KO 10-Q — Smart Summary

Fiscal calendar: Quarterly periods (other than Q4) end on the Friday closest to the last day of the calendar quarter; Q1 2026 ended April 3, 2026 and Q1 2025 ended March 28, 2025, while Q4 and the fiscal year always end December 31.

• Seasonality: Management notes that ready-to-drink beverage sales are somewhat seasonal, with the second and third calendar quarters typically accounting for the highest sales volumes, and that volume may be affected by weather conditions.
• Advertising cost allocation: For interim reporting, estimated full-year marketing expenditures that benefit multiple quarters are allocated to each quarter based on the proportion of that quarter's actual unit case volume to estimated full-year unit case volume, resulting in marketing expenditures recognized at a standard rate per unit case; changes in full-year estimates are recognized in the quarter the change occurs but do not affect total full-year marketing expenditures.
• Restricted cash: Restricted cash and restricted cash equivalents primarily consist of amounts held by captive insurance companies (included in other noncurrent assets) and, when applicable, cash related to assets held for sale.

• Acquisitions (three months ended April 3, 2026 and March 28, 2025): Total acquisitions of businesses, equity method investments, and nonmarketable securities were $37 million and $42 million for the three months ended April 3, 2026 and March 28, 2025, respectively; of these totals, $32 million and $30 million, respectively, represented investments in alternative energy limited partnerships.
• Coca-Cola Europacific Partners plc (CCEP) divested (March 2025): The Company sold a portion of its ownership interest in CCEP, an equity method investee, receiving cash proceeds of $741 million and recognizing a net gain of $331 million recorded in other income (loss) — net; total proceeds from all disposals of businesses, equity method investments, and nonmarketable securities were $748 million during the three months ended March 28, 2025.
• Africa bottling operations held for sale (October 2025 agreement): The Company entered a definitive agreement to sell a portion of its interest in its bottling operations in Africa to Coca-Cola HBC AG (CCHBC), an equity method investee, with closing subject to regulatory approvals and expected by end of 2026, at which point these operations will be deconsolidated; a separate option arrangement allows CCHBC to acquire the Company's remaining 25% ownership interest within a six-year period from closing. Assets classified as held for sale totaled $5,212 million as of April 3, 2026 ($5,342 million as of December 31, 2025), against liabilities held for sale of $2,427 million ($2,570 million as of December 31, 2025). An impairment charge of $1,274 million was recorded in 2025 (primarily reflecting negative net foreign currency translation adjustments to be reclassified to income upon sale), plus an additional $10 million impairment in the three months ended April 3, 2026 based on management's revised estimates; both charges were recorded in other income (loss) — net.

• Equity securities — balance sheet carrying values: Total equity securities were $2,881 million as of April 3, 2026 ($2,397 million in other noncurrent assets + $484 million in marketable securities at fair value; $43 million in other noncurrent assets under the measurement alternative), up from $2,633 million as of December 31, 2025.
• Equity securities — unrealized losses: Net unrealized losses on equity securities still held at period-end were $(33) million for the three months ended April 3, 2026, versus $(23) million for the three months ended March 28, 2025; total net losses recognized on equity securities were $(17) million and $(15) million, respectively.
• Debt securities — available-for-sale: Available-for-sale securities had a cost of $2,639 million and estimated fair value of $2,581 million as of April 3, 2026 (gross unrealized gains $20 million, gross unrealized losses $(78) million), up from cost of $1,816 million and fair value of $1,774 million as of December 31, 2025; the April 3, 2026 balance includes $2,015 million of Brazilian government bonds (cost $2,075 million, gross unrealized losses $(60) million).
• Captive insurance companies: Consolidated captive insurance companies held total equity and debt securities of $2,667 million as of April 3, 2026 ($2,356 million as of December 31, 2025), all classified in other noncurrent assets as the assets were not available to satisfy current obligations; one captive reinsures group annuity contracts covering certain European and Canadian pension plan obligations.

• Designated hedge fair values: As of April 3, 2026, designated hedging instruments carried total derivative assets of $366 million (vs. $298 million at December 31, 2025) and total derivative liabilities of $952 million (vs. $959 million at December 31, 2025), with the liability side dominated by interest rate contracts in Other noncurrent liabilities of $717 million (vs. $700 million).
• Non-designated hedge fair values: Economic hedge derivatives carried total assets of $244 million (vs. $143 million) and total liabilities of $89 million (vs. $90 million) as of April 3, 2026 vs. December 31, 2025, respectively; the asset increase was driven largely by commodity contracts in Prepaid expenses rising from $7 million to $78 million.
• Cash flow hedge notional exposures: Foreign currency cash flow hedge notional values were $10,447 million (April 3, 2026) vs. $9,760 million (December 31, 2025); commodity cash flow hedge notionals were $33 million vs. $53 million; interest rate cash flow hedge notionals were $778 million vs. $1,786 million; cross-currency swap notionals hedging foreign currency denominated assets/liabilities were $557 million at both dates. The Company estimates it will reclassify net losses of $97 million from AOCI into income during the next 12 months.
• Fair value hedges & net investment hedges: Fair value hedge notionals (interest rate and cross-currency interest rate swaps on fixed-rate debt) were $13,501 million vs. $13,674 million; net impact on income for the three months ended April 3, 2026 was a gain of $8 million vs. $4 million for the three months ended March 28, 2025. Net investment hedge total notionals were $16,931 million (April 3, 2026) vs. $16,065 million (December 31, 2025), producing OCI gains of $293 million for the three months ended April 3, 2026 vs. OCI losses of $606 million for the three months ended March 28, 2025, with no gains or losses reclassified from AOCI in either period.
• Economic hedge notionals: Foreign currency economic hedge notionals were $10,207 million vs. $9,744 million; commodity/fuel economic hedge notionals were $528 million vs. $482 million as of April 3, 2026 vs. December 31, 2025; total gain recognized in income from non-designated derivatives was $59 million for three months ended April 3, 2026 vs. a loss of $16 million for three months ended March 28, 2025.

• Payment terms and structure: The Company's standard payment terms with the majority of suppliers are 120 days; certain financial institutions offer a voluntary, non-recourse SCF program that allows suppliers to sell their receivables at rates leveraging the Company's credit rating, with no guarantees provided by the Company or any of its subsidiaries and no direct financial relationship between the Company and the financial institutions under the program.
• Balance sheet and cash flow classification: Amounts due to suppliers participating in the SCF program are included in accounts payable and accrued expenses (or liabilities held for sale, as applicable) on the consolidated balance sheet, and all related activity is reflected within operating activities on the consolidated statement of cash flows.
• Outstanding obligations: Confirmed obligations outstanding under the SCF program were $1,262 million as of April 3, 2026 and $1,363 million as of December 31, 2025, of which $32 million and $37 million, respectively, related to bottling operations in Africa currently held for sale.

Commercial paper: Outstanding commercial paper borrowings (issued in the United States) declined sharply to $250 million as of April 3, 2026 from $1,495 million as of December 31, 2025, with loans and notes payable consisting primarily of this commercial paper.

Commitments

• Guarantees of third-party indebtedness ($837 million as of April 3, 2026): Contingent liability for indebtedness owed by third-party customers, bottlers, and vendors, of which $63 million relates to variable interest entities; management deems significant payment remote.
• Self-insurance reserves ($159 million as of April 3, 2026): Actuarially estimated reserves for self-insured losses across global insurance programs ($155 million as of December 31, 2025).

Legal Proceedings

• IRS Transfer Pricing Dispute — 2007–2009 tax years ($6.0 billion paid September 10, 2024): IRS sought ~$3.3 billion additional federal income tax; Tax Court entered a $2.7 billion decision (August 2, 2024); total liability with interest is $6.0 billion, paid as IRS Tax Litigation Deposit; Company appealed to U.S. Court of Appeals for the Eleventh Circuit on October 22, 2024; accrued interest receivable of $457 million as of April 3, 2026.
• IRS Transfer Pricing Dispute — 2010–2025 tax years (estimated ~$14 billion as of December 31, 2025): Potential aggregate incremental tax and interest if Tax Court Methodology upheld for subsequent years; Q1 2026 application would add ~$450 million; continued 2026 application estimated to increase effective tax rate by ~3.8%.
• Tax reserve ($520 million as of April 3, 2026): Updated from $438 million recorded in 2020; reflects probability-weighted transfer pricing methodologies and recharacterized dividends; Company continues to conclude more likely than not its positions will be sustained on appeal.

AOCI balance: AOCI attributable to shareowners of The Coca-Cola Company was $(14,040) million as of April 3, 2026, compared to $(14,131) million as of December 31, 2025, with the largest component being net foreign currency translation adjustments of $(12,671) million, followed by adjustments to pension and other postretirement benefit liabilities of $(1,159) million, accumulated net losses on derivatives of $(173) million, and unrealized net losses on available-for-sale debt securities of $(37) million.

• Total comprehensive income: For the three months ended April 3, 2026, total comprehensive income was $4,013 million, comprising $4,015 million attributable to shareowners of The Coca-Cola Company and $(2) million attributable to noncontrolling interests.
• OCI components (Q1 2026 vs. Q1 2025): After-tax OCI attributable to shareowners was $91 million for the three months ended April 3, 2026 (before-tax $173 million, income tax $(82) million), compared to $361 million for the three months ended March 28, 2025 (before-tax $136 million, income tax $225 million); the prior-year period included a significantly larger net foreign currency translation gain of $586 million after tax versus only $2 million after tax in the current period.
• Reclassifications from AOCI: During the three months ended April 3, 2026, reclassifications from AOCI into consolidated net income totaled $59 million after tax on derivatives (primarily $71 million from foreign currency contracts reclassified to net operating revenues) and $16 million after tax on pension and other postretirement benefit liabilities (amortization of net actuarial loss of $21 million reclassified to other income (loss) — net).

• Total equity movement: Total equity attributable to shareowners of The Coca-Cola Company rose from $34,275M at December 31, 2025 to $35,734M at April 3, 2026, driven primarily by comprehensive income of $4,013M, partially offset by dividends of $2,280M and treasury stock purchases of $361M.
• Dividends: Dividends paid/payable to shareowners of The Coca-Cola Company were $0.53 per share in Q1 2026 (vs. $0.51 per share in Q1 2025); dividends paid to noncontrolling interests were $3M in Q1 2026 vs. $2M in Q1 2025.
• Treasury stock: The company purchased 5M shares for $361M in the three months ended April 3, 2026, compared to 4M shares for $279M in the three months ended March 28, 2025; ending treasury stock balance was $(56,747)M vs. $(56,138)M in the prior-year period.
• Noncontrolling interests: NCI equity was $2,101M at April 3, 2026 vs. $1,552M at March 28, 2025; NCI comprehensive income (loss) was $(2)M in Q1 2026 vs. $38M in Q1 2025.

• Other operating charges (Q1 2026): The Company recorded $21 million in other operating charges for the three months ended April 3, 2026, comprising $10 million related to a refranchising indemnification agreement, $4 million for North America modernization initiatives, $4 million for amortization of noncompete agreements related to the BodyArmor acquisition, and $3 million for tax litigation expense.
• Other operating charges (Q1 2025): The Company recorded $73 million in other operating charges for the three months ended March 28, 2025, including $47 million for the remeasurement of the fairlife contingent consideration liability to fair value (bringing the total liability to $6,173 million, paid in March 2025), $11 million related to the productivity and reinvestment program, $9 million for a refranchising indemnification agreement, $3 million for BodyArmor noncompete amortization, and $3 million for tax litigation expense.
• Equity income (loss) — net: The Company recorded net charges of $33 million and $8 million for the three months ended April 3, 2026 and March 28, 2025, respectively, representing its proportionate share of significant items recorded by certain equity method investees.
• Other income (loss) — net: For Q1 2026, the Company recognized a net loss of $19 million on equity and debt securities and recorded a $10 million impairment charge on bottling operations in Africa held for sale; for Q1 2025, items included a $331 million gain on the sale of a portion of the Company's ownership interest in CCEP, a $25 million impairment on a Latin America equity method investee, a $19 million net loss on securities, and charges of $25 million and $11 million for special termination benefits and a curtailment loss, respectively, related to non-U.S. pension activity.

• Net periodic pension cost: Total pension net periodic benefit cost fell to $26 million in the three months ended April 3, 2026 from $58 million in the three months ended March 28, 2025, largely because the prior-year period included a $11 million curtailment loss and $25 million of special termination benefits — both primarily related to benefit uplifts provided to active participants in connection with a group annuity buy-in for a non-U.S. defined benefit plan; the Company intends to convert that buy-in to a buy-out in the future, at which time the insurer would assume full responsibility for plan obligations.
• Expected return assumption: Weighted-average expected long-term rates of return on plan assets used in computing 2026 net periodic benefit cost were 6.25% for pension plans and 6.75% for other postretirement benefit plans.
• Cash contributions: The Company contributed $9 million to pension trusts during the three months ended April 3, 2026 and anticipates approximately $18 million of additional contributions during the remainder of 2026; in the comparable prior-year period, the Company contributed $11 million to pension trusts, offset by a $61 million transfer of surplus non-U.S. plan assets from pension trusts to the Company's general assets.
• Income statement classification: All components of net periodic benefit cost other than service cost were recorded in other income (loss) — net in the consolidated statements of income.

• Effective tax rate: Income taxes were $645 million (14.0% effective tax rate) for the three months ended April 3, 2026, down from $722 million (17.8% effective tax rate) for the three months ended March 28, 2025; both rates vary from the 21.0% statutory U.S. federal rate primarily due to significant operating and nonoperating items, earnings generated outside the United States, and earnings from equity method investments generally taxed at lower rates.
• Discrete items — current quarter: The Q1 2026 effective tax rate included $279 million of net tax benefits from discrete items, comprising $55 million of net interest income related to the IRS Tax Litigation Deposit and a $194 million tax benefit primarily related to return to provision adjustments.
• Discrete items — prior-year quarter: The Q1 2025 effective tax rate included $143 million of net tax benefits from discrete items, comprising $53 million of net interest income related to the IRS Tax Litigation Deposit and an $85 million tax benefit related to a change in the Company's indefinite reinvestment assertion for certain foreign entities.
• Alternative energy investments: The Company invested $32 million in alternative energy generation limited partnerships during the three months ended April 3, 2026 (vs. $30 million in the three months ended March 28, 2025); carrying values of these investments were $30 million as of April 3, 2026 and $32 million as of December 31, 2025, with no unfunded commitments remaining as of April 3, 2026 (vs. $32 million of unfunded commitments recorded in accounts payable and accrued expenses as of December 31, 2025).

Recurring fair value — total assets: Total assets measured at fair value on a recurring basis were $5,615 million as of April 3, 2026 (vs. $4,451 million as of December 31, 2025), comprising equity securities with readily determinable values of $2,881 million, debt securities of $2,630 million, and net derivative assets of $104 million after a $(506) million netting adjustment; the Company was obligated to return $60 million in cash collateral netted against its derivative position as of April 3, 2026 (vs. $48 million at December 31, 2025).

• Recurring fair value — total liabilities: Derivative liabilities on a net basis were $42 million as of April 3, 2026 (vs. $95 million as of December 31, 2025) after a $(999) million netting adjustment; the Company had the right to reclaim $551 million in cash collateral (vs. $597 million at December 31, 2025); derivative instruments were recorded as $12 million in assets held for sale, $92 million in other noncurrent assets, $2 million in liabilities held for sale, and $40 million in other noncurrent liabilities.
• Nonrecurring impairments: During the three months ended April 3, 2026, the Company recorded a $10 million impairment charge related to its bottling operations in Africa (held for sale, Level 3); during the three months ended March 28, 2025, a $25 million other-than-temporary impairment was recorded for a joint venture in Latin America (Level 3, due to restructuring and planned liquidation); both charges were recorded in other income (loss) — net.
• Long-term debt fair value: As of April 3, 2026, the carrying value and fair value of long-term debt (including current portion) were $43,558 million and $40,088 million, respectively, compared to $43,941 million carrying value and $39,385 million fair value as of December 31, 2025; fair value is estimated using Level 2 inputs based on quoted prices or, where unavailable, discounted cash flows.

• Segment structure: The company has 5 operating segments — EMEA, Latin America, North America, Asia Pacific, and Bottling Investments — plus a Corporate category; results are presented alongside intersegment eliminations to arrive at consolidated figures.
• CODM designation: Effective March 31, 2026, the Chief Executive Officer serves as the company's chief operating decision maker (CODM); total assets by segment are not disclosed because such information is not regularly provided to, or used by, the CODM.
• Intersegment eliminations: Intersegment revenues totaled $291 million in the three months ended April 3, 2026 and $276 million in the three months ended March 28, 2025, fully eliminated in consolidation; cost of goods sold eliminations were ($291) million and ($276) million, respectively.
• Below-the-line items: Interest income, interest expense, equity income (loss) — net, and other income (loss) — net are not allocated to segments; these reconcile segment operating income to consolidated income before income taxes.

• BodyArmor impairment: During the three months ended December 31, 2025, underperforming operating results and lower expectations of future performance vs. original forecasts triggered an updated impairment analysis of the BodyArmor trademark, resulting in an impairment charge of $960 million; the decrease in fair value was primarily driven by revised projections of future operating results, including a slowing of the projected long-term growth rate for the category, an intensifying competitive environment, and more focused innovation and international rollout plans.
• Remaining carrying value and current fair value: The remaining carrying value of the BodyArmor trademark is $2,440 million; as of April 3, 2026, the fair value of this trademark approximates its carrying value.
• Ongoing impairment risk: Management flagged that if near-term operating results do not achieve revised financial projections, or if macroeconomic conditions cause the discount rate to increase without an offsetting improvement in operating results, an additional impairment charge would likely be required; management will continue to monitor the fair value in future periods.
• Estimation complexity: Impairment tests rely on numerous interdependent assumptions — including sales volume, pricing, royalty rates, long-term growth rates, discount rates, foreign currency exchange rates, and tax rates — which are described as especially difficult to estimate given highly volatile global financial markets.

• Seasonality: Ready-to-drink beverage sales are somewhat seasonal, with the second and third calendar quarters typically accounting for the highest sales volumes, and may be affected by weather conditions.
• Global trade exposure: While operations are primarily local, the company remains subject to global trade dynamics that may impact certain components of its cost structure as well as the cost structures of its bottlers and customers, and may affect consumer sentiment across its markets.

• India refranchising: In May 2025, the Company refranchised its bottling operations in certain territories in India; the impact is included as a structural change in net operating revenues analysis on a consolidated basis and for the Bottling Investments and Asia Pacific operating segments for the three months ended April 3, 2026.
• Nigeria divestiture: In October 2025, the Company sold its finished product operations in Nigeria; the impact is included as a divestiture in net operating revenues analysis on a consolidated basis and for the EMEA operating segment for the three months ended April 3, 2026.
• Volume metric definitions: Unit case volume reflects demand at the consumer level across both consolidated and unconsolidated bottling partners; concentrate sales volume covers concentrates, syrups, source waters, and powders/minerals (expressed in unit case equivalents) sold to bottling partners or other customers, with revenue timing differing for consolidated versus unconsolidated partners.
• Structural change scope: Structural changes (acquisitions/divestitures of bottling operations) typically do not affect the Company's unit case volume on a consolidated basis or at the geographic operating segment level, but do impact the Bottling Investments segment, which only includes volume from consolidated bottling operations.

• Worldwide volume growth: Unit cases grew 3% and concentrate sales grew 8% for the three months ended April 3, 2026 versus the comparable prior-year period; concentrate sales are not based on average daily sales and benefited from the first quarter of 2026 having six additional days compared to the first quarter of 2025.
• Segment unit case / concentrate performance: North America led unit case growth at 4% (concentrate sales +11%), followed by Asia Pacific at 5% unit cases (+10% concentrate), EMEA at 2% (+5%), Latin America at 1% (+7%), and Bottling Investments at 1% on a reported basis (+5% concentrate); after considering structural changes, Bottling Investments unit case volume increased 4%.
• Measurement methodology: Unit case volume is based on average daily sales; concentrate sales volume is not, which, together with factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product introductions, and changes in product mix, explains why the two growth rates differ in any given period.

• EMEA: Unit case volume grew 2%, with 4% growth in both sparkling flavors and water, sports, coffee and tea, plus growth in energy drinks; partially offset by a 15% decline in juice, value-added dairy and plant-based beverages driven by the sale of finished product operations in Nigeria; Trademark Coca-Cola was even; by unit, Africa +3%, Eurasia and Middle East +2%, Europe +1%.
• Latin America: Unit case volume grew 1%, with 3% growth in water, sports, coffee and tea and 2% growth in sparkling flavors, plus growth in energy drinks; Trademark Coca-Cola and juice, value-added dairy and plant-based beverages were even; Brazil +2%, partially offset by Argentina -5% and Mexico -1%.
• North America: Unit case volume grew 4%, with 5% growth in both Trademark Coca-Cola and water, sports, coffee and tea, 2% growth in sparkling flavors, growth in energy drinks, and juice, value-added dairy and plant-based beverages even.
• Asia Pacific: Unit case volume grew 5%, with 8% growth in water, sports, coffee and tea, 5% growth in Trademark Coca-Cola, 4% growth in sparkling flavors, 2% growth in juice, value-added dairy and plant-based beverages, and growth in energy drinks; Greater China and Mongolia +8%, India and Southwest Asia +5%, Japan and South Korea +5%, ASEAN and South Pacific +3%; Bottling Investments +1%, driven by Africa growth partially offset by refranchising of certain India bottling territories.

• Concentrate vs. unit case volume: Worldwide concentrate sales volume increased 8% and unit case volume increased 3% for the three months ended April 3, 2026 compared to the three months ended March 28, 2025; concentrate sales volume is based on amounts sold in the period (affected by day count), while unit case volume is based on average daily sales (not affected by day count).
• Calendar effect: The first quarter of 2026 had six additional days compared to the first quarter of 2025, contributing to the divergence between the two growth rates on a consolidated basis and across individual operating segments; timing of concentrate shipments also affected segment-level differences.
• Full-year outlook: Management expects differences between concentrate sales volume and unit case volume growth rates to be minimal on a full year basis.

• Overall revenue: Net operating revenues grew 12% to $12,472 million in the three months ended April 3, 2026, from $11,129 million in the three months ended March 28, 2025, an increase of $1,343 million, driven by 8% volume, 2% price/mix, 3% favorable foreign currency, and a 1% headwind from acquisitions & divestitures.
• Price/mix by segment: The 2% consolidated price/mix benefit was driven by favorable pricing (including inflationary pricing) in EMEA, Latin America, and North America, partially offset by unfavorable mix in North America and Asia Pacific; Asia Pacific was additionally impacted by affordability initiatives, while Bottling Investments saw unfavorable mix partially offset by favorable pricing.
• Foreign currency: The 3% favorable FX impact reflects a weaker U.S. dollar versus the euro, Mexican peso, South African rand, and British pound (benefiting EMEA, Latin America, and Bottling Investments), partially offset by a stronger U.S. dollar versus the Argentine peso, Turkish lira, and Indian rupee (unfavorably impacting Latin America, EMEA, Asia Pacific, and Bottling Investments).
• Forward FX view: Based on current spot rates and hedging coverage in place, management expects foreign currency exchange rate fluctuations will have a favorable impact on full year 2026 net operating revenues.

• Gross profit margin: Rose to 63.0% for the three months ended April 3, 2026, from 62.6% for the three months ended March 28, 2025, driven by favorable pricing initiatives, foreign currency exchange rate fluctuations, and the impact of the sale of finished product operations in Nigeria, partially offset by higher commodity costs.

• SG&A growth: Selling, general and administrative expenses rose $238 million, or 7%, to $3,472 million for the three months ended April 3, 2026, from $3,234 million for the three months ended March 28, 2025, driven primarily by increased marketing spending, partially offset by lower annual incentive expense and the impact of the sale of finished product operations in Nigeria.
• Advertising expenses: Advertising expenses increased to $1,377 million for the three months ended April 3, 2026, from $1,089 million for the three months ended March 28, 2025.
• FX impact: Foreign currency exchange rate fluctuations increased selling, general and administrative expenses by 4% during the three months ended April 3, 2026.

• Current quarter charges: Other operating charges totaled $21 million for the three months ended April 3, 2026, comprising $10 million related to an indemnification agreement from refranchising of certain bottling operations, $4 million related to North America modernization initiatives, $4 million for amortization of noncompete agreements related to the BodyArmor acquisition, and $3 million related to tax litigation expense.
• Prior year quarter charges: Other operating charges totaled $73 million for the three months ended March 28, 2025, driven primarily by $47 million related to the remeasurement of the contingent consideration liability to fair value in conjunction with the fairlife acquisition in 2020 (bringing the total liability to $6,173 million, paid in March 2025), plus $11 million related to the Company's productivity and reinvestment program, $9 million related to a bottling refranchising indemnification agreement, $3 million for BodyArmor noncompete amortization, and $3 million for tax litigation expense.
• Segment concentration: Charges in both periods were concentrated in Corporate ($17 million in Q1 2026 vs. $73 million in Q1 2025); North America contributed $4 million in Q1 2026 and nothing in Q1 2025; all other segments recorded zero charges in both periods.

• Consolidated operating income: Operating income was $4,359 million for the three months ended April 3, 2026, up $700 million, or 19%, from $3,659 million for the three months ended March 28, 2025, driven by an 8% increase in concentrate sales volume, favorable price/mix, lower operating expenses, lower other operating charges, and a favorable foreign currency exchange rate impact of 4%, partially offset by increased marketing spending and higher commodity costs; consolidated operating margin expanded to 35.0% from 32.9%.
• Foreign currency impact: Fluctuations in foreign currency exchange rates, including hedging effects, favorably impacted consolidated operating income by 4% due to a weaker U.S. dollar versus the Mexican peso and euro (benefiting Latin America and EMEA), partially offset by a stronger U.S. dollar versus the Argentine peso and Turkish lira (unfavorable to Latin America and EMEA); management expects foreign currency exchange rate fluctuations will have a favorable impact on full year 2026 operating income based on current spot rates and hedging coverage in place.
• Segment highlights: EMEA operating income rose to $1,259 million from $1,065 million (margin 44.8% vs. 42.9%); Latin America rose to $1,038 million from $904 million (margin 61.9% vs. 61.2%); North America rose to $1,606 million from $1,341 million (margin 32.8% vs. 30.8%); Asia Pacific declined to $536 million from $624 million (margin 37.6% vs. 47.1%) driven by unfavorable price/mix, higher commodity costs, and increased marketing spending despite a 10% volume increase; Bottling Investments rose to $191 million from $119 million (margin 11.7% vs. 8.1%).
• Corporate operating loss: Corporate's operating loss narrowed to $271 million from $394 million, primarily due to lower annual incentive expense and lower other operating charges.

• Interest income: $222 million for the three months ended April 3, 2026, up $42 million, or 23%, from $180 million for the three months ended March 28, 2025, primarily driven by higher average investment balances.

Interest expense: $375 million for the three months ended April 3, 2026, down $12 million, or 3%, from $387 million for the three months ended March 28, 2025, primarily due to lower average short-term debt balances.

• Equity income: Equity income was $384 million for the three months ended April 3, 2026, up from $351 million for the three months ended March 28, 2025, an increase of $33 million, or 9%.
• Drivers of increase: The increase reflects more favorable operating results reported by certain equity method investees and a favorable foreign currency exchange rate impact.
• Offsets: Favorable impacts were partially offset by the sale of ownership interests in certain equity method investees in 2025 and a $25 million increase in net charges from the Company's proportionate share of significant operating and nonoperating items recorded by certain equity method investees.

• Current quarter result: Other income (loss) — net was income of $21 million for the three months ended April 3, 2026, compared to income of $254 million in the prior-year period, with the sharp year-over-year decline primarily reflecting the absence of a $331 million gain from the sale of a portion of the Company's ownership interest in CCEP that was recognized in the three months ended March 28, 2025.
• Current quarter components: The $21 million income figure included dividend income of $33 million, net foreign currency exchange gains of $30 million, a net loss of $19 million on 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, $13 million of costs related to the trade accounts receivable factoring program, and a $10 million impairment charge related to bottling operations in Africa held for sale.
• Prior-year quarter components: The $254 million income in the three months ended March 28, 2025 included the $331 million CCEP gain, dividend income of $55 million, a $25 million impairment charge on an equity method investee in Latin America, a net loss of $19 million on equity and debt securities, net foreign currency exchange losses of $16 million, $24 million of factoring costs, and $33 million of expense for non-service cost components of net periodic benefit cost (including $25 million for special termination benefits and an $11 million curtailment loss related to non-U.S. pension activity).

• Effective tax rate: Income taxes were $645 million (14.0% effective tax rate) for the three months ended April 3, 2026, down from $722 million (17.8% effective tax rate) for the three months ended March 28, 2025; both rates vary from the statutory 21.0% U.S. federal rate primarily due to significant operating and nonoperating items, earnings generated outside the United States, and earnings from equity method investments taxed at lower rates.
• Discrete items (Q1 2026): The Q1 2026 effective rate included $279 million of net tax benefits from discrete items, comprising $55 million of net interest income on the IRS Tax Litigation Deposit and a $194 million benefit primarily related to return to provision adjustments; the Q1 2025 rate included $143 million of net discrete tax benefits, including $53 million of IRS Tax Litigation Deposit interest income and an $85 million benefit related to a change in the indefinite reinvestment assertion for certain foreign entities.
• Full-year 2026 outlook: Based on current tax laws, including the impact of global minimum tax regulations enacted by several countries, the Company's effective tax rate for 2026 is expected to be approximately 19.9%, before any significant operating and nonoperating items and excluding the impact of the ongoing IRS litigation for tax years 2007 through 2009.
• Pillar Two / OECD developments: In January 2026, the OECD issued guidance introducing a side-by-side framework under Pillar Two largely exempting U.S.-headquartered companies from Pillar Two application, following a June 2025 G7 statement supporting such an approach; the Company states it will continue to monitor further revisions and guidance from the OECD and implementing countries.

• Liquidity position: Cash, cash equivalents, short-term investments and marketable securities totaled $13.8 billion as of April 3, 2026, supplemented by $6.6 billion in unused backup lines of credit for general corporate purposes expiring at various times through 2031, plus an active commercial paper program.
• Capital allocation priorities: 2026 capital expenditures are expected to be approximately $2.2 billion; the Company also expects to repurchase shares in 2026 to offset dilution from employee stock-based compensation, while continuing to grow its dividend and pursue consumer-centric acquisitions.
• Receivables factoring: The Company sold $3,271 million of trade accounts receivables under its factoring program during the three months ended April 3, 2026 (vs. $5,034 million in the three months ended March 28, 2025), at a factoring cost of $13 million (vs. $24 million in the prior-year period).
• IRS tax litigation: The Tax Court's decision resulted in a total liability of $6.0 billion for tax years 2007–2009, for which the Company paid a deposit on September 10, 2024; accrued interest receivable on that payment was $457 million as of April 3, 2026, and the Company recorded net interest income of $55 million for the three months ended April 3, 2026 related to the payment. The Company estimates potential aggregate remaining incremental tax and interest liability for tax years 2010–2025 could be approximately $14 billion as of December 31, 2025, with the three months ended April 3, 2026 adding approximately $450 million to that estimate; the Company appealed the Tax Court's decision to the U.S. Court of Appeals for the Eleventh Circuit on October 22, 2024, and believes it is more likely than not it will ultimately prevail.

• Operating cash swing: Net cash provided by operating activities was $2,021 million for the three months ended April 3, 2026, compared to net cash used of $5,202 million for the three months ended March 28, 2025, a year-over-year improvement of approximately $7,223 million.
• Drivers of improvement: The increase was primarily driven by strong cash operating results, a benefit of the trade accounts receivable factoring program in the current year, a favorable impact due to foreign currency exchange rate fluctuations, lower net interest payments, and lower annual incentive payments, partially offset by higher tax payments and unfavorable hedging activity.
• Prior-year fairlife payment: The 2025 period included $6,069 million of the $6,173 million final milestone payment for fairlife made during the three months ended March 28, 2025, which was a significant contributor to the prior-year cash outflow.

Investing cash flows: Net cash provided by investing activities was $1,746 million for the three months ended April 3, 2026, compared to net cash used in investing activities of $1,067 million for the three months ended March 28, 2025, representing a swing from outflow to inflow year over year.

• Current quarter investment activity: During the three months ended April 3, 2026, purchases of investments were $1,459 million and proceeds from disposals of investments were $3,503 million, resulting in a net cash inflow of $2,044 million.
• Prior-year comparable activity: During the three months ended March 28, 2025, purchases of investments were $2,507 million and proceeds from disposals of investments were $1,005 million, resulting in a net cash outflow of $1,502 million — a swing of approximately $3,546 million year over year.
• Composition of activity: This activity primarily represents purchases of, and proceeds from disposals of, investments in marketable securities and short-term investments made as part of the Company's overall cash management strategy, and also includes investments held by captive insurance companies.

• Total acquisition/investment spend: Acquisitions of businesses, equity method investments, and nonmarketable securities totaled $37 million in the three months ended April 3, 2026, versus $42 million in the three months ended March 28, 2025.
• Alternative energy partnerships: The dominant component of activity in both periods was investments in alternative energy limited partnerships, totaling $32 million in the three months ended April 3, 2026 and $30 million in the three months ended March 28, 2025.

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

Capital expenditures: Purchases of property, plant and equipment were $266 million for the three months ended April 3, 2026, compared to $309 million for the three months ended March 28, 2025.

Financing activities swing: Net cash used in financing activities was $3,868 million for the three months ended April 3, 2026, compared to net cash provided by financing activities of $3,432 million for the three months ended March 28, 2025 — a year-over-year swing from inflow to outflow.

• Q1 2026 debt payments: The Company made total debt payments of $1,262 million in the three months ended April 3, 2026, comprising $746 million of commercial paper and short-term debt with maturities of 90 days or less, $500 million of commercial paper and short-term debt with maturities greater than 90 days, and $16 million of long-term debt payments; no new debt issuances were disclosed for this period.
• Q1 2025 debt activity: In the three months ended March 28, 2025, the Company issued $5,436 million of debt (including $3,917 million net issuances of commercial paper/short-term debt ≤90 days, $1,033 million of commercial paper/short-term debt >90 days, and $486 million of long-term debt net of discounts and issuance costs) and made payments of $1,599 million (consisting of $1,047 million on commercial paper/short-term debt >90 days and $552 million on long-term debt).

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

• Q1 2026 repurchase activity: The Company repurchased 4.9 million shares at an average cost of $74.04 per share for a total cost of $361 million under the Board-authorized share repurchase plan; total cash outflow for treasury stock purchases (including shares surrendered for tax withholding/option exercise price) was $477 million, with a net cash outflow of $322 million after accounting for stock issuances.
• Q1 2025 repurchase activity: The Company repurchased 4.3 million shares at an average cost of $65.04 per share for a total cost of $279 million; total cash outflow for treasury stock purchases was $370 million, with a net cash outflow of $211 million after accounting for stock issuances.
• Year-over-year comparison: Repurchase volume rose from 4.3 million to 4.9 million shares, average cost per share increased from $65.04 to $74.04, and net cash outflow widened from $211 million to $322 million.

• Dividends paid: The Company paid dividends of $2,281 million in the three months ended April 3, 2026 versus $89 million in the three months ended March 28, 2025; the large differential reflects timing differences in quarterly reporting periods and dividend payment dates, with substantially all of the 2025 first quarterly dividend paid in the second quarter and all of the 2026 first quarterly dividend paid in the first quarter.
• Upcoming dividend: The Board of Directors approved a regular quarterly dividend of $0.53 per share at its April 2026 meeting, payable July 1, 2026 to shareowners of record as of the close of business on June 15, 2026.

• Cash outflow: Total cash outflow for other financing activities was $3 million for the three months ended April 3, 2026, compared to $105 million for the three months ended March 28, 2025.
• Prior-period driver: The three months ended March 28, 2025 outflow included $104 million of the $6,173 million final milestone payment for fairlife.

• FX impact on operating income: Taking into account hedging activities, foreign currency exchange rate fluctuations increased operating income by 4% for the three months ended April 3, 2026.
• Forward-looking FX outlook: Based on current spot rates and hedging coverage in place, management expects foreign currency exchange rate fluctuations will have a favorable impact on operating income and cash flows from operating activities through the end of the year.
• Hedging objective: Hedging activities are designed to mitigate, over time, a portion of the impact of exchange rate fluctuations on net income, with geographic diversity providing a natural offset as weakness in some currencies may be offset by strength in others over time.