COCA COLA CO

Previous wording

In November 2021, the Company acquired the remaining 85% ownership interest in, and now owns 100% of, BA Sports Nutrition, LLC (“BodyArmor”), which offers a line of sports performance and hydration beverages. During 2021, in conjunction with acquiring the remaining ownership interest, we recognized a noncash gain of $834 million resulting from the remeasurement of our previously held equity interest in BodyArmor to fair value. The Company allocated $4.2 billion of the $5.6 billion purchase price to the BodyArmor trademark. As of December 31, 2023, the fair value of the trademark approximated its carrying value. During the three months ended March 29, 2024, the operating results related to the trademark were lower than expected. Therefore, the Company revised its projections of the future operating results related to the trademark which triggered the need to update its impairment analysis. As a result, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an impairment charge of $760 million. The decrease in fair value was primarily driven by the revised projections of future operating results as well as higher discount rates resulting from changes in macroeconomic conditions since the acquisition date. If the near-term operating results of this trademark do not achieve our revised financial projections, or if the macroeconomic conditions change causing the discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an additional impairment charge. Management will continue to monitor the fair value of this trademark in future periods.

Current wording

In November 2021, the Company acquired the remaining 85% ownership interest in, and now owns 100% of, BA Sports Nutrition, LLC (“BodyArmor”), which offers a line of sports performance and hydration beverages. During 2021, in conjunction with acquiring the remaining ownership interest, we recognized a noncash gain of $834 million resulting from the remeasurement of our previously held equity interest in BodyArmor to fair value. The Company allocated $4.2 billion of the $5.6 billion purchase price to the BodyArmor trademark. During the three months ended March 29, 2024, the operating results related to the trademark were lower than expected. Therefore, the Company revised its projections of the future operating results related to the trademark which triggered the need to update its impairment analysis. As a result, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an impairment charge of $760 million. The decrease in fair value was primarily driven by the revised projections of future operating results as well as higher discount rates resulting from changes in macroeconomic conditions since the acquisition date. If the near-term operating results of this trademark do not achieve our revised financial projections, or if the macroeconomic conditions change causing the discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an additional impairment charge. Management will continue to monitor the fair value of this trademark in future periods.

Previous wording

In May 2023, the Company acquired certain brands in Asia Pacific. The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Asia Pacific operating segment. Additionally, in January 2023, the Company refranchised our bottling operations in Vietnam. In January and February 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines. The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three months ended March 29, 2024.

Current wording

In May 2023, the Company acquired certain brands in Asia Pacific. The impact of acquiring these brands has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Asia Pacific operating segment for the three and six months ended June 28, 2024. Additionally, in January 2023, the Company refranchised our bottling operations in Vietnam. The impact of this refranchising has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the six months ended June 28, 2024. In January and February 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines. The impact of each of these refranchisings has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments for the three and six months ended June 28, 2024.

Previous wording

5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three months ended March 29, 2024 grew 8%.

Current wording

5 After considering the impact of structural changes, unit case volume for Bottling Investments for both the three and six months ended June 28, 2024 grew 7%.

Previous wording

6 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three months ended March 29, 2024 declined 1%.

Current wording

7 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three and six months ended June 28, 2024 grew 7% and 3%, respectively.

Previous wording

Unit case volume in Europe, Middle East and Africa increased 2%, which included 9% growth in water, sports, coffee and tea, and 2% growth in both sparkling flavors and juice, value-added dairy and plant-based beverages. Unit case volume in Trademark Coca-Cola was even. The operating segment reported an increase in unit case volume of 9% in the Africa operating unit, partially offset by a decline of 4% in the Eurasia and Middle East operating unit. Unit case volume in the Europe operating unit was even.

Current wording

Unit case volume in Europe, Middle East and Africa increased 1%, which included 7% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors, partially offset by a 1% decline in juice, value-added dairy and plant-based beverages. Unit case volume in Trademark Coca-Cola was even. The operating segment reported an increase in unit case volume of 7% in the Africa operating unit, partially offset by declines of 2% in the Eurasia and Middle East operating unit and 1% in the Europe operating unit.

Previous wording

Unit case volume in Latin America increased 4%, which included 5% growth in Trademark Coca-Cola, 4% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors, partially offset by a 1% decline in juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included 9% growth in Brazil and 4% growth in Mexico, partially offset by a 23% decline in Argentina.

Current wording

Unit case volume in Latin America increased 4%, which included 6% growth in Trademark Coca-Cola, 5% growth in water, sports, coffee and tea, and 1% growth in sparkling flavors. Unit case volume in juice, value-added dairy and plant-based beverages was even. The operating segment’s volume performance included 5% growth in Mexico and 10% growth in Brazil, partially offset by a 21% decline in Argentina.

Previous wording

Unit case volume in North America was even, which included 5% growth in juice, value-added dairy and plant-based beverages and 1% growth in Trademark Coca-Cola, offset by a 5% decline in water, sports, coffee and tea. Unit case volume in sparkling flavors was even.

Current wording

Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, and a 1% decline in sparkling flavors, partially offset by 4% growth in juice, value-added dairy and plant-based beverages. Unit case volume in Trademark Coca-Cola was even.

Previous wording

Unit case volume in Asia Pacific decreased 2%, which included a 9% decline in water, sports, coffee and tea and a 1% decline in sparkling flavors, partially offset by 2% growth in Trademark Coca-Cola and 1% growth in juice, value-added dairy and plant-based beverages. The operating segment reported a decline in unit case volume of 11% in the Greater China and Mongolia operating unit, partially offset by 7% growth in the ASEAN and South Pacific operating unit, 2% growth in the India and Southwest Asia operating unit and 1% growth in the Japan and South Korea operating unit.

Current wording

Unit case volume in Asia Pacific increased 1%, which included 4% growth in sparkling flavors, 3% growth in Trademark Coca-Cola and 2% growth in juice, value-added dairy and plant-based beverages, partially offset by a 7% decline in water, sports, coffee and tea. The operating segment’s volume performance included 10% growth in the India and Southwest Asia operating unit, 6% growth in the ASEAN and South Pacific operating unit and 3% growth in the Japan and South Korea operating unit, partially offset by a decline in unit case volume of 9% in the Greater China and Mongolia operating unit.

Previous wording

Unit case volume for Global Ventures increased 1%, driven by 1% growth in juice, value-added dairy and plant-based beverages along with growth in energy drinks, partially offset by a 6% decline in water, sports, coffee and tea.

Current wording

Unit case volume for Global Ventures increased 2%, driven by growth in energy drinks, partially offset by a 6% decline in water, sports, coffee and tea. Unit case volume in juice, value-added dairy and plant-based beverages was even.

Previous wording

During the three months ended March 29, 2024, worldwide concentrate sales volume declined 2% and unit case volume increased 1% compared to the three months ended March 31, 2023. Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments. In addition, the first quarter of 2024 had one less day when compared to the first quarter of 2023, which also contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments. We expect the differences between concentrate sales volume and unit case volume growth rates to lessen over the remainder of the year.

Current wording

During the three months ended June 28, 2024, worldwide concentrate sales volume increased 5% and unit case volume increased 2% compared to the three months ended June 30, 2023. During the six months ended June 28, 2024, worldwide concentrate sales volume increased 1% and unit case volume increased 2% compared to the six months ended June 30, 2023. Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments. In addition, the first quarter of 2024 had one less day when compared to the first quarter of 2023, which also contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments during the six months ended June 28, 2024. We expect the differences between concentrate sales volume and unit case volume growth rates to lessen over the remainder of the year.

Previous wording

During the three months ended March 29, 2024, net operating revenues were $11,300 million, compared to $10,980 million during the three months ended March 31, 2023, an increase of $320 million, or 3%.

Current wording

During the three months ended June 28, 2024, net operating revenues were $12,363 million, compared to $11,972 million during the three months ended June 30, 2023, an increase of $391 million, or 3%.

Previous wording

“Price, product and geographic mix” refers to the change in net operating revenues caused by factors such as price changes, the mix of products and packages sold, and the mix of channels and geographic territories where the sales occurred. The impact of price, product and geographic mix is calculated by subtracting the change in net operating revenues resulting from volume increases or decreases, fluctuations in foreign currency exchange rates, and acquisitions and divestitures from the total change in net operating revenues. Management believes that providing investors with price, product and geographic mix enhances their understanding about the combined impact that the following items had on the Company’s net operating revenues: (1) pricing actions taken by the Company and, where applicable, our bottling partners; (2) changes in the mix of products and packages sold; (3) changes in the mix of channels where products were sold; and (4) changes in the mix of geographic territories where products were sold. Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.

Current wording

“Price, product and geographic mix” refers to the change in net operating revenues caused by factors such as pricing actions taken by the Company and, where applicable, our bottling partners; the mix of categories, products and packages sold; and the mix of channels and geographic territories where the sales occurred. Management believes that providing investors with price, product and geographic mix enhances their understanding about the combined impact that these items had on the Company’s net operating revenues. The impact of price, product and geographic mix is calculated by subtracting the change in net operating revenues resulting from volume increases or decreases, fluctuations in foreign currency exchange rates, and acquisitions and divestitures from the total change in net operating revenues. Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.

Previous wording

Price, product and geographic mix had a 13% favorable impact on our consolidated net operating revenues. Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:

Current wording

Price, product and geographic mix had a 9% favorable impact on our consolidated net operating revenues. Price, product and geographic mix was impacted by a variety of factors and events including, but not limited to, the following:

Previous wording

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

Current wording

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

Previous wording

Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America and Europe, Middle East and Africa operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso, Brazilian real, British pound and euro, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Current wording

Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar and Turkish lira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso and British pound, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Previous wording

•Asia Pacific — favorable pricing initiatives, as well as favorable category, package and geographic mix;

Current wording

•Asia Pacific — favorable pricing initiatives and favorable package mix, partially offset by unfavorable geographic mix;

Previous wording

During the three months ended March 29, 2024, fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 7% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar, Turkish lira, and Japanese yen, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Asia Pacific operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso, Brazilian real, and euro which had a favorable impact on our Latin America and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Current wording

Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 6%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Nigerian naira, Zimbabwean dollar, Turkish lira and Japanese yen, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; Asia Pacific; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso and British pound, which had a favorable impact on our Latin America, Global Ventures and Europe, Middle East and Africa operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Previous wording

Our gross profit margin increased to 62.5% for the three months ended March 29, 2024, compared to 60.7% for the three months ended March 31, 2023. The increase was primarily due to the impact of favorable pricing initiatives and structural changes, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Current wording

Our gross profit margin increased to 61.1% for the three months ended June 28, 2024, compared to 59.0% for the three months ended June 30, 2023. Our gross profit margin increased to 61.8% for the six months ended June 28, 2024, compared to 59.8% for the six months ended June 30, 2023. These increases were primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Previous wording

During the three months ended March 29, 2024, selling, general and administrative expenses increased $166 million, or 5%, versus the prior year. The increase was primarily due to higher advertising expenses, partially offset by a decrease in selling and distribution expenses. The decrease in selling and distribution expenses was primarily due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. During the three months ended March 29, 2024, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 5%.

Current wording

During the three and six months ended June 28, 2024, selling, general and administrative expenses increased $228 million, or 7%, and increased $394 million, or 6%, respectively, versus the prior year. The increases were primarily due to higher advertising expenses, partially offset by a decrease in selling and distribution expenses. The decrease in selling and distribution expenses was primarily due to the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. During both the three and six months ended June 28, 2024, foreign currency exchange rate fluctuations decreased selling, general and administrative expenses by 5%.

Previous wording

As of March 29, 2024, we had $389 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.9 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.

Current wording

As of June 28, 2024, we had $363 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.8 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.

Previous wording

During the three months ended March 29, 2024, the Company recorded other operating charges of $1,573 million. These charges primarily consisted of $765 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $760 million related to the impairment of our BodyArmor trademark and $36 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $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 $1 million related to tax litigation expense.

Current wording

During the six months ended June 28, 2024, the Company recorded other operating charges of $2,943 million. These charges primarily consisted of $2,102 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $760 million related to the impairment of our BodyArmor trademark and $68 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $7 million for the amortization of noncompete agreements related to the BodyArmor acquisition. These charges were partially offset by a net benefit of $1 million related to a revision of management’s estimates for tax litigation expense.

Previous wording

During the three months ended March 31, 2023, the Company recorded other operating charges of $111 million. These charges primarily consisted of $62 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $27 million related to the Company’s productivity and reinvestment program and $18 million related to the restructuring of our North America operating unit. In addition, other operating charges included $4 million for the amortization of noncompete agreements related to the BodyArmor acquisition.

Current wording

During the three months ended June 30, 2023, the Company recorded other operating charges of $1,338 million. These charges primarily consisted of $1,262 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $35 million related to the discontinuation of certain manufacturing operations in Asia Pacific and $24 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $8 million related to the restructuring of our North America operating unit, $6 million related to tax litigation expense and $3 million for the amortization of noncompete agreements related to the BodyArmor acquisition.

Previous wording

The Europe, Middle East and Africa operating segment reported operating income of $1,080 million and $1,135 million for the three months ended March 29, 2024 and March 31, 2023, respectively. The decrease in operating income was primarily driven by a decline in concentrate sales volume of 6%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 15%, partially offset by favorable pricing initiatives.

Current wording

The Europe, Middle East and Africa operating segment reported operating income of $1,252 million and $1,133 million for the three months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 5% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 22%.

Previous wording

Asia Pacific’s operating income for the three months ended March 29, 2024 and March 31, 2023 was $654 million and $563 million, respectively. The increase in operating income was primarily driven by favorable pricing initiatives, lower operating expenses and the impact of acquired brands and structural changes, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs and increased marketing spending.

Current wording

Operating income for North America for the three months ended June 28, 2024 and June 30, 2023 was $1,312 million and $1,216 million, respectively. The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending and higher operating expenses.

Previous wording

Bottling Investments’ operating income for the three months ended March 29, 2024 and March 31, 2023 was $156 million and $139 million, respectively. The increase in operating income was primarily driven by unit case volume growth of 6% and favorable pricing initiatives, partially offset by higher commodity costs, higher operating expenses, an unfavorable foreign currency exchange rate impact of 3% and the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India.

Current wording

Bottling Investments’ operating income for the three months ended June 28, 2024 and June 30, 2023 was $98 million and $122 million, respectively. The decrease in operating income was primarily driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher operating expenses; and an unfavorable foreign currency exchange rate impact of 3%, partially offset by unit case volume growth of 7% and favorable pricing initiatives.

Previous wording

Corporate’s operating loss for the three months ended March 29, 2024 and March 31, 2023 was $1,191 million and $407 million, respectively. Operating loss in 2024 increased primarily as a result of higher operating expenses, higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, and an unfavorable foreign currency exchange rate impact of 1%. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.

Current wording

Corporate’s operating loss for the three months ended June 28, 2024 and June 30, 2023 was $1,689 million and $1,618 million, respectively. Operating loss in 2024 increased as a result of higher other operating charges primarily due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, partially offset by a favorable foreign currency exchange rate impact of 1%. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.

Previous wording

During the three months ended March 29, 2024, operating income was $2,141 million, compared to $3,367 million during the three months ended March 31, 2023, a decrease of $1,226 million, or 36%. The decrease was driven by a decline in concentrate sales volume of 2%; higher commodity costs; higher selling, general and administrative expenses; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 7%. These items were partially offset by favorable pricing initiatives.

Current wording

During the six months ended June 28, 2024, operating income was $4,773 million, compared to $5,768 million during the six months ended June 30, 2023, a decrease of $995 million, or 17%. The decrease was driven by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; higher selling, general and administrative expenses; higher other operating charges; and an unfavorable foreign currency exchange rate impact of 11%. These items were partially offset by an increase in concentrate sales volume of 2% and favorable pricing initiatives.

Previous wording

Latin America reported operating income of $942 million and $853 million for the three months ended March 29, 2024 and March 31, 2023, respectively. The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 7%.

Current wording

Latin America reported operating income of $1,862 million and $1,650 million for the six months ended June 28, 2024 and June 30, 2023, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 4% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 10%.

Previous wording

Operating income for North America for the three months ended March 29, 2024 and March 31, 2023 was $445 million and $1,033 million, respectively. The decrease in operating income was primarily driven by higher commodity costs, higher operating expenses and higher other operating charges due to the impairment of our BodyArmor trademark, partially offset by favorable pricing initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment of our BodyArmor trademark.

Current wording

Operating income for North America for the six months ended June 28, 2024 and June 30, 2023 was $1,757 million and $2,249 million, respectively. The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, higher operating expenses and higher other operating charges due to the impairment of our BodyArmor trademark, partially offset by favorable pricing initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the impairment of our BodyArmor trademark.

Previous wording

Global Ventures’ operating income for the three months ended March 29, 2024 and March 31, 2023 was $55 million and $51 million, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 2%, lower commodity costs and a favorable foreign currency exchange rate impact of 3%, partially offset by higher marketing spending and higher operating expenses.

Current wording

Global Ventures’ operating income for the six months ended June 28, 2024 and June 30, 2023 was $147 million and $129 million, respectively. The increase in operating income was primarily driven by concentrate sales volume growth of 2% and a favorable foreign currency exchange rate impact of 1%, partially offset by increased marketing spending and higher operating expenses.

Previous wording

During the three months ended March 29, 2024, interest income was $246 million, compared to $168 million during the three months ended March 31, 2023, an increase of $78 million, or 46%. The increase was primarily driven by higher average investment balances and higher returns on our Corporate and certain international investments.

Current wording

During the three months ended June 28, 2024, interest income was $275 million, compared to $224 million during the three months ended June 30, 2023, an increase of $51 million, or 23%. During the six months ended June 28, 2024, interest income was $521 million, compared to $392 million during the six months ended June 30, 2023, an increase of $129 million, or 33%. The increases were primarily driven by higher average investment balances on our Corporate and certain international investments.

Previous wording

During the three months ended March 29, 2024, interest expense was $382 million, compared to $372 million during the three months ended March 31, 2023, an increase of $10 million, or 3%. The increase was primarily due to the impact of higher interest rates on short-term borrowings and derivative instruments compared to the prior year.

Current wording

During the three months ended June 28, 2024, interest expense was $418 million, compared to $374 million during the three months ended June 30, 2023, an increase of $44 million, or 12%. During the six months ended June 28, 2024, interest expense was $800 million, compared to $746 million during the six months ended June 30, 2023, an increase of $54 million, or 7%. The increases were primarily due to the impact of higher debt balances and higher interest rates on derivative instruments compared to the prior year.

Previous wording

During the three months ended March 29, 2024, equity income was $354 million, compared to equity income of $275 million during the three months ended March 31, 2023, an increase of $79 million, or 29%. The increase reflects, among other items, the impact of more favorable operating results reported by some of our equity method investees in the current year, a favorable foreign currency exchange rate impact, and a $57 million decrease in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Current wording

During the three months ended June 28, 2024, equity income was $537 million, compared to equity income of $538 million during the three months ended June 30, 2023, a decrease of $1 million. The decrease reflects, among other items, the impact of the sale of our ownership interest in certain of our equity method investees, a $22 million increase in net charges resulting from the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees and an unfavorable foreign currency exchange rate impact. These unfavorable impacts were partially offset by the impact of more favorable operating results reported by certain of our equity method investees in the current year.

Previous wording

During the three months ended March 29, 2024, other income (loss) — net was income of $1,513 million. The Company recognized net gains of $599 million and $293 million related to the refranchising of our bottling operations in the Philippines and certain territories in India, respectively. The Company also recognized a net gain of $516 million related to the sale of our ownership interest in an equity method investee in Thailand. Additionally, the Company recognized a net gain of $178 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, recognized net foreign currency exchange losses of $68 million, and recorded $22 million of costs related to our trade accounts receivable factoring program. Other income (loss) — net also included income of $15 million related to the non-service cost components of net periodic benefit cost, dividend income of $25 million and a loss of $7 million related to post-closing adjustments for the refranchising of our bottling operations in Vietnam in 2023.

Current wording

During the six months ended June 28, 2024, other income (loss) — net was income of $1,515 million. The Company recognized net gains of $599 million and $290 million related to the refranchising of our bottling operations in the Philippines and certain territories in India, respectively. The Company also recognized a net gain of $516 million related to the sale of our ownership interest in an equity method investee in Thailand. Additionally, the Company recognized a net gain of $228 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities, dividend income of $73 million and income of $28 million related to the non-service cost components of net periodic benefit cost. Other income (loss) — net also included net foreign currency exchange losses of $132 million, $51 million of costs related to our trade accounts receivable factoring program, an other-than-temporary impairment charge of $34 million related to an equity method investee in Latin America and a loss of $7 million related to post-closing adjustments for the refranchising of our bottling operations in Vietnam in 2023.

Previous wording

During the three months ended March 31, 2023, other income (loss) — net was income of $615 million. The Company recognized a net gain of $439 million related to the refranchising of our bottling operations in Vietnam. The Company recognized a net gain of $113 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, recognized net foreign currency exchange losses of $24 million, and recorded $11 million of costs related to our trade accounts receivable factoring program. Additionally, other income (loss) — net included income of $13 million related to the non-service cost components of net periodic benefit cost and dividend income of $66 million.

Current wording

During the six months ended June 30, 2023, other income (loss) — net was income of $706 million. The Company recognized a net gain of $439 million related to the refranchising of our bottling operations in Vietnam. The Company recognized a net gain of $240 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, recognized net foreign currency exchange losses of $120 million, and recorded $31 million of costs related to our trade accounts receivable factoring program. Additionally, other income (loss) — net included dividend income of $128 million and income of $25 million related to the non-service cost components of net periodic benefit cost.

Previous wording

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations, as well as the sale of our ownership interest in an equity method investee in Thailand. Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities. Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact that certain of these items had on our operating segments and Corporate.

Current wording

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations as well as the sale of our ownership interest in an equity method investee in Thailand. Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities. Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the other-than-temporary impairment charge. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact that certain of these items had on our operating segments and Corporate.

Previous wording

The Company recorded income taxes of $687 million (17.7% effective tax rate) and $940 million (23.2% effective tax rate) during the three months ended March 29, 2024 and March 31, 2023, respectively.

Current wording

The Company recorded income taxes of $627 million (20.7% effective tax rate) and $359 million (12.5% effective tax rate) during the three months ended June 28, 2024 and June 30, 2023, respectively. The Company recorded income taxes of $1,314 million (19.0% effective tax rate) and $1,299 million (18.7% effective tax rate) during the six months ended June 28, 2024 and June 30, 2023, respectively.

Previous wording

The Company’s effective tax rates for the three months ended March 29, 2024 and March 31, 2023 vary from the statutory U.S. federal tax rate of 21.0% primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12 of Notes to Consolidated Financial Statements, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S. federal tax rate.

Current wording

The Company’s effective tax rates for the three and six months ended June 28, 2024 and June 30, 2023 vary from the statutory U.S. federal tax rate of 21.0% primarily due to the tax impact of significant operating and nonoperating items, as described in Note 12 of Notes to Consolidated Financial Statements, along with the tax benefits of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method, both of which are generally taxed at rates lower than the statutory U.S. federal tax rate.

Previous wording

The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $16.9 billion as of March 29, 2024. In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $4.6 billion in unused backup lines of credit for general corporate purposes as of March 29, 2024. These backup lines of credit expire at various times through 2028.

Current wording

The Company’s cash, cash equivalents, short-term investments and marketable securities totaled $19.0 billion as of June 28, 2024. In addition to these funds, our commercial paper program, and our ability to issue long-term debt, we had $4.6 billion in unused backup lines of credit for general corporate purposes as of June 28, 2024. These backup lines of credit expire at various times through 2028.

Previous wording

The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $4,508 million and $2,709 million of trade accounts receivables under this program during the three months ended March 29, 2024 and March 31, 2023, respectively. The costs of factoring such receivables were $22 million and $11 million for the three months ended March 29, 2024 and March 31, 2023, respectively. The cash received from the financial institutions is reflected within the operating activities section of our consolidated statement of cash flows.

Current wording

The Company has a trade accounts receivable factoring program in certain countries. Under this program, we can elect to sell trade accounts receivables to unaffiliated financial institutions at a discount. In these factoring arrangements, for ease of administration, the Company collects customer payments related to the factored receivables and remits those payments to the financial institutions. The Company sold $10,021 million and $7,197 million of trade accounts receivables under this program during the six months ended June 28, 2024 and June 30, 2023, respectively. The costs of factoring such receivables were $51 million and $31 million for the six months ended June 28, 2024 and June 30, 2023, respectively. The cash received from the financial institutions is reflected within the operating activities section of our consolidated statement of cash flows.