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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 June 28,2024 OR 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 001-02217 COCA 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 PlazaAtlanta Georgia30313(Addr

3、ess of principal executive offices)(Zip Code)Registrants telephone number,including area code:(404)676-2121 Securities 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 Exchange1.87

4、5%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 2030KO30BNew York Stock Exchange1.250%Notes Due 20

5、31KO31New York Stock Exchange3.125%Notes Due 2032KO32New 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 S

6、tock Exchange0.800%Notes Due 2040KO40BNew York Stock Exchange1.000%Notes Due 2041KO41New York Stock Exchange3.500%Notes Due 2044KO44New 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 o

7、f 1934 during the preceding 12 months(or for such shorter 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

8、 required to be submitted pursuant to Rule 405 of Regulation 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 f

9、iler,a non-accelerated filer,a smaller reporting company or an emerging growth company.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

10、 filerSmaller reporting companyEmerging growth companyIf 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 or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Ac

11、t.Indicate by check mark if the Registrant is a shell 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 July 25,2024$0.

12、25 Par Value 4,309,868,150THE COCA-COLA COMPANY AND SUBSIDIARIESTable of Contents PageForward-Looking Statements1Part I.Financial Information Item 1.Financial Statements2Consolidated Statements of Income Three and Six Months Ended June 28,2024 and June 30,20232Consolidated Statements of Comprehensiv

13、e Income Three and Six Months Ended June 28,2024 andJune 30,20233Consolidated Balance Sheets June 28,2024 and December 31,20234Consolidated Statements of Cash Flows Six Months Ended June 28,2024 and June 30,20235Notes to Consolidated Financial Statements6Item 2.Managements Discussion and Analysis of

14、 Financial Condition and Results of Operations33Item 3.Quantitative and Qualitative Disclosures About Market Risk49Item 4.Controls and Procedures49Part II.Other Information Item 1.Legal Proceedings50Item 1A.Risk Factors52Item 2.Unregistered Sales of Equity Securities and Use of Proceeds52Item 5.Othe

15、r Information52Item 6.Exhibits52Signatures56FORWARD-LOOKING STATEMENTSThis report contains information that may constitute“forward-looking statements.”Generally,the words“believe,”“expect,”“intend,”“estimate,”“anticipate,”“project,”“will”and similar expressions identify forward-looking statements,wh

16、ich generally are not historical in nature.However,the absence of these words or similar expressions does 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 the future including statemen

17、ts relating to volume growth,share of sales and net income per share growth,and statements expressing general views about future operating results are forward-looking statements.Management believes that these forward-looking statements are reasonable as and when made.However,caution should be taken

18、not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made.Our Company undertakes no obligation to publicly update or revise any forward-looking statements,whether as a result of new information,future events or otherwise,except as

19、required by law.In addition,forward-looking statements are subject to certain risks and uncertainties that could cause our Companys actual results to differ materially from historical experience and our present expectations or projections.These risks and uncertainties include,but are not limited to,

20、the possibility that the assumptions used to calculate our estimated aggregate incremental tax and 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 Fact

21、ors”and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31,2023;and those described 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 S

22、UBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(In millions except per share data)Three Months EndedSix Months EndedJune 28,2024June 30,2023June 28,2024June 30,2023Net Operating Revenues$12,363$11,972$23,663$22,952 Cost of goods sold 4,812 4,912 9,047 9,229 Gross Profit 7,551 7,060 14,616 13,723 Sellin

23、g,general and administrative expenses 3,549 3,321 6,900 6,506 Other operating charges 1,370 1,338 2,943 1,449 Operating Income 2,632 2,401 4,773 5,768 Interest income 275 224 521 392 Interest expense 418 374 800 746 Equity income(loss)net 537 538 891 813 Other income(loss)net 2 91 1,515 706 Income B

24、efore Income Taxes 3,028 2,880 6,900 6,933 Income taxes 627 359 1,314 1,299 Consolidated Net Income 2,401 2,521 5,586 5,634 Less:Net income(loss)attributable to noncontrolling interests(10)(26)(2)(20)Net Income Attributable to Shareowners of The Coca-Cola Company$2,411$2,547$5,588$5,654 Basic Net In

25、come Per Share1$0.56$0.59$1.30$1.31 Diluted Net Income Per Share1$0.56$0.59$1.29$1.30 Average Shares Outstanding Basic 4,309 4,325 4,309 4,325 Effect of dilutive securities 10 16 12 18 Average Shares Outstanding Diluted 4,319 4,341 4,321 4,343 1 Calculated based on net income attributable to shareow

26、ners of The Coca-Cola Company.Refer to Notes to Consolidated Financial Statements.2THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(In millions)Three Months EndedSix Months EndedJune 28,2024June 30,2023June 28,2024June 30,2023Consolidated Net Income$2,401$2,521$5

27、,586$5,634 Other Comprehensive Income:Net foreign currency translation adjustments(1,014)252 (1,317)801 Net gains(losses)on derivatives 118 (25)167 (95)Net change in unrealized gains(losses)on available-for-sale debt securities(27)1 (22)9 Net change in pension and other postretirement benefit liabil

28、ities 27 2 23 13 Total Comprehensive Income 1,505 2,751 4,437 6,362 Less:Comprehensive income(loss)attributable to noncontrolling interests 48 (101)32 (170)Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company$1,457$2,852$4,405$6,532 Refer to Notes to Consolidated Financial

29、 Statements.3THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In millions except par value)June 28,2024December 31,2023ASSETSCurrent Assets Cash and cash equivalents$13,708$9,366 Short-term investments 3,691 2,997 Total Cash,Cash Equivalents and Short-Term Investments 17,399 12,363

30、Marketable securities 1,594 1,300 Trade accounts receivable,less allowances of$502 and$502,respectively 4,545 3,410 Inventories 4,763 4,424 Prepaid expenses and other current assets 3,298 5,235 Total Current Assets 31,599 26,732 Equity method investments 18,940 19,671 Other investments 167 118 Other

31、 noncurrent assets 7,274 7,162 Deferred income tax assets 1,409 1,561 Property,plant and equipment,less accumulated depreciation of$9,492 and$9,233,respectively 9,508 9,236 Trademarks with indefinite lives 13,510 14,349 Goodwill 18,324 18,358 Other intangible assets 471 516 Total Assets$101,202$97,7

32、03 LIABILITIES AND EQUITYCurrent Liabilities Accounts payable and accrued expenses$21,909$15,485 Loans and notes payable 3,793 4,557 Current maturities of long-term debt 1,939 1,960 Accrued income taxes 1,622 1,569 Total Current Liabilities 29,263 23,571 Long-term debt 38,085 35,547 Other noncurrent

33、 liabilities 4,077 8,466 Deferred income tax liabilities 2,366 2,639 The Coca-Cola Company Shareowners Equity Common stock,$0.25 par value;authorized 11,200 shares;issued 7,040 shares 1,760 1,760 Capital surplus 19,468 19,209 Reinvested earnings 75,189 73,782 Accumulated other comprehensive income(l

34、oss)(15,458)(14,275)Treasury stock,at cost 2,731 and 2,732 shares,respectively(55,106)(54,535)Equity Attributable to Shareowners of The Coca-Cola Company 25,853 25,941 Equity attributable to noncontrolling interests 1,558 1,539 Total Equity 27,411 27,480 Total Liabilities and Equity$101,202$97,703 R

35、efer to Notes to Consolidated Financial Statements.4THE COCA-COLA COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)Six Months Ended June 28,2024June 30,2023Operating Activities Consolidated net income$5,586$5,634 Adjustments to reconcile consolidated net income to net cash p

36、rovided by operating activities:Depreciation and amortization 531 567 Stock-based compensation expense 140 120 Deferred income taxes(202)(211)Equity(income)loss net of dividends(274)(467)Foreign currency adjustments(87)34 Significant(gains)losses net(1,398)(442)Other operating charges 2,867 1,375 Ot

37、her items(66)(225)Net change in operating assets and liabilities(2,984)(1,756)Net Cash Provided by Operating Activities 4,113 4,629 Investing Activities Purchases of investments(3,827)(2,103)Proceeds from disposals of investments 2,662 1,608 Acquisitions of businesses,equity method investments and n

38、onmarketable securities(25)(43)Proceeds from disposals of businesses,equity method investments and nonmarketable securities 2,907 320 Purchases of property,plant and equipment(792)(615)Proceeds from disposals of property,plant and equipment 21 38 Collateral(paid)received associated with hedging acti

39、vities net(76)(15)Other investing activities 127 44 Net Cash Provided by(Used in)Investing Activities 997 (766)Financing Activities Issuances of loans,notes payable and long-term debt 6,832 4,638 Payments of loans,notes payable and long-term debt(4,734)(2,366)Issuances of stock 437 359 Purchases of

40、stock for treasury(874)(1,084)Dividends(2,184)(2,089)Other financing activities(9)(456)Net Cash Provided by(Used in)Financing Activities(532)(998)Effect of Exchange Rate Changes on Cash,Cash Equivalents,Restricted Cash and Restricted Cash Equivalents(357)162 Cash,Cash Equivalents,Restricted Cash and

41、 Restricted Cash EquivalentsNet increase(decrease)in cash,cash equivalents,restricted cash and restricted cash equivalents during the period 4,221 3,027 Cash,cash equivalents,restricted cash and restricted cash equivalents at beginning of period 9,692 9,825 Cash,Cash Equivalents,Restricted Cash and

42、Restricted Cash Equivalents at End of Period 13,913 12,852 Less:Restricted cash and restricted cash equivalents at end of period 205 288 Cash and Cash Equivalents at End of Period$13,708$12,564 Refer to Notes to Consolidated Financial Statements.5THE COCA-COLA COMPANY AND SUBSIDIARIESNOTES TO CONSOL

43、IDATED FINANCIAL STATEMENTSNOTE 1:SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationThe accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States(“U.S.GAAP”)for interim financial informati

44、on 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 by U.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 Consolidat

45、ed Financial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31,2023.When 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 consolidated financial stat

46、ements.In the opinion of management,all adjustments(including normal recurring accruals)considered necessary for a fair presentation have been included.Operating results for the three and six months ended June 28,2024 are not necessarily indicative of the results that may be expected for the year en

47、ding December 31,2024.Sales 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 of sales in the beverage business may be affected by weather conditions.Each of our quarterly reporting periods,

48、other than the fourth quarter,ends on the Friday closest to the last day of the corresponding quarterly calendar period.The second quarter of 2024 and the second quarter of 2023 ended on June 28,2024 and June 30,2023,respectively.Our fourth quarter and our fiscal year end on December 31 regardless o

49、f the day of the week on which December 31 falls.Advertising CostsThe Companys accounting policy related to advertising costs for annual reporting purposes is to expense production costs of print,radio,television and other advertisements as of the first date the advertisements take place.All other m

50、arketing expenditures are expensed in the annual period in which the expenditure is incurred.For quarterly reporting purposes,we allocate our estimated full year marketing expenditures that benefit multiple quarters to each of those quarters.We use the proportion of each quarters actual unit case vo

51、lume to the estimated full year unit case volume as the basis for the allocation.This methodology results in our marketing expenditures being recognized 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 marketin

52、g expenditures that benefit multiple quarters in order to evaluate if a change in estimate is necessary.The impact of any change in the full year estimate is recognized in the quarter in which the change in estimate occurs.Our full year marketing expenditures are not impacted by this interim account

53、ing policy.Cash,Cash Equivalents,Restricted Cash and Restricted Cash EquivalentsWe classify time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents or restricted cash equivalents,as applicable.Restricted cash

54、and restricted cash equivalents generally consist of amounts held by our captive insurance companies,which are included in the line item other noncurrent assets in our consolidated balance sheet,and when applicable,cash and cash equivalents related to assets held for sale are included in the line it

55、em prepaid expenses and other current assets in our consolidated balance sheet.We manage our exposure to counterparty credit risk through specific minimum credit standards,diversification of counterparties and procedures to monitor our concentrations of credit risk.Refer to Note 2 for additional inf

56、ormation on our assets held for sale and Note 4 for additional information on our captive insurance companies.The following tables provide a summary of cash,cash equivalents,restricted cash and restricted cash equivalents that constitute the total amounts shown in our consolidated statements of cash

57、 flows(in millions):June 28,2024December 31,2023Cash and cash equivalents$13,708$9,366 Restricted cash and restricted cash equivalents 205 326 Cash,cash equivalents,restricted cash and restricted cash equivalents$13,913$9,692 6June 30,2023December 31,2022Cash and cash equivalents$12,564$9,519 Restri

58、cted cash and restricted cash equivalents 288 306 Cash,cash equivalents,restricted cash and restricted cash equivalents$12,852$9,825 Recently Issued Accounting GuidanceIn November 2023,the Financial Accounting Standards Board(“FASB”)issued Accounting Standards Update(“ASU”)2023-07,Segment Reporting(

59、Topic 280):Improvements to Reportable Segment Disclosures,which expands annual and interim disclosure requirements for reportable segments,primarily through enhanced disclosures about significant segment expenses.The expanded annual disclosures are effective for the year ending December 31,2024,and

60、the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented.The Company is currently evaluating the impact that ASU 2023-07 will have on our consolidated financial statements.In December 2023,the FASB issued ASU 2023-09,Income Taxes(Topic

61、 740):Improvements to Income Tax Disclosures,which requires,among other things,additional disclosures primarily related to the income tax rate reconciliation and income taxes paid.The expanded annual disclosures are effective for the year ending December 31,2025.The Company is currently evaluating t

62、he impact that ASU 2023-09 will have on our consolidated financial statements and whether we will apply the standard prospectively or retrospectively.NOTE 2:ACQUISITIONS AND DIVESTITURESAcquisitionsOur Companys acquisitions of businesses,equity method investments and nonmarketable securities totaled

63、$25 million and$43 million during the six months ended June 28,2024 and June 30,2023,respectively.DivestituresProceeds from disposals of businesses,equity method investments and nonmarketable securities during the six months ended June 28,2024 totaled$2,907 million,which primarily related to the ref

64、ranchising of the Companys bottling operations that were classified as held for sale as of December 31,2023.Also included was the sale of our ownership interest in an equity method investee in Thailand for which we received cash proceeds of$728 million and recognized a net gain of$516 million,which

65、was recorded in the line item other income(loss)net in our consolidated statement of income.Proceeds from disposals of businesses,equity method investments and nonmarketable securities during the six months ended June 30,2023 totaled$320 million,which primarily related to the sale of our ownership i

66、nterest in an equity method investee in Indonesia to Coca-Cola Europacific Partners plc(“CCEP”),an equity method investee,for which we received cash proceeds of$302 million and recognized a net gain of$12 million.The Company also refranchised its bottling operations in Vietnam in January 2023 and re

67、cognized a net gain of$439 million as a result of the sale.The Company received the related cash proceeds of$823 million in December 2022.These gains were recorded in the line item other income(loss)net in our consolidated statement of income.Assets and Liabilities Held for SaleAs of December 31,202

68、3,the Companys bottling operations in the Philippines,Bangladesh and certain territories in India met the criteria to be classified as held for sale.As a result,we were required to record the related assets and liabilities at the lower of carrying value or fair value less any costs to sell.As the fa

69、ir values less any costs to sell exceeded the carrying values,the related assets and liabilities were recorded at their carrying values.These assets and liabilities were included in the Bottling Investments operating segment.The Company refranchised its bottling operations in certain territories in

70、India in January and February of 2024,for which we received net cash proceeds of$476 million and recognized a net gain of$290 million,including the impact of post-closing adjustments.The Company refranchised its bottling operations in Bangladesh to Coca-Cola İecek A.(“CCI”),an equity method investee

71、,in February 2024,for which we received net cash proceeds of$27 million and a note receivable of$29 million and recognized a net loss of$18 million,primarily due to the related reversal of cumulative translation adjustments.Additionally,in February 2024,the Company refranchised its bottling operatio

72、ns in the Philippines to CCEP and a local business partner,for which we received net cash proceeds of$1,656 million and recognized a net gain of$599 million.These gains and losses were recorded in the line item other income(loss)net in our consolidated statement of income.7The following table presen

73、ts information related to the major classes of assets and liabilities that were classified as held for sale and were included in the line items prepaid expenses and other current assets and accounts payable and accrued expenses,respectively,in our consolidated balance sheet(in millions):December 31,

74、2023Cash,cash equivalents and short-term investments$37 Marketable securities 8 Trade accounts receivable,less allowances 95 Inventories 299 Prepaid expenses and other current assets 60 Equity method investments 4 Other noncurrent assets 51 Deferred income tax assets 28 Property,plant and equipment

75、net 1,267 Goodwill 231 Other intangible assets 14 Assets held for sale$2,094 Accounts payable and accrued expenses$464 Loans and notes payable 63 Accrued income taxes 24 Long-term debt 2 Other noncurrent liabilities 108 Deferred income tax liabilities 58 Liabilities held for sale$719 NOTE 3:NET OPER

76、ATING REVENUES The following tables present net operating revenues disaggregated between the United States and International and further by line of business(in millions):United StatesInternationalTotalThree Months Ended June 28,2024Concentrate operations$2,278$5,216$7,494 Finished product operations

77、 2,462 2,407 4,869 Total$4,740$7,623$12,363 Three Months Ended June 30,2023Concentrate operations$2,347$4,703$7,050 Finished product operations 1,955 2,967 4,922 Total$4,302$7,670$11,972 United StatesInternationalTotalSix Months Ended June 28,2024Concentrate operations$4,403$9,746$14,149 Finished pr

78、oduct operations 4,455 5,059 9,514 Total$8,858$14,805$23,663 Six Months Ended June 30,2023Concentrate operations$4,336$9,047$13,383 Finished product operations 3,815 5,754 9,569 Total$8,151$14,801$22,952 Refer to Note 17 for disclosures of net operating revenues by operating segment and Corporate.8N

79、OTE 4:INVESTMENTSEquity SecuritiesThe carrying values of our equity securities were included in the following line items in our consolidated balance sheets(in millions):June 28,2024Marketable securities$381$Other investments 125 42 Other noncurrent assets 1,628 Total equity securities$2,134$42 Decem

80、ber 31,2023Marketable securities$345$Other investments 76 42 Other noncurrent assets 1,585 Total equity securities$2,006$42 Fair Value with Changes Recognized in IncomeMeasurement Alternative No Readily Determinable Fair Value The calculation of net unrealized gains and losses recognized during the

81、period related to equity securities still held at the end of the period is as follows(in millions):Three Months EndedJune 28,2024June 30,2023Net gains(losses)recognized during the period related to equity securities$52$130 Less:Net gains(losses)recognized during the period related to equity securiti

82、es sold during the period 4 22 Net unrealized gains(losses)recognized during the period related to equity securitiesstill held at the end of the period$48$108 Six Months EndedJune 28,2024June 30,2023Net gains(losses)recognized during the period related to equity securities$235$255 Less:Net gains(los

83、ses)recognized during the period related to equity securities sold during the period 21 33 Net unrealized gains(losses)recognized during the period related to equity securitiesstill held at the end of the period$214$222 Debt SecuritiesOur debt securities consisted of the following(in millions):Gross

84、 UnrealizedEstimatedFair Value CostGainsLossesJune 28,2024Trading securities$44$1$(1)$44 Available-for-sale securities 1,575 22 (58)1,539 Total debt securities$1,619$23$(59)$1,583 December 31,2023Trading securities$43$(2)$41 Available-for-sale securities 1,136 26 (28)1,134 Total debt securities$1,17

85、9$26$(30)$1,175 9The carrying values of our debt securities were included in the following line items in our consolidated balance sheets(in millions):June 28,2024December 31,2023Trading Securities Available-for-Sale Securities Trading Securities Available-for-Sale Securities Marketable securities$44

86、$1,169$41$914 Other noncurrent assets 370 220 Total debt securities$44$1,539$41$1,134 The contractual maturities of these available-for-sale debt securities as of June 28,2024 were as follows(in millions):CostEstimated Fair Value Within 1 year$187$187 After 1 year through 5 years 1,156 1,125 After 5

87、 years through 10 years 46 56 After 10 years 186 171 Total$1,575$1,539 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 res

88、ulted in the following realized activity(in millions):Three Months EndedSix Months EndedJune 28,2024June 30,2023June 28,2024June 30,2023Gross gains$4$2$5$2 Gross losses(2)(1)(9)(4)Proceeds 57 40 440 108 Captive Insurance CompaniesIn accordance with local insurance regulations,our consolidated captiv

89、e insurance companies are required to meet and maintain minimum solvency capital requirements.The Company 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.The Company uses one of our co

90、nsolidated captive insurance companies to reinsure group annuity insurance contracts that cover the obligations of certain of our European and Canadian pension plans.This captives solvency capital funds included total equity and debt securities of$1,877 million and$1,643 million as of June 28,2024 a

91、nd December 31,2023,respectively,which were classified in the line item other noncurrent assets in our consolidated balance sheets because the assets were not available to satisfy our current obligations.NOTE 5:INVENTORIESInventories consisted of the following(in millions):June 28,2024December 31,20

92、23Raw materials and packaging$2,801$2,618 Finished goods 1,615 1,449 Other 347 357 Total inventories$4,763$4,424 10NOTE 6:HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS The following table presents the fair values of the Companys derivative instruments that were designated and qualified a

93、s part of a hedging relationship(in millions):Fair Value1,2Derivatives Designated as Hedging InstrumentsBalance Sheet Location1June 28,2024December 31,2023Assets:Foreign currency contractsPrepaid expenses and other current assets$232$109 Foreign currency contractsOther noncurrent assets 38 13 Intere

94、st rate contractsPrepaid expenses and other current assets 7 Interest rate contractsOther noncurrent assets 14 50 Total assets$291$172 Liabilities:Foreign currency contractsAccounts payable and accrued expenses$20$111 Foreign currency contractsOther noncurrent liabilities 46 40 Commodity contractsAc

95、counts payable and accrued expenses 2 3 Interest rate contractsAccounts payable and accrued expenses 1 5 Interest rate contractsOther noncurrent liabilities 1,245 1,113 Total liabilities$1,314$1,272 1All of the Companys derivative instruments are carried at fair value in our consolidated balance she

96、ets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties,as applicable.Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements a

97、nd cash collateral.Refer to Note 16 for the net presentation of the Companys derivative instruments.2Refer to Note 16 for additional information related to the estimated fair value.The following table presents the fair values of the Companys derivative instruments that were not designated as hedging

98、 instruments(in millions):Fair Value1,2Derivatives Not Designated as Hedging InstrumentsBalance Sheet Location1June 28,2024December 31,2023Assets:Foreign currency contractsPrepaid expenses and other current assets$125$91 Foreign currency contractsOther noncurrent assets 1 3 Commodity contractsPrepai

99、d expenses and other current assets 6 5 Commodity contractsOther noncurrent assets 1 Other derivative instrumentsPrepaid expenses and other current assets 1 4 Total assets$134$103 Liabilities:Foreign currency contractsAccounts payable and accrued expenses$43$106 Foreign currency contractsOther noncu

100、rrent liabilities 12 3 Commodity contractsAccounts payable and accrued expenses 63 62 Commodity contractsOther noncurrent liabilities 4 1 Other derivative instrumentsAccounts payable and accrued expenses 4 Total liabilities$122$176 1All of the Companys derivative instruments are carried at fair valu

101、e in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties,as applicable.Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impa

102、ct of master netting agreements and cash collateral.Refer to Note 16 for the net presentation of the Companys derivative instruments.2Refer to Note 16 for additional information related to the estimated fair value.11Credit Risk Associated with DerivativesWe have established strict counterparty credi

103、t guidelines and enter into transactions only with financial institutions of investment grade or better.We monitor counterparty exposures 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 requiring c

104、ollateral for substantially all of our transactions.To mitigate pre-settlement risk,minimum credit standards become more stringent as the duration of the derivative financial instrument increases.In addition,the Companys master netting agreements reduce credit risk by permitting the Company to net s

105、ettle for transactions with the same counterparty.To minimize the concentration of credit risk,we enter into derivative transactions with a portfolio of financial institutions.Furthermore,for certain derivative financial instruments,the Company has agreements with counterparties that require collate

106、ral to be exchanged based on changes in the fair value of the instruments.The Company 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 collateral account is in a liability position.As a result

107、 of these factors,we consider the risk of counterparty default to be minimal.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 currency exchange rates,commodity p

108、rices or interest rates.The changes in the fair values of derivatives designated as cash flow hedges are recorded in accumulated other comprehensive 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 same

109、period the hedged items affect earnings.The changes in the fair values of 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

110、years.The Company maintains a foreign currency cash flow hedging program to reduce the risk that our U.S.dollar net cash inflows from sales outside the United States and U.S.dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange r

111、ates.We enter into forward contracts and purchase foreign currency options and collars(principally euro,British pound and Japanese yen)to hedge certain portions of forecasted cash flows denominated in foreign currencies.When the U.S.dollar strengthens against the foreign currencies,the decline in th

112、e present value of future foreign currency cash flows is partially offset by gains in the 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 offset by losses in the fair value of the der

113、ivative instruments.The total notional values of derivatives that were designated and qualified for the Companys foreign currency cash flow hedging program were$9,199 million and$9,408 million as of June 28,2024 and December 31,2023,respectively.The Company uses cross-currency swaps to hedge the cha

114、nges in cash flows of certain of its foreign currency denominated debt and other monetary assets or liabilities due to fluctuations in foreign currency exchange rates.For this hedging program,the Company recognizes in earnings each period the changes in carrying values of these foreign currency deno

115、minated assets and liabilities due to fluctuations in exchange rates.The changes in fair values of the cross-currency swap derivatives are recorded in AOCI with an immediate reclassification into earnings for the changes in fair values attributable to fluctuations in foreign currency exchange rates.

116、The total notional values of derivatives that were designated as cash flow hedges for the Companys foreign currency denominated assets and liabilities were$557 million and$958 million as of June 28,2024 and December 31,2023,respectively.The Company has entered into commodity futures contracts and ot

117、her derivative instruments on various commodities to mitigate the price risk associated with forecasted purchases of materials used in our manufacturing process.These derivative instruments were designated as part of the Companys commodity cash flow hedging program.The objective of this hedging prog

118、ram is to reduce the variability of cash flows associated with future purchases of certain commodities.The total notional values of derivatives that were designated and qualified for this program were$28 million and$54 million as of June 28,2024 and December 31,2023,respectively.Our Company monitors

119、 our mix of short-term debt and long-term debt regularly.We manage our risk related to interest rate fluctuations through the use of derivative financial instruments.From time to time,the Company has entered into interest rate swap agreements and has designated these instruments as part of the Compa

120、nys interest rate cash flow hedging program.The objective of this hedging program is to mitigate the risk of adverse changes in benchmark interest rates on the Companys future interest payments.The total notional values of derivatives that were designated and qualified for this program were$1,250 mi

121、llion and$750 million as of June 28,2024 and December 31,2023,respectively.12The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income(“OCI”),AOCI and earnings(in millions):Gain(Loss)Recognized in OC

122、I Location of Gain(Loss)Recognized in IncomeGain(Loss)Reclassified from AOCI into IncomeThree Months Ended June 28,2024Foreign currency contracts$160 Net operating revenues$(1)Foreign currency contracts 9 Cost of goods sold 6 Foreign currency contracts Interest expense(1)Foreign currency contracts(9

123、)Other income(loss)net 2 Commodity contracts(3)Cost of goods sold(2)Interest rate contracts 1 Interest expense Total$158$4 Three Months Ended June 30,2023Foreign currency contracts$(22)Net operating revenues$(7)Foreign currency contracts 13 Cost of goods sold 4 Foreign currency contracts Interest ex

124、pense(1)Foreign currency contracts 22 Other income(loss)net 3 Commodity contracts(9)Cost of goods sold(3)Total$4$(4)Gain(Loss)Recognized in OCI Location of Gain(Loss)Recognized in IncomeGain(Loss)Reclassified from AOCI into IncomeSix Months Ended June 28,2024Foreign currency contracts$208 Net operat

125、ing revenues$(18)Foreign currency contracts 20 Cost of goods sold 9 Foreign currency contracts Interest expense(2)Foreign currency contracts(24)Other income(loss)net(26)Commodity contracts(2)Cost of goods sold(3)Interest rate contracts 2 Interest expense Total$204$(40)Six Months Ended June 30,2023Fo

126、reign currency contracts$(58)Net operating revenues$(6)Foreign currency contracts 17 Cost of goods sold 8 Foreign currency contracts Interest expense(2)Foreign currency contracts 9 Other income(loss)net 3 Commodity contracts(11)Cost of goods sold(6)Total$(43)$(3)As of June 28,2024,the Company estima

127、tes that it will reclassify into earnings during the next 12 months net gains of$132 million from the pretax amount recorded in AOCI as the anticipated cash flows occur.Fair Value Hedging StrategyThe Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to c

128、hanges in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates.The Company also uses cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debt relating to fluctuations in foreign currency exchange rates and b

129、enchmark interest rates.The changes in the fair values of derivatives designated as fair value hedges and the offsetting changes 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 is no longer des

130、ignated as a fair value hedge for any reason,including termination and maturity,the remaining unamortized difference between the carrying value of the hedged item 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

131、the hedged item has matured or has been extinguished.The total notional values of derivatives that were designated and 13qualified as fair value hedges of this type were$12,898 million and$13,693 million as of June 28,2024 and December 31,2023,respectively.The following tables summarize the pretax i

132、mpact that changes in the fair values of derivatives designated as fair value hedges had on earnings(in millions):Hedging Instruments and Hedged ItemsLocation of Gain(Loss)Recognized in IncomeGain(Loss)Recognized in IncomeThree Months EndedJune 28,2024June 30,2023Interest rate contractsInterest expe

133、nse$(19)$(102)Fixed-rate debtInterest expense 20 131 Net impact of fair value hedging instruments$1$29 Hedging Instruments and Hedged ItemsLocation of Gain(Loss)Recognized in IncomeGain(Loss)Recognized in IncomeSix Months EndedJune 28,2024June 30,2023Interest rate contractsInterest expense$(164)$106

134、 Fixed-rate debtInterest expense 167 (91)Net impact of fair value hedging instruments$3$15 The following table summarizes 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 Adjustmen

135、ts1Carrying Values of Hedged ItemsIncluded in the Carrying Values of Hedged ItemsRemaining for Which Hedge Accounting Has Been DiscontinuedBalance Sheet Location of Hedged ItemsJune 28,2024December 31,2023June 28,2024December 31,2023June 28,2024December 31,2023Current maturities of long-term debt$55

136、2$1$Long-term debt 11,767 12,186 (1,258)(1,135)146 162 1Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations.In June 2023,the Company amended the terms of its interest rate swap agreements to implement a forward-looking inter

137、est rate based on the Secured Overnight Financing Rate in place of the London Interbank Offered Rate.Since the interest rate swap agreements were affected by reference rate reform,the Company applied the expedients and exceptions provided to preserve the past presentation of its derivatives without

138、de-designating the existing hedging relationships.All amendments to interest rate swap agreements were executed with the existing counterparties and did not change the notional amounts,maturity dates or other critical terms of the hedging relationships.Hedges of Net Investments in Foreign Operations

139、 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 investments in a number of foreign operations.For derivative financial instruments that are designated and qualify as hedges of net

140、 investments in foreign operations,the changes in the fair values of the derivative financial instruments are recognized in net foreign currency translation adjustments,a component of AOCI,to offset the changes in the values of the net investments being hedged.For non-derivative financial instrument

141、s that are designated and qualify as hedges of net investments in foreign operations,the changes in the carrying values of the designated portions of the non-derivative financial instruments due to fluctuations in foreign currency exchange rates are recorded in net foreign currency translation adjus

142、tments.Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change.14The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges(in millions):Notional

143、ValuesGain(Loss)Recognized in OCIas ofThree Months EndedSix Months Ended June 28,2024December 31,2023June 28,2024June 30,2023June 28,2024June 30,2023Foreign currency contracts$360$150$22$(1)$24$(1)Foreign currency denominated debt 12,609 12,437 85 (80)357 (234)Total$12,969$12,587$107$(81)$381$(235)T

144、he Company reclassified a gain of$3 million related to net investment hedges from AOCI into earnings during the six months ended June 28,2024.The Company did not reclassify any gains or losses during the three months ended June 28,2024 nor the three and six months ended June 30,2023.In addition,the

145、Company did not have any ineffectiveness related to net investment hedges during the three and six months ended June 28,2024 and June 30,2023.The cash inflows and outflows associated with the Companys derivative contracts designated as net investment hedges are classified in the line item other inve

146、sting activities in our consolidated statement of cash flows.Economic(Non-Designated)Hedging StrategyIn addition to derivative instruments that have been designated and qualify for hedge accounting,the Company also uses certain derivatives as economic hedges of foreign currency,interest rate and com

147、modity exposure.Although these derivatives were not designated and/or did not qualify for hedge accounting,they are effective economic hedges.The changes in the fair values of economic hedges are immediately recognized in earnings.The Company uses foreign currency economic hedges to offset the earni

148、ngs impact that fluctuations in foreign currency exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies.The changes in the fair values of economic hedges used to offset those monetary assets and liabilities are immediately recognized in earnings in the

149、 line item other income(loss)net in our consolidated statement of income.In addition,we use foreign currency economic hedges to minimize the variability in cash flows associated with fluctuations in foreign currency exchange rates,including those related to certain acquisition and divestiture activi

150、ties.The changes in the fair values of economic hedges used to offset the variability in U.S.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 tot

151、al notional values of derivatives related to our foreign currency economic hedges were$7,570 million and$6,989 million as of June 28,2024 and December 31,2023,respectively.The Company uses interest rate contracts as economic hedges to minimize exposure to changes in the fair value of fixed-rate debt

152、 that result from fluctuations in benchmark interest rates.As of June 28,2024 and December 31,2023,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 use

153、d in the manufacturing process and vehicle fuel.The changes in the fair values of these economic hedges are immediately recognized in earnings in the line items net operating revenues,cost of goods sold,or selling,general and administrative expenses in our consolidated statement of income,as applica

154、ble.The total notional values of derivatives related to our economic hedges of this type were$303 million and$325 million as of June 28,2024 and December 31,2023,respectively.The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instr

155、uments had on earnings(in millions):Derivatives Not Designated as Hedging InstrumentsLocation of Gain(Loss)Recognized in IncomeGain(Loss)Recognized in IncomeThree Months EndedJune 28,2024June 30,2023Foreign currency contractsNet operating revenues$58$(10)Foreign currency contractsCost of goods sold(

156、22)23 Foreign currency contractsOther income(loss)net(96)11 Commodity contractsCost of goods sold(49)(84)Other derivative instrumentsSelling,general and administrative expenses 6 1 Total$(103)$(59)15Derivatives Not Designated as Hedging InstrumentsLocation of Gain(Loss)Recognized in IncomeGain(Loss)

157、Recognized in IncomeSix Months EndedJune 28,2024June 30,2023Foreign currency contractsNet operating revenues$119$(17)Foreign currency contractsCost of goods sold(8)51 Foreign currency contractsOther income(loss)net(58)Commodity contractsCost of goods sold(68)(130)Other derivative instrumentsSelling,

158、general and administrative expenses 12 4 Total$(3)$(92)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,which enables our suppliers,at their sole discret

159、ion,to sell their receivables from the Company to these financial institutions on a non-recourse basis at a rate that leverages our credit rating and thus may be more beneficial to them.The SCF program is available to suppliers of goods and services included in cost of goods sold and selling,general

160、 and administrative expenses in our consolidated statement of income.The Company and our suppliers agree on contractual terms for the goods and services we procure,including prices,quantities and payment terms,regardless of whether the supplier elects to participate in the SCF program.The suppliers

161、sell goods or services,as applicable,to the Company 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 sell their invoices to the financial institutions.Our suppliers voluntary participation in t

162、he SCF program has no bearing 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 suppliers decision to participate in the SCF program,and we have no direct financial relationship with the financial institu

163、tions,as it relates to the SCF program.Accordingly,amounts due to our suppliers that elected to participate in the SCF program are included in the line item accounts payable and accrued expenses in our consolidated balance sheet.All activity related to amounts due to suppliers that elected to partic

164、ipate in the SCF program is reflected within the operating activities section of our consolidated statement of cash flows.As of June 28,2024 and December 31,2023,the amount of obligations outstanding that the Company has confirmed as valid to the financial institutions under the SCF program was$1,35

165、2 million and$1,421 million,respectively.NOTE 8:DEBT AND BORROWING ARRANGEMENTSLoans and notes payable consist primarily of commercial paper issued in the United States.As of June 28,2024 and December 31,2023,we had$3,502 million and$4,209 million,respectively,in outstanding commercial paper borrowi

166、ngs.During 2024,the Company issued fixed interest rate U.S.dollar-and euro-denominated debt of$3,000 million and 1,000 million,respectively,with maturity dates ranging from 2032 to 2064 and interest rates ranging from 3.125%to 5.400%.The carrying value of this debt as of June 28,2024 was$4,017 milli

167、on.NOTE 9:COMMITMENTS AND CONTINGENCIES GuaranteesAs of June 28,2024,we were contingently liable for guarantees of indebtedness owed by third parties of$811 million,of which$84 million was related to variable interest entities.Our guarantees are primarily related to third-party customers,bottlers an

168、d vendors and have arisen through the normal course of business.These guarantees have various terms,and none of these guarantees is individually significant.These amounts represent the maximum potential future payments that we could be required to make under the guarantees.However,management has con

169、cluded 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 our operations.Legal ContingenciesThe

170、 Company is involved in various legal proceedings.We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.Management has also identified certain other legal matters where we be

171、lieve an unfavorable outcome is reasonably possible and/or for which no 16estimate of possible losses can be made.Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings(excluding tax audit claims)will not have a material advers

172、e 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 additional taxes.On September 17,2015,the Company received a Statutory Notice of Defici

173、ency(“Notice”)from the United States 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.parent company from certain of its foreign affi

174、liates 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 transfer pricing require a

175、rms-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 determining the amount of

176、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 accord in a closing agreement resolving that dispute(“Closing Agreement”).The Closing Agreement provided that,absent a change in material facts or circumst

177、ances or relevant federal 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 calculation methodology that the Company and the IRS agreed would be used for the 1987 through 1995 tax years.The IRS audited

178、and confirmed the Companys compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006.The September 17,2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favo

179、r of an entirely different 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.parent company from its foreign licensees for tax years 2007 through 2009.Consistent with the Closing Agreement,the IRS did not

180、 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 alternative means for resolution of a tax dispute.As a result of the IRS designation of the Compa

181、nys matter for litigation,the Company was forced to either accept the IRS newly imposed 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 attempt to sett

182、le 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 the Notice.Prior to trial,the IRS increased its transfer pricing adjustment by$3

183、85 million,resulting in an additional tax adjustment of$135 million.The Company obtained a summary judgment 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 the Tax Cou

184、rt 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 paid by the foreign licensees to the U.S.

185、parent company in reliance upon the Closing Agreement should continue to be allowed to offset royalties,including those that would become payable to the Company in accordance with the Opinion.On November 8,2023,the Tax Court issued a supplemental opinion(together with the original Tax Court opinion,

186、“Opinions”),siding with the IRS in concluding both that certain U.S.tax regulations(known as the blocked-income regulations)that address the effect of certain Brazilian legal restrictions on royalty payments by the Companys licensee in Brazil apply to the Companys operations and that the Tax Court o

187、pinion in 3M Co.&Subs.v.Commissioner(February 9,2023)controlled as to the validity of those regulations.The Company believes that the IRS and the Tax Court misinterpreted and misapplied the applicable regulations in reallocating income earned by the Companys foreign licensees to increase the Company

188、s U.S.tax.Moreover,the Company believes that the retroactive imposition of such tax liability using a calculation methodology different from that previously agreed upon by the IRS and the Company,and audited by the IRS for over a decade,is unconstitutional.The Company intends to assert its 17claims

189、on appeal and vigorously defend its position.In addition,for its litigation with the IRS and for purposes of its appeal of the Tax Court decision,the Company is currently evaluating the implications of several significant administrative law cases recently decided by the U.S.Supreme Court,most notabl

190、y Loper Bright v.Raimondo,which overruled Chevron U.S.A.,Inc.v.NRDC(“Chevron”).Since 1984,Chevron had required that courts defer to agency interpretations of statutes and agency action.In Ohio v.EPA and Garland v.Cargill,two of the recent decisions,the U.S.Supreme Court demonstrated how courts are t

191、o rule on agency interpretations and actions without the deference previously required by Chevron.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 Accounting Standards Codification 740,Accounti

192、ng for Income Taxes.In doing so,we consulted with outside advisors,and we reviewed and considered relevant laws,rules,and regulations,including,but not limited to,the Opinions and relevant caselaw.We also considered our intention to vigorously defend our positions and assert our various well-founded

193、 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 not the Companys tax positions will ultimately be sustained on appeal.In addition,we considered a number of alternative transfer pricing m

194、ethodologies,including the methodology asserted by the IRS and affirmed in the Opinions(“Tax Court Methodology”),that could be applied by the courts upon final resolution of the litigation.Based on the required probability analysis,we determined the methodologies we believe the federal courts could

195、ultimately order to be used in calculating the Companys tax.As a result of this analysis,we recorded a tax reserve of$438 million during the year ended December 31,2020 related to the application of the resulting methodologies as well as the different tax treatment applicable to dividends originally

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

197、ustained on appeal is unchanged as of June 28,2024.However,we updated 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 of the required probability analysis to these updated calculations

198、 and the accrual of interest through the current reporting period,we updated our tax reserve as of June 28,2024 to$456 million.While the Company strongly disagrees with the IRS positions and the portions of the Opinions affirming such positions,it is possible that some portion or all of the adjustme

199、nt proposed 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 tax years 2007 through 2009,and potentially also for subsequent years,which could have a material adverse impact on the Company

200、s financial position,results of operations and cash 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 the Opinions,assuming such methodology were to be ultimately upheld by the c

201、ourts,and 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 accrued through December 31,2023 for the 2007 through 2009 litigated tax years and for subsequent tax years from 2010 through 2023.The calcul

202、ations incorporated the estimated impact of correlative adjustments to the previously accrued transition tax payable under the 2017 Tax Cuts and Jobs Act.The Company estimates that the potential aggregate incremental tax and interest liability could be approximately$16 billion as of December 31,2023

203、.Additional income tax and interest would continue to accrue until the time any such potential liability,or portion thereof,were to be paid.The Company estimates the impact of the continued application of the Tax Court Methodology for the three and six months ended June 28,2024 would increase the po

204、tential aggregate incremental tax and interest liability by approximately$500 million and$1.0 billion,respectively.We currently project the continued application of the Tax Court Methodology in future years,assuming similar facts and circumstances as of December 31,2023,would result in an incrementa

205、l annual tax liability that would increase the Companys effective tax rate by approximately 3.5%.The Company and the IRS are now in the process of agreeing on the tax impacts of the Opinions.Subsequent to the completion of this process,the Tax Court will render a decision in the case.The Company wil

206、l have 90 days thereafter to file a notice of appeal to the U.S.Court of Appeals for the Eleventh Circuit.The IRS will then seek to collect any additional tax related to the 2007 through 2009 tax years reflected in the Tax Court decision(and interest thereon).The Company expects to pay such amounts

207、at some point between the issuance of the Tax Court decision and the date the amounts are due pursuant to the notice of collection from the IRS.The Company currently estimates that the payment to be made at that time related to the 2007 through 2009 tax years,which is included in the above estimate

208、of the potential aggregate incremental tax and interest liability,would be approximately$6.0 billion(including interest accrued through June 28,2024),plus any additional interest accrued through the time of payment.Some or all of this amount,plus accrued interest,would be refunded if the Company wer

209、e to prevail on appeal.18Risk Management ProgramsThe Company 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 many different types of claims;however,we do use commercial insurance above our self-ins

210、ured retentions to reduce the Companys risk of catastrophic loss.Our reserves for the Companys self-insured losses are estimated using actuarial methods and assumptions of the insurance industry,adjusted for our specific expectations based on our claims history.Our self-insurance reserves totaled$17

211、5 million and$197 million as of June 28,2024 and December 31,2023,respectively.NOTE 10:OTHER COMPREHENSIVE INCOME AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of shareowners equity,which also includes our proportio

212、nate share of equity method investees 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 f

213、ollowing,net of tax(in millions):June 28,2024December 31,2023Net foreign currency translation adjustments$(14,077)$(12,726)Accumulated net gains(losses)on derivatives 13 (154)Unrealized net gains(losses)on available-for-sale debt securities(23)(1)Adjustments to pension and other postretirement benef

214、it liabilities(1,371)(1,394)Accumulated other comprehensive income(loss)$(15,458)$(14,275)The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests(in millions):Six Months Ended June 28,2024Shareowners ofThe

215、Coca-Cola CompanyNoncontrollingInterestsTotalConsolidated net income$5,588$(2)$5,586 Other comprehensive income:Net foreign currency translation adjustments(1,351)34 (1,317)Net gains(losses)on derivatives1 167 167 Net change in unrealized gains(losses)on available-for-sale debt securities2(22)(22)Ne

216、t change in pension and other postretirement benefit liabilities 23 23 Total comprehensive income(loss)$4,405$32$4,437 1Refer to Note 6 for additional information related to the net gains or losses on derivative instruments.2Refer to Note 4 for additional information related to the net unrealized ga

217、ins or losses on available-for-sale debt securities.19The 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 June 28,2024Before-Tax Amount Income TaxAfter-Tax Amount Foreig

218、n currency translation adjustments:Translation adjustments arising during the period$(1,109)$127$(982)Gains(losses)on intra-entity transactions that are of a long-term investment nature(170)(170)Gains(losses)on net investment hedges arising during the period1 107 (27)80 Net foreign currency translat

219、ion adjustments$(1,172)$100$(1,072)Derivatives:Gains(losses)arising during the period$156$(35)$121 Reclassification adjustments recognized in net income(4)1 (3)Net gains(losses)on derivatives1$152$(34)$118 Available-for-sale debt securities:Unrealized gains(losses)arising during the period$(38)$13$(

220、25)Reclassification adjustments recognized in net income(2)(2)Net change in unrealized gains(losses)on available-for-sale debt securities2$(40)$13$(27)Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the period$4$6$10 Reclas

221、sification adjustments recognized in net income 23 (6)17 Net change in pension and other postretirement benefit liabilities$27$27 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$(1,033)$79$(954)1 Refer to Note 6 for additional information related to the net gains

222、 or losses on derivative instruments.2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.Six Months Ended June 28,2024Before-Tax Amount Income TaxAfter-Tax Amount Foreign currency translation adjustments:Translation adjustm

223、ents arising during the period$(1,143)$92$(1,051)Reclassification adjustments recognized in net income 103 103 Gains(losses)on intra-entity transactions that are of a long-term investment nature(688)(688)Gains(losses)on net investment hedges arising during the period1 381 (96)285 Net foreign currenc

224、y translation adjustments$(1,347)$(4)$(1,351)Derivatives:Gains(losses)arising during the period$183$(46)$137 Reclassification adjustments recognized in net income 40 (10)30 Net gains(losses)on derivatives1$223$(56)$167 Available-for-sale debt securities:Unrealized gains(losses)arising during the per

225、iod$(38)$13$(25)Reclassification adjustments recognized in net income 4 (1)3 Net change in unrealized gains(losses)on available-for-sale debt securities2$(34)$12$(22)Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the perio

226、d$(9)$(2)$(11)Reclassification adjustments recognized in net income 45 (11)34 Net change in pension and other postretirement benefit liabilities$36$(13)$23 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$(1,122)$(61)$(1,183)1 Refer to Note 6 for additional inform

227、ation related to the net gains or losses on derivative instruments.2 Refer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.20Three Months Ended June 30,2023Before-Tax Amount Income TaxAfter-Tax Amount Foreign currency translati

228、on adjustments:Translation adjustments arising during the period$300$(63)$237 Gains(losses)on intra-entity transactions that are of a long-term investment nature 151 151 Gains(losses)on net investment hedges arising during the period1(81)20 (61)Net foreign currency translation adjustments$370$(43)$3

229、27 Derivatives:Gains(losses)arising during the period$(31)$3$(28)Reclassification adjustments recognized in net income 4 (1)3 Net gains(losses)on derivatives1$(27)$2$(25)Available-for-sale debt securities:Unrealized gains(losses)arising during the period$4$(3)$1 Reclassification adjustments recogniz

230、ed in net income(1)1 Net change in unrealized gains(losses)on available-for-sale debt securities2$3$(2)$1 Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the period$(11)$(4)$(15)Reclassification adjustments recognized in ne

231、t income 22 (5)17 Net change in pension and other postretirement benefit liabilities$11$(9)$2 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$357$(52)$305 1Refer to Note 6 for additional information related to the net gains or losses on derivative instruments.2Re

232、fer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.Six Months Ended June 30,2023Before-Tax Amount Income TaxAfter-Tax Amount Foreign currency translation adjustments:Translation adjustments arising during the period$737$(154)$

233、583 Reclassification adjustments recognized in net income 101 101 Gains(losses)on intra-entity transactions that are of a long-term investment nature 443 443 Gains(losses)on net investment hedges arising during the period1(235)59 (176)Net foreign currency translation adjustments$1,046$(95)$951 Deriv

234、atives:Gains(losses)arising during the period$(107)$10$(97)Reclassification adjustments recognized in net income 3 (1)2 Net gains(losses)on derivatives1$(104)$9$(95)Available-for-sale debt securities:Unrealized gains(losses)arising during the period$13$(6)$7 Reclassification adjustments recognized i

235、n net income 2 2 Net change in unrealized gains(losses)on available-for-sale debt securities2$15$(6)$9 Pension and other postretirement benefit liabilities:Net pension and other postretirement benefit liabilities arising during the period$(16)$(6)$(22)Reclassification adjustments recognized in net i

236、ncome 44 (9)35 Net change in pension and other postretirement benefit liabilities$28$(15)$13 Other comprehensive income(loss)attributable to shareowners of The Coca-Cola Company$985$(107)$878 1Refer to Note 6 for additional information related to the net gains or losses on derivative instruments.2Re

237、fer to Note 4 for additional information related to the net unrealized gains or losses on available-for-sale debt securities.21The following table presents the amounts and line items in our consolidated statements of income where adjustments reclassified from AOCI into income were recorded(in millio

238、ns):Amount Reclassified from AOCIinto IncomeDescription of AOCI ComponentFinancial Statement Line ItemThree Months Ended June 28,2024Six Months Ended June 28,2024Foreign currency translation adjustments:Divestitures,deconsolidations and other1Other income(loss)net$103 Income before income taxes 103

239、Income taxes Consolidated net income$103 Derivatives:Foreign currency contractsNet operating revenues$1$18 Foreign currency contracts and commodity contractsCost of goods sold(4)(6)Foreign currency contractsInterest expense 1 2 Foreign currency contractsOther income(loss)net(2)26 Income before incom

240、e taxes(4)40 Income taxes 1 (10)Consolidated net income$(3)$30 Available-for-sale debt securities:Sale of debt securitiesOther income(loss)net$(2)$4 Income before income taxes(2)4 Income taxes (1)Consolidated net income$(2)$3 Pension and other postretirement benefit liabilities:Divestitures,deconsol

241、idations and other2Other income(loss)net$(1)$(3)Recognized net actuarial loss(gain)Other income(loss)net 24 49 Recognized prior service cost(credit)Other income(loss)net (1)Income before income taxes 23 45 Income taxes(6)(11)Consolidated net income$17$34 1Related to the refranchising of our bottling

242、 operations in the Philippines and Bangladesh and the sale of our ownership interest in an equity method investee in Thailand.Refer to Note 2.2Primarily related to the refranchising of our bottling operations in the Philippines and Bangladesh.Refer to Note 2.22NOTE 11:CHANGES IN EQUITYThe following

243、tables provide a reconciliation of the beginning and ending carrying amounts of total equity,equity attributable to shareowners of The Coca-Cola Company and equity attributable to noncontrolling interests(in millions):Shareowners of The Coca-Cola Company Three Months Ended June 28,2024Common Shares

244、Outstanding TotalReinvested EarningsAccumulated Other Comprehensive Income(Loss)Common StockCapital SurplusTreasury StockNon-controlling InterestsMarch 29,2024 4,308$27,946$74,868$(14,504)$1,760$19,321$(55,016)$1,517 Comprehensive income(loss)1,505 2,411 (954)48 Dividends paid/payable to shareowners

245、 of The Coca-Cola Company($0.485 per share)(2,090)(2,090)Dividends paid to noncontrolling interests (7)(7)Purchases of treasury stock(3)(156)(156)Impact related to stock-based compensation plans 4 213 147 66 June 28,2024 4,309$27,411$75,189$(15,458)$1,760$19,468$(55,106)$1,558 Shareowners of The Coc

246、a-Cola Company Six Months Ended June 28,2024Common Shares Outstanding TotalReinvested EarningsAccumulated Other Comprehensive Income(Loss)Common StockCapital SurplusTreasury StockNon-controlling InterestsDecember 31,2023 4,308$27,480$73,782$(14,275)$1,760$19,209$(54,535)$1,539 Comprehensive income(l

247、oss)4,437 5,588 (1,183)32 Dividends paid/payable to shareowners of The Coca-Cola Company($0.97 per share)(4,181)(4,181)Dividends paid to noncontrolling interests (9)(9)Divestitures,deconsolidations and other (4)(4)Purchases of treasury stock(13)(777)(777)Impact related to stock-based compensation pl

248、ans 14 465 259 206 June 28,2024 4,309$27,411$75,189$(15,458)$1,760$19,468$(55,106)$1,558 23 Shareowners of The Coca-Cola Company Three Months Ended June 30,2023Common Shares Outstanding TotalReinvested EarningsAccumulated Other Comprehensive Income(Loss)Common StockCapital SurplusTreasury StockNon-c

249、ontrolling InterestsMarch 31,2023 4,325$26,868$72,137$(14,322)$1,760$18,889$(53,247)$1,651 Comprehensive income(loss)2,751 2,547 305 (101)Dividends paid/payable to shareowners of The Coca-Cola Company($0.46 per share)(1,989)(1,989)Dividends paid to noncontrolling interests (9)(9)Acquisition of inter

250、ests held by noncontrolling owners (22)(20)(2)Purchases of treasury stock(4)(230)(230)Impact related to stock-based compensation plans 3 183 124 59 June 30,2023 4,324$27,552$72,695$(14,017)$1,760$18,993$(53,418)$1,539 Shareowners of The Coca-Cola Company Six Months Ended June 30,2023Common Shares Ou

251、tstanding TotalReinvested EarningsAccumulated Other Comprehensive Income(Loss)Common StockCapital SurplusTreasury StockNon-controlling InterestsDecember 31,2022 4,328$25,826$71,019$(14,895)$1,760$18,822$(52,601)$1,721 Comprehensive income(loss)6,362 5,654 878 (170)Dividends paid/payable to shareowne

252、rs of The Coca-Cola Company($0.92 per share)(3,978)(3,978)Dividends paid to noncontrolling interests (13)(13)Acquisition of interests held by noncontrolling owners (22)(20)(2)Purchases of treasury stock(16)(979)(979)Impact related to stock-based compensation plans 12 356 194 162 Other activities (3)

253、3 June 30,2023 4,324$27,552$72,695$(14,017)$1,760$18,993$(53,418)$1,539 NOTE 12:SIGNIFICANT OPERATING AND NONOPERATING ITEMSOther Operating ChargesDuring the three months ended June 28,2024,the Company recorded other operating charges of$1,370 million.These charges primarily consisted of$1,337 milli

254、on related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife,LLC(“fairlife”)in 2020,$32 million related to the Companys productivity and reinvestment program and$3 million for the amortization of noncompete agreements related

255、 to the BA Sports Nutrition,LLC(“BodyArmor”)acquisition in 2021.These charges were partially offset by a net benefit of$2 million related to a revision of managements estimates for tax litigation expense.During the six months ended June 28,2024,the Company recorded other operating charges of$2,943 m

256、illion.These charges primarily consisted of$2,102 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife,$760 million related to the impairment of our BodyArmor trademark and$68 million related to the Companys prod

257、uctivity and reinvestment program.In addition,other operating charges included$7 million of transaction costs related to the refranchising of our bottling operations in certain territories in India and$7 million for the amortization of noncompete agreements related to the BodyArmor acquisition.These

258、 charges were partially offset by a net benefit of$1 million related to a revision of managements estimates for tax litigation expense.During the three months ended June 30,2023,the Company recorded other operating charges of$1,338 million.These charges primarily consisted of$1,262 million related t

259、o the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition,$35 million related to the discontinuation of certain manufacturing operations in Asia 24Pacific and$24 million related to the Companys productivity and reinvestment program.In ad

260、dition,other operating charges included$8 million related to the restructuring of our North America operating unit,$6 million related to tax litigation expense and$3 million for the amortization of noncompete agreements related to the BodyArmor acquisition.During the six months ended June 30,2023,th

261、e Company recorded other operating charges of$1,449 million.These charges primarily consisted of$1,324 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition,$51 million related to the Companys productivity and reinve

262、stment program and$35 million related to the discontinuation of certain manufacturing operations in Asia Pacific.In addition,other operating charges included$26 million related to the restructuring of our North America operating unit,$7 million for the amortization of noncompete agreements related t

263、o the BodyArmor acquisition and$6 million related to tax litigation expense.Refer to Note 2 for additional information on the refranchising of our bottling operations in certain territories in India.Refer to Note 9 for additional information on the tax litigation.Refer to Note 13 for additional info

264、rmation on the Companys restructuring initiatives.Refer to Note 16 for additional information on the fairlife acquisition and the BodyArmor impairment.Refer to Note 17 for the impact these charges had on our operating segments and Corporate.Other Nonoperating ItemsEquity Income(Loss)NetDuring the th

265、ree and six months ended June 28,2024,the Company recorded net charges of$24 million and$49 million,respectively.During the three and six months ended June 30,2023,the Company recorded net charges of$2 million and$84 million,respectively.These amounts represent the Companys proportionate share of si

266、gnificant operating and nonoperating items recorded by certain of our equity method investees.Refer to Note 17 for the impact these items had on our operating segments and Corporate.Other Income(Loss)NetDuring the three months ended June 28,2024,the Company recognized a net gain of$50 million relate

267、d to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities and an other-than-temporary impairment charge of$34 million related to an equity method investee in Latin America.During the six m

268、onths ended June 28,2024,the Company recognized net gains of$599 million and$290 million related to the refranchising of our bottling operations in the Philippines and certain territories in India,respectively.The Company also recognized a net gain of$516 million related to the sale of our ownership

269、 interest in an equity method investee in Thailand.Additionally,the Company recognized a net gain of$228 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.These gains

270、 were partially offset by an other-than-temporary impairment charge of$34 million related to an equity method investee in Latin America and a loss of$7 million related to post-closing adjustments for the refranchising of our bottling operations in Vietnam in 2023.During the three months ended June 3

271、0,2023,the Company recognized a net gain of$127 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.During the six months ended June 30,2023,the Company recognized a ne

272、t gain of$439 million related to the refranchising of our bottling operations in Vietnam.Additionally,the Company recognized a net gain of$240 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on availabl

273、e-for-sale debt securities.Refer to Note 2 for additional information on the refranchising of our bottling operations as well as the sale of our ownership interest in an equity method investee in Thailand.Refer to Note 4 for additional information on equity and debt securities.Refer to Note 16 for a

274、dditional information on the other-than-temporary impairment charge.Refer to Note 17 for the impact these items had on our operating segments and Corporate.NOTE 13:RESTRUCTURINGProductivity and Reinvestment ProgramIn February 2012,the Company announced a productivity and reinvestment program designe

275、d to strengthen our brands and reinvest our resources to drive long-term profitable growth.The program was expanded multiple times,with the last expansion occurring in April 2017.The remaining initiatives included in this program,which are primarily designed to further simplify and standardize our o

276、rganization,will be completed in 2024.25During the three and six months ended June 28,2024,the Company incurred expenses of$32 million and$68 million,respectively,and during the three and six months ended June 30,2023 incurred expenses of$24 million and$51 million,respectively,related to our product

277、ivity and reinvestment program.These expenses primarily included internal and external costs associated with the implementation of the programs initiatives and were recorded in the line item other operating charges in our consolidated statements of income.Refer to Note 17 for the impact these expens

278、es had on our operating segments and Corporate.The Company has incurred total pretax expenses of$4,361 million related to this program since it commenced.North America Operating Unit RestructuringIn November 2022,the Company announced a restructuring program for our North America operating unit desi

279、gned to better align its operating structure with its customers and bottlers.The evolved operating structure brought together all bottler-related components(franchise leadership,commercial leadership,digital,governance and technical innovation)and helped streamline how we work.During the three and s

280、ix months ended June 30,2023,the Company incurred expenses of$8 million and$26 million,respectively,related to this program.These expenses primarily included severance costs and were recorded in the line item other operating charges in our consolidated statements of income.The Company has incurred t

281、otal pretax expenses of$65 million related to this program since it commenced.This restructuring program was complete as of December 31,2023.NOTE 14:PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of

282、the following(in millions):Pension PlansOther Postretirement Benefit PlansThree Months EndedJune 28,2024June 30,2023June 28,2024June 30,2023Service cost$26$23$1$1 Interest cost 77 81 5 7 Expected return on plan assets1(117)(119)(2)(3)Amortization of prior service cost(credit)1 1 (1)(1)Amortization o

283、f net actuarial loss(gain)25 24 (1)(2)Net periodic benefit cost(income)$12$10$2$2 1The weighted-average expected long-term rates of return on plan assets used in computing 2024 net periodic benefit cost(income)were 7.00%for pension plans and 4.50%for other postretirement benefit plans.Pension PlansO

284、ther Postretirement Benefit PlansSix Months EndedJune 28,2024June 30,2023June 28,2024June 30,2023Service cost$53$47$2$2 Interest cost 154 162 9 14 Expected return on plan assets1(235)(238)(4)(7)Amortization of prior service cost(credit)1 1 (2)(2)Amortization of net actuarial loss(gain)51 48 (2)(3)Ne

285、t periodic benefit cost(income)$24$20$3$4 1The weighted-average expected long-term rates of return on plan assets used in computing 2024 net periodic benefit cost(income)were 7.00%for pension plans and 4.50%for other postretirement benefit plans.All of the amounts in the tables above,other than serv

286、ice cost,were recorded in the line item other income(loss)net in our consolidated statements of income.During the six months ended June 28,2024,the Company contributed$16 million to our pension trusts,offset by a$44 million transfer of surplus international plan assets from pension trusts to general

287、 assets of the Company.We anticipate making additional contributions of approximately$19 million during the remainder of 2024.The Company contributed$23 million to our pension trusts during the six months ended June 30,2023.NOTE 15:INCOME TAXESThe Company recorded income taxes of$627 million(20.7%ef

288、fective tax rate)and$359 million(12.5%effective tax rate)during the three months ended June 28,2024 and June 30,2023,respectively.The Company recorded income taxes of 26$1,314 million(19.0%effective tax rate)and$1,299 million(18.7%effective tax rate)during the six months ended June 28,2024 and June

289、30,2023,respectively.The Companys effective tax rates for the three and six months ended June 28,2024 and June 30,2023 vary from the statutory U.S.federal tax rate of 21.0%primarily due to the tax impact of significant operating and nonoperating items,as described in Note 12,along with the tax benef

290、its of having significant earnings generated outside of the United States and significant earnings generated in investments accounted for under the equity method,both of which are generally taxed at rates lower than the statutory U.S.federal tax rate.The Companys effective tax rates for the three an

291、d six months ended June 28,2024 included$119 million and$60 million,respectively,of net tax expense related to various discrete tax items,including the resolution of certain foreign tax matters.The Companys effective tax rates for the three and six months ended June 30,2023 included$120 million and$

292、125 million,respectively,of net tax benefits related to various discrete tax items,including a change in tax law in a certain foreign jurisdiction.On November 18,2020,the Tax Court issued the Opinion regarding the Companys 2015 litigation with the IRS involving transfer pricing tax adjustments in wh

293、ich it predominantly sided with the IRS.On November 8,2023,the Tax Court issued a supplemental opinion,siding with the IRS in concluding both that the blocked-income regulations apply to the Companys operations and that the Tax Court opinion in 3M Co.&Subs.v.Commissioner(February 9,2023)controlled a

294、s to the validity of those regulations.The Company strongly disagrees with the Opinions and intends to vigorously defend its position.Refer to Note 9.NOTE 16:FAIR VALUE MEASUREMENTSRecurring Fair Value MeasurementsThe following tables summarize assets and liabilities measured at fair value on a recu

295、rring basis(in millions):June 28,2024Level 1Level 2Level 3Other3NettingAdjustment4Fair ValueMeasurementsAssets:Equity securities with readily determinable values1$1,890$150$6$88$2,134 Debt securities1 1,583 1,583 Derivatives2 425 (317)6 108 8Total assets$1,890$2,158$6$88$(317)$3,825 Liabilities:Cont

296、ingent consideration liability$5,119 5$5,119 Derivatives2 2 1,434 (1,377)7 59 8Total liabilities$2$1,434$5,119$(1,377)$5,178 1Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.2Refer to Note 6 for addit

297、ional information related to the composition of our derivatives portfolio.3Certain 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 included to reconcile to the amounts

298、presented in Note 4.4Amounts represent the 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 with the same counterparties.There were no amounts subject to legally enforceable master net

299、ting agreements that management has chosen not to offset or that do not meet the offsetting requirements.Refer to Note 6.5Represents 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 th

300、rough 2024 and,if achieved,is payable in 2025.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 value was determined using discounted cash flow analyses.We are required to remeasure this li

301、ability to fair value quarterly,with any changes in the fair value recorded in income until the final milestone payment is made.6The Company is obligated to return$4 million in cash collateral it has netted against its derivative position.7The Company has the right to reclaim$1,065 million in cash c

302、ollateral it has netted against its derivative position.8The Companys derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows:$54 million in the line item prepaid expenses and other current assets,$54 million in the line item other noncurrent assets,

303、and$59 million in the line item other noncurrent liabilities.Refer to Note 6 for additional information related to the composition of our derivatives portfolio.27December 31,2023Level 1Level 2Level 3Other3NettingAdjustment4Fair ValueMeasurementsAssets:Equity securities with readily determinable valu

304、es1$1,727$188$6$85$2,006 Debt securities1 1,172 3 1,175 Derivatives2 275 (222)6 53 8Total assets$1,727$1,635$9$85$(222)$3,234 Liabilities:Contingent consideration liability$3,017 5$3,017 Derivatives2 3 1,445 (1,256)7 192 8Total liabilities$3$1,445$3,017$(1,256)$3,209 1Refer to Note 4 for additional

305、information related to the composition of our equity securities with readily determinable values and debt securities.2Refer to Note 6 for additional information related to the composition of our derivatives portfolio.3Certain investments that are measured at fair value using the net asset value per

306、share(or its equivalent)practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 4.4Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative

307、 positions and also cash collateral held or placed with the same counterparties.There were no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements.Refer to Note 6.5Represents the fair value of the re

308、maining milestone payment related to our acquisition of fairlife in 2020,which is contingent on fairlife achieving certain financial targets through 2024 and,if achieved,is payable in 2025.This milestone payment is based on agreed-upon formulas related to fairlifes operating results,the resulting va

309、lue of which is not subject to a ceiling.The fair value was determined using a Monte Carlo valuation model.We are required to remeasure this liability to fair value quarterly,with any changes in the fair value recorded in income until the final milestone payment is made.The Company made a milestone

310、payment of$275 million during 2023.6The Company was obligated to return$4 million in cash collateral it had netted against its derivative position.7The Company had the right to reclaim$1,039 million in cash collateral it had netted against its derivative position.8The Companys derivative financial i

311、nstruments were recorded at fair value in our consolidated balance sheet as follows:$53 million in the line item other noncurrent assets and$192 million in the line item other noncurrent liabilities.Refer to Note 6 for additional information related to the composition of our derivatives portfolio.Gr

312、oss realized and unrealized gains and losses on Level 3 assets and liabilities,excluding the contingent consideration liability,were not significant for the three and six months ended June 28,2024 and June 30,2023.The Company recognizes transfers between levels within the hierarchy as of the beginni

313、ng of the reporting period.Gross transfers between levels within the hierarchy were not significant for the three and six months ended June 28,2024 and June 30,2023.Nonrecurring Fair Value MeasurementsDuring the three and six months ended June 28,2024,the Company recorded an other-than-temporary imp

314、airment charge of$34 million related to an equity method investee in Latin America.This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.During the six months ended June 28,2024,the Company recorded an asset impairment cha

315、rge of$760 million related to our BodyArmor trademark in North America,which was primarily driven by revised projections of future operating results and higher discount rates resulting from changes in macroeconomic conditions since the acquisition date.The fair value of this trademark was derived us

316、ing discounted cash flow analyses based on Level 3 inputs.This charge was recorded in the line item other operating charges in our consolidated statement of income.The remaining carrying value of the trademark is$3,400 million.During the three and six months ended June 30,2023,the Company recorded a

317、n asset impairment charge of$25 million related to the discontinuation of certain manufacturing operations in Asia Pacific.This impairment charge was derived using Level 3 inputs and was primarily driven by managements best estimate of the potential proceeds from the disposal of the related assets.O

318、ther 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 payable approximate their fair values because of the relatively short-term maturities of these financial instruments.

319、The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments.Where quoted prices are not available,the fair value is estimated using discounted cash flows and market-based expectations for interest rates,credit risk and the contractual terms of

320、the debt instruments.As of June 28,2024,the 28carrying value and fair value of our long-term debt,including the current portion,were$40,024 million and$35,137 million,respectively.As of December 31,2023,the carrying value and fair value of our long-term debt,including the current portion,were$37,507

321、 million and$33,445 million,respectively.NOTE 17:OPERATING SEGMENTS Information about our Companys operations by operating segment and Corporate is as follows(in millions):Europe,Middle East&Africa Latin America NorthAmericaAsia Pacific Global Ventures BottlingInvestmentsCorporateEliminationsConsoli

322、datedAs of and for the Three Months Ended June 28,2024 Net operating revenues:Third party$2,184$1,650$4,808$1,386$768$1,537$30$12,363 Intersegment 155 4 126 2 (287)Total net operating revenues 2,339 1,650 4,812 1,512 768 1,539 30 (287)12,363 Operating income(loss)1,252 920 1,312 647 92 98 (1,689)2,6

323、32 Income(loss)before income taxes 1,267 887 1,324 648 94 548 (1,740)3,028 Identifiable operating assets 7,475 3,064 25,972 2,532 2 7,576 7,888 2 27,588 82,095 Investments1 402 671 15 54 12,751 5,214 19,107 As of and for the Three MonthsEnded June 30,2023 Net operating revenues:Third party$2,043$1,3

324、78$4,365$1,349$765$2,042$30$11,972 Intersegment 145 2 218 (365)Total net operating revenues 2,188 1,378 4,367 1,567 765 2,042 30 (365)11,972 Operating income(loss)1,133 797 1,216 673 78 122 (1,618)2,401 Income(loss)before income taxes 1,147 802 1,227 675 78 577 (1,626)2,880 Identifiable operating as

325、sets 7,729 2,474 26,109 2,453 2,3 7,622 9,281 2,3 23,368 79,036 Investments1 394 728 15 76 13,406 4,801 19,420 As of December 31,2023 Identifiable operating assets$7,117$3,149$25,808$2,428 2$7,607$9,871 2$21,934$77,914 Investments1 389 712 15 71 13,639 4,963 19,789 1Principally equity method investm

326、ents and other investments in bottling companies.2Property,plant and equipment net in India represented 14%,10%and 12%of consolidated property,plant and equipment net as of June 28,2024,June 30,2023 and December 31,2023,respectively.3Property,plant and equipment net in the Philippines represented 10

327、%of consolidated property,plant and equipment net as of June 30,2023.As of December 31,2023,the Companys bottling operations in the Philippines met the criteria to be classified as held for sale.Refer to Note 2.During the three months ended June 28,2024,the results of our operating segments and Corp

328、orate were impacted by the following items:Operating income(loss)and income(loss)before income taxes were reduced by$1,337 million for Corporate due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition.Refer to Note 16.Operating in

329、come(loss)and income(loss)before income taxes were reduced by$32 million for Corporate due to the Companys productivity and reinvestment program.Refer to Note 13.Operating income(loss)and income(loss)before income taxes were reduced by$7 million for North America due to the restructuring of our manu

330、facturing operations in the United States.Operating income(loss)and income(loss)before income taxes were reduced by$3 million for Corporate due to charges related to our acquisition of BodyArmor.Refer to Note 12.Income(loss)before income taxes was increased by$50 million for Corporate due to realize

331、d and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities.Refer to Note 4.29 Income(loss)before income taxes was reduced by$34 million for Latin America due to an other-than-temporary impairment charg

332、e related to an equity method investee.Refer to Note 16.Income(loss)before income taxes was reduced by$21 million for Bottling Investments and$3 million for Latin America due to the Companys proportionate share of significant operating and nonoperating items recorded by certain of our equity method

333、investees.During the three months ended June 30,2023,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$1,262 million for Corporate due to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition.Refer to Note 16.Operating inc