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What changed in Coca-Cola Company (The)'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Coca-Cola Company (The)'s 2022 and 2023 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 2023 report.

+458 added−493 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-21)

Top changes in Coca-Cola Company (The)'s 2023 10-K

458 paragraphs added · 493 removed · 379 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+12 added−3 removed90 unchanged
Biggest changeHowever, we typically reserve for us or our designee the right (1) to prepare and package such Company Trademark Beverages in such containers in the territory for sale outside the territory; (2) to prepare, package, distribute and sell such Company Trademark Beverages in the territory in any other manner or form (territorial restrictions on bottlers vary in some cases in accordance with local law); and (3) to handle certain key accounts (accounts that cover multiple territories). 5 While under most of our bottler’s agreements we generally have complete flexibility to determine the price and other terms of sale of the concentrates and syrups we sell to our bottlers, as a practical matter, our Company’s ability to exercise its contractual flexibility to determine the price and other terms of sale of concentrates and syrups is subject, both outside and within the United States, to competitive market conditions.
Biggest changeHowever, we typically reserve for us or our designee the right (1) to prepare and package such Company Trademark Beverages in such containers in the territory for sale outside the territory; (2) to prepare, package, distribute and sell such Company Trademark Beverages in the territory in any other manner or form (territorial restrictions on bottlers vary in some cases in accordance with local law); and (3) to handle certain key accounts (accounts that cover multiple territories).
In addition, increasing concern over climate change is expected to continue to result in additional legal or regulatory requirements (both inside and outside the United States) designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment, to discourage the use of plastic materials, to limit or impose additional costs on commercial water use due to local water scarcity concerns, or to expand disclosure of certain sustainability metrics.
In addition, increasing concern over climate change is expected to continue to result in additional legal or regulatory requirements (both inside and outside the United States) designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment, to discourage the use of plastic materials, to 9 limit or impose additional costs on commercial water use due to local water scarcity concerns, or to expand disclosure of certain sustainability metrics.
Our competitive challenges include strong competitors in all geographic regions; in many countries, a concentrated 7 retail sector with powerful buyers able to freely choose among Company products, products of competitive beverage suppliers and individual retailers’ own store or private-label beverage brands; new industry entrants; and dramatic shifts in consumer shopping methods and patterns due to a rapidly evolving digital landscape.
Our competitive challenges include strong competitors in all geographic regions; in many countries, a concentrated retail sector with powerful buyers able to freely choose among Company products, products of competitive beverage suppliers and individual retailers’ own store or private-label beverage brands; new industry entrants; and dramatic shifts in consumer shopping methods and patterns due to a rapidly evolving digital landscape.
Among other things, CCBSS provides procurement services to our North American operations and to our U.S. bottling partners for the purchase of various goods and services, including HFCS. The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium, sucralose, saccharin, cyclamate and steviol glycosides. Generally, these raw materials are readily available from numerous sources.
Among other things, CCBSS provides procurement services to our North American operations and to our U.S. and Canadian bottling partners for the purchase of various goods and services, including HFCS. The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium, sucralose, saccharin, cyclamate and steviol glycosides. Generally, these raw materials are readily available from numerous sources.
We also encourage regular, live communication across the organization and host quarterly global town halls with our senior leadership that include employee question-and-answer sessions. In addition, function-level town halls are held on a regular basis. 11 Available Information The Company maintains a website at the following address: www.coca-colacompany.com.
We also encourage regular, live communication across the organization and host quarterly global town halls with our senior leadership that include employee question-and-answer sessions. In addition, function-level town halls are held on a regular basis. Available Information The Company maintains a website at the following address: www.coca-colacompany.com.
Consumers enjoy finished beverage products bearing trademarks owned by or licensed to the Company at a rate of 2.2 billion servings each day. Our strong and stable bottling and distribution system helps us capture growth by manufacturing, distributing and selling existing, enhanced and new innovative products to consumers throughout the world.
Consumers enjoy finished beverage products bearing trademarks owned by or licensed to the Company at a rate of 4 2.2 billion servings each day. Our strong and stable bottling and distribution system helps us capture growth by manufacturing, distributing and selling existing, enhanced and new innovative products to consumers throughout the world.
We grow our business in ways that achieve positive change in the world and build a more sustainable future for our planet. • For A Better Shared Future. We invest to improve people’s lives, from our employees to all those who touch our business system, to our investors, to the broad communities we call home.
We grow our business in ways that achieve positive change in the world and build a more sustainable future for our planet. • For a Better Shared Future. We invest to improve people’s lives, from our employees to all those who touch our business system, to our investors, to the communities we call home.
In the United States, we manufacture fountain syrups and sell them to fountain retailers, who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who in turn sell the fountain syrups to fountain retailers. These fountain syrup sales are included in our North America operating segment.
In the United States, we manufacture fountain syrups and sell them to fountain retailers, who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who in turn sell and distribute the fountain syrups to fountain retailers. These fountain syrup sales are included in our North America operating segment.
Depending upon the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained. Pursuant to our bottler’s agreements, we authorize our bottlers to use applicable Company trademarks in connection with their preparation, packaging, distribution and sale of Company products.
Depending upon the jurisdiction, trademarks are valid as long as they are in use and/or their registrations are properly maintained. Pursuant to our bottler’s agreements, we 8 authorize our bottlers to use applicable Company trademarks in connection with their preparation, packaging, distribution and sale of Company products.
In the United States, we purchase HFCS to meet our and our bottlers’ requirements with the assistance of Coca-Cola Bottlers’ Sales & Services Company LLC (“CCBSS”). CCBSS is a limited liability company that is owned by authorized Coca-Cola bottlers doing business in the United States.
In the United States, we purchase HFCS to meet our and our bottlers’ requirements with the assistance of Coca-Cola Bottlers’ Sales & Services Company LLC (“CCBSS”). CCBSS is a limited liability company that is owned by authorized Coca-Cola bottlers doing business in the United States and Canada.
All of our Company’s facilities and other operations in the United States and elsewhere around the world are subject to various environmental protection statutes and regulations, including those relating to the use of water resources, discharge of wastewater and air emissions.
All of our Company’s facilities and other operations in the United States and elsewhere around the world are subject to various environmental protection statutes and regulations, including those relating to the use and treatment of water resources, discharge of wastewater and air emissions.
Our policy is to comply with all such legal requirements. We have made, and plan on continuing to make, expenditures 9 necessary to comply with applicable environmental laws and regulations and to make progress toward achieving our sustainability goals.
Our policy is to comply with all such legal requirements. We have made, and plan on continuing to make, expenditures necessary to comply with applicable environmental laws and regulations and to make progress toward achieving our sustainability goals.
Raw Materials We and our bottling partners use various ingredients in our business, including high fructose corn syrup (“HFCS”), sucrose, aspartame, acesulfame potassium, sucralose, saccharin, cyclamate, steviol glycosides, ascorbic acid, citric acid, phosphoric acid, caffeine and caramel color; other raw materials such as coffee, orange and other fruit juice and juice concentrates; packaging materials such as polyethylene terephthalate (“PET”), bio-based PET and recycled PET for bottles; and aluminum cans, glass bottles and other containers.
Raw Materials We and our bottling partners use various ingredients in our business, including high fructose corn syrup (“HFCS”), sucrose, aspartame, acesulfame potassium, sucralose, saccharin, cyclamate, steviol glycosides, ascorbic acid, citric acid, phosphoric acid, caffeine and caramel color; other raw materials such as orange and other fruit juice and juice concentrates, milk, and 7 coffee; packaging materials such as polyethylene terephthalate (“PET”), bio-based PET and recycled PET for bottles; and aluminum cans, glass bottles and other containers.
Our bottling partners either combine concentrates with still or sparkling water and sweeteners (depending on the product), or combine syrups with still or sparkling water, to produce finished beverages.
Our bottling partners either combine concentrates with still or 3 sparkling water and sweeteners (depending on the product), or combine syrups with still or sparkling water, to produce finished beverages.
(“Coca-Cola FEMSA”), which has bottling and distribution operations in Mexico (a substantial part of central Mexico, including Mexico City, as well as southeast and northeast Mexico), Guatemala (most of the country), Colombia (most of the country), Nicaragua, Costa Rica, Panama, Venezuela, Uruguay, Brazil (a major part of the states of São Paulo and Minas Gerais; the states of Mato Grosso do Sul, Paraná and Santa Catarina; and part of the states of Rio Grande do Sul, Goiás and Rio de Janeiro), and Argentina (federal capital of Buenos Aires and surrounding areas); • Coca-Cola Europacific Partners plc (“CCEP”), which has bottling and distribution operations in Andorra, Australia, Belgium, Fiji, continental France, Germany, Great Britain, Iceland, Indonesia, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Papua New Guinea, Portugal, Samoa, Spain and Sweden; • Coca-Cola HBC AG (“Coca-Cola Hellenic”), which has bottling and distribution operations in Armenia, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Egypt, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Montenegro, Nigeria, North Macedonia, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland and Ukraine; • Arca Continental, S.A.B. de C.V., which has bottling and distribution operations in northern and western Mexico, northern Argentina, Ecuador, Peru, and the state of Texas and part of the states of New Mexico, Oklahoma and Arkansas in the United States; and • Swire Coca-Cola Limited, which as of December 31, 2022 had bottling and distribution operations in 11 provinces and the Shanghai municipality in mainland China, Hong Kong, Taiwan, Cambodia and territories in 13 states in the western United States.
(“Coca-Cola FEMSA”), which has bottling and distribution operations in Mexico (a substantial part of central Mexico, as well as southeast and northeast Mexico), Guatemala, Colombia (most of the country), Nicaragua, Costa Rica, Panama, Venezuela, Uruguay, Brazil (a major part of the states of São Paulo and Minas Gerais; the states of Mato Grosso do Sul, Paraná, Rio Grande do Sul, and Santa Catarina; and part of the states of Goiás and Rio de Janeiro), and Argentina (federal capital of Buenos Aires and surrounding areas); • Coca-Cola Europacific Partners plc (“CCEP”), which has bottling and distribution operations in Andorra, Australia, Belgium, Fiji, continental France, Germany, Great Britain, Iceland, Indonesia, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, Papua New Guinea, Portugal, Samoa, Spain and Sweden; • Coca-Cola HBC AG (“Coca-Cola Hellenic”), which has bottling and distribution operations in Armenia, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, the Czech Republic, Egypt, Estonia, Greece, Hungary, Italy, Latvia, Lithuania, Moldova, Montenegro, Nigeria, North Macedonia, Northern Ireland, Poland, Republic of Ireland, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland and Ukraine; • Arca Continental, S.A.B. de C.V., which has bottling and distribution operations in northern and western Mexico, northern Argentina, Ecuador, Peru, and the state of Texas and part of the states of New Mexico, Oklahoma and Arkansas in the United States; and • Swire Coca-Cola Limited, which has bottling and distribution operations in 11 provinces and the Shanghai municipality in mainland China, Hong Kong, Taiwan, Cambodia, Vietnam and territories in 13 states in the western United States.
For example, our Performance Enablement and Culture & Engagement Pulse platforms provide regular opportunities for employees across the organization to provide feedback on how their leaders, teammates and work experiences support the growth behaviors. Data from questionnaires are anonymized and plotted against historical results to inform teams and functions on areas of strength and opportunities for improvement.
For example, our Performance Enablement and 11 Culture & Engagement Survey platforms provide regular opportunities for employees across the organization to provide feedback on how their leaders, teammates and work experiences support the growth behaviors. Data from questionnaires are anonymized and plotted against historical results to inform teams and functions on areas of strength and opportunities for improvement.
Patents, Copyrights, Trade Secrets and Trademarks Our Company owns numerous patents, copyrights, trade secrets and other know-how and technology, which we collectively refer to in this report as “technology.” This technology generally relates to beverage products and the processes for their production; packages and packaging materials; design and operation of processes and equipment useful for our business; and 8 certain software.
Patents, Copyrights, Trade Secrets and Trademarks Our Company owns numerous patents, copyrights, trade secrets and other know-how and technology, which we collectively refer to as “technology.” This technology generally relates to beverage products and the processes for their production; packages and packaging materials; design and operation of processes and equipment useful for our business; and certain software.
For additional information about our operating segments and Corporate, refer to Note 19 of Notes to Consolidated Financial Statements set forth in Part II, “Item 8. Financial Statements and Supplementary Data” of this report.
For additional information about our operating segments and Corporate, refer to Note 20 of Notes to Consolidated Financial Statements set forth in Part II, “Item 8. Financial Statements and Supplementary Data” of this report.
Our compensation programs are designed to reinforce our growth agenda and our talent strategy as well as to drive a strong connection between the contributions of our employees and their pay. We believe the structure of our compensation packages provides the appropriate incentives to attract, retain and motivate our employees.
Our compensation programs are designed to reinforce our growth agenda and our talent strategy as well as to drive a strong connection between the contributions of our employees and their pay. We believe our compensation packages provide the appropriate incentives to attract, retain and motivate our employees.
As of December 31, 2022, approximately 600 employees in North America were covered by collective bargaining agreements. These agreements typically have terms of three to five years. We currently anticipate that we will be able to successfully renegotiate such agreements when they expire.
As of December 31, 2023, approximately 400 employees in North America were covered by collective bargaining agreements. These agreements typically have terms of three to five years. We currently anticipate that we will be able to successfully renegotiate such agreements when they expire.
When appropriate, we adjust base pay. Also, as permitted by local law, during the annual rewards cycle, we perform an adverse impact analysis on base pay, annual incentives and long-term incentives to help ensure fairness. We support many employee-led inclusion networks, which are an integral part of operationalizing and embedding our diversity, equity and inclusion strategies.
Also, as permitted by U.S. law, during the annual rewards cycle, we perform an adverse impact analysis on base pay, annual incentives and long-term incentives to help ensure fairness. When appropriate, we make adjustments. We support many employee-led inclusion networks, which are an integral part of operationalizing and embedding our diversity, equity and inclusion strategies.
We own or license and market numerous beverage brands, which we group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. We own and market five of the world’s top six nonalcoholic sparkling soft drink brands: Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.
We own or license and market numerous beverage brands, which we group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. We own and market several of the world’s largest nonalcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.
In the United States, the safety, production, transportation, distribution, advertising, labeling and sale of our Company’s products and their ingredients are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; various federal and state laws and regulations governing competition and trade practices, including the Robinson-Patman Act of 1936, as amended, and the Clayton Antitrust Act of 1914, as amended; federal, state and local workplace health and safety laws; various federal, state and local environmental protection laws; privacy and personal data protection laws; and various other federal, state and local statutes and regulations.
In the United States, the safety, production, storage, transportation, distribution, advertising, marketing, labeling and sale of our Company’s products and their ingredients are subject to the Federal Food, Drug, and Cosmetic Act; the Federal Trade Commission Act; the Lanham Act; state consumer protection laws; various federal and state laws and regulations governing competition and trade practices, including the Robinson-Patman Act of 1936, as amended, and the Clayton Antitrust Act of 1914, as amended; federal, state and local workplace health and safety laws; various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity and compensation; various federal, state and local environmental protection laws; privacy and personal data protection laws; and various other federal, state and local statutes and regulations.
The Coca-Cola system sold 32.7 billion and 31.3 billion unit cases of our products in 2022 and 2021, respectively. Sparkling soft drinks represented 69 percent of our worldwide unit case volume in both 2022 and 2021. Trademark Coca-Cola accounted for 46 percent and 47 percent of our worldwide unit case volume in 2022 and 2021, respectively.
The Coca-Cola system sold 33.3 billion and 32.7 billion unit cases of our products in 2023 and 2022, respectively. Sparkling soft drinks represented 69% of our worldwide unit case volume in both 2023 and 2022. Trademark Coca-Cola accounted for 47% and 46% of our worldwide unit case volume in 2023 and 2022, respectively.
We are also subject to various federal, state and international laws and regulations related to cybersecurity, privacy and data protection, including the European Union’s General Data Protection Regulation, China’s Personal Information Protection Law, the California Consumer Privacy Act of 2018, which became effective on January 1, 2020, as amended by the California Privacy Rights Act, which became effective on January 1, 2023, the Virginia Consumer Data Protection Act, which became effective on January 1, 2023, and privacy laws in Colorado, Connecticut and Utah, which are slated to take effect during 2023.
We are also subject to various federal, state and international laws and regulations related to cybersecurity, privacy and data protection, including the European Union’s General Data Protection Regulation, China’s Personal Information Protection Law and the California Consumer Privacy Act of 2018 (“CCPA”), which became effective on January 1, 2020, as amended by the California Privacy Rights Act (“CPRA”), which became effective on January 1, 2023.
In 2022, unit case volume in the United States represented 17 percent of the Company’s worldwide unit case volume. Of the U.S. unit case volume, 61 percent was attributable to sparkling soft drinks. Trademark Coca-Cola accounted for 42 percent of U.S. unit case volume.
In 2023, unit case volume in the United States represented 16% of the Company’s worldwide unit case volume. Of the U.S. unit case volume, 61% was attributable to sparkling soft drinks. Trademark Coca-Cola accounted for 42% of U.S. unit case volume. Unit case volume outside the United States represented 84% of the Company’s worldwide unit case volume in 2023.
These operations are generally included in one of our geographic operating segments or our Global Ventures operating segment. Additionally, we sell directly to consumers through retail stores operated by Costa Limited (“Costa”). These sales are included in our Global Ventures operating segment.
Additionally, we sell directly to consumers through retail stores operated by Costa Limited (“Costa”). These sales are included in our Global Ventures operating segment.
These operations consist primarily of our consolidated bottling and distribution operations, which are included in our Bottling Investments operating segment. In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners.
In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners. These operations are generally included in one of our geographic operating segments or our Global Ventures operating segment.
Swire Coca-Cola Limited acquired our bottling and distribution operations in Vietnam in January 2023. In 2022, these five bottling partners combined represented 42 percent of our total worldwide unit case volume. Being a bottler does not create a legal partnership or joint venture between us and our bottlers. Our bottlers are independent contractors and are not our agents.
In 2023, these five bottling partners combined represented 42% of our total worldwide unit case volume. Being a bottler does not create a legal partnership or joint venture between us and our bottlers. Our bottlers are independent contractors and are not our agents.
Through our people-centered approach, we strive to create an integrated, streamlined and inspiring career experience. We believe that development is anchored in acquiring skills and work experiences. We focus on investing in inspirational leadership, capability development, and providing learning opportunities to equip our global workforce with the skills they need for the future and to improve employee engagement and retention.
We believe that development is anchored in acquiring skills and work experiences. We focus on investing in inspirational leadership, capability development, and providing learning opportunities to equip our global workforce with the skills they need for the future and to improve employee engagement and retention.
We believe in providing challenging and diverse experiences and opportunities to our people to help them develop and grow. In 2022, we launched a global career strategy program called “Thrive,” which is designed to provide clarity to employees on what it means to have a career at the Company.
We believe in providing challenging and diverse experiences and opportunities to our people to help them develop and grow. Our global career strategy program, called “Thrive,” is designed to provide clarity to employees on what it means to have a career at the Company. Through our people-centered approach, we strive to create an integrated, streamlined and inspiring career experience.
We seek to create a better shared future for everyone our brands and business touch. We are focused on providing access to equal opportunity and fostering belonging both in our workplaces and the local communities we proudly serve.
Of these 7,600 employees, 42% and 49% were female and people of color, respectively. We seek to create a better shared future for everyone our brands and business touch. We are focused on providing access to equal opportunity and fostering belonging both in our workplaces and the local communities we proudly serve.
As further discussed below, our bottler’s agreements for territories outside the United States differ in some respects from our bottler’s agreements for territories within the United States. Bottler’s Agreements Outside the United States Bottler’s agreements between us and our authorized bottlers outside the United States generally are of stated duration, subject in some cases to possible extensions or renewals.
Bottler’s Agreements Outside the United States Bottler’s agreements between us and our authorized bottlers outside the United States generally are of stated duration, subject in some cases to possible extensions or renewals.
Under the terms of the bottler’s agreements, bottlers in the United States generally are not authorized to manufacture fountain syrups. Rather, the Company manufactures and sells fountain syrups to authorized fountain wholesalers (including certain authorized bottlers) and some fountain retailers.
Under the terms of the bottler’s agreements, bottlers in the United States generally are not authorized to manufacture fountain syrups. Rather, the Company manufactures and sells fountain syrups to authorized fountain wholesalers (including certain authorized bottlers) and some fountain retailers. These wholesalers in turn sell the syrups, or deliver them on our behalf, to restaurants and other retailers.
Other significant competitors include, but are not limited to, Nestlé S.A., Keurig Dr Pepper Inc., Danone S.A., Suntory Beverage & Food Limited, Unilever, AB InBev, Kirin Holdings, Heineken N.V., Diageo and Red Bull GmbH.
In many of the countries in which we do business, PepsiCo, Inc. is a primary competitor. Other significant competitors include, but are not limited to, Nestlé S.A., Keurig Dr Pepper Inc., Danone S.A., Suntory Beverage & Food Limited, AB InBev, Kirin Holdings, Heineken N.V., Diageo and Red Bull GmbH.
Under this model, the concentrate price we charge is impacted by a number of factors, including, but not limited to, bottler pricing, the channels in which the finished products produced from the concentrates are sold, and package mix.
Under this model, the concentrate price we charge is impacted by a number of factors, including, but not limited to, bottler pricing, the channels in which the finished products produced from the concentrates are sold, and package mix. 5 As further discussed below, our bottler’s agreements for territories outside the United States differ in some respects from our bottler’s agreements for territories within the United States.
Our Company continually seeks to further optimize its portfolio of brands, products and services in order to create and satisfy consumer demand in every market. 4 Distribution System We make our branded beverage products available to consumers in more than 200 countries and territories through our network of independent bottling partners, distributors, wholesalers and retailers as well as our consolidated bottling and distribution operations.
Distribution System We make our branded beverage products available to consumers in more than 200 countries and territories through our network of independent bottling partners, distributors, wholesalers and retailers as well as our consolidated bottling and distribution operations.
Likewise, when we use the capitalized word “Trademark” together with the name of one of our other beverage products (such as “Trademark Fanta,” “Trademark Sprite” or “Trademark Simply”), we mean beverages bearing the indicated trademark (that is, Fanta, Sprite or Simply, respectively) and all its variations and line extensions (such that “Trademark Fanta” includes Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, etc.; “Trademark Sprite” includes Sprite, Sprite Zero Sugar, etc.; and “Trademark Simply” includes Simply Orange, Simply Apple, Simply Grapefruit, etc.). 3 Our Company markets, manufactures and sells: • beverage concentrates, sometimes referred to as “beverage bases,” and syrups, including fountain syrups (we refer to this part of our business as our “concentrate operations”); and • finished sparkling soft drinks and other beverages (we refer to this part of our business as our “finished product operations”).
Likewise, when we use the capitalized word “Trademark” together with the name of one of our other beverage products (such as “Trademark Fanta,” “Trademark Sprite” or “Trademark Simply”), we mean nonalcoholic beverages bearing the indicated trademark (that is, Fanta, Sprite or Simply, respectively) and all its variations and line extensions (such that “Trademark Fanta” includes Fanta Orange, Fanta Zero Orange, Fanta Zero Sugar, Fanta Apple, etc.; “Trademark Sprite” includes Sprite, Sprite Zero Sugar, etc.; and “Trademark Simply” includes Simply Orange, Simply Apple, Simply Grapefruit, etc.).
The interpretation and application of privacy, data protection and data residency laws are often uncertain and are expanding in the United States and internationally, including in the European Union, Brazil, China and other jurisdictions.
Congress has also considered legislation relating to data privacy and data protection, and the U.S. federal government may in the future pass such legislation. The interpretation and application of privacy, data protection and data residency laws are often uncertain and are expanding in the United States and internationally, including in the European Union, Brazil, China and other jurisdictions.
We have publicly announced our 2030 aspirations to be 50 percent led by women globally, and in the United States, to reflect the U.S. Census racial and ethnic representation at all job grade levels. Each of our operating units outside the United States has developed locally relevant diversity, equity and inclusion aspirations.
We have publicly announced our 2030 aspirations to reflect the markets we serve, including, for example, to be 50% led by women globally. Each of our operating units outside the United States has developed locally relevant diversity, equity and inclusion 10 aspirations.
These competitive products are sold to consumers in both ready-to-drink and non-ready-to-drink form. The Company has directly entered the alcohol beverage category in numerous markets outside the United States. In the United States, the Company has authorized alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases.
These competitive products are sold to consumers in both ready-to-drink and non-ready-to-drink form. The Company has directly entered the alcohol beverage category in numerous markets outside the United States.
Human Capital Management Our people and culture agendas are critical business priorities. Our Board of Directors, through the Talent and Compensation Committee, provides oversight of the Company’s policies and strategies relating to talent; leadership and culture, including diversity, equity and inclusion; and the Company’s compensation philosophy and programs.
Our Board of Directors, through the Talent and Compensation Committee, provides oversight of the Company’s policies and strategies relating to talent; leadership and culture, including diversity, equity and inclusion; and the Company’s compensation philosophy and programs. The Talent and Compensation Committee also evaluates and approves the Company’s compensation plans, policies and programs applicable to our senior executives.
These wholesalers in turn sell the syrups, or deliver them on our behalf, to restaurants and other retailers. 6 Promotional and Marketing Programs In addition to conducting our own independent advertising and marketing activities, we may provide promotional and marketing support and/or funds to our bottlers.
Promotional and Marketing Programs In addition to conducting our own independent advertising and marketing activities, we may provide promotional and marketing support and/or funds to our bottlers.
Outside the United States, our business is subject to numerous similar statutes and regulations, as well as other legal and regulatory requirements and regulatory reviews.
We are also required to comply with the Foreign Corrupt Practices Act and the Trade Sanctions Reform and Export Enhancement Act. Outside the United States, our business is subject to numerous similar statutes and regulations, as well as other legal and regulatory requirements and regulatory reviews.
Of the non-U.S. unit case volume, 70 percent was attributable to sparkling soft drinks. Trademark Coca-Cola accounted for 47 percent of non-U.S. unit case volume. Our five largest independent bottling partners based on unit case volume in 2022 were as follows: • Coca-Cola FEMSA, S.A.B. de C.V.
Our five largest independent bottling partners based on unit case volume in 2023 were as follows: • Coca-Cola FEMSA, S.A.B. de C.V.
Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. Our concentrate operations typically generate net operating revenues by selling concentrates, syrups and certain finished beverages to authorized bottling operations (to which we typically refer as our “bottlers” or our “bottling partners”).
Our Company operates in two lines of business: concentrate operations and finished product operations. Our concentrate operations typically generate net operating revenues by selling beverage concentrates, sometimes referred to as “beverage bases,” syrups, including fountain syrups, and certain finished beverages to authorized bottling operations (to which we typically refer as our “bottlers” or our “bottling partners”).
Unit case volume outside the United States represented 83 percent of the Company’s worldwide unit case volume in 2022. The countries outside the United States in which our unit case volumes were the largest were Mexico, China, Brazil and India, which together accounted for 32 percent of our worldwide unit case volume.
The countries outside the United States in which our unit case volumes were the largest were Mexico, China, Brazil and India, which together accounted for 33% of our worldwide unit case volume. Of the non-U.S. unit case volume, 70% was attributable to sparkling soft drinks. Trademark Coca-Cola accounted for 48% of non-U.S. unit case volume.
Also, on a discretionary basis in most cases, our Company may develop and introduce new products, packages and equipment to assist the bottlers. Likewise, in many instances, we provide promotional and marketing support and/or funds and/or dispensing equipment and repair services to fountain and bottle/can retailers, typically pursuant to marketing agreements.
Also, on a discretionary basis in most cases, our Company may develop and introduce new products, packages and equipment to assist the bottlers.
We believe our sustainability goals, including our diversity, equity and inclusion aspirations, are key drivers for growth.
Diversity and inclusion metrics, which highlight progress and help drive accountability, are shared with our senior leaders on a quarterly basis. We believe our sustainability goals, including our diversity, equity and inclusion aspirations, are key drivers for growth.
Accordingly, in 2022, we introduced quantitative and qualitative components into our compensation programs for our executives to promote progress toward our diversity, equity and inclusion aspirations, as well as to encourage the design and implementation of sustainable diversity, equity and inclusion strategies and programs that foster the recruitment, development and retention of diverse talent. 10 We conduct annual pay equity analyses, with regard to gender globally and race/ethnicity in the United States, to help ensure our base pay structures are fair and to identify and address potential issues or disparities.
Accordingly, our compensation programs for our executives include qualitative and quantitative components to foster the design and implementation of sustainable diversity, equity and inclusion strategies and programs that contribute to the recruitment, development and retention of diverse talent, as well as to encourage progress toward our diversity, equity and inclusion aspirations.
Diversity, Equity and Inclusion We believe that a diverse, equitable and inclusive workplace that mirrors the markets we serve is critical to the Company’s continued growth and success. We take a comprehensive view of diversity, equity and inclusion across different races, ethnicities, tribes, religions, socioeconomic backgrounds, generations, abilities, and expressions of gender and sexual identity.
Diversity, Equity and Inclusion We believe that a diverse, equitable and inclusive workplace that reflects the markets we serve is a strategic business imperative that is critical to the Company’s continued growth and success.
Consumer demand can vary from one market to another and can change over time within a single market.
Consumer demand can vary from one market to another and can change over time within a single market. Our Company continually seeks to further optimize its portfolio of brands, products and services in order to create and satisfy consumer demand in every market.
The Talent and Compensation Committee also evaluates and approves the Company’s compensation plans, policies and programs applicable to our senior executives. In addition, the Committee on Directors and Corporate Governance of our Board of Directors oversees succession planning and talent development for our senior executives.
In addition, the Corporate Governance and Sustainability Committee of our Board of Directors oversees succession planning and talent development for our senior executives. Employees We believe people are our most important asset, and we strive to attract and retain high-performing talent.
As of December 31, 2022, we had approximately 7,800 employees located in the United States, excluding the employees of the Global Ventures operating segment; fairlife, LLC; and BA Sports Nutrition, LLC. Of these 7,800 employees, 40 percent and 48 percent were female and people of color, respectively.
We take a comprehensive view of diversity, equity and inclusion across different races, ethnicities, tribes, religions, socioeconomic backgrounds, generations, abilities, and expressions of gender and sexual identity. As of December 31, 2023, we had approximately 7,600 employees located in the United States, excluding the employees of the Global Ventures operating segment; fairlife; and BA Sports Nutrition, LLC (“BodyArmor”).
Employees We believe people are our most important asset, and we strive to attract and retain high-performing talent. As of December 31, 2022 and 2021, our Company had approximately 82,500 and 79,000 employees, respectively, of which approximately 9,000 and 9,400, respectively, were located in the United States.
As of December 31, 2023 and 2022, our Company had approximately 79,100 and 82,500 employees, respectively, of which approximately 9,000 were located in the United States. The decrease in the total number of employees was primarily due to 2023 refranchising activity. Our Company, through its divisions and subsidiaries, is a party to numerous collective bargaining agreements.
In addition, citrus greening disease is reducing the number of citrus trees and increasing grower costs and prices. We generate most of our coffee revenues through Costa. Costa purchases Rainforest Alliance Certified and other green coffee through multiple suppliers.
In addition, citrus greening disease is reducing the number of citrus trees and increasing grower costs and prices. Milk is the principal raw material for our dairy products. We derive the majority of our dairy revenues through fairlife, LLC (“fairlife”), which purchases milk from dairy cooperatives that in turn source milk from farms within the cooperatives.
The aggregate amount provided by our Company to bottlers, resellers and other customers of our Company’s products, principally for participation in promotional and marketing programs, was $4.8 billion in 2022. Investments in Bottling Operations Most of our branded beverage products are prepared, packaged, distributed and sold by independent bottling partners.
Likewise, in many instances, we provide promotional and marketing support and/or funds and/or dispensing equipment and repair services to fountain and bottle/can retailers, typically pursuant to marketing agreements. 6 Investments in Bottling Operations Most of our branded beverage products are prepared, packaged, distributed and sold by independent bottling partners.
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Competitive products include all flavored alcohol beverages containing various alcohol bases. In many of the countries in which we do business, PepsiCo, Inc. is a primary competitor.
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Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations. These operations consist primarily of our consolidated bottling and distribution operations, which are included in our Bottling Investments operating segment.
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The increase in the total number of employees was primarily due to Costa opening new retail stores as well as the existing Costa retail stores requiring additional staff to meet increased demand, partially offset by the impact of refranchising our bottling operations in Cambodia. Our Company, through its divisions and subsidiaries, is a party to numerous collective bargaining agreements.
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The Company has also directly entered the alcohol beverage category in numerous markets outside the United States. In the United States, the Company has established a wholly owned, indirect, firewalled subsidiary, which authorizes alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases.
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Diversity and inclusion metrics, which highlight progress and help drive accountability, are shared with our senior leaders on a quarterly basis. Our Global Women’s Leadership Council, composed of ten senior leaders, focuses on accelerating the development and promotion of women into roles of increasing responsibility and influence.
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The Company’s approach in alcohol focuses on three segments of alcohol ready-to-drink beverages: hard seltzers (e.g., Topo Chico Hard Seltzer), hard alternatives (e.g., Lemon-Dou) and pre-mixed cocktails (e.g., Jack Daniel’s & Coca-Cola).
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While under most of our bottler’s agreements we generally have complete flexibility to determine the price and other terms of sale of the concentrates and syrups we sell to our bottlers, as a practical matter, our Company’s ability to exercise its contractual flexibility to determine the price and other terms of sale of concentrates and syrups is subject, both outside and within the United States, to competitive market conditions.
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In the United States, the Company has established a wholly owned, indirect, firewalled subsidiary, which authorizes alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases. Competitive products include all alcohol ready-to-drink beverages containing various alcohol bases.
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While our sourcing for milk is currently concentrated among a few dairy cooperatives, we believe we have access to alternate suppliers, if necessary, to help ensure an adequate supply of milk. We generate most of our coffee revenues through Costa. Costa purchases Rainforest Alliance Certified and other green coffee through multiple suppliers.
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Various jurisdictions have adopted, and may seek to adopt, significant additional product labeling or warning requirements or limitations on the marketing or sale of our products because of what they contain or allegations that they cause adverse health effects.
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If these types of requirements become applicable to one or more of our products under current or future environmental or health laws or regulations, they may inhibit sales of such products or make it necessary for us to reformulate certain of our products.
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In addition to California, at least 12 other states in the United States have passed comprehensive privacy laws similar to the CCPA and the CPRA. These laws are either in effect or will go into effect sometime before the end of 2026, and we expect other states to consider adopting similar laws in the future.
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Like the CCPA and the CPRA, these laws create, or are expected to create, obligations related to the processing of personal information, as well as special obligations for the processing of “sensitive” data. Some of the provisions of these laws may apply to our business activities. The U.S.
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For additional information, refer to Part I, “Item IA. Risk Factors” of this report. Human Capital Management Our people and culture agendas are critical business priorities.
Added
We conduct annual pay equity analyses, with regard to gender globally and race/ethnicity in the United States, to help ensure our base pay structures are fair and to identify and address potential issues or disparities.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough we currently do not anticipate that the suspension of our operations in Russia or the disruptions in Ukraine will have a material impact on our results of operations, the conflict has resulted, and could continue to result, in volatile commodity markets, supply chain disruptions, increased risk of cyber incidents or other disruptions to our information systems, reputational risk, heightened risks to employee safety, business disruptions (including labor shortages), reduced availability and increased costs for transportation, energy, packaging and raw materials and other input costs, additional sanctions, export controls and other legislation or regulations (including restrictions on the transfer of funds to and from Russia), or difficulty protecting and enforcing our intellectual property rights.
Biggest changeThese conflicts have resulted, and could continue to result, in volatile commodity markets; logistical, transportation and supply chain disruptions; increased risk of cyber incidents or other disruptions to our information systems; reputational risk; heightened risks to employee safety; business disruptions (including labor shortages); reduced availability and increased costs of transportation, energy, packaging, raw materials and other input costs; sanctions, export controls and other legislation or regulation; or difficulty protecting and enforcing our intellectual property rights.
In addition, in the past, the 19 U.S. Congress considered imposing a federal excise tax on beverages sweetened with sugar, HFCS or other nutritive sweeteners and may consider similar proposals in the future.
In addition, in the past, the U.S. Congress considered imposing a federal excise tax on beverages sweetened with sugar, HFCS or other 19 nutritive sweeteners and may consider similar proposals in the future.
Public debate and concern about perceived negative health consequences of certain ingredients in our beverage products, such as synthetic colors, non-nutritive sweeteners and biotechnology-derived substances; substances that are present in our beverage products naturally or that occur as a result of the manufacturing process, such as 4-methylimidazole (“4-MEI”), a chemical compound that is formed during the manufacturing of certain types of caramel coloring used in cola-flavored beverages; or substances used in packaging materials, such as bisphenol A (“BPA”), an odorless, tasteless food-grade chemical commonly used in the food and beverage industries as a component in the coating of the interior of cans, may affect consumers’ preferences and cause them to shift away from some of our beverage products.
Public debate and concern about perceived negative health consequences of certain ingredients in our beverage products, such as synthetic colors, non-nutritive sweeteners and biotechnology-derived substances; substances that are present in our beverage products naturally or that occur as a result of the manufacturing process, such as 4-methylimidazole (“4-MEI”), a chemical 16 compound that is formed during the manufacturing of certain types of caramel coloring used in cola-flavored beverages; or substances used in packaging materials, such as bisphenol A (“BPA”), an odorless, tasteless food-grade chemical commonly used in the food and beverage industries as a component in the coating of the interior of cans, may affect consumers’ preferences and cause them to shift away from some of our beverage products.
In addition, we depend on information systems for digital marketing activities and electronic communications among our locations around the world and between Company employees and our bottlers, customers, suppliers, consumers and other third parties. Because information systems are critical to many of the Company’s operating activities, our business may be impacted by system shutdowns, service disruptions or cybersecurity incidents.
In addition, we depend on information systems for digital marketing activities and electronic communications among our locations around the world and between Company employees and our bottlers, customers, suppliers, consumers and other third parties. Because information systems are critical to many of the Company’s operating activities, our business may be impacted by 22 system shutdowns, service disruptions or cybersecurity incidents.
Climate change may also exacerbate extreme weather, resulting in water scarcity or flooding, and cause a further deterioration of water quality in affected regions, which could limit water availability for the Coca-Cola system’s bottling operations. Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products.
Climate change may also exacerbate extreme weather, resulting in water scarcity or flooding, and cause a further deterioration of water quality in affected regions, which could limit water availability for the Coca-Cola system’s bottling operations. Increased frequency or duration of extreme weather conditions could also impair 25 production capabilities, disrupt our supply chain or impact demand for our products.
While we generally have been able to renegotiate collective bargaining agreements on satisfactory terms when they expire and regard our relations with employees and their representatives as generally satisfactory, negotiations may nevertheless be challenging, as the Company must have competitive cost structures in each market while meeting the compensation and benefits needs of our employees.
While we generally have been able to renegotiate collective bargaining agreements on satisfactory terms when they expire and regard our relations with employees and their representatives as generally satisfactory, negotiations may nevertheless be challenging, as the Company must have competitive cost structures in each market while meeting the compensation and 15 benefits needs of our employees.
Our security controls over personal data, the training of employees and vendors on data privacy and data security, and the policies, 23 procedures and practices we have implemented or may implement in the future may not prevent the improper disclosure of personal data by us or the third-party service providers and vendors whose technology, systems and services we use in connection with the receipt, storage and transmission of personal data.
Our security controls over personal data, the training of employees and vendors on data privacy and data security, and the policies, procedures and practices we have implemented or may implement in the future may not prevent the improper disclosure of personal data by us or the third-party service providers and vendors whose technology, systems and services we use in connection with the receipt, storage and transmission of personal data.
Our attempts to offset these cost pressures, such as through price increases of some of our products, may not be successful. Higher product prices may result in reductions in sales volume. Consumers may be less willing to pay a price differential for our branded products and may increasingly purchase lower-priced offerings, or may forgo some purchases altogether.
Our attempts to offset cost pressures, such as through price increases of some of our products, may not be successful. Higher product prices may result in reductions in sales volume. Consumers may be less willing to pay a price differential for our branded products and may increasingly purchase lower-priced offerings, or may forgo some purchases altogether.
In addition, while we have procedures in place for assessing risk along with selecting, managing and monitoring our relationships with third-party service providers and other business partners, we do not have control over their business operations or governance and compliance systems, practices and procedures, which increases our financial, legal, reputational and operational risk.
In addition, while we have procedures in place for assessing risk along with selecting, managing and monitoring our relationships with third-party service providers and other business partners, we do not have control over their business operations or governance and compliance systems, practices and procedures, which increases our financial, legal, cybersecurity, reputational and operational risk.
Our business operations are subject to numerous duties or taxes that are not based on income, sometimes referred to as “indirect taxes,” including import duties, tariffs, excise taxes, sales or value-added taxes, taxes on sweetened beverages, packaging taxes, carbon taxes, property taxes and payroll taxes, in many of the jurisdictions in which we operate.
Our business operations are subject to numerous duties or taxes that are not based on income, sometimes referred to as “indirect taxes,” including import duties, tariffs, excise taxes, sales or value-added taxes, taxes on sweetened or aerated beverages, packaging taxes, carbon taxes, property taxes and payroll taxes, in many of the jurisdictions in which we operate.
These risks may also be present to the extent a business we have acquired, but which does not use our information systems, experiences severe damage, a system shutdown, service disruption, or a cybersecurity incident. Like most major corporations, the Company’s information systems are a target of attacks.
These risks may also be present to the extent a business or bottler we have acquired, but which does not use our information systems, experiences severe damage, a system shutdown, service disruption or a cybersecurity incident. Like most major corporations, the Company’s information systems are a target of attacks.
Due to product price, limited purchasing power and cultural differences, our products may not be accepted in any particular emerging or developing market. If we do not successfully manage the potential negative consequences of our productivity initiatives, our business operations could be adversely affected.
Due to product price, limited purchasing power and cultural differences, our products may not be accepted in any particular emerging or developing market. 13 If we do not successfully manage the potential negative consequences of our productivity initiatives, our business operations could be adversely affected.
In addition, increasing public concern about perceived or potential health consequences of the presence of ingredients or substances in our beverage products or in packaging materials (or alleged presence of substances such as PFAS) and/or the results of third-party studies (whether or not scientifically valid) purporting to assess the health implications of consumption of certain ingredients or substances present in certain of our products or packaging materials have resulted, and could result, in additional governmental regulations concerning the advertising, marketing, labeling, packaging or sale of our beverages; potential new or increased taxes on our beverages by government entities; and negative publicity, or actual or threatened legal actions against us or other companies in our industry, all of which could damage the reputation of, and may reduce demand for, our beverage products.
In addition, increasing public concern about perceived or potential health consequences of the presence of ingredients or substances in our beverage products or in packaging materials (or alleged presence of substances such as PFAS) and/or the results of third-party studies (whether or not scientifically valid) purporting to assess the health implications of consumption of certain ingredients or substances present in certain of our products or packaging materials have resulted, and could result, in additional governmental regulations concerning the advertising, marketing, labeling, packaging or sale of our beverages; limitations on the use of certain ingredients or packaging; potential new or increased taxes on our beverages by government entities; and negative publicity, or actual or threatened legal actions against us or other companies in our industry, all of which could damage the reputation of, and may reduce demand for, our beverage products.
A deterioration of the financial condition or results of operations of one or more of our major bottling partners could adversely affect our net operating revenues from sales of concentrates and syrups; and, if such deterioration involves one or more of our 18 equity method investee bottling partners, it could also result in a decrease in our equity income and/or impairments of our equity method investments.
A deterioration of the financial condition or results of operations of one or more of our major bottling partners could adversely affect our net operating revenues from sales of concentrates and syrups; and, if such deterioration involves one or more of our equity method investee bottling partners, it could also result in a decrease in our equity income and/or impairments of our equity method investments.
In addition, adverse weather conditions may affect the supply of agricultural commodities from which key ingredients for our products are derived. Any sustained or significant disruption to the manufacturing or sourcing of products or materials could increase our costs and interrupt product supply, which could adversely impact our business.
In addition, adverse and extreme weather conditions may affect the supply of agricultural commodities from which key ingredients for our products are derived. Any sustained or significant disruption to the manufacturing or sourcing of products or materials could increase our costs and interrupt product supply, which could adversely impact our business.
There are increasing concerns among consumers, governments and other stakeholders about the damaging impact of the accumulation of plastic bottles and other packaging materials in the environment, particularly in the world’s waterways, lakes and oceans, as well as inefficient use of resources when packaging materials are not included in a circular economy.
There are increasing concerns among consumers, governments and other stakeholders about the damaging impact of the accumulation of plastic bottles and other packaging materials in the environment, particularly in the world’s waterways, lakes 24 and oceans, as well as inefficient use of resources when packaging materials are not included in a circular economy.
We maintain levels of debt that we consider prudent based on our cash flows, interest coverage ratio and percentage of debt to capital. We use debt financing to lower our cost of capital, which increases our return on shareowners’ equity. This exposes us to adverse changes in interest rates.
We maintain levels of debt that we consider prudent based on our cash flows, interest coverage ratio and percentage of debt to capital. We use debt financing to lower our cost of capital, which increases our return on shareowners’ equity. This exposes us 21 to adverse changes in interest rates.
RISKS RELATED TO INFORMATION TECHNOLOGY AND DATA PRIVACY If we are unable to protect our information systems against service interruption, misappropriation of data or cybersecurity incidents, our operations could be disrupted, we may suffer financial losses and our reputation may be damaged.
RISKS RELATED TO CYBERSECURITY AND DATA PRIVACY If we are unable to protect our information systems against service interruption, misappropriation of data or cybersecurity incidents, our operations could be disrupted, we may suffer financial losses and our reputation may be damaged.
If we are unable to successfully manage the potential negative consequences of our productivity initiatives, our business operations could be adversely affected. 13 If we are unable to attract or retain a highly skilled and diverse workforce, our business could be negatively affected.
If we are unable to successfully manage the potential negative consequences of our productivity initiatives, our business operations could be adversely affected. If we are unable to attract or retain a highly skilled and diverse workforce, our business could be negatively affected.
RISKS RELATED TO CONSUMER DEMAND FOR OUR PRODUCTS Obesity and other health-related concerns may reduce demand for some of our products. There is growing concern among consumers, public health professionals and government agencies about the health problems associated with obesity.
RISKS RELATED TO CONSUMER DEMAND FOR OUR PRODUCTS Obesity and other health-related concerns may reduce demand for some of our products. There is concern among consumers, public health professionals and government agencies about the health problems associated with obesity.
When and to the extent appropriate, we use derivative financial instruments to reduce our 21 exposure to interest rate risks. However, our financial risk management program may not be successful in reducing the risks inherent in exposures to interest rate fluctuations.
When and to the extent appropriate, we use derivative financial instruments to reduce our exposure to interest rate risks. However, our financial risk management program may not be successful in reducing the risks inherent in exposures to interest rate fluctuations.
Likewise, campaigns by activists connecting us, or our bottling system or supply 17 chain, with workplace, human rights or animal welfare issues, whether actual or perceived, could adversely impact our corporate image and reputation.
Likewise, campaigns by activists connecting us, or our bottling system or supply chain, with workplace, human rights or animal welfare issues, whether actual or perceived, could adversely impact our corporate image and reputation.
Our financial performance is impacted by how well we can integrate and manage acquired businesses, brands and bottling operations, and we may not be able to achieve our strategic and financial objectives for acquired businesses, brands or bottling operations.
Our financial performance is impacted by how well we can integrate and manage our acquisitions, and we may not be able to achieve our strategic and financial objectives for acquired businesses, brands or bottling operations.
Increased demand for food products; decreased agricultural productivity in certain regions of the world as a result of changing weather patterns; increased agricultural regulations, including regulation of ingredient sourcing due diligence; and other factors have in the past, and may in the future, limit the availability and/or increase the cost of such agricultural commodities and could impact the food security of communities around the world.
Increased demand for food products; decreased agricultural productivity in certain regions of the world as a result of changing weather patterns; loss of biodiversity; increased agricultural regulations, including regulation of ingredient sourcing due diligence; and other factors have in the past, and may in the future, limit the availability and/or increase the cost of such agricultural commodities and could impact the food security of communities around the world.
Moreover, the IRS could successfully appeal the portions of the Opinion that are favorable to the Company and/or assert new claims for additional tax relating to the subsequent years by broadening the scope to cover additional foreign licensees. These adjustments could have a material adverse impact on the Company’s financial position, results of operations and cash flows.
Moreover, the IRS could successfully appeal the portions of the Opinions that are favorable to the Company and/or assert new claims for additional tax relating to the subsequent years by broadening the scope to cover additional foreign licensees. These adjustments could have a material adverse impact on the Company’s financial position, results of operations and cash flows.
These factors include changes in supply and demand; supplier capacity constraints; a deterioration of our or our bottling partners’ relationships with suppliers; inflation; weather conditions (including the effects of climate change); wildfires and other natural disasters; disease or pests (including the impact of citrus greening disease on the citrus industry); agricultural uncertainty; health epidemics, pandemics or other contagious outbreaks (including COVID-19); labor shortages, strikes or work stoppages; changes in or the enactment of new laws and regulations; governmental actions or controls (including import/export restrictions, such as new or increased tariffs, sanctions, quotas or trade barriers); port congestion or delays; transport capacity constraints; cybersecurity incidents or other disruptions; political uncertainties; acts of terrorism; governmental instability; or fluctuations in foreign currency exchange rates.
These factors include changes in supply and demand; supplier capacity constraints; a deterioration of our or our bottling partners’ relationships with suppliers; international conflicts; political uncertainties; acts of terrorism; governmental instability; inflation; weather conditions (including the effects of climate change); wildfires, floods and other natural disasters; disease or pests (including the impact of citrus greening disease on the citrus industry); agricultural uncertainty; health epidemics, pandemics or other contagious outbreaks (including COVID-19); labor shortages, strikes or work stoppages; changes in or the enactment of new laws and regulations; governmental actions or controls (including import/export restrictions, such as new or increased tariffs, sanctions, quotas or trade barriers); port 14 congestion or delays; transport capacity constraints; cybersecurity incidents or other disruptions; or fluctuations in foreign currency exchange rates.
Although the Company disagrees with the unfavorable portions of the Opinion and intends to vigorously defend its position, considering all avenues of appeal, there is no assurance that the courts will ultimately rule in the Company’s favor. It is therefore possible that all or some of the unfavorable portions of the Opinion could ultimately be upheld.
Although the Company disagrees with the unfavorable portions of the Opinions and intends to vigorously defend its position, considering all avenues of appeal, there is no assurance that the courts will ultimately rule in the Company’s favor. It is therefore possible that all or some of the unfavorable portions of the Opinions could ultimately be upheld.
Disruption of our supply chain, including increased commodity, raw material, packaging, energy, transportation and other input costs may adversely affect our financial condition or results of operations. We have experienced, and could continue to experience, disruptions in our manufacturing operations and supply chain.
Disruption of our supply chain, including increased commodity, raw material, packaging, energy, transportation and other input costs, may adversely affect our financial condition or results of operations. At times, we have experienced, and could continue to experience, disruptions in our manufacturing operations and supply chain.
The OECD is currently coordinating a project on behalf of the G20 and other participating countries which would grant additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered.
The OECD is currently coordinating a two pillared project on behalf of the G20 and other participating countries which would grant additional taxing rights over profits earned by multinational enterprises to the countries in which their products are sold and services rendered.
Our ability to achieve our sustainability goals and targets and to accurately and transparently report our progress presents numerous operational, financial, legal and other risks, and is dependent on the actions of our bottling partners, suppliers and other third parties, all of which are outside of our control.
Our ability to achieve our sustainability goals and targets and to accurately and transparently report our progress presents numerous operational, financial, legal and other risks and is dependent on the actions of our bottling partners, suppliers and other third parties, some of which are outside of our control.
These engagements in public policy debates have been, and could in the future be, the subject of backlash from advocacy groups or others that have a differing point of view and could result in adverse media and consumer reaction, including product boycotts.
These engagements in public policy debates have been, and could in the future be, the subject of criticism from advocacy groups or others that have a differing point of view and could result in adverse media and consumer reaction, including product boycotts.
In that event, the Company would be subject to significant additional liabilities for the years at issue and potentially also for the subsequent years if the unfavorable portions of the Opinion were to be applied to the foreign licensees covered within the scope of the Opinion.
In that event, the Company would be subject to significant additional liabilities for the years at issue and potentially also for the subsequent years if the unfavorable portions of the Opinions were to be applied to the foreign licensees covered within the scope of the Opinions.
However, despite our strong commitment to product safety and quality, we or our bottling partners periodically have not met, and may not always meet, these standards, particularly as we expand our product offerings through innovation or acquisitions into beverage categories, such as value-added dairy and plant-based beverages, that are beyond our traditional range of beverage products.
However, despite our strong commitment to product safety and quality, we or our bottling partners at times have not met, and may not always meet, these standards, particularly as we expand our product offerings through innovation or acquisitions into beverage categories, such as value-added dairy and plant-based beverages, that are beyond our traditional range of beverage products.
In addition, increased or additional regulations to limit and/or report carbon dioxide and other greenhouse gas emissions as a result of concern over climate change; to discourage the use of plastic materials, including regulations relating to recovery and/or disposal of plastic bottles and other packaging materials due to environmental concerns; or to limit or impose additional costs on commercial water use due to local water scarcity concerns, have in the past and could continue to result in increased compliance costs, capital expenditures and other financial obligations for us and our bottling partners, which could affect our profitability, or may impede the production, distribution, marketing and sale of our products, which could affect our net operating revenues.
In addition, increased or additional regulations to limit and/or report carbon dioxide and other greenhouse gas emissions as a result of concern over climate change; to discourage the use of plastic materials, including regulations relating to recovery and/or disposal of plastic bottles and other packaging materials due to environmental concerns; to limit or impose additional costs on commercial water use due to local water scarcity concerns; or to address wastewater discharge to protect local bodies of water, have in the past and could continue to result in increased compliance costs, capital expenditures and other financial obligations for us and our bottling partners, which could affect our profitability, or may impede the production, distribution, marketing and sale of our products, which could affect our net operating revenues.
Many of our raw materials and supplies are purchased in the open market and the prices we pay for such items are subject to fluctuation. We expect the inflationary pressures on input and other costs to continue to impact our business in 2023.
Many of our raw materials and supplies are purchased in the open market and the prices we pay for such items are subject to fluctuation. We expect the inflationary pressures on certain input and other costs to continue to impact our business in 2024.
We are party to various litigation claims and legal proceedings in the ordinary course of business, including, but not limited to, those arising out of our advertising and marketing practices, product claims and labels, competition, distribution and pricing, intellectual property and commercial disputes, tax disputes, and environmental and employment matters.
We are party to various litigation claims and legal proceedings in the ordinary course of business, including, but not limited to, those arising out of our advertising and marketing practices, product claims and labels, competition, distribution and pricing, personal data protection and privacy, intellectual property and commercial disputes, tax disputes, and environmental and employment matters.
Our Company is subject to various laws and regulations in the countries and territories throughout the world in which we do business, including laws and regulations relating to competition, distribution and pricing, product safety, advertising and labeling, container deposits, recycling, recycled content, product stewardship, the protection of the environment, occupational health and safety, employment and labor practices, personal data protection and privacy, and data security.
Our Company is subject to various laws and regulations in the countries and territories throughout the world in which we do business, including laws and regulations relating to competition, distribution and pricing, product safety, product design, advertising and labeling, container deposits, recycling, recycled content, product stewardship, the protection of the environment, occupational health and safety, employment and labor practices, machine learning and artificial intelligence, personal data protection and privacy, and data security.
The success of new and evolved products depends on a number of factors, including timely and successful product development, adherence to new global and/or local standards of practice, consumer acceptance and stakeholder perception.
The success of new and evolved products depends on several factors, including timely and successful product development, adherence to new global and/or local standards of practice, consumer acceptance and stakeholder perception.
RISKS RELATED TO FINANCE, ACCOUNTING AND INVESTMENTS Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results. We earn revenues, pay expenses, own assets and incur liabilities in countries using many currencies other than the U.S. dollar. In 2022, we derived $27.6 billion of net operating revenues from operations outside the United States.
RISKS RELATED TO FINANCE, ACCOUNTING AND INVESTMENTS Fluctuations in foreign currency exchange rates could have a material adverse effect on our financial results. We earn revenues, pay expenses, own assets and incur liabilities in countries using many currencies other than the U.S. dollar. In 2023, we derived $29.2 billion of net operating revenues from operations outside the United States.
Public debate and concern about perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials, may reduce demand for our beverage products.
Public debate and concern about perceived negative health consequences of certain ingredients, such as non-nutritive sweeteners and biotechnology-derived substances, and of other substances present in our beverage products or packaging materials, may reduce demand for our beverage products or result in additional governmental regulation.
In preparation for the discontinuation of LIBOR, we have amended, or will amend, our LIBOR-referencing agreements to either reference the Secured Overnight Financing Rate or include mechanics for selecting an alternative rate, but it is possible that these changes may have an adverse impact on our financing costs as compared to LIBOR in the long term.
As a result of the discontinuation of LIBOR, we have amended our LIBOR-referencing agreements to either reference the Secured Overnight Financing Rate or include mechanics for selecting an alternative rate, but it is possible that these changes may have an adverse impact on our financing costs as compared to LIBOR in the long term.
We operate in the highly competitive commercial beverage industry. For additional information regarding the competitive environment in which we operate, including the names of certain of our significant competitors, refer to the heading “Competition” set forth in Part I, “Item 1. Business” of this report.
For additional information regarding the competitive environment in which we operate, including the names of certain of our significant competitors, refer to the heading “Competition” set forth in Part I, “Item 1. Business” of this report.
Failure to attract, hire, develop, motivate and retain highly skilled and diverse talent; to meet our goals related to fostering an inclusive and diverse culture, including increasing the number of underrepresented employees in the United States; to develop and implement an adequate succession plan for our management team; to maintain a corporate culture that fosters innovation, collaboration and inclusion; or to design and successfully implement flexible work models that meet the expectations of employees and prospective employees could disrupt our operations and adversely affect our business and our future success.
Failure to attract, hire, develop, motivate and retain highly skilled and diverse talent; to meet our goals related to fostering an inclusive and diverse culture; to develop and implement an adequate succession plan for our management team; to maintain a corporate culture that fosters innovation, collaboration and inclusion; or to design and successfully implement flexible work models that meet the expectations of employees and prospective employees could disrupt our operations and adversely affect our business and our future success.
Our bottling partners’ financial condition is affected in large part by conditions and events that are beyond our and their control, including competitive and general market conditions; the availability of capital and other financing resources on reasonable terms; loss of major customers; changes in or additional regulations; or disruptions of bottling operations that may be caused by strikes, work stoppages, labor unrest, natural disasters or other catastrophic events.
Our bottling partners’ financial condition is affected in large part by conditions and events that are beyond our and their control, including competitive and general market conditions; the availability of capital and other financing resources on reasonable terms; loss of major customers; changes in or additional regulations; or disruptions of bottling operations that may be caused by strikes, work stoppages, labor unrest, natural disasters, international conflicts, acts of war, health epidemics, pandemics or other catastrophic events.
Moreover, as cyberattacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in amounts and on terms we view as appropriate for our operations.
Moreover, as cyberattacks increase in frequency and magnitude, we may be unable to obtain cybersecurity insurance in types and amounts we view as appropriate for our operations.
If we fail to address changes in consumer product and shopping preferences, do not successfully anticipate and prepare for future changes in such preferences, or are ineffective or slow in developing and implementing appropriate digital transformation initiatives, our share of sales, revenue growth and overall financial results could be negatively affected. 16 Product safety and quality concerns could negatively affect our business.
If we fail to address changes in consumer product and shopping preferences, do not successfully anticipate and prepare for future changes in such preferences, or are ineffective or slow in developing and implementing appropriate digital transformation initiatives, our share of sales, revenue growth and overall financial results could be negatively affected.
Increasing public concern about obesity; other health-related public concerns surrounding consumption of sweetened beverages; potential new or increased taxes on sweetened beverages by government entities to reduce consumption or to raise revenue; additional governmental regulations concerning the advertising, marketing, labeling, packaging or sale of our sweetened beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sweetened beverages may reduce demand for, or increase the cost of, our sweetened beverages, which could adversely affect our profitability.
Ongoing public concern about obesity; other health-related public concerns surrounding consumption of sweetened beverages; the effects or perceived effects of the usage of weight-loss drugs on consumption patterns; potential new or increased taxes on sweetened beverages by government entities to reduce consumption or to raise revenue; additional governmental regulations concerning the advertising, marketing, labeling, packaging or sale of our sweetened beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sweetened beverages may reduce demand for, or increase the cost of, our sweetened beverages, which could adversely affect our profitability.
Our success depends in large part on our ability to maintain consumer confidence in the safety and quality of all of our products. We have rigorous product safety and quality standards, which we expect our operations as well as our bottling partners to meet.
Product safety and quality concerns could negatively affect our business. Our success depends in large part on our ability to maintain consumer confidence in the safety and quality of all of our products. We have rigorous product safety and quality standards, which we expect our operations as well as our bottling partners to meet.
On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating the London Interbank Offered Rate (“LIBOR”), ceased to publish certain LIBOR reference rates. However, other LIBOR reference rates, including U.S. dollar overnight, 1-month, 3-month, 6-month and 12-month maturities, will continue to be published through June 2023.
On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating the London Interbank Offered Rate (“LIBOR”), ceased to publish certain LIBOR reference rates. Other LIBOR reference rates, including U.S. dollar overnight, 1-month, 3-month, 6-month and 12-month maturities, ceased to be published in July 2023.
The effects of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
The physical effects and transition costs of climate change and legal, regulatory or market initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
These incidents may be caused by failures during routine 22 operations, such as system upgrades, or by user errors, as well as network or hardware failures, malicious or disruptive software, unintentional or malicious actions of employees or contractors, cyberattacks by hackers, criminal groups or nation-state organizations (which may include social engineering, business email compromise, cyber extortion, denial of service, or attempts to exploit vulnerabilities), geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic events.
These incidents may be caused by failures during routine operations, such as system upgrades, or by user errors, as well as network or hardware failures, malicious or disruptive software, unintentional or malicious actions of employees or contractors, cyberattacks by hackers, criminal groups or nation-state organizations (which may include deepfake or social engineering schemes, ransomware and other forms of malware, business email compromise, cyber extortion, denial of service, or attempts to exploit vulnerabilities or gain unauthorized access), geopolitical events, natural disasters, failures or impairments of telecommunications networks, or other catastrophic events.
Other financial uncertainties in our major markets and unstable geopolitical conditions or events in certain markets, including civil unrest, acts of war, terrorism or governmental changes, or changes in international relations could undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products. Product boycotts resulting from political activism could reduce demand for our products.
Other financial uncertainties in our major markets and unstable geopolitical conditions or events in certain markets, including international conflicts, civil unrest, acts of war, terrorism, governmental changes, or changes in international relations, could undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products.
Global events, including the conflict between Russia and Ukraine, trade disputes, economic sanctions, inflation, increasing interest rates and emerging market volatility, and the resulting uncertainties, may cause currencies to fluctuate in relation to the U.S. dollar. Due to the geographic diversity of our operations, weakness in some currencies may be offset by strength in other currencies over time.
Global events, including political instability, international conflicts, trade disputes, economic sanctions, inflation, increasing interest rates and emerging market volatility, and the resulting uncertainties, may cause currencies to fluctuate in relation to the U.S. dollar. Due to the geographic diversity of our operations, weakness in some currencies may be offset by strength in other currencies over time.
Our business, operating results, financial condition and liquidity may be adversely affected by changes in global economic conditions, including inflation, credit market conditions, increased unemployment, levels of consumer and business confidence, commodity (including energy) prices and supply, a recession or economic slowdown, trade policies, foreign currency exchange rates, changing policy positions or priorities, levels of government spending and deficits, and actual or anticipated default on sovereign debt.
Our business, operating results, financial condition and liquidity may be adversely affected by changes in global economic conditions, including global inflationary pressures, prevailing interest rates, credit market conditions, increased unemployment, levels of consumer and business confidence, bank failures, commodity (including energy) prices and supply, a recession or economic slowdown, trade policies, foreign currency exchange rates, changing policy positions or priorities, governmental rules and approaches to taxation, levels of government spending and deficits, and actual or anticipated default on sovereign debt.
If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or business partners fail to satisfactorily fulfill their commitments and responsibilities, our financial results could suffer.
If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or business partners fail to satisfactorily fulfill their commitments and responsibilities or experience events that could directly or indirectly impact us, our financial results could suffer.
Any failure or perceived failure, whether or not valid, to pursue or fulfill our sustainability goals and targets or to satisfy various sustainability reporting standards within the timelines we announce, or at all, could increase the risk of litigation.
Any failure or perceived failure, whether or not valid, to pursue or fulfill our sustainability goals and aspirations or to satisfy various sustainability reporting standards or regulatory requirements within the timelines we announce, or at all, could increase the risk of litigation or result in regulatory actions.
We may not be able to successfully compete for, attract or retain the highly skilled and diverse workforce that we want and that our future business needs may require, such as employees with e-commerce, social media and digital marketing and advertising skills, and/or digital and analytics capabilities.
We may not be able to successfully compete for, attract or retain the highly skilled and diverse workforce that we want and may require for our future business needs, such as employees with advanced technology, artificial intelligence and machine learning, social media and digital marketing skills, and/or digital and analytics capabilities.
Model rules adopted pursuant to this project would establish a global per-country minimum tax of 15 percent, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws. The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023.
In December 2021, the OECD issued Pillar Two model rules which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws. The directive requires the rules to initially become effective for fiscal years starting on or after December 31, 2023.
To the extent that price increases are not sufficient to offset higher costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our financial condition or results of operations may be adversely affected.
To the extent that price increases are not sufficient to offset higher costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our financial condition or results of operations may be adversely affected. Furthermore, we may not be able to offset cost increases through productivity initiatives or through our commodity hedging activity.
For instance, the Company has directly entered the alcohol beverage category in numerous markets outside the United States, and in the United States, the Company has authorized alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases.
For instance, the Company has directly entered the alcohol beverage category in numerous markets outside the United States, and in the United States, the Company has established a wholly owned, indirect, firewalled subsidiary, which authorizes alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases.
In addition, if we fail to respect our employees’ and our supply chain employees’ human rights, or inadvertently discriminate against any group of employees or hiring prospects, our ability to hire and retain the best talent will be diminished, which could have an adverse impact on our overall business.
In addition, if we fail to respect our employees’ and our supply chain workers’ human rights, or inadvertently discriminate against any group of employees or hiring prospects, our ability to hire and retain the best talent will be diminished, which could have an adverse impact on our overall business. 17 If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
A reduction in consumer demand for our products and/or an increase in costs and 24 expenditures relating to production and distribution as a result of these environmental concerns regarding plastic bottles and other packaging materials could have an adverse effect on our business and results of operations.
A reduction in consumer demand for our products and/or an increase in costs and expenditures relating to production and distribution as a result of these environmental concerns regarding plastic bottles and other packaging materials could have an adverse effect on our business and results of operations. Water scarcity and poor quality could negatively impact the Coca-Cola system’s costs and capacity.
Many of the jurisdictions in which our products are sold have experienced, and could continue to experience, unfavorable changes in economic conditions, which could negatively affect the affordability of, and consumer demand for, our beverages.
Many of the jurisdictions in which our products are sold have experienced, and could continue to experience, unfavorable changes in economic conditions, which could negatively affect the affordability of, and consumer demand for, our beverages, and certain markets in which our products are sold experienced intensified inflation throughout 2023, which may continue to accelerate in 2024.
Some of the raw materials and supplies used in the production of our products are available from a limited number of suppliers or from a sole supplier or are in short supply when seasonal demand is at its peak. Furthermore, some of our suppliers are located in countries experiencing political or other risks and/or unfavorable economic conditions.
Some of the raw materials and supplies used in the production of our products are available from a limited number of suppliers or from a sole supplier or are in short supply when seasonal demand is at its peak.
We and our bottling partners may not be able to maintain favorable arrangements and relationships with these suppliers, and our contingency plans may not be effective in preventing disruptions that may arise from shortages of any ingredients or other raw materials.
We and our bottling partners may not be able to maintain favorable arrangements and relationships with these suppliers, and our contingency plans may not be effective in preventing disruptions that may arise from shortages of any ingredients or other raw materials. Furthermore, some of our suppliers are located in countries experiencing political instability or other risks and/or unfavorable economic conditions.
We routinely evaluate opportunities to acquire businesses or brands to expand our beverage portfolio and capabilities. Additionally, from time to time, we have acquired or taken control of bottling operations, often in underperforming markets where we believe we can use our resources and expertise to improve performance.
Additionally, from time to time, we have acquired or taken control of bottling operations, often in underperforming markets where we believe we can use our resources and expertise to improve performance.
Moreover, we may encounter challenges to successfully integrating the operations, technologies, services, products and systems of any acquired businesses in an effective, timely and cost-efficient manner.
We have encountered, and may in the future encounter, challenges in successfully integrating the operations, technologies, services, products and systems of any acquired businesses, brands or bottling partners in an effective, timely and cost-efficient manner.
Similarly, our sponsorship relationships have subjected us in the past, and could subject us in the future, to negative publicity as a result of actual or alleged misconduct by individuals, hosts or entities associated with organizations we sponsor or support financially or through in-kind contributions.
Similarly, our sponsorship relationships and associations with influencers have subjected us in the past, and could subject us in the future, to negative publicity as a result of actual or alleged misconduct by individuals, hosts or entities associated with organizations we sponsor or support financially or through in-kind contributions, as well as by the influencers we collaborate with who may engage in actions or express opinions that may negatively reflect on our brand.
If we are unable to successfully manage our relationships with our joint venture partners or our strategic relationships, including our relationship with Monster, or if for any other reason we fail to realize all or a significant portion of the benefits we expect from our joint ventures or strategic relationships, our financial performance could be adversely affected. 15 If our third-party service providers and business partners do not satisfactorily fulfill their commitments and responsibilities, our financial results could suffer.
If we are unable to successfully manage our relationships with our joint venture partners or our strategic relationships, including our relationship with Monster, or if for any other reason we fail to realize all or a significant portion of the benefits we expect from our joint ventures or strategic relationships, our financial performance could be adversely affected.
Competition for, along with compensation and benefits expectations of, existing and prospective personnel have increased. In addition, the broader labor market is experiencing a shortage of qualified workers, which has further increased the competition we face for qualified employees.
Competition for, along with compensation and benefits expectations of, existing and prospective employees has increased, especially in light of changing worker expectations and talent marketplace variability regarding flexible work models. In addition, the broader labor market is experiencing a shortage of qualified workers, which has further increased the competition we face for qualified employees.
We may incur unforeseen liabilities and obligations in connection with acquiring businesses, brands or bottling operations. The expected benefits of business or brand acquisitions, including cost and growth synergies associated with such acquisitions, may take longer to realize than expected or may not be realized at all.
Acquisitions of businesses, brands or bottling operations may involve significant challenges and risks, and the expected benefits, including cost and growth synergies associated with such acquisitions, may take longer to realize than expected or may not be realized at all.
The imposition of retaliatory sanctions against U.S. multinational corporations by countries that are or may become subject to U.S. trade sanctions, or the delisting of our branded products by retailers in various countries in reaction to U.S. trade sanctions or other governmental actions or policies, could also negatively affect our business.
The imposition of retaliatory sanctions against U.S. multinational corporations by countries that are or may become subject to U.S. trade sanctions, or the delisting of our branded products by retailers in various countries in reaction to U.S. trade sanctions or other governmental actions or policies, could also negatively affect our business. 12 Throughout 2023, the Company faced disruptions to our operations due to international conflicts, including the conflict between Russia and Ukraine and conflicts in the Middle East.
If these types of requirements become applicable to one or more of our products under current or future environmental or health laws or regulations, they may inhibit sales of such products.
If these types of requirements become applicable to one or more of our products under current or future environmental or health laws or regulations, they may inhibit sales of such products or make it necessary for us to reformulate certain of our products, resulting in adverse effects on our business.
The continuing evolution of the pandemic may also present risks not currently known to us. If we do not successfully integrate and manage our acquired businesses, brands or bottling operations, or if we are unable to realize a significant portion of the anticipated benefits of our joint ventures or strategic relationships, our financial results could suffer.
If we do not successfully integrate and manage our acquired businesses, brands or bottling operations, or if we are unable to realize a significant portion of the anticipated benefits of our joint ventures or strategic relationships, our financial results could suffer. We routinely evaluate opportunities to acquire businesses or brands to expand our beverage portfolio and capabilities.
These divestitures may adversely impact our business, results of operations, cash flows and financial condition if we are unable to offset impacts from the loss of revenue associated with the divested brands or businesses, or if we are otherwise unable to achieve the anticipated benefits or cost savings from such divestitures.
These divestitures may adversely impact our business, results of operations, cash flows and financial condition if we are unable to offset impacts from the loss of revenue associated with the divested brands or businesses, or if we are otherwise unable to achieve the anticipated benefits or cost savings from such divestitures. 18 RISKS RELATED TO REGULATORY AND LEGAL MATTERS Increases in income tax rates, changes in income tax laws or regulations, or unfavorable resolutions of tax matters could have a material adverse impact on our financial results.
These privacy and data protection laws may be interpreted and applied differently from jurisdiction to jurisdiction and may create inconsistent or conflicting requirements. In addition, new legislation in this area may be enacted in other jurisdictions at any time. These laws impose operational requirements for companies receiving or processing personal data, and many provide for significant penalties for noncompliance.
These privacy and data protection laws may include different standards and obligations or may be interpreted and applied differently from jurisdiction to jurisdiction and may create inconsistent or conflicting requirements. In addition, new legislation in this area may be enacted in other jurisdictions at any time or may revise the law in jurisdictions that already have privacy regulations.
If we are unable to successfully manage new product launches, our business and financial results could be adversely affected. Due to the highly competitive nature of the commercial beverage industry, the Company continually introduces new products and evolves existing products to stimulate consumer demand.
Due to the highly competitive nature of the commercial beverage industry, the Company continually introduces new products and evolves existing products to stimulate consumer demand.
Water scarcity and poor quality could negatively impact the Coca-Cola system’s costs and capacity. Water is a main ingredient in substantially all of our products, is vital to the production of the agricultural ingredients on which our business relies and is needed in our manufacturing process.
Water is a main ingredient in substantially all of our products, is vital to the production of the agricultural ingredients on which our business relies and is needed in our manufacturing process. It also is critical to the prosperity of the communities we serve and the ecosystems in which we operate.
Other countries have taken similar actions. It is possible that the legislative adoption of these or other proposals could have a material impact on our net income and cash flows. Significant judgment is required in determining our annual income tax expense and in evaluating our tax positions.
To the extent additional legislative changes take place in the countries in which we operate, it is possible that these changes may increase uncertainty and have a material impact on our net income and cash flow. Significant judgment is required in determining our annual income tax expense and in evaluating our tax positions.
In addition, such cybersecurity incidents could result in unauthorized or accidental access to or disclosure of material confidential information or regulated personal data.
Cybercriminals have increasingly demonstrated advanced capabilities, such as use of zero-day vulnerabilities, and rapid integration of new technology such as generative artificial intelligence. In addition, cybersecurity incidents could result in unauthorized or accidental access to or disclosure of material confidential information or regulated personal data.

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Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed2 unchanged
Biggest changeThe following table summarizes our principal production facilities, distribution and storage facilities, and retail stores by operating segment and Corporate as of December 31, 2022: Principal Concentrate and/or Syrup Plants Principal Beverage Manufacturing/Bottling Plants Principal Distribution and Storage Facilities Principal Retail Stores Owned Leased Owned Leased Owned Leased Owned Leased Europe, Middle East & Africa 5 — 2 — 7 26 — 13 Latin America 5 — — — 2 4 — — North America 11 — 5 4 — 35 — 5 Asia Pacific 7 — — — 2 1 — — Global Ventures 1 — 2 — — 9 — 1,618 Bottling Investments — — 84 4 105 118 — — Corporate 3 — — — — 5 — — Total 32 — 93 8 116 198 — 1,636 Management believes that our Company’s facilities used for the production of our products are suitable and adequate, that they are being appropriately utilized in line with past experience, and that they have sufficient production capacity for their present intended purposes.
Biggest changeThese properties are generally included in the geographic operating segment in which they are located, with the exception of our Costa retail stores, which are included in the Global Ventures operating segment, and facilities related to our consolidated bottling and distribution operations, which are included in the Bottling Investments operating segment. 27 The following table summarizes our principal production facilities, distribution and storage facilities, and retail stores by operating segment and Corporate as of December 31, 2023: Principal Concentrate and/or Syrup Plants Principal Beverage Manufacturing/Bottling Plants Principal Distribution and Storage Facilities Principal Retail Stores Owned Leased Owned Leased Owned Leased Owned Leased Europe, Middle East & Africa 5 — 2 — 7 27 — 13 Latin America 5 — — — 2 6 — — North America 10 — 6 3 — 39 — 5 Asia Pacific 7 — 3 — 3 4 — — Global Ventures 1 — 2 — — 8 — 1,575 Bottling Investments — — 81 4 104 112 — — Corporate 3 — — — — 5 — — Total 31 — 94 7 116 201 — 1,593 Management believes that our Company’s facilities used for the production of our products are suitable and adequate, that they are being appropriately utilized in line with past experience, and that they have sufficient production capacity for their present intended purposes.
The extent of utilization of our production facilities varies based upon seasonal demand for our products. However, management believes that additional production can be achieved at the existing facilities by adding personnel and capital equipment or, at some facilities, by adding shifts of personnel or expanding the facilities.
The extent of utilization of our production facilities varies based upon seasonal demand for our products. However, management believes that, with the exception of certain dairy products that require specialized equipment, additional production can be achieved at the existing facilities by adding personnel and capital equipment or, at some facilities, by adding shifts of personnel or expanding the facilities.
We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and/or dispose of existing facilities.
The Company is in the process of increasing our dairy production capacity. We continuously review our anticipated requirements for facilities and, on the basis of that review, may from time to time acquire or lease additional facilities and/or dispose of existing facilities.
Removed
These properties are generally included in the geographic operating segment in which they are located, with the exception of our Costa retail stores, which are included in the Global Ventures operating segment, and facilities related to our consolidated bottling and distribution operations, which are included in the Bottling Investments operating segment.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

18 edited+2 added−4 removed41 unchanged
Biggest changeThe Company will have 90 days thereafter to file a notice of appeal to the U.S. Court of Appeals for the Eleventh Circuit and pay the tax liability and interest related to the 2007 through 2009 tax years.
Biggest changeThe Company and the IRS are now in the process of agreeing on the tax impacts of the Opinions. Subsequent to the completion of this process, the Tax Court will render a decision in the case. The Company will have 90 days thereafter to file a notice of appeal to the U.S. Court of Appeals for the Eleventh Circuit.
The IRS audited and confirmed the Company’s compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006. The September 17, 2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favor of an entirely different methodology, without prior notice to the Company.
The IRS audited and confirmed the Company’s compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006. 29 The September 17, 2015, Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favor of an entirely different methodology, without prior notice to the Company.
To resolve the same transfer pricing issue for the tax years 1987 through 1995, the Company and the IRS had agreed in 1996 on an arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as 27 compensation from its foreign licensees.
To resolve the same transfer pricing issue for the tax years 1987 through 1995, the Company and the IRS had agreed in 1996 on an arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as compensation from its foreign licensees.
The judgment directs, among other things, that each insurer whose policy is triggered is jointly and severally liable for 100 percent of Aqua-Chem’s losses up to policy limits. The court’s judgment concluded the Wisconsin insurance coverage litigation.
The judgment directs, among other things, that each insurer whose policy is triggered is jointly and severally liable for 100% of Aqua-Chem’s losses up to policy limits. The court’s judgment concluded the Wisconsin insurance coverage litigation.
The 1981 agreement, and a subsequent 1983 settlement agreement, outlined the parties’ rights and obligations concerning past and future claims and lawsuits involving Aqua-Chem. Cleaver-Brooks, a division of Aqua-Chem, manufactured boilers, some of 26 which contained asbestos gaskets.
The 1981 agreement, and a subsequent 1983 settlement agreement, outlined the parties’ rights and obligations concerning past and future claims and lawsuits involving Aqua-Chem. Cleaver-Brooks, a division of Aqua-Chem, manufactured boilers, some of which contained asbestos gaskets.
As a result of this analysis, we recorded a tax reserve of $438 million during the year ended December 31, 2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinion and the Company’s analysis.
As a result of this analysis, we recorded a tax reserve of $438 million during the year ended December 31, 2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinions and the Company’s analysis.
In doing so, we consulted with outside advisors, and we reviewed and considered relevant laws, rules, and regulations, including, but not limited to, the Opinion and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal.
In doing so, we consulted with outside advisors, and we reviewed and considered relevant laws, rules, and regulations, including, but not limited to, the Opinions and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal.
The action also sought a monetary judgment reimbursing any amounts paid by the plaintiffs in excess of their obligations.
The action also sought a monetary 28 judgment reimbursing any amounts paid by the plaintiffs in excess of their obligations.
This impact would include taxes and interest accrued through December 31, 2022 for the 2007 through 2009 litigated tax years and for subsequent tax years from 2010 through 2022. The calculations incorporated the estimated impact of correlative adjustments to the previously accrued transition tax payable under the Tax Reform Act.
This impact would include taxes and interest accrued through December 31, 2023 for the 2007 through 2009 litigated tax years and for subsequent tax years from 2010 through 2023. The calculations incorporated the estimated impact of correlative adjustments to the previously accrued transition tax payable under the Tax Reform Act.
While the Company strongly disagrees with the IRS’ positions and the portions of the Opinion affirming such positions, it is possible that some portion or all of the adjustment proposed by the IRS and sustained by the Tax Court could ultimately be upheld.
While the Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions, it is possible that some portion or all of the adjustment proposed by the IRS and sustained by the Tax Court could ultimately be upheld.
In addition, we considered a number of alternative transfer pricing methodologies, including the methodology asserted by the IRS and affirmed in the Opinion (“Tax Court Methodology”), that could be applied by the courts upon final resolution of the litigation.
In addition, we considered a number of alternative transfer pricing methodologies, including the methodology asserted by the IRS and affirmed in the Opinions (“Tax Court Methodology”), that could be applied by the courts upon final resolution of the litigation.
The Company’s conclusion that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal is unchanged as of December 31, 2022. However, we updated our calculation of the methodologies we believe the federal courts 28 could ultimately order to be used in calculating the Company’s tax.
The Company’s conclusion that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal is unchanged as of December 31, 2023. However, we updated our calculation of the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s tax.
The Company calculated the potential impact of applying the Tax Court Methodology to reallocate income from foreign licensees potentially covered within the scope of the Opinion, assuming such methodology were to be ultimately upheld by the courts, and the IRS were to decide to apply that methodology to subsequent years, with consent of the federal courts.
The Company calculated the potential impact of applying the Tax Court Methodology to reallocate income from foreign licensees potentially covered within the scope of the Opinions, assuming such methodology were to be ultimately upheld by the 30 courts, and the IRS were to decide to apply that methodology to subsequent years, with consent of the federal courts.
We currently project the continued application of the Tax Court Methodology in future years, assuming similar facts and circumstances as of December 31, 2022, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5 percent.
We currently project the continued application of the Tax Court Methodology in future years, assuming similar facts and circumstances as of December 31, 2023, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5%.
The Company currently estimates that the payment to be made at that time related to the 2007 through 2009 tax years, which is included in the above estimate of the potential aggregate incremental tax and interest liability, would be approximately $5.2 billion (including interest accrued through December 31, 2022), plus any additional interest accrued through the time of payment.
The Company currently estimates that the payment to be made at that time related to the 2007 through 2009 tax years, which is included in the above estimate of the potential aggregate incremental tax and interest liability, would be approximately $5.8 billion (including interest accrued through December 31, 2023), plus any additional interest accrued through the time of payment.
The Company estimates that the potential aggregate incremental tax and interest liability could be approximately $14 billion as of December 31, 2022. Additional income tax and interest would continue to accrue until the time any such potential liability, or portion thereof, were to be paid.
The Company estimates that the potential aggregate incremental tax and interest liability could be approximately $16 billion as of December 31, 2023. Additional income tax and interest would continue to accrue until the time any such potential liability, or portion thereof, were to be paid.
As a result of the application of the required probability analysis to these updated calculations and the accrual of interest through the current reporting period, we updated our tax reserve as of December 31, 2022 to $423 million.
As a result of the application of the required probability analysis to these updated calculations and the accrual of interest through the current reporting period, we updated our tax reserve as of December 31, 2023 to $439 million.
Some or all of this amount would be refunded if the Company were to prevail on appeal.
Some or all of this amount, plus accrued interest, would be refunded if the Company were to prevail on appeal.
Removed
The Tax Court reserved ruling on the effect of Brazilian legal restrictions on the payment of royalties by the Company’s licensee in Brazil until after the Tax Court issues its opinion in the separate case of 3M Co. & Subs. v. Commissioner, T.C. Docket No. 5816-13 (filed March 11, 2013).
Added
On November 8, 2023, the Tax Court issued a supplemental opinion, siding with the IRS in concluding both that the blocked-income regulations apply to the Company’s operations and that the Tax Court opinion in 3M Co. & Subs. v. Commissioner (February 9, 2023) controlled as to the validity of those regulations.
Removed
The Tax Court issued its opinion in 3M Co.’s case (“3M Co. opinion”) on February 9, 2023. Once the Tax Court completes its analysis of the application of the 3M Co. opinion to the Company’s case, the Company expects the Tax Court to render another opinion, and ultimately a final decision, in the Company’s case.
Added
The IRS will then seek to collect, and the Company expects to pay, any additional tax related to the 2007 through 2009 tax years reflected in the Tax Court decision (and interest thereon).
Removed
The Company does not know when the Tax Court will issue its opinion regarding the effect of Brazilian legal restrictions on the payment of royalties by the Company’s licensee in Brazil for the 2007 through 2009 tax years.
Removed
After the Tax Court issues its opinion on the Company’s Brazilian licensee, the Company and the IRS will be provided time to agree on the tax impact, if any, of both opinions, after which the Tax Court would render a final decision in the case.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

15 edited+3 added−2 removed2 unchanged
Biggest changeChief Technical and Innovation Officer since February 2021, and prior to that, Chief Technical Officer from January 2019, and Chief Technical Officer of Coca-Cola North America from July 2016. Global R&D Officer from January 2012 to July 2016. James Quincey 58 Chairman of the Board of Directors since April 2019 and Chief Executive Officer since May 2017.
Biggest changeGlobal R&D Officer from January 2012 to July 2016. James Quincey 59 Chairman of the Board of Directors since April 2019 and Chief Executive Officer since May 2017. Elected to the Board of Directors in April 2017. President from August 2015 to December 2018, and Chief Operating Officer from August 2015 to April 2017.
Bruno Pietracci 48 President of the Latin America operating unit since February 2023, and prior to that, President of the Africa operating unit from January 2021 to January 2023.
Bruno Pietracci 49 President, Latin America operating unit since February 2023, and prior to that, President of the Africa operating unit from January 2021 to January 2023.
Prior to that, Senior Vice President and Chief Human Resources Officer for AMB Group LLC, which is the investment management and shared services arm of The Blank Family of Businesses, from 2014 through 2018.
Senior Vice President and Chief Human Resources Officer for AMB Group LLC, which is the investment management and shared services arm of The Blank Family of Businesses, from 2014 through 2018.
President of the Asia Pacific Group from August 2016 to December 2018, and President of the South Latin business unit from January 2013 to August 2016. Beatriz Perez 53 Senior Vice President and Chief Communications, Sustainability and Strategic Partnerships Officer since May 2017.
President of the Asia Pacific Group from August 2016 to December 2018, and President of the South Latin business unit from January 2013 to August 2016. Beatriz Perez 54 Executive Vice President since January 2024 and Global Chief Communications, Sustainability and Strategic Partnerships Officer since May 2017. Senior Vice President from May 2017 to December 2023.
President of the Africa and Middle East business unit from February 2020 to December 2020, President of the South and East Africa business unit from July 2018 to January 2020, and Vice President of operations for the Europe, Middle East and Africa Group from November 2016 to June 2018. Nancy Quan 56 Senior Vice President since January 2019.
President of the Africa and Middle East business unit from February 2020 to December 2020, President of the South and East Africa business unit from July 2018 to January 2020, and Vice President of operations for the Europe, Middle East and Africa Group from November 2016 to June 2018.
President of the Brazil business unit from September 2016 to September 2020, and President of the Greater China and Korea business unit from April 2013 to August 2016. Lisa Chang 54 Senior Vice President and Chief People Officer since March 2019 when she joined the Company.
President of the Brazil business unit from September 2016 to September 2020, and President of the Greater China and Korea business unit from April 2013 to August 2016. Lisa Chang 55 Executive Vice President since January 2024 and Global Chief People Officer since March 2019 when she joined the Company. Senior Vice President from March 2019 to December 2023.
President, Global Ventures from January 2019 to December 2022, Chief People Officer from May 2017 to March 2019, and Chief of Staff for James Quincey, then President and Chief Operating Officer and later Chief Executive Officer, from October 2015 to October 2018. Vice President and General Manager of Coca-Cola Freestyle from June 2012 to October 2015.
Senior Vice President from May 2017 to December 2023. President, Global Ventures from January 2019 to December 2022, Chief People Officer from May 2017 to March 2019, and Chief of Staff for James Quincey, then President and Chief Operating Officer and later Chief Executive Officer, from October 2015 to October 2018.
There is no family relationship between any of the Directors or executive officers of the Company. 30 Part II
All executive officers serve at the pleasure of the Board of Directors. There is no family relationship between any of the Directors or executive officers of the Company. 32 Part II
John Murphy 61 President since October 2022 and Chief Financial Officer since March 2019. Executive Vice President from March 2019 to September 2022, and prior to that, Senior Vice President and Deputy Chief Financial Officer from January 2019 to March 2019.
Vice President and General Manager of Coca-Cola Freestyle from June 2012 to October 2015. John Murphy 62 President since October 2022 and Chief Financial Officer since March 2019. Executive Vice President from March 2019 to September 2022, and prior to that, Senior Vice President and Deputy Chief Financial Officer from January 2019 to March 2019.
Nikolaos Koumettis 58 President of the Europe operating unit since January 2021, and prior to that, President of the Europe, Middle East and Africa Group from January 2019. President of the Central and Eastern Europe business unit from April 2016 to December 2018, and President of the Central and Southern Europe business unit from April 2011 to April 2016.
Nikolaos Koumettis 59 President, Europe operating unit since January 2021, and prior to that, President of the Europe, Middle East and Africa Group from January 2019.
Prior to joining AMB Group LLC, Vice President of Human Resources for International at Equifax Inc. from 2013 through 2014, where she led human resources for all of its global locations. 29 Name Age Position Monica Howard Douglas 50 Senior Vice President and General Counsel since April 2021, and prior to that, Chief Compliance Officer and Associate General Counsel of the North America operating unit from January 2018.
Prior to joining AMB Group LLC, Vice President of Human Resources for International at Equifax Inc. from 2013 through 2014, where she led human resources for all of its global locations. Monica Howard Douglas 51 Executive Vice President since January 2024 and Global General Counsel since April 2021.
President of the Mexico business unit from July 2017 to December 2018, and prior to that, General Manager for Iberia from February 2017. Prior to rejoining the Company in February 2017, Chief Executive Officer of Deoleo, S.A., a Spanish multinational olive oil processing company, from May 2015 to September 2016, and Senior Vice President and President, Asia Pacific, of S.C.
Prior to rejoining the Company in February 2017, Chief Executive Officer of Deoleo, S.A., a Spanish multinational olive oil processing company, from May 2015 to September 2016, and Senior Vice President and President, Asia Pacific, of S.C. Johnson & Son, Inc., a multinational consumer product manufacturer, from September 2014 to May 2015.
Johnson & Son, Inc., a multinational consumer product manufacturer, from September 2014 to May 2015. President of the Company’s ASEAN business unit from 2010 to August 2014. Henrique Braun 54 President, International Development, with oversight of seven of the Company’s operating units, since January 2023, and prior to that, President of the Latin America operating unit from October 2020.
President of the Company’s ASEAN business unit from 2010 to August 2014. Henrique Braun 55 Executive Vice President since January 2024 and President, International Development, with oversight of seven of the Company’s operating units, since January 2023. President of the Latin America operating unit from October 2020 to December 2022.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of our Company as of February 21, 2023: Name Age Position Manuel Arroyo 55 Chief Marketing Officer since January 2020 and, prior to that, President of the Asia Pacific Group from January 2019 to December 2020.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following are the executive officers of our Company as of February 20, 2024: Name Age Position Manuel Arroyo 56 Executive Vice President since January 2024.
Jennifer K. Mann 50 President of the North America operating unit since January 2023 and Senior Vice President since May 2017.
President of the Central and Eastern Europe business unit from April 2016 to December 2018, and President of the Central and Southern Europe business unit from April 2011 to April 2016. 31 Name Age Position Jennifer K. Mann 51 Executive Vice President since January 2024 and President, North America operating unit since January 2023.
Removed
Elected to the Board of Directors in April 2017. President from August 2015 to December 2018, and Chief Operating Officer from August 2015 to April 2017. Brian Smith 67 Senior Executive since October 2022, and prior to that, President and Chief Operating Officer from January 2019.
Added
Global Chief Marketing Officer since January 2020 and, prior to that, President of the Asia Pacific Group from January 2019 to December 2020. President of the Mexico business unit from July 2017 to December 2018, and prior to that, General Manager for Iberia from February 2017.
Removed
President of the Europe, Middle East and Africa Group from August 2016 to December 2018, and President of the Latin America Group from January 2013 to August 2016. Mr. Smith will retire from the Company on February 28, 2023. All executive officers serve at the pleasure of the Board of Directors.
Added
Senior Vice President from April 2021 to December 2023, and Chief Compliance Officer and Associate General Counsel of the North America operating unit from January 2018 to April 2021.
Added
Nancy Quan 57 Executive Vice President since January 2024, and prior to that, Senior Vice President from January 2019 to December 2023. Global Chief Technical and Innovation Officer since February 2021, Chief Technical Officer from January 2019 to February 2021, and Chief Technical Officer of Coca-Cola North America from July 2016 to December 2018.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−6 removed1 unchanged
Biggest changeThis column discloses the number of shares purchased, if any, pursuant to the 2019 Plan during the indicated time periods (including shares purchased pursuant to the terms of preset trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act). 31 Performance Graph Comparison of Five-Year Cumulative Total Shareowner Return Among The Coca-Cola Company, the Prior Peer Group, the Dow Jones Food & Beverage Total Return Index and the S&P 500 Index December 31, 2017 2018 2019 2020 2021 2022 The Coca-Cola Company $ 100 $ 107 $ 129 $ 132 $ 147 $ 163 Prior Peer Group 100 81 101 109 126 136 Dow Jones Food & Beverage Total Return Index 100 92 115 124 141 151 S&P 500 Index 100 96 126 149 192 157 The total shareowner return is based on a $100 investment on December 31, 2017 and assumes that dividends were reinvested on the day of issuance.
Biggest changeThis column discloses the number of shares purchased, if any, pursuant to the 2019 Plan during the indicated time periods (including shares purchased pursuant to the terms of preset trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act). 33 Performance Graph Comparison of Five-Year Cumulative Total Shareowner Return Among The Coca-Cola Company, the Dow Jones U.S.
The information under the subheading “Equity Compensation Plan Information” under the principal heading “Compensation” in the Company’s Proxy Statement for the 2023 Annual Meeting of Shareowners (“Company’s 2023 Proxy Statement”), to be filed with the SEC, is incorporated herein by reference.
The information under the subheading “Equity Compensation Plan Information” under the principal heading “Compensation” in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareowners (“Company’s 2024 Proxy Statement”), to be filed with the SEC, is incorporated herein by reference.
During the year ended December 31, 2022, no equity securities of the Company were sold by the Company that were not registered under the Securities Act of 1933, as amended.
During the year ended December 31, 2023, no equity securities of the Company were sold by the Company that were not registered under the Securities Act of 1933, as amended.
As of February 17, 2023, there were 187,325 shareowner accounts of record. This figure does not include a substantially greater number of “street name” holders or beneficial holders of our common stock, whose shares are held of record by banks, brokers and other financial institutions.
As of February 16, 2024, there were 182,362 shareowner accounts of record. This figure does not include a substantially greater number of “street name” holders or beneficial holders of our common stock, whose shares are held of record by banks, brokers and other financial institutions.
The following table presents information with respect to purchases of common stock of the Company made during the three months ended December 31, 2022 by the Company or any “affiliated purchaser” of the Company as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased 1 Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plan 2 Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan October 1, 2022 through October 28, 2022 2,142 $ 55.18 — 139,705,526 October 29, 2022 through November 25, 2022 — — — 139,705,526 November 26, 2022 through December 31, 2022 94,298 63.46 — 139,705,526 Total 96,440 $ 63.28 — 1 The total number of shares purchased includes: (1) shares purchased, if any, pursuant to the 2019 Plan described in footnote 2 below, and (2) shares surrendered, if any, to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees. 2 In February 2019, the Company publicly announced that our Board of Directors had authorized a plan (“2019 Plan”) for the Company to purchase up to 150 million shares of our common stock.
The following table presents information with respect to purchases of common stock of the Company made during the three months ended December 31, 2023 by the Company or any “affiliated purchaser” of the Company as defined in Rule 10b-18(a)(3) under the Exchange Act: Period Total Number of Shares Purchased 1 Average Price Paid Per Share Total Number of Shares Purchased as Part of the Publicly Announced Plan 2 Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan September 30, 2023 through October 27, 2023 2,660,342 $ 55.28 2,660,200 119,149,975 October 28, 2023 through November 24, 2023 8,576,806 57.02 8,576,806 110,573,169 November 25, 2023 through December 31, 2023 7,731,904 58.70 7,721,097 102,852,072 Total 18,969,052 $ 57.46 18,958,103 1 The total number of shares purchased includes: (1) shares purchased, if any, pursuant to the 2019 Plan described in footnote 2 below, and (2) shares surrendered, if any, to the Company to pay the exercise price and/or to satisfy tax withholding obligations in connection with so-called stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees. 2 In February 2019, the Company publicly announced that our Board of Directors had authorized a plan (“2019 Plan”) for the Company to purchase up to 150 million shares of our common stock.
Removed
To better align with the Company’s direct competitors, the Company has chosen to change the peer group for the performance graph above.
Added
Food & Beverage Total Return Index and the S&P 500 Index December 31, 2018 2019 2020 2021 2022 2023 The Coca-Cola Company $ 100 $ 121 $ 124 $ 138 $ 152 $ 145 Dow Jones U.S.
Removed
A self-constructed peer group (“Prior Peer Group”), which consisted of the companies included in the Dow Jones Food & Beverage Index (from which the Company has been excluded) and the Dow Jones Tobacco Index, was replaced with the Dow Jones Food & Beverage Total Return Index.
Added
Food & Beverage Total Return Index 100 125 135 153 165 158 S&P 500 Index 100 131 156 200 164 207 The total shareowner return is based on a $100 investment on December 31, 2018 and assumes that dividends were reinvested on the day of issuance. ITEM 6. RESERVED
Removed
Accordingly, the performance graph presents the total shareowner return for both the Prior Peer Group and the Dow Jones Food & Beverage Total Return Index.
Removed
In 2022, the Prior Peer Group consisted of the following companies: Altria Group, Inc., Archer Daniels Midland Company, The Boston Beer Company, Inc., Brown-Forman Corporation, Bunge Limited, Campbell Soup Company, Celsius Holdings, Inc., ConAgra Brands, Inc., Constellation Brands, Inc., Darling Ingredients Inc., Flowers Foods, Inc., General Mills, Inc., The Hershey Company, Hormel Foods Corporation, Ingredion Incorporated, Kellogg Company, Keurig Dr Pepper Inc., The Kraft Heinz Company, Lamb Weston Holdings, Inc., Lancaster Colony Corporation, McCormick & Company, Incorporated, Molson Coors Brewing Company, Mondelēz International, Inc., Monster Beverage Corporation, National Beverage Corp., PepsiCo, Inc., Performance Food Group Company, Philip Morris International Inc., Pilgrim’s Pride Corporation, Post Holdings, Inc., Seaboard Corporation, The J.M.
Removed
Smucker Company, Tyson Foods, Inc. and US Foods Holding Corp. 32 Companies included in the Dow Jones Food & Beverage Index and the Dow Jones Tobacco Index change periodically.
Removed
As a result, in 2022, Celsius Holdings, Inc. was added to the Prior Peer Group, and Beyond Meat, Inc., Freshpet Inc., The Hain Celestial Group, Inc. and Herbalife Nutrition Ltd. were removed from the Prior Peer Group. ITEM 6. RESERVED

Item 7. Management's Discussion & Analysis

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

184 edited+38 added−77 removed114 unchanged
Biggest changeIn addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method. 50 A reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows: Year Ended December 31, 2022 2021 Statutory U.S. federal tax rate 21.0 % 21.0 % State and local income taxes — net of federal benefit 1.4 1.1 Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate (0.6) 2.3 1 Equity income or loss (2.7) (2.0) Excess tax benefits on stock-based compensation (0.7) (0.5) Other — net (0.3) (0.8) 2 Effective tax rate 18.1 % 21.1 % 1 Includes net tax charges of $375 million (or a 3.0 percent impact on our effective tax rate) related to changes in tax laws in certain foreign jurisdictions, amounts required to be recorded for changes to our uncertain tax positions, including interest and penalties, in various international jurisdictions, as well as other discrete items. 2 Includes a tax benefit of $14 million (or a 1.5 percent impact on our effective tax rate) associated with the $834 million gain recorded upon the acquisition of the remaining ownership interest in BodyArmor.
Biggest changeA reconciliation of the statutory U.S. federal tax rate and our effective tax rate is as follows: Year Ended December 31, 2023 2022 Statutory U.S. federal tax rate 21.0 % 21.0 % State and local income taxes — net of federal benefit 1.1 1.4 Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate (0.3) (0.6) Equity income or loss (2.1) (2.7) Excess tax benefits on stock-based compensation (0.3) (0.7) Other — net (2.0) (0.3) Effective tax rate 17.4 % 18.1 % On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which the court predominantly sided with the IRS.
In addition, other operating charges included $38 million related to the restructuring of our North America operating unit and $38 million related to the BodyArmor acquisition in 2021, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, net of the reimbursement of distributor termination fees recorded in 2021.
In addition, other operating charges included $38 million related to the restructuring of our North America operating unit and $38 million related to the BodyArmor acquisition, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, net of the reimbursement of distributor termination fees recorded in 2021.
Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. Our sales terms generally do not allow for a right of return except for matters related to any manufacturing defects on our part. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract.
Upon transfer of control to the customer, which completes our performance obligation, revenue is recognized. Our sales terms generally do not allow for 40 a right of return except for matters related to any manufacturing defects on our part. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract.
The table above shows expected cash payments to be made by the Company and excludes the noncash portion of debt, including any fair market value adjustments, unamortized discounts and premiums. 3 We calculated estimated interest payments for our long-term debt based on the applicable rates and payment dates.
The table above shows expected cash payments to be made by the Company and excludes the noncash portion of debt, including any fair value adjustments, unamortized discounts and premiums. 3 We calculated estimated interest payments for our long-term debt based on the applicable rates and payment dates.
The fair values of most of our Company’s investments in publicly traded companies are often readily available based on quoted market prices. For investments in nonpublicly traded companies, management’s assessment of fair value is based on various valuation methodologies, including discounted cash flows, estimates of sales proceeds, and appraisals, as appropriate.
The fair values of most of our Company’s investments in publicly traded companies are readily available based on quoted market prices. For investments in nonpublicly traded companies, management’s assessment of fair value is based on various valuation methodologies, including discounted cash flows, estimates of sales proceeds, and appraisals, as appropriate.
In making 40 our estimates of variable consideration, we consider past results and make significant assumptions related to: (1) customer sales volumes; (2) customer ending inventories; (3) customer selling price per unit; (4) selling channels; and (5) discount rates, rebates and other pricing allowances, as applicable.
In making our estimates of variable consideration, we consider past results and make significant assumptions related to: (1) customer sales volumes; (2) customer ending inventories; (3) customer selling price per unit; (4) selling channels; and (5) discount rates, rebates and other pricing allowances, as applicable.
However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s acquisitions and divestitures.
However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the 42 unit case volume of our consolidated bottling operations. Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the Company’s acquisitions and divestitures.
We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence over the operating and financial policies of the investee. Our consolidated net income includes our 36 Company’s proportionate share of the net income or loss of these companies.
We use the equity method to account for investments in companies if our investment provides us with the ability to exercise significant influence over the operating and financial policies of the investee. Our consolidated net income includes our Company’s proportionate share of the net income or loss of these companies.
Risk Factors” in Part I of this report for additional information about risks and uncertainties facing our Company. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S.
Risk Factors” in Part I of this report for additional information about risks and uncertainties facing our Company. 37 CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S.
In addition, outside the 33 United States, our bottling partners are typically authorized to manufacture fountain syrups, using our concentrates, which they sell to fountain retailers for use in producing beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.
In addition, outside the United States, our bottling partners are typically authorized to manufacture fountain syrups, using our concentrates, which they sell to fountain retailers for use in producing beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.
A valuation allowance is required to be established unless management determines that it is more likely than not that the Company will ultimately realize the tax benefit associated with a deferred tax asset.
A valuation allowance is required 41 to be established unless management determines that it is more likely than not that the Company will ultimately realize the tax benefit associated with a deferred tax asset.
Refer to Note 19 of Notes to Consolidated Financial Statements for the impact these items had on our operating segments and Corporate. Income Taxes Our effective tax rate reflects the tax benefits of having significant operations outside the United States, which are generally taxed at rates lower than the statutory U.S. federal tax rate.
Refer to Note 20 of Notes to Consolidated Financial Statements for the impact these items had on our operating segments and Corporate. Income Taxes Our effective tax rate reflects the tax benefits of having significant operations outside the United States, which are generally taxed at rates lower than the statutory U.S. federal tax rate.
For additional information regarding our operating segments and Corporate, refer to Note 19 of Notes to Consolidated Financial Statements. Structural Changes, Acquired Brands and Newly Licensed Brands In order to continually improve upon the Company’s operating performance, from time to time, we engage in buying and selling ownership interests in bottling partners and other manufacturing operations.
For additional information regarding our operating segments and Corporate, refer to Note 20 of Notes to Consolidated Financial Statements. Structural Changes, Acquired Brands and Newly Licensed Brands In order to continually improve upon the Company’s operating performance, from time to time, we engage in buying and selling ownership interests in bottling partners and other manufacturing operations.
Additionally, two global financial institutions offer a voluntary supply chain finance (“SCF”) program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.
Two global financial institutions offer a voluntary supply chain finance program which enables our suppliers, at their sole discretion, to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.
Upon payment of outstanding commercial paper, we typically issue new commercial paper. Lines of credit and other short-term borrowings are expected to fluctuate depending upon current liquidity needs, especially at international subsidiaries. 2 Refer to Note 10 of Notes to Consolidated Financial Statements for additional information regarding long-term debt.
Upon payment of outstanding commercial paper, we typically issue new commercial paper. Lines of credit and other short-term borrowings are expected to fluctuate depending upon current liquidity needs, especially at international subsidiaries. 2 Refer to Note 11 of Notes to Consolidated Financial Statements for additional information regarding long-term debt.
Our Company holds interests in certain VIEs, primarily bottling operations, for which we were not determined to be the primary beneficiary. Our variable interests in these VIEs primarily relate to equity investments, profit guarantees or subordinated financial support. Refer to Note 11 of Notes to Consolidated Financial Statements.
Our Company holds interests in certain VIEs, primarily bottling operations, for which we were not determined to be the primary beneficiary. Our variable interests in these VIEs primarily relate to equity investments, profit guarantees or subordinated financial support. Refer to Note 12 of Notes to Consolidated Financial Statements.
We adjust these reserves, including any impact on the related interest and penalties, in light of changing facts and circumstances, such as the progress of a tax audit. Refer to the heading “Operations Review — Income Taxes” below and Note 14 of Notes to Consolidated Financial Statements.
We adjust these reserves, including any impact on the related interest and penalties, in light of changing facts and circumstances, such as the progress of a tax audit. Refer to the heading “Operations Review — Income Taxes” below and Note 15 of Notes to Consolidated Financial Statements.
Management believes operating margin provides investors with useful information related to the profitability of our business after considering all of the selling, general and administrative expenses and other operating charges incurred. Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.
Management believes operating margin provides investors with useful information related to the profitability of our business after considering selling, general and administrative expenses and other operating charges. Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance.
MD&A includes the following sections: • Our Business — a general description of our business and its challenges and risks. • Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical judgments and estimates. • Operations Review — an analysis of our consolidated results of operations for 2022 and 2021 and year-to-year comparisons between 2022 and 2021.
MD&A includes the following sections: • Our Business — a general description of our business and its challenges and risks. • Critical Accounting Policies and Estimates — a discussion of accounting policies that require critical judgments and estimates. • Operations Review — an analysis of our consolidated results of operations for 2023 and 2022 and year-to-year comparisons between 2023 and 2022.
These charges primarily consisted of $1,000 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC ("fairlife") in 2020, $85 million related to the Company’s productivity and reinvestment program and $57 million related to the impairment of a trademark in Asia Pacific.
These charges primarily consisted of $1,000 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $85 million related to the Company’s productivity and reinvestment program and $57 million related to the impairment of a trademark in Asia Pacific.
Refer to Note 13 of Notes to Consolidated Financial Statements for additional information about our pension plans and related actuarial assumptions. Revenue Recognition Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied.
Refer to Note 14 of Notes to Consolidated Financial Statements for additional information about our pension plans and related actuarial assumptions. Revenue Recognition Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied.
Settlement of any particular issue would usually require the use of cash. Refer to Note 11 of Notes to Consolidated Financial Statements. Tax laws require certain items to be included in the tax return at different times than when these items are reflected in the consolidated financial statements.
Settlement of any particular issue would usually require the use of cash. Refer to Note 12 of Notes to Consolidated Financial Statements. Tax laws require certain items to be included in the tax return at different times than when these items are reflected in the consolidated financial statements.
Information about our net operating revenues by operating segment and Corporate as a percentage of Company net operating revenues is as follows: Year Ended December 31, 2022 2021 Europe, Middle East & Africa 16.0 % 17.0 % Latin America 11.4 10.7 North America 36.5 34.1 Asia Pacific 11.0 12.1 Global Ventures 6.6 7.3 Bottling Investments 18.3 18.6 Corporate 0.2 0.2 Total 100.0 % 100.0 % The percentage contribution of each operating segment fluctuates over time due to net operating revenues in some operating segments growing at a faster rate compared to other operating segments.
Information about our net operating revenues by operating segment and Corporate as a percentage of Company net operating revenues is as follows: Year Ended December 31, 2023 2022 Europe, Middle East & Africa 16.2 % 16.0 % Latin America 12.7 11.4 North America 36.6 36.5 Asia Pacific 10.3 11.0 Global Ventures 6.7 6.6 Bottling Investments 17.2 18.3 Corporate 0.3 0.2 Total 100.0 % 100.0 % The percentage contribution of each operating segment fluctuates over time due to net operating revenues in some operating segments growing at a faster rate compared to other operating segments.
An analysis of our consolidated results of operations for 2021 and 2020 and year-to-year comparisons between 2021 and 2020 can be found in MD&A in Part II, Item 7 of the Company’s Form 10-K for the year ended December 31, 2021. • Liquidity, Capital Resources and Financial Position — an analysis of cash flows, contractual obligations, foreign exchange, and the impact of inflation and changing prices.
An analysis of our consolidated results of operations for 2022 and 2021 and year- 34 to-year comparisons between 2022 and 2021 can be found in MD&A in Part II, Item 7 of the Company’s Form 10-K for the year ended December 31, 2022. • Liquidity, Capital Resources and Financial Position — an analysis of cash flows, contractual obligations, foreign exchange, and the impact of inflation and changing prices.
Our interest expense may also be affected by our credit ratings. As of December 31, 2022, our long-term debt was rated “A+” by Standard & Poor’s and “A1” by Moody’s. Our commercial paper program was rated “A-1” by Standard & Poor’s and “P-1” by Moody’s.
Our interest expense may also be affected by our credit ratings. As of December 31, 2023, our long-term debt was rated “A+” by Standard & Poor’s and “A1” by Moody’s. Our commercial paper program was rated “A-1” by Standard & Poor’s and “P-1” by Moody’s.
In gathering data to estimate our variable consideration, we generally calculate our estimates using a portfolio approach at the country and product line level rather than at the individual contract level. The result of making these estimates will impact the line items trade accounts receivable and accounts payable and accrued expenses in our consolidated balance sheet.
In gathering data to estimate our variable consideration, we generally calculate our estimates using a portfolio approach at the country and product line level rather than at the individual contract level. The result of making these estimates will impact the line items trade accounts receivable or accounts payable and accrued expenses in our consolidated balance sheet, as applicable.
Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on our full year 2023 net operating revenues.
Based on current spot rates and our hedging coverage in place, we expect foreign currency exchange rate fluctuations will have an unfavorable impact on our full year 2024 net operating revenues.
Refer to Note 14 of Notes to Consolidated Financial Statements. 41 OPERATIONS REVIEW Our organizational structure consists of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. Our operating structure also includes Corporate, which consists of a center and a platform services organization.
Refer to Note 15 of Notes to Consolidated Financial Statements. OPERATIONS REVIEW Our organizational structure consists of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. Our operating structure also includes Corporate, which consists of a center and a platform services organization.
On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating LIBOR, ceased to publish certain LIBOR reference rates. However, other LIBOR reference rates, including U.S. dollar overnight, 1-month, 3-month, 6-month and 12-month maturities, will continue to be published through June 2023.
On December 31, 2021, the United Kingdom’s Financial Conduct Authority, the governing body responsible for regulating LIBOR, ceased to publish certain LIBOR reference rates. However, other LIBOR reference rates, including U.S. dollar overnight, 1-month, 3-month, 6-month and 12-month maturities, continued to be published through June 2023.
In the event that all of the adjustments proposed by the IRS were ultimately upheld for tax years 2007 through 2009 and the IRS, with the consent of the federal courts, were to decide to apply the Tax Court Methodology to the subsequent years up to and including 2022, the Company currently estimates that the potential aggregate incremental tax and interest liability could be approximately $14 billion as of December 31, 2022.
In the event that all of the adjustments proposed by the IRS were to be ultimately upheld for tax years 2007 through 2009 and the IRS, with the consent of the federal courts, were to decide to apply the Tax Court Methodology to the subsequent years up to and including 2023, the Company currently estimates that the potential aggregate incremental tax and interest liability could be approximately $16 billion as of December 31, 2023.
The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Brazilian real and Mexican peso, which had a favorable impact on our Latin America operating segment.
The unfavorable impact of a stronger U.S. dollar compared to the currencies listed above was partially offset by the impact of a weaker U.S. dollar compared to certain other foreign currencies, including the Mexican peso, which had a favorable impact on our Latin America operating segment.
Our judgment regarding the level of influence over each equity method investee includes considering key factors, such as our ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions.
Our judgment regarding the level of influence over each equity method investee includes considering key factors, such as our ownership interest, representation on the board of directors, participation in policy-making decisions, other commercial arrangements and material intercompany transactions.
The following table illustrates, on a percentage basis, the estimated impact of the factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments: Percent Change 2022 versus 2021 Volume 1 Price, Product & Geographic Mix Foreign Currency Exchange Rate Fluctuations Acquisitions & Divestitures 2 Total Consolidated 5 % 11 % (7) % 2 % 11 % Europe, Middle East & Africa 2 % 16 % (14) % — % 5 % Latin America 7 17 (5) — 19 North America 1 12 — 6 19 Asia Pacific 8 3 (9) — 3 Global Ventures 13 — (11) — 1 Bottling Investments 12 7 (9) — 10 Note: Certain rows may not add due to rounding. 1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments and our Global Ventures operating segment (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any.
The following table illustrates, on a percentage basis, the estimated impact of the factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments: Percent Change 2023 versus 2022 Volume 1 Price, Product & Geographic Mix Foreign Currency Exchange Rate Fluctuations Acquisitions & Divestitures 2 Total Consolidated 2 % 10 % (4) % (1) % 6 % Europe, Middle East & Africa — 19 (12) — 7 Latin America 6 16 (3) — 19 North America (1) 8 — — 7 Asia Pacific — 5 (5) 1 — Global Ventures 5 2 — — 8 Bottling Investments 6 8 (7) (8) — Note: Certain rows may not add due to rounding. 1 Represents the percent change in net operating revenues attributable to the increase (decrease) in concentrate sales volume for our geographic operating segments and our Global Ventures operating segment (expressed in unit case equivalents) after considering the impact of acquisitions and divestitures, if any.
The Company strongly disagrees with the IRS’ positions and the portions of the Opinion affirming such positions and intends to vigorously defend our positions utilizing every available avenue of appeal.
The Company strongly disagrees with the IRS’ positions and the portions of the Opinions affirming such positions and intends to vigorously defend our positions utilizing every available avenue of appeal.
For our variable-rate debt, we have assumed the December 31, 2022 rate for all periods presented. We expect to fund such interest payments with cash flows from operating activities and/or short-term borrowings. 4 Refer to Note 14 of Notes to Consolidated Financial Statements for additional information regarding income taxes.
For our variable-rate debt, we have assumed the December 31, 2023 rate for all periods presented. We expect to fund such interest payments with cash flows from operating activities and/or short-term borrowings. 4 Refer to Note 15 of Notes to Consolidated Financial Statements for additional information regarding income taxes.
These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is not probable. As of December 31, 2022, we were not directly liable for the debt of any unconsolidated entity.
These amounts represent the maximum potential future payments that we could be required to make under the guarantees. However, management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is remote. As of December 31, 2023, we were not directly liable for the debt of any unconsolidated entity.
Also included in this activity are purchases of, and proceeds from the disposals of, investments held by our captive insurance companies. Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities In 2022, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $73 million.
Also included in this activity are purchases of, and proceeds from the disposals of, investments held by our captive insurance companies. Acquisitions of Businesses, Equity Method Investments and Nonmarketable Securities In 2023 and 2022, the Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $62 million and $73 million, respectively.
Accrued income taxes include $2,886 million related to the one-time transition tax required by the Tax Reform Act. Liabilities of $1,424 million for unrecognized tax benefits plus accrued interest and penalties are not included in the total above. Currently, the settlement period for the unrecognized tax benefits cannot be determined.
Accrued income taxes include $2,029 million related to the one-time transition tax required by the Tax Reform Act. Liabilities of $1,476 million for unrecognized tax benefits plus accrued interest and penalties are not included in the total above. Currently, the settlement period for the unrecognized tax benefits cannot be determined.
We expect to make all contributions to our pension trusts with cash flows from operating activities. Our pension plans are generally funded in accordance with local laws and tax regulations. The Company expects to contribute approximately $42 million in 2023 to our pension trusts, all of which will be allocated to our international plans.
We expect to make all contributions to our pension trusts with cash flows from operating activities. Our pension plans are generally funded in accordance with local laws and tax regulations. The Company expects to contribute approximately $47 million in 2024 to our pension trusts, all of which will be allocated to our international plans.
Refer to Note 5 of Notes to Consolidated Financial Statements for additional information on our hedging activities. Other Investing Activities During the years ended December 31, 2022 and 2021, the total cash inflow for other investing activities was $706 million and $51 million, respectively.
Refer to Note 5 of Notes to Consolidated Financial Statements for additional information on our hedging activities. Other Investing Activities During the years ended December 31, 2023 and 2022, the total cash inflow for other investing activities was $39 million and $706 million, respectively.
Our ability to achieve our sustainability goals is dependent on many factors, including, but not limited to, our actions along with the actions of various stakeholders, such as our bottling partners, suppliers, governments, nongovernmental organizations, communities, and other third parties, all of which are outside of our control. See “Item 1A.
Our ability to achieve our sustainability goals is dependent on many factors, including, but not limited to, our actions along with the actions of various stakeholders, such as our bottling partners, suppliers, governments, nongovernmental organizations, communities, and other third parties, some of which are outside of our control.
A deterioration of macroeconomic conditions may not only negatively impact the estimated operating cash flows used in our cash flow models but may also negatively impact other assumptions used in our analyses, including, but not limited to, the estimated cost of capital and/or discount rates.
A deterioration of macroeconomic conditions may not only negatively impact the estimated operating cash flows used in our cash flow models but may also negatively impact other assumptions used in our analyses, including, but not limited to, the discount rates.
Additionally, other income (loss) — net included net income of $219 million related to the non-service cost components of net periodic benefit income, a net gain of $153 million related to the refranchising of our bottling operations in Cambodia and dividend income of $111 million. In 2021, other income (loss) — net was income of $2,000 million.
Additionally, other income (loss) — net included net income of $219 million related to the non-service cost components of net periodic benefit income, a net gain of $153 million related to the refranchising of our bottling operations in Cambodia and dividend income of $111 million.
Debt Financing Our Company maintains debt levels we consider prudent based on our cash flows, interest coverage ratio and percentage of debt to capital. We use debt financing to lower our overall cost of capital, which increases our return on shareowners’ equity. This exposes us to adverse changes in interest rates.
Loans, Notes Payable and Long-Term Debt Our Company maintains debt levels we consider prudent based on our cash flows, interest coverage ratio and percentage of debt to capital. We use debt financing to lower our overall cost of capital, which increases our return on shareowners’ equity. This exposes us to adverse changes in interest rates.
We own or license and market numerous beverage brands, which we group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. We own and market five of the world’s top six nonalcoholic sparkling soft drink brands: Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.
We own or license and market numerous beverage brands, which we group into the following categories: Trademark Coca-Cola; sparkling flavors; water, sports, coffee and tea; juice, value-added dairy and plant-based beverages; and emerging beverages. We own and market several of the world’s largest nonalcoholic sparkling soft drink brands, including Coca-Cola, Sprite, Fanta, Coca-Cola Zero Sugar and Diet Coke/Coca-Cola Light.
The projected benefit obligation of all pension plans other than the U.S. qualified pension plan was $2,275 million, and the fair value of the plans’ assets was $2,822 million. The Company sponsors various unfunded pension plans outside the United States as well as unfunded nonqualified pension plans covering certain U.S. employees.
The projected benefit obligation of all pension plans other than the U.S. qualified pension plan was $2,450 million, and the fair value of the plans’ assets was $3,204 million. The Company sponsors various unfunded pension plans outside the United States as well as unfunded nonqualified pension plans covering certain U.S. employees.
Corporate’s operating loss for the years ended December 31, 2022 and 2021 was $2,636 million and $2,383 million, respectively. Operating loss in 2022 increased primarily as a result of higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition and increased marketing spending.
Corporate’s operating loss for the years ended December 31, 2023 and 2022 was $3,705 million and $2,636 million, respectively. Operating loss in 2023 increased primarily as a result of higher other operating charges due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, higher operating expenses and increased marketing spending.
In 2022 and 2021, the weighted-average exchange rates for foreign currencies in which the Company conducted operations (all operating currencies), and for certain individual currencies, strengthened (weakened) against the U.S. dollar as follows: Year Ended December 31, 2022 2021 All operating currencies (8) % 2 % Australian dollar (7) % 10 % Brazilian real 4 (4) British pound sterling (11) 3 Euro (11) 5 Japanese yen (17) (2) Mexican peso 1 6 South African rand (9) 6 The percentages in the table above do not include the effects of our hedging activities and, therefore, do not reflect the actual impact of fluctuations in foreign currency exchange rates on our operating results.
In 2023 and 2022, the weighted-average exchange rates for foreign currencies in which the Company conducted operations (all operating currencies), and for certain individual currencies, strengthened (weakened) against the U.S. dollar as follows: Year Ended December 31, 2023 2022 All operating currencies (2) % (8) % Australian dollar (5) (7) Brazilian real 3 4 British pound 2 (11) Chinese yuan (7) (3) Euro 3 (11) Indian rupee (6) (5) Japanese yen (7) (17) Mexican peso 14 1 Philippine peso (3) (9) South African rand (11) (9) 57 The percentages in the table above do not include the effects of our hedging activities and, therefore, do not reflect the actual impact of fluctuations in foreign currency exchange rates on our operating results.
We, along with other beverage companies, are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, consumer spending, economic conditions, availability and quality of water, consumer preferences, inflation, geopolitical conditions, local and national laws and regulations, foreign currency exchange rate fluctuations, fuel prices, weather patterns and the COVID-19 pandemic.
We, along with other beverage companies, are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, consumer spending, economic conditions, availability and quality of water, consumer preferences, inflation, geopolitical conditions including international conflicts, local and national laws and regulations, foreign currency exchange rate fluctuations, fuel prices, weather patterns and health crises.
Information about our operating margin on a consolidated basis and by operating segment and Corporate is as follows: Year Ended December 31, 2022 2021 Consolidated 25.4 % 26.7 % Europe, Middle East & Africa 57.4 56.9 Latin America 58.5 61.2 North America 23.9 25.3 Asia Pacific 48.9 49.7 Global Ventures 6.5 10.5 Bottling Investments 6.2 6.6 Corporate * * * Calculation is not meaningful.
Information about our operating margin on a consolidated basis and by operating segment and Corporate is as follows: Year Ended December 31, 2023 2022 Consolidated 24.7 % 25.4 % Europe, Middle East & Africa 56.8 57.4 Latin America 58.9 58.5 North America 26.4 23.9 Asia Pacific 43.2 48.9 Global Ventures 10.7 6.5 Bottling Investments 7.4 6.2 Corporate * * * Calculation is not meaningful.
As of December 31, 2022, we were contingently liable for guarantees of indebtedness owed by third parties of $1,017 million, of which $133 million was related to VIEs. Our guarantees are primarily related to third-party customers, bottlers and vendors and arose through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant.
As of December 31, 2023, we were contingently liable for guarantees of indebtedness owed by third parties of $633 million, of which $87 million was related to VIEs. Our guarantees are primarily related to third-party customers, bottlers and vendors and arose through the normal course of business. These guarantees have various terms, and none of these guarantees is individually significant.
We are focused on the following strategic priorities: unlocking the potential of our portfolio of strong global, regional and scaled local brands; developing a robust innovation pipeline focusing on scalable initiatives; increasing consumer-centric marketing effectiveness and efficiency; winning in the marketplace with aligned data-driven revenue growth management and execution capabilities; and further embedding sustainability goals into our operations. 34 Challenges and Risks Being a global enterprise provides unique opportunities for our Company.
We are focused on the following strategic priorities: unlocking the potential of our portfolio of strong global, regional and scaled local brands; developing a robust innovation pipeline focusing on scalable initiatives; increasing consumer-centric marketing effectiveness and efficiency; winning in the marketplace with aligned data-driven revenue growth management and execution capabilities; and further embedding sustainability goals into our operations.
Issuances of Stock The issuances of stock in 2022 and 2021 were related to the exercise of stock options by employees. Share Repurchases In 2012, our Board of Directors authorized a share repurchase plan of up to 500 million shares (“2012 Plan”) of the Company’s common stock.
Issuances of Stock The issuances of stock in 2023 and 2022 were related to the exercise of stock options by employees. Purchases of Stock for Treasury In 2012, our Board of Directors authorized a share repurchase plan of up to 500 million shares (“2012 Plan”) of the Company’s common stock.
Operating Income and Operating Margin Information about our operating income contribution by operating segment and Corporate on a percentage basis is as follows: Year Ended December 31, 2022 2021 Europe, Middle East & Africa 36.3 % 36.2 % Latin America 26.3 24.6 North America 34.3 32.3 Asia Pacific 21.1 22.6 Global Ventures 1.7 2.8 Bottling Investments 4.5 4.6 Corporate (24.2) (23.1) Total 100.0 % 100.0 % Operating margin is a ratio calculated by dividing operating income by net operating revenues.
Operating Income and Operating Margin Information about our operating income contribution by operating segment and Corporate on a percentage basis is as follows: Year Ended December 31, 2023 2022 Europe, Middle East & Africa 37.2 % 36.3 % Latin America 30.3 26.3 North America 39.2 34.3 Asia Pacific 18.0 21.1 Global Ventures 2.9 1.7 Bottling Investments 5.1 4.5 Corporate (32.7) (24.2) Total 100.0 % 100.0 % Operating margin is a ratio calculated by dividing operating income by net operating revenues.
Refer to Note 13 of Notes to Consolidated Financial Statements. We did not include our estimated contributions to our pension trusts in the table above. 56 As of December 31, 2022, the projected benefit obligation of the U.S. qualified pension plan was $4,101 million, and the fair value of the plan assets was $4,336 million.
Refer to Note 14 of Notes to Consolidated Financial Statements. We did not include our estimated contributions to our pension trusts in the table above. 56 As of December 31, 2023, the projected benefit obligation of the U.S. qualified pension plan was $4,094 million, and the fair value of the plan assets was $4,056 million.
We believe our most critical accounting policies and estimates relate to the following: • Principles of Consolidation • Recoverability of Current and Noncurrent Assets • Pension Plan Valuations • Revenue Recognition • Income Taxes Management has discussed the development, selection and disclosure of critical accounting policies and estimates with the Audit Committee of our Company’s Board of Directors.
We believe our most critical accounting policies and estimates relate to the following: • Principles of Consolidation • Recoverability of Equity Method Investments and Indefinite-Lived Intangible Assets • Pension Plan Valuations • Revenue Recognition • Income Taxes Management has discussed the development, selection and disclosure of critical accounting policies and estimates with the Audit Committee of our Company’s Board of Directors.
For this plan, we estimate that a 50 basis-point decrease in the discount rate would result in a $13 million increase in our 2023 net periodic pension cost, and we estimate that a 50 basis-point decrease in the expected long-term rate of return on plan assets would result in a $21 million increase in our 2023 net periodic pension cost.
For this plan, we estimate that a 50 basis-point decrease in the discount rate would result in an $8 million increase in our 2024 net periodic pension cost, and we estimate that a 50 basis-point decrease in the expected long-term rate of return on plan assets would result in a $19 million increase in our 2024 net periodic pension cost.
The Company must assess whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount. If the Company concludes that this is the case, it must perform the impairment testing described above.
The Company must assess whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company concludes that this is the case, it must perform the impairment testing discussed above.
The Company had $496 million and $453 million in interest and penalties related to unrecognized tax benefits accrued as of December 31, 2022 and 2021, respectively. Of these amounts, expense of $43 million and $62 million was recognized in 2022 and 2021, respectively.
The Company had $544 million and $496 million in interest and penalties related to unrecognized tax benefits accrued as of December 31, 2023 and 2022, respectively. Of these amounts, expense of $48 million and $43 million was recognized in 2023 and 2022, respectively.
The impact of this acquisition has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Europe, Middle East and Africa operating segments. Additionally, in November 2022, the Company refranchised our bottling operations in Cambodia.
The impact of this acquisition has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Europe, Middle East and Africa operating segments.
Our hedging activities are designed to mitigate, over time, a portion of the potentially unfavorable impact of exchange rate fluctuations on our net income. The total impact of foreign currency exchange rate fluctuations on net operating revenues, including the effect of our hedging activities, was a decrease of 7 percent in 2022 and an increase of 1 percent in 2021.
Our hedging activities are designed to mitigate, over time, a portion of the potentially unfavorable impact of exchange rate fluctuations on our net income. The total impact of foreign currency exchange rate fluctuations on net operating revenues, including the effect of our hedging activities, was a decrease of 4% and 7% in 2023 and 2022, respectively.
Our investment objective for our pension assets is to ensure all funded pension plans have sufficient assets to meet their benefit obligations when they become due. As a result, the Company periodically revises asset allocations, where appropriate, to seek to improve returns and manage risk. In 2022, the Company’s net periodic pension income was $124 million.
Our investment objective for our pension assets is to ensure all funded pension plans have sufficient assets to meet their benefit obligations when they become due. As a result, the Company periodically revises asset allocations, where appropriate, to seek to improve returns and manage risk.
Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 7 percent.
Fluctuations in foreign currency exchange rates decreased our consolidated net operating revenues by 4%.
Asia Pacific’s operating income for the years ended December 31, 2022 and 2021 was $2,303 million and $2,325 million, respectively.
Asia Pacific’s operating income for the years ended December 31, 2023 and 2022 was $2,040 million and $2,303 million, respectively.
The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments and the impact of unit case volume from certain joint ventures in which the Company has an ownership interest, but to which the Company does not sell concentrates, syrups, source waters or powders/minerals. 44 Net Operating Revenues Net operating revenues were $43,004 million in 2022, compared to $38,655 million in 2021, an increase of $4,349 million, or 11 percent.
The differences between concentrate sales volume and unit case volume growth rates for the operating segments were primarily due to the timing of concentrate shipments and the impact of unit case volume from certain joint ventures in which the Company has an ownership interest, but to which the Company does not sell concentrates, syrups, source waters or powders/minerals. 44 Net Operating Revenues Net operating revenues were $45,754 million in 2023, compared to $43,004 million in 2022, an increase of $2,750 million, or 6%.
Global Ventures’ operating income for the years ended December 31, 2022 and 2021 was $185 million and $293 million, respectively.
Global Ventures’ operating income for the years ended December 31, 2023 and 2022 was $329 million and $185 million, respectively.
However, we anticipate benefit payments for these unfunded pension plans will be approximately $65 million annually for 2023 through 2025. Thereafter, the expected annual benefit payments will gradually decline. Refer to Note 13 of Notes to Consolidated Financial Statements.
However, we anticipate benefit payments for these unfunded pension plans will be approximately $64 million annually for 2024 and 2025. Thereafter, the expected annual benefit payments will gradually decline. Refer to Note 14 of Notes to Consolidated Financial Statements.
Factors that management must estimate include, among others, the economic lives of the assets, sales volume, pricing, royalty rates, cost of raw materials, delivery costs, the impact of any supply chain disruptions, inflation, long-term growth rates, cost of capital, marketing spending, foreign currency exchange rates, tax rates, capital spending, proceeds from the sale of assets and customers’ financial condition.
Factors that management must estimate include, among others, the economic lives of the assets, sales volume, pricing, royalty rates, cost of raw materials, delivery costs, long-term growth rates, discount rates, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets.
During 2022, the Company had issuances of debt of $3,972 million, which included $2,321 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, $798 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, and long-term debt issuances of $853 million, net of related discounts and issuance costs. 54 During 2022, the Company made payments of debt of $4,930 million, which consisted of $3,623 million of payments related to commercial paper and short-term debt with maturities greater than 90 days and payments of long-term debt of $1,307 million.
During 2022, the Company had issuances of debt of $3,972 million, which included $2,321 million of issuances of commercial paper and short-term debt with maturities greater than 90 days, $798 million of net issuances of commercial paper and short-term debt with maturities of 90 days or less, and long-term debt issuances of $853 million, net of related discounts and issuance costs.
Other Operating Charges Other operating charges incurred by operating segment and Corporate were as follows (in millions): Year Ended December 31, 2022 2021 Europe, Middle East & Africa $ (7) $ 141 Latin America — 11 North America 19 39 Asia Pacific 57 12 Global Ventures — — Bottling Investments — — Corporate 1,146 643 Total $ 1,215 $ 846 In 2022, the Company recorded other operating charges of $1,215 million.
Other Operating Charges Other operating charges incurred by operating segment and Corporate were as follows (in millions): Year Ended December 31, 2023 2022 Europe, Middle East & Africa $ — $ (7) Latin America — — North America 26 19 Asia Pacific 35 57 Global Ventures — — Bottling Investments — — Corporate 1,890 1,146 Total $ 1,951 $ 1,215 In 2023, the Company recorded other operating charges of $1,951 million.
Dividends The Company paid dividends of $7,616 million and $7,252 million during the years ended December 31, 2022 and 2021, respectively. At its February 2023 meeting, our Board of Directors increased our regular quarterly dividend to $0.46 per share, equivalent to a full year dividend of $1.84 per share in 2023. This is our 61 st consecutive annual increase.
Dividends The Company paid dividends of $7,952 million and $7,616 million during the years ended December 31, 2023 and 2022, respectively. At its February 2024 meeting, our Board of Directors increased our regular quarterly dividend to $0.485 per share, equivalent to a full year dividend of $1.94 per share in 2024. This is our 62 nd consecutive annual increase.
In Asia Pacific, unit case volume increased 6 percent, which included 8 percent growth in sparkling flavors, 6 percent growth in Trademark Coca-Cola, 4 percent growth in water, sports, coffee and tea, and 9 percent growth in juice, value-added dairy and plant-based beverages.
In Asia Pacific, unit case volume increased 3%, which included 4% growth in both sparkling flavors and Trademark Coca-Cola, 10% growth in juice, value-added dairy and plant-based beverages, and 1% growth in water, sports, coffee and tea.
Purchases of Property, Plant and Equipment Purchases of property, plant and equipment during the years ended December 31, 2022 and 2021 were $1,484 million and $1,367 million, respectively. 53 Total capital expenditures for property, plant and equipment and the percentage of such totals by operating segment and Corporate were as follows (in millions): Year Ended December 31, 2022 2021 Capital expenditures $ 1,484 $ 1,367 Europe, Middle East & Africa 3.3 % 2.6 % Latin America 0.3 0.1 North America 18.9 16.7 Asia Pacific 1.5 4.8 Global Ventures 12.0 20.8 Bottling Investments 47.0 41.0 Corporate 17.0 14.0 Collateral (Paid) Received Associated with Hedging Activities — Net Collateral paid associated with our hedging activities during the year ended December 31, 2022 was $1,465 million.
Total capital expenditures for property, plant and equipment and the percentage of such totals by operating segment and Corporate were as follows (in millions): Year Ended December 31, 2023 2022 Capital expenditures $ 1,852 $ 1,484 Europe, Middle East & Africa 2.3 % 3.3 % Latin America — 0.3 North America 22.3 18.9 Asia Pacific 1.2 1.5 Global Ventures 10.4 12.0 Bottling Investments 45.5 47.0 Corporate 18.3 17.0 Collateral (Paid) Received Associated with Hedging Activities — Net Collateral received associated with our hedging activities during the year ended December 31, 2023 was $366 million and collateral paid associated with our hedging activities during the year ended December 31, 2022 was $1,465 million.
The increase in operating income was primarily driven by concentrate sales volume growth of 7 percent, favorable pricing initiatives, favorable channel and package mix, and lower other operating charges, partially offset by an unfavorable foreign currency exchange rate impact of 6 percent, higher commodity costs and increased marketing spending.
The increase in operating income was primarily driven by concentrate sales volume growth of 6% and favorable pricing initiatives, partially offset by higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 5%.
As of December 31, 2022, our self-insurance reserves totaled $199 million. Refer to Note 11 of Notes to Consolidated Financial Statements. We did not include estimated payments related to our self-insurance reserves in the table above. Deferred income tax liabilities as of December 31, 2022 were $2,914 million. Refer to Note 14 of Notes to Consolidated Financial Statements.
As of December 31, 2023, our self-insurance reserves totaled $197 million. Refer to Note 12 of Notes to Consolidated Financial Statements. We did not include estimated payments related to our self-insurance reserves in the table above. Deferred income tax liabilities as of December 31, 2023 were $2,639 million. Refer to Note 15 of Notes to Consolidated Financial Statements.
Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the acquisition of BodyArmor, the sale of our ownership interest in CCA and the refranchising of our bottling operations in Cambodia. Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities.
Refer to Note 2 of Notes to Consolidated Financial Statements for additional information on the sale of our ownership interests in Pakistan and Indonesia and the refranchising of our bottling operations in Vietnam and Cambodia. Refer to Note 4 of Notes to Consolidated Financial Statements for additional information on equity and debt securities.
We believe our success depends on our ability to connect with consumers by providing them with a wide variety of beverage options to meet their desires, needs and lifestyles. Our success further depends on the ability of our people to execute effectively, every day.
We believe our success depends on our ability to connect with consumers by providing them with a wide variety of beverage options to meet their desires, needs and lifestyles. Our success further depends on the ability of our people to execute effectively, every day. Our Company operates in two lines of business: concentrate operations and finished product operations.
These operations consist primarily of our consolidated bottling and distribution operations, which are included in our Bottling Investments operating segment. In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners.
In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of the Company’s bottling partners. These operations are generally included in one of our geographic operating segments or our Global Ventures operating segment.
Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance. Price, product and geographic m ix had an 11 percent favorable impact on our consolidated net operating revenues.
Management uses this measure in making financial, operating and planning decisions and in evaluating the Company’s performance. Price, product and geographic mix had a 10% favorable impact on our consolidated net operating revenues.
This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Japanese yen, Turkish lira, euro, British pound sterling, Philippine peso, South African rand and Argentine peso, which had an unfavorable impact on our Asia Pacific; Europe, Middle East and Africa; Global Ventures; Bottling Investments; and Latin America operating segments.
This unfavorable impact was primarily due to a stronger U.S. dollar compared to certain foreign currencies, including the Argentine peso, Zimbabwean dollar, South African rand, Nigerian naira, Turkish lira, Japanese yen, Indian rupee and Chinese yuan, which had an unfavorable impact on our Latin America; Europe, Middle East and Africa; Asia Pacific; and Bottling Investments operating segments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeHowever, this increase in interest expense would have been partially offset by the increase in interest income due to higher interest rates. 58 The Company is subject to interest rate risk related to its investments in highly liquid debt securities. These investments are primarily managed by external managers within the guidelines of the Company’s investment policy.
Biggest changeThe Company is subject to interest rate risk related to its investments in highly liquid debt securities. These investments are primarily managed by external managers within the guidelines of the Company’s investment policy. Our policy requires these investments to be investment grade, with the primary objective of minimizing the risk of principal loss.
Our Company enters into forward exchange contracts and purchases foreign currency options and collars (principally euro, British pound sterling and Japanese yen) to hedge certain portions of forecasted cash flows denominated in foreign currencies. Additionally, we enter into forward exchange contracts to offset the earnings impact related to foreign currency exchange rate fluctuations on certain monetary assets and liabilities.
Our Company enters into forward exchange contracts and purchases foreign currency options and collars (principally euro, British pound and Japanese yen) to hedge certain portions of forecasted cash flows denominated in foreign currencies. Additionally, we enter into forward exchange contracts to offset the earnings impact related to foreign currency exchange rate fluctuations on certain monetary assets and liabilities.
Certain of these derivatives do not qualify for hedge accounting, but they are effective economic hedges that help the Company mitigate the price risk associated with the purchases and transportation of materials used in our manufacturing processes. The total notional values of our commodity derivatives were $371 million and $918 million as of December 31, 2022 and 2021, respectively.
Certain of these derivatives do not qualify for hedge accounting, but they are effective economic hedges that help the Company mitigate the price risk associated with the purchases and transportation of materials used in our manufacturing processes. The total notional values of our commodity derivatives were $379 million and $371 million as of December 31, 2023 and 2022, respectively.
We also enter into forward exchange contracts as hedges of net investments in foreign operations. The total notional values of our foreign currency derivatives were $11,370 million and $13,691 million as of December 31, 2022 and 2021, respectively. These values included derivative instruments that were designated and qualified for hedge accounting along with derivative instruments that are economic hedges.
We also enter into forward exchange contracts as hedges of net investments in foreign operations. The total notional values of our foreign currency derivatives were $17,505 million and $11,370 million as of December 31, 2023 and 2022, respectively. These values included derivative instruments that were designated and qualified for hedge accounting along with derivative instruments that are economic hedges.
Foreign Currency Exchange Rates We manage most of our foreign currency exposures on a consolidated basis, which allows us to net certain exposures and take advantage of any natural offsets. In 2022, we generated $27.6 billion of our net operating revenues from operations outside the United States.
Foreign Currency Exchange Rates We manage most of our foreign currency exposures on a consolidated basis, which allows us to net certain exposures and take advantage of any natural offsets. In 2023, we generated $29.2 billion of our net operating revenues from operations outside the United States.
The fair value of the commodity derivatives that did not qualify for hedge accounting resulted in a net loss of $1 million as of December 31, 2022, and we estimate that a 10 percent decrease in underlying commodity prices would have resulted in an $8 million decrease in fair value. 59
The fair value of the commodity derivatives that did not qualify for hedge accounting resulted in a net loss of $58 million as of December 31, 2023, and we estimate that a 10% decrease in underlying commodity prices would have resulted in a $54 million decrease in fair value. 59
The fair value of foreign currency derivatives that qualified for hedge accounting resulted in a net unrealized loss of $66 million as of December 31, 2022, and we estimate that a 10 percent weakening of the U.S. dollar would have increased the net unrealized loss to $296 million.
The fair value of foreign currency derivatives that qualified for hedge accounting resulted in a net unrealized gain of $22 million as of December 31, 2023, and we estimate that a 10% weakening of the U.S. dollar would have resulted in a $278 million decrease in fair value.
Based on the Company’s variable-rate debt and derivative instruments outstanding as of December 31, 2022, we estimate that a 1 percentage point increase in interest rates would have increased interest expense by $136 million in 2022.
Based on the Company’s variable-rate debt and derivative instruments outstanding as of December 31, 2023, we estimate that a 1 percentage point increase in interest rates would have increased interest expense by $134 million in 2023. However, this increase in interest expense would have been partially offset by the increase in interest income due to higher interest rates.
Interest Rates The Company is subject to interest rate volatility with regard to existing and future issuances of debt. We monitor our mix of fixed-rate and variable-rate debt as well as our mix of short-term debt and long-term debt. From time to time, we enter into interest rate swap agreements to manage our exposure to interest rate fluctuations.
We monitor our mix of fixed-rate and variable-rate debt as well as our mix of short-term debt and long-term debt. From time to time, we enter into interest rate swap agreements to manage our exposure to interest rate fluctuations.
These values included derivative instruments that were designated and qualified for hedge accounting along with derivative instruments that are economic hedges. There were no significant commodity derivatives that qualified for hedge accounting as of December 31, 2022 .
These values included derivative instruments that were designated and qualified for hedge accounting along with derivative instruments that are economic hedges.
The fair value of the foreign currency derivatives that did not qualify for hedge accounting resulted in a net unrealized loss of $20 million as of December 31, 2022, and we estimate that a 10 percent weakening of the U.S. dollar would have resulted in a $137 million decrease in fair value.
The fair value of the foreign currency derivatives that did not qualify for hedge accounting resulted in a net unrealized loss of $15 million as of December 31, 2023, and we estimate that a 10% weakening of the U.S. dollar would have resulted in a $161 million decrease in fair value. 58 Interest Rates The Company is subject to interest rate volatility with regard to existing and future issuances of debt.
We estimate that a 1 percentage point increase in interest rates would have resulted in a $29 million decrease in the fair value of our portfolio of highly liquid debt securities. Commodity Prices The Company is subject to market risk with respect to commodity price fluctuations, principally related to our purchases of sweeteners, metals, juices, PET and fuels.
Commodity Prices The Company is subject to market risk with respect to commodity price fluctuations, principally related to our purchases of sweeteners, metals, juices, PET and fuels.
Removed
Our policy requires these investments to be investment grade, with the primary objective of minimizing the risk of principal loss. In addition, our policy limits the amount of credit exposure to any one issuer.
Added
In addition, our policy limits the amount of credit exposure to any one issuer. We estimate that a 1 percentage point increase in interest rates would have resulted in a $29 million decrease in the fair value of our portfolio of highly liquid debt securities.
Added
The fair value of commodity derivatives that qualified for hedge accounting resulted in a net unrealized loss of $3 million as of December 31, 2023, and we estimate that a 10% decrease in underlying commodity prices would have resulted in a $3 million decrease in fair value .

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