10-K – 2026-02-18 – coke-20251231.htm

SD&A expenses include the following: sales management labor costs, distribution costs resulting from transporting finished products from distribution centers to customer locations, distribution center overhead including depreciation expense, distribution center warehousing costs, delivery vehicles and cold drink equipment, point-of-sale expenses, advertising expenses, cold drink equipment repair costs, amortization of intangible assets and administrative support labor and operating costs. Labor costs represent approximately two-thirds of total SD&A expenses on an annual basis.
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SD&A expenses increased $88.9 million, or 4.8%, to $1.92 billion in 2025, as compared to $1.83 billion in 2024. The increase in SD&A expenses was primarily driven by an increase in labor and benefits costs related to annual wage adjustments, medical benefit trends and an additional investment in the base wages of our front-line teammates, which became effective beginning in the third quarter of 2025. SD&A expenses as a percentage of net sales was 26.6% in both 2025 and 2024.

Shipping and handling costs included in SD&A expenses were approximately $842 million in 2025 and approximately $806 million in 2024.

Interest Expense, Net

Interest expense, net increased $40.8 million to $42.7 million in 2025, as compared to $1.8 million in 2024. The increase in interest expense, net was primarily driven by higher average debt balances during 2025 as compared to 2024. In 2025, the Company had $102.9 million of interest expense and $60.2 million of interest income. In 2024, the Company had $62.0 million of interest expense and $60.2 million of interest income.

Mark-to-Market on Acquisition Related Contingent Consideration

Each reporting period, the Company adjusts its acquisition related contingent consideration liability to fair value, which is determined by discounting future expected acquisition related sub-bottling payments using the Company’s estimated WACC and future cash flow projections, and records the fair value adjustment as mark-to-market on acquisition related contingent consideration in the consolidated statement of operations.

Mark-to-market on acquisition related contingent consideration was an increase of $131.9 million in 2025 and an increase of $59.2 million in 2024. During 2025, the $131.9 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by decreases in the WACC used to calculate the fair value of the liability and higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments. During 2024, the $59.2 million increase in the fair value of the acquisition related contingent consideration liability was primarily driven by higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments, partially offset by increases in the WACC used to calculate the fair value of the liability.

Other Expense, Net

Other expense, net was $3.2 million in 2025 and $2.7 million in 2024.

Income Tax Expense

The Company’s effective income tax rate was 26.2% for 2025 and 26.1% for 2024. The Company’s income tax expense decreased $21.2 million, or 9.5%, to $202.3 million in 2025, as compared to $223.5 million in 2024. The increase in the effective income tax rate was primarily attributable to lower income before taxes.

Other Comprehensive (Loss) Income, Net of Tax

Other comprehensive (loss) income, net of tax was a loss of $7.9 million in 2025 and income of $6.2 million in 2024. The change was primarily related to changes in the actuarial assumptions related to the Company’s pension and postretirement plan liabilities.

Segment Operating Results

The Company evaluates segment reporting in accordance with Financial Accounting Standards Board 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.

As of December 31, 2025, the Company has two operating segments, each identified by its 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. 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.”

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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 December 31, 2025, the Data Ventures, Inc. operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment. For reporting purposes, all periods presented have been retroactively adjusted to reflect the liquidation and dissolution of the Data Ventures, Inc. operating segment within the “All Other” bucket 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:

Fiscal Year 2025
(in thousands) Nonalcoholic Beverages All Other Eliminations (1)
Total
Net sales $ 7,183,782  $ 325,969  $ (281,696) $ 7,228,055 
Cost of goods sold 4,380,271  186,810  (211,388) 4,355,693 
Gross profit 2,803,511  139,159  (70,308) 2,872,362 
Selling, delivery and administrative expenses:
Payroll costs (2)
$ 1,203,097  $ 50,542  $ —  $ 1,253,639 
Fleet costs (3)
99,135  31,216  —  130,351 
Depreciation and amortization expense (4)
115,744  2,204  —  117,948 
All other segment items (5)
460,370  29,706  (70,308) 419,768 
Total selling, delivery and administrative expenses 1,878,346  113,668  (70,308) 1,921,706 
Income from operations $ 925,165   $ 25,491   $ —   $ 950,656  

Total depreciation and amortization expense (4)
$ 197,602  $ 20,928  $ —  $ 218,530 

Fiscal Year 2024
(in thousands) Nonalcoholic Beverages All Other Eliminations (1)
Total
Net sales $ 6,839,368  $ 342,892  $ (282,544) $ 6,899,716 
Cost of goods sold 4,138,869  219,204  (211,536) 4,146,537 
Gross profit 2,700,499  123,688  (71,008) 2,753,179 
Selling, delivery and administrative expenses:
Payroll costs (2)
$ 1,149,363  $ 50,668  $ —  $ 1,200,031 
Fleet costs (3)
103,444  31,475  —  134,919 
Depreciation and amortization expense (4)
103,451  1,993  —  105,444 
All other segment items (5)
437,014  26,429  (71,008) 392,435 
Total selling, delivery and administrative expenses 1,793,272  110,565  (71,008) 1,832,829 
Income from operations $ 907,227   $ 13,123   $ —   $ 920,350  

Total depreciation and amortization expense (4)
$ 177,527  $ 16,264  $ —  $ 193,791 

(1) The entire net sales elimination represents net sales from the All Other segment to the Nonalcoholic Beverages segment. The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other segment in the generation of net sales to the Nonalcoholic Beverages 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.

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Comparable and Adjusted Results (Non-GAAP)

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). However, management believes that certain non-GAAP financial measures provide users of the financial statements with additional, meaningful financial information that should be considered, in addition to the measures reported in accordance with GAAP, when assessing the Company’s ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company’s performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP. The Company’s non-GAAP financial information does not represent a comprehensive basis of accounting.

The tables below reconcile reported results (GAAP) to comparable and adjusted results (non-GAAP). Results for 2025 include one fewer selling day compared to 2024. For comparison purposes, the estimated impact of the additional selling day in 2024 has been excluded from our comparable volume results. All share or per share amounts impacting the basic net income per share amounts have been retroactively adjusted to reflect the effects of the Stock Split (as defined below) executed by the Company during 2025. Refer to the discussion in “Liquidity and Capital Resources” below for further details related to the Stock Split.

Fiscal Year
(in thousands) 2025 2024 Change
Standard physical case volume 354,048   353,103   0.3   %
Volume related to extra day in fiscal period —  (965)
Comparable standard physical case volume 354,048   352,138   0.5   %

Fiscal Year 2025
(in thousands, except per share data) Gross
profit SD&A
expenses Income from
operations Income before
taxes Net
income Basic net income
per share
Reported results (GAAP) $ 2,872,362   $ 1,921,706   $ 950,656   $ 772,918   $ 570,582   $ 6.82  
Fair value adjustment of acquisition related contingent consideration (1)
—  —  —  131,901  99,190  1.18 
Fair value adjustments for commodity derivative instruments (2)
(2,183) (455) (1,728) (1,728) (1,299) (0.02)
Total reconciling items (2,183) (455) (1,728) 130,173   97,891   1.16  
Adjusted results (non-GAAP) $ 2,870,179   $ 1,921,251   $ 948,928   $ 903,091   $ 668,473   $ 7.98  

 

Adjusted percentage change versus 2024 4.2  % 4.9  % 3.0  %

Fiscal Year 2024
(in thousands, except per share data) Gross
profit SD&A
expenses Income from
operations Income before
taxes Net
income Basic net income
per share
Reported results (GAAP) $ 2,753,179   $ 1,832,829   $ 920,350   $ 856,654   $ 633,125   $ 7.01  
Fair value adjustment of acquisition related contingent consideration (1)
—  —  —  59,166  44,493  0.49 
Fair value adjustments for commodity derivative instruments (2)
728  (547) 1,275  1,275  959  0.01 
Total reconciling items 728   (547) 1,275   60,441   45,452   0.50  
Adjusted results (non-GAAP) $ 2,753,907   $ 1,832,282   $ 921,625   $ 917,095   $ 678,577   $ 7.51  

Following is an explanation of non-GAAP adjustments:

(1) This non-cash, fair value adjustment of acquisition related contingent consideration fluctuates based on factors such as long-term interest rates and future cash flow projections of the distribution territories subject to acquisition related sub-bottling payments.
(2) The Company enters into commodity derivative instruments from time to time to hedge some or all of its projected purchases of aluminum, PET resin, diesel fuel and unleaded gasoline in order to mitigate commodity price risk. The Company accounts for its commodity derivative instruments on a mark-to-market basis.

Financial Condition

Total assets decreased $1.01 billion to $4.30 billion on December 31, 2025, as compared to $5.31 billion on December 31, 2024. Net working capital, defined as current assets less current liabilities, was $298.0 million on December 31, 2025, which was a decrease of $936.1 million from December 31, 2024.

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Significant changes in net working capital as of December 31, 2025 as compared to December 31, 2024 were as follows:

• A decrease in cash and cash equivalents of $853.9 million and a decrease in short-term investments of $301.2 million, primarily as a result of share repurchases and related fee payments totaling $2.61 billion, which were funded through cash on hand, liquidation of short-term investments and additional borrowings, as further discussed below. The Company also used cash to repay $350 million of senior bonds and to invest in capital expenditures totaling approximately $312 million. These decreases to cash were partially offset by the Company’s strong operating performance during 2025.
• A decrease in current portion of debt of $249.7 million due to the repayment of $350 million of senior bonds, net of issuance costs, which matured on November 25, 2025, offset by the reclassification to current portion of debt of $100 million of senior notes maturing on October 10, 2026.
• An increase in other accrued liabilities of $60.6 million, primarily as a result of accrued excise taxes on share repurchases of $28.0 million, an increase in the current portion of the liability related to the acquisition related contingent consideration and an increase in accrued insurance costs.

Liquidity and Capital Resources

The Company’s sources of capital include cash flows from operations, available credit facilities and the issuance of debt and equity securities. As of December 31, 2025, the Company had $281.9 million in cash and cash equivalents. The Company’s cash equivalent balance at December 31, 2025 consisted predominantly of investments in money market funds. As of December 31, 2025, the Company did not have any short-term investments. Historically, short-term investments have consisted primarily of U.S. Treasury securities and investment-grade corporate bonds with maturities of one year or less. The Company has obtained its debt from public markets, private placements and bank facilities. Management believes the Company has sufficient sources of capital available to finance its business plan, to meet its working capital requirements and to maintain an appropriate level of capital spending for at least the next 12 months from the issuance of the consolidated financial statements.

On November 7, 2025, the Company entered into the Repurchase Agreement with the Seller, an indirect wholly owned subsidiary of The Coca-Cola Company, The Coca‑Cola Company and J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, 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 approximately $2.4 billion. 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 below.

Upon completion of the Repurchase, the 18,835,460 shares of Common Stock repurchased from the Seller were retired and recorded as a reduction to Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings. As a result, the Company is in a deficit position as of December 31, 2025. This deficit position does not impact the Company’s ability to pay dividends.

In the third quarter of 2025, the Company retired 31,488,535 shares of Common Stock and 6,281,140 shares of Class B Common Stock included in treasury stock. The retired treasury stock had a carrying value of $162.6 million. The retirement of treasury stock was recorded as a reduction to Common Stock and Class B Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings.

On March 4, 2025, the Company announced that its Board of Directors had approved a 10-for-1 forward stock split (the “Stock Split”) of Common Stock and Class B Common Stock. The Stock Split was effected through an amendment to the Company’s Restated Certificate of Incorporation (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. The par value per share of Common Stock and Class B Common Stock remains unchanged.

On August 20, 2024, the Company announced that its Board of Directors had approved a 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 Company expects share repurchases to be made from time to time in the open market or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, the prevailing market price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. During 2025, the Company repurchased 1,778,081 shares of Common Stock under the Share Repurchase Program for an aggregate purchase price of $212.0 million, excluding fees and expenses related to the share repurchases. As of December 31, 2025, the total remaining share repurchase authorization was $136.3 million.
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The Company’s debt as of December 31, 2025 and December 31, 2024 was as follows:

(in thousands) Maturity Date December 31, 2025 December 31, 2024
Senior bonds (the “2025 Senior Bonds”) (1)
11/25/2025 $ —  $ 350,000 
Senior notes (2)
10/10/2026 100,000  100,000 
Term loan facility (the “Three-Year Term Loan Facility”) (3)
12/8/2028 900,000  — 
Senior bonds (the “2029 Senior Bonds”) (4)
6/1/2029 700,000  700,000 
Revolving credit facility (5)
6/10/2029 —  — 
Senior notes 3/21/2030 150,000  150,000 
Term loan facility (the “Five-Year Term Loan Facility”) (3)
12/6/2030 450,000  — 
Senior bonds (the “2034 Senior Bonds”) (6)
6/1/2034 500,000  500,000 
Unamortized discount on senior bonds (1)(4)(6)
Various (1,201) (1,482)
Debt issuance costs   (12,790) (12,170)
Total debt 2,786,009   1,786,348  
Less: Current portion of debt (1)(2)
100,000  349,699 
Total long-term debt   $ 2,686,009   $ 1,436,649  

(1) The 2025 Senior Bonds were issued at 99.975% of par. The 2025 Senior Bonds were fully repaid during the fourth quarter of 2025.
(2) As of December 31, 2025, the senior notes maturing in 2026 were classified as current portion of debt in the consolidated balance sheets.
(3) The Term Loan Facilities (as defined below) were issued in connection with the financing of the Repurchase, as further discussed above.
(4) The 2029 Senior Bonds were issued at 99.843% of par.
(5) 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.
(6) The 2034 Senior Bonds were issued at 99.893% of par.

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 an 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.

Subsequent to the end of 2025, on February 9, 2026, the Company repaid $150 million of the $450 million aggregate principal balance outstanding under the Five-Year Term Loan Facility using cash on hand.

The indentures under which the 2025 Senior Bonds, the 2029 Senior Bonds and the 2034 Senior Bonds were issued do not include financial covenants, but do 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 the 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 December 31, 2025. These covenants have not restricted, and are not expected to restrict, the Company’s liquidity or capital resources.

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.

The Company’s credit ratings are reviewed periodically by certain nationally recognized rating agencies. Changes in the Company’s operating results or financial position could result in changes in the Company’s credit ratings. Lower credit ratings could result in
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higher borrowing costs for the Company or reduced access to capital markets, which could have a material adverse impact on the Company’s operating results or financial position. As of December 31, 2025, the Company’s credit ratings and outlook for its debt were as follows:

  Credit Rating Rating Outlook
Moody’s Baa1 Stable
Standard & Poor’s BBB+ Negative

The Company’s Board of Directors has declared, and the Company has paid, dividends on the Common Stock and the Class B Common Stock and each class of common stock has participated equally in all dividends declared by the Board of Directors and paid by the Company for more than 30 years. The amount and frequency of future dividends will be determined by the Company’s Board of Directors in light of the earnings and financial condition of the Company at such time, and no assurance can be given that dividends will be declared or paid in the future.

We review supplier terms and conditions on an ongoing basis, and we have negotiated payment term extensions in recent years in connection with our efforts to improve cash flow and working capital. Separate from those term extension actions, 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 in order to negotiate shorter payment terms on their outstanding receivable arrangements. 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. See Note 13 to the consolidated financial statements for additional information related to the SCF program.

The Company’s only Level 3 asset or liability is the acquisition related contingent consideration liability. There were no transfers of assets or liabilities from Level 1 or Level 2 in any period presented. Fair value adjustments were non-cash and, therefore, did not impact the Company’s liquidity or capital resources. Following is a summary of the Level 3 activity:

Fiscal Year
(in thousands) 2025 2024
Beginning balance - Level 3 liability $ 654,191   $ 669,337  
Payments of acquisition related contingent consideration (68,884) (64,312)
Reclassification to current payables 700  (10,000)
Increase in fair value 131,901  59,166 
Ending balance - Level 3 liability $ 717,908   $ 654,191  

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Cash Sources and Uses

A summary of cash-based activity is as follows:

Fiscal Year
(in thousands) 2025 2024
Cash Sources:
Proceeds from bridge loan $ 1,200,000  $ — 
Proceeds from term loan facility upon modification 950,000  — 
Net cash provided by operating activities (1)
931,904  876,357 
Proceeds from the disposal of short-term investments 696,415  150,274 
Proceeds from the sale of property, plant and equipment 6,594  569 
Proceeds from bond issuance —  1,200,000 
Total cash sources $ 3,784,913   $ 2,227,200  

Cash Uses:
Payments related to share repurchases $ 2,606,031  $ 625,654 
Repayment of bridge loan upon extinguishment 800,000  — 
Purchases of short-term investments 390,111  446,309 
Repayment of senior bonds 350,000  — 
Additions to property, plant and equipment 312,315  371,015 
Cash dividends paid 86,673  185,635 
Payments of acquisition related contingent consideration 68,884  64,312 
Investment in equity method investees 19,600  15,720 
Debt issuance fees 3,396  15,512 
Payments on financing lease obligations 1,809  2,488 
Total cash uses $ 4,638,819   $ 1,726,645  
Net (decrease) increase in cash and cash equivalents during period $ (853,906) $ 500,555  

(1) Net cash provided by operating activities in 2025 included net income tax payments of $196.6 million, net interest payments of $92.8 million and pension plan contributions of $5.0 million. Net cash provided by operating activities in 2024 included net income tax payments of $224.0 million, net interest payments of $56.1 million and pension plan contributions of $2.0 million.

Cash Flows From Operating Activities

During 2025, cash provided by operating activities was $931.9 million, which was an increase of $55.5 million as compared to 2024. The increase was primarily a result of our strong operating performance during 2025.

Cash Flows From Investing Activities

During 2025, cash used in investing activities was $19.0 million, which was a decrease of $663.2 million as compared to 2024. The Company had net proceeds from short-term investments of $306.3 million during 2025, as compared to net purchases of short-term investments of $296.0 million during 2024, representing a net change of approximately $602 million.

The decrease in cash used in investing activities was also partially a result of fewer additions to property, plant and equipment, which were $312.3 million during 2025 and $371.0 million during 2024. Additions to property, plant and equipment in 2024 included the purchase of the Company’s Nashville, Tennessee production facility for approximately $56 million. There were $33.2 million and $44.9 million of additions to property, plant and equipment accrued in accounts payable, trade as of December 31, 2025 and December 31, 2024, respectively.

The additions to property, plant and equipment reflect the Company’s continued focus on optimizing its supply chain and investing for future growth. The Company expects additions to property, plant and equipment in 2026 to be approximately $300 million.

Cash Flows From Financing Activities

During 2025, cash used in financing activities was $1.77 billion, as compared to cash provided by financing activities of $306.4 million during 2024, a change of $2.07 billion. The cash used in financing activities during 2025 was primarily related to share repurchases of $2.61 billion and dividend payments of $86.7 million, offset by net debt proceeds of $1.00 billion.
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The Company had cash payments for acquisition related contingent consideration of $68.9 million during 2025 and $64.3 million during 2024. For the next five years (including in fiscal year 2026), the Company anticipates that the amount it could pay annually under the acquisition related contingent consideration arrangements for the distribution territories subject to acquisition related sub-bottling payments will be in the range of approximately $50 million to $80 million.

Material Contractual Obligations

The Company had a number of contractual obligations and commercial obligations as of December 31, 2025 that are material to an assessment of the Company’s short- and long-term cash requirements.

The Company has outstanding debt of $2.80 billion, $100.0 million of which is contractually due in fiscal year 2026 and classified as current debt on the consolidated balance sheets. The remaining interest payments on the Company’s debt obligations are $622.2 million determined in reference to the contractual terms of such debt, of which $138.7 million is due in fiscal year 2026. Several of the Company’s debt instruments have variable interest rates and, thus, are impacted by fluctuations in interest rates, which could cause changes in the amount of estimated interest payments reported above.

The Company’s acquisition related contingent consideration liability relates to acquisition related sub-bottling payments required in certain distribution territories under the CBA and totaled $717.9 million as of December 31, 2025. 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. The Company’s short-term portion of the acquisition related contingent consideration liability was $74.9 million as of December 31, 2025 and was included within other accrued liabilities in the consolidated balance sheets.

The Company is obligated to purchase 16.0 million cases of finished product from SAC on an annual basis through June 2034. Based on information available as of December 31, 2025, the Company estimates this purchase obligation to be $1.20 billion, of which an estimated $141 million of purchases is expected to occur in fiscal year 2026.

The Company has $137.7 million in total minimum operating lease obligations including interest, of which $28.5 million are due in fiscal year 2026. The Company has $1.9 million in total minimum financing lease obligations including interest, of which $0.6 million are due in fiscal year 2026.

As of December 31, 2025, the Company estimated obligations for its executive benefit plans to be $217.1 million, of which $40.6 million is expected to be paid in fiscal year 2026.

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. As of December 31, 2025, the Company had obligations related to its postretirement benefits plan of $73.7 million, of which $4.4 million is expected to be paid in fiscal year 2026.

The Company is a shareholder of Southeastern Container (“Southeastern”), a plastic bottle manufacturing cooperative from which the Company is obligated to purchase at least 80% of its requirements of plastic bottles for certain designated territories. This obligation has no minimum purchase requirements; however, purchases from Southeastern were $119.3 million during 2025 and are expected to remain material in future foreseeable periods. See Note 21 to the consolidated financial statements for additional information related to Southeastern.

The Company participates in long-term marketing contractual arrangements with certain prestige properties, athletic venues and other locations. As of December 31, 2025, the future payments related to these contractual arrangements, which expire at various dates through 2035, amounted to $151.1 million, of which $37.6 million is expected to be paid in fiscal year 2026.

Hedging Activities

The Company uses commodity derivative instruments to manage its exposure to fluctuations in certain commodity prices where practicable. Fees paid by the Company for commodity derivative instruments are amortized over the corresponding period of the instrument. The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.

The Company uses several different financial institutions for commodity derivative instruments to minimize the concentration of credit risk. The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net
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settlement of derivative transactions. The net impact of the commodity derivative instruments on the consolidated statements of operations was as follows:

  Fiscal Year
(in thousands) 2025 2024
Decrease in cost of sales $ (2,002) $ (590)
Increase in SD&A expenses 1,443  2,647 
Net impact $ (559) $ 2,057  

Discussion of 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 consolidated financial statements in conformity with GAAP. Actual results could differ significantly from those estimates under different assumptions and conditions. The Company believes the following discussion addresses 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.

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”).

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 consolidated financial statements.

The Company sells its products and extends credit, generally without requiring collateral, based on an ongoing evaluation of the customer’s business prospects and financial condition. The Company evaluates the collectability of its trade accounts receivable based on a number of factors, including the Company’s historic collections pattern and changes to a specific customer’s ability to meet its financial obligations. The Company typically collects payment from customers within 30 days from the date of sale.

The Company has established an allowance for doubtful accounts to adjust the recorded receivable to the estimated amount the Company believes will ultimately be collected. The Company’s allowance for doubtful accounts in the 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 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.
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Valuation of Long-Lived Assets, Goodwill and Other Intangibles

Management performs recoverability and impairment tests of long-lived assets, goodwill and other intangibles in accordance with GAAP, during which management makes numerous assumptions which involve a significant amount of judgment. When performing impairment tests, management estimates the fair values of the assets using its best assumptions, which management believes would be consistent with what a hypothetical marketplace participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. For certain assets, recoverability and/or impairment tests are required only when conditions exist that indicate the carrying value may not be recoverable. For other assets, impairment tests are required at least annually, or more frequently if events or circumstances indicate that an asset may be impaired.

The Company evaluates the recoverability of the carrying amount of its property, plant and equipment and other intangibles when events or circumstances indicate the carrying amount of an asset or asset group may not be recoverable. These evaluations are performed at a level where independent cash flows may be attributed to either an asset or an asset group. If the Company determines the carrying amount of an asset or asset group is not recoverable based upon the expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated fair values of the long-lived assets. During 2025 and 2024, the Company did not identify any impairment triggers related to property, plant and equipment and other intangibles.

All business combinations are accounted for using the acquisition method. All of the Company’s goodwill resides within one reporting unit within the Nonalcoholic Beverages reportable segment and, therefore, the Company has determined it has one reporting unit for the purpose of assessing goodwill for potential impairment. The Company performs its annual goodwill impairment test as of the first day of the fourth quarter each year, and more frequently if facts and circumstances indicate such assets may be impaired, including significant declines in actual or future projected cash flows and significant deterioration of market conditions.

The Company uses its overall market capitalization as part of its estimate of fair value of the reporting unit and in assessing the reasonableness of the Company’s internal estimates of fair value. The Company’s goodwill impairment assessment includes a qualitative assessment to determine whether it is more likely than not that the fair value of the goodwill is below its carrying value, each year, and more often if there are significant changes in business conditions that could result in impairment. When a quantitative analysis is considered necessary for the annual impairment analysis of goodwill, the Company develops an estimated fair value for the reporting unit considering three different approaches: (i) market value, using the Company’s stock price plus outstanding debt; (ii) discounted cash flow analysis; and (iii) multiple of earnings before interest, taxes, depreciation and amortization based upon relevant industry data.

The estimated fair value of the reporting unit is then compared to its carrying amount, including goodwill. If the estimated fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount, including goodwill, exceeds its estimated fair value, any excess of the carrying value of goodwill of the reporting unit over its fair value is recorded as an impairment. The Company performed its annual impairment test of goodwill as of the first day of the fourth quarter during both 2025 and 2024 and determined there was no impairment of the carrying values of these assets. The Company has determined there has not been an interim impairment trigger since the first day of the fourth quarter of 2025 annual test date.

Acquisition Related Contingent Consideration Liability

The acquisition related contingent consideration liability consists of the estimated amounts due to The Coca‑Cola Company under the CBA with The Coca‑Cola Company and CCR over the useful life of the related distribution rights. Pursuant to the CBA, the Company is required 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. This acquisition related contingent consideration is 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. These 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
37

period. The Company estimates a 10-basis point change in the underlying risk-free interest rate used to estimate the Company’s WACC would result in a change of approximately $7 million to the Company’s acquisition related contingent consideration liability.

Income Tax Estimates

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating losses and tax credit carryforwards, as well as the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance will be provided against deferred tax assets if the Company determines it is more likely than not such assets will not ultimately be realized.

The Company does not recognize a tax benefit unless it concludes that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in the Company’s judgment, is greater than 50% likely to be realized. The Company records interest and penalties related to uncertain tax positions in income tax expense.

Pension and Postretirement Benefit Obligations

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. Contributions to the Bargaining Plan are based on actuarially determined amounts and are limited to the amounts currently deductible for income tax purposes.

Several statistical and other factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the Bargaining Plan. These factors include assumptions about the discount rate, expected return on plan assets, employee turnover and age at retirement, as determined by the Company, within certain guidelines. In addition, the Company uses subjective factors such as mortality rates to estimate the projected benefit obligation. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. These differences may result in a significant impact to the amount of net periodic pension cost recorded by the Company in future periods. See Note 18 to the consolidated financial statements for additional information.

The discount rate used in determining the actuarial present value of the projected benefit obligation for the Bargaining Plan was 5.92% in 2025 and 5.89% in 2024. The discount rate assumption is generally the estimate which can have the most significant impact on the projected benefit obligation and the net periodic pension cost for the Bargaining Plan. The Company determines an appropriate discount rate annually for the Bargaining Plan based on the Aon AA Above Median yield curve as of the measurement date and reviews the discount rate assumption at the end of each year. See Note 18 to the consolidated financial statements for additional information.

Pension costs for the Bargaining Plan were $3.2 million in 2025 and $3.7 million in 2024.

A 0.25% increase or decrease in the discount rate assumption would have impacted the projected benefit obligation and the net periodic pension cost for the Bargaining Plan as follows:

(in thousands) 0.25% Increase 0.25% Decrease
Increase (decrease) in:
Projected benefit obligation at December 31, 2025 $ (2,024) $ 2,156 
Net periodic pension cost in 2025 (219) 178 

The weighted average expected long-term rate of return of plan assets used in computing net periodic pension cost for the Bargaining Plan was 7.00% in both 2025 and 2024. These rates reflect an estimate of long-term future returns for the pension plan assets, and the estimate is primarily a function of the asset classes (equities versus fixed income) in which the Bargaining Plan assets are invested. This analysis includes expected long-term inflation and the risk premiums associated with equity and fixed income investments. See Note 18 to the consolidated financial statements for the details by asset type for the Bargaining Plan. The actual return on pension plan assets for the Bargaining Plan was a gain of 10.4% in 2025 and a gain of 3.7% in 2024.

The Company sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria. Several statistical and other factors, which attempt to anticipate future events, are used in calculating the net periodic postretirement benefit cost and the
38

postretirement benefit obligation for this plan. These factors include assumptions about the discount rate and the expected growth rate for the cost of healthcare benefits. In addition, the Company uses subjective factors such as withdrawal and mortality rates to estimate the projected liability under this plan. The actuarial assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. The Company does not prefund its postretirement benefits and has the right to modify or terminate certain of these benefits in the future.

The discount rate assumption, the annual healthcare cost trend and the ultimate trend rate for healthcare costs are key estimates which can have a significant impact on the net periodic postretirement benefit cost and the postretirement benefit obligation in future periods. The Company annually determines the healthcare cost trend based on recent actual medical trend experience and projected experience for subsequent years.

The discount rate assumptions used to determine the postretirement benefit obligation are based on the annual yield on long-term corporate bonds as of the plan’s measurement date. The discount rate used in determining the postretirement benefit obligation was 5.41% in 2025 and 5.68% in 2024. The discount rate was derived using the Aon AA Above Median yield curve. Projected benefit payouts for the plan were matched to the Aon AA Above Median yield curve and an equivalent flat rate was derived.

A 0.25% increase or decrease in the discount rate assumption would have impacted the postretirement benefit obligation and the net periodic postretirement benefit cost for the Company’s postretirement healthcare plan as follows:

(in thousands) 0.25% Increase 0.25% Decrease
Increase (decrease) in:
Postretirement benefit obligation at December 31, 2025 $ (1,576) $ 1,639 
Net periodic postretirement benefit cost in 2025 (133) 138 

Cautionary Note Regarding Forward-Looking Statements

Certain statements made in this report, or in other public filings, press releases, or other written or oral communications made by the Company, which are not historical facts, are forward-looking statements subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties which we expect will or may occur in the future and may impact our business, financial condition and results of operations. The words “anticipate,” “believe,” “expect,” “intend,” “project,” “may,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These forward-looking statements reflect the Company’s best judgment based on current information, and, although we base these statements on circumstances that we believe to be reasonable when made, there can be no assurance that future events will not affect the accuracy of such forward-looking information. As such, the forward-looking statements are not guarantees of future performance, and actual results may vary materially from the projected results and expectations discussed in this report. Factors that might cause the Company’s actual results to differ materially from those anticipated in forward-looking statements include, but are not limited to: increased costs (including due to inflation or uncertainty around tariffs) or disruption, unavailability or shortages of raw materials, fuel and other supplies; the reliance on purchased finished products from external sources; changes in public and consumer perception and preferences, including concerns related to product safety and sustainability, artificial ingredients, brand reputation and obesity; changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients, recycling, sustainability, product safety and benefit programs, including SNAP; decreases from historic levels of marketing funding support provided to us by The Coca‑Cola Company and other beverage companies; material changes in the performance requirements for marketing funding support or our inability to meet such requirements; decreases from historic levels of advertising, marketing and product innovation spending by The Coca‑Cola Company and other beverage companies, or advertising campaigns that are negatively perceived by the public; any failure of the several Coca‑Cola system governance entities of which we are a participant to function efficiently or in our best interest and any failure or delay of ours to receive anticipated benefits from these governance entities; provisions in our beverage distribution and manufacturing agreements with The Coca‑Cola Company that could delay or prevent a change in control of us or a sale of our Coca‑Cola distribution or manufacturing businesses; the concentration of our capital stock ownership; our inability to meet requirements under our beverage distribution and manufacturing agreements; changes in the inputs used to calculate our acquisition related contingent consideration liability; technology failures or cyberattacks on our information technology systems or our effective response to technology failures or cyberattacks on our third-party service providers’, business partners’, customers’, suppliers’ or other third parties’ information technology systems; unfavorable changes in the general economy; changes in trade policies, including the imposition of, or increase in, tariffs on imported goods; the concentration risks among our customers and suppliers; lower than expected net pricing of our products resulting from continued and increased customer and competitor consolidations and marketplace competition; the effect of changes in our level of debt, borrowing costs and credit ratings on our access to capital and credit markets, operating flexibility and ability to obtain additional financing to fund future needs; the failure to attract, train and retain qualified employees while controlling labor costs and other labor issues; the failure to maintain productive relationships with our employees covered by collective bargaining agreements, including failing to renegotiate collective bargaining agreements; changes in accounting standards; our use of estimates and assumptions; changes in tax laws, disagreements
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with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather, or the increased frequency of any such events due to climate change, and public expectations around combatting climate change; or legislative or regulatory responses to such change; and the risks discussed in “Item 1A. Risk Factors” of this report and elsewhere herein.

Caution should be taken not to place undue reliance on the forward-looking statements included in this report. The Company assumes no obligation to update any forward-looking statements, except as may be required by law. In evaluating forward-looking statements, these risks and uncertainties should be considered, together with the other risks described from time to time in the Company’s reports and other filings with the SEC.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The Company is subject to interest rate volatility with regard to existing issuances of debt, including its revolving credit facility and the Term Loan Facilities. The Company had outstanding borrowings under the Term Loan Facilities in 2025 totaling $1.35 billion. Based on the Company’s variable rate debt outstanding as of December 31, 2025, we estimate a 1% increase in interest rates would increase annual interest expense by $13.5 million. As of December 31, 2024, the Company did not have any outstanding borrowings on variable rate debt and, as such, estimated a 1% increase in interest rates would have had no impact on interest expense.

The Company’s acquisition related contingent consideration liability, which is adjusted to fair value each reporting period, is also impacted by changes in interest rates. The risk-free interest rate used to estimate the Company’s WACC is a component of the discount rate used to calculate the present value of future expected acquisition related sub-bottling payments due under the CBA. As a result, any changes in the underlying risk-free interest rate 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 Company estimates a 10-basis point change in the underlying risk-free interest rate used to estimate the Company’s WACC would result in a change of approximately $7 million to the Company’s acquisition related contingent consideration liability.

The Company is exposed to certain market risks and commodity price risk that arise in the ordinary course of business. The Company may enter into commodity derivative instruments to manage or reduce market risk. The Company does not use commodity derivative instruments for trading or speculative purposes.

The Company is also subject to commodity price risk arising from price movements for certain commodities included as part of its input costs, which predominately relate to our Sparkling products. The Company estimates a 10% increase in the market prices of its key commodities, including aluminum, PET resin and high-fructose corn syrup, and excluding concentrate, over the current market prices would cumulatively increase costs during the next 12 months by approximately $35 million to $40 million assuming no change in volume.

The Company manages its commodity price risk in some cases by entering into contracts with adjustable prices to hedge commodity purchases, including our aluminum input costs and fuel expenses related to our selling and distribution activities. The Company periodically uses commodity derivative instruments in the management of this risk, and estimates a 10% decrease in the underlying commodity prices would have decreased the fair value of our commodity derivative instruments by approximately $4 million as of December 31, 2025.

Fees paid by the Company for agreements to hedge commodity purchases are amortized over the corresponding period of the agreement. The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.

The annual rate of inflation in the United States, as measured by year-over-year changes in the Consumer Price Index, was 2.7% in 2025, 2.9% in 2024 and 3.4% in 2023. Inflation in the prices of those commodities important to the Company’s business is reflected in changes in the Consumer Price Index.

The principal effect of inflation in both commodity and consumer prices on the Company’s operating results is to increase both cost of goods sold and SD&A expenses. Although the Company can offset these cost increases by increasing selling prices for its products, consumers may not have the buying power to cover these increased costs and may reduce their volume of purchases of those products. In that event, selling price increases may not be sufficient to offset completely the Company’s cost increases.

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Item 8. Financial Statements and Supplementary Data.

COCA ‑ COLA CONSOLIDATED, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Year
(in thousands, except per share data) 2025 2024 2023
Net sales $ 7,228,055   $ 6,899,716   $ 6,653,858  
Cost of sales 4,355,693   4,146,537   4,055,147  
Gross profit 2,872,362   2,753,179   2,598,711  
Selling, delivery and administrative expenses 1,921,706   1,832,829   1,764,260  
Income from operations 950,656   920,350   834,451  
Interest expense (income), net 42,678   1,848   ( 918 )
Mark-to-market on acquisition related contingent consideration 131,901   59,166   159,354  
Pension plan settlement expense —   —   112,796  
Other expense, net 3,159   2,682   5,738  
Income before taxes 772,918   856,654   557,481  
Income tax expense 202,336   223,529   149,106  
Net income $ 570,582   $ 633,125   $ 408,375  

Basic net income per share:      
Common Stock $ 6.82   $ 7.01   $ 4.36  
Weighted average number of Common Stock shares outstanding 73,658   80,348   83,690  

Class B Common Stock $ 6.78   $ 6.95   $ 4.36  
Weighted average number of Class B Common Stock shares outstanding 10,047   10,047   10,047  

Diluted net income per share:
Common Stock $ 6.81   $ 6.99   $ 4.35  
Weighted average number of Common Stock shares outstanding – assuming dilution 83,807   90,524   93,923  

Class B Common Stock $ 6.76   $ 6.92   $ 4.34  
Weighted average number of Class B Common Stock shares outstanding – assuming dilution 10,149   10,176   10,233  

See accompanying notes to consolidated financial statements.
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COCA ‑ COLA CONSOLIDATED, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

  Fiscal Year
(in thousands) 2025 2024 2023
Net income $ 570,582   $ 633,125   $ 408,375  

Other comprehensive (loss) income, net of tax:      
Defined benefit plans reclassification including pension costs:      
Actuarial gain 21   3,885   3,762  
Prior service (costs) credits ( 82 ) 12   8  
Postretirement benefits reclassification including benefit costs:
Actuarial (loss) gain ( 7,804 ) 2,239   ( 6,031 )
Net change in unrealized gain/loss on short-term investments ( 25 ) 25   —  
Pension plan settlement —   —   82,822  
Other comprehensive (loss) income, net of tax ( 7,890 ) 6,161   80,561  
Comprehensive income $ 562,692   $ 639,286   $ 488,936  

See accompanying notes to consolidated financial statements.
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COCA ‑ COLA CONSOLIDATED, INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except share data) December 31, 2025 December 31, 2024
ASSETS    
Current Assets:    
Cash and cash equivalents $ 281,918   $ 1,135,824  
Short-term investments —   301,210  
Accounts receivable, trade 585,777   567,653  
Allowance for doubtful accounts ( 11,176 ) ( 14,674 )
Accounts receivable from The Coca-Cola Company 70,197   89,871  
Accounts receivable, other 54,889   40,692  
Inventories 336,401   330,395  
Prepaid expenses and other current assets 108,668   96,331  
Total current assets 1,426,674   2,547,302  
Property, plant and equipment, net 1,604,605   1,505,267  
Right-of-use assets - operating leases 116,611   112,351  
Leased property under financing leases, net 1,160   3,138  
Other assets 216,428   181,048  
Goodwill 165,903   165,903  
Distribution agreements, net 767,360   792,252  
Customer lists, net 4,257   5,878  
Total assets $ 4,302,998   $ 5,313,139  

LIABILITIES AND (DEFICIT)/EQUITY    
Current Liabilities:    
Current portion of obligations under operating leases $ 24,412   $ 23,257  
Current portion of obligations under financing leases 556   2,685  
Accounts payable, trade 359,107   334,878  
Accounts payable to The Coca-Cola Company 182,446   187,271  
Other accrued liabilities 307,237   246,687  
Accrued compensation 154,899   168,692  
Current portion of debt 100,000   349,699  
Total current liabilities 1,128,657   1,313,169  
Deferred income taxes 143,738   132,941  
Pension and postretirement benefit obligations 69,298   58,502  
Other liabilities 918,755   859,559  
Noncurrent portion of obligations under operating leases 95,076   92,362  
Noncurrent portion of obligations under financing leases 1,188   2,346  
Long-term debt 2,686,009   1,436,649  
Total liabilities 5,042,721   3,895,528  
Commitments and Contingencies
(Deficit)/Equity:    
Convertible Preferred Stock, $ 100.00 par value:  authorized - 50,000 shares; issued - none
—   —  
Nonconvertible Preferred Stock, $ 100.00 par value:  authorized - 50,000 shares; issued - none
—   —  
Preferred Stock, $ 0.01 par value:  authorized - 20,000,000 shares; issued - none
—   —  
Common Stock, $ 1.00 par value:  authorized - 300,000,000 shares; issued - 56,517,334 and 108,327,480 shares, respectively
56,517   108,327  
Class B Common Stock, $ 1.00 par value:  authorized - 100,000,000 shares; issued - 10,046,960 and 16,328,100 shares, respectively
10,047   16,328  
Class C Common Stock, $ 1.00 par value:  authorized - 20,000,000 shares; issued - none
—   —  
Additional paid in capital 23,764   23,764  
Retained (deficit) earnings ( 824,046 ) 1,395,183  
Accumulated other comprehensive (loss) income ( 6,005 ) 1,885  
Treasury stock, at cost:  Common Stock - 0 and 31,196,605 shares, respectively
—   ( 127,467 )
Treasury stock, at cost:  Class B Common Stock - 0 and 6,281,140 shares, respectively
—   ( 409 )
Total (deficit)/equity ( 739,723 ) 1,417,611  
Total liabilities and (deficit)/equity $ 4,302,998   $ 5,313,139  

See accompanying notes to consolidated financial statements.
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COCA-COLA CONSOLIDATED, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

  Fiscal Year
(in thousands) 2025 2024 2023
Cash Flows from Operating Activities:
Net income $ 570,582   $ 633,125   $ 408,375  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense from property, plant and equipment and financing leases 195,081   170,343   153,472  
Amortization of intangible assets and deferred proceeds, net 23,449   23,448   23,494  
Fair value adjustment of acquisition related contingent consideration 131,901   59,166   159,354  
Deferred income taxes 13,704   2,529   ( 49,021 )
Amortization of debt costs 3,346   2,310   991  
Loss on sale of property, plant and equipment 644   3,168   7,181  
Pension plan settlement expense —   —   112,796  
Change in current assets less current liabilities 10,551   ( 3,774 ) 29,138  
Change in other noncurrent assets 7,054   8,904   12,708  
Change in other noncurrent liabilities ( 24,408 ) ( 22,862 ) ( 47,798 )
Total adjustments 361,322   243,232   402,315  
Net cash provided by operating activities $ 931,904   $ 876,357   $ 810,690  

Cash Flows from Investing Activities:      
Proceeds from the disposal of short-term investments $ 696,415   $ 150,274   $ —  
Purchases of short-term investments ( 390,111 ) ( 446,309 ) —  
Additions to property, plant and equipment ( 312,315 ) ( 371,015 ) ( 282,304 )
Investment in equity method investees ( 19,600 ) ( 15,720 ) ( 13,741 )
Proceeds from the sale of property, plant and equipment 6,594   569   695  
Net cash used in investing activities $ ( 19,017 ) $ ( 682,201 ) $ ( 295,350 )

Cash Flows from Financing Activities:
Payments related to share repurchases $ ( 2,606,031 ) $ ( 625,654 ) $ —  
Proceeds from bridge loan 1,200,000   —   —  
Proceeds from term loan facility upon modification 950,000   —   —  
Repayment of bridge loan upon extinguishment ( 800,000 ) —   —  
Repayment of senior bonds ( 350,000 ) —   —  
Cash dividends paid ( 86,673 ) ( 185,635 ) ( 46,868 )
Payments of acquisition related contingent consideration ( 68,884 ) ( 64,312 ) ( 28,208 )
Debt issuance fees ( 3,396 ) ( 15,512 ) ( 340 )
Payments on financing lease obligations ( 1,809 ) ( 2,488 ) ( 2,303 )
Proceeds from bond issuance —   1,200,000   —  
Net cash (used in) provided by financing activities $ ( 1,766,793 ) $ 306,399   $ ( 77,719 )

Net (decrease) increase in cash and cash equivalents $ ( 853,906 ) $ 500,555   $ 437,621  
Cash and cash equivalents at beginning of year 1,135,824   635,269   197,648  
Cash and cash equivalents at end of year $ 281,918   $ 1,135,824   $ 635,269  

See accompanying notes to consolidated financial statements.
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COCA-COLA CONSOLIDATED, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
 

(in thousands, except per share data) Common
Stock Class B
Common
Stock Additional Paid-in Capital Retained
Earnings (Deficit) Accumulated
Other
Comprehensive (Loss) Income Treasury
Stock -
Common
Stock Treasury
Stock -
Class B
Common
Stock Total
Equity (Deficit)
Balance on December 31, 2022 $ 114,314   $ 16,328   $ 18,375   $ 1,112,462   $ ( 84,837 ) $ ( 60,845 ) $ ( 409 ) $ 1,115,388  
Net income —  —  —  408,375   —  —  —  408,375  
Other comprehensive income, net of tax —  —  —  —  80,561   —  —  80,561  
Dividends declared:
Common Stock ($ 1.80 per share)
—  —  —  ( 150,642 ) —  —  —  ( 150,642 )
Class B Common Stock ($ 1.80 per share)
—  —  —  ( 18,084 ) —  —  —  ( 18,084 )
Balance on December 31, 2023 $ 114,314   $ 16,328   $ 18,375   $ 1,352,111   $ ( 4,276 ) $ ( 60,845 ) $ ( 409 ) $ 1,435,598  
Net income —  —  —  633,125   —  —  —  633,125  
Other comprehensive income, net of tax —  —  —  —  6,161   —  —  6,161  
Dividends declared:
Common Stock ($ 0.35 per share)
—  —  —  ( 27,452 ) —  —  —  ( 27,452 )
Class B Common Stock ($ 0.35 per share)
—  —  —  ( 3,517 ) —  —  —  ( 3,517 )
Share repurchases (1)
( 5,987 ) —  5,389   ( 559,084 ) —  ( 66,622 ) —  ( 626,304 )
Balance on December 31, 2024 $ 108,327   $ 16,328   $ 23,764   $ 1,395,183   $ 1,885   $ ( 127,467 ) $ ( 409 ) $ 1,417,611  
Net income —  —  —  570,582   —  —  —  570,582  
Other comprehensive loss, net of tax —  —  —  —  ( 7,890 ) —  —  ( 7,890 )
Dividends declared:
Common Stock ($ 1.00 per share)
—  —  —  ( 76,625 ) —  —  —  ( 76,625 )
Class B Common Stock ($ 1.00 per share)
—  —  —  ( 10,048 ) —  —  —  ( 10,048 )
Share repurchases (2)
( 20,322 ) —  —  ( 2,578,276 ) —  ( 34,755 ) —  ( 2,633,353 )
Retirement of Treasury Stock ( 31,488 ) ( 6,281 ) —  ( 124,862 ) —  162,222   409   —  
Balance on December 31, 2025 $ 56,517   $ 10,047   $ 23,764   $ ( 824,046 ) $ ( 6,005 ) $ —   $ —   $ ( 739,723 )
                            
(1) The share repurchases relate to shares repurchased in a tender offer and a separate share repurchase transaction with a subsidiary of The Coca‑Cola Company, as well as shares repurchased under a separate share repurchase program approved by the Board of Directors (as discussed in Note 5).
(2) The share repurchases relate to the Repurchase (as defined in Note 2), as well as shares repurchased under a separate share repurchase program approved by the Board of Directors (as discussed in Note 5).

See accompanying notes to consolidated financial statements.
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COCA-COLA CONSOLIDATED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Summary of Critical Accounting Policies

Description of Business

Coca‑Cola Consolidated, Inc. (the “Company”) distributes, markets and manufactures nonalcoholic beverages, primarily products of The Coca‑Cola Company, and is the largest Coca‑Cola bottler in the United States. Approximately 85 % of the Company’s total bottle/can sales volume to retail customers consists of products of The Coca‑Cola Company, which include some of the most recognized and popular beverage brands in the world. The Company also distributes products for several other beverage companies, including Monster Energy Company and Keurig Dr Pepper Inc.

The Company offers a range of nonalcoholic beverage products and flavors, including both sparkling and still beverages, designed to meet the demands of its consumers. Sparkling beverages are carbonated beverages and the Company’s principal sparkling beverage is Coca‑Cola. Still beverages include energy products and noncarbonated beverages such as bottled water, ready-to-drink tea, ready-to-drink coffee, enhanced water, juices and sports drinks.

The Company’s products are sold and distributed in the United States through various channels, which include selling directly to customers, including grocery stores, mass merchandise stores, club stores, convenience stores and drug stores, selling to on-premise locations, where products are typically consumed immediately, such as restaurants, schools, amusement parks and recreational facilities, and selling through other channels such as vending machine outlets.

The Company manages its business on the basis of two operating segments. Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations. 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.”

Principles of Consolidation

The consolidated financial statements include the accounts and the consolidated operations of the Company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements, in conformity with accounting principles generally accepted in the United States (“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.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash in banks and cash equivalents, which are highly liquid money market funds, time deposits, commercial paper and debt instruments with maturities of 90 days or less. The Company maintains cash deposits with major banks, which may exceed federally insured limits. The Company periodically assesses the financial condition of the institutions and believes the risk of any loss is minimal. Investments in debt securities with maturities of 90 days or less that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale.

Short-term Investments

Short-term investments include various instruments, such as U.S. Treasury securities, investment-grade corporate bonds and commercial paper instruments, with maturities of greater than three months, but less than one year. Short-term investments that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Short-term investments that are not classified as held-to-maturity are carried at fair value and classified as available-for-sale.

Accounts Receivable, Trade

The Company sells its products and extends credit, generally without requiring collateral, based on an ongoing evaluation of the customer’s business prospects and financial condition. The Company evaluates the collectability of its trade accounts receivable based
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on a number of factors, including the Company’s historic collections pattern and changes to a specific customer’s ability to meet its financial obligations. The Company typically collects payment from customers within 30 days from the date of sale.

Allowance for Doubtful Accounts

The Company has established an allowance for doubtful accounts to adjust the recorded receivable to the estimated amount the Company believes will ultimately be collected. The Company’s allowance for doubtful accounts in the 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 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.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method for finished products and manufacturing materials and on the average cost method for plastic shells, plastic pallets and other inventories.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements on operating leases are depreciated over the shorter of the estimated useful lives or the term of the lease, including renewal options the Company determines are reasonably assured. Additions and major replacements or betterments are added to the assets at cost. Maintenance and repair costs and minor replacements are charged to expense when incurred. When assets are replaced or otherwise disposed, the cost and accumulated depreciation are removed from the accounts and the gains or losses, if any, are reflected in the consolidated statements of operations. Gains or losses on the disposal of manufacturing equipment and manufacturing plants are included in cost of sales. Gains or losses on the disposal of all other property, plant and equipment are included in selling, delivery and administrative (“SD&A”) expenses.

The Company evaluates the recoverability of the carrying amount of its property, plant and equipment when events or circumstances indicate the carrying amount of an asset or asset group may not be recoverable. These evaluations are performed at a level where independent cash flows may be attributed to either an asset or an asset group. If the Company determines the carrying amount of an asset or asset group is not recoverable based upon the expected undiscounted future cash flows of the asset or asset group, an impairment loss is recorded equal to the excess of the carrying amounts over the estimated fair values of the long-lived assets.

Leases

The Company leases office and warehouse space, machinery and other equipment under noncancelable operating lease agreements and also leases certain warehouse space under financing lease agreements. The Company uses the following policies and assumptions to evaluate its leases:

• Determining a lease: The Company assesses contracts at inception to determine whether an arrangement is or includes a lease, which conveys the Company’s right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets and associated liabilities are recognized at the commencement date and initially measured based on the present value of lease payments over the defined lease term.
• Allocating lease and non-lease components: The Company has elected the practical expedient to not separate lease and non-lease components for certain classes of underlying assets. The Company has equipment and vehicle lease agreements, which generally have the lease and associated non-lease components accounted for as a single lease component. The Company has real estate lease agreements with lease and non-lease components, which are accounted for separately where applicable.
• Calculating the discount rate: The Company calculates the discount rate based on the discount rate implicit in the lease, or if the implicit rate is not readily determinable from the lease, then the Company calculates an incremental borrowing rate using a portfolio approach. The incremental borrowing rate is calculated using the contractual lease term and the Company’s borrowing rate.
• Recognizing leases: The Company does not recognize leases with a contractual term of less than 12 months on its consolidated balance sheets. Lease expense for these short-term leases is expensed on a straight-line basis over the lease term.
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• Including rent increases or escalation clauses: Certain leases contain scheduled rent increases or escalation clauses, which can be based on the Consumer Price Index or other rates. The Company assesses each contract individually and applies the appropriate variable payments based on the terms of the agreement.
• Including renewal options and/or purchase options: Certain leases include renewal options to extend the lease term and/or purchase options to purchase the leased asset. The Company assesses these options using a threshold of reasonably certain, which is a high threshold and, therefore, the majority of the Company’s leases do not include renewal periods or purchase options for the measurement of the right-of-use asset and the associated lease liability. For leases the Company is reasonably certain to renew or purchase, those options are included within the lease term and, therefore, included in the measurement of the right-of-use asset and the associated lease liability.
• Including options to terminate: Certain leases include the option to terminate the lease prior to its scheduled expiration. This allows a contractually bound party to terminate its obligation under the lease contract, typically in return for an agreed-upon financial consideration. The terms and conditions of the termination options vary by contract.
• Including residual value guarantees, restrictions or covenants: The Company’s lease agreements do not contain residual value guarantees, restrictions or covenants.

Internal Use Software

The Company capitalizes costs incurred in the development or acquisition of internal use software. The Company expenses costs incurred in the preliminary project planning stage. Costs, such as maintenance and training, are also expensed as incurred. Capitalized costs are amortized over their estimated useful lives using the straight-line method. Amortization expense for internal use software, which is included in depreciation expense, was $ 1.1  million in 2025, $ 1.0  million in 2024 and $ 1.7  million in 2023.

Goodwill

All business combinations are accounted for using the acquisition method. Goodwill is tested for impairment annually, or more frequently if facts and circumstances indicate such assets may be impaired. The Company performs its annual goodwill impairment test, which includes a qualitative assessment to determine whether it is more likely than not that the fair value of the goodwill is below its carrying value, as of the first day of the fourth quarter each year, and more often if there are significant changes in business conditions that could result in impairment.

All of the Company’s goodwill resides within one reporting unit within the Nonalcoholic Beverages reportable segment and, therefore, the Company has determined it has one reporting unit for the purpose of assessing goodwill for potential impairment. The Company uses its overall market capitalization as part of its estimate of fair value of the reporting unit and in assessing the reasonableness of the Company’s internal estimates of fair value.

When a quantitative analysis is considered necessary for the annual impairment analysis of goodwill, the Company develops an estimated fair value for the reporting unit considering three different approaches:

• market value, using the Company’s stock price plus outstanding debt;
• discounted cash flow analysis; and
• multiple of earnings before interest, taxes, depreciation and amortization based upon relevant industry data.

The estimated fair value of the reporting unit is then compared to its carrying amount, including goodwill. If the estimated fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount, including goodwill, exceeds its estimated fair value, any excess of the carrying value of goodwill of the reporting unit over its fair value is recorded as an impairment.

To the extent the actual and projected cash flows decline in the future or if market conditions or market capitalization significantly deteriorate, the Company may be required to perform an interim impairment analysis that could result in an impairment of goodwill.

During 2025, 2024 and 2023, the Company performed its annual impairment test of goodwill and determined there was no impairment of the carrying values of these assets.

Distribution Agreements and Customer Lists

The Company’s definite-lived intangible assets consist of distribution agreements and customer lists, which have estimated useful lives of 20 to 40 years and five to 12 years, respectively. These assets are amortized on a straight-line basis over their estimated useful lives.

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Acquisition Related Contingent Consideration Liability

The acquisition related contingent consideration liability consists of the estimated amounts due to The Coca‑Cola Company under the Company’s comprehensive beverage agreements (as amended, collectively, the “CBA”) with The Coca‑Cola Company and Coca‑Cola Refreshments USA, LLC (“CCR”), a wholly owned subsidiary of The Coca‑Cola Company, over the useful life of the related distribution rights. The CBA relates 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”). Pursuant to the CBA, the Company is required 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. This acquisition related contingent consideration is valued using a probability weighted discounted cash flow model based on internal forecasts and the weighted average cost of capital (“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. These 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.

Pension and Postretirement Benefit Plans

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. 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 also sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria.

The expense and liability amounts recorded for the benefit plans reflect estimates related to interest rates, investment returns, employee turnover and age at retirement, mortality rates and healthcare costs. The Company determines an appropriate discount rate annually for the Bargaining Plan and the postretirement healthcare plan based on the Aon AA Above Median yield curve as of the measurement date and reviews the discount rate assumption at the end of each year. The service cost components of the net periodic benefit cost of the plans are charged to current operations, and the non-service cost components of the net periodic benefit cost of the plans are classified as other expense, net. In addition, certain other union employees are covered by plans provided by their respective union organizations and the Company expenses amounts as paid in accordance with union agreements.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating losses and tax credit carryforwards, as well as the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance will be provided against deferred tax assets if the Company determines it is more likely than not such assets will not ultimately be realized.

The Company does not recognize a tax benefit unless it concludes that it is more likely than not that the benefit will be sustained on audit by the taxing authority based solely on the technical merits of the associated tax position. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in the Company’s judgment, is greater than 50% likely to be realized. The Company records interest and penalties related to uncertain tax positions in income tax expense.

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,
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post-mix sales, transportation revenue and equipment maintenance revenue. 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.

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”).

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 consolidated financial statements.

Marketing Programs and Sales Incentives

The Company participates in various sales programs with The Coca‑Cola Company, other beverage companies and customers to increase the sale of its products. Programs negotiated with customers include arrangements under which allowances can be earned for attaining agreed-upon sales levels. The cost of these various sales incentives is not considered a separate performance obligation and is included as a deduction to net sales.

Allowance payments made to customers can be conditional on the achievement of volume targets and/or marketing commitments. Payments made in advance are recorded as prepayments and amortized in the consolidated statements of operations over the relevant period for which the customer commitment is made. In the event there is no separate identifiable benefit or the fair value of such benefit cannot be established, the amortization of the prepayment is included as a deduction to net sales.

The nature of the Company’s contracts gives rise to several types of variable consideration, including prospective and retrospective rebates. The Company accounts for its prospective and retrospective rebates using the expected value method, which estimates the net price to the customer based on the customer’s expected annual sales volume projections.

Marketing and Other Funding Support

The Company receives marketing funding support payments in cash from The Coca‑Cola Company and other beverage companies. The Company’s brand partners also provide funding related to the delivery of post-mix gallons to locally managed customers within the Company’s territories. Payments to the Company for marketing and other funding programs to promote bottle/can sales volume and fountain syrup sales volume are recognized as a reduction to cost of sales, primarily on a per unit basis, as the product is sold. Payments for periodic programs are recognized in the period during which they are earned.

Cash consideration received by a customer from a vendor is presumed to be a reduction of the price of the vendor’s products or services. As such, the cash received is accounted for as a reduction to cost of sales unless it is a specific reimbursement of costs or payments for services. Payments the Company receives from The Coca‑Cola Company and other beverage companies for marketing and other funding support are classified as a reduction to cost of sales.

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 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
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derivative instruments, which is amortized over the corresponding period of each commodity derivative instrument. Settlements of commodity derivative instruments are included in cash flows from operating activities in the consolidated statements of cash flows.

All commodity derivative instruments are recorded at fair value as either assets or liabilities in the 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 consolidated balance sheets and the net amounts of derivative liabilities are recognized in either other accrued liabilities or other liabilities in the consolidated balance sheets.

Risk Management Programs

The Company uses various insurance structures to manage costs related to workers’ compensation, auto liability, medical and other insurable risks. These structures consist of retentions, deductibles, limits and a diverse group of insurers that serve to strategically finance, transfer and mitigate the financial impact of losses to the Company. Losses are accrued using assumptions and procedures followed in the insurance industry, then adjusted for company-specific history and expectations.

Cost of Sales

Inputs representing a substantial portion of the Company’s cost of sales include: (i) purchases of finished products, (ii) raw material costs, including aluminum cans, plastic bottles, carbon dioxide and sweetener, (iii) concentrate costs and (iv) manufacturing costs, including labor, overhead and warehouse costs. In addition, cost of sales includes shipping, handling and fuel costs related to the movement of finished products from manufacturing plants to distribution centers, amortization expense of distribution rights, distribution fees of certain products and marketing credits and post-mix funding from brand companies.

Selling, Delivery and Administrative Expenses

SD&A expenses include the following: sales management labor costs, distribution costs resulting from transporting finished products from distribution centers to customer locations, distribution center overhead including depreciation expense, distribution center warehousing costs, delivery vehicles and cold drink equipment, point-of-sale expenses, advertising expenses, cold drink equipment repair costs, amortization of intangible assets and administrative support labor and operating costs.

Shipping and Handling Costs

Shipping and handling costs related to the movement of finished products from manufacturing plants to distribution centers are included in cost of sales. Shipping and handling costs directly related to the movement of finished products from distribution centers to customer locations, including distribution center warehousing costs, are included in SD&A expenses.

Stock Compensation

The Company has a long-term performance equity plan (the “Long-Term Performance Equity Plan”) under which awards are earned and granted to J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, based on the Company’s attainment during a performance period of performance measures specified by the Compensation Committee of the Company’s Board of Directors. Mr. Harrison may elect to have awards earned under the Long‑Term Performance Equity Plan settled in cash and/or shares of Class B Common Stock (as defined below). See Note 2 for additional information on the Long‑Term Performance Equity Plan.

Common Stock and Class B Common Stock

The Company has two classes of common stock outstanding, Common Stock, par value $ 1.00 per share (“Common Stock”), and Class B Common Stock, par value $ 1.00 per share (“Class B Common Stock”). The Common Stock is traded on The Nasdaq Global Select Market under the symbol “COKE.” There is no established public trading market for the Class B Common Stock. Shares of Class B Common Stock are convertible on a share-for-share basis into shares of Common Stock at any time at the option of the holder.

Each share of Common Stock is entitled to one vote per share and each share of Class B Common Stock is entitled to 20 votes per share at all meetings of the Company’s stockholders. Except as otherwise required by law, holders of the Common Stock and the Class B Common Stock vote together as a single class on all matters submitted to the Company’s stockholders, including the election of the Board of Directors. As a result, the holders of the Class B Common Stock control approximately 78 % of the total voting power of the stockholders of the Company and control the election of the Board of Directors. In the event of liquidation, there is no preference between the two classes of common stock.

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Treasury Stock Retirement

In the third quarter of 2025, the Company retired 31,488,535 shares of Common Stock and 6,281,140 shares of Class B Common Stock included in treasury stock. The retired treasury stock had a carrying value of $ 162.6 million. The retirement of treasury stock was recorded as a reduction to Common Stock and Class B Common Stock at par value, with the excess of carrying value over par value recorded as a deduction from retained (deficit) earnings. Subsequent to the retirement of the above treasury shares in the third quarter of 2025, all additional shares of the Company’s Common Stock that were repurchased during 2025 were immediately retired.

Stock Split

On March 4, 2025, the Company announced that its Board of Directors had approved a 10 -for-1 forward stock split (the “Stock Split”) of Common Stock and Class B Common Stock. The Stock Split was effected through an amendment to the Company’s Restated Certificate of Incorporation (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. The par value per share of Common Stock and Class B Common Stock remains unchanged. Accordingly, an amount equal to the par value of the additional shares issued in the Stock Split was reclassified from additional paid-in capital to Common Stock and Class B Common Stock in the Company’s consolidated financial statements. All references made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Stock Split.

Dividends

No cash dividend or dividend of property or stock other than stock of the Company, as specifically described in the Company’s Restated Certificate of Incorporation, as amended (the “Restated Certificate of Incorporation”), may be declared and paid on the Class B Common Stock unless an equal or greater dividend is declared and paid on the Common Stock. Under the Restated Certificate of Incorporation, the Board of Directors may declare dividends on the Common Stock without declaring equal or any dividends on the Class B Common Stock. Notwithstanding this provision, the Class B Common Stock has voting and conversion rights that allow the Class B Common Stock to participate equally on a per share basis with the Common Stock.

The Company’s Board of Directors has declared, and the Company has paid, dividends on the Common Stock and the Class B Common Stock and each class of common stock has participated equally in all dividends declared by the Board of Directors and paid by the Company since 1994. Dividends paid per share on both the Common Stock and the Class B Common Stock were $ 1.00 per share in 2025, $ 2.00 per share in 2024 and $ 0.50 per share in 2023. Total cash dividends paid were $ 86.7  million in 2025, $ 185.6  million in 2024 and $ 46.9 million in 2023.

Net Income Per Share

The Company applies the two-class method for calculating and presenting net income per share. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared or accumulated and participation rights in undistributed earnings. Under this method:

(i) Income from continuing operations (“net income”) is reduced by the amount of dividends declared in the current period for each class of stock and by the contractual amount of dividends that must be paid for the current period.
(ii) The remaining earnings (“undistributed earnings”) are allocated to the Common Stock and the Class B Common Stock to the extent each security may share in earnings as if all the earnings for the period had been distributed. The total earnings allocated to each security is determined by adding together the amount allocated for dividends and the amount allocated for a participation feature.
(iii) The total earnings allocated to each security is then divided by the number of outstanding shares of the security to which the earnings are allocated to determine the earnings per share for the security.
(iv) Basic and diluted net income per share data are presented for each class of common stock.

In applying the two-class method, the Company determined undistributed earnings should be allocated equally on a per share basis between the Common Stock and the Class B Common Stock due to the aggregate participation rights of the Class B Common Stock (i.e., the voting and conversion rights) and the Company’s history of paying dividends equally on a per share basis on the Common Stock and the Class B Common Stock.

The Class B Common Stock conversion rights allow the Class B Common Stock to participate in dividends equally with the Common Stock. Class B Common Stock is convertible into Common Stock on a one -for-one per share basis at any time at the option of the
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holder. Accordingly, the holders of the Class B Common Stock can participate equally in any dividends declared on the Common Stock by exercising their conversion rights.

Basic net income per share excludes potential common shares that were dilutive and is computed by dividing net income available for common stockholders by the weighted average number of Common and Class B Common shares outstanding. Diluted net income per share for Common Stock and Class B Common Stock gives effect to all securities representing potential common shares that were dilutive and outstanding during the period. The Company does no t have anti-dilutive shares.

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 conformed to ASU 2023-09, effective December 31, 2025, using a retrospective approach and included the required disclosures in the income tax notes within the consolidated financial statements. The standard update did not affect the Company’s operating results.

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 December 31, 2025, 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, Chairman of the Board of Directors and Chief Executive Officer of the Company, 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 approximately $ 2.4 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 20.

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 in the Company’s annual proxy statement.

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The following table summarizes the significant cash transactions between the Company and The Coca‑Cola Company:

  Fiscal Year
(in thousands) 2025 2024 2023
Payments made by the Company to The Coca-Cola Company (1)
$ 2,263,965   $ 2,109,748   $ 2,019,409  
Payments made by The Coca-Cola Company to the Company 382,017   274,322   253,972  

(1) This excludes acquisition related sub-bottling payments made by the Company to CCR, a wholly owned subsidiary of The Coca‑Cola Company, as well as the payment made in connection with the Repurchase (as further discussed above).

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 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 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 consolidated statements of operations. 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 consolidated statements of operations.

Coca‑Cola Refreshments USA, LLC

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 $ 68.9  million in 2025, $ 64.3  million in 2024 and $ 28.2  million in 2023. 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) December 31, 2025 December 31, 2024
Current portion of acquisition related contingent consideration $ 74,938   $ 63,982  
Noncurrent portion of acquisition related contingent consideration 642,970   590,209  
Total acquisition related contingent consideration $ 717,908   $ 654,191  

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 consolidated balance sheets, was $ 21.3  million as of December 31, 2025 and $ 20.9 million as of December 31, 2024.

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 consolidated balance sheets, was $ 35.0  million as of December 31, 2025 and $ 25.3  million as of December 31, 2024. The Company also guarantees a portion of SAC’s debt. As of both December 31, 2025 and December 31, 2024, the Company was not required to guarantee any of SAC’s debt. See Note 21 for additional information.

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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 consolidated statements of operations, were $ 9.8  million in 2025, $ 9.5  million in 2024 and $ 9.3  million in 2023.

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 $ 17.3  million on December 31, 2025 and $ 14.5  million on December 31, 2024, which were classified as accounts receivable, other in the consolidated balance sheets. Changes in rebates receivable relate to volatility in raw material prices and the timing of cash receipts of rebates.

In addition, the Company pays an administrative fee to CCBSS for its services. The Company incurred administrative fees to CCBSS of $ 2.9  million in 2025 and $ 2.8  million in both 2024 and 2023, which were classified as SD&A expenses in the consolidated statements of operations.

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 consolidated balance sheets, was $ 30.2  million as of December 31, 2025 and $ 27.5  million as of December 31, 2024.

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 $ 25.7  million in 2025, $ 26.7  million in 2024 and $ 27.5  million in 2023, which were classified as SD&A expenses in the consolidated statements of operations.

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. The principal balance outstanding under this lease was $ 15.9  million on December 31, 2025 and $ 19.3  million on December 31, 2024. Rental payments for this lease were $ 4.1 million in 2025, $ 4.0 million in 2024 and $ 3.9 million in 2023.

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 SD&A expenses in the consolidated statements of operations, was $ 10.7  million in 2025, $ 10.5  million in 2024 and $ 10.3  million in 2023.

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
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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 sales accounted for approximately 99 % of the Company’s net sales in 2025 and approximately 98 % of the Company’s net sales in both 2024 and 2023.

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. 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 consolidated financial statements.

The following table represents a disaggregation of revenue from contracts with customers:

  Fiscal Year
(in thousands) 2025 2024 2023
Point in time net sales:
Nonalcoholic Beverages - point in time $ 7,126,304   $ 6,781,744   $ 6,510,155  
Total point in time net sales $ 7,126,304   $ 6,781,744   $ 6,510,155  

Over time net sales:
Nonalcoholic Beverages - over time (1)
$ 57,478   $ 57,624   $ 52,817  
All Other - over time (1)
44,273   60,348   90,886  
Total over time net sales $ 101,751   $ 117,972   $ 143,703  

Total net sales $ 7,228,055   $ 6,899,716   $ 6,653,858  

(1) Due to the liquidation and 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 periods presented to reflect the liquidation and dissolution of the Data Ventures, Inc. operating segment within the “All Other - over time” bucket 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 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 $ 6.0  million as of December 31, 2025 and $ 5.2  million as of December 31, 2024.

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 2025, 2024 and 2023:

Fiscal Year
(in thousands) 2025 2024 2023
Beginning balance - allowance for credit losses $ 9,524   $ 11,560   $ 13,119  
Additions charged to expenses and as a reduction to net sales 3,215   3,080   2,639  
Deductions ( 7,513 ) ( 5,116 ) ( 4,198 )
Ending balance - allowance for credit losses $ 5,226   $ 9,524   $ 11,560  

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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.

As of December 31, 2025, 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. 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 December 31, 2025, the Data Ventures, Inc. operating segment was liquidated, dissolved and merged into the Nonalcoholic Beverages operating segment. For reporting purposes, all periods presented have been retroactively adjusted to reflect the dissolution of the Data Ventures, Inc. operating segment within the “All Other” bucket 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:

Fiscal Year 2025
(in thousands) Nonalcoholic Beverages All Other Eliminations (1)
Total
Net sales $ 7,183,782   $ 325,969   $ ( 281,696 ) $ 7,228,055  
Cost of goods sold 4,380,271   186,810   ( 211,388 ) 4,355,693  
Gross profit 2,803,511   139,159   ( 70,308 ) 2,872,362  
Selling, delivery and administrative expenses:
Payroll costs (2)
$ 1,203,097   $ 50,542   $ —   $ 1,253,639  
Fleet costs (3)
99,135   31,216   —   130,351  
Depreciation and amortization expense (4)
115,744   2,204   —   117,948  
All other segment items (5)
460,370   29,706   ( 70,308 ) 419,768  
Total selling, delivery and administrative expenses 1,878,346   113,668   ( 70,308 ) 1,921,706  
Income from operations $ 925,165   $ 25,491   $ —   $ 950,656  

Total depreciation and amortization expense (4)
$ 197,602   $ 20,928   $ —   $ 218,530  

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Fiscal Year 2024
(in thousands) Nonalcoholic Beverages All Other Eliminations (1)
Total
Net sales $ 6,839,368   $ 342,892   $ ( 282,544 ) $ 6,899,716  
Cost of goods sold 4,138,869   219,204   ( 211,536 ) 4,146,537  
Gross profit 2,700,499   123,688   ( 71,008 ) 2,753,179  
Selling, delivery and administrative expenses:
Payroll costs (2)
$ 1,149,363   $ 50,668   $ —   $ 1,200,031  
Fleet costs (3)
103,444   31,475   —   134,919  
Depreciation and amortization expense (4)
103,451   1,993   —   105,444  
All other segment items (5)
437,014   26,429   ( 71,008 ) 392,435  
Total selling, delivery and administrative expenses 1,793,272   110,565   ( 71,008 ) 1,832,829  
Income from operations $ 907,227   $ 13,123   $ —   $ 920,350  

Total depreciation and amortization expense (4)
$ 177,527   $ 16,264   $ —   $ 193,791  

Fiscal Year 2023
(in thousands) Nonalcoholic Beverages All Other Eliminations (1)
Total
Net sales $ 6,562,972   $ 367,422   $ ( 276,536 ) $ 6,653,858  
Cost of goods sold 3,999,292   263,307   ( 207,452 ) 4,055,147  
Gross profit 2,563,680   104,115   ( 69,084 ) 2,598,711  
Selling, delivery and administrative expenses:
Payroll costs (2)
$ 1,097,684   $ 53,894   $ —   $ 1,151,578  
Fleet costs (3)
106,235   32,945   —   139,180  
Depreciation and amortization expense (4)
95,330   2,104   —   97,434  
All other segment items (5)
422,939   22,213   ( 69,084 ) 376,068  
Total selling, delivery and administrative expenses 1,722,188   111,156   ( 69,084 ) 1,764,260  
Income from operations $ 841,492   $ ( 7,041 ) $ —   $ 834,451  

Total depreciation and amortization expense (4)
$ 164,494   $ 12,472   $ —   $ 176,966  

(1) The entire net sales elimination represents net sales from the All Other segment to the Nonalcoholic Beverages segment. The entire cost of goods sold and SD&A eliminations represent costs incurred by the All Other segment in the generation of net sales to the Nonalcoholic Beverages 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.

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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. See Note 1 for additional information related to net income per share.

  Fiscal Year
(in thousands, except per share data) 2025 2024 2023
Numerator for basic and diluted net income per Common Stock and Class B Common Stock share:
Net income $ 570,582   $ 633,125   $ 408,375  
Less dividends:
Common Stock 76,625   165,541   41,844  
Class B Common Stock 10,048   20,094   5,024  
Total undistributed earnings $ 483,909   $ 447,490   $ 361,507  

Common Stock undistributed earnings – basic $ 425,826   $ 397,753   $ 322,760  
Class B Common Stock undistributed earnings – basic 58,083   49,737   38,747  
Total undistributed earnings – basic $ 483,909   $ 447,490   $ 361,507  

Common Stock undistributed earnings – diluted $ 425,308   $ 397,187   $ 322,120  
Class B Common Stock undistributed earnings – diluted 58,601   50,303   39,387  
Total undistributed earnings – diluted $ 483,909   $ 447,490   $ 361,507  

Numerator for basic net income per Common Stock share:
Dividends on Common Stock $ 76,625   $ 165,541   $ 41,844  
Common Stock undistributed earnings – basic 425,826   397,753   322,760  
Numerator for basic net income per Common Stock share $ 502,451   $ 563,294   $ 364,604  

Numerator for basic net income per Class B Common Stock share:
Dividends on Class B Common Stock $ 10,048   $ 20,094   $ 5,024  
Class B Common Stock undistributed earnings – basic 58,083   49,737   38,747  
Numerator for basic net income per Class B Common Stock share $ 68,131   $ 69,831   $ 43,771  

Numerator for diluted net income per Common Stock share:
Dividends on Common Stock $ 76,625   $ 165,541   $ 41,844  
Dividends on Class B Common Stock assumed converted to Common Stock 10,048   20,094   5,024  
Common Stock undistributed earnings – diluted 483,909   447,490   361,507  
Numerator for diluted net income per Common Stock share $ 570,582   $ 633,125   $ 408,375  

Numerator for diluted net income per Class B Common Stock share:
Dividends on Class B Common Stock $ 10,048   $ 20,094   $ 5,024  
Class B Common Stock undistributed earnings – diluted 58,601   50,303   39,387  
Numerator for diluted net income per Class B Common Stock share $ 68,649   $ 70,397   $ 44,411  

Denominator for basic net income per Common Stock and Class B Common Stock share:
Common Stock weighted average shares outstanding – basic 73,658   80,348   83,690  
Class B Common Stock weighted average shares outstanding – basic 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) 83,807   90,524   93,923  
Class B Common Stock weighted average shares outstanding – diluted 10,149   10,176   10,233  

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Fiscal Year
(in thousands, except per share data) 2025 2024 2023
Basic net income per share:
Common Stock $ 6.82   $ 7.01   $ 4.36  
Class B Common Stock $ 6.78   $ 6.95   $ 4.36  

Diluted net income per share:
Common Stock $ 6.81   $ 6.99   $ 4.35  
Class B Common Stock $ 6.76   $ 6.92   $ 4.34  

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 no t 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, Chairman of the Board of Directors and Chief Executive Officer of the Company, 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. All share or per share amounts reflected above have been retroactively adjusted to reflect the effects of the Stock Split.
(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 1,778,081 shares of Common Stock repurchased under the Share Repurchase Program during 2025. Refer to “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for further details related to the Share Repurchase Program.

6. Short-Term Investments

Short-term investments that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Short-term investments that are not classified as held-to-maturity are carried at fair value and classified as available-for-sale. Realized gains and losses on available-for-sale investments are included in net income. Unrealized gains and losses, net of tax, on available-for-sale investments are included in the consolidated balance sheet as a component of accumulated other comprehensive (loss) income.

As of December 31, 2025, the Company did not have any short-term investments. As of December 31, 2024, all of the Company’s short-term investments were classified as available-for-sale and had weighted average maturities of less than one year. The Company did not identify any other-than-temporary impairment on its available-for-sale investments during 2025 or 2024.

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As of December 31, 2024, the Company’s available-for-sale investments consisted of the following cost, unrealized positions and estimated fair value, disaggregated by class of instrument:

  Gross Unrealized
(in thousands) Cost Gains Losses Estimated Fair Value
U.S. Treasury securities $ 178,016   $ 67   $ ( 44 ) $ 178,039  
Corporate bonds 103,970   77   ( 78 ) 103,969  
Commercial paper instruments 17,657   6   —   17,663  
Asset-backed securities 1,534   5   —   1,539  
Total short-term investments $ 301,177   $ 155   $ ( 122 ) $ 301,210  

The sale and/or maturity of available-for-sale investments resulted in the following realized activity during 2025 and 2024:

(in thousands) 2025 2024
Gross realized gains $ 69   $ —  
Gross realized losses ( 57 ) —  
Proceeds 696,415   150,274  

7. Inventories

Inventories consisted of the following:

(in thousands) December 31, 2025 December 31, 2024
Finished products $ 218,380   $ 203,373  
Manufacturing materials 73,825   84,096  
Plastic shells, plastic pallets and other inventories 44,196   42,926  
Total inventories $ 336,401   $ 330,395  

8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(in thousands) December 31, 2025 December 31, 2024
Repair parts $ 35,109   $ 34,465  
Prepaid taxes 19,952   12,119  
Prepaid software 11,940   8,616  
Prepaid marketing 5,545   5,142  
Commodity hedges at fair market value 4,242   2,472  
Other prepaid expenses and other current assets 31,880   33,517  
Total prepaid expenses and other current assets $ 108,668   $ 96,331  

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9. Property, Plant and Equipment, Net

The principal categories and estimated useful lives of property, plant and equipment, net were as follows:

(in thousands) December 31, 2025 December 31, 2024 Estimated Useful Lives
Land $ 138,309   $ 132,543    
Buildings 534,167   493,810   8 - 50 years

Machinery and equipment 663,064   563,834   5 - 20 years

Transportation equipment 743,325   682,263   3 - 20 years

Furniture and fixtures 110,819   113,156   3 - 10 years

Cold drink dispensing equipment 466,537   456,984   3 - 17 years

Leasehold and land improvements 217,833   192,282   5 - 20 years

Software for internal use 23,567   50,293   3 - 10 years

Construction in progress 53,307   77,707    
Total property, plant and equipment, at cost 2,950,928   2,762,872    
Less:  Accumulated depreciation and amortization 1,346,323   1,257,605    
Property, plant and equipment, net $ 1,604,605   $ 1,505,267    

During 2025, 2024 and 2023, the Company performed periodic reviews of property, plant and equipment and determined no material impairment existed.

10. Leases

Following is a summary of the weighted average remaining lease term and the weighted average discount rate for the Company’s leases:

December 31, 2025 December 31, 2024
Weighted average remaining lease term:
Operating leases 6.4 years 6.4 years
Financing leases 4.1 years 2.9 years
Weighted average discount rate:
Operating leases 4.4   % 4.1   %
Financing leases 4.8   % 5.2   %

Following is a summary of the Company’s leases within the consolidated statements of operations:

Fiscal Year
(in thousands) 2025 2024 2023
Operating lease costs $ 27,579   $ 29,616   $ 32,959  
Short-term and variable leases 7,952   12,816   15,995  
Depreciation expense from financing leases 1,051   1,647   1,646  
Interest expense on financing lease obligations 156   321   447  
Total lease cost $ 36,738   $ 44,400   $ 51,047  

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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 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 - operating and financing leases 24,412   556  
Noncurrent portion of lease liabilities - operating and financing leases $ 95,076   $ 1,188  

Following is a summary of future minimum lease payments for all noncancelable operating leases and financing leases as of December 31, 2024:

(in thousands) Operating Leases Financing Leases
2025 $ 26,799   $ 2,869  
2026 24,578   1,233  
2027 21,101   338  
2028 16,427   345  
2029 15,046   352  
Thereafter 27,482   268  
Total minimum lease payments including interest $ 131,433   $ 5,405  
Less:  Amounts representing interest 15,814   374  
Present value of minimum lease principal payments 115,619   5,031  
Less:  Current portion of lease liabilities - operating and financing leases 23,257   2,685  
Noncurrent portion of lease liabilities - operating and financing leases $ 92,362   $ 2,346  

Following is a summary of the Company’s leases within the consolidated statements of cash flows:

Fiscal Year
(in thousands) 2025 2024 2023
Cash flows from operating activities impact:
Operating leases $ 28,522   $ 32,102   $ 33,013  
Interest payments on financing lease obligations 156   321   447  
Total cash flows from operating activities impact $ 28,678   $ 32,423   $ 33,460  

Cash flows from financing activities impact:
Principal payments on financing lease obligations $ 1,809   $ 2,488   $ 2,303  
Total cash flows from financing activities impact $ 1,809   $ 2,488   $ 2,303  

11. 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) December 31, 2025 December 31, 2024
Distribution agreements at cost $ 990,191   $ 990,191  
Less: Accumulated amortization 222,831   197,939  
Distribution agreements, net $ 767,360   $ 792,252  

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Assuming no impairment of distribution agreements, net, amortization expense in future years based upon recorded amounts as of December 31, 2025 will be $ 24.8 million, on average, for each fiscal year 2026 through 2030.

12. 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) December 31, 2025 December 31, 2024
Customer lists at cost $ 25,288   $ 25,288  
Less: Accumulated amortization 21,031   19,410  
Customer lists, net $ 4,257   $ 5,878  

Assuming no impairment of customer lists, net, amortization expense in future years based upon recorded amounts as of December 31, 2025 will be as follows for each fiscal year 2026 through 2030:

(in thousands) Amortization expense
2026 $ 1,578  
2027 1,293  
2028 1,002  
2029 384  
2030 —  

13. 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. Suppliers participating in the SCF program may sell their 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. Our current payment terms with most of our 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 consolidated balance sheets, and associated payments are included in operating activities in the consolidated statements of cash flows. The Company’s outstanding confirmed obligations included in accounts payable, trade in the consolidated balance sheets were $ 66.6  million as of December 31, 2025 and $ 52.2  million as of December 31, 2024.

The following table is a rollforward of the Company’s outstanding obligations confirmed as valid under the SCF program for 2025 and 2024:

Fiscal Year
(in thousands) 2025 2024
Confirmed obligations outstanding at the beginning of the year $ 52,167   $ 55,105  
Invoices confirmed during the year 262,818   230,346  
Confirmed invoices paid during the year ( 248,415 ) ( 233,284 )
Confirmed obligations outstanding at the end of the year $ 66,570   $ 52,167  

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14. Other Accrued Liabilities

Other accrued liabilities consisted of the following:

(in thousands) December 31, 2025 December 31, 2024
Current portion of acquisition related contingent consideration $ 74,938   $ 63,982  
Accrued insurance costs 68,181   58,040  
Accrued marketing costs 62,467   55,879  
Employee and retiree benefit plan accruals 35,308   33,446  
Accrued excise taxes related to share repurchases 27,972   650  
Accrued interest payable 10,558   7,611  
Accrued taxes (other than income taxes) 6,485   6,821  
All other accrued expenses 21,328   20,258  
Total other accrued liabilities $ 307,237   $ 246,687  

15. 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 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 of commodity derivative instruments are included in cash flows from operating activities in the 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 consolidated statements of operations:

  Fiscal Year
(in thousands) 2025 2024 2023
Cost of sales $ 2,183   $ ( 728 ) $ 1,220  
Selling, delivery and administrative expenses ( 455 ) ( 547 ) ( 2,281 )
Total gain (loss) $ 1,728   $ ( 1,275 ) $ ( 1,061 )

All commodity derivative instruments are recorded at fair value as either assets or liabilities in the 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 consolidated balance sheets and the net amounts of derivative liabilities are recognized in either other accrued liabilities or other liabilities in the 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 consolidated balance sheets:

(in thousands) December 31, 2025 December 31, 2024
Assets:
Prepaid expenses and other current assets $ 4,242   $ 2,472  
Total assets $ 4,242   $ 2,472  

Liabilities:
Other accrued liabilities $ 42   $ —  
Total liabilities $ 42   $ —  

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The following table summarizes the Company’s gross commodity derivative instrument assets and gross commodity derivative instrument liabilities in the consolidated balance sheets:

(in thousands) December 31, 2025 December 31, 2024
Gross commodity derivative instrument assets $ 4,994   $ 2,472  
Gross commodity derivative instrument liabilities 794   —  

The following table summarizes the Company’s outstanding commodity derivative instruments:

(in thousands) December 31, 2025 December 31, 2024
Notional amount of outstanding commodity derivative instruments $ 12,714   $ 50,928  
Latest maturity date of outstanding commodity derivative instruments December 2026 December 2025

16. 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.

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.
Pension plan assets Level 1 The fair values of the Company’s Level 1 pension plan assets, which are equity securities and fixed income investment vehicles, are valued using the quoted market prices of those securities which are actively traded on national exchanges.
Short-term investments Level 1 The fair values of the Company’s Level 1 short-term investments, which are U.S. Treasury securities, corporate bonds and asset-backed securities, are based on the quoted market prices of those securities which are actively traded on national exchanges.
Pension plan assets Level 2 The fair values of the Company’s Level 2 pension plan assets, which are investments that are pooled with other investments in a commingled fund, are valued using the net asset value produced by the fund manager. The assets within the commingled funds have a readily determinable fair market value.
Short-term investments Level 2 The fair values of the Company’s Level 2 short-term investments, which are commercial paper instruments, are based on estimated current market prices and have readily determinable fair market values.
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.
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 WACC derived from market data.

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The following tables summarize the carrying amounts and the fair values by level of the Company’s deferred compensation plan assets and liabilities, short-term investments, pension plan assets, commodity derivative instruments, debt and acquisition related contingent consideration:

  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   $ —   $ —  

Pension plan assets 58,536   58,536   41,304   17,232   —  
Commodity derivative instruments 4,242   4,242   —   4,242   —  
Liabilities:
Deferred compensation plan liabilities 95,195   95,195   95,195   —   —  
Debt 2,786,009   2,848,500   —   2,848,500   —  
Acquisition related contingent consideration 717,908   717,908   —   —   717,908  
Commodity derivative instruments 42   42   —   42   —  

  December 31, 2024
(in thousands) Carrying
Amount Total
Fair Value Fair Value
Level 1 Fair Value
Level 2 Fair Value
Level 3
Assets:          
Deferred compensation plan assets $ 81,123   $ 81,123   $ 81,123   $ —   $ —  
Short-term investments 301,210   301,210   283,547   17,663  
Pension plan assets 49,617   49,617   34,655   14,962   —  
Commodity derivative instruments 2,472   2,472   —   2,472   —  
Liabilities:
Deferred compensation plan liabilities 81,123   81,123   81,123   —   —  
Debt 1,786,348   1,803,500   —   1,803,500   —  
Acquisition related contingent consideration 654,191   654,191   —   —   654,191  

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:

  Fiscal Year
(in thousands) 2025 2024
Beginning balance - Level 3 liability $ 654,191   $ 669,337  
Payments of acquisition related contingent consideration ( 68,884 ) ( 64,312 )
Reclassification to current payables 700   ( 10,000 )
Increase in fair value 131,901   59,166  
Ending balance - Level 3 liability $ 717,908   $ 654,191  

As of December 31, 2025 and December 31, 2024, a WACC of 8.5 % and 9.3 %, 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
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consideration liability in 2025 was primarily driven by decreases in the WACC used to calculate the fair value of the liability and higher projections of future cash flows in the distribution territories subject to acquisition related sub-bottling payments. This fair value adjustment was recorded in mark-to-market on acquisition related contingent consideration in the consolidated statement of operations for 2025.

For the next five years (including in fiscal year 2026), the Company anticipates that the amount it could pay annually under the acquisition related contingent consideration arrangements for the distribution territories subject to acquisition related sub-bottling payments will be in the range of approximately $ 50  million to $ 80  million.

17. Income Taxes

The current income tax provision represents the estimated amount of income taxes paid or payable for the year, as well as changes in estimates from prior years. The deferred income tax provision (benefit) represents the change in deferred tax liabilities and assets. The following table presents the significant components of the provision for income taxes:

  Fiscal Year
(in thousands) 2025 2024 2023
Current:
Federal $ 149,255   $ 179,019   $ 158,475  
State 39,377   41,981   39,652  
Total current provision $ 188,632   $ 221,000   $ 198,127  

Deferred:      
Federal $ 12,430   $ 958   $ ( 40,658 )
State 1,274   1,571   ( 8,363 )
Total deferred provision (benefit) $ 13,704   $ 2,529   $ ( 49,021 )

Income tax expense $ 202,336   $ 223,529   $ 149,106  

The Company’s effective income tax rate was 26.2 % for 2025, 26.1 % for 2024 and 26.7 % for 2023. The following table provides a reconciliation of income tax expense at the statutory federal rate to actual income tax expense:

  Fiscal Year
  2025 2024 2023
(in thousands) Income
tax expense % pre-tax
income Income
tax expense % pre-tax
income Income
tax expense % pre-tax
income
U.S. federal statutory expense $ 162,312   21.0   % $ 179,898   21.0   % $ 117,071   21.0   %
State income taxes, net of federal benefit (1)
30,188   4.0   32,638   3.8   21,494   3.9  
Nontaxable/nondeductible items 10,047   1.3   10,494   1.2   11,290   2.0  
Changes in valuation allowance 168   —   1,414   0.2   701   0.1  
Adjustment for uncertain tax positions 70   —   55   —   52   —  
Other, net 126   —   215   —   ( 257 ) ( 0.1 )
Tax credits ( 575 ) ( 0.1 ) ( 1,185 ) ( 0.1 ) ( 1,245 ) ( 0.2 )
Income tax expense $ 202,336   26.2   % $ 223,529   26.1   % $ 149,106   26.7   %

(1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include Indiana, Maryland, Virginia and Tennessee for fiscal years 2025, 2024 and 2023.

Total cash income taxes paid in 2025 was $ 196.6 million, of which $ 155.0 million related to federal tax and $ 41.6 million related to state and local tax jurisdictions. Total cash income taxes paid in 2024 was $ 224.0 million, of which $ 180.0 million related to federal tax and $ 44.0 related to state and local tax jurisdictions. Total cash income taxes paid in 2023 was $ 200.8 million, of which $ 162.0 million related to federal tax and $ 38.8 million related to state and local tax jurisdictions. For 2025, 2024 and 2023, no cash taxes paid to any individual state or local jurisdiction met or exceeded 5% of total cash income taxes paid.

The Company records liabilities for uncertain tax positions related to income tax positions. These liabilities reflect the Company’s best estimate of the ultimate income tax liability based on known facts and information. Material changes in facts or information, as well as
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the expiration of statutes of limitations and/or settlements with individual tax jurisdictions, may result in material adjustments to these estimates in the future.

The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense. During 2025, 2024 and 2023, the interest and penalties related to uncertain tax positions recognized in income tax expense were not material. In addition, the amount of interest and penalties accrued at December 31, 2025 and December 31, 2024 were not material.

The Company had uncertain tax positions, including accrued interest, of $ 0.5  million on December 31, 2025 and $ 0.4  million on December 31, 2024, all of which would affect the Company’s effective income tax rate if recognized.

A reconciliation of uncertain tax positions, excluding accrued interest, is as follows:

  Fiscal Year
(in thousands) 2025 2024 2023
Beginning balance - gross uncertain tax positions $ 374   $ 330   $ 285  
Increase as a result of tax positions taken in the current year 120   105   105  

Reduction as a result of the expiration of the applicable statute of limitations ( 61 ) ( 61 ) ( 60 )
Ending balance - gross uncertain tax positions $ 433   $ 374   $ 330  

Deferred income taxes are recorded based upon temporary differences between the financial statement and tax bases of assets and liabilities and available net operating loss and tax credit carryforwards. Temporary differences and carryforwards that comprised deferred income tax assets and liabilities were as follows:

(in thousands) December 31, 2025 December 31, 2024
Acquisition related contingent consideration $ 176,850   $ 160,120  
Deferred compensation 39,364   34,308  
Accrued liabilities 35,285   35,912  
Operating lease liabilities 29,435   28,299  
Deferred revenue 25,195   25,474  
Postretirement benefits 16,114   13,179  
Transactional costs 2,253   2,670  
Net operating loss carryforwards 564   754  
Financing lease agreements —   287  
Other —   956  
Deferred income tax assets $ 325,060   $ 301,959  
Less: Valuation allowance for deferred tax assets 5,715   5,535  
Net deferred income tax asset $ 319,345   $ 296,424  

Depreciation $ ( 245,739 ) $ ( 212,926 )
Intangible assets ( 165,413 ) ( 167,428 )
Right-of-use assets - operating leases ( 28,726 ) ( 27,499 )
Prepaid expenses ( 10,399 ) ( 9,784 )
Inventory ( 7,169 ) ( 8,547 )
Patronage dividend ( 2,728 ) ( 3,181 )
Other ( 2,909 ) —  
Deferred income tax liabilities $ ( 463,083 ) $ ( 429,365 )

Net deferred income tax liability $ ( 143,738 ) $ ( 132,941 )

The Company’s deferred income tax assets and liabilities are subject to adjustment in future periods based on the Company’s ongoing evaluations of such deferred assets and liabilities and new information available to the Company.

Valuation allowances are recognized on deferred tax assets if the Company believes it is more likely than not that some or all of the deferred tax assets will not be realized. The Company believes the majority of the deferred tax assets will be realized due to the reversal of certain significant temporary differences and anticipated future taxable income from operations.

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The valuation allowance of $ 5.7  million on December 31, 2025 and $ 5.5  million on December 31, 2024 was established primarily for certain loss carryforwards and deferred compensation.

As of December 31, 2025, the Company had no federal net operating losses and $ 11.3  million of state net operating losses available to reduce future income taxes, which expire in varying amounts through 2045.

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.

On July 4, 2025, H.R. 1, commonly known as the “One Big Beautiful Bill Act” (the “OBBBA”), was enacted into law. The OBBBA is a reconciliation bill impacting businesses as it includes a broad range of tax reform provisions. The Company does not expect any material net impact to its consolidated financial statements as a result of the OBBBA.

18. Benefit Plans

Executive Benefit Plans

In addition to the Company’s Director Deferral Plan, the Company has four executive benefit plans: the Supplemental Savings Incentive Plan, the Long-Term Retention Plan, the Officer Retention Plan and the Long-Term Performance Plan. The Company also has a Long-Term Performance Equity Plan, as discussed in Note 2.

Pursuant to the Supplemental Savings Incentive Plan, as amended and restated effective July 30, 2024, eligible participants may elect to defer a portion of their annual salary and bonus. Participants are immediately vested in all deferred contributions they make and become fully vested in Company contributions upon completion of five years of service with the Company, termination of employment due to death or retirement or a change in control. Participant deferrals and Company contributions made in years prior to 2006 are invested in either a fixed benefit option or certain investment funds determined by the participant. Beginning in 2010, the Company may elect at its discretion to match up to 50 % of the first 6 % of salary, excluding bonuses, deferred by the participant. During 2025, 2024 and 2023, the Company matched 50 % of the first 6 % of salary, excluding bonuses, deferred by the participant. The Company may also make discretionary contributions to participants’ accounts.

Under the Director Deferral Plan, as amended and restated effective January 1, 2014, non-employee directors may defer payment of all or a portion of their annual retainer and meeting fees. There is no Company matching contribution under the Director Deferral Plan. The liability under these two deferral plans was as follows:

(in thousands) December 31, 2025 December 31, 2024
Current liabilities $ 10,372   $ 10,424  
Noncurrent liabilities 94,102   89,293  
Total liability - Supplemental Savings Incentive Plan and Director Deferral Plan $ 104,474   $ 99,717  

Under the Long-Term Retention Plan, as amended and restated effective July 30, 2024, the Company accrues a defined amount each year for an eligible participant based upon an award schedule. Amounts awarded may earn an investment return based on certain investment funds specified by the Company. Accrued benefits under the Long-Term Retention Plan are 50 % vested until age 51 . Beginning at age 51 , the vesting percentage increases by 5 % each year until the accrued benefit is fully vested at age 60 . Participants receive payments from the plan upon retirement or, in certain instances, upon termination of employment. Payments are made in the form of monthly installments over a period of 10 , 15 or 20 years. The liability under this plan was as follows:

(in thousands) December 31, 2025 December 31, 2024
Current liabilities $ 287   $ 268  
Noncurrent liabilities 19,934   14,660  
Total liability - Long-Term Retention Plan $ 20,221   $ 14,928  

Under the Officer Retention Plan, as amended and restated effective July 30, 2024, eligible participants may elect to receive an annuity payable in equal monthly installments over a 10 -, 15 - or 20-year period commencing at retirement or, in certain instances, upon termination of employment. The benefits under the Officer Retention Plan increase with each year of participation as set forth in an agreement between the participant and the Company. Accrued benefits under the Officer Retention Plan are 50 % vested until age
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51 . Beginning at age 51 , the vesting percentage increases by 5 % each year until the accrued benefit is fully vested at age 60 . The liability under this plan was as follows:

(in thousands) December 31, 2025 December 31, 2024
Current liabilities $ 2,458   $ 3,489  
Noncurrent liabilities 33,780   32,486  
Total liability - Officer Retention Plan $ 36,238   $ 35,975  

Under the Long-Term Performance Plan, as amended and restated effective July 30, 2024, the Compensation Committee of the Company’s Board of Directors establishes dollar amounts to which a participant shall be entitled upon attainment of the applicable performance measures. Bonus awards under the Long-Term Performance Plan are made to executive officers based on the relative achievement of performance measures in terms of the Company-sponsored objectives or objectives related to the performance of the individual participant or of the subsidiary, division, department, region or function in which the participant is employed. The liability under this plan was as follows:

(in thousands) December 31, 2025 December 31, 2024
Current liabilities $ 10,234   $ 9,588  
Noncurrent liabilities 10,580   9,541  
Total liability - Long-Term Performance Plan $ 20,814   $ 19,129  

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. 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 updates its mortality assumptions used in the calculation of its pension liability each year using The Society of Actuaries’ latest mortality tables and mortality projection scales.

The following tables set forth pertinent information for the Bargaining Plan:

  Fiscal Year
(in thousands) 2025 2024
Beginning balance - Bargaining Plan projected benefit obligation $ 44,935   $ 46,123  
Service cost 3,703   4,330  
Interest cost 2,722   2,379  
Plan amendments 124   —  
Actuarial loss (gain) 1,665   ( 7,000 )
Benefits paid ( 1,049 ) ( 897 )
Ending balance - Bargaining Plan projected benefit obligation $ 52,100   $ 44,935  

Changes in Projected Benefit Obligation

The plan assets of the Bargaining Plan were in excess of the projected benefit obligation and the accumulated benefit obligation as of both December 31, 2025 and December 31, 2024. The accumulated benefit obligation associated with the Bargaining Plan was $ 52.1  million on December 31, 2025 and $ 44.9  million on December 31, 2024.

Changes to demographic assumptions for the Bargaining Plan, as compared to the previous year, was the primary driver of the actuarial loss in 2025. The increase in the discount rate for the Bargaining Plan, as compared to the previous year, was the primary driver of the actuarial gain in 2024. The actuarial loss (gain), net of tax, was recorded in accumulated other comprehensive (loss) income in the consolidated balance sheets.

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Change in Plan Assets

  Fiscal Year
(in thousands) 2025 2024
Beginning balance - Bargaining Plan assets at fair value $ 49,617   $ 47,321  
Actual return on plan assets 5,231   1,424  
Employer contributions 5,000   2,000  
Benefits and expenses paid ( 1,312 ) ( 1,128 )
Ending balance - Bargaining Plan assets at fair value $ 58,536   $ 49,617  

Funded Status

(in thousands) December 31, 2025 December 31, 2024
Projected benefit obligation $ ( 52,100 ) $ ( 44,935 )
Plan assets at fair value 58,536   49,617  
Net funded status - Bargaining Plan $ 6,436   $ 4,682  

Amounts Recognized in the Consolidated Balance Sheets

(in thousands) December 31, 2025 December 31, 2024

Assets:
 Noncurrent assets $ 6,436   $ 4,682  
Total asset - Bargaining Plan $ 6,436   $ 4,682  

Net Periodic Pension Cost

  Fiscal Year
(in thousands) 2025 2024 2023
Service cost $ 3,703   $ 4,330   $ 3,996  
Interest cost 2,722   2,379   2,079  
Expected return on plan assets ( 3,276 ) ( 3,050 ) ( 2,438 )
Amortization of prior service costs 16   16   16  
Net periodic pension cost - Bargaining Plan $ 3,165   $ 3,675   $ 3,653  

Significant Assumptions

  Fiscal Year
  2025 2024 2023
Projected benefit obligation at the measurement date:
Discount rate - Bargaining Plan 5.92   % 5.89   % 5.16   %
Weighted average rate of compensation increase N/A N/A N/A
Net periodic pension cost for the fiscal year:
Discount rate - Bargaining Plan 5.89   % 5.16   % 5.34   %
Weighted average expected long-term rate of return of plan assets - Bargaining Plan (1)
7.00   % 7.00   % 7.00   %
Weighted average rate of compensation increase N/A N/A N/A

(1) The weighted average expected long-term rate of return assumption for the Bargaining Plan assets, which was used to compute net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions set at the beginning of each fiscal year.

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Cash Flows

The anticipated future pension benefit payments as of December 31, 2025 were as follows:

(in thousands) Anticipated Future Payment
2026 $ 1,535  
2027 1,782  
2028 2,043  
2029 2,299  
2030 2,562  
2031 - 2035 17,154  

The Company expects to make cash contributions to the Bargaining Plan of approximately $ 5 million during fiscal year 2026.

Plan Assets

All assets in the Bargaining Plan are invested in institutional investment funds managed by professional investment advisors which hold U.S. and international equity and debt securities. The objective of the Company’s investment philosophy is to earn the Bargaining Plan’s targeted rate of return over longer periods without assuming excess investment risk. The weighted average expected long-term rate of return assumption for the Bargaining Plan assets, which will be used to compute fiscal year 2026 net periodic pension cost, is based upon target asset allocation and is determined using forward-looking performance and duration assumptions in the context of historical returns and volatilities for each asset class. The Company evaluates the rate of return assumption on an annual basis.

The Company’s actual asset allocation at December 31, 2025 and December 31, 2024 and target asset allocation for fiscal year 2026 by asset category for the Bargaining Plan were as follows:

Percentage of Bargaining Plan
Assets at Fiscal Year-End Target Asset
Allocation
2025 2024 2026
U.S. debt securities 54   % 50   % 50   %
U.S. equity securities 26   % 26   % 25   %
International debt securities 2   % 3   % —   %
International equity securities 11   % 13   % 13   %
Cash and cash equivalents 1   % 1   % 2   %
Other 6   % 7   % 10   %
Total 100   % 100   % 100   %

The expected long-term rate of return on assets for the Bargaining Plan as of December 31, 2025 was 7.00 %.

Debt securities in the Bargaining Plan as of December 31, 2025 consisted primarily of investments in government and corporate bonds with a weighted average maturity of approximately 18 years. U.S. equity securities in the Bargaining Plan as of December 31, 2025 included large-capitalization, mid-capitalization and small-capitalization domestic equity funds represented by various indices. International equity securities in the Bargaining Plan as of December 31, 2025 included companies from both developed and emerging markets outside the United States. Other investments in the Bargaining Plan as of December 31, 2025 included alternative investment funds and other strategic opportunities. Cash and cash equivalents have a weighted average duration of less than one year .

The following table summarizes the Bargaining Plan assets, which are classified as Level 1 and Level 2 for fair value measurement. The Company does not have any Level 3 pension plan assets. See Note 16 for additional information.

(in thousands) December 31, 2025 December 31, 2024
Pension plan assets - fixed income $ 32,491   $ 26,243  
Pension plan assets - equity securities 21,819   19,468  
Pension plan assets - cash and cash equivalents 588   671  
Pension plan assets - other 3,638   3,235  
Total pension plan assets $ 58,536   $ 49,617  

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401(k) Savings Plan

The Company provides a 401(k) Savings Plan for substantially all of its employees who are not part of collective bargaining agreements and for certain employees who are part of collective bargaining agreements. The Company’s matching contribution for employees who are not part of collective bargaining agreements is discretionary, with the option to match contributions for eligible participants up to 5 % based on the Company’s financial results. For all years presented, the Company matched the maximum 5 % of participants’ contributions. The Company’s matching contribution for employees who are part of collective bargaining agreements is determined in accordance with negotiated formulas for the respective employees. The total expense for the Company’s matching contributions to the 401(k) Savings Plan was $ 35.1  million in 2025, $ 32.7  million in 2024 and $ 30.5  million in 2023.

Postretirement Benefits