Coca-Cola KO · USD

OPERATING SEGMENTS Our organizational structure consists of the following five operating segments: EMEA, Latin America, North America, Asia Pacific, and Bottling Investments. Our operating structure also includes Corporate, which consists of two components: (1) a center focusing on strategic initiatives, policy, governance and scaling global initiatives, and (2) a platform services organization supporting operating units, global marketing category leadership teams and the center by providing efficient and scaled global services and capabilities, including, but not limited to, transactional work, data management, consumer analytics, digital commerce and social/digital hubs.Segment Products and ServicesThe business of our Company is primarily nonalcoholic beverages. Our geographic operating segments (EMEA, Latin America, North America and Asia Pacific) derive a majority of their revenues from the manufacture and sale of beverage concentrates and syrups and, in some cases, the sale of finished beverages. Our EMEA operating segment also includes the results of the Costa business (excluding the ready-to-drink business), regardless of the location of the retail stores. The results of Costa’s ready-to-drink business and the fees related to Monster are reported within the applicable geographic operating segments. Our Bottling Investments operating segment is composed of our consolidated bottling operations, regardless of the geographic location of the bottler. Our consolidated bottling operations derive the majority of their revenues from the manufacture and sale of finished beverages. Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. Refer to Note 3. The following table sets forth the percentage of total net operating revenues attributable to concentrate operations and finished product operations:Year Ended December 31,202520242023Concentrate operations59%59%58%Finished product operations41 41 42 Total100%100%100%Chief Operating Decision Maker and Method of Determining Segment Income or LossOur Company’s chief operating decision maker (“CODM”) is the Chairman of the Board of Directors and Chief Executive Officer. The CODM evaluates operating segment performance based primarily on net operating revenues and operating income (loss) to make strategic operating and resource allocation decisions for the Company.

NET OPERATING REVENUES Our Company operates in two lines of business: concentrate operations and finished product operations.Our concentrate operations typically generate net operating revenues by selling beverage concentrates, sometimes referred to as “beverage bases,” syrups, including fountain syrups, and certain finished beverages to authorized bottling operations (to which we typically refer as our “bottlers” or our “bottling partners”). Our bottling partners combine concentrates with still or sparkling water and sweeteners (depending on the product), or combine syrups with still or sparkling water, to produce finished beverages. The finished beverages are packaged in authorized containers, such as cans and refillable and nonrefillable glass and plastic bottles, bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. In addition, outside the United States, our bottling partners are typically authorized to manufacture fountain syrups, using our concentrates, which they sell to fountain retailers for use in producing beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers. Our concentrate operations are included in our geographic operating segments.Our finished product operations generate net operating revenues by selling sparkling soft drinks and a variety of other finished beverages to retailers, or to distributors and wholesalers who in turn sell the beverages to retailers. Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. These operations consist primarily of our consolidated bottling and distribution operations, which are included in our Bottling Investments operating segment. In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners. These operations are generally included in our geographic operating segments. Additionally, we sell directly to consumers through retail stores operated by Costa. These sales are included in our EMEA operating segment, regardless of the physical location of the retail stores.

COMMITMENTS AND CONTINGENCIES GuaranteesAs of December 31, 2025, we were contingently liable for guarantees of indebtedness owed by third parties of $786 million, of which $61 million was related to VIEs. Refer to Note 1 for additional information related to the Company’s maximum exposure to loss due to our involvement with VIEs. Our guarantees are primarily related to third-party customers, bottlers and vendors and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant. These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is remote.Concentrations of Credit RiskWe believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations.Legal ContingenciesThe Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings (excluding tax audit claims) will not have a material adverse effect on the Company taken as a whole.IndemnificationsAt the time we acquire or divest an ownership interest in an entity, we sometimes agree to indemnify the seller or buyer for specific contingent liabilities. Management believes that any liability to the Company that may arise as a result of any such indemnification agreements will not have a material adverse effect on the Company taken as a whole.Tax AuditsThe Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These uncertain tax matters may result in the assessment of additional taxes. Refer to Note 15.On September 17, 2015, the Company received a Notice from the IRS seeking approximately $3.3 billion of additional federal income tax for years 2007 through 2009. In the Notice, the IRS stated its intent to reallocate over $9 billion of income to the U.S.

DEBT AND BORROWING ARRANGEMENTS Loans and Notes PayableLoans and notes payable consist primarily of commercial paper issued in the United States. As of December 31, 2025 and 2024, we had $1,495 million and $1,139 million, respectively, in outstanding commercial paper borrowings. Our weighted-average interest rates for commercial paper outstanding were 3.9% and 5.0% as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company also had $56 million and $360 million, respectively, in lines of credit, short-term credit facilities and other short-term borrowings.In addition, we had $7,227 million in unused lines of credit and other short-term credit facilities as of December 31, 2025, of which $6,150 million was in corporate backup lines of credit for general purposes. These backup lines of credit expire at various times through 2030. There were no borrowings under these corporate backup lines of credit during 2025. These credit facilities are subject to normal banking terms and conditions. Some of the financial arrangements require compensating balances, none of which was significant to our Company.Long-Term DebtThe Company’s long-term debt consisted of the following (in millions except average rate data):December 31, 2025December 31, 2024AmountAverage Rate1AmountAverage Rate1Fixed interest rate long-term debt:U.S. dollar notes due 2027-2093$26,945 3.6%$26,931 3.1%U.S. dollar debentures due 2026-2098767 4.8 778 4.8 Euro notes due 2026-205315,470 2.4 13,619 3.1 Swiss franc notes due 2028726 5.1 635 6.7 Other, due through 20982651 4.9 1,845 7.1 Fair value adjustments3(618) N/A(785) N/ATotal4,543,941 3.3%43,023 3.4%Less: Current portion1,822 648 Long-term debt$42,119 $42,375 1Rates represent the weighted-average effective interest rate on the balances outstanding as of year end, as adjusted for the effective amount of interest rate swap agreements and cross-currency swap agreements, if applicable. Refer to Note 5 for a more detailed discussion on interest rate management.2As of December 31, 2024, the amount includes $1,249 million of debt instruments related to our bottling operations in Africa. As of December 31, 2025, the Company’s bottling operations in Africa met the criteria to be classified as held for sale. As a result, the related debt balance as of December 31, 2025 was recorded in the line item liabilities held for sale in our consolidated balance sheet. Refer to Note 2.

INCOME TAXES Income before income taxes consisted of the following (in millions):Year Ended December 31,20252024120231United States$5,678 $2,499 $1,991 International10,320 10,587 10,961 Total$15,998 $13,086 $12,952 1The Company reclassified income before income taxes related to its Puerto Rico operations in 2024 and 2023 from United States to International to align with the jurisdictional disaggregation requirements of ASU 2023‑09.Income taxes consisted of the following (in millions):United StatesState and LocalInternationalTotal2025 Current$86 $178 $2,080 $2,344 Deferred220 123 174 517 2024 Current$324 $143 $1,981 $2,448 Deferred(254)(134)377 (11)2023 Current$83 $129 $2,039 $2,251 Deferred(135)(78)211 (2)Net income tax payments after the prospective adoption of ASU 2023-09, as described in Note 1, consisted of the following (in millions):Year Ended December 31,2025United States — federal1$1,291 United States — state and local127 International: Brazil238 India265 Mexico280 Other foreign672 Total income taxes paid, net of refunds$2,873 1The Company’s U.S. federal payments were reduced by foreign tax credits, general business credits and prior year overpayments. These general business credits include tax credits related to the Company’s investments in limited partnerships constructing, owning and operating alternative energy generation facilities in 2025.We made income tax payments of $3,262 million and $2,580 million in 2024 and 2023, respectively, which included $964 million and $723 million, respectively, of the one-time transition tax required by the Tax Reform Act. The 2024 amount does not include $6.0 billion paid in relation to invoices the IRS issued for the 2007 through 2009 tax years resulting from the Tax Court’s decision. Refer to Note 12.In 2025, the Company invested $306 million in limited partnerships that receive tax credits and other tax benefits by constructing, owning and operating alternative energy generation facilities. During 2025, the Company received tax credits and other income tax benefits of $241 million and recognized amortization expense of $224 million related to these investments. The amount of non-income tax-related activity and other returns related to these investments was not material during 2025. As of December 31, 2025, the carrying value of these investments was $32 million. The Company expects to fulfill $32 million of unfunded commitments related to these investments in the first quarter of 2026.

STOCK-BASED COMPENSATION PLANS Our Company grants long-term equity awards under its stock-based compensation plans to certain employees of the Company. Effective May 1, 2024, shareowners approved The Coca-Cola Company 2024 Equity Plan (“2024 Plan”). The 2024 Plan allows for grants of stock options, stock appreciation rights, performance share units, restricted stock, restricted stock units and other equity compensation awards. Under the 2024 Plan, up to 240 million shares of our common stock may be issued through the grant of equity awards. In addition to the shares under the 2024 Plan, certain shares of our common stock subject to certain outstanding awards under predecessor stock plans that expire, are canceled, or are forfeited, are available for issuance. As of December 31, 2025, there were 230 million shares available to be granted under the 2024 Plan.Effective May 1, 2024, shareowners approved the Global Employee Stock Purchase Plan (“GESPP”). The GESPP provides for grants of matching share awards. Under the GESPP, up to 15 million shares of our common stock may be issued through the grant of matching share awards. As of December 31, 2025, there were 14 million shares available to be issued under the GESPP.Total stock-based compensation expense was $279 million, $286 million and $251 million in 2025, 2024 and 2023, respectively. Stock-based compensation expense in 2025 and 2024 was recorded in the line item selling, general and administrative expenses in our consolidated statements of income. In 2023, the Company recorded stock-based compensation expense of $254 million in the line item selling, general and administrative expenses in our consolidated statement of income. This was partially offset by $3 million related to the revision of management’s estimates arising from the settlement of the estimated cash payments recognized in 2022, which was recorded in the line item other operating charges in our consolidated statement of income. The total income tax benefit recognized in our consolidated statements of income related to total stock-based compensation expense was $47 million, $47 million and $40 million in 2025, 2024 and 2023, respectively. As of December 31, 2025, we had $236 million of total unrecognized compensation cost related to nonvested stock-based compensation awards granted under our plans, which we expect to recognize over a weighted-average period of 1.7 years as stock‑based compensation expense.

The weighted-average fair value of stock options granted during the years ended December 31, 2025, 2024 and 2023, and the weighted-average assumptions used in the Black-Scholes-Merton option-pricing model for such grants were as follows:Year Ended December 31,202520242023Fair value of stock options on grant date$11.97 $10.28 $9.84 Dividend yield13.1%3.2%3.0%Expected volatility217.0%17.0%17.5%Risk-free interest rate34.2%4.3%4.1%Expected term of stock options47 years6 years6 years1The dividend yield is the calculated yield on the closing market price per share of the Company’s stock on the grant date.2The expected volatility is based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other factors.3The risk-free interest rate for the period matching the expected term of the stock options is based on the U.S. Treasury yield curve in effect on the grant date.4The expected term of the stock options represents the period of time that stock options are expected to be outstanding and is derived by analyzing historical exercise behavior.

LEASES We have operating leases primarily for real estate, manufacturing and other equipment, aircraft and vehicles. Balance sheet information related to operating leases is as follows (in millions):December 31,20252024Operating lease ROU assets1$1,697 $1,182 Current portion of operating lease liabilities2$321 $290 Noncurrent portion of operating lease liabilities31,401 923 Total operating lease liabilities$1,722 $1,213 1 Operating lease ROU assets are included in the line item other noncurrent assets in our consolidated balance sheets.2 The current portion of operating lease liabilities is included in the line item accounts payable and accrued expenses in our consolidated balance sheets.3 The noncurrent portion of operating lease liabilities is included in the line item other noncurrent liabilities in our consolidated balance sheets.We had operating lease costs of $405 million, $362 million and $397 million for the years ended December 31, 2025, 2024 and 2023, respectively. During 2025, 2024 and 2023, cash paid for amounts included in the measurement of operating lease liabilities was $404 million, $359 million and $389 million, respectively. Operating lease ROU assets obtained in exchange for operating lease obligations were $867 million, $313 million and $328 million for the years ended December 31, 2025, 2024 and 2023, respectively.Information associated with the measurement of our operating lease liabilities as of December 31, 2025 is as follows:Weighted-average remaining lease term9 yearsWeighted-average discount rate3.9%Our leases have remaining lease terms of up to 44 years, inclusive of renewal or termination options that we are reasonably certain to exercise.