COCA COLA CO

Previous wording

Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries and territories in which we operate, particularly in developing and emerging markets. Refer to the headings “Item 1A. Risk Factors” in Part I and “Our Business — Challenges and Risks” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2023, as well as the heading “Operations Review” below for additional information related to our present business environment. As a result, management must make numerous assumptions, which involve a significant amount of judgment, when performing impairment tests of equity method investments and indefinite-lived intangible assets in various regions around the world. The performance of impairment tests involves critical accounting estimates. These estimates require significant management judgment and include inherent uncertainties. Factors that management must estimate include, among others, the economic lives of the assets, sales volume, pricing, royalty rates, cost of raw materials, delivery costs, long-term growth rates, discount rates, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets. The variability of these factors depends on a number of conditions, and thus our accounting estimates may change from period to period. These factors are even more difficult to estimate when global financial markets are highly volatile. As these factors are often interdependent and may not change in isolation, we do not believe it is practicable or meaningful to present the impact of changing a single factor.

Current wording

Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries and territories in which we operate, particularly in developing and emerging markets. Refer to the headings “Item 1A. Risk Factors” in Part I and “Our Business — Challenges and Risks” in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as the heading “Operations Review” below for additional information related to our present business environment. As a result, management must make numerous assumptions, which involve a significant amount of judgment, when performing impairment tests of equity method investments and indefinite-lived intangible assets in various regions around the world. The performance of impairment tests involves critical accounting estimates. These estimates require significant management judgment and include inherent uncertainties. Factors that management must estimate include, among others, the economic lives of the assets, sales volume, pricing, royalty rates, cost of raw materials, delivery costs, long-term growth rates, discount rates, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets. The variability of these factors depends on a number of conditions, and thus our accounting estimates may change from period to period. These factors are even more difficult to estimate given the highly volatile global financial markets. As these factors are often interdependent and may not change in isolation, we do not believe it is practicable or meaningful to present the impact of changing a single factor.

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. 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, BodyArmor, which offers a line of sports performance and hydration beverages. During 2021, in conjunction with acquiring the remaining ownership interest, we recognized a noncash gain of $834 million resulting from the remeasurement of our previously held equity interest in BodyArmor to fair value. The Company allocated $4.2 billion of the $5.6 billion purchase price to the BodyArmor trademark. During the three months ended March 29, 2024, the operating results related to the trademark were lower than expected. Therefore, the Company revised its projections of the future operating results related to the trademark, which triggered the need to update its impairment analysis. As a result, the Company concluded that the fair value of the trademark was less than its carrying value and recorded an impairment charge of $760 million. The decrease in fair value was primarily driven by the revised projections of future operating results as well as higher discount rates resulting from changes in macroeconomic conditions since the acquisition date. As of March 28, 2025, the fair value of this trademark approximates its carrying value. If the near-term operating results of this trademark do not achieve our revised financial projections, or if the macroeconomic conditions change causing the discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an additional impairment charge. Management will continue to monitor the fair value of this trademark in future periods.

Previous wording

We generally refer to acquisitions and divestitures of bottling operations as “structural changes,” which are a component of acquisitions and divestitures. Typically, structural changes do not impact the Company’s unit case volume or concentrate sales volume on a consolidated basis or at the geographic operating segment level. We report unit case volume for all sales of Company beverage products, regardless of our ownership interest in the bottling partner, if any. However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s divestitures.

Current wording

We generally refer to acquisitions and divestitures of bottling operations as “structural changes,” which are a component of acquisitions and divestitures. Typically, structural changes do not impact the Company’s unit case volume on a consolidated basis or at the geographic operating segment level. We recognize unit case volume for all sales of Company beverage products, regardless of our ownership interest in the bottling partner, if any. However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s acquisitions and divestitures.

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 for the nine months ended September 27, 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 nine months ended September 27, 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 nine months ended September 27, 2024.

Current wording

In January, February and December 2024, the Company refranchised our bottling operations in certain territories in India, and in February 2024, the Company refranchised our bottling operations in Bangladesh and the Philippines. 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 28, 2025.

Previous wording

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

Current wording

2 Geographic operating segment data reflects unit case volume growth for all bottlers, both consolidated and unconsolidated, and distributors in the applicable geographic areas. Unit case volume growth for Costa retail stores is reflected in the Europe, Middle East and Africa operating segment data.

Previous wording

4 Concentrate sales volume represents the amount of concentrates, syrups, source waters and powders/minerals (in all instances expressed in unit case equivalents) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers and is not based on average daily sales. For Costa non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers and is not based on average daily sales. Each of our quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. As a result, the first quarter of 2024 had one less day when compared to the first quarter of 2023, and the fourth quarter of 2024 will have two additional days when compared to the fourth quarter of 2023.

Current wording

4 Concentrate sales volume represents the amount of concentrates, syrups, source waters and powders/minerals (in all instances expressed in unit case equivalents) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers and is not based on average daily sales. For Costa non-ready-to-drink beverage products, concentrate sales volume represents the amount of beverages, primarily measured in number of transactions (in all instances expressed in unit case equivalents), sold by the Company to customers or consumers and is not based on average daily sales. Each of our quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. As a result, the first quarter of 2025 had two fewer days when compared to the first quarter of 2024, and the fourth quarter of 2025 will have one additional day when compared to the fourth quarter of 2024.

Previous wording

5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three and nine months ended September 27, 2024 declined 1% and grew 5%, respectively.

Current wording

5 After considering the impact of structural changes, unit case volume for Bottling Investments for the three months ended March 28, 2025 grew 1%.

Previous wording

7 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three and nine months ended September 27, 2024 declined 4% and grew 1%, respectively.

Current wording

6 After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three months ended March 28, 2025 grew 8%.

Previous wording

Unit case volume in Europe, Middle East and Africa decreased 2%, which included a 3% decline in Trademark Coca-Cola, a 2% decline in sparkling flavors and a 5% decline in juice, value-added dairy and plant-based beverages, partially offset by 1% growth in water, sports, coffee and tea. The operating segment’s volume performance included a 7% decline in the Eurasia and Middle East operating unit as well as a 3% decline in the Africa operating unit, partially offset by growth of 1% in the Europe operating unit.

Current wording

Unit case volume in Europe, Middle East and Africa increased 3%, which included 3% growth in both Trademark Coca-Cola and sparkling flavors, 2% growth in water, sports, coffee and tea, as well as growth in energy drinks, partially offset by a 5% decline in juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included an increase in unit case volume of 11% in the Eurasia and Middle East operating unit, 1% in the Africa operating unit and growth in energy drinks, partially offset by a decline of 1% in the Europe operating unit.

Previous wording

Unit case volume in Latin America was even, which included 2% growth in Trademark Coca-Cola, offset by a 3% decline in water, sports, coffee and tea, a 4% decline in sparkling flavors, and a 3% decline in juice, value-added dairy and plant-based beverages. The operating segment’s volume performance included 7% growth in Brazil, offset by a decline of 3% in Mexico and a decline of 8% in Argentina.

Current wording

Unit case volume in Latin America was even, which included 1% growth in both Trademark Coca-Cola and water, sports, coffee and tea, as well as growth in energy drinks, offset by a 4% decline in sparkling flavors. Unit case volume in juice, value-added dairy and plant-based beverages was even. The operating segment’s volume performance included 4% growth in Brazil and 17% growth in Argentina, offset by a decline of 3% in Mexico.

Previous wording

Unit case volume in North America decreased 1%, which included a 5% decline in water, sports, coffee and tea, partially offset by 3% growth in juice, value-added dairy and plant-based beverages. Unit case volume in both Trademark Coca-Cola and sparkling flavors was even.

Current wording

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

Previous wording

Unit case volume in Asia Pacific was even, which included 3% growth in sparkling flavors and 2% growth in Trademark Coca-Cola, 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. The operating segment’s volume performance included 7% growth in the India and Southwest Asia operating unit, 3% growth in the ASEAN and South Pacific operating unit and 4% growth in the Japan and South Korea operating unit, offset by a decline in unit case volume of 7% in the Greater China and Mongolia operating unit.

Current wording

Unit case volume in Asia Pacific increased 6%, which included 6% growth in sparkling flavors, 7% growth in water, sports, coffee and tea, 3% growth in Trademark Coca-Cola, 4% growth in juice, value-added dairy and plant-based beverages and growth in energy drinks. The operating segment’s volume performance included 16% growth in the India and Southwest Asia operating unit, 6% growth in the Greater China and Mongolia operating unit, 1% growth in the Japan and South Korea operating unit and growth in energy drinks, partially offset by a decline of 2% in the ASEAN and South Pacific operating unit.

Previous wording

During the three months ended September 27, 2024, worldwide concentrate sales volume and unit case volume both decreased 1% compared to the three months ended September 29, 2023. During the nine months ended September 27, 2024, worldwide concentrate sales volume was even and unit case volume increased 1% compared to the nine months ended September 29, 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 nine months ended September 27, 2024. 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 March 28, 2025, worldwide concentrate sales volume increased 1% and unit case volume increased 2% compared to the three months ended March 29, 2024. Concentrate sales volume growth is calculated based on the amount sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. The first quarter of 2025 had two fewer days when compared to the first quarter of 2024, which contributed to the differences between concentrate sales volume and unit case volume growth rates on a consolidated basis and for the individual operating segments. Additionally, the differences between concentrate sales volume and unit case volume growth rates for the operating segments were impacted by the timing of concentrate shipments. 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 September 27, 2024, net operating revenues were $11,854 million, compared to $11,953 million during the three months ended September 29, 2023, a decrease of $99 million, or 1%.

Current wording

During the three months ended March 28, 2025, net operating revenues were $11,129 million, compared to $11,300 million during the three months ended March 29, 2024, a decrease of $171 million, or 2%.

Previous wording

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments and our Global Ventures operating segment (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any. For our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the increase (decrease) in unit case volume computed by comparing the total sales (rather than the average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only after considering the impact of structural changes, if any. Refer to the heading “Beverage Volume” above.

Current wording

1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments after considering the impact of acquisitions and divestitures, if any. For our Bottling Investments operating segment, this represents the percent change in net operating revenues attributable to the increase (decrease) in unit case volume computed by comparing the total sales (rather than the average daily sales) in each of the corresponding periods after considering the impact of structural changes, if any. Our Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only after considering the impact of structural changes, if any. Refer to the heading “Beverage Volume” above.

Previous wording

Price, product and geographic mix had a 10% 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 5% 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

•Europe, Middle East and Africa — favorable pricing initiatives, including inflationary pricing primarily in Nigeria, Türkiye and Zimbabwe, and favorable geographic mix, partially offset by unfavorable category mix;

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

•North America — favorable pricing initiatives and favorable mix;

Previous wording

•Bottling Investments — favorable pricing initiatives across most markets and favorable geographic mix.

Current wording

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

Previous wording

Fluctuations in foreign currency exchange rates unfavorably impacted our consolidated net operating revenues by 5%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Mexican peso, Brazilian real, Nigerian naira and Zimbabwean dollar, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the British pound, Kenyan shilling and South African rand, which had a favorable impact on our Global Ventures; Europe, Middle East and Africa; and Bottling Investments 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 5%. This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Mexican peso, Brazilian real, Argentine peso, Ethiopian birr, euro, Zimbabwe gold, and Nigerian naira, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; and Bottling Investments operating segments. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Previous wording

Our gross profit margin decreased to 60.7% for the three months ended September 27, 2024, compared to 61.0% for the three months ended September 29, 2023. The decrease was primarily due to the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs, partially offset by the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India. Our gross profit margin increased to 61.4% for the nine months ended September 27, 2024, compared to 60.2% for the nine months ended September 29, 2023. The increase was primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Current wording

Our gross profit margin increased to 62.6% for the three months ended March 28, 2025, compared to 62.5% for the three months ended March 29, 2024. The increase was primarily due to the impact of favorable pricing initiatives and the refranchising of our bottling operations in the Philippines, Bangladesh and certain territories in India, partially offset by the unfavorable impact of foreign currency exchange rate fluctuations and higher commodity costs.

Previous wording

As of September 27, 2024, we had $298 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.7 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.

Current wording

As of March 28, 2025, we had $391 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 2.0 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based compensation awards.

Previous wording

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

Current wording

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

Previous wording

During the nine months ended September 27, 2024, the Company recorded other operating charges of $3,987 million. These charges consisted of $3,021 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, $760 million related to the impairment of our BodyArmor trademark, $102 million related to the Company’s productivity and reinvestment program and $87 million related to the impairment of a trademark in Latin America. In addition, other operating charges included $11 million for the amortization of noncompete agreements related to the BodyArmor acquisition, $7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and $2 million of transaction costs related to the sale of a portion of our interest in Coke Consolidated. These charges were partially offset by a net benefit of $3 million related to a revision of management’s estimates for tax litigation expense.

Current wording

During the three months ended March 29, 2024, the Company recorded other operating charges of $1,573 million. These charges consisted of $765 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 $36 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $7 million for 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.

Previous wording

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations in certain territories in India and the sale of a portion of our interest in Coke Consolidated. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation. Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition and the impairments. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact these charges 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 in certain territories in India. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation. Refer to Note 13 of Notes to Consolidated Financial Statements for additional information on the Company’s restructuring initiatives. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition and the BodyArmor impairment. Refer to Note 17 of Notes to Consolidated Financial Statements for the impact these charges had on our operating segments and Corporate.

Previous wording

During the nine months ended September 27, 2024, operating income was $7,283 million, compared to $9,038 million during the nine months ended September 29, 2023, a decrease of $1,755 million, or 19%. 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 12%. These items were partially offset by an increase in concentrate sales volume of 1% and favorable pricing initiatives.

Current wording

During the three months ended March 28, 2025, operating income was $3,659 million, compared to $2,141 million during the three months ended March 29, 2024, an increase of $1,518 million, or 71%. The increase was driven by an increase in concentrate sales volume of 1%, favorable pricing initiatives and lower other operating charges, partially offset by the impact of refranchising our bottling operations in the Philippines, Bangladesh and certain territories in India; higher commodity costs; and an unfavorable foreign currency exchange rate impact of 18%.

Previous wording

Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 15% due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso and Mexican peso, which had an unfavorable impact on our Latin America operating segment. Refer to the heading “Liquidity, Capital Resources and Financial Position — Foreign Exchange” below.

Current wording

Fluctuations in foreign currency exchange rates unfavorably impacted consolidated operating income by 18% due to a stronger U.S. dollar compared to certain foreign currencies, including the Mexican peso, Brazilian real, Argentine peso, euro, and Zimbabwe gold, which had an unfavorable 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.

Previous wording

The Europe, Middle East and Africa operating segment reported operating income of $3,309 million and $3,404 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The decrease in operating income was primarily driven by a decrease in concentrate sales volume of 3%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 16%, partially offset by favorable pricing initiatives.

Current wording

The Europe, Middle East and Africa operating segment reported operating income of $1,065 million and $1,080 million for the three months ended March 28, 2025 and March 29, 2024, respectively. The decrease in operating income was primarily driven by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 9%, partially offset by an increase in concentrate sales volume of 1% and favorable pricing initiatives.

Previous wording

Operating income for North America for the nine months ended September 27, 2024 and September 29, 2023 was $3,162 million and $3,525 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.

Current wording

Operating income for North America for the three months ended March 28, 2025 and March 29, 2024 was $1,341 million and $497 million, respectively. The increase in operating income was primarily driven by favorable pricing initiatives and lower other operating charges due to the impairment of our BodyArmor trademark in the prior year, partially offset by a decrease in concentrate sales volume of 4%, higher commodity costs, increased marketing spending, higher operating expenses 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 impairment of our BodyArmor trademark.

Previous wording

Bottling Investments’ operating income for the three months ended September 27, 2024 and September 29, 2023 was $43 million and $132 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; a decline in unit case volume of 1%; higher commodity costs; higher operating expenses; and an unfavorable foreign currency exchange rate impact of 4%, partially offset by favorable pricing initiatives.

Current wording

Bottling Investments’ operating income for the three months ended March 28, 2025 and March 29, 2024 was $119 million and $156 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 4%, partially offset by favorable pricing initiatives.

Previous wording

Corporate’s operating loss for the nine months ended September 27, 2024 and September 29, 2023 was $4,264 million and $2,856 million, respectively. Operating loss in 2024 increased as a result of higher operating expenses and higher other operating charges, primarily due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. 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 March 28, 2025 and March 29, 2024 was $394 million and $1,194 million, respectively. Operating loss in 2025 decreased primarily as a result of lower operating expenses and lower other operating charges, primarily due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the fairlife acquisition.

Previous wording

During the three months ended September 27, 2024, interest income was $263 million, compared to $248 million during the three months ended September 29, 2023, an increase of $15 million, or 6%. During the nine months ended September 27, 2024, interest income was $784 million, compared to $640 million during the nine months ended September 29, 2023, an increase of $144 million, or 23%. The increases were primarily driven by higher average investment balances on our Corporate and certain international investments.

Current wording

During the three months ended March 28, 2025, interest income was $180 million, compared to $246 million during the three months ended March 29, 2024, a decrease of $66 million, or 27%. The decrease was primarily driven by lower average investment balances on our Corporate and certain international investments.

Previous wording

During the three months ended September 27, 2024, interest expense was $425 million, compared to $368 million during the three months ended September 29, 2023, an increase of $57 million, or 15%. During the nine months ended September 27, 2024, interest expense was $1,225 million, compared to $1,114 million during the nine months ended September 29, 2023, an increase of $111 million, or 10%. The increases were primarily due to the impact of higher debt balances and higher interest rates on derivative instruments compared to the prior year.

Current wording

During the three months ended March 28, 2025, interest expense was $387 million, compared to $382 million during the three months ended March 29, 2024, an increase of $5 million, or 1%. The increase was primarily due to the impact of higher debt balances, partially offset by lower rates on derivative instruments compared to the prior year.

Previous wording

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the refranchising of our bottling operations, the sale of our ownership interest in an equity method investee in Thailand and the sale of a portion of our interest in Coke Consolidated. Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities. Refer to Note 14 of Notes to Consolidated Financial Statements for additional information on net periodic benefit cost or income. Refer to Note 16 of Notes to Consolidated Financial Statements for additional information on the 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.

Current wording

Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the sale of our ownership interest in CCEP, the sale of our ownership interest in an equity method investee in Thailand and the refranchising of our bottling operations. 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 impairment charge.

Previous wording

The Company’s effective tax rates for the three and nine months ended September 27, 2024 and September 29, 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 months ended March 28, 2025 and March 29, 2024 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 effective tax rates for the three and nine months ended September 29, 2023 included $186 million and $311 million, respectively, of net tax benefits related to various discrete tax items, including return to provision adjustments and the net tax impact of agreed-upon audit issues. The Company’s effective tax rate for the nine months ended September 29, 2023 also included a tax benefit of $90 million related to a change in tax law in a certain foreign jurisdiction.

Current wording

The Company’s effective tax rate for the three months ended March 28, 2025 included $143 million of net tax benefits related to various discrete tax items, including net interest income of $53 million related to the IRS Tax Litigation Deposit recorded in the line item income taxes in our consolidated statement of income, in accordance with our accounting policy, and a tax benefit of $85 million related to a change in the Company’s indefinite reinvestment assertion for certain foreign entities.

Previous wording

On November 18, 2020, the U.S. Tax Court (“Tax Court”) issued an opinion (“Opinion”) regarding the Company’s 2015 litigation with the United States Internal Revenue Service (“IRS”) involving transfer pricing tax adjustments in which it predominantly sided with the IRS. On November 8, 2023, the Tax Court issued a supplemental opinion (together with the original Tax Court opinion, “Opinions”), siding with the IRS in concluding both that the blocked-income regulations apply to the Company’s operations and that the Tax Court opinion in 3M Co. & Subs. v. Commissioner (February 9, 2023) controlled as to the validity of those regulations. The Company strongly disagrees with the Opinions and intends to vigorously defend its position. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

Current wording

On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which it predominantly sided with the IRS. On November 8, 2023, the Tax Court issued a supplemental opinion, siding with the IRS in concluding both that the blocked-income regulations apply to the Company’s operations and that the Tax Court opinion in 3M Co. & Subs. v. Commissioner (February 9, 2023) controlled as to the validity of those regulations. The Company strongly disagrees with the Opinions and intends to vigorously defend its positions. Refer to Note 9 of Notes to Consolidated Financial Statements for additional information on the tax litigation.

Previous wording

At the end of each quarter, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year. This estimate reflects, among other items, our best estimate of operating results and foreign currency exchange rates. Based on enacted tax laws, as well as our current interpretation of recently issued regulations, the Company’s effective tax rate in 2024 is expected to be 18.8% before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate. This rate does not include the impact of the ongoing tax litigation with the IRS, if the Company were not to prevail.

Current wording

At the end of each quarter, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year. This estimate reflects, among other items, our best estimate of operating results and foreign currency exchange rates. Based on current tax laws, including the impact of several countries enacting global minimum tax regulations, the Company’s effective tax rate in 2025 is expected to be approximately 20.8% before considering the potential impact of any significant operating and nonoperating items that may affect our effective tax rate. This rate does not include the impact of the ongoing tax litigation with the IRS, if the Company were not to prevail.

Previous wording

In December 2021, the OECD issued Pillar Two model rules which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws. The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, numerous countries have enacted legislation, or have indicated their intent to adopt legislation, to implement certain aspects of Pillar Two effective January 1, 2024, with general implementation of the remaining global minimum tax rules by January 1, 2025. The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance. The Company will continue to monitor developments to determine any potential impact in the countries in which we operate.

Current wording

In December 2021, the OECD issued Pillar Two model rules which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws. The directive requires, with certain limited exceptions, the rules to initially become effective for fiscal years starting on or after December 31, 2023. Numerous countries have enacted legislation that implemented certain aspects of Pillar Two effective January 1, 2024, while many others have indicated their intent to adopt, or have adopted, legislation effective in