COCA COLA CO 10-Q

Item 1. Financial Statements THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In millions except per share data) Three Months Ended Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Net Operating Revenues $ 13,380 $ 12,535 $ 25,852 $ 23,664 Cost of goods sold 4,965 4,714 9,585 8,877 Gross Profit 8,415 7,821 16,267 14,787 Selling, general and administrative expenses 3,720 3,470 7,192 6,704 Other operating charges 23 71 44 144 Operating Income 4,672 4,280 9,031 7,939 Interest income 198 188 420 368 Interest expense 369 445 744 832 Equity income (loss) — net 604 561 988 912 Other income (loss) — net 370 212 391 466 Income Before Income Taxes 5,475 4,796 10,086 8,853 Income taxes 1,037 993 1,682 1,715 Consolidated Net Income 4,438 3,803 8,404 7,138 Less: Net income (loss) attributable to noncontrolling interests 13 ( 7 ) 55 ( 2 ) Net Income Attributable to Shareowners of The Coca-Cola Company $ 4,425 $ 3,810 $ 8,349 $ 7,140 Basic Net Income Per Share 1 $ 1.03 $ 0.89 $ 1.94 $ 1.66 Diluted Net Income Per Share 1 $ 1.03 $ 0.88 $ 1.94 $ 1.65 Average Shares Outstanding — Basic 4,303 4,304 4,302 4,303 Effect of dilutive securities 10 11 11 11 Average Shares Outstanding — Diluted 4,313 4,315 4,313 4,314 1 Calculated based on net income attributable to shareowners of The Coca-Cola Company. Refer to Notes to Consolidated Financial Statements. 2 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In millions) Three Months Ended Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Consolidated Net Income $ 4,438 $ 3,803 $ 8,404 $ 7,138 Other Comprehensive Income: Net foreign currency translation adjustments 399 1,103 357 1,722 Net gains (losses) on derivatives 60 ( 344 ) 131 ( 601 ) Net change in unrealized gains (losses) on available-for-sale debt securities ( 3 ) 10 ( 14 ) 23 Net change in pension and other postretirement benefit liabilities 14 1 43 20 Total Comprehensive Income 4,908 4,573 8,921 8,302 Less: Comprehensive income (loss) attributable to noncontrolling interests 69 39 67 77 Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company $ 4,839 $ 4,534 $ 8,854 $ 8,225 Refer to Notes to Consolidated Financial Statements. 3 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions except par value) July 3, 2026 December 31, 2025 ASSETS Current Assets Cash and cash equivalents $ 12,907 $ 10,270 Short-term investments 622 3,602 Total Cash, Cash Equivalents and Short-Term Investments 13,529 13,872 Marketable securities 2,842 1,934 Trade accounts receivable, less allowances of $ 492 and $ 495 , respectively 3,732 3,038 Inventories 4,647 4,425 Prepaid expenses and other current assets 2,688 2,433 Assets held for sale 5,438 5,342 Total Current Assets 32,876 31,044 Equity method investments 20,782 20,235 Deferred income tax assets 1,090 1,206 Property, plant and equipment, less accumulated depreciation of $ 9,328 and $ 9,119 , respectively 9,636 9,613 Trademarks with indefinite lives 12,500 12,531 Goodwill 15,456 15,491 Other noncurrent assets 15,582 14,696 Total Assets $ 107,922 $ 104,816 LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses $ 15,434 $ 14,813 Loans and notes payable 48 1,551 Current maturities of long-term debt 6,494 1,822 Accrued income taxes 782 525 Liabilities held for sale 2,442 2,570 Total Current Liabilities 25,200 21,281 Long-term debt 37,001 42,119 Other noncurrent liabilities 4,627 4,735 Deferred income tax liabilities 2,779 2,406 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 20,741 20,581 Reinvested earnings 84,169 80,382 Accumulated other comprehensive income (loss) ( 13,626 ) ( 14,131 ) Treasury stock, at cost — 2,737 and 2,738 shares, respectively ( 56,894 ) ( 56,423 ) Equity Attributable to Shareowners of The Coca-Cola Company 36,150 32,169 Equity attributable to noncontrolling interests 2,165 2,106 Total Equity 38,315 34,275 Total Liabilities and Equity $ 107,922 $ 104,816 Refer to Notes to Consolidated Financial Statements. 4 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) Six Months Ended July 3, 2026 June 27, 2025 Operating Activities Consolidated net income $ 8,404 $ 7,138 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 530 546 Stock-based compensation expense 117 130 Deferred income taxes 353 459 Equity (income) loss — net of dividends ( 520 ) ( 387 ) Foreign currency adjustments 107 111 Significant (gains) losses — net ( 56 ) ( 433 ) Other operating charges — 38 Other items ( 125 ) 238 Net change in operating assets and liabilities ( 1,267 ) ( 9,231 ) Net Cash Provided by (Used in) Operating Activities 7,543 ( 1,391 ) Investing Activities Purchases of investments ( 2,799 ) ( 2,865 ) Proceeds from disposals of investments 4,574 2,201 Acquisitions of businesses, equity method investments and nonmarketable securities ( 199 ) ( 179 ) Proceeds from disposals of businesses, equity method investments and nonmarketable securities 1 973 Purchases of property, plant and equipment ( 684 ) ( 751 ) Proceeds from disposals of property, plant and equipment 7 13 Collateral (paid) received associated with hedging activities — net ( 37 ) 206 Other investing activities 241 124 Net Cash Provided by (Used in) Investing Activities 1,104 ( 278 ) Financing Activities Issuances of loans, notes payable and long-term debt 9 5,320 Payments of loans, notes payable and long-term debt ( 1,559 ) ( 2,630 ) Issuances of stock 251 223 Purchases of stock for treasury ( 663 ) ( 472 ) Dividends ( 4,562 ) ( 2,283 ) Other financing activities ( 11 ) ( 106 ) Net Cash Provided by (Used in) Financing Activities ( 6,535 ) 52 Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents 85 332 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 2,197 ( 1,285 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 11,010 11,488 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Period 13,207 10,203 Less: Restricted cash and restricted cash equivalents at end of period 300 613 Cash and Cash Equivalents at End of Period $ 12,907 $ 9,590 Refer to Notes to Consolidated Financial Statements. 5 THE COCA-COLA COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31, 2025. Certain other amounts in the prior year’s consolidated financial statements and notes have been revised to conform to the current year presentation. When used in these notes, the terms “The Coca-Cola Company,” “Company,” “we,” “us” and “our” mean The Coca-Cola Company and all entities included in our consolidated financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended July 3, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Sales of our ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters typically accounting for the highest sales volumes. The volume of sales in the beverage business may be affected by weather conditions. Each of our quarterly reporting periods, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The second quarter of 2026 and the second quarter of 2025 ended on July 3, 2026 and June 27, 2025, respectively. Our fourth quarter and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls. Advertising Costs The Company’s accounting policy related to advertising costs for annual reporting purposes is to expense production costs of print, radio, television and other advertisements as of the first date the advertisements take place. All other marketing expenditures are expensed in the annual period in which the expenditure is incurred. For quarterly reporting purposes, we allocate our estimated full year marketing expenditures that benefit multiple quarters to each of those quarters. We use the proportion of each quarter’s actual unit case volume to the estimated full year unit case volume as the basis for the allocation. This methodology results in our marketing expenditures being recognized at a standard rate per unit case. At the end of each quarter, we review our estimated full year unit case volume and our estimated full year marketing expenditures that benefit multiple quarters in order to evaluate if a change in estimate is necessary. The impact of any change in the full year estimate is recognized in the quarter in which the change in estimate occurs. Our full year marketing expenditures are not impacted by this interim accounting policy. Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents We classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents or restricted cash equivalents, as applicable. Restricted cash and restricted cash equivalents generally consist of amounts held by our captive insurance companies, which are included in the line item other noncurrent assets in our consolidated balance sheet, and when applicable, cash and cash equivalents related to assets held for sale are included in the line item assets held for sale in our consolidated balance sheet. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor our concentrations of credit risk. Refer to Note 2 for additional information on our assets held for sale and Note 4 for additional information on our captive insurance companies. The following tables provide a summary of cash, cash equivalents, restricted cash and restricted cash equivalents that constitute the total amounts shown in our consolidated statements of cash flows (in millions): July 3, 2026 December 31, 2025 Cash and cash equivalents $ 12,907 $ 10,270 Restricted cash and restricted cash equivalents 300 740 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 13,207 $ 11,010 6 June 27, 2025 December 31, 2024 Cash and cash equivalents $ 9,590 $ 10,828 Restricted cash and restricted cash equivalents 613 660 Cash, cash equivalents, restricted cash and restricted cash equivalents $ 10,203 $ 11,488 NOTE 2: ACQUISITIONS AND DIVESTITURES Acquisitions Our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $ 199 million and $ 179 million during the six months ended July 3, 2026 and June 27, 2025, respectively. The activity during 2026 included additional investments of $ 112 million in an equity method investee in Japan. The activity during the six months ended July 3, 2026 and June 27, 2025 included $ 75 million and $ 148 million, respectively, of investments in alternative energy limited partnerships. Refer to Note 14 for additional information on these investments. Divestitures Proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled $ 1 million and $ 973 million during the six months ended July 3, 2026 and June 27, 2025, respectively. In March 2025, the Company sold a portion of our ownership interest in Coca-Cola Europacific Partners plc (“CCEP”), an equity method investee, for which we received cash proceeds of $ 741 million and recognized a net gain of $ 331 million. In May 2025, the Company refranchised its bottling operations in certain territories in India that were held for sale as of December 31, 2024, for which we received net cash proceeds of $ 218 million and recognized a net gain of $ 102 million. These gains were recorded in the line item other income (loss) — net in our consolidated statement of income. Assets and Liabilities Held for Sale In October 2025, the Company entered into a definitive agreement to sell a portion of our interest in our bottling operations in Africa to Coca-Cola HBC AG (“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, during the year ended December 31, 2025, 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. This resulted in an impairment charge of $ 1,274 million, primarily due to the negative net foreign currency translation adjustments that will be reclassified to income upon sale. During the three and six months ended July 3, 2026, we recorded a gain to reduce this impairment charge by $ 66 million and $ 56 million, respectively, based on management’s revised estimates. These amounts were recorded in the line item other income (loss) — net in our consolidated statements of income. 7 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): July 3, 2026 December 31, 2025 Cash, cash equivalents and short-term investments $ 139 $ 178 Trade accounts receivable, less allowances 284 389 Inventories 474 466 Prepaid expenses and other current assets 166 147 Equity method investments 8 5 Deferred income tax assets 47 46 Property, plant and equipment — net 2,034 1,964 Trademarks with indefinite lives 2 2 Goodwill 3,432 3,350 Other noncurrent assets 59 60 Allowance for reduction of assets held for sale ( 1,207 ) ( 1,265 ) Assets held for sale $ 5,438 $ 5,342 Accounts payable and accrued expenses $ 651 $ 816 Loans and notes payable 173 187 Current maturities of long-term debt 411 398 Accrued income taxes — 5 Long-term debt 868 850 Other noncurrent liabilities 155 154 Deferred income tax liabilities 184 160 Liabilities held for sale $ 2,442 $ 2,570 NOTE 3 : NET OPERATING REVENUES The following tables present net operating revenues disaggregated between the United States and International and further by line of business (in millions): United States International Total Three Months Ended July 3, 2026 Concentrate operations $ 2,426 $ 5,720 $ 8,146 Finished product operations 2,834 2,400 5,234 Total $ 5,260 $ 8,120 $ 13,380 Three Months Ended June 27, 2025 Concentrate operations $ 2,322 $ 5,296 $ 7,618 Finished product operations 2,613 2,304 4,917 Total $ 4,935 $ 7,600 $ 12,535 United States International Total Six Months Ended July 3, 2026 Concentrate operations $ 4,614 $ 10,917 $ 15,531 Finished product operations 5,391 4,930 10,321 Total $ 10,005 $ 15,847 $ 25,852 Six Months Ended June 27, 2025 Concentrate operations $ 4,297 $ 9,915 $ 14,212 Finished product operations 4,891 4,561 9,452 Total $ 9,188 $ 14,476 $ 23,664 Refer to Note 16 for disclosures of net operating revenues by operating segment and Corporate. 8 NOTE 4: INVESTMENTS Equity Securities The carrying values of our equity securities were included in the following line items in our consolidated balance sheets (in millions): Fair Value with Changes Recognized in Income Measurement Alternative — No Readily Determinable Fair Value July 3, 2026 Marketable securities $ 547 $ — Other noncurrent assets 2,738 293 Total equity securities $ 3,285 $ 293 December 31, 2025 Marketable securities $ 489 $ — Other noncurrent assets 2,100 44 Total equity securities $ 2,589 $ 44 The calculation of net unrealized gains and losses recognized during the period related to equity securities still held at the end of the period is as follows (in millions): Three Months Ended July 3, 2026 June 27, 2025 Net gains (losses) recognized during the period related to equity securities $ 322 $ 165 Less: Net gains (losses) recognized during the period related to equity securities sold during the period 24 ( 6 ) Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period $ 298 $ 171 Six Months Ended July 3, 2026 June 27, 2025 Net gains (losses) recognized during the period related to equity securities $ 305 $ 150 Less: Net gains (losses) recognized during the period related to equity securities sold during the period 51 11 Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period $ 254 $ 139 Debt Securities Our debt securities consisted of the following (in millions): Gross Unrealized Estimated Fair Value Cost Gains Losses July 3, 2026 Trading securities $ 48 $ 1 $ — $ 49 Available-for-sale securities 1 2,686 20 ( 81 ) 2,625 Total debt securities $ 2,734 $ 21 $ ( 81 ) $ 2,674 December 31, 2025 Trading securities $ 49 $ 1 $ — $ 50 Available-for-sale securities 1 1,816 23 ( 65 ) 1,774 Total debt securities $ 1,865 $ 24 $ ( 65 ) $ 1,824 1 The estimated fair value as of July 3, 2026 includes $ 2,056 million of Brazilian government bonds with a cost of $ 2,119 million and gross unrealized losses of $ 63 million and, as of December 31, 2025, includes $ 1,207 million of Brazilian government bonds with a cost of $ 1,255 million, gross unrealized gains of $ 1 million and gross unrealized losses of $ 49 million. 9 The carrying values of our debt securities were included in the following line items in our consolidated balance sheets (in millions): July 3, 2026 December 31, 2025 Trading Securities Available-for-Sale Securities Trading Securities Available-for-Sale Securities Marketable securities $ 49 $ 2,246 $ 50 $ 1,395 Other noncurrent assets — 379 — 379 Total debt securities $ 49 $ 2,625 $ 50 $ 1,774 The contractual maturities of these available-for-sale debt securities as of July 3, 2026 were as follows (in millions): Cost Estimated Fair Value Within 1 year $ 791 $ 762 After 1 year through 5 years 1,678 1,653 After 5 years through 10 years 38 44 After 10 years 179 166 Total $ 2,686 $ 2,625 The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations. The sale and/or maturity of available-for-sale debt securities resulted in the following realized activity (in millions): Three Months Ended Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Gross gains $ 1 $ 2 $ 2 $ 3 Gross losses ( 2 ) ( 2 ) ( 3 ) ( 4 ) Proceeds 374 70 571 207 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 $ 2,965 million and $ 2,356 million as of July 3, 2026 and December 31, 2025, 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: INVENTORIES Inventories consisted of the following (in millions): July 3, 2026 December 31, 2025 Raw materials and packaging $ 2,771 $ 2,708 Finished goods 1,514 1,375 Other 362 342 Total inventories $ 4,647 $ 4,425 10 NOTE 6: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the fair values of the Company’s derivative instruments that were designated and qualified as part of a hedging relationship (in millions): Fair Value 1,2 Derivatives Designated as Hedging Instruments Financial Statement Line Item Impacted 1 July 3, 2026 December 31, 2025 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 168 $ 125 Foreign currency contracts Other noncurrent assets 41 31 Commodity contracts Prepaid expenses and other current assets 17 — Interest rate contracts Other noncurrent assets 132 142 Total assets $ 358 $ 298 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 100 $ 205 Foreign currency contracts Other noncurrent liabilities 22 28 Commodity contracts Accounts payable and accrued expenses — 9 Interest rate contracts Accounts payable and accrued expenses 26 17 Interest rate contracts Other noncurrent liabilities 692 700 Total liabilities $ 840 $ 959 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 15 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 15 for additional information related to the estimated fair value. 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 July 3, 2026 December 31, 2025 Assets: Foreign currency contracts Prepaid expenses and other current assets $ 139 $ 115 Foreign currency contracts Other noncurrent assets 24 18 Commodity contracts Prepaid expenses and other current assets 34 7 Commodity contracts Other noncurrent assets 2 — Commodity contracts Assets held for sale 4 3 Other derivative instruments Prepaid expenses and other current assets 8 — Total assets $ 211 $ 143 Liabilities: Foreign currency contracts Accounts payable and accrued expenses $ 111 $ 66 Foreign currency contracts Other noncurrent liabilities 25 5 Foreign currency contracts Liabilities held for sale 3 5 Commodity contracts Accounts payable and accrued expenses 18 10 Commodity contracts Other noncurrent liabilities 5 1 Commodity contracts Liabilities held for sale 1 1 Other derivative instruments Accounts payable and accrued expenses — 2 Total liabilities $ 163 $ 90 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 15 for the net presentation of the Company’s derivative instruments. 2 Refer to Note 15 for additional information related to the estimated fair value. 11 Credit Risk Associated with Derivatives We have established strict counterparty credit guidelines and enter into transactions only with financial institutions of investment grade or better. We monitor counterparty exposures regularly and review any downgrade in credit rating immediately. If a downgrade in the credit rating of a counterparty were to occur, we have provisions requiring collateral for substantially all of our transactions. To mitigate pre-settlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. In addition, the Company’s master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Furthermore, for certain derivative financial instruments, the Company has agreements with counterparties that require collateral to be exchanged based on changes in the fair value of the instruments. The Company classifies collateral payments and receipts as investing cash flows when the collateral account is in an asset position and as financing cash flows when the collateral account is in a liability position. As a result of these factors, we consider the risk of counterparty default to be minimal. Cash Flow Hedging Strategy The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The changes in the fair values of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into the line item in our consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. The changes in the fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into 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. 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 $ 10,536 million and $ 9,760 million as of July 3, 2026 and December 31, 2025, 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 July 3, 2026 and December 31, 2025. 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 $ 89 million and $ 53 million as of July 3, 2026 and December 31, 2025, respectively. Our Company monitors our mix of short-term debt and long-term debt regularly. We manage our risk related to interest rate fluctuations through the use of derivative financial instruments. From time to time, the Company has entered into interest rate swap agreements and has designated these instruments as part of the Company’s interest rate cash flow hedging program. The objective of this hedging program is to mitigate the risk of adverse changes in benchmark interest rates on the Company’s future interest payments. The total notional values of derivatives that were designated and qualified for this program were $ 775 million and $ 1,786 million as of July 3, 2026 and December 31, 2025, respectively. 12 The following tables present 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 Three Months Ended July 3, 2026 Foreign currency contracts $ ( 44 ) Net operating revenues $ ( 63 ) Foreign currency contracts 7 Cost of goods sold 3 Foreign currency contracts — Interest expense ( 1 ) Foreign currency contracts 6 Other income (loss) — net ( 3 ) Commodity contracts 58 Cost of goods sold 25 Interest rate contracts 1 Interest expense ( 1 ) Total $ 28 $ ( 40 ) Three Months Ended June 27, 2025 Foreign currency contracts $ ( 501 ) Net operating revenues $ ( 69 ) Foreign currency contracts ( 11 ) Cost of goods sold 1 Foreign currency contracts — Interest expense ( 1 ) Foreign currency contracts 41 Other income (loss) — net 44 Commodity contracts ( 13 ) Cost of goods sold ( 5 ) Interest rate contracts ( 1 ) Interest expense — Total $ ( 485 ) $ ( 30 ) Gain (Loss) Recognized in OCI Financial Statement Line Item Impacted Gain (Loss) Reclassified from AOCI into Income Six Months Ended July 3, 2026 Foreign currency contracts $ 9 Net operating revenues $ ( 134 ) Foreign currency contracts 18 Cost of goods sold 5 Foreign currency contracts — Interest expense ( 2 ) Foreign currency contracts ( 3 ) Other income (loss) — net ( 15 ) Commodity contracts 46 Cost of goods sold 30 Interest rate contracts ( 1 ) Interest expense ( 2 ) Total $ 69 $ ( 118 ) Six Months Ended June 27, 2025 Foreign currency contracts $ ( 770 ) Net operating revenues $ ( 28 ) Foreign currency contracts ( 18 ) Cost of goods sold 4 Foreign currency contracts — Interest expense ( 2 ) Foreign currency contracts 37 Other income (loss) — net 68 Commodity contracts ( 10 ) Cost of goods sold ( 2 ) Interest rate contracts ( 1 ) Interest expense ( 1 ) Total $ ( 762 ) $ 39 As of July 3, 2026, the Company estimates that it will reclassify into income during the next 12 months net losses of $ 34 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 13 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 $ 13,441 million and $ 13,674 million as of July 3, 2026 and December 31, 2025, respectively. 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 Three Months Ended Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Interest rate contracts Interest expense $ 38 $ 168 $ ( 11 ) $ 248 Fixed-rate debt Interest expense ( 40 ) ( 170 ) 17 ( 246 ) Net impact of fair value hedging instruments $ ( 2 ) $ ( 2 ) $ 6 $ 2 The following table summarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships (in millions): Cumulative Amount of Fair Value Hedging Adjustments 1 Carrying Values of Hedged Items Included in the Carrying Values of Hedged Items Remaining for Which Hedge Accounting Has Been Discontinued Balance Sheet Location of Hedged Items July 3, 2026 December 31, 2025 July 3, 2026 December 31, 2025 July 3, 2026 December 31, 2025 Current maturities of long-term debt $ 3,166 $ 1,491 $ ( 20 ) $ ( 10 ) $ 9 $ — Long-term debt 9,715 11,648 ( 701 ) ( 705 ) 72 97 1 Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations. Hedges of Net Investments in Foreign Operations Strategy The Company uses forward contracts and a portion of its foreign currency denominated debt, a non-derivative financial instrument, to protect the value of our net investments in a number of foreign operations. 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. The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions): Notional Values Gain (Loss) Recognized in OCI as of Three Months Ended Six Months Ended July 3, 2026 December 31, 2025 July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Foreign currency contracts $ 1,377 $ 1,067 $ ( 9 ) $ — $ ( 10 ) $ ( 1 ) Foreign currency denominated debt 14,602 14,998 102 ( 1,139 ) 396 ( 1,744 ) Total $ 15,979 $ 16,065 $ 93 $ ( 1,139 ) $ 386 $ ( 1,745 ) The Company did not reclassify any gains or losses during the three and six months ended July 3, 2026, nor the three and six months ended June 27, 2025. 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. 14 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 $ 12,482 million and $ 9,744 million as of July 3, 2026 and December 31, 2025, respectively. The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process and vehicle fuel. The changes in the fair values of these economic hedges are immediately recognized in earnings in the line items net operating revenues, cost of goods sold, or selling, general and administrative expenses in our consolidated statement of income, as applicable. The total notional values of derivatives related to our economic hedges of this type were $ 716 million and $ 482 million as of July 3, 2026 and December 31, 2025, respectively. The following tables present 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 Three Months Ended July 3, 2026 June 27, 2025 Foreign currency contracts Net operating revenues $ ( 26 ) $ ( 111 ) Foreign currency contracts Cost of goods sold 29 58 Foreign currency contracts Other income (loss) — net 33 67 Commodity contracts Cost of goods sold ( 35 ) ( 10 ) Other derivative instruments Selling, general and administrative expenses 26 11 Total $ 27 $ 15 Derivatives Not Designated as Hedging Instruments Financial Statement Line Item Impacted Gain (Loss) Recognized in Income Six Months Ended July 3, 2026 June 27, 2025 Foreign currency contracts Net operating revenues $ ( 65 ) $ ( 182 ) Foreign currency contracts Cost of goods sold 35 79 Foreign currency contracts Other income (loss) — net 58 96 Commodity contracts Cost of goods sold 32 ( 6 ) Other derivative instruments Selling, general and administrative expenses 26 12 Total $ 86 $ ( 1 ) NOTE 7: SUPPLY CHAIN FINANCE PROGRAM Our current payment terms with the majority of our suppliers are 120 days. Certain financial institutions offer a voluntary supply chain finance (“SCF”) program, which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them. The SCF program is available to suppliers of goods and services included in cost of goods sold and selling, general and administrative expenses in our consolidated statement of income. The Company and our suppliers agree on contractual terms for the goods and services we procure, including prices, quantities and payment terms, regardless of whether 15 the supplier elects to participate in the SCF program. The suppliers sell goods or services, as applicable, to the Company and issue the associated invoices to the Company based on the agreed-upon contractual terms. Then, if they are participating in the SCF program, our suppliers sell their invoices to the financial institutions. Our suppliers’ voluntary participation in the SCF program has no bearing on our payment terms. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. We have no economic interest in a supplier’s decision to participate in the SCF program, and we have no direct financial relationship with the financial institutions, as it relates to the SCF program. Accordingly, amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses 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. As of July 3, 2026 and December 31, 2025, the amount of obligations outstanding that the Company has confirmed as valid to the financial institutions under the SCF program was $ 1,431 million and $ 1,363 million, respectively. As of July 3, 2026 and December 31, 2025, these amounts included $ 22 million and $ 37 million, respectively, of confirmed obligations outstanding related to our bottling operations in Africa that are currently held for sale. Refer to Note 2. NOTE 8: DEBT AND BORROWING ARRANGEMENTS Loans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2025, we had $ 1,495 million in outstanding commercial paper borrowings. We had no outstanding commercial paper borrowings as of July 3, 2026. NOTE 9: COMMITMENTS AND CONTINGENCIES Guarantees As of July 3, 2026, we were contingently liable for guarantees of indebtedness owed by third parties of $ 874 million, of which $ 61 million was related to variable interest entities. Our guarantees are primarily related to third-party customers, bottlers and vendors and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant. These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is remote. Concentrations of Credit Risk We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations. Legal Contingencies The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings (excluding tax audit claims) will not have a material adverse effect on the Company taken as a whole. Tax Audits The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These uncertain tax matters may result in the assessment of additional taxes. On September 17, 2015, the Company received a Statutory Notice of Deficiency (“Notice”) from the United States Internal Revenue Service (“IRS”) seeking approximately $ 3.3 billion of additional federal income tax for years 2007 through 2009. In the Notice, the IRS stated its intent to reallocate over $ 9 billion of income to the U.S. parent company from certain of its foreign affiliates that the U.S. parent company licensed to manufacture, distribute, sell, market and promote its products in certain non-U.S. markets. The Notice concerned the Company’s transfer pricing between its U.S. parent company and certain of its foreign affiliates. IRS rules governing transfer pricing require arm’s-length pricing of transactions between related parties such as the Company’s U.S. parent and its foreign affiliates. To resolve the same transfer pricing issue for the tax years 1987 through 1995, the Company and the IRS had agreed in 1996 on an arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as compensation from its foreign licensees. The Company and the IRS memorialized this accord in a closing agreement resolving that dispute (“Closing Agreement”). The Closing Agreement provided that, absent a change in material facts or circumstances or relevant federal tax law, in calculating the Company’s income taxes going forward, the Company would not be assessed 16 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 U.S. Tax Court (“Tax Court”) in December 2015, challenging the tax adjustments enumerated in the Notice. Prior to trial, the IRS increased its transfer pricing adjustment by $ 385 million, resulting in an additional tax adjustment of $ 135 million. The Company obtained a summary judgment in its favor on a different matter related to Mexican foreign tax credits, which thereafter effectively reduced the IRS’ potential tax adjustment by $ 138 million. The trial was held in the Tax Court from March through May 2018, and final post-trial briefs were filed and exchanged in April 2019. On November 18, 2020, the Tax Court issued an opinion (“Opinion”) in which it predominantly sided with the IRS but agreed with the Company that dividends previously paid by the foreign licensees to the U.S. parent company in reliance upon the Closing Agreement should continue to be allowed to offset royalties, including those that would become payable to the Company in accordance with the Opinion. On November 8, 2023, the Tax Court issued a supplemental opinion (together with the original Tax Court opinion, “Opinions”), siding with the IRS in concluding both that certain U.S. tax regulations (known as the blocked-income regulations) that address the effect of certain Brazilian legal restrictions on royalty payments by the Company’s licensee in Brazil apply to the Company’s operations and that the Tax Court opinion in 3M Co. & Subs. v. Commissioner (February 9, 2023) (“ 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 Internal Revenue Code (“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 Chevron U.S.A., Inc. v. NRDC (“ Chevron case”). Since 1984, the Chevron case had required that courts defer to agency interpretations of statutes and agency action. In Ohio v. EPA and Garland v. Cargill , two of the recent decisions, the U.S. Supreme Court demonstrated how courts are to rule on agency interpretations and actions without the deference previously required by the Chevron case . On August 2, 2024, the Tax Court entered a decision reflecting additional federal income tax of $ 2.7 billion for the 2007 through 2009 tax years. With applicable interest, the total liability for the 2007 through 2009 tax years resulting from the Tax Court’s decision is $ 6.0 billion, for which the IRS issued the Company invoices on September 3, 2024. The Company paid those invoices (“IRS Tax Litigation Deposit”) on September 10, 2024, which stopped interest from accruing on the additional tax due for the 2007 through 2009 tax years. That amount, plus interest earned, would be refunded in full or in part if the Company’s tax positions are ultimately sustained on appeal. For the three and six months ended July 3, 2026, the Company recorded net interest income of $ 43 million and $ 98 million, respectively, related to this tax payment. For the three and six months ended June 27, 2025, the Company recorded net interest income of $ 54 million and $ 107 million, respectively, related 17 to this tax payment. These amounts were recorded 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 July 3, 2026 and December 31, 2025. On October 22, 2024, the Company appealed the Tax Court’s decision to the U.S. Court of Appeals for the Eleventh Circuit. The Company filed its principal appellate brief with the U.S. Court of Appeals for the Eleventh Circuit on March 12, 2025. The IRS filed its appellate brief on July 7, 2025. The Company filed its reply brief on August 27, 2025. The U.S. Court of Appeals for the Eleventh Circuit heard the case on June 25, 2026. In determining the amount of tax reserve to be recorded as of December 31, 2020, the Company completed the required two-step evaluation process prescribed by Accounting Standards Codification 740, Accounting for Income Taxes . In doing so, we consulted with outside advisors, and we reviewed and considered relevant laws, rules, and regulations, including, but not limited to, the Opinions and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal. We concluded, based on the technical and legal merits of the Company’s tax positions, that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal. In addition, we considered a number of alternative transfer pricing methodologies, including the methodology asserted by the IRS and affirmed in the Opinions (“Tax Court Methodology”), that could be applied by the courts upon final resolution of the litigation. Based on the required probability analysis, we determined the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s tax. As a result of this analysis, we recorded a tax reserve of $ 438 million during the year ended December 31, 2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinions and the Company’s analysis. 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 July 3, 2026. However, based on the required probability analysis and the accrual of interest through the current reporting period, we updated our tax reserve as of July 3, 2026 to $ 529 million. While the Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions, it is possible that some portion or all of the adjustments proposed by the IRS and sustained by the Tax Court could ultimately be upheld. In that event, the Company would not receive a refund of the applicable portion or all of the $ 6.0 billion it paid in response to the IRS invoices issued in September 2024 and the related accrued interest receivable of $ 514 million as of July 3, 2026. 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 2017 Tax Cuts and Jobs Act. The Company estimates that the potential aggregate remaining incremental tax and interest liability for the tax years 2010 through 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. The Company estimates the impact of the continued application of the Tax Court Methodology for the three and six months ended July 3, 2026 would increase the potential aggregate incremental tax and interest liability by approximately $ 450 million and $ 900 million, respectively. We currently project the continued application of the Tax Court Methodology in 2026, assuming similar facts and circumstances as of December 31, 2025 and reflecting changes enacted under the One Big Beautiful Bill Act effective in 2026, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.8 %. 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 $ 156 million and $ 155 million as of July 3, 2026 and December 31, 2025, respectively . 18 NOTE 10: OTHER COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of shareowners’ equity, which also includes our proportionate share of equity method investees’ AOCI. OCI attributable to noncontrolling interests is allocated to, and included in, our consolidated balance sheet as part of the line item equity attributable to noncontrolling interests. AOCI attributable to shareowners of The Coca-Cola Company consisted of the following, net of tax (in millions): July 3, 2026 December 31, 2025 Net foreign currency translation adjustments $ ( 12,328 ) $ ( 12,673 ) Accumulated net gains (losses) on derivatives ( 113 ) ( 244 ) Unrealized net gains (losses) on available-for-sale debt securities ( 40 ) ( 26 ) Adjustments to pension and other postretirement benefit liabilities ( 1,145 ) ( 1,188 ) Accumulated other comprehensive income (loss) $ ( 13,626 ) $ ( 14,131 ) The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests (in millions): Six Months Ended July 3, 2026 Shareowners of The Coca-Cola Company Noncontrolling Interests Total Consolidated net income $ 8,349 $ 55 $ 8,404 Other comprehensive income: Net foreign currency translation adjustments 345 12 357 Net gains (losses) on derivatives 1 131 — 131 Net change in unrealized gains (losses) on available-for-sale debt securities 2 ( 14 ) — ( 14 ) Net change in pension and other postretirement benefit liabilities 43 — 43 Total comprehensive income (loss) $ 8,854 $ 67 $ 8,921 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 19 The following tables present OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees’ OCI (in millions): Three Months Ended July 3, 2026 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 472 $ ( 29 ) $ 443 Gains (losses) on intra-entity transactions that are of a long-term investment nature ( 171 ) — ( 171 ) Gains (losses) on net investment hedges arising during the period 1 93 ( 22 ) 71 Net foreign currency translation adjustments $ 394 $ ( 51 ) $ 343 Derivatives: Gains (losses) arising during the period $ 33 $ ( 3 ) $ 30 Reclassification adjustments recognized in net income 40 ( 10 ) 30 Net gains (losses) on derivatives 1 $ 73 $ ( 13 ) $ 60 Available-for-sale debt securities: Unrealized gains (losses) arising during the period $ ( 5 ) $ 1 $ ( 4 ) Reclassification adjustments recognized in net income 1 — 1 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ ( 4 ) $ 1 $ ( 3 ) Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ ( 1 ) $ ( 2 ) $ ( 3 ) Reclassification adjustments recognized in net income 22 ( 5 ) 17 Net change in pension and other postretirement benefit liabilities $ 21 $ ( 7 ) $ 14 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 484 $ ( 70 ) $ 414 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. Six Months Ended July 3, 2026 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 722 $ ( 9 ) $ 713 Gains (losses) on intra-entity transactions that are of a long-term investment nature ( 661 ) — ( 661 ) Gains (losses) on net investment hedges arising during the period 1 386 ( 93 ) 293 Net foreign currency translation adjustments $ 447 $ ( 102 ) $ 345 Derivatives: Gains (losses) arising during the period $ 55 $ ( 13 ) $ 42 Reclassification adjustments recognized in net income 118 ( 29 ) 89 Net gains (losses) on derivatives 1 $ 173 $ ( 42 ) $ 131 Available-for-sale debt securities: Unrealized gains (losses) arising during the period $ ( 20 ) $ 5 $ ( 15 ) Reclassification adjustments recognized in net income 1 — 1 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ ( 19 ) $ 5 $ ( 14 ) Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ 13 $ ( 3 ) $ 10 Reclassification adjustments recognized in net income 43 ( 10 ) 33 Net change in pension and other postretirement benefit liabilities $ 56 $ ( 13 ) $ 43 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 657 $ ( 152 ) $ 505 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 20 Three Months Ended June 27, 2025 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 95 $ ( 84 ) $ 11 Gains (losses) on intra-entity transactions that are of a long-term investment nature 1,901 — 1,901 Gains (losses) on net investment hedges arising during the period 1 ( 1,139 ) 284 ( 855 ) Net foreign currency translation adjustments $ 857 $ 200 $ 1,057 Derivatives: Gains (losses) arising during the period $ ( 485 ) $ 118 $ ( 367 ) Reclassification adjustments recognized in net income 30 ( 7 ) 23 Net gains (losses) on derivatives 1 $ ( 455 ) $ 111 $ ( 344 ) Available-for-sale debt securities: Unrealized gains (losses) arising during the period $ 16 $ ( 6 ) $ 10 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ 16 $ ( 6 ) $ 10 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ ( 22 ) $ 4 $ ( 18 ) Reclassification adjustments recognized in net income 26 ( 7 ) 19 Net change in pension and other postretirement benefit liabilities $ 4 $ ( 3 ) $ 1 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 422 $ 302 $ 724 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. Six Months Ended June 27, 2025 Before-Tax Amount Income Tax After-Tax Amount Foreign currency translation adjustments: Translation adjustments arising during the period $ 103 $ ( 93 ) $ 10 Reclassification adjustments recognized in net income 34 ( 2 ) 32 Gains (losses) on intra-entity transactions that are of a long-term investment nature 2,911 — 2,911 Gains (losses) on net investment hedges arising during the period 1 ( 1,745 ) 435 ( 1,310 ) Net foreign currency translation adjustments $ 1,303 $ 340 $ 1,643 Derivatives: Gains (losses) arising during the period $ ( 759 ) $ 187 $ ( 572 ) Reclassification adjustments recognized in net income ( 39 ) 10 ( 29 ) Net gains (losses) on derivatives 1 $ ( 798 ) $ 197 $ ( 601 ) Available-for-sale debt securities: Unrealized gains (losses) arising during the period $ 32 $ ( 10 ) $ 22 Reclassification adjustments recognized in net income 1 — 1 Net change in unrealized gains (losses) on available-for-sale debt securities 2 $ 33 $ ( 10 ) $ 23 Pension and other postretirement benefit liabilities: Net pension and other postretirement benefit liabilities arising during the period $ ( 39 ) $ 14 $ ( 25 ) Reclassification adjustments recognized in net income 59 ( 14 ) 45 Net change in pension and other postretirement benefit liabilities $ 20 $ — $ 20 Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 558 $ 527 $ 1,085 1 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments. 2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities. 21 The following table presents the amounts and line items in our consolidated statements of income where adjustments reclassified from AOCI into income were recorded (in millions): Amount Reclassified from AOCI into Income Description of AOCI Component Financial Statement Line Item Impacted Three Months Ended July 3, 2026 Six Months Ended July 3, 2026 Derivatives: Foreign currency contracts Net operating revenues $ 63 $ 134 Foreign currency and commodity contracts Cost of goods sold ( 28 ) ( 35 ) Foreign currency and interest rate contracts Interest expense 2 4 Foreign currency contracts Other income (loss) — net 3 15 Income before income taxes 40 118 Income taxes ( 10 ) ( 29 ) Consolidated net income $ 30 $ 89 Available-for-sale debt securities: Sale of debt securities Other income (loss) — net $ 1 $ 1 Income before income taxes 1 1 Income taxes — — Consolidated net income $ 1 $ 1 Pension and other postretirement benefit liabilities: Amortization of net actuarial loss (gain) Other income (loss) — net $ 22 $ 43 Income before income taxes 22 43 Income taxes ( 5 ) ( 10 ) Consolidated net income $ 17 $ 33 NOTE 11: CHANGES IN EQUITY The following tables provide a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to shareowners of The Coca-Cola Company and equity attributable to noncontrolling interests (in millions): Shareowners of The Coca-Cola Company Three Months Ended July 3, 2026 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests April 3, 2026 4,303 $ 35,734 $ 82,026 $ ( 14,040 ) $ 1,760 $ 20,634 $ ( 56,747 ) $ 2,101 Comprehensive income (loss) — 4,908 4,425 414 — — — 69 Dividends paid/payable to shareowners of The Coca-Cola Company ($ 0.53 per share) — ( 2,282 ) ( 2,282 ) — — — — — Dividends paid to noncontrolling interests — ( 5 ) — — — — — ( 5 ) Purchases of treasury stock ( 2 ) ( 188 ) — — — — ( 188 ) — Impact related to stock-based compensation plans 2 148 — — — 107 41 — July 3, 2026 4,303 $ 38,315 $ 84,169 $ ( 13,626 ) $ 1,760 $ 20,741 $ ( 56,894 ) $ 2,165 22 Shareowners of The Coca-Cola Company Six Months Ended July 3, 2026 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests December 31, 2025 4,302 $ 34,275 $ 80,382 $ ( 14,131 ) $ 1,760 $ 20,581 $ ( 56,423 ) $ 2,106 Comprehensive income (loss) — 8,921 8,349 505 — — — 67 Dividends paid/payable to shareowners of The Coca-Cola Company ($ 1.06 per share) — ( 4,562 ) ( 4,562 ) — — — — — Dividends paid to noncontrolling interests — ( 8 ) — — — — — ( 8 ) Purchases of treasury stock ( 7 ) ( 549 ) — — — — ( 549 ) — Impact related to stock-based compensation plans 8 238 — — — 160 78 — July 3, 2026 4,303 $ 38,315 $ 84,169 $ ( 13,626 ) $ 1,760 $ 20,741 $ ( 56,894 ) $ 2,165 Shareowners of The Coca-Cola Company Three Months Ended June 27, 2025 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests March 28, 2025 4,304 $ 27,754 $ 77,189 $ ( 16,482 ) $ 1,760 $ 19,873 $ ( 56,138 ) $ 1,552 Comprehensive income (loss) — 4,573 3,810 724 — — — 39 Dividends paid/payable to shareowners of The Coca-Cola Company ($ 0.51 per share) — ( 2,196 ) ( 2,196 ) — — — — — Dividends paid to noncontrolling interests — ( 7 ) — — — — — ( 7 ) Contributions by noncontrolling interests — 13 — — — — — 13 Purchases of treasury stock ( 1 ) ( 81 ) — — — — ( 81 ) — Impact related to stock-based compensation plans 1 126 — — — 97 29 — June 27, 2025 4,304 $ 30,182 $ 78,803 $ ( 15,758 ) $ 1,760 $ 19,970 $ ( 56,190 ) $ 1,597 Shareowners of The Coca-Cola Company Six Months Ended June 27, 2025 Common Shares Outstanding Total Reinvested Earnings Accumulated Other Comprehensive Income (Loss) Common Stock Capital Surplus Treasury Stock Non-controlling Interests December 31, 2024 4,302 $ 26,372 $ 76,054 $ ( 16,843 ) $ 1,760 $ 19,801 $ ( 55,916 ) $ 1,516 Comprehensive income (loss) — 8,302 7,140 1,085 — — — 77 Dividends paid/payable to shareowners of The Coca-Cola Company ($ 1.02 per share) — ( 4,391 ) ( 4,391 ) — — — — — Dividends paid to noncontrolling interests — ( 9 ) — — — — — ( 9 ) Contributions by noncontrolling interests — 13 — — — — — 13 Purchases of treasury stock ( 5 ) ( 360 ) — — — — ( 360 ) — Impact related to stock-based compensation plans 7 255 — — — 169 86 — June 27, 2025 4,304 $ 30,182 $ 78,803 $ ( 15,758 ) $ 1,760 $ 19,970 $ ( 56,190 ) $ 1,597 23 NOTE 12: SIGNIFICANT OPERATING AND NONOPERATING ITEMS Other Operating Charges During the three months ended July 3, 2026, the Company recorded other operating charges of $ 23 million. These charges consisted of $ 9 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $ 6 million related to North America modernization initiatives, $ 5 million related to tax litigation expense and $ 3 million for the amortization of noncompete agreements related to the BA Sports Nutrition, LLC (“BodyArmor”) acquisition in 2021. During the six months ended July 3, 2026, the Company recorded other operating charges of $ 44 million. These charges consisted of $ 19 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $ 10 million related to North America modernization initiatives, $ 8 million related to tax litigation expense and $ 7 million for the amortization of noncompete agreements related to the BodyArmor acquisition. During the three months ended June 27, 2025, the Company recorded other operating charges of $ 71 million. These charges primarily included $ 31 million related to the impairment of a trademark in Latin America, $ 28 million related to the Company’s productivity and reinvestment program, $ 7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India, $ 4 million for the amortization of noncompete agreements related to the BodyArmor acquisition and $ 2 million related to tax litigation expense. During the six months ended June 27, 2025, the Company recorded other operating charges of $ 144 million. These charges consisted of $ 47 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, which brought the total liability to $ 6,173 million and was paid in March 2025. Additionally, other operating charges included $ 39 million related to the Company’s productivity and reinvestment program, $ 31 million related to the impairment of a trademark in Latin America, $ 8 million related to an indemnification agreement entered into as a part of the refranchising of certain of our bottling operations, $ 7 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 $ 5 million related to tax litigation expense. Refer to Note 2 for additional information on the refranchising of our bottling operations in certain territories in India. Refer to Note 9 for additional information on the tax litigation. Refer to Note 15 for additional information on the impairment charge. Other Nonoperating Items Equity Income (Loss) — Net During the three and six months ended July 3, 2026, the Company recorded a net benefit of $ 11 million and a net charge of $ 22 million, respectively. During the three and six months ended June 27, 2025, the Company recorded net charges of $ 20 million and $ 28 million, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Other Income (Loss) — Net During the three months ended July 3, 2026, the Company recognized a net gain of $ 320 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. The Company also recorded a reduction in the previously recorded impairment charge of $ 66 million related to our bottling operations in Africa, which are held for sale. This reduction is based on management’s revised estimates. During the six months ended July 3, 2026, the Company recognized a net gain of $ 301 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. The Company also recorded a reduction in the previously recorded impairment charge of $ 56 million related to our bottling operations in Africa, which are held for sale. This reduction is based on management’s revised estimates. During the three months ended June 27, 2025, the Company recognized a net gain of $ 163 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 $ 102 million related to the refranchising of our bottling operations in certain territories in India, an other-than-temporary impairment charge of $ 40 million related to an equity method investee in Latin America and a charge of $ 28 million related to assets held for sale. 24 During the six months ended June 27, 2025, the Company recognized a gain of $ 331 million related to the sale of a portion of our ownership interest in CCEP, a net gain of $ 144 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 $ 102 million related to the refranchising of our bottling operations in certain territories in India. The Company also recorded 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, as well as a charge of $ 28 million related to assets held for sale, and charges of $ 25 million and $ 11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S. pension activity. Refer to Note 2 for additional information on our bottling operations in Africa and our divestiture activities. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 13 for additional information on the non-U.S. pension curtailment and special termination benefits. Refer to Note 15 for additional information on the impairment charges . NOTE 13: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of the following (in millions): Pension Plans Other Postretirement Benefit Plans Three Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Service cost $ 26 $ 25 $ — $ 1 Interest cost 75 74 3 2 Expected return on plan assets 1 ( 97 ) ( 104 ) ( 1 ) ( 1 ) Amortization of net actuarial loss (gain) 22 26 — — Net periodic benefit cost (income) $ 26 $ 21 $ 2 $ 2 1 The weighted-average expected long-term rates of return on plan assets used in computing 2026 net periodic benefit cost (income) were 6.25 % for pension plans and 6.75 % for other postretirement benefit plans. Pension Plans Other Postretirement Benefit Plans Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Service cost $ 52 $ 51 $ 1 $ 2 Interest cost 151 149 5 5 Expected return on plan assets 1 ( 195 ) ( 208 ) ( 2 ) ( 2 ) Amortization of prior service cost (credit) 1 — ( 1 ) ( 1 ) Amortization of net actuarial loss (gain) 43 51 — — Curtailment loss (gain) 2 — 11 — — Special termination benefits 2 — 25 — — Net periodic benefit cost (income) $ 52 $ 79 $ 3 $ 4 1 The weighted-average expected long-term rates of return on plan assets used in computing 2026 net periodic benefit cost (income) were 6.25 % for pension plans and 6.75 % for other postretirement benefit plans. 2 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. All of the amounts in the tables above, other than service cost, were recorded in the line item other income (loss) — net in our consolidated statements of income. During the six months ended July 3, 2026, the Company contributed $ 14 million to our pension trusts. We anticipate making additional contributions of approximately $ 13 million during the remainder of 2026. The Company contributed $ 17 million to our pension trusts, offset by a $ 331 million transfer of surplus non-U.S. plan assets from pension trusts to general assets of the Company during the six months ended June 27, 2025. 25 NOTE 14: INCOME TAXES The Company recorded income taxes of $ 1,037 million ( 18.9 % effective tax rate) and $ 993 million ( 20.7 % effective tax rate) during the three months ended July 3, 2026 and June 27, 2025, respectively. The Company recorded income taxes of $ 1,682 million ( 16.7 % effective tax rate) and $ 1,715 million ( 19.4 % effective tax rate) during the six months ended July 3, 2026 and June 27, 2025, respectively. The Company’s effective tax rates for the three and six months ended July 3, 2026 and June 27, 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, 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 six months ended July 3, 2026 included $ 40 million and $ 319 million, respectively, of net tax benefits related to various discrete tax items, including net interest income of $ 43 million and $ 98 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. The Company’s effective tax rates for the three and six months ended July 3, 2026 also included net tax expense of $ 13 million and a net tax benefit of $ 181 million, respectively, primarily related to return to provision adjustments. The Company’s effective tax rates for the three and six months ended June 27, 2025 included $ 12 million and $ 155 million, respectively, of net tax benefits related to various discrete tax items, including net interest income of $ 54 million and $ 107 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. The Company’s effective tax rate for the six months ended June 27, 2025 also included a tax benefit of $ 85 million related to a change in the Company’s indefinite reinvestment assertion for certain foreign entities. During the six months ended July 3, 2026, the Company invested $ 75 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During the three and six months ended July 3, 2026, the Company received tax credits and other income tax benefits of $ 2 million and $ 5 million, respectively, and recognized amortization expense of $ 2 million and $ 4 million, respectively, related to all of our investments of this nature. The amount of non-income tax-related activity and other returns related to these investments was not material during the three and six months ended July 3, 2026. During the six months ended June 27, 2025, the Company invested $ 148 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During the three and six months ended June 27, 2025, the Company received tax credits and other income tax benefits of $ 146 million and $ 155 million, respectively, and recognized amortization expense of $ 135 million and $ 142 million, respectively, related to all of our investments of this nature. The amount of non-income tax-related activity and other returns related to these investments was not material during the three and six months ended June 27, 2025. As of July 3, 2026 and December 31, 2025, the carrying values of these investments were $ 246 million and $ 32 million, respectively. The Company recorded $ 174 million and $ 32 million of unfunded commitments related to these investments in the line item accounts payable and accrued expenses in our consolidated balance sheets as of July 3, 2026 and December 31, 2025, respectively. We are currently in litigation with the IRS for tax years 2007 through 2009. Refer to Note 9. 26 NOTE 15: FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions): July 3, 2026 Level 1 Level 2 Level 3 Other 3 Netting Adjustment 4 Fair Value Measurements Assets: Equity securities with readily determinable values 1 $ 2,427 $ 435 $ 70 $ 353 $ — $ 3,285 Debt securities 1 — 2,674 — — — 2,674 Derivatives 2 17 552 — — ( 464 ) 5 105 7 Total assets $ 2,444 $ 3,661 $ 70 $ 353 $ ( 464 ) $ 6,064 Liabilities: Derivatives 2 $ — $ 1,003 $ — $ — $ ( 991 ) 6 $ 12 7 Total liabilities $ — $ 1,003 $ — $ — $ ( 991 ) $ 12 1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities. 2 Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 The Company is obligated to return $ 63 million in cash collateral it has netted against its derivative position. 6 The Company has the right to reclaim $ 589 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: $ 5 million in the line item assets held for sale, $ 100 million in the line item other noncurrent assets, $ 4 million in the line item liabilities held for sale and $ 8 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio. 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 6 for additional information related to the composition of our derivatives portfolio. 3 Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4. 4 Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 6. 5 The Company was obligated to return $ 48 million in cash collateral it had netted against its derivative position. 6 The Company had the right to reclaim $ 597 million in cash collateral it had 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 6 for additional information related to the composition of our derivatives portfolio. Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the three and six months ended July 3, 2026. Gross realized and unrealized gains and losses on Level 3 assets and liabilities, excluding the 27 remeasurement of the fairlife contingent consideration liability, were not significant for the three and six months ended June 27, 2025. Refer to Note 12 for additional information on the fairlife contingent consideration liability. The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the three and six months ended July 3, 2026 and June 27, 2025. Nonrecurring Fair Value Measurements The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the following table (in millions): Gains (Losses) Three Months Ended Six Months Ended July 3, 2026 June 27, 2025 July 3, 2026 June 27, 2025 Assets held for sale $ 66 1 $ ( 28 ) 2 $ 56 1 $ ( 28 ) 2 Other-than-temporary impairment charges — ( 40 ) 3 — ( 65 ) 3,5 Impairment of intangible assets — ( 31 ) 4 — ( 31 ) 4 Total $ 66 $ ( 99 ) $ 56 $ ( 124 ) 1 During the three and six months ended July 3, 2026, the Company recorded a reduction in the previously recorded impairment charge of $ 66 million and $ 56 million, respectively, related to our bottling operations in Africa, which are held for sale, based on Level 3 inputs. These gains were recorded in the line item other income (loss) — net in our consolidated statements of income. Refer to Note 2. 2 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 agreed-upon sale price. During the three and six months ended June 27, 2025, the Company recorded a charge of $ 28 million in the line item other income (loss) — net in our consolidated statements of income. This charge was 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 impacted the line item property, plant and equipment in our consolidated balance sheet. 3 During the three and six months ended June 27, 2025, the Company recorded an other-than-temporary impairment charge of $ 40 million related to an equity method investee in Latin America. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results. This charge was recorded in the line item other income (loss) — net in our consolidated statements of income. 4 During the three and six months ended June 27, 2025, the Company recorded an asset impairment charge of $ 31 million related to a trademark in Latin America. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results and changes in macroeconomic conditions. This charge was recorded in the line item other operating charges in our consolidated statements of income. The remaining carrying value of the trademark is $ 55 million. 5 During the six months ended June 27, 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. Other Fair Value Disclosures The carrying values of cash and cash equivalents, short-term investments, trade accounts receivable, accounts payable and accrued expenses, and loans and notes payable approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted prices are not available, the fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk and the contractual terms of the debt instruments. As of July 3, 2026, the carrying value and fair value of our long-term debt, including the current portion, were $ 43,495 million and $ 38,825 million, respectively. 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. 28 NOTE 16: OPERATING SEGMENTS Our organizational structure consists of the following five operating segments: Europe, Middle East and Africa (“EMEA”), Latin America, North America, Asia Pacific, and Bottling Investments. 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 Three Months Ended July 3, 2026 Net operating revenues: Third party $ 3,087 $ 1,839 $ 5,405 $ 1,487 $ 1,525 $ 13,343 $ 37 $ — $ 13,380 Intersegment 153 — 3 94 2 252 — ( 252 ) — Total net operating revenues 3,240 1,839 5,408 1,581 1,527 13,595 37 ( 252 ) 13,380 Cost of goods sold 808 275 2,659 470 1,067 5,279 ( 62 ) ( 252 ) 4,965 Selling, general and administrative expenses 1,123 387 1,048 455 369 3,382 338 — 3,720 Other operating charges — — 6 — — 6 17 — 23 Operating income (loss) $ 1,309 $ 1,177 $ 1,695 $ 656 $ 91 $ 4,928 $ ( 256 ) $ — $ 4,672 Interest income 198 Interest expense 369 Equity income (loss) — net 604 Other income (loss) — net 370 Income before income taxes $ 5,475 Other segment information: Capital expenditures $ 47 $ — $ 179 $ — $ 91 $ 317 $ 101 $ — $ 418 Depreciation and amortization 51 9 92 12 86 250 16 — 266 Three Months Ended June 27, 2025 Net operating revenues: Third party $ 3,008 $ 1,587 $ 5,028 $ 1,464 $ 1,409 $ 12,496 $ 39 $ — $ 12,535 Intersegment 168 — 1 108 2 279 — ( 279 ) — Total net operating revenues 3,176 1,587 5,029 1,572 1,411 12,775 39 ( 279 ) 12,535 Cost of goods sold 895 263 2,405 476 1,018 5,057 ( 64 ) ( 279 ) 4,714 Selling, general and administrative expenses 956 336 1,003 449 334 3,078 392 — 3,470 Other operating charges — 31 — — — 31 40 — 71 Operating income (loss) $ 1,325 $ 957 $ 1,621 $ 647 $ 59 $ 4,609 $ ( 329 ) $ — $ 4,280 Interest income 188 Interest expense 445 Equity income (loss) — net 561 Other income (loss) — net 212 Income before income taxes $ 4,796 Other segment information: Capital expenditures $ 49 $ 1 $ 154 $ 4 $ 119 $ 327 $ 115 $ — $ 442 Depreciation and amortization 55 8 81 10 76 230 49 — 279 29 EMEA Latin America North America Asia Pacific Bottling Investments Operating Segments Total Corporate Eliminations Consolidated Six Months Ended July 3, 2026 Net operating revenues: Third party $ 5,894 $ 3,517 $ 10,296 $ 2,913 $ 3,163 $ 25,783 $ 69 $ — $ 25,852 Intersegment 358 — 5 176 4 543 — ( 543 ) — Total net operating revenues 6,252 3,517 10,301 3,089 3,167 26,326 69 ( 543 ) 25,852 Cost of goods sold 1,577 549 4,991 987 2,178 10,282 ( 154 ) ( 543 ) 9,585 Selling, general and administrative expenses 2,107 753 1,999 910 707 6,476 716 — 7,192 Other operating charges — — 10 — — 10 34 — 44 Operating income (loss) $ 2,568 $ 2,215 $ 3,301 $ 1,192 $ 282 $ 9,558 $ ( 527 ) $ — $ 9,031 Interest income 420 Interest expense 744 Equity income (loss) — net 988 Other income (loss) — net 391 Income before income taxes $ 10,086 Other segment information: Capital expenditures $ 100 $ — $ 262 $ 1 $ 165 $ 528 $ 156 $ — $ 684 Depreciation and amortization 99 17 191 23 169 499 31 — 530 Six Months Ended June 27, 2025 Net operating revenues: Third party $ 5,489 $ 3,064 $ 9,387 $ 2,789 $ 2,870 $ 23,599 $ 65 $ — $ 23,664 Intersegment 344 — 3 204 4 555 — ( 555 ) — Total net operating revenues 5,833 3,064 9,390 2,993 2,874 24,154 65 ( 555 ) 23,664 Cost of goods sold 1,654 537 4,511 866 2,028 9,596 ( 164 ) ( 555 ) 8,877 Selling, general and administrative expenses 1,789 635 1,917 856 668 5,865 839 — 6,704 Other operating charges — 31 — — — 31 113 — 144 Operating income (loss) $ 2,390 $ 1,861 $ 2,962 $ 1,271 $ 178 $ 8,662 $ ( 723 ) $ — $ 7,939 Interest income 368 Interest expense 832 Equity income (loss) — net 912 Other income (loss) — net 466 Income before income taxes $ 8,853 Other segment information: Capital expenditures $ 90 $ 1 $ 269 $ 5 $ 224 $ 589 $ 162 $ — $ 751 Depreciation and amortization 99 15 162 22 152 450 96 — 546 Effective March 31, 2026, our Company’s chief operating decision maker (“CODM”) is our Chief Executive Officer. Information about total assets by segment is not disclosed because such information is not regularly provided to, or used by, our CODM. During the three and six months ended July 3, 2026 and June 27, 2025, our operating segments and Corporate were impacted by acquisition and divestiture activities. Refer to Note 2. Additionally, during the three and six months ended July 3, 2026 and June 27, 2025, our operating segments and Corporate were impacted by certain significant operating and nonoperating items. Refer to Note 12. 30