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Financial Instruments | 8 Months Ended
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Sep. 06, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments We are exposed to market risks arising from adverse changes in: •commodity prices, affecting the cost of our raw materials and energy; •foreign exchange rates and currency restrictions; and •interest rates. There have been no material changes during the 36 weeks ended September 6, 2025 with respect to our risk management policies or strategies and valuation techniques used in measuring the fair value of the financial assets or liabilities disclosed in Note 9 to our consolidated financial statements in our Recast Segment Information. Certain of our agreements with our counterparties require us to post full collateral on derivative instruments in a net liability position if our credit rating is at A2 (Moody’s Investors Service, Inc.) or A (S&P Global Ratings) and we have been placed on credit watch for possible downgrade or if our credit rating falls below either of these levels. The fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of September 6, 2025 was $88 million. We have posted no collateral under these contracts and no credit-risk-related contingent features were triggered as of September 6, 2025. The notional amounts of our financial instruments used to hedge the above risks are as follows:
| Notional Amounts(a)
| 9/6/2025 |  | 12/28/2024
Commodity contracts | $ | 1.3 |  |  | $ | 1.4 |
Interest rate swap contracts | $ | 2.0 |  |  | $ | 2.0 |
Foreign exchange contracts | $ | 3.2 |  |  | $ | 3.1 |
Cross-currency contracts | $ | 1.7 |  |  | $ | 1.2 |
Non-derivative debt instruments | $ | 4.3 |  |  | $ | 2.9 |
(a)In billions. As of September 6, 2025 and December 28, 2024, approximately 13% of total debt was subject to variable rates, after the impact of the related interest rate swap contracts. Debt Securities Available-for-Sale On August 28, 2025, as part of the Celsius Transaction described in Note 4, we acquired Series B convertible preferred shares, issued by Celsius, valued at $585 million upon acquisition, excluding acquisition-related charges. These Series B convertible preferred shares include certain conversion and redemption features and convert into Celsius common shares after six years from issuance if certain market-based conditions are met, or can be redeemed for cash after seven years from issuance. Shares underlying the transaction were priced at $51.75 per share, and the preferred shares are entitled to a 5% annual dividend, payable either in cash or in-kind. Given our redemption right, we classified our investment in the convertible preferred stock as a Level 3 investment in available-for-sale debt securities, consistent with the Series A convertible preferred shares issued by Celsius that we currently hold. In addition, as part of this transaction, the conversion and redemption periods of the Series A convertible preferred shares were extended to match the terms of the newly issued Series B convertible preferred shares, which was accounted for as a modification. The activity related to our Level 3 investments in certain available-for-sale debt securities is as follows:
|  |  |  |  | 12 Weeks Ended |  | 36 Weeks Ended
|  |  |  |  | 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Celsius: |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  |  |  |  | $ | 958 |  |  | $ | 1,337 |  |  | $ | 785 |  |  | $ | 1,156 |
Acquired |  |  |  |  | 590 |  |  | — |  |  | 590 |  |  | — |
Net unrealized gain/(loss) |  |  |  |  | 535 |  |  | (453) |  |  | 722 |  |  | (265) |
Cash dividends received |  |  |  |  | (6) |  |  | (7) |  |  | (20) |  |  | (14) |
Balance, end of period |  |  |  |  | $ | 2,077 |  |  | $ | 877 |  |  | $ | 2,077 |  |  | $ | 877 |
Other: |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  |  |  |  | $ | 261 |  |  | $ | — |  |  | $ | 256 |  |  | $ | — |
Net unrealized gain/(loss) |  |  |  |  | 6 |  |  | — |  |  | 11 |  |  | — |
Balance, end of period |  |  |  |  | $ | 267 |  |  | $ | — |  |  | $ | 267 |  |  | $ | — |
Total Level 3 available-for-sale balance, end of period |  |  |  |  | $ | 2,344 |  |  | $ | 877 |  |  | $ | 2,344 |  |  | $ | 877 |
There were no impairment charges related to our investments in available-for-sale debt securities in both the 36 weeks ended September 6, 2025 and September 7, 2024. There were unrealized gains of $1,067 million and $347 million as of September 6, 2025 and September 7, 2024, respectively, associated with our available-for-sale debt securities. Recurring Fair Value Measurements The fair values of our financial assets and liabilities are categorized as follows:
|  |  | 9/6/2025 |  | 12/28/2024
| Fair Value Hierarchy Levels(a) |  | Assets(a) |  | Liabilities(a) |  | Assets(a) |  | Liabilities(a)
Available-for-sale debt securities (b) | 3 |  | $ | 2,344 |  |  | $ | — |  |  | $ | 1,041 |  |  | $ | — |
Index funds (c) | 1 |  | $ | 325 |  |  | $ | — |  |  | $ | 336 |  |  | $ | — |
Prepaid forward contracts (d) | 2 |  | $ | 9 |  |  | $ | — |  |  | $ | 15 |  |  | $ | — |
Deferred compensation (e) | 2 |  | $ | — |  |  | $ | 485 |  |  | $ | — |  |  | $ | 503 |
Contingent consideration (f) | 3 |  | $ | — |  |  | $ | 180 |  |  | $ | — |  |  | $ | — |
Derivatives designated as fair value hedging instruments: |  |  |  |
Interest rate swap contracts (g) | 2 |  | $ | 31 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 46 |
Derivatives designated as cash flow hedging instruments: |  |  |  |
Foreign exchange contracts (h) | 2 |  | $ | 8 |  |  | $ | 32 |  |  | $ | 55 |  |  | $ | 3 |
Cross-currency contracts (h) | 2 |  | — |  |  | 105 |  |  | — |  |  | 165 |
Commodity contracts (i) | 2 |  | 86 |  |  | 8 |  |  | 27 |  |  | 6 |
|  |  | $ | 94 |  |  | $ | 145 |  |  | $ | 82 |  |  | $ | 174 |
Derivatives designated as net investment hedging instruments: |  |  |  |
Cross-currency contracts (h) | 2 |  | $ | — |  |  | $ | 16 |  |  | $ | 1 |  |  | $ | 4 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange contracts (h) | 2 |  | $ | 6 |  |  | $ | 12 |  |  | $ | 28 |  |  | $ | 12 |
Commodity contracts (i) | 2 |  | 1 |  |  | 11 |  |  | 3 |  |  | 10 |
|  |  | $ | 7 |  |  | $ | 23 |  |  | $ | 31 |  |  | $ | 22 |
Total derivatives at fair value (j) |  |  | $ | 132 |  |  | $ | 185 |  |  | $ | 114 |  |  | $ | 246 |
Total |  |  | $ | 2,810 |  |  | $ | 850 |  |  | $ | 1,506 |  |  | $ | 749 |
(a)Fair value hierarchy levels are categorized consistently by Level 1 (quoted prices in active markets for identical assets), Level 2 (significant other observable inputs) and Level 3 in both years. Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. (b)Classified as other assets. Includes $2,077 million and $785 million related to our investment in Celsius as of September 6, 2025 and December 28, 2024, respectively; also, includes $267 million and $256 million related to our other investment in available-for-sale debt securities as of September 6, 2025 and December 28, 2024, respectively. The fair value of our Level 3 investment in Celsius is estimated using probability-weighted discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as an 80% probability that a certain market-based condition will be met and an average estimated discount rate of 10.1% and 7.3% as of September 6, 2025 and December 28, 2024, respectively. The fair value of the other Level 3 investment is estimated using a lattice model primarily based on the underlying stock price, volatility and certain significant unobservable inputs, such as a discount rate of 8.3% based on an estimated synthetic credit rating. An increase in the probability that certain market-based conditions will be met or a decrease in the discount rate would result in a higher fair value measurement, while a decrease in the probability that certain market-based conditions will be met or an increase in the discount rate would result in a lower fair value measurement. (c)Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability. (d)Based primarily on the price of our common stock. (e)Based on the fair value of investments corresponding to employees’ investment elections. (f)In connection with our acquisition of poppi, we recorded a liability at fair value for the contingent consideration payable upon achievement of certain performance milestones by the third quarter of 2027, with a maximum payment of $300 million. If these performance milestones are not met, no payment will be made. The fair value of the liability is estimated using discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as forecasts of net revenue and margin. An increase in the net revenue and margin forecasts would result in a higher fair value measurement, while a decrease in the net revenue and margin forecasts would result in a lower fair value measurement. (g)Based on Secured Overnight Financing Rate forward rates. As of September 6, 2025, the carrying amount of hedged fixed-rate debt was $2.0 billion, which was classified on the balance sheet within long-term debt obligations. (h)Based on recently reported market transactions of spot and forward rates. (i)Primarily based on recently reported market transactions of swap arrangements. (j)Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on our balance sheet as of September 6, 2025 and December 28, 2024 were not material. Collateral received or posted against our asset or liability positions was not material. Exchange-traded commodity futures are cash-settled on a daily basis and, therefore, not included in the table. The carrying amounts of our cash and cash equivalents and short-term investments recorded at amortized cost approximate fair value (classified as Level 2 in the fair value hierarchy) due to their short-term maturity. The fair value of our debt obligations as of September 6, 2025 and December 28, 2024 was $48 billion and $40 billion, respectively, based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs. Losses/(gains) on our fair value hedges recognized in the income statement are as follows:
|  |  |  |  | 12 Weeks Ended |  | 36 Weeks Ended
|  |  |  |  | 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Interest rate swap contracts (a) |  |  |  |  | $ | (33) |  |  | $ | — |  |  | $ | (76) |  |  | $ | — |
(a)Interest rate derivative losses/(gains) are included in net interest expense and other. These losses/(gains) are substantially offset by decreases/increases in the value of the underlying debt, which are also included in net interest expense and other. Losses/(gains) on our cash flow hedges are categorized as follows:
| 12 Weeks Ended
| Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a)
| 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Foreign exchange contracts | $ | 8 |  |  | $ | (33) |  |  | $ | 13 |  |  | $ | (3) |
Cross-currency contracts | (5) |  |  | (15) |  |  | (8) |  |  | (21) |
Commodity contracts | (38) |  |  | 75 |  |  | (10) |  |  | 34 |
Total | $ | (35) |  |  | $ | 27 |  |  | $ | (5) |  |  | $ | 10 |
|  |  |  |  | 36 Weeks Ended
|  |  | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a)
|  |  |  |  | 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Foreign exchange contracts |  |  |  |  | $ | 78 |  |  | $ | (48) |  |  | $ | (11) |  |  | $ | 15 |
Cross-currency contracts |  |  |  |  | (60) |  |  | 19 |  |  | (63) |  |  | 14 |
Commodity contracts |  |  |  |  | (138) |  |  | 103 |  |  | (15) |  |  | 85 |
Total |  |  |  |  | $ | (120) |  |  | $ | 74 |  |  | $ | (89) |  |  | $ | 114 |
(a)Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Cross-currency interest rate swap derivative losses/(gains) are included in selling, general and administrative expenses. Commodity derivative losses/(gains) are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. See Note 11 for further information. As of September 6, 2025, we expect to reclassify net gains of $74 million related to our cash flow hedges from accumulated other comprehensive loss within common shareholders’ equity into net income during the next 12 months. Losses/(gains) on our net investment hedges are categorized as follows:
|  |  |  |  | 12 Weeks Ended
|  |  | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Recognized in Income Statement(a)
|  |  |  |  | 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Non-derivative debt instruments |  |  |  |  | $ | 27 |  |  | $ | 114 |  |  | $ | — |  |  | $ | — |
Cross-currency contracts |  |  |  |  | 4 |  |  | 13 |  |  | (3) |  |  | (2) |
Foreign exchange contracts |  |  |  |  | (13) |  |  | — |  |  | — |  |  | — |
Total |  |  |  |  | $ | 18 |  |  | $ | 127 |  |  | $ | (3) |  |  | $ | (2) |
|  |  |  |  | 36 Weeks Ended
|  |  | Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss |  | Losses/(Gains) Recognized in Income Statement(a)
|  |  |  |  | 9/6/2025 |  | 9/7/2024 |  | 9/6/2025 |  | 9/7/2024
Non-derivative debt instruments |  |  |  |  | $ | 311 |  |  | $ | 45 |  |  | $ | — |  |  | $ | — |
Cross-currency contracts |  |  |  |  | 13 |  |  | 13 |  |  | (7) |  |  | (2) |
Foreign exchange contracts |  |  |  |  | (13) |  |  | — |  |  | — |  |  | — |
Total |  |  |  |  | $ | 311 |  |  | $ | 58 |  |  | $ | (7) |  |  | $ | (2) |
(a)Amount excluded from the assessment of effectiveness recognized in earnings associated with cross-currency interest rate swaps. Losses/(gains) recognized in the income statement related to our non-designated hedges are categorized as follows:
| 12 Weeks Ended
| 9/6/2025 |  | 9/7/2024
| Cost of sales |  | Selling, general and administrative expenses |  | Total |  | Cost of sales |  | Selling, general and administrative expenses |  | Total
Foreign exchange contracts | $ | — |  |  | $ | (3) |  |  | $ | (3) |  |  | $ | 1 |  |  | $ | (8) |  |  | $ | (7) |
Commodity contracts | 16 |  |  | 4 |  |  | 20 |  |  | 24 |  |  | 36 |  |  | 60 |
Total | $ | 16 |  |  | $ | 1 |  |  | $ | 17 |  |  | $ | 25 |  |  | $ | 28 |  |  | $ | 53 |
| 36 Weeks Ended
| 9/6/2025 |  | 9/7/2024
| Cost of sales |  | Selling, general and administrative expenses |  | Total |  | Cost of sales |  | Selling, general and administrative expenses |  | Total
Foreign exchange contracts | $ | 1 |  |  | $ | 51 |  |  | $ | 52 |  |  | $ | 1 |  |  | $ | 34 |  |  | $ | 35 |
Commodity contracts | 12 |  |  | (6) |  |  | 6 |  |  | 9 |  |  | 16 |  |  | 25 |
Total | $ | 13 |  |  | $ | 45 |  |  | $ | 58 |  |  | $ | 10 |  |  | $ | 50 |  |  | $ | 60 |

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