← Back to COKE filing summaryThis is the extracted source text from the SEC filing. Formatting may differ from the original document.
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Second Quarter First Half
(in thousands, except per share data) 2026 2025 2026 2025
Net sales $ 2,052,420 $ 1,855,519 $ 3,899,088 $ 3,435,496
Cost of sales 1,274,007 1,113,023 2,393,595 2,065,896
Gross profit 778,413 742,496 1,505,493 1,369,600
Selling, delivery and administrative expenses 507,074 470,412 996,630 907,696
Income from operations 271,339 272,084 508,863 461,904
Interest expense, net 30,481 5,948 62,544 12,822
Mark-to-market on acquisition related contingent consideration 24,723 12,390 78,114 55,118
Other expense, net 1,015 754 1,866 1,499
Income before taxes 215,120 252,992 366,339 392,465
Income tax expense 56,299 65,605 95,962 101,467
Net income $ 158,821 $ 187,387 $ 270,377 $ 290,998
Basic net income per share:
Common Stock $ 2.39 $ 2.15 $ 4.06 $ 3.34
Weighted average number of Common Stock shares outstanding 56,517 76,969 56,517 77,048
Class B Common Stock $ 2.39 $ 2.15 $ 4.06 $ 3.34
Weighted average number of Class B Common Stock shares outstanding 10,047 10,047 10,047 10,047
Diluted net income per share:
Common Stock $ 2.38 $ 2.15 $ 4.06 $ 3.34
Weighted average number of Common Stock shares outstanding – assuming dilution 66,649 87,157 66,649 87,236
Class B Common Stock $ 2.38 $ 2.15 $ 4.05 $ 3.33
Weighted average number of Class B Common Stock shares outstanding – assuming dilution 10,132 10,188 10,132 10,188
Cash dividends per share:
Common Stock $ 0.25 $ 0.25 $ 0.50 $ 0.50
Class B Common Stock $ 0.25 $ 0.25 $ 0.50 $ 0.50
See accompanying notes to condensed consolidated financial statements.
1
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Net income $ 158,821 $ 187,387 $ 270,377 $ 290,998
Other comprehensive income (loss), net of tax:
Defined benefit plan reclassification including pension costs:
Actuarial loss — (6) — (12)
Prior service credits 6 3 12 6
Postretirement benefits reclassification including benefit costs:
Actuarial gain 184 — 368 —
Interest rate swap 970 — 2,118 —
Net change in unrealized gain/loss on short-term investments — (29) — (40)
Other comprehensive income (loss), net of tax 1,160 (32) 2,498 (46)
Comprehensive income $ 159,981 $ 187,355 $ 272,875 $ 290,952
See accompanying notes to condensed consolidated financial statements.
2
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share data) July 3, 2026 December 31, 2025
ASSETS
Current Assets:
Cash and cash equivalents $ 171,687 $ 281,918
Accounts receivable, trade 709,020 585,777
Allowance for doubtful accounts (13,341) (11,176)
Accounts receivable from The Coca‑Cola Company 126,346 70,197
Accounts receivable, other 55,577 54,889
Inventories 371,185 336,401
Prepaid expenses and other current assets 106,174 108,668
Total current assets 1,526,648 1,426,674
Property, plant and equipment, net 1,638,914 1,604,605
Right-of-use assets - operating leases 105,859 116,611
Leased property under financing leases, net 957 1,160
Other assets 235,828 216,428
Goodwill 165,903 165,903
Distribution agreements, net 754,915 767,360
Customer lists, net 3,451 4,257
Total assets $ 4,432,475 $ 4,302,998
LIABILITIES AND EQUITY (DEFICIT)
Current Liabilities:
Current portion of obligations under operating leases $ 23,637 $ 24,412
Current portion of obligations under financing leases 422 556
Accounts payable, trade 425,076 359,107
Accounts payable to The Coca‑Cola Company 299,256 182,446
Other accrued liabilities 298,033 307,237
Accrued compensation 113,817 154,899
Current portion of debt 100,000 100,000
Total current liabilities 1,260,241 1,128,657
Deferred income taxes 137,432 143,738
Pension and postretirement benefit obligations 69,984 69,298
Other liabilities 965,914 918,755
Noncurrent portion of obligations under operating leases 84,875 95,076
Noncurrent portion of obligations under financing leases 1,047 1,188
Long-term debt 2,413,112 2,686,009
Total liabilities 4,932,605 5,042,721
Commitments and Contingencies
(Deficit)/Equity:
Common Stock, $1.00 par value: 300,000,000 shares authorized; 56,517,334 shares issued 56,517 56,517
Class B Common Stock, $1.00 par value: 100,000,000 shares authorized; 10,046,960 shares issued 10,047 10,047
Additional paid-in capital 23,764 23,764
Retained deficit (586,951) (824,046)
Accumulated other comprehensive loss (3,507) (6,005)
Total (deficit)/equity (500,130) (739,723)
Total liabilities and (deficit)/equity $ 4,432,475 $ 4,302,998
See accompanying notes to condensed consolidated financial statements.
3
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
First Half
(in thousands) 2026 2025
Cash Flows from Operating Activities:
Net income $ 270,377 $ 290,998
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense from property, plant and equipment and financing leases 103,334 96,413
Amortization of intangible assets and deferred proceeds, net 11,719 11,725
Fair value adjustment of acquisition related contingent consideration 78,114 55,118
Deferred income taxes (7,119) (15,985)
Loss (gain) on sale of property, plant and equipment 3,702 (1,856)
Amortization of debt costs 2,443 1,663
Change in current assets less current liabilities (39,707) (17,821)
Change in other noncurrent assets 704 4,048
Change in other noncurrent liabilities (2,920) (18,082)
Total adjustments 150,270 115,223
Net cash provided by operating activities $ 420,647 $ 406,221
Cash Flows from Investing Activities:
Additions to property, plant and equipment $ (147,354) $ (157,383)
Investment in equity method investees (9,927) (10,594)
Proceeds from the sale of property, plant and equipment 334 6,277
Proceeds from the disposal of short-term investments — 224,485
Purchases of short-term investments — (270,144)
Net cash used in investing activities $ (156,947) $ (207,359)
Cash Flows from Financing Activities:
Payments on term loan facility $ (275,000) $ —
Payments of acquisition related contingent consideration (37,126) (35,209)
Cash dividends paid (33,282) (43,589)
Payments related to share repurchases (27,972) (34,410)
Debt issuance fees (276) (233)
Payments on financing lease obligations (275) (1,320)
Net cash used in financing activities $ (373,931) $ (114,761)
Net (decrease) increase in cash and cash equivalents during period $ (110,231) $ 84,101
Cash and cash equivalents at beginning of period 281,918 1,135,824
Cash and cash equivalents at end of period $ 171,687 $ 1,219,925
Significant non-cash investing and financing activities:
Additions to property, plant and equipment accrued and recorded in accounts payable, trade $ 27,359 $ 34,789
Right-of-use assets obtained in exchange for operating lease obligations 837 6,197
See accompanying notes to condensed consolidated financial statements.
4
COCA‑COLA CONSOLIDATED, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY
(Unaudited)
(in thousands, except per share data) Common Stock Class B Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Loss Treasury Stock - Common Stock Treasury Stock - Class B Common Stock Total Deficit
Balance on April 3, 2026 $ 56,517 $ 10,047 $ 23,764 $ (729,131) $ (4,667) $ — $ — $ (643,470)
Net income — — — 158,821 — — — 158,821
Other comprehensive income, net of tax — — — — 1,160 — — 1,160
Dividends declared:
Common Stock ($0.25 per share) — — — (14,129) — — — (14,129)
Class B Common Stock ($0.25 per share) — — — (2,512) — — — (2,512)
Balance on July 3, 2026 $ 56,517 $ 10,047 $ 23,764 $ (586,951) $ (3,507) $ — $ — $ (500,130)
Balance on December 31, 2025 $ 56,517 $ 10,047 $ 23,764 $ (824,046) $ (6,005) $ — $ — $ (739,723)
Net income — — — 270,377 — — — 270,377
Other comprehensive income, net of tax — — — — 2,498 — — 2,498
Dividends declared:
Common Stock ($0.50 per share) — — — (28,258) — — — (28,258)
Class B Common Stock ($0.50 per share) — — — (5,024) — — — (5,024)
Balance on July 3, 2026 $ 56,517 $ 10,047 $ 23,764 $ (586,951) $ (3,507) $ — $ — $ (500,130)
(in thousands, except per share data) Common Stock Class B Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income Treasury Stock - Common Stock Treasury Stock - Class B Common Stock Total Equity
Balance on March 28, 2025 $ 108,327 $ 16,328 $ 23,764 $ 1,477,000 $ 1,871 $ (127,467) $ (409) $ 1,499,414
Net income — — — 187,387 — — — 187,387
Other comprehensive loss, net of tax — — — — (32) — — (32)
Dividends declared:
Common Stock ($0.25 per share) — — — (19,283) — — — (19,283)
Class B Common Stock ($0.25 per share) — — — (2,512) — — — (2,512)
Share repurchases — — — — — (34,755) — (34,755)
Balance on June 27, 2025 $ 108,327 $ 16,328 $ 23,764 $ 1,642,592 $ 1,839 $ (162,222) $ (409) $ 1,630,219
Balance on December 31, 2024 $ 108,327 $ 16,328 $ 23,764 $ 1,395,183 $ 1,885 $ (127,467) $ (409) $ 1,417,611
Net income — — — 290,998 — — — 290,998
Other comprehensive income, net of tax — — — — (46) — — (46)
Dividends declared:
Common Stock ($0.50 per share) — — — (38,565) — — — (38,565)
Class B Common Stock ($0.50 per share) — — — (5,024) — — — (5,024)
Share repurchases — — — — — (34,755) — (34,755)
Balance on June 27, 2025 $ 108,327 $ 16,328 $ 23,764 $ 1,642,592 $ 1,839 $ (162,222) $ (409) $ 1,630,219
See accompanying notes to condensed consolidated financial statements.
5
COCA‑COLA CONSOLIDATED, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Critical Accounting Policies
The condensed consolidated financial statements include the accounts and the consolidated operations of Coca‑Cola Consolidated, Inc. and its majority-owned subsidiaries (collectively referred to herein as the “Company”). All significant intercompany accounts and transactions have been eliminated. The condensed consolidated financial statements reflect all adjustments, including normal, recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results for the periods presented.
Each of the Company’s quarters, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The Company’s fourth quarter and fiscal year end on December 31 regardless of the day of the week on which December 31 falls. The condensed consolidated financial statements presented are:
•The financial position as of July 3, 2026 and December 31, 2025.
•The results of operations, comprehensive income and changes in stockholders’ (deficit) equity for the three-month periods ended July 3, 2026 (the “second quarter” of fiscal 2026 (“2026”)) and June 27, 2025 (the “second quarter” of fiscal 2025 (“2025”)) and the six-month periods ended July 3, 2026 (the “first half” of 2026) and June 27, 2025 (the “first half” of 2025).
•The changes in cash flows for the first half of 2026 and the first half of 2025.
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and the instructions to Form 10-Q and Article 10 of Regulation S-X. The accounting policies followed in the presentation of interim financial results are consistent with those followed on an annual basis. These policies are presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2025 filed with the United States Securities and Exchange Commission.
The preparation of condensed consolidated financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Critical Accounting Estimates
In the ordinary course of business, the Company has made a number of estimates and assumptions relating to the reporting of its results of operations and financial position in the preparation of its condensed consolidated financial statements in conformity with GAAP. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company included in its Annual Report on Form 10-K for 2025 under the caption “Discussion of Critical Accounting Estimates” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” a discussion of the Company’s most critical accounting estimates, which are those the Company believes to be the most important to the portrayal of its financial condition and results of operations and that require management’s most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Any changes in critical accounting estimates are discussed with the Audit Committee of the Company’s Board of Directors during the quarter in which a change is contemplated and prior to making such change.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of specific categories in the rate reconciliation, including additional information for reconciling items that meet a quantitative threshold, and specific disaggregation of income taxes paid and tax expense. The amendment is effective for fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 in the fourth quarter of 2025, noting no material impact on its consolidated financial statements. See Note 16 for disclosure related to the Company’s income tax reporting.
6
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disclosure of disaggregated income expenses, including purchases of inventory, employee compensation, depreciation, and intangible asset amortization, among other things. The amendment also requires companies to provide a qualitative description of expense captions not separately disaggregated, as well as the total amount of selling expenses and, annually, the entity’s definition of selling expenses. The amendment is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is in the process of evaluating the impact ASU 2024-03 will have on its consolidated financial statements.
2. Related Party Transactions
J. Frank Harrison, III
As of July 3, 2026, J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 10,043,940 shares of Class B Common Stock, which represented approximately 78% of the total voting power of the outstanding Common Stock and Class B Common Stock on a consolidated basis.
The Coca‑Cola Company
The Company’s business consists primarily of the distribution, marketing and manufacture of nonalcoholic beverages of The Coca‑Cola Company, which is the sole owner of the formulas under which the primary components of the Company’s soft drink products, either concentrate or syrup, are manufactured.
On November 7, 2025, the Company entered into a purchase agreement (the “Repurchase Agreement”) with Carolina Coca-Cola Bottling Investments, Inc. (the “Seller”), an indirect wholly owned subsidiary of The Coca‑Cola Company, The Coca‑Cola Company and J. Frank Harrison, III, pursuant to which the Company agreed to purchase and the Seller agreed to sell all of the Seller’s shares of Common Stock for a cash payment in the aggregate amount of $2.40 billion (the “Repurchase”). The closing of the Repurchase also occurred on November 7, 2025. The Company funded the purchase price for the Repurchase with cash on hand and a term loan obtained under a certain bridge loan agreement (the “Bridge Facility”), as further discussed in Note 19.
As a result of the Repurchase, The Coca‑Cola Company does not own any shares of Common Stock or Class B Common Stock. The Coca‑Cola Company no longer has the right to have a designee proposed by the Company for nomination to the Company’s Board of Directors at each election of directors.
The following table summarizes the significant cash transactions between the Company and The Coca‑Cola Company:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Payments made by the Company to The Coca-Cola Company(1) $ 636,604 $ 604,600 $ 1,155,855 $ 1,047,856
Payments made by The Coca-Cola Company to the Company 89,497 88,999 143,204 169,044
(1)This excludes acquisition related sub-bottling payments made by the Company to CCR (as defined below), a wholly owned subsidiary of The Coca‑Cola Company.
More than 80% of the payments made by the Company to The Coca‑Cola Company were for concentrate, syrup, sweetener and other finished goods products, which were recorded in cost of sales in the condensed consolidated statements of operations and represent the primary components of the soft drink products the Company manufactures and distributes. Payments made by the Company to The Coca‑Cola Company also included payments for marketing programs associated with large, national customers managed by The Coca‑Cola Company on behalf of the Company, which were recorded as a reduction to net sales in the condensed consolidated statements of operations. Other payments made by the Company to The Coca‑Cola Company related to cold drink equipment parts, fees associated with the rights to distribute certain brands and other customary items.
Payments made by The Coca‑Cola Company to the Company included annual funding in connection with the Company’s agreement to support certain business initiatives developed by The Coca‑Cola Company and funding associated with the delivery of post-mix products to various customers, both of which were recorded as a reduction to cost of sales in the condensed
7
consolidated statements of operations. Post-mix products are dispensed through equipment that mixes fountain syrups with carbonated or still water, enabling fountain retailers to sell finished products to consumers in cups or glasses. Payments made by The Coca‑Cola Company to the Company also included fountain product delivery and equipment repair services performed by the Company on The Coca‑Cola Company’s equipment, all of which were recorded in net sales in the condensed consolidated statements of operations.
Coca‑Cola Refreshments USA, LLC (“CCR”)
The Company, The Coca‑Cola Company and CCR entered into comprehensive beverage agreements (as amended, collectively, the “CBA”), related to a multi-year series of transactions, which were completed in October 2017, through which the Company acquired and exchanged distribution territories and manufacturing plants (the “System Transformation”). The CBA requires the Company to make quarterly acquisition related sub-bottling payments to CCR on a continuing basis in exchange for the grant of exclusive rights to distribute, promote, market and sell the authorized brands of The Coca‑Cola Company and related products in certain distribution territories the Company acquired from CCR. These acquisition related sub-bottling payments are based on gross profit derived from the Company’s sales of certain beverages and beverage products that are sold under the same trademarks that identify a covered beverage, a beverage product or certain cross-licensed brands applicable to the System Transformation.
Acquisition related sub-bottling payments to CCR were $37.1 million in the first half of 2026 and $35.2 million in the first half of 2025. The following table summarizes the liability recorded by the Company to reflect the estimated fair value of contingent consideration related to future expected acquisition related sub-bottling payments to CCR:
(in thousands) July 3, 2026 December 31, 2025
Current portion of acquisition related contingent consideration $ 71,054 $ 74,938
Noncurrent portion of acquisition related contingent consideration 689,342 642,970
Total acquisition related contingent consideration $ 760,396 $ 717,908
Southeastern Container (“Southeastern”)
The Company is a shareholder of Southeastern, a plastic bottle manufacturing cooperative. The Company accounts for Southeastern as an equity method investment. The Company’s investment in Southeastern, which was classified as other assets in the condensed consolidated balance sheets, was $21.5 million as of July 3, 2026 and $21.3 million as of December 31, 2025.
South Atlantic Canners, Inc. (“SAC”)
The Company is a shareholder of SAC, a manufacturing cooperative located in Bishopville, South Carolina. All of SAC’s shareholders are Coca‑Cola bottlers and each has equal voting rights. The Company accounts for SAC as an equity method investment. The Company’s investment in SAC, which was classified as other assets in the condensed consolidated balance sheets, was $39.9 million as of July 3, 2026 and $35.0 million as of December 31, 2025. The Company also guarantees a portion of SAC’s debt. As of both July 3, 2026 and December 31, 2025, the Company was not required to guarantee any of SAC’s debt. See Note 20 for additional information.
The Company receives a fee for managing the day-to-day operations of SAC pursuant to a management agreement. Proceeds from management fees received from SAC, which were recorded as a reduction to cost of sales in the condensed consolidated statements of operations, were $5.0 million in the first half of 2026 and $4.8 million in the first half of 2025.
Coca‑Cola Bottlers’ Sales & Services Company LLC (“CCBSS”)
Along with all other Coca‑Cola bottlers in the United States and Canada, the Company is a member of CCBSS, a company formed to provide certain procurement and other services with the intention of enhancing the efficiency and competitiveness of the Coca‑Cola bottling system. The Company accounts for CCBSS as an equity method investment and its investment in CCBSS is not material.
CCBSS negotiates the procurement for the majority of the Company’s raw materials, excluding concentrate, and the Company receives a rebate from CCBSS for the purchase of these raw materials. The Company had rebates due from CCBSS of $21.3 million on July 3, 2026 and $17.3 million on December 31, 2025, which were classified as accounts receivable, other in the condensed consolidated balance sheets. Changes in rebates receivable relate to volatility in raw material prices and the timing of cash receipts of rebates.
8
CONA Services LLC (“CONA”)
Along with certain other Coca‑Cola bottlers, the Company is a member of CONA, an entity formed to provide business process and information technology services to its members. The Company accounts for CONA as an equity method investment. The Company’s investment in CONA, which was classified as other assets in the condensed consolidated balance sheets, was $30.1 million as of July 3, 2026 and $30.2 million as of December 31, 2025.
Pursuant to an amended and restated master services agreement with CONA, the Company is authorized to use the Coke One North America system (the “CONA System”), a uniform information technology system developed to promote operational efficiency and uniformity among North American Coca‑Cola bottlers. In exchange for the Company’s rights to use the CONA System and receive CONA-related services, it is charged service fees by CONA. The Company incurred service fees to CONA of $12.8 million in the first half of 2026 and $12.2 million in the first half of 2025.
Related Party Leases
The Company leases its headquarters office facility and an adjacent office facility in Charlotte, North Carolina from Beacon Investment Corporation, of which J. Frank Harrison, III is the majority stockholder and each of Morgan H. Everett, Vice Chair of the Company’s Board of Directors, and the spouse of Ellison C. Glenn, the Company’s Chief Sales and Service Officer, is a minority stockholder. The annual base rent the Company is obligated to pay under this lease is subject to an adjustment for an inflation factor and the lease expires on December 31, 2029. Rental payments for this lease were $1.0 million in both the second quarter of 2026 and the second quarter of 2025 and $2.1 million and $2.0 million in the first half of 2026 and the first half of 2025, respectively. The principal balance outstanding under this lease was $14.1 million on July 3, 2026 and $15.9 million on December 31, 2025.
Long-Term Performance Equity Plan
The Long-Term Performance Equity Plan compensates J. Frank Harrison, III based on the Company’s performance. Awards granted to Mr. Harrison under the Long-Term Performance Equity Plan are earned based on the Company’s attainment during a performance period of certain performance measures, each as specified by the Compensation Committee of the Company’s Board of Directors. These awards may be settled in cash and/or shares of Class B Common Stock, based on the average of the closing prices of shares of Common Stock during the last 20 trading days of the performance period. Compensation expense for the Long-Term Performance Equity Plan, which was included in selling, delivery and administrative (“SD&A”) expenses in the condensed consolidated statements of operations, was $4.0 million and $3.9 million in the second quarter of 2026 and the second quarter of 2025, respectively, and $6.2 million and $6.0 million in the first half of 2026 and the first half of 2025, respectively.
3. Revenue Recognition
The Company’s sales are divided into two main categories: (i) bottle/can sales and (ii) other sales. Bottle/can sales include products packaged primarily in plastic bottles and aluminum cans. Bottle/can net pricing is based on the invoice price charged to customers reduced by any promotional allowances. Bottle/can net pricing per unit is impacted by the price charged per package, the sales volume generated for each package and the channels in which those packages are sold. Other sales include sales to other Coca‑Cola bottlers, post-mix sales, transportation revenue and equipment maintenance revenue.
The Company’s contracts are derived from customer orders, including customer sales incentives, generated through an order processing and replenishment model. Generally, the Company’s service contracts and contracts related to the delivery of specifically identifiable products have a single performance obligation. Revenues do not include sales or other taxes collected from customers. The Company has defined its performance obligations for its contracts as either at a point in time or over time. Bottle/can sales, sales to other Coca‑Cola bottlers and post-mix sales are recognized when control transfers to a customer, which is generally upon delivery and is considered a single point in time (“point in time”). Point in time sales accounted for approximately 99% of the Company’s net sales in both the first half of 2026 and the first half of 2025.
Other sales, which include revenue for service fees related to the repair of cold drink equipment and delivery fees for freight hauling and brokerage services, are recognized over time (“over time”). Revenues related to cold drink equipment repair are recognized as the respective services are completed using a cost-to-cost input method. Repair services are generally completed in less than one day but can extend up to one month. Revenues related to freight hauling and brokerage services are recognized as the delivery occurs using a miles driven output method. Generally, delivery occurs and freight charges are recognized in the same day. Over time sales orders open at the end of a financial period are not material to the condensed consolidated financial statements.
9
The following table represents a disaggregation of revenue from contracts with customers:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Point in time net sales:
Nonalcoholic Beverages - point in time $ 2,022,887 $ 1,831,130 $ 3,842,563 $ 3,386,895
Total point in time net sales $ 2,022,887 $ 1,831,130 $ 3,842,563 $ 3,386,895
Over time net sales:
Nonalcoholic Beverages - over time(1) $ 16,058 $ 13,931 $ 30,201 $ 27,263
All Other - over time(1) 13,475 10,458 26,324 21,338
Total over time net sales $ 29,533 $ 24,389 $ 56,525 $ 48,601
Total net sales $ 2,052,420 $ 1,855,519 $ 3,899,088 $ 3,435,496
(1)Due to the dissolution of the Data Ventures, Inc. operating segment as of December 31, 2025 (as discussed in Note 4), these figures have been retroactively adjusted for all prior periods presented to reflect the dissolution of the Data Ventures, Inc. operating segment within the “All Other - over time” category and the merger of the Data Ventures, Inc. operating segment with the Nonalcoholic Beverages operating segment.
The Company’s allowance for doubtful accounts in the condensed consolidated balance sheets includes a reserve for customer returns and an allowance for credit losses. The Company experiences customer returns primarily as a result of damaged or out-of-date product. At any given time, the Company estimates less than 1% of bottle/can sales and post-mix sales could be at risk for return by customers. Returned product is recognized as a reduction to net sales. The Company’s reserve for customer returns was $6.3 million as of July 3, 2026 and $6.0 million as of December 31, 2025.
The Company estimates an allowance for credit losses, based on historic days’ sales outstanding trends, aged customer balances, previously written-off balances and expected recoveries up to balances previously written off, in order to present the net amount expected to be collected. Accounts receivable balances are written off when determined uncollectible and are recognized as a reduction to the allowance for credit losses. Following is a summary of activity for the allowance for credit losses during the first half of 2026 and the first half of 2025:
First Half
(in thousands) 2026 2025
Beginning balance - allowance for credit losses $ 5,226 $ 9,524
Additions charged to expenses and as a reduction to net sales 2,925 879
Deductions (1,135) (4,029)
Ending balance - allowance for credit losses $ 7,016 $ 6,374
4. Segments
The Company evaluates segment reporting in accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting, each reporting period, including evaluating the reporting package reviewed by the Chief Operating Decision Maker (the “CODM”). The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM. Segment asset information is not provided to the CODM.
The Company has two operating segments, each identified by its unique products and services. Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations. The accounting policies of the Nonalcoholic Beverages operating segment are the same as those described in the summary of significant accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for 2025. The additional operating segment, which includes the Red Classic subsidiaries, does not meet the quantitative threshold for separate reporting and, therefore, has been reported as “All Other.”
Previously, the Company had three operating segments, Nonalcoholic Beverages and two additional operating segments, which included Data Ventures, Inc. and the Red Classic subsidiaries. Since the two additional operating segments did not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, they were combined into “All Other.” As of
10
December 31, 2025, the Data Ventures, Inc. operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment. For reporting purposes, all prior periods presented have been retroactively adjusted to reflect the dissolution of the Data Ventures, Inc. operating segment within the All Other operating segment and the merger of the Data Ventures, Inc. operating segment with the Nonalcoholic Beverages operating segment.
The CODM uses net sales, gross profit and income from operations in the annual budgeting and forecasting process. Monthly, the CODM considers budget-to-actual variances and current year to prior year variances for these profit measures when making strategic business decisions and allocating resources to Company operations.
The Company’s segment results are as follows:
Second Quarter 2026
(in thousands) Nonalcoholic Beverages All Other Eliminations(1) Total
Net sales $ 2,038,945 $ 92,343 $ (78,868) $ 2,052,420
Cost of goods sold 1,277,498 57,939 (61,430) 1,274,007
Gross profit 761,447 34,404 (17,438) 778,413
Selling, delivery and administrative expenses:
Payroll costs(2) $ 320,542 $ 13,628 $ — $ 334,170
Fleet costs(3) 27,127 7,337 — 34,464
Depreciation and amortization expense(4) 31,153 585 — 31,738
All other segment items(5) 116,518 7,622 (17,438) 106,702
Total selling, delivery and administrative expenses 495,340 29,172 (17,438) 507,074
Income from operations $ 266,107 $ 5,232 $ — $ 271,339
Total depreciation and amortization expense(4) $ 52,634 $ 5,517 $ — $ 58,151
Second Quarter 2025
(in thousands) Nonalcoholic Beverages All Other Eliminations(1) Total
Net sales $ 1,845,061 $ 80,402 $ (69,944) $ 1,855,519
Cost of goods sold 1,121,401 44,880 (53,258) 1,113,023
Gross profit 723,660 35,522 (16,686) 742,496
Selling, delivery and administrative expenses:
Payroll costs(2) $ 295,639 $ 12,451 $ — $ 308,090
Fleet costs(3) 23,262 6,690 — 29,952
Depreciation and amortization expense(4) 29,128 545 — 29,673
All other segment items(5) 111,767 7,616 (16,686) 102,697
Total selling, delivery and administrative expenses 459,796 27,302 (16,686) 470,412
Income from operations $ 263,864 $ 8,220 $ — $ 272,084
Total depreciation and amortization expense(4) $ 49,387 $ 5,378 $ — $ 54,765
11
First Half 2026
(in thousands) Nonalcoholic Beverages All Other Eliminations(1) Total
Net sales $ 3,872,764 $ 181,823 $ (155,499) $ 3,899,088
Cost of goods sold 2,401,711 111,392 (119,508) 2,393,595
Gross profit 1,471,053 70,431 (35,991) 1,505,493
Selling, delivery and administrative expenses:
Payroll costs(2) $ 633,446 $ 27,458 $ — $ 660,904
Fleet costs(3) 41,760 16,089 — 57,849
Depreciation and amortization expense(4) 61,687 1,163 — 62,850
All other segment items(5) 236,675 14,343 (35,991) 215,027
Total selling, delivery and administrative expenses 973,568 59,053 (35,991) 996,630
Income from operations $ 497,485 $ 11,378 $ — $ 508,863
Total depreciation and amortization expense(4) $ 104,224 $ 10,829 $ — $ 115,053
First Half 2025
(in thousands) Nonalcoholic Beverages All Other Eliminations(1) Total
Net sales $ 3,414,158 $ 155,512 $ (134,174) $ 3,435,496
Cost of goods sold 2,076,336 90,173 (100,613) 2,065,896
Gross profit 1,337,822 65,339 (33,561) 1,369,600
Selling, delivery and administrative expenses:
Payroll costs(2) $ 562,318 $ 24,477 $ — $ 586,795
Fleet costs(3) 47,089 14,373 — 61,462
Depreciation and amortization expense(4) 57,384 1,081 — 58,465
All other segment items(5) 219,924 14,611 (33,561) 200,974
Total selling, delivery and administrative expenses 886,715 54,542 (33,561) 907,696
Income from operations $ 451,107 $ 10,797 $ — $ 461,904
Total depreciation and amortization expense(4) $ 97,437 $ 10,701 $ — $ 108,138
(1)The entire net sales elimination represents net sales from the All Other operating segment to the Nonalcoholic Beverages operating segment. The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other operating segment in the generation of net sales to the Nonalcoholic Beverages operating segment.
(2)Payroll costs includes compensation, incentive plans, defined contribution plans, healthcare benefits and tax-advantaged spending accounts.
(3)Fleet costs includes fleet repairs, maintenance and fuel and oil costs.
(4)Total depreciation and amortization expense is included within both cost of goods sold and SD&A expenses. For segment reporting, the difference between total depreciation and amortization expense and the portion within SD&A expenses is the amount within cost of goods sold.
(5)All other segment items includes information technology costs, stewardship, insurance and other costs incurred in the selling and delivery of the Company’s products.
12
5. Net Income Per Share
The following table sets forth the computation of basic net income per share and diluted net income per share under the two-class method:
Second Quarter First Half
(in thousands, except per share data) 2026 2025 2026 2025
Numerator for basic and diluted net income per Common Stock and Class B Common Stock share:
Net income $ 158,821 $ 187,387 $ 270,377 $ 290,998
Less dividends:
Common Stock 14,129 19,283 28,258 38,565
Class B Common Stock 2,512 2,512 5,024 5,024
Total undistributed earnings $ 142,180 $ 165,592 $ 237,095 $ 247,409
Common Stock undistributed earnings – basic $ 120,720 $ 146,472 $ 201,308 $ 218,869
Class B Common Stock undistributed earnings – basic 21,460 19,120 35,787 28,540
Total undistributed earnings – basic $ 142,180 $ 165,592 $ 237,095 $ 247,409
Common Stock undistributed earnings – diluted $ 120,566 $ 146,236 $ 201,052 $ 218,515
Class B Common Stock undistributed earnings – diluted 21,614 19,356 36,043 28,894
Total undistributed earnings – diluted $ 142,180 $ 165,592 $ 237,095 $ 247,409
Numerator for basic net income per Common Stock share:
Dividends on Common Stock $ 14,129 $ 19,283 $ 28,258 $ 38,565
Common Stock undistributed earnings – basic 120,720 146,472 201,308 218,869
Numerator for basic net income per Common Stock share $ 134,849 $ 165,755 $ 229,566 $ 257,434
Numerator for basic net income per Class B Common Stock share:
Dividends on Class B Common Stock $ 2,512 $ 2,512 $ 5,024 $ 5,024
Class B Common Stock undistributed earnings – basic 21,460 19,120 35,787 28,540
Numerator for basic net income per Class B Common Stock share $ 23,972 $ 21,632 $ 40,811 $ 33,564
Numerator for diluted net income per Common Stock share:
Dividends on Common Stock $ 14,129 $ 19,283 $ 28,258 $ 38,565
Dividends on Class B Common Stock assumed converted to Common Stock 2,512 2,512 5,024 5,024
Common Stock undistributed earnings – diluted 142,180 165,592 237,095 247,409
Numerator for diluted net income per Common Stock share $ 158,821 $ 187,387 $ 270,377 $ 290,998
Numerator for diluted net income per Class B Common Stock share:
Dividends on Class B Common Stock $ 2,512 $ 2,512 $ 5,024 $ 5,024
Class B Common Stock undistributed earnings – diluted 21,614 19,356 36,043 28,894
Numerator for diluted net income per Class B Common Stock share $ 24,126 $ 21,868 $ 41,067 $ 33,918
Denominator for basic net income per Common Stock and Class B Common Stock share:
Common Stock weighted average shares outstanding – basic 56,517 76,969 56,517 77,048
Class B Common Stock weighted average shares outstanding – basic 10,047 10,047 10,047 10,047
Denominator for diluted net income per Common Stock and Class B Common Stock share:
Common Stock weighted average shares outstanding – diluted (assumes conversion of Class B Common Stock to Common Stock) 66,649 87,157 66,649 87,236
Class B Common Stock weighted average shares outstanding – diluted 10,132 10,188 10,132 10,188
13
Second Quarter First Half
(in thousands, except per share data) 2026 2025 2026 2025
Basic net income per share:
Common Stock $ 2.39 $ 2.15 $ 4.06 $ 3.34
Class B Common Stock $ 2.39 $ 2.15 $ 4.06 $ 3.34
Diluted net income per share:
Common Stock $ 2.38 $ 2.15 $ 4.06 $ 3.34
Class B Common Stock $ 2.38 $ 2.15 $ 4.05 $ 3.33
NOTES TO TABLE
(1)For purposes of the diluted net income per share computation for Common Stock, all shares of Class B Common Stock are assumed to be converted; therefore, 100% of undistributed earnings is allocated to Common Stock.
(2)For purposes of the diluted net income per share computation for Class B Common Stock, weighted average shares of Class B Common Stock are assumed to be outstanding for the entire period and not converted.
(3)For periods presented during which the Company has net income, the denominator for diluted net income per share for Common Stock and Class B Common Stock includes the dilutive effect of unvested performance shares relative to the Long-Term Performance Equity Plan. For periods presented during which the Company has net loss, the unvested performance shares granted pursuant to the Long-Term Performance Equity Plan are excluded from the computation of diluted net loss per share, as the effect would have been anti-dilutive. See Note 2 for additional information on the Long-Term Performance Equity Plan.
(4)The Long-Term Performance Equity Plan awards may be settled in cash and/or shares of Class B Common Stock. Once an election has been made to settle an award in cash, the dilutive effect of unvested performance shares relative to such award is prospectively removed from the denominator in the computation of diluted net income per share.
(5)The Company did not have anti-dilutive unvested performance shares for any periods presented.
(6)On November 7, 2025, the Company entered into the Repurchase Agreement with the Seller, The Coca-Cola Company and J. Frank Harrison, III, pursuant to which the Company agreed to purchase and the Seller agreed to sell all 18,835,460 of the Seller’s shares of Common Stock.
(7)On March 4, 2025, the Company announced that its Board of Directors had approved the Stock Split of Common Stock and Class B Common Stock. The Stock Split was effected through the Amendment. The Amendment also effected a proportionate increase in the number of authorized shares of Common Stock and Class B Common Stock. The Amendment obtained stockholder approval at the Company’s 2025 Annual Meeting of Stockholders, which took place on May 13, 2025. Each stockholder of record as of the close of business on May 16, 2025 received nine additional shares for each share of Common Stock or Class B Common Stock held as of such date reflected in the stockholder’s account on May 23, 2025. Trading began on a split-adjusted basis on May 27, 2025.
(8)On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program (the “Share Repurchase Program”) under which the Company was initially authorized to repurchase up to $1.00 billion of Common Stock. On November 7, 2025, the Company’s Board of Directors reduced the total authorization under the Share Repurchase Program from $1.00 billion to $400.0 million. The share repurchase authorization is discretionary and has no expiration date. There were no shares of Common Stock repurchased under the Share Repurchase Program during the first half of 2026. As of July 3, 2026, the total remaining authorization under the Share Repurchase Program was $136.3 million.
6. Inventories
Inventories consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Finished products $ 240,716 $ 218,380
Manufacturing materials 86,969 73,825
Plastic shells, plastic pallets and other inventories 43,500 44,196
Total inventories $ 371,185 $ 336,401
14
7. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Repair parts $ 34,096 $ 35,109
Prepaid software 15,531 11,940
Commodity hedges at fair market value 6,525 4,242
Prepaid marketing 6,166 5,545
Prepaid taxes 2,675 19,952
Other prepaid expenses and other current assets 41,181 31,880
Total prepaid expenses and other current assets $ 106,174 $ 108,668
8. Property, Plant and Equipment, Net
The principal categories and estimated useful lives of property, plant and equipment, net were as follows:
(in thousands) July 3, 2026 December 31, 2025 Estimated Useful Lives
Land $ 142,567 $ 138,309
Buildings 547,041 534,167 8-50 years
Machinery and equipment 668,662 663,064 5-20 years
Transportation equipment 781,310 743,325 3-20 years
Furniture and fixtures 114,083 110,819 3-10 years
Cold drink dispensing equipment 469,403 466,537 3-17 years
Leasehold and land improvements 225,425 217,833 5-20 years
Software for internal use 27,994 23,567 3-10 years
Construction in progress 66,340 53,307
Total property, plant and equipment, at cost 3,042,825 2,950,928
Less: Accumulated depreciation and amortization 1,403,911 1,346,323
Total property, plant and equipment, net $ 1,638,914 $ 1,604,605
9. Leases
Following is a summary of the weighted average remaining lease term and the weighted average discount rate for the Company’s leases:
July 3, 2026 December 31, 2025
Weighted average remaining lease term:
Operating leases 6.2 years 6.4 years
Financing leases 3.9 years 4.1 years
Weighted average discount rate:
Operating leases 4.4 % 4.4 %
Financing leases 4.9 % 4.8 %
Following is a summary of the Company’s leases within the condensed consolidated statements of operations:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Operating lease costs $ 6,994 $ 6,639 $ 14,028 $ 13,233
Short-term and variable leases 1,765 1,830 4,033 3,917
Depreciation expense from financing leases 101 374 203 785
Interest expense on financing lease obligations 18 48 38 106
Total lease cost $ 8,878 $ 8,891 $ 18,302 $ 18,041
15
The future minimum lease payments related to the Company’s leases include renewal options the Company has determined to be reasonably certain and exclude payments to landlords for real estate taxes and common area maintenance. Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of July 3, 2026:
(in thousands) Operating Leases Financing Leases
Remainder of 2026 $ 15,056 $ 314
2027 24,989 338
2028 20,407 345
2029 19,095 352
2030 11,454 268
Thereafter 33,320 —
Total minimum lease payments including interest $ 124,321 $ 1,617
Less: Amounts representing interest 15,809 148
Present value of minimum lease principal payments 108,512 1,469
Less: Current portion of lease liabilities 23,637 422
Noncurrent portion of lease liabilities $ 84,875 $ 1,047
Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of December 31, 2025:
(in thousands) Operating Leases Financing Leases
2026 $ 28,530 $ 627
2027 24,969 338
2028 20,403 345
2029 19,095 352
2030 11,447 268
Thereafter 33,290 —
Total minimum lease payments including interest $ 137,734 $ 1,930
Less: Amounts representing interest 18,246 186
Present value of minimum lease principal payments 119,488 1,744
Less: Current portion of lease liabilities 24,412 556
Noncurrent portion of lease liabilities $ 95,076 $ 1,188
Following is a summary of the Company’s leases within the condensed consolidated statements of cash flows:
First Half
(in thousands) 2026 2025
Cash flows from operating activities impact:
Operating leases $ 14,251 $ 12,521
Interest payments on financing lease obligations 38 106
Total cash flows from operating activities impact $ 14,289 $ 12,627
Cash flows from financing activities impact:
Principal payments on financing lease obligations $ 275 $ 1,320
Total cash flows from financing activities impact $ 275 $ 1,320
10. Distribution Agreements, Net
Distribution agreements, net, which are amortized on a straight-line basis and have estimated useful lives of 20 to 40 years, consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Distribution agreements at cost $ 990,191 $ 990,191
Less: Accumulated amortization 235,276 222,831
Distribution agreements, net $ 754,915 $ 767,360
16
11. Customer Lists, Net
Customer lists, net, which are amortized on a straight-line basis and have estimated useful lives of five to 12 years, consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Customer lists at cost $ 25,288 $ 25,288
Less: Accumulated amortization 21,837 21,031
Customer lists, net $ 3,451 $ 4,257
12. Supply Chain Finance Program
The Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (the “SCF program”), which allows qualifying suppliers to sell their receivables from the Company to the financial institution. The participating suppliers negotiate their outstanding receivable arrangements and associated fees directly with the financial institution, and the Company is not party to those agreements. Once a qualifying supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices it sells to the financial institution. A supplier participating in the SCF program may sell its invoices to the financial institution for payment in full by the financial institution to the supplier by the original maturity date of the invoice, or discounted payment at an earlier date as agreed upon with the supplier. The Company’s current payment terms with most of its suppliers are 90 days. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by a supplier’s participation in the SCF program.
All outstanding amounts related to suppliers participating in the SCF program are recorded in accounts payable, trade in the condensed consolidated balance sheets, and associated payments are included in operating activities in the condensed consolidated statements of cash flows. The Company’s outstanding confirmed obligations included in accounts payable, trade in the condensed consolidated balance sheets were $88.5 million as of July 3, 2026 and $66.6 million as of December 31, 2025.
13. Other Accrued Liabilities
Other accrued liabilities consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Accrued insurance costs $ 84,595 $ 68,181
Current portion of acquisition related contingent consideration 71,054 74,938
Accrued marketing costs 62,361 62,467
Employee and retiree benefit plan accruals 35,852 35,308
Accrued interest payable 9,720 10,558
Accrued taxes (other than income taxes) 8,253 6,485
Accrued excise taxes related to share repurchases — 27,972
All other accrued expenses 26,198 21,328
Total other accrued liabilities $ 298,033 $ 307,237
14. Commodity Derivative Instruments
The Company is subject to the risk of increased costs arising from adverse changes in certain commodity prices. In the normal course of business, the Company manages this risk, where practicable, through a variety of strategies, including the use of commodity derivative instruments. The Company does not use commodity derivative instruments for trading or speculative purposes. These commodity derivative instruments are not designated as hedging instruments under GAAP and are used as “economic hedges” to manage certain commodity price risk. The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk. While the Company would be exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these counterparties.
Commodity derivative instruments held by the Company are marked to market on a quarterly basis and are recognized in earnings consistent with the expense classification of the underlying hedged item. The Company generally pays a fee for these commodity derivative instruments, which is amortized over the corresponding period of each commodity derivative instrument. Settlements
17
of commodity derivative instruments are included in cash flows from operating activities in the condensed consolidated statements of cash flows. The following table summarizes pre-tax changes in the fair values of the Company’s commodity derivative instruments and the classification of such changes in the condensed consolidated statements of operations:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Cost of sales $ (10,086) $ 1,320 $ (7,588) $ 521
Selling, delivery and administrative expenses (3,523) 689 6,854 854
Total (loss) gain $ (13,609) $ 2,009 $ (734) $ 1,375
All commodity derivative instruments are recorded at fair value as either assets or liabilities in the condensed consolidated balance sheets. The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net settlement of derivative transactions. Accordingly, the net amounts of derivative assets are recognized in either prepaid expenses and other current assets or other assets in the condensed consolidated balance sheets and the net amounts of derivative liabilities are recognized in either other accrued liabilities or other liabilities in the condensed consolidated balance sheets. The following table summarizes the fair values of the Company’s commodity derivative instruments and the classification of such instruments in the condensed consolidated balance sheets:
(in thousands) July 3, 2026 December 31, 2025
Assets:
Prepaid expenses and other current assets $ 6,525 $ 4,242
Other assets 288 —
Total assets $ 6,813 $ 4,242
Liabilities:
Other accrued liabilities $ 1,446 $ 42
Other liabilities 1,901 —
Total liabilities $ 3,347 $ 42
The following table summarizes the Company’s gross commodity derivative instrument assets and gross commodity derivative instrument liabilities in the condensed consolidated balance sheets:
(in thousands) July 3, 2026 December 31, 2025
Gross commodity derivative instrument assets $ 13,213 $ 4,994
Gross commodity derivative instrument liabilities 9,747 794
The following table summarizes the Company’s outstanding commodity derivative instruments:
(in thousands) July 3, 2026 December 31, 2025
Aluminum Fuel Aluminum Fuel
Net notional amount of outstanding commodity derivative instruments $ 2,838 $ 3,065 $ 15,129 $ 2,415
Hedged via call and swap instruments 67 t 11,430 gal 10 t 7,500 gal
Hedged via put instruments 74 t 14,310 gal 5 t 9,900 gal
Latest maturity date of outstanding commodity derivative instruments December 2028 December 2027 December 2026 December 2026
15. Fair Values of Financial Instruments
GAAP requires assets and liabilities carried at fair value to be classified and disclosed in one of the following categories:
•Level 1: Quoted market prices in active markets for identical assets or liabilities.
•Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
•Level 3: Unobservable inputs that are not corroborated by market data.
18
The below methods and assumptions were used by the Company in estimating the fair values of its financial instruments. There were no transfers of assets or liabilities between levels in any period presented.
Financial Instrument Fair Value Level Methods and Assumptions
Deferred compensation plan assets and liabilities Level 1 The fair value of the Company’s nonqualified deferred compensation plan for certain executives and other highly compensated employees is based on the fair values of associated assets and liabilities, which are held in mutual funds and are based on the quoted market prices of the securities held within the mutual funds.
Commodity derivative instruments Level 2 The fair values of the Company’s commodity derivative instruments are based on current settlement values at each balance sheet date, which represent the estimated amounts the Company would have received or paid upon termination of those instruments. The Company’s credit risk related to the commodity derivative instruments is managed by requiring high standards for its counterparties and periodic settlements. The Company considers nonperformance risk in determining the fair values of commodity derivative instruments.
Interest rate swaps Level 2 The fair values of the Company’s interest rate swaps are determined using standard calculations and valuation models. The significant inputs used in these standard calculations/valuation models are readily available in public markets or can be derived from observable market transactions and, therefore, have been classified as Level 2. Inputs used in these standard calculations/valuation models for derivative instruments include swap rates, interest rates and discount rates. The discount rates are based on the historical U.S. deposit rates, U.S. Treasury rates and/or U.S. swap rates. The Company’s credit risk related to the interest rate swaps is managed by requiring high standards for its counterparties and periodic settlements.
Debt Level 2 The carrying amounts of the Company’s variable rate debt approximate the fair values due to variable interest rates with short reset periods. The fair values of the Company’s fixed rate debt are based on estimated current market prices.
Acquisition related contingent consideration Level 3 The fair value of the Company’s acquisition related contingent consideration is based on internal forecasts and the weighted average cost of capital (“WACC”) derived from market data.
The following tables summarize the carrying amounts and the fair values by level of the Company’s deferred compensation plan assets and liabilities, commodity derivative instruments, interest rate swaps, debt and acquisition related contingent consideration:
July 3, 2026
(in thousands) Carrying Amount Total Fair Value Fair Value Level 1 Fair Value Level 2 Fair Value Level 3
Assets:
Deferred compensation plan assets $ 105,486 $ 105,486 $ 105,486 $ — $ —
Commodity derivative instruments 6,813 6,813 — 6,813 —
Interest rate swaps 2,807 2,807 — 2,807 —
Liabilities:
Deferred compensation plan liabilities 105,486 105,486 105,486 — —
Commodity derivative instruments 3,347 3,347 — 3,347 —
Debt 2,513,112 2,548,600 — 2,548,600 —
Acquisition related contingent consideration 760,396 760,396 — — 760,396
December 31, 2025
(in thousands) Carrying Amount Total Fair Value Fair Value Level 1 Fair Value Level 2 Fair Value Level 3
Assets:
Deferred compensation plan assets $ 95,195 $ 95,195 $ 95,195 $ — $ —
Commodity derivative instruments 4,242 4,242 — 4,242 —
Liabilities:
Deferred compensation plan liabilities 95,195 95,195 95,195 — —
Commodity derivative instruments 42 42 — 42 —
Debt 2,786,009 2,848,500 — 2,848,500 —
Acquisition related contingent consideration 717,908 717,908 — — 717,908
19
The acquisition related contingent consideration was valued using a probability weighted discounted cash flow model based on internal forecasts and the WACC derived from market data, which are considered Level 3 inputs. Each reporting period, the Company adjusts its acquisition related contingent consideration liability related to the distribution territories subject to acquisition related sub-bottling payments to fair value by discounting future expected acquisition related sub-bottling payments required under the CBA using the Company’s estimated WACC.
The future expected acquisition related sub-bottling payments extend through the life of the related distribution assets acquired in each distribution territory, which is generally 40 years. As a result, the fair value of the acquisition related contingent consideration liability is impacted by the Company’s WACC, management’s estimate of the acquisition related sub-bottling payments that will be made in the future under the CBA, and current acquisition related sub-bottling payments (all Level 3 inputs). Changes in any of these Level 3 inputs, particularly the underlying risk-free interest rate used to estimate the Company’s WACC, could result in material changes to the fair value of the acquisition related contingent consideration liability and could materially impact the amount of non-cash expense (or income) recorded each reporting period.
The acquisition related contingent consideration liability is the Company’s only Level 3 asset or liability. A summary of the Level 3 activity is as follows:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Beginning balance - Level 3 liability $ 753,029 $ 681,800 $ 717,908 $ 654,191
Payments of acquisition related contingent consideration (18,056) (15,390) (37,126) (35,209)
Reclassification to current payables 700 (3,500) 1,500 1,200
Increase in fair value 24,723 12,390 78,114 55,118
Ending balance - Level 3 liability $ 760,396 $ 675,300 $ 760,396 $ 675,300
As of July 3, 2026 and June 27, 2025, a WACC of 8.2% and 8.9%, respectively, was utilized in the valuation of the Company’s acquisition related contingent consideration liability. The increase in the fair value of the acquisition related contingent consideration liability during the first half of 2026 was driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments and a decrease in the WACC used to calculate the fair value of the liability from 8.5% as of December 31, 2025. This fair value adjustment was recorded in mark-to-market on acquisition related contingent consideration in the condensed consolidated statement of operations for the first half of 2026.
For 2026, the Company estimates the annual sub-bottling payments will be in the range of approximately $70 million to $80 million. For the next five future years (beginning with fiscal year 2027), the Company anticipates that the amount it could pay annually will be in the range of approximately $50 million to $70 million.
16. Income Taxes
The Company’s effective income tax rate was 26.2% for the first half of 2026 and 25.9% for the first half of 2025. The Company’s income tax expense was $96.0 million for the first half of 2026 and $101.5 million for the first half of 2025. The decrease in income tax expense was primarily attributable to lower income before taxes during the first half of 2026 compared to the first half of 2025.
The Company had uncertain tax positions, including accrued interest, of $0.6 million on July 3, 2026 and $0.5 million on December 31, 2025, all of which would affect the Company’s effective income tax rate if recognized.
Prior tax years beginning in year 2022 remain open to examination by the Internal Revenue Service, and various tax years beginning in year 2002 remain open to examination by certain state tax jurisdictions due to loss carryforwards.
17. Pension and Postretirement Benefit Obligations
Pension Plan
The Company sponsors a pension plan (the “Bargaining Plan”) for certain employees under collective bargaining agreements. Benefits under the Bargaining Plan are determined in accordance with negotiated formulas for the respective participants.
20
The components of net periodic pension cost were as follows:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Service cost $ 993 $ 973 $ 1,986 $ 1,946
Interest cost 760 653 1,520 1,306
Expected return on plan assets (963) (819) (1,927) (1,639)
Recognized net actuarial gain — (9) — (18)
Amortization of prior service costs 8 4 17 8
Net periodic pension cost $ 798 $ 802 $ 1,596 $ 1,603
Contributions to the Bargaining Plan are based on actuarially determined amounts and are limited to the amounts currently deductible for income tax purposes. The Company did not make any contributions to the Bargaining Plan during the first half of 2026. The Company expects to make cash contributions to the Bargaining Plan of up to $5.0 million during 2026.
Postretirement Benefits
The Company provides postretirement benefits for employees meeting specified qualifying criteria. The Company recognizes the cost of postretirement benefits, which consist principally of medical benefits, during employees’ periods of active service. The Company does not prefund these benefits and has the right to modify or terminate certain of these benefits in the future.
The components of net periodic postretirement benefit cost were as follows:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Service cost $ 309 $ 323 $ 619 $ 646
Interest cost 968 857 1,935 1,714
Recognized net actuarial loss 244 — 487 —
Net periodic postretirement benefit cost $ 1,521 $ 1,180 $ 3,041 $ 2,360
18. Other Liabilities
Other liabilities consisted of the following:
(in thousands) July 3, 2026 December 31, 2025
Noncurrent portion of acquisition related contingent consideration $ 689,342 $ 642,970
Accruals for executive benefit plans 177,694 176,506
Noncurrent deferred proceeds from related parties 92,516 94,048
Other 6,362 5,231
Total other liabilities $ 965,914 $ 918,755
21
19. Debt
Following is a summary of the Company’s debt:
(in thousands) Maturity Date Interest Rate Interest Paid Public/ Nonpublic July 3, 2026 December 31, 2025
Senior notes(1) 10/10/2026 3.930% Quarterly Nonpublic $ 100,000 $ 100,000
Term loan facility (the “Three-Year Term Loan Facility”)(2) 12/8/2028 Variable Monthly Nonpublic 900,000 900,000
Senior bonds (the “2029 Senior Bonds”)(3) 6/1/2029 5.250% Semi-annually Public 700,000 700,000
Revolving credit facility(4) 6/10/2029 Variable Varies Nonpublic — —
Senior notes 3/21/2030 3.960% Quarterly Nonpublic 150,000 150,000
Term loan facility (the “Five-Year Term Loan Facility”)(2) 12/6/2030 Variable Monthly Nonpublic 175,000 450,000
Senior bonds (the “2034 Senior Bonds”)(5) 6/1/2034 5.450% Semi-annually Public 500,000 500,000
Unamortized discount on senior bonds(3)(5) Various (1,065) (1,201)
Debt issuance costs (10,823) (12,790)
Total debt 2,513,112 2,786,009
Less: Current portion of debt(1) 100,000 100,000
Total long-term debt $ 2,413,112 $ 2,686,009
(1)As of July 3, 2026 and December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the condensed consolidated balance sheets.
(2)The Term Loan Facilities (as defined below) were issued in connection with the financing of the Repurchase, as further discussed in Note 2.
(3)The 2029 Senior Bonds were issued at 99.843% of par.
(4)The Company’s revolving credit facility has an aggregate maximum borrowing capacity of $500 million. The Company currently believes all banks participating in the revolving credit facility have the ability to and will meet any funding requests from the Company.
(5)The 2034 Senior Bonds were issued at 99.893% of par.
The Company mitigates its financing risk by using multiple financial institutions and only entering into credit arrangements with institutions with investment grade credit ratings. The Company monitors counterparty credit ratings on an ongoing basis.
The Company entered into the Bridge Facility, dated as of November 7, 2025, providing for a 364-day senior unsecured bridge term loan facility in the aggregate principal amount of $1.20 billion to fund the Repurchase. Also on November 7, 2025, the Company borrowed $1.20 billion under the Bridge Facility, the full amount available under the Bridge Facility.
On December 8, 2025, the Company entered into a term loan agreement, providing for (i) the Three-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $900 million, maturing on December 8, 2028 and (ii) the Five-Year Term Loan Facility, a senior unsecured term loan facility in the aggregate principal amount of up to $450 million, maturing on December 6, 2030 (collectively, the “Term Loan Facilities”). Also on December 8, 2025, the Company borrowed $1.35 billion under the Term Loan Facilities, the full amount available under the Term Loan Facilities. In conjunction with the borrowings under the Term Loan Facilities, the Company modified and extinguished the Bridge Facility discussed above, fully repaying the $1.20 billion outstanding under the Bridge Facility through a net cash settlement with the lender. As of July 3, 2026, the Company has repaid $275 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand, bringing the aggregate principal balance outstanding to $175 million.
The indenture under which the 2029 Senior Bonds and the 2034 Senior Bonds were issued does not include financial covenants, but does limit the incurrence of certain liens and encumbrances as well as indebtedness by the Company’s subsidiaries in excess of certain amounts. The agreements under which the Company’s nonpublic debt, including its revolving credit facility and the Term Loan Facilities, was issued include two financial covenants: a consolidated cash flow/fixed charges ratio and a consolidated funded indebtedness/cash flow ratio (each as defined in the respective agreement). The Company was in compliance with these covenants as of July 3, 2026. These covenants have not restricted the Company’s liquidity or capital resources.
22
On February 12, 2026, the Company entered into three $150 million fixed rate swap agreements, maturing on February 8, 2027, August 8, 2027 and February 8, 2028 to hedge a portion of the interest rate risk on the Three-Year Term Loan Facility and the Five-Year Term Loan Facility. Over the next 12 months, the Company expects approximately $2 million related to these interest rate swaps to be released from accumulated other comprehensive loss. These interest rate swaps are designated as cash flow hedging instruments and changes in their fair values are not expected to be material to the condensed consolidated balance sheets. Changes in the fair values of these interest rate swaps were classified as accumulated other comprehensive loss on the condensed consolidated balance sheets and included in the condensed consolidated statements of comprehensive income. Settlements of interest rate swaps are included in cash flows from operating activities in the condensed consolidated statements of cash flows.
All outstanding debt has been issued by the Company and none has been issued by any of its subsidiaries. There are no guarantees of the Company’s debt.
20. Commitments and Contingencies
Manufacturing Cooperatives
The Company is obligated to purchase at least 80% of its requirements of plastic bottles for certain designated territories from Southeastern. The Company is also obligated to purchase 16.0 million cases of finished product from SAC on an annual basis through June 2034. The Company purchased 13.9 million cases and 13.3 million cases of finished product from SAC in the first half of 2026 and the first half of 2025, respectively.
The following table summarizes the Company’s purchases from these manufacturing cooperatives:
Second Quarter First Half
(in thousands) 2026 2025 2026 2025
Purchases from Southeastern $ 22,512 $ 29,266 $ 56,280 $ 56,540
Purchases from SAC 60,790 57,126 123,207 110,144
Total purchases from manufacturing cooperatives $ 83,302 $ 86,392 $ 179,487 $ 166,684
The Company guarantees a portion of SAC’s debt, which matures in 2028, based on the ratio of SAC’s total liabilities to SAC’s shareholders’ equity as of December 31 of each year. As of July 3, 2026 and December 31, 2025, the ratio of SAC’s total liabilities to SAC’s shareholders’ equity was such that the Company was not required to guarantee any of SAC’s debt. In the event SAC fails to fulfill its commitments under the related debt, the Company would be responsible for payment to the lenders up to the level of the guarantee. The Company does not anticipate SAC will fail to fulfill its commitments related to the debt. The Company further believes SAC has sufficient assets, including production equipment, facilities and working capital, and the ability to adjust the selling prices of its products to adequately mitigate the risk of material loss relating to the Company’s guarantee.
The Company holds no assets as collateral against the SAC guarantee, the fair value of which is immaterial to the condensed consolidated financial statements. The Company monitors its investment in SAC and would be required to write down its investment if an impairment, other than a temporary impairment, was identified. No impairment of the Company’s investment in SAC was identified as of July 3, 2026, and there was no impairment identified in 2025.
Other Commitments and Contingencies
The Company has standby letters of credit and other collateral, primarily related to its property and casualty insurance programs. These letters of credit and other collateral totaled $52.7 million on July 3, 2026 and $47.5 million on December 31, 2025.
The Company participates in long-term marketing contractual arrangements with certain prestige properties, athletic venues and other locations. As of July 3, 2026 and December 31, 2025, the future payments related to these contractual arrangements, which expire at various dates through 2035, amounted to $146.1 million and $151.1 million, respectively.
The Company is involved in various claims and legal proceedings which have arisen in the ordinary course of its business. Although it is difficult to predict the ultimate outcome of these claims and legal proceedings, management believes the ultimate disposition of these matters will not have a material adverse effect on the financial condition, results of operations or cash flows of the Company. No material amount of loss in excess of recorded amounts is believed to be reasonably possible as a result of these claims and legal proceedings.
23
The Company is subject to audits by tax authorities in jurisdictions where it conducts business. These audits may result in assessments that are subsequently resolved with the authorities or potentially through the courts. Management believes the Company has adequately provided for any assessments likely to result from these audits; however, final assessments, if any, could be different than the amounts recorded in the condensed consolidated financial statements.
21. Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) (“AOCI(L)”) is composed of adjustments to the Company’s pension and postretirement medical benefit plans, unrealized gains/losses on the Company’s interest rate swap agreements and unrealized gains/losses on the Company’s available-for-sale short-term investments.
Following is a summary of AOCI(L) for the second quarter of 2026 and the second quarter of 2025:
Gains (Losses) During the Period Reclassification to Income
(in thousands) April 3, 2026 Pre-tax Activity Tax Effect Pre-tax Activity Tax Effect July 3, 2026
Net pension activity:
Actuarial gain $ 4,439 $ — $ — $ — $ — $ 4,439
Prior service costs (161) — — 8 (2) (155)
Net postretirement benefits activity:
Actuarial loss (4,660) — — 244 (60) (4,476)
Prior service costs (624) — — — — (624)
Interest rate swaps 1,148 1,286 (316) — — 2,118
Reclassification of stranded tax effects (4,809) — — — — (4,809)
Total AOCI(L) $ (4,667) $ 1,286 $ (316) $ 252 $ (62) $ (3,507)
Gains (Losses) During the Period Reclassification to Income
(in thousands) March 28, 2025 Pre-tax Activity Tax Effect Pre-tax Activity Tax Effect June 27, 2025
Net pension activity:
Actuarial gain $ 4,412 $ — $ — $ (9) $ 3 $ 4,406
Prior service costs (82) — — 4 (1) (79)
Net postretirement benefits activity:
Actuarial gain 2,960 — — — — 2,960
Prior service costs (624) — — — — (624)
Unrealized gain (loss) on short-term investments 14 (37) 8 — — (15)
Reclassification of stranded tax effects (4,809) — — — — (4,809)
Total AOCI(L) $ 1,871 $ (37) $ 8 $ (5) $ 2 $ 1,839
24
Following is a summary of AOCI(L) for the first half of 2026 and the first half of 2025:
Gains (Losses) During the Period Reclassification to Income
(in thousands) December 31, 2025 Pre-tax Activity Tax Effect Pre-tax Activity Tax Effect July 3, 2026
Net pension activity:
Actuarial gain $ 4,439 $ — $ — $ — $ — $ 4,439
Prior service costs (167) — — 17 (5) (155)
Net postretirement benefits activity: —
Actuarial loss (4,844) — — 487 (119) (4,476)
Prior service costs (624) — — — — (624)
Interest rate swaps — 2,807 (689) — — 2,118
Reclassification of stranded tax effects (4,809) — — — — (4,809)
Total AOCI(L) $ (6,005) $ 2,807 $ (689) $ 504 $ (124) $ (3,507)
Gains (Losses) During the Period Reclassification to Income
(in thousands) December 31, 2024 Pre-tax Activity Tax Effect Pre-tax Activity Tax Effect June 27, 2025
Net pension activity:
Actuarial gain $ 4,418 $ — $ — $ (18) $ 6 $ 4,406
Prior service costs (85) — — 8 (2) (79)
Net postretirement benefits activity:
Actuarial gain 2,960 — — — — 2,960
Prior service costs (624) — — — — (624)
Unrealized gain (loss) on short-term investments 25 (51) 11 — — (15)
Reclassification of stranded tax effects (4,809) — — — — (4,809)
Total AOCI(L) $ 1,885 $ (51) $ 11 $ (10) $ 4 $ 1,839
22. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash were as follows:
First Half
(in thousands) 2026 2025
Accounts receivable, trade $ (123,243) $ (36,594)
Allowance for doubtful accounts 2,165 (2,950)
Accounts receivable from The Coca‑Cola Company (56,149) 2,650
Accounts receivable, other (688) 1,323
Inventories (34,784) (18,773)
Prepaid expenses and other current assets 5,301 3,484
Short-term investments — (3,368)
Accounts payable, trade 73,195 41,779
Accounts payable to The Coca‑Cola Company 116,810 65,390
Other accrued liabilities 18,768 14,948
Accrued compensation (41,082) (85,710)
Change in current assets less current liabilities $ (39,707) $ (17,821)
25