from Disposals of Investments

During the nine months ended September 26, 2025, purchases of investments were $3,292 million and proceeds from disposals of investments were $4,300 million, resulting in a net cash inflow of $1,008 million.

During the nine months ended September 27, 2024, purchases of investments were $4,398 million and proceeds from disposals of investments were

$5,125 million, resulting in a net cash inflow of $727 million.

During the three months ended April 3, 2026, purchases of investments were $1,459 million and proceeds from disposals of investments were $3,503 million, resulting in a net cash inflow of $2,044 million.

During the three months ended March 28, 2025, purchases of investments were $2,507 million and proceeds from disposals of investments were $1,005 million, resulting in a net cash outflow of $1,502 million.

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

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Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities

During the nine months ended September 26, 2025 and September 27, 2024, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $356 million and $153 million, respectively.

The activity during the nine months ended September 26, 2025 included an additional investment of $54 million in an equity method investee in Japan.

The activity during the nine months ended September 26, 2025 and September 27, 2024 included $271 million and $114 million, respectively, of investments in alternative energy limited partnerships.

During the three months ended April 3, 2026 and March 28, 2025, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $37 million and $42 million, respectively.

The activity during the three months ended April 3, 2026 and March 28, 2025 included $32 million and $30 million, respectively, of investments in alternative energy limited partnerships.

Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on these investments.

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

During the nine months ended September 26, 2025 and September 27, 2024, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $1,020 million and $3,468 million, respectively.

The activity during the nine months ended September 26, 2025 primarily related to the sale of a portion of our ownership interest in CCEP and the refranchising of certain of our bottling operations.

The activity during the nine months ended September 27, 2024 primarily related to sales of our ownership interests in certain equity method investees and the refranchising of certain of our bottling operations.

During the three months ended March 28, 2025, proceeds from disposals of businesses, equity method investments and nonmarketable securities were $748 million, which primarily related to the sale of a portion of our ownership interest in CCEP.

Refer to Note 2 of Notes to Consolidated Financial Statements.

Purchases of Property, Plant and Equipment

Purchases of property, plant and equipment during the nine months ended September 26, 2025 and September 27, 2024 were $1,230 million and $1,261 million, respectively.

Other Investing Activities

During the nine months ended September 26, 2025 and September 27, 2024, the total cash inflow was $214 million and $194 million, respectively.

The activity during the nine months ended September 26, 2025 included $139 million related to the reimbursement of advanced payments made to finance the construction of leased assets.

The activity during the nine months ended September 27, 2024 included the receipt of a $100 million installment payment on the note receivable related to the sale of our ownership interest in an equity method investee in Pakistan in 2023 and the collection of $69 million of deferred proceeds related to the refranchising of our bottling operations in Vietnam.

Purchases of property, plant and equipment during the three months ended April 3, 2026 and March 28, 2025 were $266 million and $309 million, respectively.

Cash Flows from Financing Activities

Net cash used in financing activities during the nine months ended September 26, 2025 and September 27, 2024 was $3,088 million and $1,426 million, respectively.

Net cash used in financing activities during the three months ended April 3, 2026 was $3,868 million, and net cash provided by financing activities during the three months ended March 28, 2025 was $3,432 million.

Loans, Notes Payable and Long-Term Debt

During the nine months ended September 26, 2025, the Company had issuances of debt of $4,854 million, which consisted of $764 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, $3,442 million of issuances of commercial paper and short-term debt with maturities greater than 90 days and long-term debt issuances of $648 million, net of related discounts and issuance costs.

Refer to Note 8 of Notes to Consolidated Financial Statements for additional information.

The Company made payments of debt of $4,166 million during the nine months ended September 26, 2025, which consisted of $3,427 million of payments related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $739 million.

During the nine months ended September 27, 2024, the Company had issuances of debt of $11,298 million, which consisted of $3,129 million of issuances of commercial paper and short-term debt with maturities greater than 90 days and long-term debt issuances of $8,169 million, net of related discounts and issuance costs.

The Company made payments of debt of $7,925 million during the nine months ended September 27, 2024, which consisted of $818 million of net payments of commercial paper and short-term debt with maturities of 90 days or less, payments of $4,829 million related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $2,278 million.

The Company made payments of debt of $1,262 million during the three months ended April 3, 2026, which consisted of $746 million of payments related to commercial paper and short-term debt with maturities of 90 days or less, $500 million of payments related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $16 million.

During the three months ended March 28, 2025, the Company had issuances of debt of $5,436 million, which consisted of $3,917 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, $1,033 million of issuances of commercial paper and short-term debt with maturities greater than 90 days and long-term debt issuances of $486 million, net of related discounts and issuance costs.

The Company made payments of debt of $1,599 million during the three months ended March 28, 2025, which consisted of $1,047 million of payments related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $552 million.

Issuances of Stock

The issuances of stock during the nine months ended September 26, 2025 and September 27, 2024 were related to the exercise of stock options by employees.

The issuances of stock during the three months ended April 3, 2026 and March 28, 2025 were related to the exercise of stock options by employees.

Purchases of Stock for Treasury

During the nine months ended September 26, 2025, the total cash outflow for treasury stock purchases was $644 million.

During the three months ended April 3, 2026, the total cash outflow for treasury stock purchases was $477 million.

The Company repurchased 4.9 million shares of common stock under the share repurchase plan authorized by our Board of Directors.

These shares were repurchased at an average cost of $74.04 per share, for a total cost of $361 million.

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

The net impact of the Company’s issuances of stock and share repurchases during the nine months ended September 26, 2025 resulted in a net cash outflow of $401 million.

During the nine months ended September 27, 2024, the total cash outflow for treasury stock purchases was $1,228 million.

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

The net impact of the Company’s issuances of stock and share repurchases during the three months ended April 3, 2026 resulted in a net cash outflow of $322 million.

During the three months ended March 28, 2025, the total cash outflow for treasury stock purchases was $370 million.

The Company repurchased 4.3 million shares of common stock under the share repurchase plan authorized by our Board of Directors.

These shares were repurchased at an average cost of $65.04 per share, for a total cost of $279 million.

The net impact of the Company’s issuances of stock and share repurchases during the nine months ended September 27, 2024 resulted in a net cash outflow of $511 million.

During the nine months ended September 26, 2025 and September 27, 2024, the Company paid dividends of $4,391 million and $4,274 million, respectively.

As a result of the timing of our quarterly reporting periods as well as our dividend payment dates, the Company paid substantially all of the 2024 and 2025 third quarterly dividends in the fourth quarter of each year.

Our Board of Directors approved the Company’s regular quarterly dividend of $0.51 per share at its October 2025 meeting.

This dividend is payable on December 15, 2025 to shareowners of record as of the close of business on December 1, 2025.

Proceeds from Sale of a Noncontrolling Interest

During the nine months ended September 26, 2025, the Company received proceeds of $1,277 million from the sale of a noncontrolling interest.

Refer to Note 11 of Notes to Consolidated Financial Statements for additional information.

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

The net impact of the Company’s issuances of stock and share repurchases during the three months ended March 28, 2025 resulted in a net cash outflow of $211 million.

During the three months ended April 3, 2026 and March 28, 2025, the Company paid dividends of $2,281 million and $89 million, respectively.

As a result of the timing of our quarterly reporting periods as well as our dividend payment dates, the Company paid substantially all of the 2025 first quarterly dividend in the second quarter and paid all of the 2026 first quarterly dividend in the first quarter.

Our Board of Directors approved the Company’s regular quarterly dividend of $0.53 per share at its April 2026 meeting.

This dividend is payable on July 1, 2026 to shareowners of record as of the close of business on June 15, 2026.

Other Financing Activities

During the nine months ended September 26, 2025 and September 27, 2024, the total cash outflow for other financing activities was $261 million and $14 million, respectively.

The cash outflow during the nine months ended September 26, 2025 included $149 million of withholding taxes and other direct costs related to the sale of a noncontrolling interest.

Refer to Note 11 of Notes to Consolidated Financial Statements for additional information.

Additionally, the cash outflow during the nine months ended September 26, 2025 includes $104 million of the $6.2 billion final milestone payment for fairlife.

During the three months ended April 3, 2026 and March 28, 2025, the total cash outflow for other financing activities was $3 million and $105 million, respectively.

The cash outflow during the three months ended March 28, 2025 included $104 million of the $6,173 million final milestone payment for fairlife.

Foreign Exchange

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

Taking into account the effects of our hedging activities, the impact of fluctuations in foreign currency exchange rates decreased our operating income for the three and nine months ended September 26, 2025 by 4% and 12%, respectively.

Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on operating income and cash flows from operating activities through the end of the year.

Taking into account the effects of our hedging activities, the impact of fluctuations in foreign currency exchange rates increased our operating income for the three months ended April 3, 2026 by 4%.

Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have a favorable impact on operating income and cash flows from operating activities through the end of the year.

Quantitative and Qualitative Disclosures About Market Risk

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What changed 10-Q

Item 2. Management’s Discussion and Analysis