Item 1. Financial Statements

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In millions except per share data)

			Three Months Ended									Six Months Ended
			July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Net Operating Revenues			$	11,325		$	10,129					$	21,816		$	19,149
Cost of goods sold			4,830			3,787						8,921			7,292
Gross Profit			6,495			6,342						12,895			11,857
Selling, general and administrative expenses			3,203			3,017						6,170			5,686
Other operating charges			951			309						979			433
Operating Income			2,341			3,016						5,746			5,738
Interest income			100			71						178			137
Interest expense			198			780						380			1,222
Equity income (loss) — net			392			402						654			681
Other income (loss) — net			(351)			909						(456)			1,047
Income Before Income Taxes			2,284			3,618						5,742			6,381
Income taxes			384			994						1,049			1,502
Consolidated Net Income			1,900			2,624						4,693			4,879
Less: Net income (loss) attributable to noncontrolling interests			(5)			(17)						7			(7)
Net Income Attributable to Shareowners of The Coca-Cola Company			$	1,905		$	2,641					$	4,686		$	4,886
Basic Net Income Per Share****1			$	0.44		$	0.61					$	1.08		$	1.13
Diluted Net Income Per Share****1			$	0.44		$	0.61					$	1.08		$	1.13
Average Shares Outstanding — Basic			4,331			4,313						4,331			4,310
Effect of dilutive securities			22			25						24			24
Average Shares Outstanding — Diluted			4,353			4,338						4,355			4,334

1 Calculated based on net income attributable to shareowners of The Coca-Cola Company.

Refer to Notes to Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

			Three Months Ended									Six Months Ended
			July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Consolidated Net Income			$	1,900		$	2,624					$	4,693		$	4,879
Other Comprehensive Income:
Net foreign currency translation adjustments			(1,910)			856						(901)			860
Net gains (losses) on derivatives			93			52						157			156
Net change in unrealized gains (losses) on available-for-sale debt securities			5			(1)						(30)			(61)
Net change in pension and other postretirement benefit liabilities			165			(20)						250			400
Total Comprehensive Income			253			3,511						4,169			6,234
Less: Comprehensive income (loss) attributable to noncontrolling interests			(191)			36						(46)			46
Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company			$	444		$	3,475					$	4,215		$	6,188

Refer to Notes to Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions except par value)

			July 1, 2022			December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents			$	8,976		$	9,684
Short-term investments			776			1,242
Total Cash, Cash Equivalents and Short-Term Investments			9,752			10,926
Marketable securities			1,867			1,699
Trade accounts receivable, less allowances of $510 and $516, respectively			4,494			3,512
Inventories			3,621			3,414
Prepaid expenses and other current assets			3,407			2,994
Total Current Assets			23,141			22,545
Equity method investments			17,720			17,598
Other investments			655			818
Other noncurrent assets			6,470			6,731
Deferred income tax assets			1,833			2,129
Property, plant and equipment, less accumulated depreciation of $9,099 and $8,942, respectively			9,462			9,920
Trademarks with indefinite lives			14,271			14,465
Goodwill			18,910			19,363
Other intangible assets			707			785
Total Assets			$	93,169		$	94,354
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses			$	14,213		$	14,619
Loans and notes payable			4,358			3,307
Current maturities of long-term debt			788			1,338
Accrued income taxes			1,172			686
Total Current Liabilities			20,531			19,950
Long-term debt			36,755			38,116
Other noncurrent liabilities			8,046			8,607
Deferred income tax liabilities			3,034			2,821
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			18,581			18,116
Reinvested earnings			69,970			69,094
Accumulated other comprehensive income (loss)			(14,801)			(14,330)
Treasury stock, at cost — 2,714 and 2,715 shares, respectively			(52,505)			(51,641)
Equity Attributable to Shareowners of The Coca-Cola Company			23,005			22,999
Equity attributable to noncontrolling interests			1,798			1,861
Total Equity			24,803			24,860
Total Liabilities and Equity			$	93,169		$	94,354

Refer to Notes to Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

			Six Months Ended
			July 1, 2022			July 2, 2021
Operating Activities
Consolidated net income			$	4,693		$	4,879
Depreciation and amortization			646			749
Stock-based compensation expense			189			148
Deferred income taxes			(127)			500
Equity (income) loss — net of dividends			(359)			(333)
Foreign currency adjustments			138			(31)
Significant (gains) losses — net			25			(690)
Other operating charges			966			238
Other items			301			503
Net change in operating assets and liabilities			(1,926)			(438)
Net Cash Provided by Operating Activities			4,546			5,525
Investing Activities
Purchases of investments			(2,040)			(3,431)
Proceeds from disposals of investments			2,272			3,811
Acquisitions of businesses, equity method investments and nonmarketable securities			(6)			(11)
Proceeds from disposals of businesses, equity method investments and nonmarketable securities			218			1,765
Purchases of property, plant and equipment			(487)			(450)
Proceeds from disposals of property, plant and equipment			33			28
Other investing activities			(1,135)			41
Net Cash Provided by (Used in) Investing Activities			(1,145)			1,753
Financing Activities
Issuances of debt			3,256			10,752
Payments of debt			(1,816)			(11,957)
Issuances of stock			652			342
Purchases of stock for treasury			(1,210)			(104)
Dividends			(3,810)			(3,623)
Other financing activities			(1,022)			(372)
Net Cash Provided by (Used in) Financing Activities			(3,950)			(4,962)
Effect of Exchange Rate Changes on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents			(161)			82
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period			(710)			2,398
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period			10,025			7,110
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Period			9,315			9,508
Less: Restricted cash and restricted cash equivalents at end of period			339			320
Cash and Cash Equivalents at End of Period			$	8,976		$	9,188

Refer to Notes to Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The 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 information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required 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 Consolidated Financial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31, 2021.

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 statements. 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 July 1, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. 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, other than the fourth quarter, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The second quarter of 2022 and the second quarter of 2021 ended on July 1, 2022 and July 2, 2021, respectively. Our fourth quarter and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls.

Advertising Costs

The Company’s 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 marketing 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 quarter’s actual unit case volume to the estimated full year unit case volume as the basis for the allocation. This methodology results in our marketing expenditures 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 marketing 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 accounting policy.

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

We 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 and restricted cash equivalents generally consist of amounts held by our captive insurance companies, which are included in the line item other noncurrent assets on 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.

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 flows (in millions):

			July 1, 2022			December 31, 2021
Cash and cash equivalents			$	8,976		$	9,684
Restricted cash and restricted cash equivalents included in other noncurrent assets1,2			339			341
Cash, cash equivalents, restricted cash and restricted cash equivalents			$	9,315		$	10,025

1Amounts represent restricted cash and restricted cash equivalents in our solvency capital portfolio set aside primarily to cover pension obligations in certain of our European and Canadian pension plans. Refer to Note 4.

2Restricted cash and restricted cash equivalents include amounts related to assets held for sale. Refer to Note 2.

			July 2, 2021			December 31, 2020
Cash and cash equivalents			$	9,188		$	6,795
Restricted cash and restricted cash equivalents included in other noncurrent assets1			320			315
Cash, cash equivalents, restricted cash and restricted cash equivalents			$	9,508		$	7,110

1Amounts represent restricted cash and restricted cash equivalents in our solvency capital portfolio set aside primarily to cover pension obligations in certain of our European and Canadian pension plans. Refer to Note 4.

NOTE 2: ACQUISITIONS AND DIVESTITURES

Acquisitions

Our Company’s acquisitions of businesses, equity method investments and nonmarketable securities totaled $6 million and $11 million during the six months ended July 1, 2022 and July 2, 2021, respectively.

Divestitures

Proceeds from disposals of businesses, equity method investments and nonmarketable securities during the six months ended July 1, 2022 and July 2, 2021 totaled $218 million and $1,765 million, respectively. In 2022, we sold our ownership interest in one of our equity method investments for cash proceeds of $123 million. We recognized a net gain of $13 million as a result of the sale. In 2021, we sold our ownership interest in Coca-Cola Amatil Limited (“CCA”), an equity method investee, to Coca-Cola Europacific Partners plc (“CCEP”), also an equity method investee. We received cash proceeds of $1,738 million and recognized a net gain of $695 million as a result of the sale and the related reversal of cumulative translation adjustments. These gains were recorded in the line item other income (loss) — net in our consolidated statements of income.

Assets and Liabilities Held for Sale

The Company had certain bottling operations in Asia Pacific that met the criteria to be classified as held for sale. As a result, we were required to record their assets and liabilities at the lower of carrying value or fair value less any costs to sell. As the fair value less any costs to sell exceeded the carrying value, the related assets and liabilities were recorded at their carrying value. These assets and liabilities were included in the Bottling Investments operating segment. The Company expects these bottling operations to be refranchised during the second half of 2022.

The following table presents 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 sheets (in millions):

			July 1, 2022			December 31, 2021
Cash, cash equivalents and short-term investments			$	208		$	228
Trade accounts receivable, less allowances			14			21
Inventories			51			55
Prepaid expenses and other current assets			43			36
Other noncurrent assets			36			9
Deferred income tax assets			6			6
Property, plant and equipment — net			287			282
Goodwill			36			37
Assets held for sale			$	681		$	674
Accounts payable and accrued expenses			$	145		$	139
Accrued income taxes			3			4
Other noncurrent liabilities			10			9
Deferred income tax liabilities			5			5
Liabilities held for sale			$	163		$	157

NOTE 3: NET OPERATING REVENUES

The following tables present net operating revenues disaggregated between the United States and International and further by line of business (in millions):

			United States			International			Total
Three Months Ended July 1, 2022
Concentrate operations			$	1,892		$	4,473		$	6,365
Finished product operations			2,065			2,895			4,960
Total			$	3,957		$	7,368		$	11,325
Three Months Ended July 2, 2021
Concentrate operations			$	1,740		$	4,254		$	5,994
Finished product operations			1,592			2,543			4,135
Total			$	3,332		$	6,797		$	10,129

			United States			International			Total
Six Months Ended July 1, 2022
Concentrate operations			$	3,533		$	8,556		$	12,089
Finished product operations			3,947			5,780			9,727
Total			$	7,480		$	14,336		$	21,816
Six Months Ended July 2, 2021
Concentrate operations			$	3,150		$	7,826		$	10,976
Finished product operations			3,075			5,098			8,173
Total			$	6,225		$	12,924		$	19,149

Refer to Note 16 for disclosures of net operating revenues by operating segment and Corporate.

NOTE 4: INVESTMENTS

Equity Securities

The carrying values of our equity securities were included in the following line items in our consolidated balance sheets (in millions):

			Fair Value with Changes Recognized in Income			Measurement Alternative — No Readily Determinable Fair Value
July 1, 2022
Marketable securities			$	310		$	—
Other investments			614			41
Other noncurrent assets			1,282			—
Total equity securities			$	2,206		$	41
December 31, 2021
Marketable securities			$	376		$	—
Other investments			771			47
Other noncurrent assets			1,576			—
Total equity securities			$	2,723		$	47

The calculation of net unrealized gains and losses recognized during the period related to equity securities still held at the end of the period is as follows (in millions):

			Three Months Ended
			July 1, 2022			July 2, 2021
Net gains (losses) recognized during the period related to equity securities			$	(261)		$	202
Less: Net gains (losses) recognized during the period related to equity securities sold during the period			(129)			5
Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period			$	(132)		$	197

			Six Months Ended
			July 1, 2022			July 2, 2021
Net gains (losses) recognized during the period related to equity securities			$	(361)		$	357
Less: Net gains (losses) recognized during the period related to equity securities sold during the period			(254)			19
Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period			$	(107)		$	338

Debt Securities

Our debt securities consisted of the following (in millions):

						Gross Unrealized						Estimated Fair Value
			Cost			Gains			Losses
July 1, 2022
Trading securities			$	42		$	—		$	(4)		$	38
Available-for-sale securities			1,882			22			(158)			1,746
Total debt securities			$	1,924		$	22		$	(162)		$	1,784
December 31, 2021
Trading securities			$	39		$	1		$	—		$	40
Available-for-sale securities			1,648			33			(132)			1,549
Total debt securities			$	1,687		$	34		$	(132)		$	1,589

The carrying values of our debt securities were included in the following line items in our consolidated balance sheets (in millions):

			July 1, 2022									December 31, 2021
			Trading Securities			Available-for-Sale Securities						Trading Securities			Available-for-Sale Securities
Marketable securities			$	38		$	1,519					$	40		$	1,283
Other noncurrent assets			—			227						—			266
Total debt securities			$	38		$	1,746					$	40		$	1,549

The contractual maturities of these available-for-sale debt securities as of July 1, 2022 were as follows (in millions):

			Cost			Estimated Fair Value
Within 1 year			$	61		$	60
After 1 year through 5 years			1,612			1,478
After 5 years through 10 years			37			49
After 10 years			172			159
Total			$	1,882		$	1,746

The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.

The sale and/or maturity of available-for-sale debt securities resulted in the following realized activity (in millions):

			Three Months Ended									Six Months Ended
			July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Gross gains			$	2		$	1					$	3		$	2
Gross losses			(3)			(4)						(8)			(8)
Proceeds			113			809						344			967

Captive Insurance Companies

In accordance with local insurance regulations, our consolidated captive 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 consolidated captive insurance companies to reinsure group annuity insurance contracts that cover the obligations of certain of our European and Canadian pension plans. This captive’s solvency capital funds included total equity and debt securities of $1,362 million and $1,670 million as of July 1, 2022 and December 31, 2021, respectively, which were classified in the line item other noncurrent assets in our consolidated balance sheets because the assets are not available to satisfy our current obligations.

NOTE 5: INVENTORIES

Inventories consisted of the following (in millions):

			July 1, 2022			December 31, 2021
Raw materials and packaging			$	2,086		$	2,133
Finished goods			1,239			982
Other			296			299
Total inventories			$	3,621		$	3,414

NOTE 6: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The following table presents the fair values of the Company’s derivative instruments that were designated and qualified as part of a hedging relationship (in millions):

						Fair Value1,2
Derivatives Designated as Hedging Instruments			Balance Sheet Location1			July 1, 2022			December 31, 2021
Assets:
Foreign currency contracts			Prepaid expenses and other current assets			$	283		$	151
Foreign currency contracts			Other noncurrent assets			73			27
Interest rate contracts			Prepaid expenses and other current assets			—			1
Interest rate contracts			Other noncurrent assets			—			282
Total assets						$	356		$	461
Liabilities:
Foreign currency contracts			Accounts payable and accrued expenses			$	31		$	15
Foreign currency contracts			Other noncurrent liabilities			111			17
Interest rate contracts			Other noncurrent liabilities			916			14
Total liabilities						$	1,058		$	46

1All of the Company’s derivative instruments are carried at fair value 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 impact of master netting agreements and cash collateral. Refer to Note 15 for the net presentation of the Company’s derivative instruments.

2Refer to Note 15 for additional information related to the estimated fair value.

The following table presents the fair values of the Company’s derivative instruments that were not designated as hedging instruments (in millions):

						Fair Value1,2
Derivatives Not Designated as Hedging Instruments			Balance Sheet Location1			July 1, 2022			December 31, 2021
Assets:
Foreign currency contracts			Prepaid expenses and other current assets			$	83		$	53
Foreign currency contracts			Other noncurrent assets			7			—
Commodity contracts			Prepaid expenses and other current assets			208			131
Commodity contracts			Other noncurrent assets			6			3
Other derivative instruments			Prepaid expenses and other current assets			—			9
Total assets						$	304		$	196
Liabilities:
Foreign currency contracts			Accounts payable and accrued expenses			$	47		$	34
Foreign currency contracts			Other noncurrent liabilities			12			9
Commodity contracts			Accounts payable and accrued expenses			69			6
Commodity contracts			Other noncurrent liabilities			23			1
Other derivative instruments			Accounts payable and accrued expenses			8			—
Total liabilities						$	159		$	50

1All of the Company’s derivative instruments are carried at fair value 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 impact of master netting agreements and cash collateral. Refer to Note 15 for the net presentation of the Company’s derivative instruments.

2Refer to Note 15 for additional information related to the estimated fair value.

Credit Risk Associated with Derivatives

We have established strict counterparty credit 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 collateral for substantially all of our transactions. To mitigate presettlement risk, minimum credit standards become more stringent as the duration of the derivative financial instrument increases. In addition, the Company’s master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.

Cash Flow Hedging Strategy

The 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 prices 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 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 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 rates. We enter into forward contracts and purchase foreign currency options and collars (principally euro, British pound sterling and Japanese yen) to hedge certain portions of forecasted cash flows denominated in foreign currencies. When the U.S. dollar strengthens against the foreign currencies, the decline in the 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 derivative instruments. The total notional values of derivatives that were designated and qualified for the Company’s foreign currency cash flow hedging program were $5,927 million and $7,399 million as of July 1, 2022 and December 31, 2021, respectively.

The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency denominated debt and other monetary assets or liabilities due to changes 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 denominated assets and liabilities due to changes 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. The total notional values of derivatives that were designated as cash flow hedges for the Company’s foreign currency denominated assets and liabilities were $1,524 million and $1,994 million as of July 1, 2022 and December 31, 2021, respectively.

The Company has entered into commodity futures contracts and other 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 Company’s commodity cash flow hedging program. The objective of this hedging program 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 $36 million and $10 million as of July 1, 2022 and December 31, 2021, respectively.

Our Company monitors our mix of short-term debt and long-term debt regularly. We manage our risk to interest rate fluctuations through the use of derivative financial instruments. From time to time, the Company enters into interest rate swap agreements and designates these instruments as part of the Company’s 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 Company’s future interest payments. As of July 1, 2022 and December 31, 2021, we did not have any interest rate swaps designated as a cash flow hedge.

The 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 OCI						Location of Gain (Loss) Recognized in Income			Gain (Loss) Reclassified from AOCI into Income
Three Months Ended July 1, 2022
Foreign currency contracts			$	197					Net operating revenues			$	52
Foreign currency contracts			16						Cost of goods sold			2
Foreign currency contracts			—						Interest expense			(1)
Foreign currency contracts			(114)						Other income (loss) — net			(89)
Total			$	99								$	(36)
Three Months Ended July 2, 2021
Foreign currency contracts			$	7					Net operating revenues			$	(27)
Foreign currency contracts			(6)						Cost of goods sold			(2)
Foreign currency contracts			—						Interest expense			(10)
Foreign currency contracts			(29)						Other income (loss) — net			18
Interest rate contracts			(11)						Interest expense			(85)
Total			$	(39)								$	(106)

			Gain (Loss) Recognized in OCI						Location of Gain (Loss) Recognized in Income			Gain (Loss) Reclassified from AOCI into Income
Six Months Ended July 1, 2022
Foreign currency contracts			$	278					Net operating revenues			$	60
Foreign currency contracts			22						Cost of goods sold			3
Foreign currency contracts			—						Interest expense			(2)
Foreign currency contracts			(119)						Other income (loss) — net			(100)
Total			$	181								$	(39)
Six Months Ended July 2, 2021
Foreign currency contracts			$	(16)					Net operating revenues			$	(50)
Foreign currency contracts			(11)						Cost of goods sold			(3)
Foreign currency contracts			—						Interest expense			(11)
Foreign currency contracts			58						Other income (loss) — net			84
Interest rate contracts			110						Interest expense			(90)
Total			$	141								$	(70)

As of July 1, 2022, the Company estimates that it will reclassify into earnings during the next 12 months net gains of $212 million from the pretax amount recorded in AOCI as the anticipated cash flows occur.

Fair Value Hedging Strategy

The Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that result 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 benchmark 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 designated 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 the hedged item has matured or has been extinguished. The total notional values of derivatives that were designated and qualified as fair value hedges of this type were $13,205 million and $12,113 million as of July 1, 2022 and December 31, 2021, respectively.

The following tables summarize the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions):

Hedging Instruments and Hedged Items			Location of Gain (Loss) Recognized in Income			Gain (Loss) Recognized in Income
Three Months Ended
July 1, 2022			July 2, 2021
Interest rate contracts			Interest expense			$	(474)		$	10
Fixed-rate debt			Interest expense			457			(8)
Net impact to interest expense						$	(17)		$	2
Net impact of fair value hedging instruments						$	(17)		$	2

Hedging Instruments and Hedged Items			Location of Gain (Loss) Recognized in Income			Gain (Loss) Recognized in Income
Six Months Ended
July 1, 2022			July 2, 2021
Interest rate contracts			Interest expense			$	(1,185)		$	(180)
Fixed-rate debt			Interest expense			1,166			182
Net impact to interest expense						$	(19)		$	2
Net impact of fair value hedging instruments						$	(19)		$	2

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 Adjustments1
			Carrying Values of Hedged Items									Included in the Carrying Values of Hedged Items									Remaining for Which Hedge Accounting Has Been Discontinued
Balance Sheet Location of Hedged Items			July 1, 2022			December 31, 2021						July 1, 2022			December 31, 2021						July 1, 2022			December 31, 2021
Current maturities of long-term debt			$	—		$	200					$	—		$	1					$	—		$	—
Long-term debt			12,453			12,353						(880)			255						212			228

1Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations.

Hedges of Net Investments in Foreign Operations Strategy

The 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 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 instruments 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 adjustments. Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change.

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions):

			Notional Values									Gain (Loss) Recognized in OCI
			as of									Three Months Ended									Six Months Ended
			July 1, 2022			December 31, 2021						July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Foreign currency contracts			$	—		$	40					$	5		$	1					$	(1)		$	(7)
Foreign currency denominated debt			11,752			12,812						704			(114)						1,059			369
Total			$	11,752		$	12,852					$	709		$	(113)					$	1,058		$	362

The Company did not reclassify any gains or losses related to net investment hedges from AOCI into earnings during the three and six months ended July 1, 2022. During the three and six months ended July 2, 2021, the Company reclassified a loss of $4 million related to net investment hedges from AOCI into earnings. In addition, the Company did not have any ineffectiveness related to net investment hedges during the three and six months ended July 1, 2022 and July 2, 2021. The cash inflows and outflows associated with the Company’s derivative contracts designated as net investment hedges are classified in the line item other investing activities in our consolidated statement of cash flows.

Economic (Non-Designated) Hedging Strategy

In addition to derivative instruments that are designated and qualify for hedge accounting, the Company also uses certain derivatives as economic hedges of foreign currency, interest rate and commodity 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 earnings 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 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 activities. 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 total notional values of derivatives related to our foreign currency economic hedges were $4,638 million and $4,258 million as of July 1, 2022 and December 31, 2021, respectively.

The Company uses interest rate contracts as economic hedges to minimize exposure to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The total notional value of derivatives related to our economic hedges of this type was $200 million as of December 31, 2021. As of July 1, 2022, we did not have any interest rate contracts used as economic hedges.

The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process 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 applicable. The total notional values of derivatives related to our economic hedges of this type were $679 million and $908 million as of July 1, 2022 and December 31, 2021, respectively.

The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):

Derivatives Not Designated as Hedging Instruments			Location of Gain (Loss) Recognized in Income			Gain (Loss) Recognized in Income
Three Months Ended
July 1, 2022			July 2, 2021
Foreign currency contracts			Net operating revenues			$	22		$	1
Foreign currency contracts			Cost of goods sold			10			1
Foreign currency contracts			Other income (loss) — net			(4)			32
Commodity contracts			Cost of goods sold			(155)			128
Other derivative instruments			Selling, general and administrative expenses			(18)			12
Total						$	(145)		$	174

Derivatives Not Designated as Hedging Instruments			Location of Gain (Loss) Recognized in Income			Gain (Loss) Recognized in Income
Six Months Ended
July 1, 2022			July 2, 2021
Foreign currency contracts			Net operating revenues			$	7		$	—
Foreign currency contracts			Cost of goods sold			23			(7)
Foreign currency contracts			Other income (loss) — net			38			4
Interest rate contracts			Interest expense			—			(187)
Commodity contracts			Cost of goods sold			5			210
Other derivative instruments			Selling, general and administrative expenses			(21)			20
Other derivative instruments			Other income (loss) — net			—			(3)
Total						$	52		$	37

NOTE 7: DEBT AND BORROWING ARRANGEMENTS

During the six months ended July 1, 2022, the Company retired upon maturity fixed interest rate U.S. dollar-denominated debentures of $288 million with an interest rate of 8.500 percent.

NOTE 8: COMMITMENTS AND CONTINGENCIES

Guarantees

As of July 1, 2022, we were contingently liable for guarantees of indebtedness owed by third parties of $1,168 million, of which $80 million was related to variable interest entities. Our guarantees are primarily related to third-party customers, bottlers and 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 concluded that the likelihood of any significant amounts being paid by our Company under these guarantees is not probable.

We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations.

Legal Contingencies

The 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 believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities of the Company that may arise as a result of currently pending legal proceedings (excluding tax audit claims) will not have a material adverse effect on the Company taken as a whole.

Tax Audits

The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not “more likely than not” to be sustained; (2) the tax position is “more likely than not” to be sustained but for a lesser amount; or (3) the tax position is “more likely than not” to be sustained but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities, such as legislation and statutes, legislative intent, regulations, rulings and caselaw and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally resolved. The number of years subject to tax audits or tax assessments varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the “more likely than not” recognition threshold would be recognized in income tax expense in the quarter in which the uncertainty disappears under any one of the following conditions: (1) the tax position is “more likely than not” to be sustained; (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation; or (3) the statute of limitations for the tax position has expired. Refer to Note 14.

On September 17, 2015, the Company received a Statutory Notice of Deficiency (“Notice”) from the U.S. Internal Revenue Service (“IRS”) seeking approximately $3.3 billion of additional federal income tax for years 2007 through 2009. In the Notice, the IRS stated its intent to reallocate over $9 billion of income to the U.S. parent company from certain of its foreign affiliates that the U.S. parent company licensed to manufacture, distribute, sell, market and promote its products in certain non-U.S. markets.

The Notice concerned the Company’s transfer pricing between its U.S. parent company and certain of its foreign affiliates. IRS rules governing transfer pricing require arm’s-length pricing of transactions between related parties such as the Company’s 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 arm’s-length methodology for determining the amount of U.S. taxable income that the U.S. parent company would report as compensation from its foreign licensees. The 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 circumstances or relevant federal tax law, in calculating the Company’s 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 and confirmed the Company’s compliance with the agreed-upon Closing Agreement methodology in five successive audit cycles for tax years 1996 through 2006.

The September 17, 2015 Notice from the IRS retroactively rejected the previously agreed-upon methodology for the 2007 through 2009 tax years in favor of an entirely different methodology, without prior notice to the Company. 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 assert penalties, and it has yet to do so.

The IRS designated the Company’s 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 Company’s 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 settle or otherwise mutually resolve the matter with the IRS.

The Company consequently initiated litigation by filing a petition in the U.S. Tax Court (“Tax Court”) in December 2015, challenging the tax adjustments enumerated in the Notice.

Prior to trial, the IRS increased its transfer pricing adjustment by $385 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 approximately $138 million.

The trial was held in the Tax Court from March through May 2018, and final post-trial briefs were filed and exchanged in April 2019.

On November 18, 2020, the Tax Court issued an opinion (“Opinion”) in which it predominantly sided with the IRS but agreed with the Company that dividends previously paid by the foreign licensees to the U.S. 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. The Tax Court reserved ruling on the effect of Brazilian legal restrictions on the payment of royalties by the Company’s licensee in Brazil until after the Tax Court issues its opinion in the separate case of 3M Co. & Subs. v. Commissioner, T.C. Docket No. 5816-13 (filed March 11, 2013). Once the Tax Court issues its opinion in 3M Co. & Subs. v. Commissioner, the Company expects the Tax Court thereafter to render another opinion, and ultimately a final decision, in the Company’s case.

The Company believes that the IRS and the Tax Court misinterpreted and misapplied the applicable regulations in reallocating income earned by the Company’s foreign licensees to increase the Company’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 claims on appeal and vigorously defend its position.

In determining the amount of tax reserve to be recorded as of December 31, 2020, the Company completed the required two-step evaluation process prescribed by Accounting Standards Codification 740, Accounting 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 Opinion and relevant caselaw. We also considered our intention to vigorously defend our positions and assert our various well-founded legal claims via every available avenue of appeal. We concluded, based on the technical and legal merits of the Company’s tax positions, that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal. In addition, we considered a number of alternative transfer pricing methodologies, including the methodology asserted by the IRS and affirmed in the Opinion (“Tax Court Methodology”), that could be applied by the courts upon final resolution of the litigation. Based on the required probability analysis, we determined the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s 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 paid to the U.S. parent company by its foreign licensees, in reliance upon the Closing Agreement, that would be recharacterized as royalties in accordance with the Opinion and the Company’s analysis.

The Company’s conclusion that it is more likely than not the Company’s tax positions will ultimately be sustained on appeal is unchanged as of July 1, 2022. However, we updated our calculation of the methodologies we believe the federal courts could ultimately order to be used in calculating the Company’s tax. As a result of the application of the required probability analysis to these updated calculations and the accrual of interest through the current reporting period, we updated our tax reserve as of July 1, 2022 to $414 million.

While the Company strongly disagrees with the IRS’ positions and the portions of the Opinion affirming such positions, it is possible that some portion or all of the adjustment 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’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 Opinion, assuming such methodology were to be ultimately upheld by the courts and the IRS were to decide to apply that methodology to subsequent years with consent of the federal courts. This impact would include taxes and interest accrued through December 31, 2021 for the 2007 through 2009 litigated tax years and for subsequent tax years from 2010 through 2021. The calculations 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 $13 billion as of December 31, 2021. 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 July 1, 2022 would increase the potential aggregate incremental tax and interest liability by approximately $250 million and $500 million, respectively. Additionally, we currently project the continued application of the Tax Court Methodology in future years, assuming similar facts and circumstances as of December 31, 2021, would result in an incremental annual tax liability that would increase the Company’s effective tax rate by approximately 3.5 percent.

The Company does not know when the Tax Court will issue its opinion regarding the effect of Brazilian legal restrictions on the payment of royalties by the Company’s licensee in Brazil for the 2007 through 2009 tax years. After the Tax Court issues its opinion on the Company’s Brazilian licensee, the Company and the IRS will be provided time to agree on the tax impact, if any, of both opinions, after which the Tax Court would render a final decision in the case. The Company will have 90 days thereafter to file a notice of appeal to the U.S. Court of Appeals for the Eleventh Circuit and pay the tax liability and interest related to the 2007 through 2009 tax years. The Company currently estimates that the payment to be made at that time related to the 2007 through 2009 tax years, which is included in the above estimate of the potential aggregate incremental tax and interest liability, would be approximately $5.0 billion (including interest accrued through July 1, 2022), plus any additional interest accrued through the time of payment. Some or all of this amount would be refunded if the Company were to prevail on appeal.

Risk Management Programs

The 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-insured retentions to reduce the Company’s risk of catastrophic loss. Our reserves for the Company’s 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 $229 million as of both July 1, 2022 and December 31, 2021.

NOTE 9: OTHER COMPREHENSIVE INCOME

AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our consolidated balance sheet as a component of The Coca-Cola Company’s shareowners’ equity, which also includes our proportionate 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 following, net of tax (in millions):

			July 1, 2022			December 31, 2021
Net foreign currency translation adjustments			$	(13,443)		$	(12,595)
Accumulated net gains (losses) on derivatives			177			20
Unrealized net gains (losses) on available-for-sale debt securities			(92)			(62)
Adjustments to pension and other postretirement benefit liabilities			(1,443)			(1,693)
Accumulated other comprehensive income (loss)			$	(14,801)		$	(14,330)

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 July 1, 2022
			Shareowners of The Coca-Cola Company			Noncontrolling Interests			Total
Consolidated net income			$	4,686		$	7		$	4,693
Other comprehensive income:
Net foreign currency translation adjustments			(848)			(53)			(901)
Net gains (losses) on derivatives1			157			—			157
Net change in unrealized gains (losses) on available-for-sale debt securities2			(30)			—			(30)
Net change in pension and other postretirement benefit liabilities			250			—			250
Total comprehensive income (loss)			$	4,215		$	(46)		$	4,169

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 gains or losses on available-for-sale debt securities.

The following tables present OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees’ OCI (in millions):

Three Months Ended July 1, 2022			Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period			$	(950)		$	27		$	(923)
Gains (losses) on intra-entity transactions that are of a long-term investment nature			(1,333)			—			(1,333)
Gains (losses) on net investment hedges arising during the period1			709			(177)			532
Net foreign currency translation adjustments			$	(1,574)		$	(150)		$	(1,724)
Derivatives:
Gains (losses) arising during the period			$	97		$	(31)		$	66
Reclassification adjustments recognized in net income			36			(9)			27
Net gains (losses) on derivatives1			$	133		$	(40)		$	93
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period			$	2		$	2		$	4
Reclassification adjustments recognized in net income			1			—			1
Net change in unrealized gains (losses) on available-for-sale debt securities2			$	3		$	2		$	5
Pension and other postretirement benefit liabilities:
Net pension and other postretirement benefit liabilities arising during the period			$	198		$	(54)		$	144
Reclassification adjustments recognized in net income			28			(7)			21
Net change in pension and other postretirement benefit liabilities			$	226		$	(61)		$	165
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company			$	(1,212)		$	(249)		$	(1,461)

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 gains or losses on available-for-sale debt securities.

Six Months Ended July 1, 2022			Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period			$	374		$	(213)		$	161
Reclassification adjustments recognized in net income			200			—			200
Gains (losses) on intra-entity transactions that are of a long-term investment nature			(2,003)			—			(2,003)
Gains (losses) on net investment hedges arising during the period1			1,058			(264)			794
Net foreign currency translation adjustments			$	(371)		$	(477)		$	(848)
Derivatives:
Gains (losses) arising during the period			$	180		$	(52)		$	128
Reclassification adjustments recognized in net income			39			(10)			29
Net gains (losses) on derivatives1			$	219		$	(62)		$	157
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period			$	(44)		$	10		$	(34)
Reclassification adjustments recognized in net income			5			(1)			4
Net change in unrealized gains (losses) on available-for-sale debt securities2			$	(39)		$	9		$	(30)
Pension and other postretirement benefit liabilities:
Net pension and other postretirement benefit liabilities arising during the period			$	266		$	(58)		$	208
Reclassification adjustments recognized in net income			56			(14)			42
Net change in pension and other postretirement benefit liabilities			$	322		$	(72)		$	250
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company			$	131		$	(602)		$	(471)

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 gains or losses on available-for-sale debt securities.

Three Months Ended July 2, 2021			Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period			$	517		$	(24)		$	493
Reclassification adjustments recognized in net income			180			—			180
Gains (losses) on intra-entity transactions that are of a long-term investment nature			212			—			212
Gains (losses) on net investment hedges arising during the period1			(113)			27			(86)
Reclassification adjustments for net investment hedges recognized in net income1			4			—			4
Net foreign currency translation adjustments			$	800		$	3		$	803
Derivatives:
Gains (losses) arising during the period			$	(40)		$	6		$	(34)
Reclassification adjustments recognized in net income			112			(26)			86
Net gains (losses) on derivatives1			$	72		$	(20)		$	52
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period			$	(11)		$	7		$	(4)
Reclassification adjustments recognized in net income			3			—			3
Net change in unrealized gains (losses) on available-for-sale debt securities2			$	(8)		$	7		$	(1)
Pension and other postretirement benefit liabilities:
Net pension and other postretirement benefit liabilities arising during the period			$	(100)		$	34		$	(66)
Reclassification adjustments recognized in net income			61			(15)			46
Net change in pension and other postretirement benefit liabilities			$	(39)		$	19		$	(20)
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company			$	825		$	9		$	834

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 gains or losses on available-for-sale debt securities.

Six Months Ended July 2, 2021			Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period			$	1,141		$	(47)		$	1,094
Reclassification adjustments recognized in net income			180			—			180
Gains (losses) on intra-entity transactions that are of a long-term investment nature			(742)			—			(742)
Gains (losses) on net investment hedges arising during the period1			362			(91)			271
Reclassification adjustments for net investment hedges recognized in net income1			4			—			4
Net foreign currency translation adjustments			$	945		$	(138)		$	807
Derivatives:
Gains (losses) arising during the period			$	134		$	(37)		$	97
Reclassification adjustments recognized in net income			76			(17)			59
Net gains (losses) on derivatives1			$	210		$	(54)		$	156
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period			$	(103)		$	37		$	(66)
Reclassification adjustments recognized in net income			6			(1)			5
Net change in unrealized gains (losses) on available-for-sale debt securities2			$	(97)		$	36		$	(61)
Pension and other postretirement benefit liabilities:
Net pension and other postretirement benefit liabilities arising during the period			$	353		$	(75)		$	278
Reclassification adjustments recognized in net income			162			(40)			122
Net change in pension and other postretirement benefit liabilities			$	515		$	(115)		$	400
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company			$	1,573		$	(271)		$	1,302

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 gains or losses on available-for-sale debt securities.

The following table presents the amounts and line items in our consolidated statements of income where adjustments reclassified from AOCI into income were recorded (in millions):

						Amount Reclassified from AOCI into Income
Description of AOCI Component			Financial Statement Line Item			Three Months Ended July 1, 2022						Six Months Ended July 1, 2022
Foreign currency translation adjustments:
Divestitures, deconsolidations and other1			Other income (loss) — net			$	—					$	200
			Income before income taxes			—						200
			Income taxes			—						—
			Consolidated net income			$	—					$	200
Derivatives:
Foreign currency contracts			Net operating revenues			$	(52)					$	(60)
Foreign currency contracts			Cost of goods sold			(2)						(3)
Foreign currency contracts			Interest expense			1						2
Foreign currency contracts			Other income (loss) — net			89						100
			Income before income taxes			36						39
			Income taxes			(9)						(10)
			Consolidated net income			$	27					$	29
Available-for-sale debt securities:
Sale of debt securities			Other income (loss) — net			$	1					$	5
			Income before income taxes			1						5
			Income taxes			—						(1)
			Consolidated net income			$	1					$	4
Pension and other postretirement benefit liabilities:
Recognized net actuarial loss			Other income (loss) — net			$	29					$	58
Recognized prior service cost (credit)			Other income (loss) — net			(1)						(2)
			Income before income taxes			28						56
			Income taxes			(7)						(14)
			Consolidated net income			$	21					$	42

1Related to the sale of our ownership interest in one of our equity method investments and the issuance of additional shares of stock by one of our equity method investees. Refer to Note 2 and Note 15, respectively.

NOTE 10: CHANGES IN EQUITY

The following 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 July 1, 2022			Common Shares Outstanding			Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock			Capital Surplus			Treasury Stock			Non-controlling Interests
April 1, 2022			4,331			$	26,841		$	69,969		$	(13,340)		$	1,760		$	18,388		$	(51,932)		$	1,996
Comprehensive income (loss)			—			253			1,905			(1,461)			—			—			—			(191)
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.44 per share)			—			(1,904)			(1,904)			—			—			—			—			—
Dividends paid to noncontrolling interests			—			(7)			—			—			—			—			—			(7)
Purchases of treasury stock			(10)			(677)			—			—			—			—			(677)			—
Impact related to stock-based compensation plans			5			297			—			—			—			193			104			—
July 1, 2022			4,326			$	24,803		$	69,970		$	(14,801)		$	1,760		$	18,581		$	(52,505)		$	1,798

									Shareowners of The Coca-Cola Company
Six Months Ended July 1, 2022			Common Shares Outstanding			Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock			Capital Surplus			Treasury Stock			Non-controlling Interests
December 31, 2021			4,325			$	24,860		$	69,094		$	(14,330)		$	1,760		$	18,116		$	(51,641)		$	1,861
Comprehensive income (loss)			—			4,169			4,686			(471)			—			—			—			(46)
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.88 per share)			—			(3,810)			(3,810)			—			—			—			—			—
Dividends paid to noncontrolling interests			—			(16)			—			—			—			—			—			(16)
Purchases of treasury stock			(18)			(1,148)			—			—			—			—			(1,148)			—
Impact related to stock-based compensation plans			19			748			—			—			—			464			284			—
Other activities			—			—			—			—			—			1			—			(1)
July 1, 2022			4,326			$	24,803		$	69,970		$	(14,801)		$	1,760		$	18,581		$	(52,505)		$	1,798

									Shareowners of The Coca-Cola Company
Three Months Ended July 2, 2021			Common Shares Outstanding			Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock			Capital Surplus			Treasury Stock			Non-controlling Interests
April 2, 2021			4,311			$	22,332		$	67,009		$	(14,133)		$	1,760		$	17,630		$	(51,911)		$	1,977
Comprehensive income (loss)			—			3,511			2,641			834			—			—			—			36
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.42 per share)			—			(1,812)			(1,812)			—			—			—			—			—
Dividends paid to noncontrolling interests			—			(7)			—			—			—			—			—			(7)
Impact related to stock-based compensation plans			4			231			—			—			—			151			80			—
July 2, 2021			4,315			$	24,255		$	67,838		$	(13,299)		$	1,760		$	17,781		$	(51,831)		$	2,006

									Shareowners of The Coca-Cola Company
Six Months Ended July 2, 2021			Common Shares Outstanding			Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock			Capital Surplus			Treasury Stock			Non-controlling Interests
December 31, 2020			4,302			$	21,284		$	66,555		$	(14,601)		$	1,760		$	17,601		$	(52,016)		$	1,985
Adoption of accounting standards1			—			19			19			—			—			—			—			—
Comprehensive income (loss)			—			6,234			4,886			1,302			—			—			—			46
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.84 per share)			—			(3,622)			(3,622)			—			—			—			—			—
Dividends paid to noncontrolling interests			—			(25)			—			—			—			—			—			(25)
Impact related to stock-based compensation plans			13			365			—			—			—			180			185			—
July 2, 2021			4,315			$	24,255		$	67,838		$	(13,299)		$	1,760		$	17,781		$	(51,831)		$	2,006

1Represents the adoption of Accounting Standards Update 2019-12, Simplifying the Accounting for Income Taxes, effective January 1, 2021.

NOTE 11: SIGNIFICANT OPERATING AND NONOPERATING ITEMS

Other Operating Charges

During the three months ended July 1, 2022, the Company recorded other operating charges of $951 million. These charges primarily consisted of $917 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with our acquisition of fairlife, LLC (“fairlife”) in 2020, $19 million related to the Company’s productivity and reinvestment program and $13 million related to the acquisition of BA Sports Nutrition, LLC (“BodyArmor”) in the prior year, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, net of the reimbursement of distributor termination fees recorded in the prior year. Additionally, the Company recorded charges of $1 million related to its strategic realignment initiatives primarily due to revisions to estimated costs accrued in the prior year and charges of $1 million related to the restructuring of our manufacturing operations in the United States.

During the six months ended July 1, 2022, the Company recorded other operating charges of $979 million. These charges consisted of $939 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $29 million related to the Company’s productivity and reinvestment program, $8 million related to the BodyArmor acquisition in the prior year, which included various transition and transaction costs, employee retention costs and the amortization of noncompete agreements, net of the reimbursement of distributor termination fees recorded in the prior year, and $3 million related to the restructuring of our manufacturing operations in the United States.

During the three months ended July 2, 2021, the Company recorded other operating charges of $309 million. These charges primarily consisted of $247 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $29 million related to the Company’s strategic realignment initiatives and $22 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $7 million related to the restructuring of our manufacturing operations in the United States and $4 million related to tax litigation expense.

During the six months ended July 2, 2021, the Company recorded other operating charges of $433 million. These charges primarily consisted of $251 million related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition, $122 million related to the Company’s strategic realignment initiatives and $40 million related to the Company’s productivity and reinvestment program. In addition, other operating charges included $13 million related to tax litigation expense and $7 million related to the restructuring of our manufacturing operations in the United States.

Refer to Note 8 for additional information related to the tax litigation. Refer to Note 12 for additional information on the Company’s productivity and reinvestment program. Refer to Note 15 for additional information on the fairlife acquisition. Refer to Note 16 for the impact these charges had on our operating segments and Corporate.

Other Nonoperating Items

Interest Expense

During the three and six months ended July 2, 2021, the Company recorded charges of $592 million and $650 million, respectively, related to the extinguishment of long-term debt.

Equity Income (Loss) — Net

During the three and six months ended July 1, 2022, the Company recorded net charges of $35 million and $30 million, respectively. During the three and six months ended July 2, 2021, the Company recorded net charges of $60 million and $23 million, respectively. These amounts represent the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 16 for the impact these items had on our operating segments and Corporate.

Other Income (Loss) — Net

During the three months ended July 1, 2022, the Company recorded a net loss of $267 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 and recorded an other-than-temporary impairment charge of $96 million related to an equity method investee in Russia.

During the six months ended July 1, 2022, the Company recorded a net loss of $371 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 and recorded an other-than-temporary impairment charge of $96 million related to an equity method investee in Russia. The Company also recorded a net loss of $24 million as a result of one of our equity method investees issuing additional shares of its stock.

During the three months ended July 2, 2021, the Company recognized a net gain of $695 million related to the sale of our ownership interest in CCA, an equity method investee. Additionally, the Company recognized a net gain of $203 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. The Company also recorded pension settlement charges of $29 million related to our strategic realignment initiatives.

During the six months ended July 2, 2021, the Company recognized a net gain of $695 million related to the sale of our ownership interest in CCA, an equity method investee. Additionally, the Company recognized a net gain of $336 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. The Company also recorded pension settlement charges of $83 million related to our strategic realignment initiatives.

Refer to Note 2 for additional information on the sale of our ownership interest in CCA. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 15 for additional information on the impairment charge and one of our equity method investees issuing additional shares of its stock. Refer to Note 16 for the impact these items had on our operating segments and Corporate.

NOTE 12: RESTRUCTURING

In February 2012, the Company announced a productivity and reinvestment program designed 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. While we expect most of the remaining initiatives included in this program, which are primarily designed to further simplify and standardize our organization, to be completed by the end of 2023, certain initiatives may extend into 2024.

During the three and six months ended July 1, 2022, the Company incurred expenses of $19 million and $29 million, respectively, and during the three and six months ended July 2, 2021 incurred expenses of $22 million and $40 million, respectively, related to our productivity and reinvestment program. These expenses primarily included internal and external

costs associated with the implementation of these initiatives and were recorded in the line item other operating charges in our consolidated statements of income. Refer to Note 16 for the impact these expenses had on our operating segments and Corporate. The Company has incurred total pretax expenses of $4,073 million related to this program since it commenced.

NOTE 13: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

Net periodic benefit cost or income for our pension and other postretirement benefit plans consisted of the following (in millions):

			Pension Plans									Other Postretirement Benefit Plans
			Three Months Ended
			July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Service cost			$	22		$	25					$	1		$	3
Interest cost			51			47						5			3
Expected return on plan assets1			(147)			(151)						(4)			(5)
Amortization of prior service credit			—			—						(1)			—
Amortization of net actuarial loss			29			33						—			—
Net periodic benefit cost (income)			(45)			(46)						1			1
Settlement charges2			—			29						—			—
Total cost (income)			$	(45)		$	(17)					$	1		$	1

1The weighted-average expected long-term rates of return on plan assets used in computing 2022 net periodic benefit cost (income) were 7.00 percent for pension plans and 4.00 percent for other postretirement benefit plans.

2Settlement charges were primarily related to our strategic realignment initiatives.

			Pension Plans									Other Postretirement Benefit Plans
			Six Months Ended
			July 1, 2022			July 2, 2021						July 1, 2022			July 2, 2021
Service cost			$	44		$	49					$	3		$	5
Interest cost			102			91						9			7
Expected return on plan assets1			(296)			(302)						(8)			(9)
Amortization of prior service credit			—			—						(2)			(1)
Amortization of net actuarial loss			58			80						—			1
Net periodic benefit cost (income)			(92)			(82)						2			3
Settlement charges2			—			83						—			—
Total cost (income)			$	(92)		$	1					$	2		$	3

1The weighted-average expected long-term rates of return on plan assets used in computing 2022 net periodic benefit cost (income) were 7.00 percent for pension plans and 4.00 percent for other postretirement benefit plans.

2Settlement charges were primarily related to our strategic realignment initiatives.

All of the amounts in the tables above, other than service cost, were recorded in the line item other income (loss) — net in our consolidated statements of income. During the six months ended July 1, 2022, the Company contributed $19 million to our pension trusts, and we anticipate making additional contributions of approximately $7 million during the remainder of 2022. The Company contributed $18 million to our pension trusts during the six months ended July 2, 2021.

NOTE 14: INCOME TAXES

The Company recorded income taxes of $384 million (16.8 percent effective tax rate) and $994 million (27.5 percent effective tax rate) during the three months ended July 1, 2022 and July 2, 2021, respectively. The Company recorded income taxes of $1,049 million (18.3 percent effective tax rate) and $1,502 million (23.5 percent effective tax rate) during the six months ended July 1, 2022 and July 2, 2021, respectively.

The Company’s effective tax rates for the three and six months ended July 1, 2022 and July 2, 2021 vary from the statutory U.S. federal income tax rate of 21.0 percent primarily due to the tax impact of significant operating and nonoperating items, as described in Note 11, along with the tax benefits 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. rate.

The Company’s effective tax rates for the three and six months ended July 2, 2021 included $183 million and $176 million, respectively, of net tax expense related to various discrete tax items, primarily changes in tax laws in certain foreign jurisdictions.

On November 18, 2020, the Tax Court issued the Opinion regarding the Company’s 2015 litigation with the IRS involving transfer pricing tax adjustments in which the court predominantly sided with the IRS. The Company strongly disagrees with the Opinion and intends to vigorously defend its position. Refer to Note 8.

NOTE 15: FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions):

July 1, 2022			Level 1			Level 2			Level 3						Other3			Netting Adjustment			4			Fair Value Measurements
Assets:
Equity securities with readily determinable values1			$	1,902		$	195		$	17					$	92		$	—					$	2,206
Debt securities1			—			1,775			9						—			—						1,784
Derivatives2			101			559			—						—			(495)						165			7
Total assets			$	2,003		$	2,529		$	26					$	92		$	(495)					$	4,155
Liabilities:
Contingent consideration liability			$	—		$	—		$	1,529		5			$	—		$	—					$	1,529
Derivatives2			27			1,190			—						—			(1,192)			6			25			7
Total liabilities			$	27		$	1,190		$	1,529					$	—		$	(1,192)					$	1,554

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 additional 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 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 are 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 future milestone payments related to our acquisition of fairlife in 2020, which are contingent on fairlife achieving certain financial targets through 2024 and, if achieved, are payable in 2023 and 2025. These milestone payments are based on agreed-upon formulas related to fairlife’s operating results, the resulting values of which are not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model.

6The Company has the right to reclaim $753 million in cash collateral it has netted against its derivative positions.

7The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $79 million in the line item prepaid expenses and other current assets, $86 million in the line item other noncurrent assets and $25 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.

December 31, 2021			Level 1			Level 2			Level 3						Other3			Netting Adjustment			4			Fair Value Measurements
Assets:
Equity securities with readily determinable values1			$	2,372		$	230		$	17					$	104		$	—					$	2,723
Debt securities1			—			1,556			33						—			—						1,589
Derivatives2			69			588			—						—			(459)			6			198			8
Total assets			$	2,441		$	2,374		$	50					$	104		$	(459)					$	4,510
Liabilities:
Contingent consideration liability			$	—		$	—		$	590		5			$	—		$	—					$	590
Derivatives2			—			96			—						—			(82)			7			14			8
Total liabilities			$	—		$	96		$	590					$	—		$	(82)					$	604

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 additional 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 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 are 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 future milestone payments related to our acquisition of fairlife in 2020, which are contingent on fairlife achieving certain financial targets through 2024 and, if achieved, are payable in 2023 and 2025. These milestone payments are based on agreed-upon formulas related to fairlife’s operating results, the resulting values of which are not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model.

6The Company is obligated to return $331 million in cash collateral it has netted against its derivative positions.

7The Company does not have the right to reclaim any cash collateral it has netted against its derivative positions.

8The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $198 million in the line item other noncurrent assets and $14 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.

Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the three and six months ended July 1, 2022 and July 2, 2021.

The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the three and six months ended July 1, 2022 and July 2, 2021.

Nonrecurring Fair Value Measurements

During the three and six months ended July 1, 2022, the Company recorded an other-than-temporary impairment charge of $96 million related to an equity method investee in Russia. 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 July 1, 2022, we recognized a net loss of $24 million on assets measured at fair value on a nonrecurring basis. The net loss was recorded as a result of an equity method investee issuing additional shares of its stock. Accordingly, the Company is required to treat this type of transaction as if the Company had sold a proportionate share of its investment. This net loss was determined using Level 2 inputs and primarily resulted from the recognition of cumulative translation losses. We did not recognize any gains or losses on assets measured at fair value on a nonrecurring basis during the three and six months ended July 2, 2021.

Other Fair Value Disclosures

The 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. 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 the debt instruments. As of July 1, 2022, the carrying value and fair value of our long-term debt, including the current portion, were $37,543 million and $33,657 million, respectively. As of December 31, 2021, the carrying value and fair value of our long-term debt, including the current portion, were $39,454 million and $40,311 million, respectively.

NOTE 16: OPERATING SEGMENTS

Information about our Company’s operations by operating segment and Corporate is as follows (in millions):

			Europe, Middle East & Africa						Latin America			North America			Asia Pacific						Global Ventures						Bottling Investments						Corporate			Eliminations			Consolidated
As of and for the Three Months Ended July 1, 2022
Net operating revenues:
Third party			$	2,018					$	1,140		$	4,029		$	1,343					$	695					$	2,077					$	23		$	—		$	11,325
Intersegment			166						—			1			223						—						2						—			(392)			—
Total net operating revenues			2,184						1,140			4,030			1,566						695						2,079						23			(392)			11,325
Operating income (loss)			1,291						674			840			753						44						113						(1,374)			—			2,341
Income (loss) before income taxes			1,225						680			848			757						48						453						(1,727)			—			2,284
Identifiable operating assets			7,721			2			2,054			26,372			2,628			3			7,210						9,881			2,3			18,928			—			74,794
Investments1			439						605			19			222						—						12,569						4,521			—			18,375
As of and for the Three Months Ended July 2, 2021
Net operating revenues:
Third party			$	1,874					$	1,067		$	3,379		$	1,350					$	707					$	1,735					$	17		$	—		$	10,129
Intersegment			143						—			2			153						—						3						—			(301)			—
Total net operating revenues			2,017						1,067			3,381			1,503						707						1,738						17			(301)			10,129
Operating income (loss)			1,142						678			950			766						75						92						(687)			—			3,016
Income (loss) before income taxes			1,169						681			959			779						78						422						(470)			—			3,618
Identifiable operating assets			8,574			2			1,748			19,646			2,252			3			7,854						10,375			2,3			20,329			—			70,778
Investments1			478						630			346			231						3						13,382						4,346			—			19,416
As of December 31, 2021
Identifiable operating assets			$	7,908		2			$	1,720		$	25,730		$	2,355		3			$	7,949					$	10,312		2,3			$	19,964		$	—		$	75,938
Investments1			436						594			21			230						—						12,669						4,466			—			18,416

1Principally equity method investments and other investments in bottling companies.

2Property, plant and equipment — net in South Africa represented 17 percent, 16 percent and 16 percent of consolidated property, plant and equipment — net as of July 1, 2022, July 2, 2021 and December 31, 2021, respectively.

3Property, plant and equipment — net in the Philippines represented 10 percent of consolidated property, plant and equipment — net as of July 1, 2022, July 2, 2021 and December 31, 2021.

During the three months ended July 1, 2022, the results of our operating segments and Corporate were impacted by the following items:

• Operating income (loss) and income (loss) before income taxes were reduced by $917 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition in 2020. Refer to Note 15.

• Operating income (loss) and income (loss) before income taxes were reduced by $19 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 12.

• Operating income (loss) and income (loss) before income taxes were increased by $2 million for North America and were reduced by $15 million for Corporate related to our acquisition of BodyArmor in 2021. Refer to Note 11.

• Operating income (loss) and income (loss) before income taxes were reduced by $11 million for North America related to the restructuring of our manufacturing operations in the United States.

• Income (loss) before income taxes was reduced by $267 million for Corporate 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. Refer to Note 4.

• Income (loss) before income taxes was reduced by $96 million for Europe, Middle East and Africa due to an other-than-temporary impairment charge related to an equity method investee in Russia. Refer to Note 15.

• Income (loss) before income taxes was reduced by $35 million for Bottling Investments due to the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

During the three months ended July 2, 2021, 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 $247 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 15.

• Operating income (loss) and income (loss) before income taxes were reduced by $11 million for Europe, Middle East and Africa and $1 million for North America, and operating income (loss) and income (loss) before income taxes were reduced by $17 million and $46 million, respectively, for Corporate due to the Company’s strategic realignment initiatives.

• Operating income (loss) and income (loss) before income taxes were reduced by $22 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 12.

• Operating income (loss) and income (loss) before income taxes were reduced by $16 million for North America related to the restructuring of our manufacturing operations in the United States.

• Operating income (loss) and income (loss) before income taxes were reduced by $4 million for Corporate related to tax litigation expense. Refer to Note 8.

• Income (loss) before income taxes was increased by $695 million for Corporate related to the sale of our ownership interest in CCA, an equity method investee. Refer to Note 2.

• Income (loss) before income taxes was increased by $203 million for Corporate 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. Refer to Note 4.

• Income (loss) before income taxes was reduced by $592 million for Corporate related to charges associated with the extinguishment of long-term debt.

• Income (loss) before income taxes was reduced by $60 million for Bottling Investments due to the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

			Europe, Middle East & Africa			Latin America			North America			Asia Pacific			Global Ventures			Bottling Investments			Corporate			Eliminations			Consolidated
Six Months Ended July 1, 2022
Net operating revenues:
Third party			$	3,679		$	2,354		$	7,618		$	2,574		$	1,424		$	4,119		$	48		$	—		$	21,816
Intersegment			338			—			2			403			—			4			—			(747)			—
Total net operating revenues			4,017			2,354			7,620			2,977			1,424			4,123			48			(747)			21,816
Operating income (loss)			2,298			1,434			1,896			1,417			95			306			(1,700)			—			5,746
Income (loss) before income taxes			2,248			1,437			1,912			1,427			104			846			(2,232)			—			5,742
Six Months Ended July 2, 2021
Net operating revenues:
Third party			$	3,336		$	1,976		$	6,315		$	2,582		$	1,277		$	3,629		$	34		$	—		$	19,149
Intersegment			304			—			3			323			—			5			—			(635)			—
Total net operating revenues			3,640			1,976			6,318			2,905			1,277			3,634			34			(635)			19,149
Operating income (loss)			1,962			1,230			1,742			1,452			101			233			(982)			—			5,738
Income (loss) before income taxes			1,999			1,236			1,775			1,474			105			739			(947)			—			6,381

During the six months ended July 1, 2022, the results of our operating segments and Corporate were impacted by the following items:

• Operating income (loss) and income (loss) before income taxes were reduced by $939 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 15.

• Operating income (loss) and income (loss) before income taxes were reduced by $29 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 12.

• Operating income (loss) and income (loss) before income taxes were reduced by $22 million and $23 million, respectively, for North America related to the restructuring of our manufacturing operations in the United States.

• Operating income (loss) and income (loss) before income taxes were increased by $21 million for North America and were reduced by $29 million for Corporate related to our acquisition of BodyArmor in 2021. Refer to Note 11.

• Income (loss) before income taxes was reduced by $371 million for Corporate 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. Refer to Note 4.

• Income (loss) before income taxes was reduced by $96 million for Europe, Middle East and Africa due to an other-than-temporary impairment charge related to an equity method investee in Russia. Refer to Note 15.

• Income (loss) before income taxes was reduced by $30 million for Bottling Investments due to the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

• Income (loss) before income taxes was reduced by $24 million for Corporate due to one of our equity method investees issuing additional shares of its stock. Refer to Note 15.

During the six months ended July 2, 2021, 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 $251 million for Corporate related to the remeasurement of our contingent consideration liability to fair value in conjunction with the fairlife acquisition. Refer to Note 15.

• Operating income (loss) and income (loss) before income taxes were reduced by $61 million for Europe, Middle East and Africa, $11 million for Latin America, $13 million for North America and $13 million for Asia Pacific, and operating income (loss) and income (loss) before income taxes were reduced by $24 million and $107 million, respectively, for Corporate due to the Company’s strategic realignment initiatives.

• Operating income (loss) and income (loss) before income taxes were reduced by $40 million for Corporate due to the Company’s productivity and reinvestment program. Refer to Note 12.

• Operating income (loss) and income (loss) before income taxes were reduced by $35 million for North America related to the restructuring of our manufacturing operations in the United States.

• Operating income (loss) and income (loss) before income taxes were reduced by $13 million for Corporate related to tax litigation expense. Refer to Note 8.

• Income (loss) before income taxes was increased by $695 million for Corporate related to the sale of our ownership interest in CCA, an equity method investee. Refer to Note 2.

• Income (loss) before income taxes was increased by $336 million for Corporate 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. Refer to Note 4.

• Income (loss) before income taxes was reduced by $650 million for Corporate related to charges associated with the extinguishment of long-term debt.

• Income (loss) before income taxes was reduced by $55 million for Bottling Investments and increased by $32 million for Corporate due to the Company’s proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.