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What changed in Coca-Cola Consolidated, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Coca-Cola Consolidated, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+298 added−256 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-21)

Top changes in Coca-Cola Consolidated, Inc.'s 2024 10-K

298 paragraphs added · 256 removed · 219 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe following table summarizes the percentage of the Company’s total bottle/can sales volume to its largest customers, as well as the percentage of the Company’s total net sales that such volume represents: Fiscal Year 2023 2022 Approximate percent of the Company’s total bottle/can sales volume: Wal-Mart Stores, Inc. 21 % 20 % The Kroger Company 14 % 12 % Total approximate percent of the Company’s total bottle/can sales volume 35 % 32 % Approximate percent of the Company’s total net sales: Wal-Mart Stores, Inc. 17 % 16 % The Kroger Company 11 % 10 % Total approximate percent of the Company’s total net sales 28 % 26 % The loss of Wal-Mart Stores, Inc. or The Kroger Company as a customer could have a material adverse effect on the operating and financial results of the Company.
Biggest changeThe following table summarizes the percentage of the Company’s total bottle/can sales volume to its largest customers, as well as the percentage of the Company’s total net sales that such volume represents: Fiscal Year 2024 2023 Approximate percent of the Company’s total bottle/can sales volume: Walmart Inc. (1) 21 % 21 % The Kroger Co.
We also have rights to manufacture, produce and package certain beverages bearing trademarks of The Coca‑Cola Company at our manufacturing plants pursuant to a regional manufacturing agreement with The Coca‑Cola Company entered into on March 31, 2017 (as amended, the “RMA”).
We also have rights to manufacture, produce and package certain beverages bearing trademarks of The Coca‑Cola Company at our manufacturing plants pursuant to a regional manufacturing agreement (as amended, the “RMA”) with The Coca‑Cola Company entered into on March 31, 2017.
Amended and Restated Ancillary Business Letter On March 31, 2017, we entered into an amended and restated ancillary business letter with The Coca‑Cola Company (the “Ancillary Business Letter”), pursuant to which we were granted advance waivers to acquire or develop certain lines of business involving the preparation, distribution, sale, dealing in or otherwise using or handling of certain beverage products that would otherwise be prohibited under the CBA.
Amended and Restated Ancillary Business Letter On March 31, 2017, we entered into an amended and restated ancillary business letter (the “Ancillary Business Letter”) with The Coca‑Cola Company, pursuant to which we were granted advance waivers to acquire or develop certain lines of business involving the preparation, distribution, sale, dealing in or otherwise using or handling of certain beverage products that would otherwise be prohibited under the CBA.
Fixed costs, such as depreciation expense, are not significantly impacted by business seasonality. 5 Competition The nonalcoholic beverage industry is highly competitive for both sparkling and still beverages. Our competitors include bottlers and distributors of nationally and regionally advertised and marketed products, as well as bottlers and distributors of private label beverages.
Fixed costs, such as depreciation expense, are not significantly impacted by business seasonality. Competition The nonalcoholic beverage industry is highly competitive for both sparkling and still beverages. Our competitors include bottlers and distributors of nationally and regionally advertised and marketed products, as well as bottlers and distributors of private label beverages.
Management monitors market compensation and benefits to be able to attract, retain and promote teammates and to reduce turnover and its associated costs. In recent years, the Company has faced periods of high teammate turnover, periodic labor shortages and wage inflation in our front-line workforce due to tight conditions in the labor market.
Management monitors market compensation and benefits to be able to attract, retain and promote teammates and to reduce turnover and its associated costs. 7 In recent years, the Company has faced periods of high teammate turnover, periodic labor shortages and wage inflation in our front-line workforce due to tight conditions in the labor market.
Under the Ancillary Business Letter, the consent of The Coca‑Cola Company, which consent may not be unreasonably withheld, would be required for us to acquire or develop (i) any grocery, quick service restaurant, or convenience and petroleum store business engaged in the sale of beverages, beverage components or other beverage products not otherwise authorized or permitted by the CBA or (ii) any other line of business for which beverage activities otherwise prohibited under the CBA represent more than a certain threshold of net sales (subject to certain limited exceptions). 3 Markets Served and Facilities As of December 31, 2023, we served approximately 60 million consumers within our territories, which comprised five principal markets.
Under the Ancillary Business Letter, the consent of The Coca‑Cola Company, which consent may not be unreasonably withheld, would be required for us to acquire or develop (i) any grocery, quick service restaurant, or convenience and petroleum store business engaged in the sale of beverages, beverage components or other beverage products not otherwise authorized or permitted by the CBA or (ii) any other line of business for which beverage activities otherwise prohibited under the CBA represent more than a certain threshold of net sales (subject to certain limited exceptions). 3 Markets Served and Facilities As of December 31, 2024, we served approximately 60 million consumers within our territories, which comprised five principal markets.
Raw Materials In addition to concentrates purchased from The Coca‑Cola Company and other beverage companies for use in our beverage manufacturing, we also purchase sweetener, carbon dioxide, plastic bottles, cans, closures and other packaging materials, as well as equipment for the distribution, marketing and production of nonalcoholic beverages.
Raw Materials In addition to concentrates purchased from The Coca‑Cola Company and other beverage companies for use in our beverage manufacturing, we also purchase sweetener, carbon dioxide, plastic bottles, aluminum cans, closures and other packaging materials, as well as equipment for the distribution, marketing and production of nonalcoholic beverages.
Accordingly, investors should monitor the investor relations portion of our website, in addition to our press releases, SEC filings and other public communications. The SEC also maintains a website, www.sec.gov , that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Accordingly, investors should monitor the investor relations portion of our website, in addition to our press releases, SEC filings and other public communications. 8 The SEC also maintains a website, www.sec.gov , that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
We are required to comply with a variety of U.S. laws and regulations, including, but not limited to: the Federal Food, Drug and Cosmetic Act and various state laws governing food safety; the Food Safety Modernization Act; the Occupational Safety and Health Act; the Clean Air Act; the Clean Water Act; the Resource Conservation and Recovery Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Federal Motor Carrier Safety Act; the Lanham Act; various federal and state laws and regulations governing competition and trade practices; various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act; and laws and regulations restricting the sale of certain of our products in schools.
We are required to comply with a variety of U.S. laws and regulations, including, but not limited to: the Federal Food, Drug and Cosmetic Act and various state laws governing food safety; the Food Safety Modernization Act; the Occupational Safety and Health Act; the Clean Air Act; the Clean Water Act; the Resource Conservation and Recovery Act; the Robinson-Patman Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Federal Motor Carrier Safety Act; the Lanham Act; various federal and state laws and regulations governing competition and trade practices; various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act; and laws and regulations restricting the sale of certain of our products in schools.
As a manufacturer, distributor and seller of beverage products of The Coca‑Cola Company and other beverage companies in exclusive territories, we are subject to antitrust laws of general applicability.
As a manufacturer, distributor and seller of beverage products of The Coca‑Cola Company and other beverage companies in exclusive geographic territories, we are subject to antitrust laws of general applicability.
The stated objectives of the NPSG include, among others, (i) Coca‑Cola system strategic infrastructure investment and divestment planning; (ii) network optimization of plant to distribution center sourcing; and (iii) new product or packaging infrastructure planning. Under the NPSG Agreement, the NPSG Members established certain governance mechanisms, including a governing board (the “NPSG Board”) comprised of representatives of certain NPSG Members.
The stated objectives of the NPSG include, among others, (i) Coca‑Cola system strategic infrastructure investment and divestment planning; (ii) network optimization of plant to distribution center sourcing; and (iii) new product or packaging infrastructure planning. Under the NPSG Agreement, the NPSG Members established certain governance mechanisms, including a governing board (the “NPSG Board”) composed of representatives of certain NPSG Members.
Human Capital Resources At Coca-Cola Consolidated, our teammates are the heart of our business and the key to our success. As of December 31, 2023, we employed approximately 17,000 employees which we refer to as “teammates,” of which approximately 15,000 were full-time and approximately 2,000 were part-time. Approximately 15% of our workforce is covered by collective bargaining agreements.
Human Capital Resources At Coca-Cola Consolidated, our teammates are the heart of our business and the key to our success. As of December 31, 2024, we employed approximately 17,000 employees which we refer to as “teammates,” of which approximately 15,000 were full-time and approximately 2,000 were part-time. Approximately 15% of our workforce is covered by collective bargaining agreements.
Restrictive legislation, if widely enacted, could have an adverse impact on our products, sales and reputation. Most beverage products sold by the Company are classified as food or food products and are therefore eligible for purchase using supplemental nutrition assistance program (“SNAP”) benefits by consumers purchasing them for home consumption.
Restrictive legislation, if widely enacted, could have an adverse impact on the Company’s products, sales and reputation. Most beverage products sold by the Company are classified as food or food products and are therefore eligible for purchase using supplemental nutrition assistance program (“SNAP”) benefits by consumers purchasing them for home consumption.
National Product Supply Governance Agreement We are a member of a national product supply group (the “NPSG”), which is comprised of The Coca‑Cola Company, the Company and certain other Coca‑Cola bottlers who are regional producing bottlers in The Coca‑Cola Company’s national product supply system (collectively with the Company, the “NPSG Members”), pursuant to a national product supply governance agreement executed in 2015 with The Coca‑Cola Company and certain other Coca‑Cola bottlers (as amended, the “NPSG Agreement”).
National Product Supply Governance Agreement We are a member of a national product supply group (the “NPSG”), which is composed of The Coca‑Cola Company, the Company and certain other Coca‑Cola bottlers who are regional producing bottlers in The Coca‑Cola Company’s national product supply system (collectively with the Company, the “NPSG Members”), pursuant to a national product supply governance agreement (as amended, the “NPSG Agreement”) executed in 2015 with The Coca‑Cola Company and certain other Coca‑Cola bottlers.
After onboarding, our teammates may participate in numerous learning experiences offered by the Company to help them develop and improve their skills and capabilities to advance in their careers, including at one of 7 our two dedicated experiential learning centers where teammates can develop and grow their skills through a hands-on experience.
After onboarding, our teammates may participate in numerous learning experiences offered by the Company to help them develop and improve their skills and capabilities to advance in their careers, including at one of our six dedicated experiential learning centers where teammates can develop and grow their skills through a hands-on experience.
We have a diversity task force comprised of diverse teammates from across the organization and led by our President and Chief Operating Officer with a focus on cultivating diversity at Coca‑Cola Consolidated. This task force developed a diversity framework focused on four pillars – communication, accountability, empowerment and partnerships.
We have a task force composed of teammates from across the organization and led by our President and Chief Operating Officer with a focus on cultivating diversity at Coca‑Cola Consolidated. This task force developed a framework focused on four pillars – communication, accountability, empowerment and partnerships.
Sales of beverages under these agreements with other beverage companies represented approximately 15%, 14% and 17% of our total bottle/can sales volume to retail customers in 2023, 2022 and 2021, respectively. Finished Goods Supply Arrangements We have finished goods supply arrangements with other U.S.
Sales of beverages under these agreements with other beverage companies represented approximately 15%, 15% and 14% of our total bottle/can sales volume to retail customers in 2024, 2023 and 2022, respectively. Finished Goods Supply Arrangements We have finished goods supply arrangements with other U.S.
Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably. Ownership As of December 31, 2023, J.
Our Purpose is to honor God in all we do, to serve others, to pursue excellence and to grow profitably. Ownership As of December 31, 2024, J.
An important part of attracting and retaining top talent is teammate satisfaction, and we conduct an annual engagement survey administered and analyzed by an independent third party to assess teammate satisfaction and engagement and the effectiveness of our teammate development and compensation programs. In 2023, 81% of our teammates participated in the survey.
An important part of attracting and retaining top talent is teammate satisfaction, and we conduct an annual engagement survey administered and analyzed by an independent third party to assess teammate satisfaction and engagement and the effectiveness of our teammate development and compensation programs. In 2024, 82% of our teammates participated in the survey.
The following table sets forth some of our principal products, including products of The Coca‑Cola Company and products licensed to us by other beverage companies: Sparkling Beverages Still Beverages The Coca-Cola Company Products: Barqs Root Beer Fanta Zero Sugar BODYARMOR Minute Maid Coca-Cola Fresca Core Power POWERade Coca-Cola Cherry Mello Yello Dasani Tum-E Yummies Coca-Cola Vanilla Pibb Xtra fairlife Coca-Cola Zero Sugar Seagrams Ginger Ale glacéau smartwater Diet Coke Sprite glacéau vitaminwater Fanta Sprite Zero Sugar Gold Peak Products Licensed to Us by Other Beverage Companies: Diet Dr Pepper Sundrop Bang Energy Monster Energy Diet Sundrop Dunkin’ Coffee NOS® Dr Pepper Full Throttle Reign/Reign Storm 1 Beverage Distribution and Manufacturing Agreements We have rights to distribute, promote, market and sell certain nonalcoholic beverages of The Coca‑Cola Company pursuant to comprehensive beverage agreements (collectively, the “CBA”) with The Coca‑Cola Company and Coca‑Cola Refreshments USA, Inc.
The following table sets forth some of our principal products, including products of The Coca‑Cola Company and products licensed to us by other beverage companies: Sparkling Beverages Still Beverages The Coca-Cola Company Products: Barqs Root Beer Fresca BODYARMOR Gold Peak Coca-Cola Mello Yello Core Power Minute Maid Coca-Cola Cherry Pibb Xtra Dasani POWERade Coca-Cola Vanilla Seagrams Ginger Ale Dunkin’ Coffee Topo Chico Sabores Coca-Cola Zero Sugar Sprite fairlife Tum-E Yummies Diet Coke Sprite Zero Sugar glacéau smartwater Fanta glacéau vitaminwater Fanta Zero Sugar Products Licensed to Us by Other Beverage Companies: Diet Dr Pepper Sundrop Bang Energy NOS® Diet Sundrop Full Throttle Reign/Reign Storm Dr Pepper Monster Energy 1 Beverage Distribution and Manufacturing Agreements We have rights to distribute, promote, market and sell certain nonalcoholic beverages of The Coca‑Cola Company pursuant to 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.
Certain jurisdictions in which our products are sold have imposed, or are considering imposing, taxes, labeling requirements or other limitations on, or regulations pertaining to, the sale of certain of our products, ingredients or substances contained in, or attributes of, our products or commodities used in the manufacture of our products, including certain of our products that contain added sugars or sodium, exceed a specified caloric count or include specified ingredients such as caffeine.
Certain jurisdictions in which our products are sold have imposed, or are considering imposing, taxes, labeling requirements or other limitations on, or regulations pertaining to, the sale of certain of our products or ingredients contained in, or attributes of, our products or commodities used in the manufacture of our products, including certain of our products that contain added sugars or sodium, exceed 6 a specified caloric count or include specified ingredients such as caffeine or high-fructose corn syrup.
As of December 31, 2023, The Coca‑Cola Company owned shares of the Company’s Common Stock representing approximately 9% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.
As of December 31, 2024, The Coca‑Cola Company owned shares of Common Stock representing approximately 7% of the total voting power of the outstanding Common Stock and Class B Common Stock on a consolidated basis.
(“CCR”), a wholly owned subsidiary of The Coca‑Cola Company. 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 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.
We consider the funds we expend for marketing and merchandising programs necessary to maintain or increase revenue. In addition to our marketing and merchandising programs, we believe a sustained and planned charitable giving program to support the communities we serve is an essential component to the success of our brand and, by extension, our net sales.
In addition to our marketing and merchandising programs, we believe a sustained and planned charitable giving program to support the communities we serve is an essential component to the success of our brand and, by extension, our net sales.
Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of the Company’s Class B Common Stock, which represented approximately 71% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis.
Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of the Company’s Class B Common Stock, par value $1.00 per share (“Class B Common Stock”), which represented approximately 72% of the total voting power of the Company’s outstanding Common Stock, par value $1.00 per share (“Common Stock”), and Class B Common Stock on a consolidated basis.
Additionally, in 2023, we hired a Health & Wellness Director to further promote the overall physical, mental and emotional well-being of our teammates. Diversity and Inclusion We strive to cultivate diversity in our workforce and believe teammates with diverse backgrounds, experiences and viewpoints bring value to our organization.
Additionally, the Company employs a Health & Wellness Director to further promote the overall physical, mental and emotional well-being of our teammates. Diversity As a part of Our Purpose, we strive to cultivate diversity in our workforce and believe teammates with different backgrounds, experiences and viewpoints bring value to our organization.
The Coca‑Cola Company does not own any shares of the Company’s Class B Common Stock. Beverage Products We offer a range of nonalcoholic beverage products and flavors, including both sparkling and still beverages, designed to meet the demands of our consumers. Sparkling beverages are carbonated beverages and the Company’s principal sparkling beverage is Coca‑Cola.
Beverage Products We offer a range of nonalcoholic beverage products and flavors, including both sparkling and still beverages, designed to meet the demands of our consumers. Sparkling beverages are carbonated beverages and the Company’s principal sparkling beverage is Coca‑Cola.
The number of shares of the Company’s Common Stock currently held by The Coca‑Cola Company gives it 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. J.
The number of shares of Common Stock currently held by The Coca‑Cola Company gives it 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. J. Frank Harrison, III and the trustees of certain trusts established for the benefit of certain relatives of the late J.
We also expend substantial funds on our own behalf for extensive local sales promotions of our products. Historically, these expenses have been partially offset by marketing funding support provided to us by The Coca‑Cola Company and other beverage companies in support of a variety of marketing programs, such as point-of-sale displays and merchandising programs.
Historically, these expenses have been partially offset by marketing funding support provided to us by The Coca‑Cola Company and other beverage companies in support of a variety of marketing programs, such as point-of-sale displays and merchandising programs. We consider the funds we expend for marketing and merchandising programs necessary to maintain or increase revenue.
Seasonality Business seasonality results primarily from higher unit sales of the Company’s products in the second and third quarters of the fiscal year, as sales of our products are typically correlated with warmer weather.
The Company intends to continue its charitable contributions in future years, subject to the Company’s financial performance and other business factors. 5 Seasonality Business seasonality results primarily from higher unit sales of the Company’s products in the second and third quarters of the fiscal year, as sales of our products are typically correlated with warmer weather.
New brand and product introductions, packaging changes and sales promotions are the primary sales and marketing practices in the nonalcoholic beverage industry and have required, and are expected to continue to require, substantial expenditures.
New brand and product introductions, packaging changes and sales promotions are the primary sales and marketing practices in the nonalcoholic beverage industry and have required, and are expected to continue to require, substantial expenditures. Recent and upcoming introductions include Sprite Chill and Coca-Cola Orange Cream in our Sparkling brands portfolio and Topo Chico Sabores in our Still brands portfolio.
We are not currently impacted by the policies in these types of 6 proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within our distribution territories in the future.
We are not currently impacted by the policies in such proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within our distribution territories in the future. We are also subject to federal, state and local environmental laws, including laws related to water consumption and treatment, wastewater discharge and air emissions.
For example, there may be up to 25 different packages for Diet Coke within a single geographic area. Total bottle/can sales volume to retail customers during 2023 was approximately 49% bottles and 51% cans. We rely extensively on advertising in various media outlets, primarily online, television and radio, for the marketing of our products.
We sell our products primarily in single-use, recyclable bottles and cans in varying package configurations from market to market. For example, there may be up to 25 different packages for Diet Coke within a single geographic area. Total bottle/can sales volume to retail customers during 2024 was approximately 47% bottles and 53% cans.
Frank Harrison, III and the trustees of certain trusts established for the benefit of certain relatives of the late J. Frank Harrison, Jr. have agreed to vote the shares of the Company’s Common Stock and Class B Common Stock that they control in favor of such designee.
Frank Harrison, Jr. have agreed to vote the shares of Common Stock and Class B Common Stock that they control in favor of such designee. The Coca‑Cola Company does not own any shares of Class B Common Stock.
The task force and discussion groups led by our senior executive leadership team strive to enhance Company-wide engagement on diversity, equity and inclusion (“DEI”), provide opportunities for teammates to discuss DEI, develop initiatives to support our diversity framework and monitor progress across these initiatives.
The task force and resource groups across our organization strive to enhance Company-wide engagement and provide opportunities for teammates to discuss and develop initiatives to support our framework.
The Coca‑Cola Company, Dr Pepper and Monster Energy make substantial expenditures on advertising programs in our territories from which we benefit. Although The Coca‑Cola Company and other beverage companies have provided us with marketing funding support in the past, our beverage agreements generally do not obligate such funding.
Although The Coca‑Cola Company and other beverage companies have provided us with marketing funding support in the past, our beverage agreements generally do not obligate such funding. We also expend substantial funds on our own behalf for extensive local sales promotions of our products.
We recognize the personal challenges and difficulties facing our teammates each day, and how it may be difficult for them to discuss their struggles with other teammates. Through our corporate chaplaincy program and our employee assistance program, we provide resources for our teammates to engage with a third party in a personal and confidential manner to discuss their personal challenges.
We aim to fulfill our Employee Value Promise, ensuring that every day, our teammates feel Supported, Inspired, Rewarded, Developed, Empowered and Connected. We recognize the personal challenges and difficulties facing our teammates each day, and how it may be difficult for them to discuss their struggles with other teammates.
These programs are administered by third parties and are valuable resources to help enhance emotional wellness, reduce stress and increase productivity.
Through our corporate chaplaincy program and our employee assistance program, we provide resources for our teammates to engage with a third party in a personal and confidential manner to discuss their personal challenges. These programs are administered by third parties and are valuable resources to help enhance emotional wellness, reduce stress and increase productivity.
In 2023, the Company made cash donations of approximately $49 million to various charities and donor-advised funds in light of the Company’s financial performance, distribution territory footprint and future business prospects. The Company intends to continue its charitable contributions in future years, subject to the Company’s financial performance and other business factors.
In light of the Company’s financial performance, distribution territory footprint and future business prospects, in 2024, the Company made cash donations of approximately $53 million to various charities and donor-advised funds. The Company focuses on charities impacting communities throughout our territory in the following areas: Education, Youth Development, Crisis Assistance, Health & Wellness, Veteran & First Responders and Sustainability.
Removed
Recent introductions include new energy products, such as Bang Energy and Reign Storm, as well as new glacéau smartwater and BODYARMOR brands and the 12.9-ounce Discovery Contour bottle for our sparkling products. We sell our products primarily in single-use, recyclable bottles and cans in varying package configurations from market to market.
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(2) 15 % 14 % Total approximate percent of the Company’s total bottle/can sales volume 36 % 35 % Approximate percent of the Company’s total net sales: Walmart Inc. (1) 17 % 17 % The Kroger Co.
Removed
We are also subject to federal, state and local environmental laws, including laws related to water consumption and treatment, wastewater discharge and air emissions.
Added
(2) 12 % 11 % Total approximate percent of the Company’s total net sales 29 % 28 % (1) Includes bottle/can sales volume related to the Walmart, Sam’s Club and Walmart Neighborhood Market chains. (2) Includes bottle/can sales volume related to the Kroger and Harris Teeter chains.
Removed
In response to the annual engagement survey, as discussed above, the Company has continued to increase its focus on DEI, including developing a “seat at the table” framework coupled with additional education and training, creating a specific DEI manager role, launching a dedicated DEI site on the Company intranet and promoting expanded DEI celebrations for all teammates.
Added
The loss of Walmart Inc. or The Kroger Co. as a customer could have a material adverse effect on the operating and financial results of the Company.
Added
We rely extensively on advertising in various media outlets, primarily online, television and radio, for the marketing of our products. The Coca‑Cola Company, Dr Pepper and Monster Energy make substantial expenditures on advertising programs in our territories from which we benefit.
Added
It has also been proposed that the federal government enact policies through agencies such as the United States Department of Health and Human Services that would ban or restrict the usage of certain ingredients used in the manufacture of the products that we sell.
Added
Restrictive policies, if widely enacted, could have an adverse impact on our products, input costs, sales and reputation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, if beverage products taken to market are or become contaminated or adulterated, the Company may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which could cause its business and reputation to suffer. 9 The Company’s success also depends in large part on its ability and the ability of The Coca‑Cola Company and other beverage companies it works with to maintain the brand image of existing products, build up brand image for new products and brand extensions and maintain its corporate reputation and social license to operate.
Biggest changeThe Company’s success also depends in large part on its ability and the ability of The Coca‑Cola Company and other beverage companies it works with to maintain the brand image of existing products, build up brand image for new products and brand extensions and maintain its corporate reputation and social license to operate.
These customers typically make purchase decisions based on a combination of price, product quality, consumer demand and customer service performance and generally do not enter into long-term contracts. The Company faces risks related to maintaining the volume 13 demanded on a short-term basis from these customers, which can also divert resources away from other customers.
These customers typically make purchase decisions based on a combination of price, product quality, consumer demand and customer service performance and generally do not enter into long-term contracts. The Company faces risks related to maintaining the volume demanded on a short-term basis from these customers, which can also divert resources away from other customers.
Any of these factors may reduce consumers’ willingness to purchase the Company’s products and any inability on the part of the Company to anticipate or react to such changes could result in reduced demand for the Company’s products or erode the Company’s competitive and financial position and could adversely affect the Company’s business, reputation, financial condition or results of operations.
Any of these factors may reduce 9 consumers’ willingness to purchase the Company’s products and any inability on the part of the Company to anticipate or react to such changes could result in reduced demand for the Company’s products or erode the Company’s competitive and financial position and could adversely affect the Company’s business, reputation, financial condition or results of operations.
Any pervasive nutrition label changes could increase the Company’s costs and could inhibit sales of one or more of the Company’s major products. 10 Most beverage products sold by the Company are classified as food or food products and are therefore eligible for purchase using SNAP benefits by consumers purchasing them for home consumption.
Any pervasive nutrition label changes could increase the Company’s costs and could inhibit sales of one or more of the Company’s major products. Most beverage products sold by the Company are classified as food or food products and are therefore eligible for purchase using SNAP benefits by consumers purchasing them for home consumption.
Subject to the terms and conditions of the NPSG Agreement, the Company is required to comply with certain key decisions made by the NPSG Board, which include decisions regarding strategic infrastructure investment and divestment planning, optimal national product supply sourcing and new product or packaging infrastructure planning.
Subject to the terms and conditions of the NPSG Agreement, the Company is required to comply with certain key decisions made by the NPSG Board, which include decisions regarding strategic infrastructure investment and divestment planning, optimal national product supply 11 sourcing and new product or packaging infrastructure planning.
The Company’s annual income tax rate is based upon the Company’s income, federal tax laws and various state and local tax laws within the jurisdictions in which the Company operates. 15 Changes in federal, state or local income tax rates and/or tax laws could have a material adverse impact on the Company’s financial results.
The Company’s annual income tax rate is based upon the Company’s income, federal tax laws and various state and local tax laws within the jurisdictions in which the Company operates. Changes in federal, state or local income tax rates and/or tax laws could have a material adverse impact on the Company’s financial results.
The Company’s financial condition can be impacted by the stability of the general economy. Unfavorable changes in general economic conditions or in the geographic markets in which the Company does business may have the temporary effect of reducing the demand for certain of the Company’s products.
The Company’s financial condition can be impacted by the stability of the general economy. Unfavorable changes in general economic conditions or in the geographic markets in which the Company does business may have the effect of reducing the demand for certain of the Company’s products.
Any related efforts by the Company to improve pricing and/or gross margin may result in lower than expected sales volume. In addition, the Company’s sales of finished goods to The Coca‑Cola Company and other U.S.
Any related efforts by the Company to improve pricing and/or gross margin may result in lower than expected sales volume. 14 In addition, the Company’s sales of finished goods to The Coca‑Cola Company and other U.S.
Although the Company has actively sought to control increases in these costs, there can be no assurance the Company will succeed in limiting future cost increases, which could reduce the profitability of the Company’s operations.
Although the Company has actively sought to control 15 increases in these costs, there can be no assurance the Company will succeed in limiting future cost increases, which could reduce the profitability of the Company’s operations.
The Company’s volume growth is also dependent on product innovation by The Coca‑Cola Company and other beverage companies, and their ability to develop and introduce products that meet consumer preferences.
The Company’s sales volume growth is also dependent on product innovation by The Coca‑Cola Company and other beverage companies, and their ability to develop and introduce products that meet consumer preferences.
Changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients and product safety and sustainability, could reduce demand for the Company’s products and reduce profitability.
Changes in government regulations related to nonalcoholic beverages, including regulations related to obesity, public health, artificial ingredients, recycling, sustainability and product safety, could reduce demand for the Company’s products and reduce profitability.
If the Company’s information technology systems, or those of its third-party service providers or business partners, are damaged, breached or cease to function properly, the Company may incur significant financial and other resources to mitigate, upgrade, repair or replace them, and the Company may suffer interruptions in its business operations, resulting in lost revenues and potential delays in reporting its financial results.
If the Company’s information technology systems, or those of its third-party service providers or business partners, are damaged, breached or cease to function properly, the Company may incur significant costs and require other resources to mitigate, upgrade, repair or replace them, and the Company may suffer interruptions in its business operations, resulting in lost revenues and potential delays in reporting its financial results.
In addition, there are no limits on the prices The Coca‑Cola Company and other beverage companies can charge for concentrate. If the Company cannot offset higher raw material costs with higher selling prices, effective commodity price hedging, increased sales volume or reductions in other costs, the Company’s results of operations and profitability could be adversely affected.
In addition, there are few limits on the prices The Coca‑Cola Company and other beverage companies can charge for concentrate. If the Company cannot offset higher raw material costs with higher selling prices, effective commodity price hedging, increased sales volume or reductions in other costs, the Company’s results of operations and profitability could be adversely affected.
The Company continues to make significant reinvestments in its business in order to evolve its operating model and to accommodate future growth and portfolio expansion, including supply chain optimization.
The Company continues to make significant reinvestments in its business to evolve its operating model and to accommodate future growth and portfolio expansion, including supply chain optimization.
The Company’s success depends on its ability to maintain consumer confidence in the safety and quality of all of its products. The Company has rigorous product safety and quality standards.
The Company’s success depends on its ability to maintain consumer confidence in the safety and quality of its products. The Company has rigorous product safety and quality standards.
Harrison would control 1,296,780 shares of the Company’s Class B Common Stock, which would represent approximately 76% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis. Furthermore, Mr. Harrison and another member of the Harrison family serve on the Company’s Board of Directors. As a result, Mr.
Harrison would control 1,296,780 shares of Class B Common Stock, which would represent approximately 78% of the total voting power of the outstanding Common Stock and Class B Common Stock on a consolidated basis. Furthermore, Mr. Harrison and another member of the Harrison family serve on the Company’s Board of Directors. As a result, Mr.
Like most companies, the Company’s information technology systems are vulnerable to interruption due to a variety of events beyond the Company’s control, including, but not limited to, power outages, computer and telecommunications failures, computer viruses, other malicious computer programs and cyberattacks, denial-of-service attacks, security breaches, catastrophic events such as fires, tornadoes, earthquakes and hurricanes, usage errors by employees and other security issues.
The Company’s information technology systems are vulnerable to interruption due to a variety of events beyond the Company’s control, including, but not limited to, power outages, computer and telecommunications failures, computer viruses, other malicious computer programs and cyberattacks, denial-of-service attacks, security breaches, catastrophic events such as fires, tornadoes, earthquakes and hurricanes, usage errors by employees and other security issues.
The Company is also a member of the NPSG, which is comprised of The Coca‑Cola Company, the Company and certain other Coca‑Cola bottlers who are regional producing bottlers in The Coca‑Cola Company’s national product supply system.
The Company is also a member of the NPSG, which is composed of The Coca‑Cola Company, the Company and certain other Coca‑Cola bottlers who are regional producing bottlers in The Coca‑Cola Company’s national product supply system.
In addition, third-party providers of data hosting or cloud services, as well as other vendors, customers and suppliers, are vulnerable to cybersecurity incidents involving data the Company shares with them.
In addition, third-party providers of data hosting or cloud services, as well as other vendors, customers and suppliers, are vulnerable to cybersecurity incidents involving data the Company shares with them or data systems the Company relies on.
If a change in control 11 or sale of one of our businesses is delayed or prevented by the provisions in the CBA and the RMA, the market price of our Common Stock could be negatively affected. The concentration of the Company’s capital stock ownership with our Chairman and Chief Executive Officer limits other stockholders’ ability to influence corporate matters.
If a change in control or sale of one of our businesses is delayed or prevented by the provisions of our material agreements, the market price of the Common Stock could be negatively affected. The concentration of the Company’s capital stock ownership with our Chairman and Chief Executive Officer limits other stockholders’ ability to influence corporate matters.
Provisions in the CBA and the RMA require the Company to obtain The Coca‑Cola Company’s prior approval of a potential buyer of the Company’s Coca‑Cola distribution or manufacturing businesses, which could delay or prevent a change in control of the Company or the Company’s ability to sell such businesses.
For instance, both the CBA and the RMA require the Company to obtain The Coca‑Cola Company’s prior approval of a potential buyer of the Company’s Coca‑Cola distribution or manufacturing businesses, which could delay or prevent a change in control of the Company or the Company’s ability to sell such businesses.
As of December 31, 2023, J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of the Company’s Class B Common Stock, which represented approximately 71% of the total voting power of the Company’s outstanding Common Stock and Class B Common Stock on a consolidated basis. Mr.
As of December 31, 2024, J. Frank Harrison, III, Chairman of the Board of Directors and Chief Executive Officer of the Company, controlled 1,004,394 shares of Class B Common Stock, which represented approximately 72% of the total voting power of the outstanding Common Stock and Class B Common Stock on a consolidated basis. Mr.
Any failure of these governance entities to function efficiently or on the best behalf of the Company and any failure or delay of the Company to receive anticipated benefits from these governance entities could adversely affect the Company’s business, financial condition and results of operations.
Any failure of these governance entities to function efficiently or in the best interest of the Company and any failure or delay of the Company to receive anticipated benefits from these governance entities could adversely affect the Company’s business, financial condition and results of operations.
The Company’s acquisition related contingent consideration liability, which totaled $669.3 million as of December 31, 2023, consists of the estimated amounts due to The Coca‑Cola Company as acquisition related sub-bottling payments under the CBA with The Coca‑Cola Company and CCR over the useful life of the related distribution rights.
The Company’s acquisition related contingent consideration liability, which totaled $654.2 million as of December 31, 2024, consists of the estimated amounts due to The Coca‑Cola Company as acquisition related sub-bottling payments under the CBA with The Coca‑Cola Company and CCR over the useful life of the related distribution rights.
Concerns about perceived negative safety and quality consequences of certain ingredients in the Company’s products, such as non-nutritive sweeteners or ingredients in energy drinks, could result in additional governmental regulations concerning the production, marketing, labeling or availability of the Company’s products or the ingredients in such products, possible new taxes or negative publicity resulting from actual or threatened legal actions against the Company or other companies in the same industry, any of which could damage the reputation of the Company or reduce demand for the Company’s products, which could adversely affect the Company’s profitability.
Concerns about perceived negative safety and quality consequences of certain ingredients in the Company’s products, such as non-nutritive sweeteners or ingredients in energy drinks, could result in additional governmental regulations concerning the production, 10 marketing, labeling or availability of the Company’s products or the ingredients in such products, possible new taxes or negative publicity resulting from actual or threatened legal actions against the Company or other companies in the same industry.
The loss of Wal‑Mart Stores, Inc. or The Kroger Company as a customer could have a material adverse effect on the business, financial condition and results of operations of the Company.
The loss of Walmart Inc. or The Kroger Co. as a customer could have a material adverse effect on the business, financial condition and results of operations of the Company.
Changes in the Company’s level of debt, borrowing costs and credit ratings could impact the Company’s access to capital and credit markets, restrict the Company’s operating flexibility and limit the Company’s ability to obtain additional financing to fund future needs. As of December 31, 2023, the Company had $599.2 million of debt outstanding.
Changes in the Company’s level of debt, borrowing costs and credit ratings could impact the Company’s access to capital and credit markets, restrict the Company’s operating flexibility and limit the Company’s ability to obtain additional financing to fund future needs. As of December 31, 2024, the Company had $1.79 billion of debt outstanding.
In addition, the Company continuously upgrades and updates current technology or installs new technology. In order to address risks to its information technology systems, the Company continues to monitor networks and systems, to upgrade security policies and to train its employees, and it requires third-party service providers and business partners, customers, suppliers and other third parties to do the same.
In order to address risks to its information technology systems, the Company continues to monitor networks and systems, to upgrade security policies and to train its employees, and it requires third-party service providers and business partners, customers, suppliers and other third parties to do the same.
The Company’s business, financial condition or results of operations could be materially and adversely affected by any of these risks. 8 Risks Related to Our Business The Company’s business and results of operations may be adversely affected by increased costs, disruption of supply or unavailability or shortages of raw materials, fuel and other supplies.
Risks Related to Our Business The Company’s business and results of operations may be adversely affected by increased costs or disruption, unavailability or shortages of raw materials, fuel and other supplies.
Changes in business conditions or other events could materially change both the future cash flow projections and the discount rate used in the calculation of the fair value of contingent consideration under the CBA.
Changes in business conditions or other events could materially change both the future cash flow projections and the estimated weighted average cost of capital (“WACC”) used in the calculation of the fair value of contingent consideration under the CBA.
Provisions in the CBA and the RMA with The Coca‑Cola Company could delay or prevent a change in control of the Company or a sale of the Company’s Coca‑Cola distribution or manufacturing businesses.
Provisions in certain of our material agreements, including the CBA and the RMA with The Coca‑Cola Company, could delay or prevent a change in control of the Company or a sale of the Company’s Coca‑Cola distribution or manufacturing businesses. Provisions in certain of our material agreements, including the CBA and the RMA, could discourage potential acquirors of the Company.
The Company is not currently impacted by the policies in these types of proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within its distribution territories in the future.
The Company is not currently impacted by the policies in such proposed legislation, but it is possible that similar or more restrictive legal requirements may be proposed or enacted within its distribution territories in the future which could adversely impact bottle/can sales.
Additionally, the failure of the Company to successfully migrate key data to new systems could lead to data integrity issues, service interruptions or delays and other increased costs that could adversely impact the Company’s business, financial condition or results of operations.
Additionally, the failure of the Company to successfully migrate key data to new systems could lead to data integrity issues, service interruptions or delays and other increased costs that could adversely impact the Company’s business, financial condition or results of operations. The Company has technology security initiatives and disaster recovery plans in place to mitigate its risk to these vulnerabilities.
Prolonged drought conditions could lead to restrictions on water use, which could adversely affect the Company’s cost and ability to manufacture and distribute products. Hurricanes or similar storms may have a negative sourcing impact or cause shifts in product mix to lower-margin products and packages. Climate change may have a long-term adverse impact on our business and results of operations.
Hurricanes or similar storms may have a negative sourcing impact or cause shifts in product mix to lower-margin products and packages. 16 Climate change may have a long-term adverse impact on our business and results of operations.
The Company faces concentration risks related to a few customers comprising a large portion of the Company’s annual sales volume and net sales.
The concentration risks among the Company’s customers and suppliers could impact our sales and our ability to access necessary product inputs at commercially advantageous prices. The Company faces concentration risks related to a few customers comprising a large portion of the Company’s annual sales volume and net sales.
Item 1A. Risk Factors. In addition to other information in this report, the following risk factors should be considered carefully in evaluating the Company’s business.
Item 1A. Risk Factors. In addition to other information in this report, the following risk factors should be considered carefully in evaluating the Company’s business. The Company’s business, financial condition or results of operations could be materially and adversely affected by any of these risks.
Further, a decline in the interest rates used to discount the Company’s pension and postretirement medical benefits could increase the cost of these benefits and the amount of the liabilities. 14 In assessing the Company’s credit strength, credit rating agencies consider the Company’s capital structure, financial policies, consolidated balance sheet and other financial information, and may also consider financial information of other bottling and beverage companies.
In assessing the Company’s credit strength, credit rating agencies consider the Company’s capital structure, financial policies, consolidated balance sheet and other financial information and may also consider financial information of other bottling and beverage companies.
While incidents at our third-party service providers have not materially impacted our business operations, one or more of these incidents could significantly impact the Company in the future. 12 The Company depends heavily upon the efficient operation of technological resources and a failure in these information technology systems or controls could negatively impact the Company’s business, financial condition or results of operations.
While incidents at our third-party service providers have not materially impacted our business operations, one or more of these incidents could significantly impact the Company in the future.
Additionally, if receivables from one or more of these significant customers become uncollectible, the Company’s financial condition and results of operations may be adversely impacted.
Additionally, if receivables from one or more of these significant customers become uncollectible, the Company’s financial condition and results of operations may be adversely impacted. The Company’s largest customers, Walmart Inc. and The Kroger Co., accounted for approximately 36% of the Company’s 2024 total bottle/can sales volume to retail customers and approximately 29% of the Company’s 2024 total net sales.
General Risk Factors Technology failures or cyberattacks on the Company’s information technology systems or the Company’s effective response to technology failures or cyberattacks on its customers’, suppliers’ or other third parties’ information technology systems could disrupt the Company’s operations and negatively impact the Company’s reputation, business, financial condition or results of operations.
These changes 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. 12 General Risk Factors Technology failures or cyberattacks on the Company’s information technology systems or the Company’s effective response to technology failures or cyberattacks on its third-party service providers’, business partners’, customers’, suppliers’ or other third parties’ information technology systems could disrupt the Company’s operations and negatively impact the Company’s reputation, business, financial condition or results of operations.
The Company has technology security initiatives and disaster recovery plans in place to mitigate its risk to these vulnerabilities; however, these measures may not be adequate or implemented properly to ensure that the Company’s operations are not disrupted.
However, these measures may not be adequate or implemented properly to ensure that the Company’s operations are not disrupted.
Consequently, the Company’s access to capital may be diminished. Any such event of default or failure could negatively impact the Company’s business, financial condition and results of operations. The concentration risks among the Company’s customers and suppliers could impact our sales and our ability to access necessary product inputs at commercially advantageous prices.
Consequently, the Company’s access to capital may be 13 diminished. Any such event of default or failure could negatively impact the Company’s business, financial condition and results of operations. Changes in trade policies, including the imposition of, or increase in, tariffs on imported goods, could negatively affect our business.
Removed
These changes 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.
Added
However, if beverage products taken to market are or become contaminated or adulterated, the Company may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which could cause its business and reputation to suffer.
Removed
The Company’s largest customers, Wal-Mart Stores, Inc. and The Kroger Company, accounted for approximately 35% of the Company’s 2023 total bottle/can sales volume to retail customers and approximately 28% of the Company’s 2023 total net sales.
Added
Additionally, legislative priorities for increased recycled content in packaging could adversely impact our margins due to increased demand for such materials. It is also possible that the Company could be a named party in a lawsuit related to the environmental impact of plastics or littering.
Added
Any such lawsuit could subject us to liability or damage the reputation of the Company, which could adversely affect the Company’s profitability.
Added
It has also been proposed that the federal government enact policies through agencies such as the United States Department of Health and Human Services that would ban or restrict the usage of certain ingredients used in the manufacture of the products that we sell.
Added
Any such government actions could damage the reputation of the Company or reduce demand for the Company’s products, which could adversely affect the Company’s profitability.
Added
Additionally, the instruments that govern our public bonds contain provisions that give the holders of those bonds a right to require us to purchase those bonds in the event of a change in control. Other of our commercial arrangements may also be terminated in the event of a change in control.
Added
The Company depends heavily upon the efficient operation of technological resources and a failure in these information technology systems or controls could negatively impact the Company’s business, financial condition or results of operations. In addition, the Company continuously upgrades and updates current technology or installs new technology.
Added
Our business operations are subject to the impact of trade policies, including the imposition of tariffs, trade restrictions and duties on imported goods used within our supply chain to produce our products.
Added
Certain trade restrictions or the imposition of, or increases in, tariffs on imported goods could increase the cost to produce our products and, to the extent these costs are passed along to consumers, could make our products less affordable, which may negatively impact our net sales and profitability.
Added
Further, the imposition of so-called “across-the-board” tariffs has the potential to substantially reduce overall levels of aggregate demand within the U.S. economy, which could reduce consumer demand for the products which we offer or the financial stability of our customers.
Added
Because some of the limited number of suppliers are located outside the United States, disruptions to the supply chain or tariffs levied on the inputs we purchase may increase input costs.
Added
Further, a decline in the interest rates used to discount the Company’s pension and postretirement medical benefits could increase the cost of these benefits and the amount of the liabilities.
Added
Prolonged drought conditions could lead to restrictions on water use, which could adversely affect the Company’s cost and ability to manufacture and distribute products.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIO and the Information Security Director have over 55 combined years of information technology and program management experience and have served over 31 combined years in the Company’s corporate information security organization. They are familiar with the Company’s cybersecurity landscape, risks and best practices for mitigation of those risks identified.
Biggest changeThe CIO and the Information Security Director have over 56 combined years of information technology and program management experience and have served over 32 combined years in the Company’s corporate information security organization.
The Company performs periodic risk assessments of systems and applications to identify risks, vulnerabilities and threats in systems and software, performs an annual assessment of the effectiveness of the current 16 cybersecurity response process by conducting incident response tabletop exercises that involve participation by members of the management team, and requires all teammates to participate in user awareness training for information technology and cybersecurity.
The Company performs periodic risk assessments of systems and applications to identify risks, vulnerabilities and threats in systems and software, performs an annual assessment of the effectiveness of the current cybersecurity response process by conducting incident response tabletop exercises that involve participation by members of the management team, and requires all teammates to participate in user awareness training for information technology and cybersecurity.
Risk Factors” of this report. During 2023, there were no identified cybersecurity risks or threats, including as a result of previous cybersecurity incidents, that had, or were reasonably likely to have, a material effect on our business strategy, results of operations or financial condition.
Risk Factors” of this report. During 2024, there were no identified cybersecurity risks or threats, including as a result of previous cybersecurity incidents, that had, or were reasonably likely to have, a material effect on our business strategy, results of operations or financial condition.
In the event of a material cybersecurity incident, the Audit Committee will report such incident to the full Board of Directors. 17
In the event of a material cybersecurity incident, the Audit Committee will report such incident to the full Board of Directors.
As part of planning for any suspected cybersecurity incident, the CIRT has developed certain incident response strategies to help collect and preserve forensic data, to mitigate the threat and to perform other activities to restore systems to normal operation. These strategies include many of the practices recommended by the U.S.
As part of planning for any suspected cybersecurity incident, the CIRT has developed certain incident response strategies to help collect and preserve forensic data, to mitigate the threat and to perform other activities to restore systems to normal operation.
Department of Homeland Security’s Industrial Control Systems Computer Emergency Response Team. In addressing and resolving a significant cybersecurity incident, the Company may engage external experts in relevant fields, such as legal or forensic services, as needed.
These strategies include many of the practices recommended by the United States Department of Homeland Security’s Industrial Control Systems Computer Emergency Response Team. In addressing and resolving a significant cybersecurity incident, the Company may engage external experts in relevant fields, such as legal or forensic services, as needed.
The Company has developed a matrix to assist in determining if a cybersecurity incident is significant. The Information Security Director, with the help of the CIRT, determines whether an incident should be escalated to executive management, including to the Chief Executive Officer, the Chief Financial Officer and the General Counsel, based on its significance.
The Information Security Director, with the help of the CIRT, determines whether an incident should be escalated to executive management, including to the Chief Executive Officer, the Chief Financial Officer and the General Counsel, based on its significance.
Added
They are familiar with the Company’s cybersecurity landscape, risks and best practices for mitigation of those risks identified. 17 The Company has developed a matrix to assist in determining if a cybersecurity incident is significant.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe estimated utilization percentage of the Company’s manufacturing plants, which fluctuates with the seasonality of the business, as of December 31, 2023, is indicated below: Location Utilization (1) Location Utilization (1) Roanoke, VA 94 % Cincinnati, OH 80 % Nashville, TN 83 % Charlotte, NC 76 % Indianapolis, IN 82 % West Memphis, AR 72 % Silver Spring, MD 81 % Sandston, VA 72 % Baltimore, MD 80 % Twinsburg, OH 58 % (1) Estimated production divided by capacity, based on expected operations of six days per week and 20 hours per day.
Biggest changeFor the fiscal year ended December 31, 2024, the aggregate utilization rate of the Company’s manufacturing plants, which fluctuates with the seasonality of the business, was approximately 89%. The estimated utilization is based on actual production divided by capacity, based on an expected operation rate of six days per week and 20 hours per day.
Following is a summary of the Company’s manufacturing plants and certain other properties: Facility Type Location Square Feet Leased / Owned Lease Expiration Distribution Center/Manufacturing Plant Combination (1) Charlotte, NC 650,000 Owned — Distribution Center Whitestown, IN 415,000 Owned — Manufacturing Plant Indianapolis, IN 400,000 Owned — Warehouse Charlotte, NC 380,000 Leased 2028 Manufacturing Plant Cincinnati, OH 368,000 Owned — Warehouse Chester, VA 353,000 Leased 2028 Manufacturing Plant Sandston, VA 326,000 Owned — Manufacturing Plant West Memphis, AR 326,000 Owned — Manufacturing Plant Roanoke, VA 310,000 Owned — Distribution Center Erlanger, KY 301,000 Leased 2034 Distribution Center Louisville, KY 300,000 Leased 2030 Manufacturing Plant Twinsburg, OH 287,000 Owned — Warehouse Hanover, MD 278,000 Leased 2027 Distribution Center Hanover, MD 276,000 Leased 2034 Distribution Center Memphis, TN 266,000 Leased 2025 Distribution Center Clayton, NC 233,000 Leased 2026 Manufacturing Plant Nashville, TN 220,000 Leased 2029 Distribution Center La Vergne, TN 220,000 Leased 2026 Distribution Center Sandston, VA 210,000 Owned — Corporate Headquarters (2)(3) Charlotte, NC 172,000 Leased 2029 Manufacturing Plant Baltimore, MD 155,000 Owned — Manufacturing Plant Silver Spring, MD 104,000 Owned — (1) Includes a 535,000-square foot manufacturing plant and an adjacent 115,000-square foot distribution center.
Following is a summary of the Company’s manufacturing plants and certain other properties: Facility Type Location Square Feet Leased / Owned Lease Expiration Distribution Center/Manufacturing Plant Combination (1) Charlotte, NC 650,000 Owned — Distribution Center Whitestown, IN 415,000 Owned — Manufacturing Plant Indianapolis, IN 400,000 Owned — Warehouse Charlotte, NC 380,000 Leased 2028 Manufacturing Plant Cincinnati, OH 368,000 Owned — Warehouse Chester, VA 353,000 Leased 2028 Manufacturing Plant Sandston, VA 326,000 Owned — Manufacturing Plant West Memphis, AR 326,000 Owned — Manufacturing Plant Roanoke, VA 310,000 Owned — Distribution Center Erlanger, KY 301,000 Leased 2034 Distribution Center Louisville, KY 300,000 Leased 2030 Manufacturing Plant Twinsburg, OH 287,000 Owned — Warehouse Hanover, MD 278,000 Leased 2027 Distribution Center Hanover, MD 276,000 Leased 2034 Distribution Center Memphis, TN 266,000 Leased 2030 Distribution Center Clayton, NC 233,000 Leased 2026 Manufacturing Plant Nashville, TN 220,000 Owned — Distribution Center La Vergne, TN 220,000 Leased 2026 Distribution Center Sandston, VA 210,000 Owned — Corporate Headquarters (2)(3) Charlotte, NC 172,000 Leased 2029 Manufacturing Plant Baltimore, MD 155,000 Owned — Distribution Center (4) Columbus, OH 124,000 Owned — Manufacturing Plant Silver Spring, MD 104,000 Owned — (1) Includes a 535,000-square foot manufacturing plant and an adjacent 115,000-square foot distribution center.
In addition, the Company owned approximately 452,000 beverage dispensing and vending machines for the sale of beverage products in the Company’s territories as of January 26, 2024.
In addition, the Company owned approximately 441,000 beverage dispensing and vending machines for the sale of beverage products in the Company’s territories as of January 24, 2025.
There were no changes to the number of distribution centers by market area between December 31, 2023 and January 26, 2024. 18 As of January 26, 2024, the Company owned and operated approximately 4,300 vehicles in the sale and distribution of the Company’s beverage products, of which approximately 2,700 were route delivery trucks.
There were no changes to the number of distribution centers by market area between December 31, 2024 and January 24, 2025. As of January 24, 2025, the Company owned and operated approximately 4,600 vehicles in the sale and distribution of the Company’s beverage products, of which approximately 3,000 were route delivery trucks.
Item 2. Properties. As of January 26, 2024, the principal properties of the Company included its corporate headquarters, subsidiary headquarters, 60 distribution centers and 10 manufacturing plants. The Company owns 47 distribution centers and nine manufacturing plants, and leases its corporate headquarters, subsidiary headquarters, 13 distribution centers and one manufacturing plant.
Item 2. Properties. As of January 24, 2025, the principal properties of the Company included its corporate headquarters, subsidiary headquarters, 60 distribution centers and 10 manufacturing plants. The Company owns 47 distribution centers and all 10 manufacturing plants, and leases its corporate headquarters, subsidiary headquarters, and 13 distribution centers.
(2) Includes two adjacent buildings totaling approximately 172,000 square feet. (3) The lease for this facility is with a related party. The Company believes all of its facilities are in good condition and are adequate for the Company’s operations as presently conducted. The Company has production capacity to meet its current operational requirements.
(4) In February 2025, this facility will be replaced with a new distribution center totaling approximately 430,000 square feet. 18 The Company believes all of its facilities are in good condition and are adequate for the Company’s operations as presently conducted. The Company has production capacity to meet its current operational requirements.
Added
During 2024, the Company purchased its Nashville, Tennessee production facility, which was previously leased, for approximately $56 million.
Added
(2) Includes two adjacent buildings totaling approximately 172,000 square feet. (3) The lease for this facility is with a related party.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeBlickley was elected Senior Vice President, Financial Planning and Chief Accounting Officer of the Company in July 2020, effective August 2020.
Biggest changeBlickley was elected Senior Vice President, Financial Planning and Chief Accounting Officer of the Company in July 2020, effective August 2020. In January 2025, Mr. Blickley was elected Executive Vice President and Chief Financial Officer of the Company, effective April 1, 2025. Mr. Blickley will continue to serve as the Company’s Chief Accounting Officer. Mr.
Prior to that, he served in various positions within the Company, including Executive Vice President, Franchise Strategy and Operations from April 2016 to January 2018, Senior Vice President, Sales, Field Operations and Marketing from August 2010 to March 2016, Senior Vice President, Sales from June 2008 to July 2010, Vice President – Franchise Sales from 2003 to 2008, Region Sales Manager for the Company’s Southern Division from 2000 to 2003 and Sales Manager in the Company’s Columbia, South 20 Carolina branch from 1997 to 2000.
Prior to that, he served in various positions within the Company, including Executive Vice President, Franchise Strategy and 20 Operations from April 2016 to January 2018, Senior Vice President, Sales, Field Operations and Marketing from August 2010 to March 2016, Senior Vice President, Sales from June 2008 to July 2010, Vice President – Franchise Sales from 2003 to 2008, Region Sales Manager for the Company’s Southern Division from 2000 to 2003 and Sales Manager in the Company’s Columbia, South Carolina branch from 1997 to 2000.
Item 4. Mine Safety Disclosures. Not applicable. 19 Information About Our Executive Officers The following is a description of the names and ages of the executive officers of the Company, indicating all positions and offices with the Company held by each such person and each person’s principal occupation or employment during the past five years.
Item 4. Mine Safety Disclosures. Not applicable. 19 Information About Our Executive Officers The following is a description of the names and ages of the executive officers of the Company, indicating all positions and offices with the Company held by each such person and each such person’s principal occupation or employment during at least the past five years.
Anthony spent 21 years with CCE, a distributor, marketer and manufacturer of nonalcoholic beverages primarily for The Coca‑Cola Company, in a variety of roles, including Vice President, Chief Financial Officer of CCE’s North America division, Vice President, Investor Relations & Planning, and Director, Acquisitions & Investor Relations. Mr. Matthew J.
Anthony spent 21 years with CCE, a distributor, marketer and manufacturer of nonalcoholic beverages primarily for The Coca‑Cola Company, in a variety of roles, including Vice President, Chief Financial Officer of CCE’s North America division, Vice President, Investor Relations & Planning, and Director, Acquisitions & Investor Relations. Mr.
Each executive officer of the Company is elected by the Board of Directors and holds office from the date of election until thereafter removed by the Board. Name Position and Office Age J. Frank Harrison, III Chairman of the Board of Directors and Chief Executive Officer 69 David M. Katz President and Chief Operating Officer 55 F.
Each executive officer of the Company is elected by the Board of Directors and holds office from the date of election until thereafter removed by the Board. Name Position and Office Age J. Frank Harrison, III Chairman of the Board of Directors and Chief Executive Officer 70 David M. Katz President and Chief Operating Officer 56 F.
Prior to that, he served as Vice President, Financial Planning and Analysis of the Company from April 2018 to August 2020, as Senior Director, Financial Planning and Analysis of the Company from April 2016 to March 2018 and as Corporate Controller of the Company from November 2014 to March 2016. Before joining the Company, Mr.
Blickley served as Vice President, Financial Planning and Analysis of the Company from April 2018 to August 2020, as Senior Director, Financial Planning and Analysis of the Company from April 2016 to March 2018 and as Corporate Controller of the Company from November 2014 to March 2016. Before joining the Company, Mr.
Scott Anthony Executive Vice President and Chief Financial Officer 60 Matthew J. Blickley Senior Vice President, Financial Planning and Chief Accounting Officer 42 Robert G. Chambless Executive Vice President, Franchise Beverage Operations 58 Donell W. Etheridge Executive Vice President, Product Supply Operations 55 Morgan H. Everett Vice Chair of the Board of Directors 42 E.
Scott Anthony Executive Vice President and Chief Financial Officer 61 Matthew J. Blickley Senior Vice President, Financial Planning and Chief Accounting Officer 43 Robert G. Chambless Executive Vice President, Franchise Beverage Operations 59 Donell W. Etheridge Executive Vice President, Product Supply Operations 56 Morgan H. Everett Vice Chair of the Board of Directors 43 E.
Beauregarde Fisher III Executive Vice President, General Counsel and Secretary 55 Christine A. Motherwell Senior Vice President, Human Resources 45 N. Brent Tollison Senior Vice President, Public Affairs, Communications, Community, and Sustainability 50 Mr. J.
Beauregarde Fisher III Executive Vice President, General Counsel and Secretary 56 Christine A. Motherwell Senior Vice President, Human Resources 46 N. Brent Tollison Senior Vice President, Public Affairs, Communications, Community, and Sustainability 51 Mr. J.
Added
Anthony has notified the Company that he will retire, effective March 31, 2025. Following his retirement, Mr. Anthony is expected to serve as a consultant to the Company to assist with various matters related to the transition of his responsibilities. Mr. Matthew J.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes $100 was invested in the Company’s Common Stock, the Standard & Poor’s 500 Index and each of the companies within the peer group on December 30, 2018, and that all dividends were reinvested on a quarterly basis.
Biggest changePrimo Water Corporation is no longer in the peer group due to its merger with BlueTriton Brands, Inc. effective November 11, 2024, which resulted in the formation of a new company, Primo Brands Corporation. 22 The graph assumes $100 was invested in the Common Stock, the Standard & Poor’s 500 Index and each of the companies within the peer group at market close on the last trading day for the fiscal year ended December 29, 2019, and that all dividends were reinvested.
The peer group is comprised of Keurig Dr Pepper Inc., National Beverage Corp., The Coca‑Cola Company, Primo Water Corporation (f/k/a Cott Corporation) and PepsiCo, Inc.
The peer group is composed of Keurig Dr Pepper Inc., National Beverage Corp., The Coca‑Cola Company and PepsiCo, Inc. The previous peer group was composed of Keurig Dr Pepper Inc., National Beverage Corp., The Coca‑Cola Company, Primo Water Corporation (f/k/a Cott Corporation) and PepsiCo, Inc.
Stock Performance Graph Presented below is a line graph comparing the yearly percentage change in the cumulative total return on the Company’s Common Stock to the cumulative total return of the Standard & Poor’s 500 Index and a peer group for the period commencing December 30, 2018 and ending December 31, 2023.
Stock Performance Graph Presented below is a line graph comparing the yearly percentage change in the cumulative total return on the Common Stock to the cumulative total return of the Standard & Poor’s 500 Index and a peer group for the period commencing December 29, 2019 and ending December 31, 2024.
No assurance can be given that dividends will be declared or paid in the future. As of January 26, 2024, the number of stockholders of record of the Common Stock and the Class B Common Stock was 1,198 and six, respectively.
Although the Company has historically paid quarterly cash dividends, no assurance can be given that dividends will be declared or paid in the future. As of January 24, 2025, the number of stockholders of record of the Common Stock and the Class B Common Stock was 1,123 and six, respectively.
Returns for the companies included in the peer group have been weighted on the basis of the total market capitalization for each company. COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN* Among Coca-Cola Consolidated, Inc., the S&P 500 Index and a Peer Group * Assumes $100 invested on 12/30/2018 in stock or index, including reinvestment of dividends.
Returns for the companies included in the peer group have been weighted on the basis of the total market capitalization for each company. COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Coca-Cola Consolidated, Inc., the S&P 500 Index and a Peer Group Item 6. [Reserved] 23
Removed
Index calculated on a month-end basis. Item 6. [Reserved] 22
Added
On August 20, 2024, the Company announced that its Board of Directors had approved an increase in the regular quarterly cash dividend from $0.50 per share to $2.50 per share on the Common Stock and the Class B Common Stock.
Added
The following table sets forth information about the shares of Common Stock the Company repurchased during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) September 28, 2024 - October 25, 2024 — $ — — $ 1,000,000,000 October 26, 2024 - November 22, 2024 42,895 1,203.89 42,895 948,359,036 November 23, 2024 - December 31, 2024 — — — 948,359,036 Total 42,895 42,895 (1) On August 20, 2024, the Company announced that its Board of Directors had approved a share repurchase program under which the Company is authorized to repurchase up to $1.00 billion of Common Stock.
Added
The share repurchase authorization is discretionary and has no expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+51 added−30 removed55 unchanged
Biggest changeSignificant changes in net working capital as of December 31, 2023 as compared to December 31, 2022 were as follows: • An increase in cash and cash equivalents of $437.6 million, primarily as a result of cash flows relating to our strong operating performance. • An increase in accounts receivable, trade of $23.9 million, driven primarily by increased net sales and the timing of cash receipts. • A decrease in inventories of $25.6 million, primarily due to lower inventory levels for certain manufacturing materials compared to December 31, 2022. • An increase in accounts payable, trade of $31.8 million, primarily due to the timing of cash payments. • A decrease in accounts payable to The Coca‑Cola Company of $23.3 million, primarily as a result of the timing of cash payments. • An increase in other accrued liabilities of $37.0 million, primarily due to an increase in the current portion of the acquisition related contingent consideration liability. 29 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.
Biggest changeSignificant changes in net working capital as of December 31, 2024 as compared to December 31, 2023 were as follows: • An increase in cash and cash equivalents of $500.6 million, primarily as a result of bond proceeds received of $1.20 billion and strong operating performance, partially offset by share repurchases and related fee payments totaling $625.7 million, as further discussed below. • An increase in short-term investments of $301.2 million, primarily due to the purchase of short-term investments during 2024. • An increase in accounts receivable from The Coca-Cola Company of $37.9 million, primarily driven by the timing of cash receipts. • An increase in current portion of debt of $349.7 million due to the Company’s senior bonds maturing on November 25, 2025. • A decrease in accounts payable, trade of $48.7 million, primarily due to the timing of cash payments. • An increase in accounts payable to The Coca‑Cola Company of $47.8 million, primarily due to the timing of cash payments and increases in certain raw material and concentrate input costs, higher payments related to certain marketing programs and increases in our acquisition related sub-bottling payments. • A decrease in dividends payable of $154.7 million, due to the payment of a special cash dividend declared in 2023 during the first quarter of 2024.
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 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.
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.
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 33 identifiable products have a single performance obligation.
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.
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 32 does not prefund these benefits and has the right to modify or terminate certain of these benefits in the future.
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.
These covenants have not restricted, and are not expected to restrict, the Company’s liquidity or capital resources. All outstanding long-term 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 long-term debt. The Company’s credit ratings are reviewed periodically by certain nationally recognized rating agencies.
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.
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 17 to the consolidated financial statements for additional information.
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.
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 12 to the consolidated financial statements for additional information related to the Company’s SCF program. The Company’s only Level 3 asset or liability is the acquisition related contingent consideration liability.
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 Company’s SCF program. 33 The Company’s only Level 3 asset or liability is the acquisition related contingent consideration liability.
Separate from those term extension actions, the Company has an agreement with a third-party financial institution to facilitate a supply chain finance (“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 outstanding receivable arrangements.
Separate from those term extension actions, the Company has an agreement with a third-party financial institution to facilitate a supply chain finance program (“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 performed its annual impairment test of goodwill as of the first day of the fourth quarter during both 2023 and 2022 and determined there was no impairment of the carrying values of these assets.
The Company performed its annual impairment test of goodwill as of the first day of the fourth quarter during both 2024 and 2023 and determined there was no impairment of the carrying values of these assets.
This platform will enable a more seamless order and payment platform for certain customers and we expect this platform will enable us to enhance customer service and create more selling opportunities for our teammates.
This platform creates a more seamless order and payment platform for certain customers and we expect this platform will continue to enable us to enhance customer service and create more selling opportunities for our teammates.
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), disruption of supply or 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 and product safety and sustainability; 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 on our best behalf 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 customers’, suppliers’ or other third parties’ information technology systems; unfavorable changes in the general economy; 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 with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather; climate change or legislative or regulatory responses to such change; the impact of any pandemic or public health situation; and the risks discussed in “Item 1A.
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 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 and product safety; decreases from historic levels of marketing funding support provided to us by 39 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 with tax authorities or additional tax liabilities; changes in legal contingencies; natural disasters, changing weather patterns and unfavorable weather; climate change or legislative or regulatory responses to such change; and the risks discussed in “Item 1A.
The Company has determined there has not been an interim impairment trigger since the first day of the fourth quarter of 2023 annual test date.
The Company has determined there has not been an interim impairment trigger since the first day of the fourth quarter of 2024 annual test date.
The consolidated financial statements include the accounts and the consolidated operations of the Company and its majority-owned subsidiaries. All comparisons are to the prior year unless specified otherwise. The periods presented are the fiscal years ended December 31, 2023 (“2023”) and December 31, 2022 (“2022”).
The consolidated financial statements include the accounts and the consolidated operations of the Company and its majority-owned subsidiaries. All comparisons are to the prior year unless specified otherwise. The periods presented are the fiscal years ended December 31, 2024 (“2024”) and December 31, 2023 (“2023”).
The discount rate used in determining the postretirement benefit obligation was 5.02% in 2023 and 5.19% in 2022. 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.
The discount rate used in determining the postretirement benefit obligation was 5.68% in 2024 and 5.02% in 2023. 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.
All of the Company’s long-term debt instruments have fixed interest rates, and, thus, are not impacted by fluctuations in interest rates, with the exception of the Company’s revolving credit facility, which did not have any outstanding borrowings as of December 31, 2023.
All of the Company’s debt instruments have fixed interest rates, and, thus, are not impacted by fluctuations in interest rates, with the exception of the Company’s revolving credit facility, which did not have any outstanding borrowings as of December 31, 2024.
The Company’s short-term portion of the acquisition related contingent consideration liability was $64.5 million as of December 31, 2023 and was included within other accrued liabilities in the consolidated balance sheets. The Company is obligated to purchase 17.5 million cases of finished product from SAC on an annual basis through June 2024.
The Company’s short-term portion of the acquisition related contingent consideration liability was $64.0 million as of December 31, 2024 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.
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.
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.
Pension and Postretirement Benefit Obligations The Company has historically sponsored two pension plans. The Primary Plan was frozen as of June 30, 2006 and no benefits accrued to participants after that date.
Pension and Postretirement Benefit Obligations The Company has historically sponsored two pension plans. The Primary Plan was frozen as of June 30, 2006 and no benefits accrued to participants after that date. During 2023, the Primary Plan was fully settled.
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, 2023 $ (1,616) $ 1,692 Net periodic postretirement benefit cost in 2023 25 (26) 36 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.
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, 2024 $ (1,415) $ 1,476 Net periodic postretirement benefit cost in 2024 (13) 156 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.
The Company has shifted to a broader use of alternative distributors, rather than Company-owned vehicles and warehouses, to deliver post-mix products to customers in our territory. We receive a fee from a vendor on these post-mix gallons delivered to locally managed customers in our territory, which is recorded as a reduction to cost of sales.
During 2024, the Company shifted to a broader use of alternative distributors, rather than Company-owned vehicles and warehouses, to deliver post-mix products to customers in our territory. We receive a fee from our brand partners on these post-mix gallons delivered to locally managed customers in our territory, which is recorded as a reduction to cost of sales.
Information concerning the fiscal year ended December 31, 2021 (“2021”) and a comparison of 2022 and 2021 may be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10‑K for 2022, filed with the SEC on February 22, 2023.
Information concerning the fiscal year ended December 31, 2022 (“2022”) and a comparison of 2023 and 2022 may be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10‑K for 2023, filed with the SEC on February 21, 2024.
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 $669.3 million as of December 31, 2023. 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 acquisition related contingent consideration liability relates to acquisition related sub-bottling payments required in certain distribution territories under the CBA and totaled $654.2 million as of December 31, 2024. 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.
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. 34 The estimated fair value of the reporting unit is then compared to its carrying amount, including goodwill.
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.
In order to serve our customers in the most efficient way, as well as in response to customer demands, the Company has, in certain circumstances, shifted the delivery of our products to third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure, rather than through Company-owned vehicles and warehouses.
In order to serve our customers in the most efficient way, respond to customer demands and increase profitability, the Company has, in certain circumstances, shifted the delivery of our products to third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure, rather than through Company-owned vehicles and warehouses.
This obligation has no minimum purchase requirements; however, purchases from Southeastern were $146.9 million during 2023 and are expected to remain material in future foreseeable periods. See Note 20 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.
This obligation has no minimum purchase requirements; however, purchases from Southeastern were $142.2 million during 2024 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.
Total marketing funding support from The Coca‑Cola Company and other beverage companies, which includes both direct payments to the Company and payments to customers for marketing programs, was $164.5 million in 2023, as compared to $147.3 million in 2022.
Total funding support from The Coca‑Cola Company and other beverage companies, which includes both direct payments to the Company and payments to customers for marketing programs, was $186.5 million in 2024, as compared to $164.5 million in 2023.
The agreements under which the Company’s nonpublic debt 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, 2023.
The agreements under which the Company’s nonpublic debt, including the Revolving Credit Facility, 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, 2024.
The additional two operating segments do not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, and, therefore, have been combined into “All Other.” Executive Summary Net sales increased 7% to $6.65 billion in 2023, with standard physical case volume down 1.9% when compared to the prior year.
The additional two operating segments do not meet the quantitative thresholds for separate reporting, either individually or in the aggregate, and, therefore, have been combined into “All Other.” Executive Summary Net sales increased 3.7% to $6.90 billion in 2024, with standard physical case volume down 0.6% when compared to the prior year.
For the next five years, 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 $70 million.
For the next five years (including in fiscal year 2025), 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.
This platform is targeted to certain on-premise and small store customers. 24 Results of Operations The Company’s results of operations for 2023 and 2022 are highlighted in the table below and discussed in the following paragraphs.
This platform is currently targeted to certain on-premise and small store customers. 25 Results of Operations The Company’s results of operations for 2024 and 2023 are highlighted in the table below and discussed in the following paragraphs.
As of December 31, 2023, the Company’s credit ratings and outlook for its long-term debt were as follows: Credit Rating Rating Outlook Moody’s Baa1 Stable Standard & Poor’s BBB+ Stable 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 each quarter for more than 25 years.
As of December 31, 2024, 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+ Stable 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 net impact of the commodity derivative instruments on the consolidated statements of operations was as follows: Fiscal Year (in thousands) 2023 2022 Increase in cost of sales $ 1,656 $ 3,335 Increase (decrease) in SD&A expenses 5,928 (16,390) Net impact $ 7,584 $ (13,055) 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.
The net impact of the commodity derivative instruments on the consolidated statements of operations was as follows: Fiscal Year (in thousands) 2024 2023 (Decrease) increase in cost of sales $ (590) $ 1,656 Increase in SD&A expenses 2,647 5,928 Net impact $ 2,057 $ 7,584 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.
The decrease in other expense, net was primarily driven by changes in the actuarial assumptions related to our pension and postretirement plan liabilities. Income Tax Expense The Company’s effective income tax rate was 26.7% for 2023 and 25.2% for 2022.
The decrease in other expense, net was primarily driven by changes in the actuarial assumptions related to our pension and postretirement medical benefit plan liabilities. Income Tax Expense The Company’s effective income tax rate was 26.1% for 2024 and 26.7% for 2023.
As a result of not physically delivering the product, the sales volume delivered using these alternative methods of distribution is not reflected in our volume metrics. However, because we have the exclusive distribution rights for non-alcoholic beverages within our franchise territory, we receive fees for the delivery of qualified product in our territory. These fees are reported in net sales.
As a result of not physically delivering the product, the sales volume delivered using these alternative methods of distribution is not reflected in our volume metrics. However, because we have the exclusive distribution rights for nonalcoholic beverages within our franchise territory, we receive fees from our brand partners for the delivery of qualified product in our territory.
See Note 17 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 13.5% in 2023 and a loss of 24.6% in 2022. The Company sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria.
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 3.7% in 2024 and a gain of 13.5% in 2023. The Company sponsors a postretirement healthcare plan for employees meeting specified qualifying criteria.
The Coca‑Cola Company and other beverage companies that supply concentrates, syrups and finished products to the Company make substantial marketing and advertising expenditures, including national advertising programs, to develop their brand identities and to promote sales in the Company’s territories. Certain of these marketing and advertising expenditures are made pursuant to annual arrangements.
The Coca‑Cola Company and other beverage companies that supply concentrates, syrups and finished products to the Company make substantial marketing and advertising expenditures, including national advertising programs, to develop their brand identities and to promote sales in the Company’s territories.
The indenture under which the Company’s senior bonds were issued does not include financial covenants, but does limit the incurrence of certain liens and encumbrances as well as indebtedness by the Company’s subsidiaries in excess of certain amounts.
The 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 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.
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.
Digitally Enabled Selling Platform: Through our investment in CONA, we, along with other Coca-Cola bottlers, are building a digitally enabled selling platform called MyCoke 360 that we believe will enable us to better serve our customers.
Digitally Enabled Selling Platform: Through our investment in CONA, we, along with other Coca-Cola bottlers, have built a digitally enabled selling platform called MyCoke that we believe has and will continue to enable us to better serve our customers.
Compared to 2022, gross margin also benefited from the increased mix of Sparkling beverages, which generally carry higher gross margins than Still packages. Selling, delivery and administrative (“SD&A”) expenses in 2023 increased $127.4 million, or 8%. SD&A expenses as a percentage of net sales in 2023 increased 10 basis points to 26.5% as compared to 2022.
Compared to 2023, gross margin also benefited from the increased mix of Sparkling beverages, which generally carry higher gross margins than Still products. Selling, delivery and administrative (“SD&A”) expenses in 2024 increased $68.6 million, or 3.9%. SD&A expenses as a percentage of net sales in 2024 increased 10 basis points to 26.6% as compared to 2023.
Commercial Execution: Our success is dependent on our ability to execute our commercial strategy within our customers’ stores. Our ability to obtain shelf space within stores and remain in-stock across our portfolio of brands and packages in a profitable manner will have a significant impact on our results.
Our ability to obtain shelf space within stores and remain in-stock across our portfolio of brands and packages in a profitable manner will have a significant impact on our results.
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. Raw material costs represent approximately 20% of total cost of sales on an annual basis.
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, 27 distribution fees of certain products and marketing credits and post-mix funding from brand companies.
The Company has $8.2 million in total minimum financing lease obligations including interest, of which $2.8 million are due in 2024. As of December 31, 2023, the Company estimated obligations for its executive benefit plans to be $184.4 million, of which $30.9 million is expected to be paid in 2024.
The Company has $5.4 million in total minimum financing lease obligations including interest, of which $2.9 million are due in fiscal year 2025. As of December 31, 2024, the Company estimated obligations for its executive benefit plans to be $203.5 million, of which $40.0 million is expected to be paid in fiscal year 2025.
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 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 total dividends paid on February 9, 2024 were approximately $155 million. We review supplier terms and conditions on an ongoing basis, and have negotiated payment term extensions in recent years in connection with our efforts to improve cash flow and working capital.
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.
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, 2023 $ (1,996) $ 2,136 Net periodic pension cost in 2023 (194) 206 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 2023 and 5.50% in 2022.
Pension costs for the Bargaining Plan were $3.7 million in both 2024 and 2023. 38 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, 2024 $ (1,842) $ 1,965 Net periodic pension cost in 2024 (211) 224 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 2024 and 2023.
Net working capital, defined as current assets less current liabilities, was $613.8 million on December 31, 2023, which was an increase of $273.1 million from December 31, 2022.
Net working capital, defined as current assets less current liabilities, was $1.23 billion on December 31, 2024, which was an increase of $620.3 million from December 31, 2023.
As of December 31, 2023, the Company had obligations related to its postretirement benefits plan of $63.8 million, of which $3.2 million is expected to be paid in 2024.
As of December 31, 2024, the Company had obligations related to its postretirement benefits plan of $62.1 million, of which $3.6 million is expected to be paid in fiscal year 2025.
The Company has master agreements with the counterparties to its commodity derivative instruments that provide for net settlement of derivative transactions.
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 settlement of derivative transactions.
The largest driver of the increase in net sales was higher average bottle/can sales price per unit charged to retail customers, which increased net sales by approximately $515 million. The increase in net sales was partially offset by lower case sales volume as compared to 2022, which decreased net sales by approximately $110 million.
The largest driver of the increase in net sales was higher average bottle/can sales price per unit charged to retail customers, which increased net sales by approximately $250 million.
Gross profit in 2023 increased $320.8 million, or 14%, while gross margin increased 240 basis points to 39.1%. The improvement in gross profit resulted primarily from higher prices for our products and a moderation of prices for certain commodities.
Gross profit in 2024 increased $154.5 million, or 5.9%, while gross margin increased 80 basis points to 39.9%. The improvement in gross profit resulted primarily from higher prices for our products and a continued moderation of costs on certain commodities.
Material Contractual Obligations The Company had a number of contractual obligations and commercial obligations as of December 31, 2023 that are material to an assessment of the Company’s short- and long-term cash requirements. The Company has outstanding long-term debt of $600.0 million, none of which is contractually due in 2024.
Material Contractual Obligations The Company had a number of contractual obligations and commercial obligations as of December 31, 2024 that are material to an assessment of the Company’s short- and long-term cash requirements.
There were no remaining benefit liabilities or associated estimates related to the Primary Plan as of December 31, 2023. See Note 17 for additional discussion of the termination of the Primary Plan. The second Company-sponsored pension plan (the “Bargaining Plan”) is for certain employees under collective bargaining agreements.
There were no remaining benefit liabilities or associated estimates related to the Primary Plan as of December 31, 2023 or December 31, 2024. The second Company-sponsored pension plan (the “Bargaining Plan”) is for certain employees under collective bargaining agreements. Benefits under the Bargaining Plan are determined in accordance with negotiated formulas for the respective participants.
(2) 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.
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.
The remaining interest payments on the Company’s debt obligations are $73.4 million determined in reference to the contractual terms of such debt, of which $23.2 million is due in 2024.
The remaining interest payments on the Company’s debt obligations are $468.9 million determined in reference to the contractual terms of such debt, of which $85.9 million is due in fiscal year 2025.
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.
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.
Based on information available as of December 31, 2023, the Company estimates this purchase obligation to be $71.1 million, all of which is expected to occur in 2024. The Company has $146.9 million in total minimum operating lease obligations including interest, of which $29.9 million are due in 2024.
Based on information available as of December 31, 2024, the Company estimates this purchase obligation to be $1.30 billion, of which an estimated $135 million of purchases is expected to occur in fiscal year 2025. The Company has $131.4 million in total minimum operating lease obligations including interest, of which $26.8 million are due in fiscal year 2025.
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.
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).
Net income in 2023 was adversely impacted by fair value adjustments to our acquisition related contingent consideration liability, driven by changes in the discount rate and future cash flow projections used to calculate the fair value of the liability.
Additionally, net income for both 2024 and 2023 was adversely impacted by routine, non-cash fair value adjustments to our acquisition related contingent consideration liability, driven by changes in the discount rate and future cash flow projections used to compute the fair value of the liability. Cash flows from operations for 2024 were $876.4 million, compared to $810.7 million for 2023.
We are focused on execution at every step in our supply chain, including raw material and finished product procurement, manufacturing conversion, transportation, warehousing and distribution, to ensure in-store execution can occur. We continue to invest in tools and technology to enable our teammates to operate more effectively and efficiently with our customers and to drive long-term value in our business.
We are focused on execution at every step in our supply chain, including raw material and finished product procurement, manufacturing conversion, transportation, warehousing and distribution, to ensure in-store 24 execution can occur.
The Company anticipates additions to property, plant and equipment in 2024 to be in the range of approximately $300 million to $350 million. Cash Flows From Financing Activities During 2023, cash used in financing activities was $77.7 million, which was a decrease of $96.5 million as compared to 2022.
The Company anticipates additions to property, plant and equipment over the next five years will be in the range of approximately $250 million to $300 million annually. Cash Flows From Financing Activities During 2024, cash provided by financing activities was $306.4 million, as compared to cash used in financing activities of $77.7 million during 2023, a change of $384.1 million.
More than half of the post-mix gallons sold to local customers in our franchise territory in 2023 were delivered using these alternative distribution methods. 25 Product category sales volume of standard physical cases (as defined below) and the percentage change by product category were as follows: Fiscal Year (in thousands) 2023 2022 % Change Bottle/can sales volume: Sparkling beverages 263,872 264,735 (0.3) % Still beverages 91,495 97,456 (6.1) % Total bottle/can sales volume 355,367 362,191 (1.9) % A standard physical case is a volume metric used to standardize differing package configurations in order to measure delivered cases on an equivalent basis.
We expect to continue to shift to a broader use of alternative distributors to deliver post-mix products to customers in our territory in future years. 26 Product category sales volume of standard physical cases (as defined below) and the percentage change by product category were as follows: Fiscal Year (in thousands) 2024 2023 % Change Bottle/can sales volume: Sparkling beverages 266,686 263,872 1.1 % Still beverages 86,417 91,495 (5.6) % Total bottle/can sales volume 353,103 355,367 (0.6) % A standard physical case is a volume metric used to standardize differing package configurations in order to measure delivered cases on an equivalent basis.
The Company’s long-term debt as of December 31, 2023 and December 31, 2022 was as follows: (in thousands) Maturity Date December 31, 2023 December 31, 2022 Senior bonds and unamortized discount on senior bonds (1) 11/25/2025 $ 349,983 $ 349,974 Revolving credit facility (2)(3) 7/9/2026 — — Senior notes 10/10/2026 100,000 100,000 Senior notes 3/21/2030 150,000 150,000 Debt issuance costs (824) (1,157) Total long-term debt $ 599,159 $ 598,817 (1) The senior bonds due in 2025 were issued at 99.975% of par.
The Company’s debt as of December 31, 2024 and December 31, 2023 was as follows: (in thousands) Maturity Date December 31, 2024 December 31, 2023 Senior bonds (the “2025 Senior Bonds”) (1) 11/25/2025 $ 350,000 $ 350,000 Senior notes 10/10/2026 100,000 100,000 Senior bonds (the “2029 Senior Bonds”) (2)(3) 6/1/2029 700,000 — Revolving credit facility (4) 6/10/2029 — — Senior notes 3/21/2030 150,000 150,000 Senior bonds (the “2034 Senior Bonds”) (3)(5) 6/1/2034 500,000 — Unamortized discount on senior bonds (1)(2)(5) Various (1,482) (17) Debt issuance costs (12,170) (824) Total debt $ 1,786,348 $ 599,159 Less: Current portion of debt (1) 349,699 — Total long-term debt $ 1,436,649 $ 599,159 (1) The 2025 Senior Bonds were issued at 99.975% of par.
We believe strengthening our balance sheet gives us the flexibility to make optimal capital allocation decisions for long-term value creation. Optimal Route to Market: We are focused on implementing optimal methods of distribution of our products within our territory. Our typical direct store delivery method uses Company-owned vehicles and warehouses, but we are increasingly using alternative methods of distribution.
We believe strengthening our balance sheet gives us the flexibility to make optimal capital allocation decisions for long-term value creation. We have and expect to continue to return value to our stockholders. Optimal Route to Market: We are focused on implementing optimal methods of distribution of our products within our territory. DSD is our preferred and primary route to market.
Cash Flows From Operating Activities During 2023, cash provided by operating activities was $810.7 million, which was an increase of $256.2 million as compared to 2022. The cash flows from operations were primarily the result of our strong operating performance.
The increase was primarily a result of our strong operating performance during 2024. Cash Flows From Investing Activities During 2024, cash used in investing activities was $682.2 million, which was an increase of $386.9 million as compared to 2023.
Net sales by product category were as follows: Fiscal Year (in thousands) 2023 2022 % Change Bottle/can sales: Sparkling beverages $ 3,892,133 $ 3,521,273 10.5 % Still beverages 2,149,639 2,020,100 6.4 % Total bottle/can sales 6,041,772 5,541,373 9.0 % Other sales: Sales to other Coca‑Cola bottlers 353,819 349,837 1.1 % Post-mix sales and other 258,267 309,747 (16.6) % Total other sales 612,086 659,584 (7.2) % Total net sales $ 6,653,858 $ 6,200,957 7.3 % The decline in post-mix sales and other in 2023 as compared to 2022 was related to a shift in how we deliver post-mix products to our customers.
Net sales by product category were as follows: Fiscal Year (in thousands) 2024 2023 % Change Bottle/can sales: Sparkling beverages $ 4,106,073 $ 3,892,133 5.5 % Still beverages 2,227,243 2,149,639 3.6 % Total bottle/can sales 6,333,316 6,041,772 4.8 % Other sales: Sales to other Coca‑Cola bottlers 345,586 353,819 (2.3) % Post-mix sales and other 220,814 258,267 (14.5) % Total other sales 566,400 612,086 (7.5) % Total net sales $ 6,899,716 $ 6,653,858 3.7 % The decline in post-mix sales and other in 2024 as compared to 2023 was related primarily to a shift in how we deliver post-mix products to our customers in order to enhance profitability and customer service.
The discount rate assumption is generally the estimate which can have the most significant impact on net periodic pension cost and the projected benefit obligation.
The discount rate used in determining the actuarial present value of the projected benefit obligation for the Bargaining Plan was 5.89% in 2024 and 5.16% in 2023. 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.
Following is a summary of the Level 3 activity: Fiscal Year (in thousands) 2023 2022 Beginning balance - Level 3 liability $ 541,491 $ 542,105 Payments of acquisition related contingent consideration (28,208) (36,515) Reclassification to current payables (3,300) 3,600 Increase in fair value 159,354 32,301 Ending balance - Level 3 liability $ 669,337 $ 541,491 Cash Sources and Uses A summary of cash-based activity is as follows: Fiscal Year (in thousands) 2023 2022 Cash Sources: Net cash provided by operating activities (1) $ 810,690 $ 554,506 Proceeds from the sale of property, plant and equipment 695 7,369 Total cash sources $ 811,385 $ 561,875 Cash Uses: Additions to property, plant and equipment $ 282,304 $ 298,611 Cash dividends paid 46,868 9,374 Payments of acquisition related contingent consideration 28,208 36,515 Investment in equity method investees 13,741 3,094 Payments on financing lease obligations 2,303 2,988 Debt issuance fees 340 310 Acquisition of distribution rights — 30,649 Payments on term loan facility and senior notes — 125,000 Total cash uses $ 373,764 $ 506,541 Net increase in cash $ 437,621 $ 55,334 (1) Net cash provided by operating activities in 2023 included net income tax payments of $200.8 million and pension plan contributions of $16.3 million.
Following is a summary of the Level 3 activity: Fiscal Year (in thousands) 2024 2023 Beginning balance - Level 3 liability $ 669,337 $ 541,491 Payments of acquisition related contingent consideration (64,312) (28,208) Reclassification to current payables (10,000) (3,300) Increase in fair value 59,166 159,354 Ending balance - Level 3 liability $ 654,191 $ 669,337 Cash Sources and Uses A summary of cash-based activity is as follows: Fiscal Year (in thousands) 2024 2023 Cash Sources: Proceeds from bond issuance $ 1,200,000 $ — Net cash provided by operating activities (1) 876,357 810,690 Proceeds from the disposal of short-term investments 150,274 — Proceeds from the sale of property, plant and equipment 569 695 Total cash sources $ 2,227,200 $ 811,385 Cash Uses: Payments related to share repurchases $ 625,654 $ — Purchases of short-term investments 446,309 — Additions to property, plant and equipment 371,015 282,304 Cash dividends paid 185,635 46,868 Payments of acquisition related contingent consideration 64,312 28,208 Investment in equity method investees 15,720 13,741 Debt issuance fees 15,512 340 Payments on financing lease obligations 2,488 2,303 Total cash uses $ 1,726,645 $ 373,764 Net increase in cash during period $ 500,555 $ 437,621 (1) Net cash provided by operating activities in 2024 included net income tax payments of $224.0 million, interest payments of $56.1 million and pension plan contributions of $2.0 million.
These alternative routes to market include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure. These bottle/can arrangements generally come with favorable commercial terms for the Company. In 2023, more than half of our post-mix gallons and less than 10% of our bottle/can volume was delivered through alternative routes to market.
In instances of bottle/can delivery, we have shifted certain products for certain customers and channels of business to alternative routes to market. These alternative routes to market include third-party distributors, the manufacturer of the product or the customer’s supply chain infrastructure. These bottle/can arrangements generally come with favorable commercial terms for the Company.
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.
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.
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.
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. 37 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 Company’s income tax expense increased $4.2 million, or 2.9%, to $149.1 million in 2023, as compared to $144.9 million in 2022. The increase in the effective income tax rate was primarily attributable to lower income before taxes and an increase in certain nondeductible amounts during 2023 as compared to 2022.
The Company’s income tax expense increased $74.4 million, or 49.9%, to $223.5 million in 2024, as compared to $149.1 million in 2023. The decrease in the effective income tax rate was primarily attributable to higher income before taxes. Other Comprehensive Income, Net of Tax Other comprehensive income, net of tax was $6.2 million in 2024 and $80.6 million in 2023.
During 2023, we invested $282.3 million in capital expenditures as we continued to optimize our supply chain and invest for future growth. 23 Areas of Emphasis Key priorities for the Company include executing our commercial strategy, executing our revenue management strategy, optimizing our supply chain, generating cash flow, determining the optimal route to market and creating a digitally enabled selling platform.
Areas of Emphasis Key priorities for the Company include executing our commercial strategy, executing our revenue management strategy, optimizing our supply chain, generating cash flow, determining the optimal route to market and creating and maintaining a digitally enabled selling platform. Commercial Execution: Our success is dependent on our ability to execute our commercial strategy within our customers’ stores.
During 2023 and 2022, the Company performed periodic reviews of property, plant and equipment and other intangibles and determined no material impairment existed. All business combinations are accounted for using the acquisition method.
During 2024 and 2023, 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.
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.
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.
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.
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.
Interest (Income) Expense, Net Interest (income) expense, net in 2023 totaled $0.9 million of interest income, net, as compared to $24.8 million of interest expense, net in 2022. The change in interest (income) expense, net was primarily a result of an increase in interest income due to higher cash and cash equivalent balances and increased yields as compared to 2022.
The change in interest expense (income), net was primarily due to an increase in interest expense on higher debt balances in 2024 as compared to 2023, partially offset by an increase in interest income due to higher cash, cash equivalent and short-term investment balances. In 2024, the Company had $62.0 million of interest expense and $60.2 million of interest income.
(3) This adjustment reflects expenses within the Nonalcoholic Beverages segment as the Company continues to optimize efficiency opportunities across its business. (4) This non-cash settlement expense relates to the termination of the Primary Plan during 2023. Financial Condition Total assets increased $579.4 million to $4.29 billion on December 31, 2023, as compared to $3.71 billion on December 31, 2022.
(3) This non-cash settlement expense relates to the settlement of the Primary Plan benefit liabilities during 2023. Financial Condition Total assets increased $1.02 billion to $5.31 billion on December 31, 2024, as compared to $4.29 billion on December 31, 2023.
As of December 31, 2023, the future payments related to these contractual arrangements, which expire at various dates through 2033, amounted to $130.5 million, of which $30.0 million is expected to be paid in 2024.
As of December 31, 2024, the future payments related to these contractual arrangements, which expire at various dates through 2034, amounted to $135.5 million, of which $36.8 million is expected to be paid in fiscal year 2025. 35 Hedging Activities The Company uses commodity derivative instruments to manage its exposure to fluctuations in certain commodity prices.
The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM. Asset information is not provided to the CODM. The Company believes three operating segments exist. Nonalcoholic Beverages represents the vast majority of the Company’s consolidated net sales and income from operations.
The Company has concluded the Chief Executive Officer, the Chief Operating Officer and the Chief Financial Officer, as a group, represent the CODM. Segment asset information is not provided to the CODM. The Company has three operating segments, each identified by its unique products and services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+2 added−1 removed2 unchanged
Biggest changeFees 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.
Biggest changeThe 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. 40 The annual rate of inflation in the United States, as measured by year-over-year changes in the Consumer Price Index, was 2.9% in 2024, 3.4% in 2023 and 6.5% in 2022.
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 $6 million to the Company’s acquisition related contingent consideration liability. 37 The Company is exposed to certain market risks and commodity price risk that arise in the ordinary course of business.
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 $6 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.
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. 38
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. 41
As such, assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of December 31, 2023, there would be no change to interest expense for the next 12 months.
As such, assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of December 31, 2024, there would be no change to interest expense for the next 12 months.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The Company is subject to interest rate risk on its revolving credit facility and did not have any outstanding borrowings on its revolving credit facility as of December 31, 2023.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. The Company is subject to interest rate risk on its revolving credit facility and did not have any outstanding borrowings on its revolving credit facility as of December 31, 2024.
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 raw materials.
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 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.
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.
The Company estimates a 10% increase in the market prices of commodities included as part of its raw materials over the current market prices would cumulatively increase costs during the next 12 months by approximately $71 million assuming no change in volume.
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 $66 million assuming no change in volume.
The Company manages this commodity price risk in some cases by entering into contracts with adjustable prices to hedge commodity purchases. The Company periodically uses commodity derivative instruments in the management of this risk.
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.
Removed
The annual rate of inflation in the United States, as measured by year-over-year changes in the Consumer Price Index (the “CPI”), was 3.4% in 2023, 6.5% in 2022 and 7.0% in 2021. Inflation in the prices of those commodities important to the Company’s business is reflected in changes in the CPI.
Added
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 $2 million as of December 31, 2024.
Added
Fees paid by the Company for agreements to hedge commodity purchases are amortized over the corresponding period of the agreement.

Other COKE 10-K year-over-year comparisons