Coca-Cola(KO) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights The Coca-Cola Company achieved strong Q3 2025 financial growth and expanded its global franchise system through strategic refranchising and portfolio diversification Third Quarter 2025 Performance Highlights The Coca-Cola Company reported strong third-quarter 2025 results, with net revenues growing 5% and organic revenues (non-GAAP) up 6%. Operating income surged 59%, and comparable EPS (non-GAAP) increased by 6%. The company also gained value share in total nonalcoholic ready-to-drink (NARTD) beverages Q3 2025 Performance Highlights | Metric | Q3 2025 Performance | | :---------------------------------- | :------------------ | | Net Revenues Growth | 5% to $12.5 billion | | Organic Revenues (Non-GAAP) Growth | 6% | | Operating Income Growth | 59% | | Comparable Currency Neutral Operating Income (Non-GAAP) Growth | 15% | | Operating Margin | 32.0% (vs. 21.2% prior year) | | Comparable Operating Margin (Non-GAAP) | 31.9% (vs. 30.7% prior year) | | EPS Growth | 30% to $0.86 | | Comparable EPS (Non-GAAP) Growth | 6% to $0.82 | | Value Share | Gained in total NARTD beverages | - Year-to-date cash flow from operations was $3.7 billion, and free cash flow (non-GAAP) was $2.4 billion, reflecting a $6.1 billion contingent consideration payment for the fairlife acquisition. Excluding this payment, year-to-date free cash flow (non-GAAP) was $8.5 billion[5] Company Updates and Strategic Initiatives The company continued to strengthen its global franchise system through refranchising efforts, including the acquisition of a controlling interest in Coca-Cola Beverages Africa Pty Ltd (CCBA) by Coca-Cola HBC AG (CCHBC) and the sale of a 40% stake in Hindustan Coca-Cola Holdings Pvt. Ltd. in India. Strategic focus remains on a broad, consumer-centric beverage portfolio, with notable growth in Fuze Tea, Powerade/BODYARMOR, Santa Clara in Mexico, and Minute Maid Zero Sugar in Asia Pacific - Coca-Cola HBC AG (CCHBC) entered a definitive agreement to acquire a controlling interest in Coca-Cola Beverages Africa Pty Ltd (CCBA), aiming to drive CCBA's next chapter of growth[6] - A 40% ownership stake in Hindustan Coca-Cola Holdings Pvt. Ltd. was sold to Jubilant Bhartia Group, marking another milestone in India's refranchising process[6] - The ready-to-drink tea portfolio maintained global leadership, with Fuze Tea growing retail value five times the industry average year-to-date. The dual-brand sports strategy with Powerade and BODYARMOR delivered positive results, gaining value share and growing volume[6] - Santa Clara became the value share leader in Mexico's value-added dairy category, growing volume 13% during the quarter, supported by communication on lactose-free and flavored milk[6] Operating Review - Three Months Ended September 26, 2025 This section details the company's consolidated and segment-specific operational performance for Q3 2025, highlighting revenue, volume, and operating income trends Consolidated Performance (Q3 2025) Consolidated unit case volume grew 1%, driven by Central Asia, North Africa, Brazil, and the United Kingdom. Sparkling soft drinks were even, with Trademark Coca-Cola growing 1% and Coca-Cola Zero Sugar growing 14%. Juice, value-added dairy, and plant-based beverages declined 3%, while water, sports, coffee, and tea grew 3%. Price/mix increased 6%, contributing to a 59% rise in reported operating income and a 15% increase in comparable currency neutral operating income Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Concentrate Sales | 0 | | Price/Mix | 6 | | Currency Impact | 0 | | Acquisitions, Divestitures and Structural Changes, Net | 0 | | Reported Net Revenues | 5 | | Organic Revenues (Non-GAAP) | 6 | | Unit Case Volume | 1 | Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Operating Income | 59 | | Items Impacting Comparability | 51 | | Currency Impact | (7) | | Comparable Currency Neutral Operating Income (Non-GAAP) | 15 | | Reported EPS | 30 | | Items Impacting Comparability | 24 | | Currency Impact | (6) | | Comparable Currency Neutral EPS (Non-GAAP) | 12 | - Unit case volume grew 1%, primarily driven by growth in Central Asia, North Africa, Brazil, and the United Kingdom[12] - Sparkling soft drinks were even, with Trademark Coca-Cola growing 1% and Coca-Cola Zero Sugar growing 14% across all geographic operating segments[12] - Water, sports, coffee, and tea grew 3%, with water and sports drinks showing growth across segments and in North America, respectively[16] Europe, Middle East & Africa (Q3 2025) The Europe, Middle East & Africa segment saw a 4% increase in unit case volume, driven by Trademark Coca-Cola, sparkling flavors, and water, sports, coffee, and tea. Price/mix grew 4%, leading to a 10% increase in reported operating income and an 11% rise in comparable currency neutral operating income. Value share in total NARTD beverages remained even, with gains in Egypt and Kazakhstan offset by declines in South Africa and Pakistan Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Net Revenues | 10 | | Organic Revenues (Non-GAAP) | 7 | | Unit Case Volume | 4 | | Reported Operating Income | 10 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 11 | - Unit case volume grew 4%, primarily driven by growth in Trademark Coca-Cola, sparkling flavors, and water, sports, coffee and tea[16] - Value share in total NARTD beverages for the company was even, as gains in Egypt and Kazakhstan were offset by declines in South Africa and Pakistan[16] Latin America (Q3 2025) Latin America's unit case volume was even, with growth in water, sports, coffee, and tea offsetting a decline in Trademark Coca-Cola. Price/mix grew 7%, but reported operating income declined 4% due to currency headwinds. Comparable currency neutral operating income (non-GAAP) grew 3%, primarily driven by organic revenue growth. The company gained value share in total NARTD beverages, led by Brazil and Argentina Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Net Revenues | (4) | | Organic Revenues (Non-GAAP) | 4 | | Unit Case Volume | 0 | | Reported Operating Income | (4) | | Comparable Currency Neutral Operating Income (Non-GAAP) | 3 | - Unit case volume was even, as growth in water, sports, coffee and tea was offset by a decline in Trademark Coca-Cola[16] - The company gained value share in total NARTD beverages, led by share gains in Brazil and Argentina[16] North America (Q3 2025) North America's unit case volume remained even, with growth in water, sports, coffee, and tea offsetting declines in Trademark Coca-Cola and juice, value-added dairy, and plant-based beverages. Price/mix grew 6%, contributing to a 15% increase in reported operating income and an 11% rise in comparable currency neutral operating income. The segment gained value share in total NARTD beverages, particularly in juice, value-added dairy, plant-based beverages, and water, sports, coffee, and tea Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Net Revenues | 4 | | Organic Revenues (Non-GAAP) | 4 | | Unit Case Volume | 0 | | Reported Operating Income | 15 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 11 | - Unit case volume was even, as growth in water, sports, coffee and tea was offset by declines in Trademark Coca-Cola and juice, value-added dairy and plant-based beverages[16] - The company gained value share in total NARTD beverages, led by share gains in juice, value-added dairy and plant-based beverages and water, sports, coffee and tea[16] Asia Pacific (Q3 2025) The Asia Pacific segment experienced a 1% decline in unit case volume, as growth in Trademark Coca-Cola was more than offset by a decline in sparkling flavors. Price/mix grew 8%, driven by investments, pricing actions, and favorable mix. Reported operating income increased 13%, and comparable currency neutral operating income (non-GAAP) grew 2%, primarily due to organic revenue growth. The company gained value share in total NARTD beverages, led by the Philippines and Japan Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Net Revenues | 11 | | Organic Revenues (Non-GAAP) | 7 | | Unit Case Volume | (1) | | Reported Operating Income | 13 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 2 | - Unit case volume declined 1%, as growth in Trademark Coca-Cola was more than offset by a decline in sparkling flavors[19] - The company gained value share in total NARTD beverages, led by share gains in the Philippines and Japan[19] Bottling Investments (Q3 2025) Bottling Investments reported a 2% increase in unit case volume, largely due to growth in Africa and India, partially offset by the impact of refranchising. Price/mix grew 1%. Reported operating income increased 32%, and comparable currency neutral operating income (non-GAAP) grew 30%, driven by organic revenue growth despite higher input costs Percent Change (Q3 2025) | Metric | Percent Change (Q3 2025) | | :------------------------------------------------ | :----------------------- | | Reported Net Revenues | 2 | | Organic Revenues (Non-GAAP) | 7 | | Unit Case Volume | 2 | | Reported Operating Income | 32 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 30 | - Unit case volume grew 2%, largely due to growth in Africa and India, partially offset by the impact of refranchising bottling operations[19] Operating Review - Nine Months Ended September 26, 2025 This section reviews the company's year-to-date consolidated and segment-level operational performance for the nine months ended September 26, 2025 Consolidated Performance (YTD Q3 2025) For the nine months ended September 26, 2025, consolidated net revenues grew 2%, with organic revenues (non-GAAP) increasing 5%. Unit case volume grew 1%. Reported operating income surged 64%, and comparable currency neutral operating income (non-GAAP) grew 13%. Reported EPS increased 29%, and comparable currency neutral EPS (non-GAAP) grew 9% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Concentrate Sales | 0 | | Price/Mix | 6 | | Currency Impact | (3) | | Acquisitions, Divestitures and Structural Changes, Net | (1) | | Reported Net Revenues | 2 | | Organic Revenues (Non-GAAP) | 5 | | Unit Case Volume | 1 | Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Operating Income | 64 | | Items Impacting Comparability | 57 | | Currency Impact | (6) | | Comparable Currency Neutral Operating Income (Non-GAAP) | 13 | | Reported EPS | 29 | | Items Impacting Comparability | 25 | | Currency Impact | (5) | | Comparable Currency Neutral EPS (Non-GAAP) | 9 | Europe, Middle East & Africa (YTD Q3 2025) The Europe, Middle East & Africa segment reported a 5% increase in net operating revenues and a 6% increase in organic revenues (non-GAAP) year-to-date. Unit case volume grew 3%. Reported operating income increased 4%, and comparable currency neutral operating income (non-GAAP) grew 9% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Net Revenues | 5 | | Organic Revenues (Non-GAAP) | 6 | | Unit Case Volume | 3 | | Reported Operating Income | 4 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 9 | Latin America (YTD Q3 2025) Latin America experienced a 4% decline in reported net revenues year-to-date, but organic revenues (non-GAAP) grew 10%. Unit case volume declined 1%. Reported operating income decreased 2%, while comparable currency neutral operating income (non-GAAP) showed strong growth at 18% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Net Revenues | (4) | | Organic Revenues (Non-GAAP) | 10 | | Unit Case Volume | (1) | | Reported Operating Income | (2) | | Comparable Currency Neutral Operating Income (Non-GAAP) | 18 | North America (YTD Q3 2025) North America's net revenues grew 4% year-to-date, with organic revenues (non-GAAP) also increasing 4%. Unit case volume declined 1%. Reported operating income saw a significant increase of 39%, and comparable currency neutral operating income (non-GAAP) grew 9% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Net Revenues | 4 | | Organic Revenues (Non-GAAP) | 4 | | Unit Case Volume | (1) | | Reported Operating Income | 39 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 9 | Asia Pacific (YTD Q3 2025) The Asia Pacific segment reported a 3% increase in net revenues and a 6% increase in organic revenues (non-GAAP) year-to-date. Unit case volume remained flat. Reported operating income grew 2%, and comparable currency neutral operating income (non-GAAP) increased 6% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Net Revenues | 3 | | Organic Revenues (Non-GAAP) | 6 | | Unit Case Volume | 0 | | Reported Operating Income | 2 | | Comparable Currency Neutral Operating Income (Non-GAAP) | 6 | Bottling Investments (YTD Q3 2025) Bottling Investments saw a 10% decline in reported net revenues year-to-date, primarily due to refranchising impacts, but organic revenues (non-GAAP) grew 2%. Unit case volume declined 8%. Reported operating income decreased 21%, and comparable currency neutral operating income (non-GAAP) also declined 19% Percent Change (YTD Q3 2025) | Metric | Percent Change (YTD Q3 2025) | | :------------------------------------------------ | :--------------------------- | | Reported Net Revenues | (10) | | Organic Revenues (Non-GAAP) | 2 | | Unit Case Volume | (8) | | Reported Operating Income | (21) | | Comparable Currency Neutral Operating Income (Non-GAAP) | (19) | Financial Outlook The company provides its financial guidance for full year 2025, including updates to tax rate and free cash flow, and outlines considerations for Q4 2025 and full year 2026 Full Year 2025 Guidance The company maintains its full-year 2025 guidance for organic revenue growth of 5% to 6% and comparable currency neutral EPS (non-GAAP) growth of approximately 8%. The underlying effective tax rate (non-GAAP) is updated to 20.7% (from 20.8%). Free cash flow excluding the fairlife contingent consideration payment (non-GAAP) is now expected to be at least $9.8 billion (updated from $9.5 billion) - Organic revenue (non-GAAP) growth is expected to be 5% to 6% (No Update)[27] - Comparable net revenues (non-GAAP) are expected to include a 1% to 2% currency headwind and an approximate 1% headwind from acquisitions, divestitures, and structural changes (No Update)[27] - Underlying effective tax rate (non-GAAP) is estimated to be 20.7% (Updated from 20.8%)[27] - Comparable currency neutral EPS (non-GAAP) growth is expected to be approximately 8% (No Update)[27] - Free cash flow excluding the fairlife contingent consideration payment (non-GAAP) is expected to be at least $9.8 billion (Updated from $9.5 billion), consisting of $12.0 billion from operations less $2.2 billion in capital expenditures[27] Fourth Quarter 2025 Considerations For the fourth quarter of 2025, the company anticipates a slight currency tailwind for comparable net revenues (non-GAAP) and a 4% to 5% currency headwind for comparable EPS (non-GAAP) percentage growth - Comparable net revenues (non-GAAP) are expected to include a slight currency tailwind[28] - Comparable EPS (non-GAAP) percentage growth is expected to include a 4% to 5% currency headwind[28] Full Year 2026 Considerations For full year 2026, the company expects a slight currency tailwind for both comparable net revenues (non-GAAP) and comparable EPS (non-GAAP) percentage growth. Detailed guidance will be provided with fourth-quarter earnings - Comparable net revenues (non-GAAP) are expected to include a slight currency tailwind[29] - Comparable EPS (non-GAAP) percentage growth is expected to include a slight currency tailwind[29] - Full year 2026 guidance will be provided when fourth quarter earnings are reported[29] Consolidated Financial Statements This section presents the company's consolidated statements of income, balance sheets, and cash flows for the reported periods, detailing financial performance and position Consolidated Statements of Income The consolidated statements of income show a 5% increase in net operating revenues for the three months ended September 26, 2025, reaching $12,455 million, and a 2% increase for the nine-month period, totaling $36,119 million. Operating income significantly grew by 59% for the quarter and 64% year-to-date, primarily due to a substantial decrease in other operating charges. Net income attributable to shareowners increased 30% for the quarter and 28% year-to-date Consolidated Statements of Income (Three Months Ended September 26, 2025) | Metric | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :--------------------------------------- | :---------------------- | :---------------------- | :------- | | Net Operating Revenues | $12,455 | $11,854 | 5 | | Cost of goods sold | 4,797 | 4,664 | 3 | | Gross Profit | 7,658 | 7,190 | 7 | | Selling, general and administrative expenses | 3,618 | 3,636 | 0 | | Other operating charges | 58 | 1,044 | (94) | | Operating Income | 3,982 | 2,510 | 59 | | Income Before Income Taxes | 4,183 | 3,380 | 24 | | Income taxes | 500 | 530 | (6) | | Consolidated Net Income | 3,683 | 2,850 | 29 | | Net Income Attributable to Shareowners | $3,696 | $2,848 | 30 | | Basic Net Income Per Share | $0.86 | $0.66 | 30 | | Diluted Net Income Per Share | $0.86 | $0.66 | 30 | Consolidated Statements of Income (Nine Months Ended September 26, 2025) | Metric | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :--------------------------------------- | :---------------------- | :---------------------- | :------- | | Net Operating Revenues | $36,119 | $35,517 | 2 | | Cost of goods sold | 13,674 | 13,711 | 0 | | Gross Profit | 22,445 | 21,806 | 3 | | Selling, general and administrative expenses | 10,322 | 10,536 | (2) | | Other operating charges | 202 | 3,987 | (95) | | Operating Income | 11,921 | 7,283 | 64 | | Income Before Income Taxes | 13,036 | 10,280 | 27 | | Income taxes | 2,215 | 1,844 | 20 | | Consolidated Net Income | 10,821 | 8,436 | 28 | | Net Income Attributable to Shareowners | $10,836 | $8,436 | 28 | | Basic Net Income Per Share | $2.52 | $1.96 | 29 | | Diluted Net Income Per Share | $2.51 | $1.95 | 29 | Consolidated Balance Sheets As of September 26, 2025, total assets increased to $106,045 million from $100,549 million at December 31, 2024. This growth was primarily driven by increases in cash and cash equivalents, equity method investments, and property, plant and equipment. Total liabilities decreased, mainly due to a reduction in accounts payable and accrued expenses, while total equity attributable to shareowners significantly increased to $31,247 million from $24,856 million Consolidated Balance Sheets (Selected Data) | Metric | Sep 26, 2025 (Millions) | Dec 31, 2024 (Millions) | | :--------------------------------------- | :---------------------- | :---------------------- | | Total Current Assets | $27,247 | $25,997 | | Equity method investments | 20,323 | 18,087 | | Property, plant and equipment — net | 10,902 | 10,303 | | Total Assets | $106,045 | $100,549 | | Total Current Liabilities | $22,499 | $25,249 | | Long-term debt | 43,177 | 42,375 | | Equity Attributable to Shareowners | $31,247 | $24,856 | | Total Equity | $33,267 | $26,372 | | Total Liabilities and Equity | $106,045 | $100,549 | Consolidated Statements of Cash Flows For the nine months ended September 26, 2025, net cash provided by operating activities increased to $3,652 million from $2,854 million in the prior year. Net cash provided by investing activities was $977 million, a decrease from $3,307 million in the prior year, primarily due to changes in purchases and proceeds from disposals of investments. Net cash used in financing activities increased to $3,088 million, largely due to lower issuances of debt and higher dividends paid Consolidated Statements of Cash Flows (Nine Months Ended September 26, 2025) | Metric | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | | :--------------------------------------- | :---------------------- | :---------------------- | | Net Cash Provided by Operating Activities | $3,652 | $2,854 | | Net Cash Provided by (Used in) Investing Activities | 977 | 3,307 | | Net Cash Provided by (Used in) Financing Activities | (3,088) | (1,426) | | Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period | 1,876 | 4,469 | | Cash and Cash Equivalents at End of Period | $12,732 | $13,938 | Segment Financial Performance This section analyzes net operating revenues and operating income (loss) across the company's various operating segments for both quarterly and year-to-date periods Net Operating Revenues by Operating Segment For the three months ended September 26, 2025, Europe, Middle East & Africa (EMEA) and Asia Pacific segments showed strong revenue growth of 10% and 11% respectively, while Latin America experienced a 4% decline. North America grew 4%, and Bottling Investments grew 2%. Year-to-date, EMEA and North America continued to grow at 5% and 4% respectively, while Latin America declined 4% and Bottling Investments declined 10%, largely due to refranchising Net Operating Revenues by Segment (Three Months Ended September 26, 2025) | Segment | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :-------------------------- | :---------------------- | :---------------------- | :------- | | Europe, Middle East & Africa | $2,996 | $2,727 | 10 | | Latin America | 1,573 | 1,642 | (4) | | North America | 5,253 | 5,038 | 4 | | Asia Pacific | 1,506 | 1,362 | 11 | | Bottling Investments | 1,346 | 1,316 | 2 | | Consolidated | $12,455 | $11,854 | 5 | Net Operating Revenues by Segment (Nine Months Ended September 26, 2025) | Segment | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :-------------------------- | :---------------------- | :---------------------- | :------- | | Europe, Middle East & Africa | $8,829 | $8,387 | 5 | | Latin America | 4,637 | 4,824 | (4) | | North America | 14,643 | 14,138 | 4 | | Asia Pacific | 4,499 | 4,365 | 3 | | Bottling Investments | 4,220 | 4,672 | (10) | | Consolidated | $36,119 | $35,517 | 2 | Operating Income (Loss) by Operating Segment For the three months ended September 26, 2025, all operating segments reported positive operating income, with Bottling Investments showing the highest growth at 32%, followed by North America (15%), Asia Pacific (13%), and EMEA (10%). Latin America's operating income declined 4%. Year-to-date, North America's operating income surged 39%, and EMEA grew 4%, while Latin America declined 2% and Bottling Investments declined 21%. Corporate operating loss significantly improved by 80% for the quarter and 77% year-to-date Operating Income (Loss) by Segment (Three Months Ended September 26, 2025) | Segment | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :-------------------------- | :---------------------- | :---------------------- | :------- | | Europe, Middle East & Africa | $1,097 | $998 | 10 | | Latin America | 897 | 937 | (4) | | North America | 1,681 | 1,456 | 15 | | Asia Pacific | 521 | 462 | 13 | | Bottling Investments | 57 | 43 | 32 | | Corporate | (271) | (1,386) | 80 | | Consolidated | $3,982 | $2,510 | 59 | Operating Income (Loss) by Segment (Nine Months Ended September 26, 2025) | Segment | Sep 26, 2025 (Millions) | Sep 27, 2024 (Millions) | % Change | | :-------------------------- | :---------------------- | :---------------------- | :------- | | Europe, Middle East & Africa | $3,487 | $3,360 | 4 | | Latin America | 2,758 | 2,803 | (2) | | North America | 4,643 | 3,329 | 39 | | Asia Pacific | 1,792 | 1,765 | 2 | | Bottling Investments | 235 | 297 | (21) | | Corporate | (994) | (4,271) | 77 | | Consolidated | $11,921 | $7,283 | 64 | Non-GAAP Financial Measures Reconciliation This section defines non-GAAP financial measures, details items impacting comparability, and provides reconciliation tables for key financial metrics Overview and Definitions of Non-GAAP Measures This section provides definitions for various non-GAAP financial measures used by The Coca-Cola Company, including 'currency neutral operating results,' 'structural changes,' 'comparable net revenues,' 'organic revenues,' 'comparable operating income,' 'comparable EPS,' and 'free cash flow.' These measures are used by management to assess underlying business performance and trends, and to enhance comparability of period-to-period financial results, excluding the impact of items not reflective of ongoing operations - Non-GAAP financial measures are used to supplement GAAP results, providing additional meaningful financial information for assessing underlying business performance and trends[51] - Key non-GAAP definitions include 'currency neutral operating results' (adjusting for foreign exchange rate fluctuations), 'structural changes' (acquisitions/divestitures of bottling operations), 'organic revenues' (excluding currency and structural changes), 'comparable operating income' (excluding items impacting comparability and currency), 'comparable EPS' (excluding items impacting comparability and currency), and 'free cash flow' (net cash from operations less capital expenditures)[52][55] Items Impacting Comparability This section details specific items that impact the comparability of financial results between periods, which are excluded from non-GAAP measures. These include asset impairments, gains/losses from equity investees and transactions, restructuring charges, and other items such as economic hedging adjustments, unrealized gains/losses on securities, and tax matters. These adjustments aim to provide a clearer view of the company's ongoing operational performance - Items impacting comparability are charges, gains, and accounting changes viewed by management as affecting only the current or comparable period, or pertaining to different and unrelated underlying activities[54] Asset Impairments - During the nine months ended September 26, 2025, the company recorded a $40 million impairment charge for an equity method investee, a $31 million charge for a trademark, and a $25 million charge related to a joint venture restructuring, all in Latin America[57] - During the nine months ended September 27, 2024, charges included $760 million for the BODYARMOR trademark impairment and $34 million for an equity method investee in Latin America[59] Equity Investees - The company recorded a net gain of $7 million for the three months and a net charge of $21 million for the nine months ended September 26, 2025, representing its proportionate share of significant items from equity method investees[60] Transaction Gains/Losses - For Q3 2025, charges included $393 million for operations held for sale in Nigeria and $8 million for refranchising bottling operations in Ghana[61] - For YTD Q3 2025, a net gain of $331 million was recorded from the sale of a portion of Coca-Cola Europacific Partners plc, and a net gain of $102 million from India refranchising, offset by a $47 million charge for fairlife contingent consideration remeasurement[62] - For Q3 2024, charges of $919 million were related to the remeasurement of the fairlife contingent consideration liability[63] Restructuring - Charges of $24 million (Q3 2025) and $63 million (YTD Q3 2025) were recorded for initiatives to simplify and standardize the organization as part of productivity and reinvestment programs[67] Other Items - The net impact of economic hedging activities decreased non-GAAP income before income taxes by $88 million (Q3 2025) and $17 million (YTD Q3 2025)[69] - Unrealized gains and losses on equity and trading debt securities decreased non-GAAP income before income taxes by $96 million (Q3 2025) and $183 million (YTD Q3 2025)[71] - Other charges included $27 million (Q3 2025) and $35 million (YTD Q3 2025) related to an indemnification agreement from refranchising, and $4 million (Q3 2025) and $11 million (YTD Q3 2025) for BODYARMOR noncompete amortization[73] Certain Tax Matters - Net income tax benefits of $36 million (Q3 2025) and $1 million (YTD Q3 2025) were recorded primarily from return to provision adjustments[76] - Net income tax benefits of $406 million (Q3 2025) and $571 million (YTD Q3 2025) were recorded for changes to uncertain tax positions and discrete tax items[76] Reconciliation Tables (Income Statement & EPS) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for the consolidated income statement and earnings per share for both the three and nine months ended September 26, 2025, and September 27, 2024. It highlights the impact of items impacting comparability and currency fluctuations on reported figures to derive comparable and comparable currency neutral results Reconciliation of Operating Income and Operating Margin (Q3 2025 vs. Q3 2024) | Metric | Reported (GAAP) Q3 2025 | Comparable (Non-GAAP) Q3 2025 | Reported (GAAP) Q3 2024 | Comparable (Non-GAAP) Q3 2024 | | :-------------------------------- | :---------------------- | :---------------------------- | :---------------------- | :---------------------------- | | Net Operating Revenues (Millions) | $12,455 | $12,412 | $11,854 | $11,949 | | Operating Income (Millions) | $3,982 | $3,957 | $2,510 | $3,671 | | Operating Margin | 32.0% | 31.9% | 21.2% | 30.7% | | % Change - Reported (GAAP) | 5% (Revenues) / 59% (Op. Income) | - | - | - | | % Change - Comparable (Non-GAAP) | 4% (Revenues) / 8% (Op. Income) | - | - | - | | % Change - Comparable Currency Neutral (Non-GAAP) | 5% (Revenues) / 15% (Op. Income) | - | - | - | Reconciliation of Diluted Net Income Per Share (Q3 2025 vs. Q3 2024) | Metric | Reported (GAAP) Q3 2025 | Comparable (Non-GAAP) Q3 2025 | Reported (GAAP) Q3 2024 | Comparable (Non-GAAP) Q3 2024 | | :-------------------------------- | :---------------------- | :---------------------------- | :---------------------- | :---------------------------- | | Diluted Net Income Per Share | $0.86 | $0.82 | $0.66 | $0.77 | | % Change - Reported (GAAP) | 30% | - | - | - | | % Change - Comparable (Non-GAAP) | 6% | - | - | - | | % Change - Comparable Currency Neutral (Non-GAAP) | 12% | - | - | - | Reconciliation Tables (Revenues & Operating Income by Segment) This section provides detailed reconciliations of GAAP to non-GAAP net operating revenues and operating income (loss) for each operating segment and corporate, for both the three and nine months ended September 26, 2025, and September 27, 2024. It illustrates the impact of items impacting comparability, currency fluctuations, and structural changes on segment-level performance Reconciliation of Consolidated Net Operating Revenues (Q3 2025 vs. Q3 2024) | Metric | % Change - Reported (GAAP) | % Change - Organic Revenues (Non-GAAP) | | :-------------------------------- | :------------------------- | :------------------------------------- | | Consolidated | 5 | 6 | | Europe, Middle East & Africa | 10 | 7 | | Latin America | (4) | 4 | | North America | 4 | 4 | | Asia Pacific | 11 | 7 | | Bottling Investments | 2 | 7 | Reconciliation of Consolidated Operating Income (Q3 2025 vs. Q3 2024) | Metric | % Change - Reported (GAAP) | % Change - Comparable Currency Neutral (Non-GAAP) | | :-------------------------------- | :------------------------- | :------------------------------------------------ | | Consolidated | 59 | 15 | | Europe, Middle East & Africa | 10 | 11 | | Latin America | (4) | 3 | | North America | 15 | 11 | | Asia Pacific | 13 | 2 | | Bottling Investments | 32 | 30 | Reconciliation of Consolidated Net Operating Revenues (YTD Q3 2025 vs. YTD Q3 2024) | Metric | % Change - Reported (GAAP) | % Change - Organic Revenues (Non-GAAP) | | :-------------------------------- | :------------------------- | :------------------------------------- | | Consolidated | 2 | 5 | | Europe, Middle East & Africa | 5 | 6 | | Latin America | (4) | 10 | | North America | 4 | 4 | | Asia Pacific | 3 | 6 | | Bottling Investments | (10) | 2 | Reconciliation of Consolidated Operating Income (YTD Q3 2025 vs. YTD Q3 2024) | Metric | % Change - Reported (GAAP) | % Change - Comparable Currency Neutral (Non-GAAP) | | :-------------------------------- | :------------------------- | :------------------------------------------------ | | Consolidated | 64 | 13 | | Europe, Middle East & Africa | 4 | 9 | | Latin America | (2) | 18 | | North America | 39 | 9 | | Asia Pacific | 2 | 6 | | Bottling Investments | (21) | (19) | Reconciliation Tables (Operating Margin & Free Cash Flow) This section provides reconciliations for operating margin and free cash flow, highlighting the impact of items impacting comparability, currency, and structural changes on operating margin. It also details the calculation of free cash flow, both reported and excluding the fairlife contingent consideration payment, for the nine months ended September 26, 2025, and provides projections for full year 2025 Operating Margin Reconciliation (Q3 2025 vs. Q3 2024) | Metric | Sep 26, 2025 | Sep 27, 2024 | Basis Point Growth (Decline) | | :-------------------------------------------------------------------------------- | :----------- | :----------- | :--------------------------- | | Reported Operating Margin (GAAP) | 31.97 % | 21.17 % | 1,080 | | Comparable Operating Margin (Non-GAAP) | 31.87 % | 30.72 % | 115 | | Comparable Currency Neutral Operating Margin (Non-GAAP) | 33.42 % | 30.72 % | 270 | | Underlying Operating Margin (Non-GAAP) | 33.42 % | 30.77 % | 265 | Operating Margin Reconciliation (YTD Q3 2025 vs. YTD Q3 2024) | Metric | Sep 26, 2025 | Sep 27, 2024 | Basis Point Growth (Decline) | | :-------------------------------------------------------------------------------- | :----------- | :----------- | :--------------------------- | | Reported Operating Margin (GAAP) | 33.01 % | 20.50 % | 1,251 | | Comparable Operating Margin (Non-GAAP) | 33.45 % | 31.98 % | 147 | | Comparable Currency Neutral Operating Margin (Non-GAAP) | 34.69 % | 31.98 % | 271 | | Underlying Operating Margin (Non-GAAP) | 34.68 % | 32.03 % | 265 | Free Cash Flow Reconciliation (Nine Months Ended September 26, 2025) | Metric | Amount (Millions) | | :---------------------------------------------------------- | :---------------- | | Net Cash Provided by (Used in) Operating Activities (GAAP) | $3,652 | | Purchases of Property, Plant and Equipment (GAAP) | (1,230) | | Free Cash Flow (Non-GAAP) | 2,422 | | Plus: fairlife Contingent Consideration Payment | 6,069 | | Free Cash Flow Excluding the fairlife Contingent Consideration Payment (Non-GAAP) | $8,491 | Projected 2025 Free Cash Flow Excluding fairlife Contingent Consideration Payment (Billions) | Metric | Amount (Billions) | | :-------------------------------------------------------------------------------- | :---------------- | | Projected GAAP Net Cash Provided by Operating Activities | $5.9 | | Plus: fairlife Contingent Consideration Payment | 6.1 | | Projected Cash Flow from Operations Excluding the fairlife Contingent Consideration Payment (Non-GAAP) | 12.0 | | Projected GAAP Purchases of Property, Plant and Equipment | (2.2) | | Projected Free Cash Flow Excluding the fairlife Contingent Consideration Payment (Non-GAAP) | $9.8 | Company Information & Disclosures This section provides an overview of The Coca-Cola Company's global operations and portfolio, along with important disclosures regarding forward-looking statements and associated risks About The Coca-Cola Company The Coca-Cola Company (NYSE: KO) is a global beverage company operating in over 200 countries. It offers a diverse portfolio of sparkling soft drinks, water, sports, coffee, tea, juice, value-added dairy, and plant-based beverages. The company is committed to transforming its portfolio, reducing sugar, and introducing innovative products, while also focusing on sustainability initiatives like water replenishment, packaging recycling, and carbon emissions reduction. Together with its bottling partners, it employs over 700,000 people worldwide - The Coca-Cola Company operates in more than 200 countries and territories, offering a total beverage portfolio including Coca-Cola, Sprite, Fanta, Dasani, smartwater, BODYARMOR, Powerade, Costa, Fuze Tea, Minute Maid, fairlife, and AdeS[101] - The company focuses on portfolio transformation, including sugar reduction and new product innovation, and is committed to sustainability through water replenishment, packaging recycling, sustainable sourcing, and carbon emissions reductions[101] - Together with its bottling partners, the company employs over 700,000 people globally, contributing to economic opportunity in local communities[101] Forward-Looking Statements This section serves as a legal disclaimer, indicating that the press release contains forward-looking statements subject to various risks and uncertainties. These risks include unfavorable economic and geopolitical conditions, increased competition, supply chain disruptions, inability to integrate acquisitions, changes in consumer preferences, regulatory changes, and ongoing tax litigation. Readers are cautioned not to place undue reliance on these statements, and the company undertakes no obligation to update them - The press release contains forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially from expectations[103] - Key risks include economic and geopolitical conditions, competition, innovation challenges, retail landscape changes, supply chain disruptions, integration of acquired businesses, labor relations, health concerns, product safety, brand image, regulatory changes, foreign currency fluctuations, and ongoing tax litigation with the U.S. Internal Revenue Service[103] - Readers should not place undue reliance on forward-looking statements, and the company disclaims any obligation to publicly update or revise them[103]