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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31,2023OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT O

2、F 1934For the transition period from to Commission File Number 001-02217COCA COLA CO(Exact name of Registrant as specified in its charter)Delaware 58-0628465(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)One Coca-Cola PlazaAtlantaGeorgia30313(Address

3、 of principal executive offices)(Zip Code)Registrants telephone number,including area code:(404)676-2121Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.25 Par ValueKONew York Stock Exchange0.500%No

4、tes Due 2024KO24New York Stock Exchange1.875%Notes Due 2026KO26New York Stock Exchange0.750%Notes Due 2026KO26CNew York Stock Exchange1.125%Notes Due 2027KO27New York Stock Exchange0.125%Notes Due 2029KO29ANew York Stock Exchange0.125%Notes Due 2029KO29BNew York Stock Exchange0.400%Notes Due 2030KO3

5、0BNew York Stock Exchange1.250%Notes Due 2031KO31New York Stock Exchange0.375%Notes Due 2033KO33New York Stock Exchange0.500%Notes Due 2033KO33ANew York Stock Exchange1.625%Notes Due 2035KO35New York Stock Exchange1.100%Notes Due 2036KO36New York Stock Exchange0.950%Notes Due 2036KO36ANew York Stock

6、 Exchange0.800%Notes Due 2040KO40BNew York Stock Exchange1.000%Notes Due 2041KO41New York Stock ExchangeIndicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12 months(or for such sh

7、orter period that the Registrant was required to file such reports)and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Re

8、gulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the Registrant was required to submit such files).Yes No Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting com

9、pany or an emerging growthcompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting companyEmerging growth compan

10、yIf an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark if the Registrant is a shell

11、company(as defined in Rule 12b-2 of the Exchange Act).Yes No Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practicable date.Class of Common Stock Shares Outstanding as of April 24,2023$0.25 Par Value 4,324,578,189THE COCA-COLA COMPANY AND S

12、UBSIDIARIESTable of Contents PageForward-Looking Statements1Part I.Financial Information Item 1.Financial Statements2Consolidated Statements of Income Three Months Ended March 31,2023 and April 1,20222Consolidated Statements of Comprehensive Income Three Months Ended March 31,2023 andApril 1,20223Co

13、nsolidated Balance Sheets March 31,2023 and December 31,20224Consolidated Statements of Cash Flows Three Months Ended March 31,2023 and April 1,20225Notes to Consolidated Financial Statements6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations27Item 3.Quantita

14、tive and Qualitative Disclosures About Market Risk39Item 4.Controls and Procedures39Part II.Other Information Item 1.Legal Proceedings40Item 1A.Risk Factors41Item 2.Unregistered Sales of Equity Securities and Use of Proceeds42Item 6.Exhibits42Signatures46FORWARD-LOOKING STATEMENTSThis report contain

15、s information that may constitute“forward-looking statements.”Generally,the words“believe,”“expect,”“intend,”“estimate,”“anticipate,”“project,”“will”and similar expressions identify forward-looking statements,which generally are not historical in nature.However,the absence of these words or similar

16、expressionsdoes not mean that a statement is not forward-looking.All statements that address operating performance,events or developments that we expect or anticipate will occur in thefuture including statements relating to volume growth,share of sales and net income per share growth,and statements

17、expressing general views about future operatingresults are forward-looking statements.Management believes that these forward-looking statements are reasonable as and when made.However,caution should be taken notto place undue reliance on any such forward-looking statements because such statements sp

18、eak only as of the date when made.Our Company undertakes no obligation topublicly update or revise any forward-looking statements,whether as a result of new information,future events or otherwise,except as required by law.In addition,forward-looking statements are subject to certain risks and uncert

19、ainties that could cause our Companys actual results to differ materially from historical experience and our presentexpectations or projections.These risks and uncertainties include,but are not limited to,the possibility that the assumptions used to calculate our estimated aggregateincremental tax a

20、nd interest liability related to the potential unfavorable outcome of the ongoing tax dispute with the U.S.Internal Revenue Service could significantly change;those described in Part II,“Item 1A.Risk Factors”and elsewhere in this report and in our Annual Report on Form 10-K for the year ended Decemb

21、er 31,2022;and thosedescribed from time to time in our future reports filed with the Securities and Exchange Commission.1Part I.Financial InformationItem 1.Financial StatementsTHE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In millions except per share data)Three Months Ended

22、March 31,2023April 1,2022Net Operating Revenues$10,980$10,491 Cost of goods sold4,317 4,091 Gross Profit6,663 6,400 Selling,general and administrative expenses3,185 2,967 Other operating charges111 28 Operating Income3,367 3,405 Interest income168 78 Interest expense372 182 Equity income(loss)net275

23、 262 Other income(loss)net615(105)Income Before Income Taxes4,053 3,458 Income taxes940 665 Consolidated Net Income3,113 2,793 Less:Net income(loss)attributable to noncontrolling interests6 12 Net Income Attributable to Shareowners of The Coca-Cola Company$3,107$2,781 Basic Net Income Per Share$0.72

24、$0.64 Diluted Net Income Per Share$0.72$0.64 Average Shares Outstanding Basic4,326 4,332 Effect of dilutive securities19 25 Average Shares Outstanding Diluted4,345 4,357 Calculated based on net income attributable to shareowners of The Coca-Cola Company.Refer to Notes to Consolidated Financial State

25、ments.111 2THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In millions)Three Months EndedMarch 31,2023April 1,2022Consolidated Net Income$3,113$2,793 Other Comprehensive Income:Net foreign currency translation adjustments549 1,009 Net gains(losses)on derivatives

26、(70)64 Net change in unrealized gains(losses)on available-for-sale debt securities8(35)Net change in pension and other postretirement benefit liabilities11 85 Total Comprehensive Income3,611 3,916 Less:Comprehensive income(loss)attributable to noncontrolling interests(69)145 Total Comprehensive Inco

27、me Attributable to Shareownersof The Coca-Cola Company$3,680$3,771 Refer to Notes to Consolidated Financial Statements.3THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In millions except par value)March 31,2023December 31,2022ASSETSCurrent Assets Cash and cash equivalents$12,004$9,

28、519 Short-term investments1,166 1,043 Total Cash,Cash Equivalents and Short-Term Investments13,170 10,562 Marketable securities1,125 1,069 Trade accounts receivable,less allowances of$512 and$516,respectively4,599 3,487 Inventories4,727 4,233 Prepaid expenses and other current assets3,259 3,240 Tota

29、l Current Assets26,880 22,591 Equity method investments18,744 18,264 Other investments337 501 Other noncurrent assets6,324 6,189 Deferred income tax assets1,696 1,746 Property,plant and equipment,less accumulated depreciation of$9,393 and$9,234,respectively9,848 9,841 Trademarks with indefinite live

30、s14,283 14,214 Goodwill18,678 18,782 Other intangible assets614 635 Total Assets$97,404$92,763 LIABILITIES AND EQUITYCurrent Liabilities Accounts payable and accrued expenses$15,593$15,749 Loans and notes payable5,455 2,373 Current maturities of long-term debt811 399 Accrued income taxes1,498 1,203

31、Total Current Liabilities23,357 19,724 Long-term debt36,134 36,377 Other noncurrent liabilities7,874 7,922 Deferred income tax liabilities3,171 2,914 The Coca-Cola Company Shareowners Equity Common stock,$0.25 par value;authorized 11,200 shares;issued 7,040 shares1,760 1,760 Capital surplus18,889 18

32、,822 Reinvested earnings72,137 71,019 Accumulated other comprehensive income(loss)(14,322)(14,895)Treasury stock,at cost 2,715 and 2,712 shares,respectively(53,247)(52,601)Equity Attributable to Shareowners of The Coca-Cola Company25,217 24,105 Equity attributable to noncontrolling interests1,651 1,

33、721 Total Equity26,868 25,826 Total Liabilities and Equity$97,404$92,763 Refer to Notes to Consolidated Financial Statements.4THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)Three Months Ended March 31,2023April 1,2022Operating Activities Consolidated net inco

34、me$3,113$2,793 Depreciation and amortization286 324 Stock-based compensation expense58 87 Deferred income taxes260 41 Equity(income)loss net of dividends(249)(247)Foreign currency adjustments25 100 Significant(gains)losses net(442)25 Other operating charges88 38 Other items(102)(70)Net change in ope

35、rating assets and liabilities(2,877)(2,468)Net Cash Provided by Operating Activities160 623 Investing Activities Purchases of investments(739)(835)Proceeds from disposals of investments815 1,323 Acquisitions of businesses,equity method investments and nonmarketable securities(20)(5)Proceeds from dis

36、posals of businesses,equity method investments and nonmarketable securities319 218 Purchases of property,plant and equipment(276)(217)Proceeds from disposals of property,plant and equipment21 16 Collateral(paid)received associated with hedging activities net18(341)Other investing activities(21)(13)N

37、et Cash Provided by(Used in)Investing Activities117 146 Financing Activities Issuances of debt4,074 1,052 Payments of debt(1,174)(1,045)Issuances of stock229 449 Purchases of stock for treasury(848)(546)Dividends(101)(1,906)Other financing activities(115)(979)Net Cash Provided by(Used in)Financing A

38、ctivities2,065(2,975)Effect of Exchange Rate Changes on Cash,Cash Equivalents,Restricted Cash and Restricted Cash Equivalents113 173 Cash,Cash Equivalents,Restricted Cash and Restricted Cash EquivalentsNet increase(decrease)in cash,cash equivalents,restricted cash and restricted cash equivalents dur

39、ing the period2,455(2,033)Cash,cash equivalents,restricted cash and restricted cash equivalents at beginning of period9,825 10,025 Cash,Cash Equivalents,Restricted Cash and Restricted Cash Equivalents at End of Period12,280 7,992 Less:Restricted cash and restricted cash equivalents at end of period2

40、76 311 Cash and Cash Equivalents at End of Period$12,004$7,681 Refer to Notes to Consolidated Financial Statements.5THE COCA-COLA COMPANY AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationThe accompanying unaudited consoli

41、dated financial statements have been prepared in accordance with accounting principles generally accepted in the United States(“U.S.GAAP”)for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.They do not include all information and notes required b

42、yU.S.GAAP for complete financial statements.However,except as disclosed herein,there has been no material change in the information disclosed in the Notes to ConsolidatedFinancial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31,2022.When

43、used in these notes,the terms“The Coca-Cola Company,”“Company,”“we,”“us”and“our”mean The Coca-Cola Company and all entities included in our consolidatedfinancial statements.In the opinion of management,all adjustments(including normal recurring accruals)considered necessary for a fair presentation h

44、ave been included.Operating results for the three months ended March 31,2023 are not necessarily indicative of the results that may be expected for the year ending December 31,2023.Sales ofour ready-to-drink beverages are somewhat seasonal,with the second and third calendar quarters typically accoun

45、ting for the highest sales volumes.The volume of sales in thebeverage business may be affected by weather conditions.Each of our quarterly reporting periods,other than the fourth quarter,ends on the Friday closest to the last day of the corresponding quarterly calendar period.The first quarterof 202

46、3 and the first quarter of 2022 ended on March 31,2023 and April 1,2022,respectively.Our fourth quarter and our fiscal year end on December 31 regardless of the dayof the week on which December 31 falls.Advertising CostsThe Companys accounting policy related to advertising costs for annual reporting

47、 purposes is to expense production costs of print,radio,television and other advertisements asof the first date the advertisements take place.All other marketing expenditures are expensed in the annual period in which the expenditure is incurred.For quarterly reporting purposes,we allocate our estim

48、ated full year marketing expenditures that benefit multiple quarters to each of those quarters.We use the proportion ofeach quarters actual unit case volume to the estimated full year unit case volume as the basis for the allocation.This methodology results in our marketing expenditures beingrecogni

49、zed at a standard rate per unit case.At the end of each quarter,we review our estimated full year unit case volume and our estimated full year marketing expendituresthat benefit multiple quarters in order to evaluate if a change in estimate is necessary.The impact of any change in the full year esti

50、mate is recognized in the quarter in whichthe change in estimate occurs.Our full year marketing expenditures are not impacted by this interim accounting policy.Cash,Cash Equivalents,Restricted Cash and Restricted Cash EquivalentsWe classify time deposits and other investments that are highly liquid

51、and have maturities of three months or less at the date of purchase as cash equivalents or restricted cashequivalents,as applicable.Restricted cash and restricted cash equivalents generally consist of amounts held by our captive insurance companies,which are included in the lineitem other noncurrent

52、 assets in our consolidated balance sheet.We manage our exposure to counterparty credit risk through specific minimum credit standards,diversificationof counterparties and procedures to monitor our concentrations of credit risk.The following tables provide a summary of cash,cash equivalents,restrict

53、ed cash and restricted cash equivalents that constitute the total amounts shown in our consolidatedstatements of cash flows(in millions):March 31,2023December 31,2022Cash and cash equivalents$12,004$9,519 Restricted cash and restricted cash equivalents276 306 Cash,cash equivalents,restricted cash an

54、d restricted cash equivalents$12,280$9,825 Amounts include cash and cash equivalents in our solvency capital portfolio,which are included in the line item other noncurrent assets in our consolidated balance sheets.Refer to Note 4.Amount as of December 31,2022 includes cash and cash equivalents relat

55、ed to assets held for sale,which are included in the line item prepaid expenses and other current assets in ourconsolidated balance sheet.Refer to Note 2.1,2126April 1,2022December 31,2021Cash and cash equivalents$7,681$9,684 Restricted cash and restricted cash equivalents311 341 Cash,cash equivalen

56、ts,restricted cash and restricted cash equivalents$7,992$10,025 Amounts include cash and cash equivalents in our solvency capital portfolio,which are included in the line item other noncurrent assets in our consolidated balance sheets.Refer to Note 4.Amounts include cash and cash equivalents related

57、 to assets held for sale,which are included in the line item prepaid expenses and other current assets in our consolidated balance sheets.NOTE 2:ACQUISITIONS AND DIVESTITURESAcquisitionsOur Companys acquisitions of businesses,equity method investments and nonmarketable securities totaled$20 million

58、and$5 million during the three months endedMarch 31,2023 and April 1,2022,respectively.DivestituresProceeds from disposals of businesses,equity method investments and nonmarketable securities during the three months ended March 31,2023 and April 1,2022 totaled$319million and$218 million,respectively

59、,which primarily related to sales of our ownership interests in certain equity method investees.Assets and Liabilities Held for SaleAs of December 31,2022,the Companys bottling operations in Vietnam met the criteria to be classified as held for sale.As a result,we were required to record their asset

60、s andliabilities at the lower of carrying value or fair value less any costs to sell.As the fair value less any costs to sell exceeded the carrying value,the related assets and liabilitieswere recorded at their carrying value.These assets and liabilities were included in the Bottling Investments ope

61、rating segment.In December 2022,the Company received cash proceeds of$823 million in advance of refranchising its bottling operations in Vietnam.This advance was included in the lineitem accounts payable and accrued expenses in our consolidated balance sheet as of December 31,2022.The Company refran

62、chised its bottling operations in Vietnam inJanuary 2023 and recognized a net gain of$439 million as a result of the sale,which was recorded in the line item other income(loss)net in our consolidated statement ofincome.The following table presents information related to the major classes of assets a

63、nd liabilities that were classified as held for sale and were included in the line items prepaidexpenses and other current assets and accounts payable and accrued expenses,respectively,in our consolidated balance sheet(in millions):December 31,2022Cash,cash equivalents and short-term investments$229

64、 Trade accounts receivable,less allowances12 Inventories50 Prepaid expenses and other current assets43 Other noncurrent assets29 Deferred income tax assets8 Property,plant and equipment net197 Goodwill34 Assets held for sale$602 Accounts payable and accrued expenses$154 Accrued income taxes3 Other n

65、oncurrent liabilities3 Liabilities held for sale$160 1,2127NOTE 3:NET OPERATING REVENUESThe following table presents net operating revenues disaggregated between the United States and International and further by line of business(in millions):United StatesInternationalTotalThree Months Ended March 3

66、1,2023Concentrate operations$1,989$4,344$6,333 Finished product operations1,860 2,787 4,647 Total$3,849$7,131$10,980 Three Months Ended April 1,2022Concentrate operations$1,641$4,083$5,724 Finished product operations1,882 2,885 4,767 Total$3,523$6,968$10,491 Refer to Note 17 for disclosures of net o

67、perating revenues by operating segment and Corporate.NOTE 4:INVESTMENTSEquity SecuritiesThe carrying values of our equity securities were included in the following line items in our consolidated balance sheets(in millions):Fair Value with ChangesRecognized in IncomeMeasurement Alternative No Readily

68、Determinable Fair ValueMarch 31,2023Marketable securities$310$Other investments295 42 Other noncurrent assets1,403 Total equity securities$2,008$42 December 31,2022Marketable securities$308$Other investments459 42 Other noncurrent assets1,303 Total equity securities$2,070$42 The calculation of net u

69、nrealized gains and losses recognized during the period related to equity securities still held at the end of the period is as follows(in millions):Three Months EndedMarch 31,2023April 1,2022Net gains(losses)recognized during the period related to equity securities$125$(100)Less:Net gains(losses)rec

70、ognized during the period related to equity securities soldduring the period1(132)Net unrealized gains(losses)recognized during the period related to equity securitiesstill held at the end of the period$124$32 8Debt SecuritiesOur debt securities consisted of the following(in millions):Gross Unrealiz

71、edEstimatedFair ValueCostGainsLossesMarch 31,2023Trading securities$43$(4)$39 Available-for-sale securities1,027 23(47)1,003 Total debt securities$1,070$23$(51)$1,042 December 31,2022Trading securities$43$(4)$39 Available-for-sale securities979 26(61)944 Total debt securities$1,022$26$(65)$983 The c

72、arrying values of our debt securities were included in the following line items in our consolidated balance sheets(in millions):March 31,2023December 31,2022Trading SecuritiesAvailable-for-SaleSecuritiesTrading SecuritiesAvailable-for-SaleSecuritiesMarketable securities$39$776$39$722 Other noncurren

73、t assets 227 222 Total debt securities$39$1,003$39$944 The contractual maturities of these available-for-sale debt securities as of March 31,2023 were as follows(in millions):CostEstimatedFair ValueWithin 1 year$457$440 After 1 year through 5 years352 357 After 5 years through 10 years39 48 After 10

74、 years179 158 Total$1,027$1,003 The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.The sale and/or maturity of available-for-sale debt securities resulted in the following realized activit

75、y(in millions):Three Months EndedMarch 31,2023April 1,2022Gross gains$1 Gross losses(3)(5)Proceeds68 231 Captive Insurance CompaniesIn accordance with local insurance regulations,our consolidated captive insurance companies are required to meet and maintain minimum solvency capital requirements.TheC

76、ompany elected to invest a majority of its solvency capital in a portfolio of marketable equity and debt securities.These securities are included in the disclosures above.TheCompany uses one of our consolidated captive insurance companies to reinsure group annuity insurance contracts that cover the

77、obligations of certain of our European andCanadian pension plans.This captives solvency capital funds included total equity and debt securities of$1,479 million and$1,378 million as of March 31,2023 andDecember 31,2022,respectively,which were classified in the line item other noncurrent assets in ou

78、r consolidated balance sheets because the assets were not available tosatisfy our current obligations.9NOTE 5:INVENTORIESInventories consisted of the following(in millions):March 31,2023December 31,2022Raw materials and packaging$2,826$2,627 Finished goods1,550 1,247 Other351 359 Total inventories$4

79、,727$4,233 NOTE 6:HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTSThe following table presents the fair values of the Companys derivative instruments that were designated and qualified as part of a hedging relationship(in millions):Fair ValueDerivatives Designated as Hedging InstrumentsBala

80、nce Sheet LocationMarch 31,2023December 31,2022Assets:Foreign currency contractsPrepaid expenses and other current assets$115$126 Foreign currency contractsOther noncurrent assets15 13 Total assets$130$139 Liabilities:Foreign currency contractsAccounts payable and accrued expenses$81$54 Foreign curr

81、ency contractsOther noncurrent liabilities120 108 Commodity contractsAccounts payable and accrued expenses1 2 Interest rate contractsAccounts payable and accrued expenses16 Interest rate contractsOther noncurrent liabilities1,451 1,676 Total liabilities$1,669$1,840 All of the Companys derivative ins

82、truments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cashcollateral held or placed with the same counterparties,as applicable.Current disclosure requirements mandate that derivatives must also be discl

83、osed without reflecting the impact of masternetting agreements and cash collateral.Refer to Note 16 for the net presentation of the Companys derivative instruments.Refer to Note 16 for additional information related to the estimated fair value.1,211210The following table presents the fair values of

84、the Companys derivative instruments that were not designated as hedging instruments(in millions):Fair ValueDerivatives Not Designated as Hedging InstrumentsBalance Sheet LocationMarch 31,2023December 31,2022Assets:Foreign currency contractsPrepaid expenses and other current assets$73$46 Foreign curr

85、ency contractsOther noncurrent assets21 22 Commodity contractsPrepaid expenses and other current assets15 34 Total assets$109$102 Liabilities:Foreign currency contractsAccounts payable and accrued expenses$53$87 Foreign currency contractsOther noncurrent liabilities 1 Commodity contractsAccounts pay

86、able and accrued expenses56 35 Commodity contractsOther noncurrent liabilities8 Other derivative instrumentsAccounts payable and accrued expenses2 3 Total liabilities$119$126 All of the Companys derivative instruments are carried at fair value in our consolidated balance sheets after considering the

87、 impact of legally enforceable master netting agreements and cashcollateral held or placed with the same counterparties,as applicable.Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of masternetting agreements and cash collateral.Refer to

88、 Note 16 for the net presentation of the Companys derivative instruments.Refer to Note 16 for additional information related to the estimated fair value.Credit Risk Associated with DerivativesWe have established strict counterparty credit guidelines and enter into transactions only with financial in

89、stitutions of investment grade or better.We monitor counterpartyexposures regularly and review any downgrade in credit rating immediately.If a downgrade in the credit rating of a counterparty were to occur,we have provisions requiringcollateral for substantially all of our transactions.To mitigate p

90、resettlement risk,minimum credit standards become more stringent as the duration of the derivative financialinstrument increases.In addition,the Companys master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the samecounterparty.To minimize the co

91、ncentration of credit risk,we enter into derivative transactions with a portfolio of financial institutions.Furthermore,for certain derivativefinancial instruments,the Company has agreements with counterparties that require collateral to be exchanged based on changes in the fair value of the instrum

92、ents.TheCompany classifies collateral payments and receipts as investing cash flows when the collateral account is in an asset position and as financing cash flows when the collateralaccount is in a liability position.As a result of these factors,we consider the risk of counterparty default to be mi

93、nimal.Cash Flow Hedging StrategyThe Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currencyexchange rates,commodity prices or interest rates.The changes in the fair values of derivatives de

94、signated as cash flow hedges are recorded in accumulated othercomprehensive income(loss)(“AOCI”)and are reclassified into the line item in our consolidated statement of income in which the hedged items are recorded in the sameperiod the hedged items affect earnings.The changes in the fair values of

95、hedges that are determined to be ineffective are immediately reclassified from AOCI into earnings.The maximum length of time for which the Company hedges its exposure to the variability in future cash flows is typically three years.The Company maintains a foreign currency cash flow hedging program t

96、o reduce the risk that our U.S.dollar net cash inflows from sales outside of the United States and U.S.dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange rates.We enter into forward contracts and purchaseforeign currency optio

97、ns and collars(principally euro,British pound sterling and Japanese yen)to hedge certain portions of forecasted cash flows denominated in foreigncurrencies.When the U.S.dollar strengthens against the foreign currencies,the decline in the present value of future foreign currency cash flows is partial

98、ly offset by gains inthe fair value of the derivative instruments.Conversely,when the U.S.dollar weakens,the increase in the present value of future foreign currency cash flows is partially offsetby losses in the fair value of the derivative instruments.The total notional values of derivatives that

99、were designated and qualified for the Companys foreign currency cashflow hedging program were$7,042 million and$5,510 million as of March 31,2023 and December 31,2022,respectively.1,211211The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency deno

100、minated debt and other monetary assets or liabilities due tofluctuations in foreign currency exchange rates.For this hedging program,the Company recognizes in earnings each period the changes in carrying values of these foreigncurrency denominated assets and liabilities due to fluctuations in exchan

101、ge rates.The changes in fair values of the cross-currency swap derivatives are recorded in AOCI withan immediate reclassification into earnings for the changes in fair values attributable to fluctuations in foreign currency exchange rates.The total notional value of derivativesthat were designated a

102、s cash flow hedges for the Companys foreign currency denominated assets and liabilities was$958 million as of both March 31,2023 and December 31,2022.The Company has entered into commodity futures contracts and other derivative instruments on various commodities to mitigate the price risk associated

103、 with forecastedpurchases of materials used in our manufacturing process.These derivative instruments were designated as part of the Companys commodity cash flow hedging program.Theobjective of this hedging program is to reduce the variability of cash flows associated with future purchases of certai

104、n commodities.The total notional values of derivatives thatwere designated and qualified for this program were$57 million and$35 million as of March 31,2023 and December 31,2022,respectively.Our Company monitors our mix of short-term debt and long-term debt regularly.We manage our risk to interest r

105、ate fluctuations through the use of derivative financialinstruments.From time to time,the Company enters into interest rate swap agreements and designates these instruments as part of the Companys interest rate cash flowhedging program.The objective of this hedging program is to mitigate the risk of

106、 adverse changes in benchmark interest rates on the Companys future interest payments.As ofMarch 31,2023 and December 31,2022,we did not have any interest rate swaps designated as a cash flow hedge.The following table presents the pretax impact that changes in the fair values of derivatives designat

107、ed as cash flow hedges had on other comprehensive income(“OCI”),AOCIand earnings(in millions):Gain(Loss)Recognizedin OCI Location of Gain(Loss)Recognized in IncomeGain(Loss)Reclassifiedfrom AOCI into IncomeThree Months Ended March 31,2023Foreign currency contracts$(36)Net operating revenues$1 Foreig

108、n currency contracts4 Cost of goods sold4 Foreign currency contracts Interest expense(1)Foreign currency contracts(13)Other income(loss)net Commodity contracts(2)Cost of goods sold(3)Total$(47)$1 Three Months Ended April 1,2022Foreign currency contracts$81 Net operating revenues$8 Foreign currency c

109、ontracts6 Cost of goods sold1 Foreign currency contracts Interest expense(1)Foreign currency contracts(5)Other income(loss)net(11)Total$82$(3)As of March 31,2023,the Company estimates that it will reclassify into earnings during the next 12 months net gains of$14 million from the pretax amount recor

110、ded in AOCIas the anticipated cash flows occur.Fair Value Hedging StrategyThe Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that result fromfluctuations in benchmark interest rates.The Company also uses

111、 cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debtrelating to fluctuations in foreign currency exchange rates and benchmark interest rates.The changes in the fair values of derivatives designated as fair value hedges and theoffsetting chan

112、ges in the fair values of the hedged items are recognized in earnings.As a result,any difference is reflected in earnings as ineffectiveness.When a derivative isno longer designated as a fair value hedge for any reason,including termination and maturity,the remaining unamortized difference between t

113、he carrying value of the hedgeditem at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item,or immediately if the hedged item has matured or hasbeen extinguished.The total notional values of derivatives that were designated and qualified

114、 as fair value hedges of this type were$13,535 million and$13,425 million as ofMarch 31,2023 and December 31,2022,respectively.12The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings(in millions):Hedging Instru

115、ments and Hedged ItemsLocation of Gain(Loss)Recognized in IncomeGain(Loss)Recognized in IncomeThree Months EndedMarch 31,2023April 1,2022Interest rate contractsInterest expense$208$(711)Fixed-rate debtInterest expense(222)709 Net impact of fair value hedging instruments$(14)$(2)The following table s

116、ummarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships(in millions):Cumulative Amount of Fair Value Hedging AdjustmentsCarrying Values ofHedged ItemsIncluded in the Carrying Values of HedgedItemsRemaining for Which Hedge Accounti

117、ng HasBeen DiscontinuedBalance Sheet Location of Hedged ItemsMarch 31,2023December 31,2022March 31,2023December 31,2022March 31,2023December 31,2022Current maturities of long-term debt$529$(12)$Long-term debt11,697 11,900(1,436)(1,664)187 195 Cumulative amount of fair value hedging adjustments does

118、not include changes due to foreign currency exchange rate fluctuations.Hedges of Net Investments in Foreign Operations StrategyThe Company uses forward contracts and a portion of its foreign currency denominated debt,a non-derivative financial instrument,to protect the value of our net investmentsin

119、 a number of foreign operations.For derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations,the changes in the fairvalues of the derivative financial instruments are recognized in net foreign currency translation adjustments,a component of

120、AOCI,to offset the changes in the values of the netinvestments being hedged.For non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations,the changes in thecarrying values of the designated portions of the non-derivative financial instrum

121、ents due to fluctuations in foreign currency exchange rates are recorded in net foreign currencytranslation adjustments.Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change.The following table summarizes the notional values and pretax

122、 impact of changes in the fair values of instruments designated as net investment hedges(in millions):Notional ValuesGain(Loss)Recognized in OCIas ofThree Months Ended March 31,2023December 31,2022March 31,2023April 1,2022Foreign currency contracts$(6)Foreign currency denominated debt11,674 12,061(1

123、54)355 Total$11,674$12,061$(154)$349 The Company did not reclassify any gains or losses related to net investment hedges from AOCI into earnings during the three months ended March 31,2023 and April 1,2022.In addition,the Company did not have any ineffectiveness related to net investment hedges duri

124、ng the three months ended March 31,2023 and April 1,2022.The cash inflowsand outflows associated with the Companys derivative contracts designated as net investment hedges are classified in the line item other investing activities in our consolidatedstatement of cash flows.Economic(Non-Designated)He

125、dging StrategyIn addition to derivative instruments that were designated and qualified for hedge accounting,the Company also uses certain derivatives as economic hedges of foreigncurrency,interest rate and commodity exposure.Although these derivatives were not designated and/or did not qualify for h

126、edge accounting,they are effective economichedges.The changes in the fair values of economic hedges are immediately recognized in earnings.1113The Company uses foreign currency economic hedges to offset the earnings impact that fluctuations in foreign currency exchange rates have on certain monetary

127、 assets andliabilities denominated in nonfunctional currencies.The changes in the fair values of economic hedges used to offset those monetary assets and liabilities are immediatelyrecognized in earnings in the line item other income(loss)net in our consolidated statement of income.In addition,we us

128、e foreign currency economic hedges to minimizethe variability in cash flows associated with fluctuations in foreign currency exchange rates,including those related to certain acquisition and divestiture activities.The changesin the fair values of economic hedges used to offset the variability in U.S

129、.dollar net cash flows are immediately recognized in earnings in the line items net operating revenues,cost of goods sold or other income(loss)net in our consolidated statement of income,as applicable.The total notional values of derivatives related to our foreign currencyeconomic hedges were$5,330

130、million and$4,902 million as of March 31,2023 and December 31,2022,respectively.The Company uses interest rate contracts as economic hedges to minimize exposure to changes in the fair value of fixed-rate debt that result from fluctuations in benchmarkinterest rates.As of March 31,2023 and December 3

131、1,2022,we did not have any interest rate contracts used as economic hedges.The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process andvehicle fuel.The changes in the fair values of these econo

132、mic hedges are immediately recognized in earnings in the line items net operating revenues,cost of goods sold,orselling,general and administrative expenses in our consolidated statement of income,as applicable.The total notional values of derivatives related to our economic hedges ofthis type were$3

133、29 million and$336 million as of March 31,2023 and December 31,2022,respectively.The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings(in millions):Derivatives Not Designated as Hedging InstrumentsLocation

134、of Gain(Loss)Recognized in IncomeGain(Loss)Recognized in IncomeThree Months EndedMarch 31,2023April 1,2022Foreign currency contractsNet operating revenues$(7)$(15)Foreign currency contractsCost of goods sold28 13 Foreign currency contractsOther income(loss)net(11)42 Commodity contractsCost of goods

135、sold(46)160 Other derivative instrumentsSelling,general and administrative expenses3(3)Total$(33)$197 NOTE 7:SUPPLY CHAIN FINANCE PROGRAMOur current payment terms with the majority of our suppliers are 120 days.Two global financial institutions offer a voluntary supply chain finance(“SCF”)program,wh

136、ichenables 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 creditrating and thus may be more beneficial to them.The SCF program is available to suppliers of goods and services inclu

137、ded in cost of goods sold and selling,general andadministrative expenses in our consolidated statement of income.The Company and our suppliers agree on contractual terms for the goods and services we procure,includingprices,quantities and payment terms,regardless of whether the supplier elects to pa

138、rticipate in the SCF program.The suppliers sell goods or services,as applicable,to theCompany and issue the associated invoices to the Company based on the agreed-upon contractual terms.Then,if they are participating in the SCF program,our suppliers,attheir sole discretion,determine which invoices,i

139、f any,they want to sell to the financial institutions.Our suppliers voluntary inclusion of invoices in the SCF program has nobearing on our payment terms.No guarantees are provided by the Company or any of our subsidiaries under the SCF program.We have no economic interest in a suppliersdecision to

140、participate in the SCF program,and we have no direct financial relationship with the financial institutions,as it relates to the SCF program.Accordingly,amountsdue to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in o

141、ur consolidated balance sheet.Allactivity related to amounts due to suppliers that elected to participate in the SCF program is reflected within the operating activities section of our consolidated statement ofcash flows.As of March 31,2023 and December 31,2022,the amount of obligations outstanding

142、that the Company has confirmed as valid to the financial institutions under theSCF program was$1,236 million and$1,351 million,respectively.14NOTE 8:DEBT AND BORROWING ARRANGEMENTSLoans and notes payable consist primarily of commercial paper issued in the United States.As of March 31,2023 and Decemb

143、er 31,2022,we had$5,282 million and$2,146 million,respectively,in outstanding commercial paper borrowings.During the three months ended March 31,2023,our bottling operations in Africa extinguished prior to maturity U.S.dollar term loans with a total principal amount of$121 million,with variable inte

144、rest rates ranging from the three-month London Interbank Offered Rate(“LIBOR”)plus 2.950 percent to the three-month LIBOR plus 3.000percent.Additionally,the bottling operations extinguished prior to maturity a U.S.dollar revolving facility of$40 million,with a variable interest rate of the Secured O

145、vernightFinancing Rate plus 2.344 percent.NOTE 9:COMMITMENTS AND CONTINGENCIESGuaranteesAs of March 31,2023,we were contingently liable for guarantees of indebtedness owed by third parties of$1,047 million,of which$95 million was related to variable interestentities.Our guarantees are primarily rela

146、ted to third-party customers,bottlers and vendors and have arisen through the normal course of business.These guarantees havevarious terms,and none of these guarantees is individually significant.These amounts represent the maximum potential future payments that we could be required to makeunder the

147、 guarantees.However,management has concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is not probable.Concentrations of Credit RiskWe believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by

148、 our operations.Legal ContingenciesThe Company is involved in various legal proceedings.We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome isprobable and the amount of loss can be reasonably estimated.Management has also identified ce

149、rtain other legal matters where we believe an unfavorable outcome isreasonably possible and/or for which no estimate of possible losses can be made.Management believes that the total liabilities of the Company that may arise as a result ofcurrently pending legal proceedings(excluding tax audit claim

150、s)will not have a material adverse effect on the Company taken as a whole.Tax AuditsThe Company is involved in various tax matters,with respect to some of which the outcome is uncertain.These uncertain tax matters may result in the assessment of additionaltaxes.On September 17,2015,the Company recei

151、ved a Statutory Notice of Deficiency(“Notice”)from the U.S.Internal Revenue Service(“IRS”)seeking approximately$3.3 billion of additional federal income tax for years 2007 through 2009.In the Notice,the IRS stated its intent to reallocate over$9 billion of income to the U.S.parentcompany from certai

152、n of its foreign affiliates that the U.S.parent company licensed to manufacture,distribute,sell,market and promote its products in certain non-U.S.markets.The Notice concerned the Companys transfer pricing between its U.S.parent company and certain of its foreign affiliates.IRS rules governing trans

153、fer pricing require arms-length pricing of transactions between related parties such as the Companys U.S.parent and its foreign affiliates.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 arms-length methodology for deter

154、miningthe amount of U.S.taxable income that the U.S.parent company would report as compensation from its foreign licensees.The Company and the IRS memorialized this accordin a closing agreement resolving that dispute(“Closing Agreement”).The Closing Agreement provided that,absent a change in materia

155、l facts or circumstances or relevantfederal tax law,in calculating the Companys income taxes going forward,the Company would not be assessed penalties by the IRS for using the agreed-upon tax calculationmethodology that the Company and the IRS agreed would be used for the 1987 through 1995 tax years

156、.The IRS audited and confirmed the Companys compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through2006.The September 17,2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 t

157、ax years in favor of an entirelydifferent methodology,without prior notice to the Company.Using the new tax calculation methodology,the IRS reallocated over$9 billion of income to the U.S.parentcompany from its foreign licensees15for tax years 2007 through 2009.Consistent with the Closing Agreement,

158、the IRS did not assert penalties,and it has yet to do so.The IRS designated the Companys matter for litigation on October 15,2015.Litigation designation is an IRS determination that forecloses to a company any and all alternativemeans for resolution of a tax dispute.As a result of the IRS designatio

159、n of the Companys matter for litigation,the Company was forced to either accept the IRS newlyimposed tax assessment and pay the full amount of the asserted tax or litigate the matter in the federal courts.The matter remains subject to the IRS litigation designation,preventing the Company from any at

160、tempt to settle or otherwise mutually resolve the matter with the IRS.The Company consequently initiated litigation by filing a petition in the U.S.Tax Court(“Tax Court”)in December 2015,challenging the tax adjustments enumerated in theNotice.Prior to trial,the IRS increased its transfer pricing adj

161、ustment by$385 million,resulting in an additional tax adjustment of$135 million.The Company obtained a summaryjudgment in its favor on a different matter related to Mexican foreign tax credits,which thereafter effectively reduced the IRS potential tax adjustment by$138 million.The trial was held in

162、the Tax Court from March through May 2018,and final post-trial briefs were filed and exchanged in April 2019.On November 18,2020,the Tax Court issued an opinion(“Opinion”)in which it predominantly sided with the IRS but agreed with the Company that dividends previously paidby the foreign licensees t

163、o the U.S.parent company in reliance upon the Closing Agreement should continue to be allowed to offset royalties,including those that wouldbecome payable to the Company in accordance with the Opinion.The Tax Court reserved ruling on the effect of Brazilian legal restrictions on the payment of royal

164、ties by theCompanys 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).The Tax Court issued its opinion in 3M Co.s case(“3M Co.opinion”)on February 9,2023.Once the Tax Court completes its analy

165、sis of the application of the 3M Co.opinion to the Companys case,the Company expects the Tax Court to render another opinion,and ultimately a decision,in the Companys case.The Company believes that the IRS and the Tax Court misinterpreted and misapplied the applicable regulations in reallocating inc

166、ome earned by the Companys foreignlicensees to increase the Companys U.S.tax.Moreover,the Company believes that the retroactive imposition of such tax liability using a calculation methodology differentfrom that previously agreed upon by the IRS and the Company,and audited by the IRS for over a deca

167、de,is unconstitutional.The Company intends to assert its claims onappeal and vigorously defend its position.In determining the amount of tax reserve to be recorded as of December 31,2020,the Company completed the required two-step evaluation process prescribed by AccountingStandards Codification 740

168、,Accounting for Income Taxes.In doing so,we consulted with outside advisors,and we reviewed and considered relevant laws,rules,andregulations,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-

169、founded legal claims via every available avenue of appeal.We concluded,based on the technical and legal merits of the Companys tax positions,that it is more likely than notthe Companys tax positions will ultimately be sustained on appeal.In addition,we considered a number of alternative transfer pri

170、cing methodologies,including themethodology 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.Based onthe required probability analysis,we determined the methodologies we believe the federal courts cou

171、ld ultimately order to be used in calculating the Companys tax.As a resultof 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 thedifferent tax treatment applicable to dividends originall

172、y paid to the U.S.parent company by its foreign licensees,in reliance upon the Closing Agreement,that would berecharacterized as royalties in accordance with the Opinion and the Companys analysis.The Companys conclusion that it is more likely than not the Companys tax positions will ultimately be su

173、stained on appeal is unchanged as of March 31,2023.However,weupdated our calculation of the methodologies we believe the federal courts could ultimately order to be used in calculating the Companys tax.As a result of the application ofthe required probability analysis to these updated calculations a

174、nd the accrual of interest through the current reporting period,we updated our tax reserve as of March 31,2023to$432 million.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 adjustmentp

175、roposed by the IRS and sustained by the Tax Court could ultimately be upheld.In that event,the Company would likely be subject to significant additional liabilities for taxyears 2007 through 2009,and potentially also for subsequent years,which could have a material adverse impact on the Companys fin

176、ancial position,results of operations andcash flows.The Company calculated the potential impact of applying the Tax Court Methodology to reallocate income from foreign licensees potentially covered within the scope of theOpinion,assuming such methodology were to be ultimately upheld by the16courts a

177、nd the IRS were to decide to apply that methodology to subsequent years with consent of the federal courts.This impact would include taxes and interest accruedthrough December 31,2022 for the 2007 through 2009 litigated tax years and for subsequent tax years from 2010 through 2022.The calculations i

178、ncorporated the estimatedimpact of correlative adjustments to the previously accrued transition tax payable under the 2017 Tax Cuts and Jobs Act.The Company estimates that the potential aggregateincremental tax and interest liability could be approximately$14 billion as of December 31,2022.Additiona

179、l income tax and interest would continue to accrue until the timeany such potential liability,or portion thereof,were to be paid.The Company estimates the impact of the continued application of the Tax Court Methodology for the threemonths ended March 31,2023 would increase the potential aggregate i

180、ncremental tax and interest liability by approximately$400 million.Additionally,we currently projectthe continued application of the Tax Court Methodology in future years,assuming similar facts and circumstances as of December 31,2022,would result in an incrementalannual tax liability that would inc

181、rease the Companys effective tax rate by approximately 3.5 percent.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 Companys licenseein Brazil for the 2007 through 2009 tax years.After the Tax

182、Court issues its opinion on the Companys Brazilian licensee,the Company and the IRS will be provided time toagree on the tax impact of both opinions,after which the Tax Court would render a decision in the case.The Company will have 90 days thereafter to file a notice of appeal tothe U.S.Court of Ap

183、peals for the Eleventh Circuit and pay the tax liability and interest related to the 2007 through 2009 tax years.The Company currently estimates that thepayment 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 incre

184、mental tax and interestliability,would be approximately$5.4 billion(including interest accrued through March 31,2023),plus any additional interest accrued through the time of payment.Some orall of this amount would be refunded if the Company were to prevail on appeal.Risk Management ProgramsThe Comp

185、any has numerous global insurance programs in place to help protect the Company from the risk of loss.In general,we are self-insured for large portions of manydifferent types of claims.However,we do use commercial insurance above our self-insured retentions to reduce the Companys risk of catastrophi

186、c loss.Our reserves for theCompanys self-insured losses are estimated using actuarial methods and assumptions of the insurance industry,adjusted for our specific expectations based on our claimshistory.Our self-insurance reserves totaled$198 million and$199 million as of March 31,2023 and December 3

187、1,2022,respectively.NOTE 10:OTHER COMPREHENSIVE INCOMEAOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of The Coca-Cola Companysshareowners equity,which also includes our proportionate share of equity method investees

188、AOCI.OCI attributable to noncontrolling interests is allocated to,and included in,our consolidated balance sheet as part of the line item equity attributable to noncontrolling interests.AOCI attributable to shareowners of The Coca-Cola Company consisted of the following,net of tax(in millions):March

189、 31,2023December 31,2022Net foreign currency translation adjustments$(12,985)$(13,609)Accumulated net gains(losses)on derivatives(46)24 Unrealized net gains(losses)on available-for-sale debt securities(17)(25)Adjustments to pension and other postretirement benefit liabilities(1,274)(1,285)Accumulate

190、d other comprehensive income(loss)$(14,322)$(14,895)17The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests(in millions):Three Months Ended March 31,2023Shareowners ofThe Coca-Cola CompanyNoncontrollingIn

191、terestsTotalConsolidated net income$3,107$6$3,113 Other comprehensive income:Net foreign currency translation adjustments624(75)549 Net gains(losses)on derivatives(70)(70)Net change in unrealized gains(losses)on available-for-sale debt securities8 8 Net change in pension and other postretirement ben

192、efit liabilities11 11 Total comprehensive income(loss)$3,680$(69)$3,611 Refer to Note 6 for additional information related to the net gains or losses on derivative instruments.Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securiti

193、es.The following tables present OCI attributable to shareowners of The Coca-Cola Company,including our proportionate share of equity method investees OCI(in millions):Three Months Ended March 31,2023Before-Tax AmountIncome TaxAfter-Tax AmountForeign currency translation adjustments:Translation adjus

194、tments arising during the period$437$(91)$346 Reclassification adjustments recognized in net income101 101 Gains(losses)on intra-entity transactions that are of a long-term investment nature292 292 Gains(losses)on net investment hedges arising during the period(154)39(115)Net foreign currency transl

195、ation adjustments$676$(52)$624 Derivatives:Gains(losses)arising during the period$(76)$7$(69)Reclassification adjustments recognized in net income(1)(1)Net gains(losses)on derivatives$(77)$7$(70)Available-for-sale debt securities:Unrealized gains(losses)arising during the period$9$(3)$6 Reclassifica

196、tion adjustments recognized in net income3(1)2 Net change in unrealized gains(losses)on available-for-sale debt securities$12$(4)$8 Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the period$(5)$(2)$(7)Reclassification adju

197、stments recognized in net income22(4)18 Net change in pension and other postretirement benefit liabilities$17$(6)$11 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$628$(55)$573 Refer to Note 6 for additional information related to the net gains or losses on deri

198、vative instruments.Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.12121121218Three Months Ended April 1,2022Before-Tax AmountIncome TaxAfter-Tax AmountForeign currency translation adjustments:Translation adjustments aris

199、ing during the period$1,324$(240)$1,084 Reclassification adjustments recognized in net income200 200 Gains(losses)on intra-entity transactions that are of a long-term investment nature(670)(670)Gains(losses)on net investment hedges arising during the period349(87)262 Net foreign currency translation

200、 adjustments$1,203$(327)$876 Derivatives:Gains(losses)arising during the period$83$(21)$62 Reclassification adjustments recognized in net income3(1)2 Net gains(losses)on derivatives$86$(22)$64 Available-for-sale debt securities:Unrealized gains(losses)arising during the period$(46)$8$(38)Reclassific

201、ation adjustments recognized in net income4(1)3 Net change in unrealized gains(losses)on available-for-sale debt securities$(42)$7$(35)Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the period$68$(4)$64 Reclassification ad

202、justments recognized in net income28(7)21 Net change in pension and other postretirement benefit liabilities$96$(11)$85 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$1,343$(353)$990 Refer to Note 6 for additional information related to the net gains or losses o

203、n derivative instruments.Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.1121219The following table presents the amounts and line items in our consolidated statements of income where adjustments reclassified from AOCI int

204、o income were recorded(in millions):Amount Reclassified fromAOCIinto IncomeDescription of AOCI ComponentFinancial Statement Line ItemThree Months Ended March31,2023Foreign currency translation adjustments:Divestitures,deconsolidations and otherOther income(loss)net$101 Income before income taxes101

205、Income taxes Consolidated net income$101 Derivatives:Foreign currency contractsNet operating revenues$(1)Foreign currency contracts and commodity contractsCost of goods sold(1)Foreign currency contractsInterest expense1 Income before income taxes(1)Income taxes Consolidated net income$(1)Available-f

206、or-sale debt securities:Sale of debt securitiesOther income(loss)net$3 Income before income taxes3 Income taxes(1)Consolidated net income$2 Pension and other postretirement benefit liabilities:Recognized net actuarial lossOther income(loss)net$23 Recognized prior service cost(credit)Other income(los

207、s)net(1)Income before income taxes22 Income taxes(4)Consolidated net income$18 Related to the refranchising of our bottling operations in Vietnam and the sale of our ownership interest in one of our equity method investees.Refer to Note 2.1120NOTE 11:CHANGES IN EQUITYThe following tables provide a r

208、econciliation of the beginning and ending carrying amounts of total equity,equity attributable to shareowners of The Coca-Cola Company andequity attributable to noncontrolling interests(in millions):Shareowners of The Coca-Cola Company Three Months Ended March 31,2023Common SharesOutstandingTotalRei

209、nvestedEarningsAccumulated OtherComprehensiveIncome(Loss)Common StockCapital SurplusTreasury StockNon-controllingInterestsDecember 31,20224,328$25,826$71,019$(14,895)$1,760$18,822$(52,601)$1,721 Comprehensive income(loss)3,611 3,107 573 (69)Dividends paid/payable to shareowners of The Coca-Cola Comp

210、any($0.46 per share)(1,989)(1,989)Dividends paid to noncontrolling interests(4)(4)Purchases of treasury stock(12)(749)(749)Impact related to stock-based compensation plans9 173 70 103 Other activities (3)3 March 31,20234,325$26,868$72,137$(14,322)$1,760$18,889$(53,247)$1,651 Shareowners of The Coca-

211、Cola Company Three Months Ended April 1,2022Common SharesOutstandingTotalReinvestedEarningsAccumulated OtherComprehensiveIncome(Loss)Common StockCapital SurplusTreasury StockNon-controllingInterestsDecember 31,20214,325$24,860$69,094$(14,330)$1,760$18,116$(51,641)$1,861 Comprehensive income(loss)3,9

212、16 2,781 990 145 Dividends paid/payable to shareowners of The Coca-Cola Company($0.44 per share)(1,906)(1,906)Dividends paid to noncontrolling interests(9)(9)Purchases of treasury stock(8)(471)(471)Impact related to stock-based compensation plans14 451 271 180 Other activities 1 (1)April 1,20224,331

213、$26,841$69,969$(13,340)$1,760$18,388$(51,932)$1,996 NOTE 12:SIGNIFICANT OPERATING AND NONOPERATING ITEMSOther Operating ChargesDuring the three months ended March 31,2023,the Company recorded other operating charges of$111 million.These charges primarily consisted of$62 million related to theremeasu

214、rement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife,LLC(“fairlife”)in 2020,$27 million related to theCompanys productivity and reinvestment program and$18 million related to the restructuring of our North America operating unit.In addition,o

215、ther operating chargesincluded$4 million for the amortization of noncompete agreements related to the BA Sports Nutrition,LLC(“BodyArmor”)acquisition in 2021.During the three months ended April 1,2022,the Company recorded other operating charges of$28 million.These charges primarily consisted of$22

216、million related to theremeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition,$10 million related to the Companys productivity andreinvestment program and$2 million related to the restructuring of our manufacturing operations in the United S

217、tates.These charges were partially offset by a net gain of$5million,which included the reimbursement of distributor termination fees for BodyArmor recorded in 2021 partially offset by various transition and transaction costs,employeeretention costs and the amortization of noncompete agreements,and i

218、ncome of$1 million related to the Companys strategic realignment initiatives primarily as a result of arevision to estimated severance costs accrued in 2021.21Refer to Note 13 for additional information on the Companys restructuring initiatives.Refer to Note 16 for additional information on the fair

219、life acquisition.Refer to Note 17for the impact these charges had on our operating segments and Corporate.Other Nonoperating ItemsEquity Income(Loss)NetDuring the three months ended March 31,2023 and April 1,2022,the Company recorded a net charge of$82 million and a net gain of$5 million,respectivel

220、y.These amountsrepresent the Companys proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.Refer to Note 17 for theimpact these items had on our operating segments and Corporate.Other Income(Loss)NetDuring the three months ended March

221、 31,2023,the Company recognized a gain of$439 million related to the refranchising of our bottling operations in Vietnam.Additionally,the Company recognized a net gain of$113 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as reali

222、zed gainsand losses on available-for-sale debt securities.During the three months ended April 1,2022,the Company recognized a net loss of$104 million related to realized and unrealized gains and losses on equity securities andtrading debt securities as well as realized gains and losses on available-

223、for-sale debt securities and a net loss of$24 million as a result of one of our equity method investeesissuing additional shares of its stock.Refer to Note 2 for additional information on the refranchising of our bottling operations in Vietnam.Refer to Note 4 for additional information on equity and

224、 debt securities.Refer to Note 16 for additional information on one of our equity method investees issuing additional shares of its stock.Refer to Note 17 for the impact these items had on ouroperating segments and Corporate.NOTE 13:RESTRUCTURINGProductivity and Reinvestment ProgramIn February 2012,

225、the Company announced a productivity and reinvestment program designed to strengthen our brands and reinvest our resources to drive long-term profitablegrowth.The program was expanded multiple times,with the last expansion occurring in April 2017.While we expect most of the remaining initiatives inc

226、luded in this program,which are primarily designed to further simplify and standardize our organization,to be completed by the end of 2023,certain initiatives may extend into 2024.During the three months ended March 31,2023 and April 1,2022,the Company incurred expenses of$27 million and$10 million,

227、respectively,related to our productivity andreinvestment program.These expenses primarily included internal and external costs associated with the implementation of the programs initiatives and were recorded in theline item other operating charges in our consolidated statements of income.Refer to No

228、te 17 for the impact these expenses had on our operating segments and Corporate.TheCompany has incurred total pretax expenses of$4,156 million related to this program since it commenced.North America Operating Unit RestructuringIn November 2022,the Company announced a restructuring program for our N

229、orth America operating unit designed to better align its operating structure with its customers andbottlers.The evolved operating structure will bring together all bottler-related components(franchise leadership,commercial leadership,digital,governance and technicalinnovation)and will help streamlin

230、e how we work.During the three months ended March 31,2023,the Company incurred expenses of$18 million related to this program.These expenses primarily included severance costs related to the program and were recorded in the line item other operating charges in our consolidated statement of income.Re

231、fer to Note 17 for the impact these expenses had on our operating segments and Corporate.The Company has incurred total pretax expenses of$56 million related to thisprogram since it commenced.22NOTE 14:PENSION AND OTHER POSTRETIREMENT BENEFIT PLANSNet periodic benefit cost or income for our pension

232、and other postretirement benefit plans consisted of the following(in millions):Pension PlansOther PostretirementBenefit PlansThree Months EndedMarch 31,2023April 1,2022March 31,2023April 1,2022Service cost$24$22$1$2 Interest cost81 51 7 4 Expected return on plan assets(119)(149)(4)(4)Amortization of

233、 prior service credit (1)(1)Amortization of net actuarial loss(gain)24 29(1)Net periodic benefit cost(income)$10$(47)$2$1 The weighted-average expected long-term rates of return on plan assets used in computing 2023 net periodic benefit cost(income)were 7.00 percent for pension plans and 3.75 percen

234、t for otherpostretirement benefit plans.All of the amounts in the table above,other than service cost,were recorded in the line item other income(loss)net in our consolidated statements of income.During thethree months ended March 31,2023,the Company contributed$5 million to our pension trusts,and w

235、e anticipate making additional contributions of approximately$37 millionduring the remainder of 2023.The Company contributed$3 million to our pension trusts during the three months ended April 1,2022.NOTE 15:INCOME TAXESThe Company recorded income taxes of$940 million(23.2 percent effective tax rate

236、)and$665 million(19.2 percent effective tax rate)during the three months endedMarch 31,2023 and April 1,2022,respectively.The Companys effective tax rates for the three months ended March 31,2023 and April 1,2022 vary from the statutory U.S.federal tax rate of 21.0 percent primarily due tothe tax im

237、pact of significant operating and nonoperating items,as described in Note 12,along with the tax benefits of having significant earnings generated outside of theUnited States and significant earnings generated in investments accounted for under the equity method,both of which are generally taxed at r

238、ates lower than the statutory U.S.federal tax rate.On November 18,2020,the Tax Court issued the Opinion regarding the Companys 2015 litigation with the IRS involving transfer pricing tax adjustments in which the courtpredominantly sided with the IRS.The Company strongly disagrees with the Opinion an

239、d intends to vigorously defend its position.Refer to Note 9 for additional informationon the tax litigation.NOTE 16:FAIR VALUE MEASUREMENTSRecurring Fair Value MeasurementsThe following tables summarize assets and liabilities measured at fair value on a recurring basis(in millions):March 31,2023Leve

240、l 1Level 2Level 3OtherNettingAdjustmentFair ValueMeasurementsAssets:Equity securities with readily determinable values$1,742$175$8$83$2,008 Debt securities 1,026 16 1,042 Derivatives 239 (205)34 Total assets$1,742$1,440$24$83$(205)$3,084 Liabilities:Contingent consideration liability$1,377$1,377 Der

241、ivatives1 1,787 (1,611)177 Total liabilities$1$1,787$1,377$(1,611)$1,554 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.Refer to Note 6 for additional information related to the composition of our de

242、rivatives portfolio.11341126852781223Certain investments that are measured at fair value using the net asset value per share(or its equivalent)practical expedient have not been categorized in the fair value hierarchy but are includedto reconcile to the amounts presented in Note 4.Amounts represent t

243、he impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed withthe same counterparties.There were no amounts subject to legally enforceable master netting agreements that management has chose

244、n not to offset or that do not meet the offsettingrequirements.Refer to Note 6.Represents the fair value of the remaining milestone payment related to our acquisition of fairlife in 2020,which is contingent on fairlife achieving certain financial targets through 2024 and,ifachieved,is payable in 202

245、5.This milestone payment is based on agreed-upon formulas related to fairlifes operating results,the resulting value of which is not subject to a ceiling.The fair valuewas determined using a Monte Carlo valuation model.The Company made a milestone payment of$275 million during the three months ended

246、 March 31,2023.The Company is not obligated to return any cash collateral it has netted against its derivative position.The Company has the right to reclaim$1,406 million in cash collateral it has netted against its derivative position.The Companys derivative financial instruments were recorded at f

247、air value in our consolidated balance sheet as follows:$34 million in the line item other noncurrent assets and$177 million inthe line item other noncurrent liabilities.Refer to Note 6 for additional information related to the composition of our derivatives portfolio.December 31,2022Level 1Level 2Le

248、vel 3OtherNettingAdjustmentFair ValueMeasurementsAssets:Equity securities with readily determinable values$1,801$169$15$85$2,070 Debt securities 975 8 983 Derivatives2 239 (227)14 Total assets$1,803$1,383$23$85$(227)$3,067 Liabilities:Contingent consideration liability$1,590$1,590 Derivatives4 1,962

249、 (1,678)288 Total liabilities$4$1,962$1,590$(1,678)$1,878 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.Refer to Note 6 for additional information related to the composition of our derivatives portf

250、olio.Certain investments that are measured at fair value using the net asset value per share(or its equivalent)practical expedient have not been categorized in the fair value hierarchy but are includedto reconcile to the amounts presented in Note 4.Amounts represent the impact of legally enforceable

251、 master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed withthe same counterparties.There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not m

252、eet the offsettingrequirements.Refer to Note 6.Represents the fair value of future milestone payments related to our acquisition of fairlife in 2020,which are contingent on fairlife achieving certain financial targets through 2024 and,ifachieved,are payable in 2023 and 2025.These milestone payments

253、are based on agreed-upon formulas related to fairlifes operating results,the resulting values of which are not subject to aceiling.The fair value was determined using a Monte Carlo valuation model.The Company was not obligated to return any cash collateral it had netted against its derivative positi

254、on.The Company had the right to reclaim$1,447 million in cash collateral it had netted against its derivative position.The Companys derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows:$14 million in the line item other noncurrent assets and$288 m

255、illion inthe line item other noncurrent liabilities.Refer to Note 6 for additional information related to the composition of our derivatives portfolio.Gross realized and unrealized gains and losses on Level 3 assets and liabilities,excluding the contingent consideration liability,were not significan

256、t for the three months endedMarch 31,2023 and April 1,2022.The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period.Gross transfers between levels within the hierarchy were notsignificant for the three months ended March 31,2023 and April 1,202

257、2.Nonrecurring Fair Value MeasurementsWe did not recognize any gains or losses on assets measured at fair value on a nonrecurring basis during the three months ended March 31,2023.We recognized a net loss of$24 million on assets measured at fair value on a nonrecurring basis during the three months

258、ended April 1,2022.The net loss was recorded as a result of an equity methodinvestee issuing additional shares of its stock.Accordingly,the Company is required to treat this type of transaction as if the Company had sold a proportionate share of itsinvestment.This net loss was determined using Level

259、 2 inputs and primarily resulted from the recognition of cumulative translation losses.34567834 1126852781234567824Other Fair Value DisclosuresThe carrying values of cash and cash equivalents,short-term investments,trade accounts receivable,accounts payable and accrued expenses,and loans and notes p

260、ayableapproximate their fair values because of the relatively short-term maturities of these financial instruments.The fair value of our long-term debt is estimated using Level 2 inputsbased on quoted prices for those instruments.Where quoted prices are not available,the fair value is estimated usin

261、g discounted cash flows and market-based expectations forinterest rates,credit risk and the contractual terms of the debt instruments.As of March 31,2023,the carrying value and fair value of our long-term debt,including the currentportion,were$36,945 million and$32,711 million,respectively.As of Dec

262、ember 31,2022,the carrying value and fair value of our long-term debt,including the currentportion,were$36,776 million and$32,698 million,respectively.NOTE 17:OPERATING SEGMENTSInformation about our Companys operations by operating segment and Corporate is as follows(in millions):Europe,MiddleEast&A

263、fricaLatinAmericaNorthAmericaAsia PacificGlobal VenturesBottlingInvestmentsCorporateEliminationsConsolidatedAs of and for the Three Months Ended March 31,2023 Net operating revenues:Third party$1,831$1,386$3,902$1,185$707$1,944$25$10,980 Intersegment193 2 186 2 (383)Total net operating revenues2,024

264、 1,386 3,904 1,371 707 1,946 25(383)10,980 Operating income(loss)1,135 853 1,033 563 51 139(407)3,367 Income(loss)before income taxes1,142 855 1,041 423 57 504 31 4,053 Identifiable operating assets7,682 2,315 26,692 2,668 7,388 9,653 21,925 78,323 Investments401 681 15 77 13,200 4,707 19,081 As of

265、and for the Three Months Ended April 1,2022 Net operating revenues:Third party$1,661$1,214$3,589$1,231$729$2,042$25$10,491 Intersegment172 1 180 2 (355)Total net operating revenues1,833 1,214 3,590 1,411 729 2,044 25(355)10,491 Operating income(loss)1,007 760 1,056 664 51 193(326)3,405 Income(loss)b

266、efore income taxes1,023 757 1,064 670 56 393(505)3,458 Identifiable operating assets8,092 1,988 26,395 2,574 7,755 10,710 17,564 75,078 Investments415 633 19 232 13,193 4,494 18,986 As of December 31,2022 Identifiable operating assets$7,088$2,067$25,760$2,368$7,325$10,232$19,158$73,998 Investments41

267、0 629 15 219 12,892 4,600 18,765 Principally equity method investments and other investments in bottling companies.Property,plant and equipment net in the Philippines represented 10 percent of consolidated property,plant and equipment net as of March 31,2023,April 1,2022 and December 31,2022.During

268、the three months ended March 31,2023,the results of our operating segments and Corporate were impacted by the following items:Operating income(loss)and income(loss)before income taxes were reduced by$62 million for Corporate due to the remeasurement of our contingent considerationliability to fair v

269、alue in conjunction with the fairlife acquisition.Refer to Note 16.Operating income(loss)and income(loss)before income taxes were reduced by$27 million for Corporate due to the Companys productivity and reinvestment program.Refer to Note 13.Operating income(loss)and income(loss)before income taxes w

270、ere reduced by$18 million for North America due to the restructuring of our North America operatingunit.Refer to Note 13.2212212211225 Operating income(loss)and income(loss)before income taxes were reduced by$6 million for North America due to the restructuring of our manufacturing operations inthe

271、United States.Operating income(loss)and income(loss)before income taxes were reduced by$4 million for Corporate due to charges related to our acquisition of BodyArmor.Refer toNote 12.Income(loss)before income taxes was increased by$439 million for Corporate due to the refranchising of our bottling o

272、perations in Vietnam.Refer to Note 2.Income(loss)before income taxes was increased by$113 million for Corporate due to realized and unrealized gains and losses on equity securities and trading debtsecurities as well as realized gains and losses on available-for-sale debt securities.Refer to Note 4.I

273、ncome(loss)before income taxes was reduced by$140 million for Asia Pacific and was increased by$58 million for Bottling Investments due to the Companysproportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.During the three months ended

274、April 1,2022,the results of our operating segments and Corporate were impacted by the following items:Operating income(loss)and income(loss)before income taxes were increased by$19 million for North America and were reduced by$14 million for Corporate relatedto our acquisition of BodyArmor.Refer to

275、Note 12.Operating income(loss)and income(loss)before income taxes were reduced by$22 million for Corporate due to the remeasurement of our contingent considerationliability to fair value in conjunction with the fairlife acquisition.Refer to Note 16.Operating income(loss)and income(loss)before income

276、 taxes were reduced by$11 million and$12 million,respectively,for North America due to the restructuring ofour manufacturing operations in the United States.Operating income(loss)and income(loss)before income taxes were reduced by$10 million for Corporate due to the Companys productivity and reinves

277、tment program.Refer to Note 13.Income(loss)before income taxes was increased by$5 million for Bottling Investments due to the Companys proportionate share of significant operating andnonoperating items recorded by certain of our equity method investees.Income(loss)before income taxes was reduced by$

278、104 million for Corporate due to realized and unrealized gains and losses on equity securities and trading debtsecurities as well as realized gains and losses on available-for-sale debt securities.Refer to Note 4.Income(loss)before income taxes was reduced by$24 million for Corporate due to one of o

279、ur equity method investees issuing additional shares of its stock.Referto Note 16.26Item 2.Managements Discussion and Analysis of Financial Condition and Results of OperationsWhen used in this report,the terms“The Coca-Cola Company,”“Company,”“we,”“us”and“our”mean The Coca-Cola Company and all entit

280、ies included in our consolidatedfinancial statements.On March 8,2022,the Company announced the suspension of its business in Russia as a result of the conflict between Russia and Ukraine.In addition,the conflict has causeda disruption of our business in Ukraine.Given the rapidly changing conditions,

281、the Company will continue to monitor and assess the situation as circumstances evolve.As apoint of reference,during the three months ended April 1,2022,the Companys business in Russia and Ukraine contributed approximately 2 percent of the Companys unit casevolume and approximately 1 percent of both

282、the Companys consolidated net operating revenues and operating income.During the three months ended March 31,2023,the effects of the COVID-19 pandemic continued to negatively impact our business.While uncertainties caused by theCOVID-19 pandemic remain,and factors such as the state of the supply cha

283、in,labor shortages and the inflationary environment are likely to impact the pace of the economicrecovery,we are focused on executing for growth.CRITICAL ACCOUNTING POLICIES AND ESTIMATESRecoverability of Current and Noncurrent AssetsOur Company faces many uncertainties and risks related to various

284、economic,political and regulatory environments in the countries and territories in which we operate,particularly in developing and emerging markets.Refer to the headings“Item 1A.Risk Factors”in Part I and“Our Business Challenges and Risks”in Part II of our AnnualReport on Form 10-K for the year ende

285、d December 31,2022.As a result,management must make numerous assumptions,which involve a significant amount of judgment,when performing recoverability and impairment tests of current and noncurrent assets in various regions around the world.We perform recoverability and impairment tests of current a

286、nd noncurrent assets in accordance with accounting principles generally accepted in the United States(“U.S.GAAP”).For certain assets,recoverability and/or impairment tests are required only when conditions exist that indicate the carrying value may not be recoverable.For otherassets,impairment tests

287、 are required at least annually,or more frequently if events or circumstances indicate that an asset may be impaired.The performance of recoverability and impairment tests of current and noncurrent assets involves critical accounting estimates.These estimates require significant managementjudgment,i

288、nclude inherent uncertainties and are often interdependent;therefore,they do not change in isolation.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 disr

289、uptions,inflation,long-termgrowth rates,cost of capital,marketing spending,foreign currency exchange rates,tax rates,capital spending,proceeds from the sale of assets and customers financialcondition.The variability of these factors depends on a number of conditions,and thus our accounting estimates

290、 may change from period to period.These factors are even moredifficult to estimate as a result of uncertainties associated with the scope,severity and duration of the COVID-19 pandemic.The estimates we use when performingrecoverability tests of assets are consistent with those we use in our internal

291、 planning.When performing impairment tests,we estimate the fair values of the assets usingmanagements best assumptions,which we believe are consistent with those a market participant would use.The Company has certain intangible and other long-lived assetsthat are more dependent on cash flows generat

292、ed in away-from-home channels and/or that generate cash flows in geographic areas which are more heavily impacted by theCOVID-19 pandemic,and therefore these assets are more susceptible to impairment.In addition,intangible and other long-lived assets we acquired in recent transactions arenaturally m

293、ore susceptible to impairment,because they are recorded at fair value based on recent operating plans and macroeconomic conditions at the time of acquisition.Ifwe had used other assumptions and estimates when impairment tests were performed,impairment charges could have resulted.Furthermore,if manag

294、ement uses differentassumptions in future periods,or if different conditions exist in future periods,impairment charges could result.The total future impairment charges we may be required torecord could be material.As of March 31,2023,the carrying value of our investment in Coca-Cola Bottlers Japan

295、Holdings Inc.exceeded the fair value by$8 million,or 2 percent.Based on the lengthof time and the extent to which the fair value has been less than our carrying value and our intent and ability to retain the investment for a period of time sufficient to allow forany anticipated recovery in market va

296、lue,management determined that the decline in fair value was temporary in nature.Therefore,we did not record an impairment chargerelated to the investment.Our equity method investees also perform such recoverability and impairment tests.If an impairment charge is recorded by one of our equity method

297、 investees,the Companyrecords its proportionate share of such charge as a reduction of equity income(loss)net in our consolidated statement of income.However,the actual amount we record withrespect to our proportionate share of such charge may be impacted by items such as basis differences,deferred

298、taxes and deferred gains.27OPERATIONS REVIEWSales of our ready-to-drink beverages are somewhat seasonal,with the second and third calendar quarters typically accounting for the highest sales volumes.The volume ofsales in the beverage business may be affected by weather conditions.Structural Changes,

299、Acquired Brands and Newly Licensed BrandsIn order to continually improve upon the Companys operating performance,from time to time,we engage in buying and selling ownership interests in bottling partners andother manufacturing operations.In addition,we periodically acquire brands and their related o

300、perations or enter into license agreements for certain brands to supplement ourbeverage offerings.These items impact our operating results and certain key metrics used by management in assessing the Companys performance.Unit case volume growth is a key metric used by management to evaluate the Compa

301、nys performance because it measures demand for our products at the consumer level.TheCompanys unit case volume represents the number of unit cases(or unit case equivalents)of Company beverage products directly or indirectly sold by the Company and itsbottling partners to customers or consumers and,t

302、herefore,reflects unit case volume for both consolidated and unconsolidated bottlers.Refer to the heading“BeverageVolume”below.Concentrate sales volume represents the amount of concentrates,syrups,source waters and powders/minerals(in all instances expressed in unit case equivalents)sold by,orused i

303、n finished products sold by,the Company to its bottling partners or other customers.For Costa non-ready-to-drink beverage products,concentrate sales volume representsthe amount of beverages,primarily measured in number of transactions(in all instances expressed in unit case equivalents),sold by the

304、Company to customers or consumers.Refer to the heading“Beverage Volume”below.When we analyze our net operating revenues,we generally consider the following factors:(1)volume growth(concentrate sales volume or unit case volume,as applicable);(2)changes in price,product and geographic mix;(3)foreign c

305、urrency exchange rate fluctuations;and(4)acquisitions and divestitures(including structural changes as definedbelow),as applicable.Refer to the heading“Net Operating Revenues”below.The Company sells concentrates and syrups to both consolidated and unconsolidated bottlingpartners.The ownership struct

306、ure of our bottling partners impacts the timing of recognizing concentrate revenue and concentrate sales volume.When we sell concentrates orsyrups to our consolidated bottling partners,we do not recognize the concentrate revenue or concentrate sales volume until the bottling partner has sold finishe

307、d productsmanufactured from the concentrates or syrups to a third party.When we sell concentrates or syrups to our unconsolidated bottling partners,we recognize the concentraterevenue and concentrate sales volume when the concentrates or syrups are sold to the bottling partner.The subsequent sale of

308、 the finished products manufactured from theconcentrates or syrups to a third party does not impact the timing of recognizing the concentrate revenue or concentrate sales volume.When we account for an unconsolidatedbottling partner as an equity method investment,we eliminate the intercompany profit

309、related to concentrate sales,to the extent of our ownership interest,until the equitymethod investee has sold finished products manufactured from the concentrates or syrups to a third party.We typically report unit case volume when finished productsmanufactured from the concentrates or syrups are so

310、ld to a third party,regardless of our ownership interest in the bottling partner,if any.We generally refer to acquisitions and divestitures of bottling operations as“structural changes,”which are a component of acquisitions and divestitures.Typically,structuralchanges do not impact the Companys unit

311、 case volume or concentrate sales volume on a consolidated basis or at the geographic operating segment level.We report unit casevolume for all sales of Company beverage products,regardless of our ownership interest in the bottling partner,if any.However,the unit case volume reported by our Bottling

312、Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling operations.Refer toNote 2 of Notes to Consolidated Financial Statements for additional information on the Companys divestitures.“Acquired brands”refers

313、 to brands acquired during the past 12 months.Typically,the Company has not reported unit case volume or recognized concentrate sales volumerelated to acquired brands in periods prior to the closing of a transaction.Therefore,the unit case volume and concentrate sales volume related to an acquired b

314、rand areincremental to prior year volume.We generally do not consider the acquisition of a brand to be a structural change.“Licensed brands”refers to brands not owned by the Company but for which we hold certain rights,generally including,but not limited to,distribution rights,and from whichwe deriv

315、e an economic benefit when the related products are sold.Typically,the Company has not reported unit case volume or recognized concentrate sales volume related toa licensed brand in periods prior to the beginning of the term of a license agreement.Therefore,in the year that a license agreement is en

316、tered into,the unit case volume andconcentrate sales volume related to a licensed brand are incremental to prior year volume.We generally do not consider the licensing of a brand to be a structural change.In July 2022,the Company acquired certain brands in Asia Pacific.The impact of acquiring these

317、brands has been included in acquisitions and divestitures in our analysis of netoperating revenues on a consolidated basis as well as for the Asia Pacific operating segment.Also,in August 2022,the Company acquired a controlling interest in a bottlingoperation in Malawi.The28impact of this acquisitio

318、n has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investmentsoperating segment.Additionally,in November 2022,the Company refranchised our bottling operations in Cambodia.The impact of this refranchising has been i

319、ncluded as astructural change in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.In January 2023,the Company refranchised our bottling operations in Vietnam.The impact of this refranchising has been included a

320、s a structural change in our analysis of netoperating revenues on a consolidated basis as well as for the Bottling Investments and Asia Pacific operating segments.Beverage VolumeWe measure the volume of Company beverage products sold in two ways:(1)unit cases of finished products and(2)concentrate s

321、ales.As used in this report,“unit case”meansa unit of measurement equal to 192 U.S.fluid ounces of finished beverage(24 eight-ounce servings),with the exception of unit case equivalents for Costa non-ready-to-drinkbeverage products,which are primarily measured in number of transactions;and“unit case

322、 volume”means the number of unit cases(or unit case equivalents)of Companybeverage products directly or indirectly sold by the Company and its bottling partners to customers or consumers.Unit case volume primarily consists of beverage productsbearing Company trademarks.Also included in unit case vol

323、ume are certain brands licensed to,or distributed by,our Company,and brands owned by Coca-Cola systembottlers for which our Company provides marketing support and from the sale of which we derive an economic benefit.In addition,unit case volume includes sales by certainjoint ventures in which the Co

324、mpany has an ownership interest.We believe unit case volume is one of the indicators of the underlying strength of the Coca-Cola systembecause it measures demand for our products at the consumer level.The unit case volume numbers used in this report are derived based on estimates received by the Com

325、panyfrom its bottling partners and distributors.Concentrate sales volume represents the amount of concentrates,syrups,source waters and powders/minerals(in all instancesexpressed in unit case equivalents)sold by,or used in finished beverages sold by,the Company to its bottling partners or other cust

326、omers.For Costa non-ready-to-drinkbeverage products,concentrate sales volume represents the amount of beverages,primarily measured in number of transactions(in all instances expressed in unit caseequivalents),sold by the Company to customers or consumers.Unit case volume and concentrate sales volume

327、 growth rates are not necessarily equal during any given period.Factors such as seasonality,bottlers inventory practices,supply point changes,timing of price increases,new product introductions and changes in product mix can createdifferences between unit case volume and concentrate sales volume gro

328、wth rates.In addition to these items,the impact of unit case volume from certain joint ventures in whichthe Company has an ownership interest,but to which the Company does not sell concentrates,syrups,source waters or powders/minerals,may give rise to differences betweenunit case volume and concentr

329、ate sales volume growth rates.Information about our volume growth worldwide and for each of our operating segments is as follows:Percent Change 2023 versus 2022Three Months EndedMarch 31,2023Unit CasesConcentrate SalesWorldwide3%1%Europe,Middle East&Africa(3)%2%Latin America5 1 North America(2)Asia

330、Pacific10 Global Ventures7 8 Bottling Investments(1)N/ABottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only.Geographic and Global Ventures operating segment data reflects unit case volume growth for all bottlers,both consolidated and unconsolida

331、ted,and distributors in the applicable geographicareas.Global Ventures operating segment data also reflects unit case volume growth for Costa retail stores.Unit case volume percent change is based on average daily sales.Unit case volume growth based on average daily sales is computed by comparing th

332、e average daily sales in each of thecorresponding periods.Average daily sales are the unit cases sold during the period divided by the number of days in the period.1,2,346512329Concentrate sales volume represents the amount of concentrates,syrups,source waters and powders/minerals(in all instances e

333、xpressed in unit case equivalents)sold by,or used in finishedbeverages sold by,the Company to its bottling partners or other customers and is not based on average daily sales.For Costa non-ready-to-drink beverage products,concentrate sales volumerepresents the amount of beverages,primarily measured in number of transactions(in all instances expressed in unit case equivalents),sold by the Company t