What changed in this filing

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Item 1. Financial Statements

2024-07-25 compared with 2024-04-25 · 153 added, 93 removed, 639 unchanged (28% of the section changed)

3 unchanged sentences

( UNAUDITED )

First Quarter

Second Quarter First Six Months

(in millions, except per share data) 2024 2023 2024 2023

3 unchanged sentences

Selling, general and administrative expenses 1,295 1,272 2,471 2,437

Other operating income, net ( 1 ) ( 5 )

Other operating expense (income), net 16 — 15 ( 5 )

Income from operations 861 769 1,626 1,353

14 unchanged sentences

( UNAUDITED )

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

3 unchanged sentences

Net change in cash flow hedges, net of tax of $ 1 , $ 3 , $ 1 and $ 24 , respectively

21 ( 17 ) 19 ( 99 )

Total other comprehensive (loss) income ( 180 ) 142 ( 238 ) 168

4 unchanged sentences

( UNAUDITED )

March 31, December 31,

June 30, December 31,

(in millions, except share and per share data) 2024 2023

27 unchanged sentences

Preferred stock, $ 0.01 par value, 15,000,000 shares authorized, no shares issued

Common stock, $ 0.01 par value, 2,000,000,000 shares authorized, 1,355,571,438 and 1,390,446,043 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.01 par value, 2,000,000,000 shares authorized, 1,355,763,506 and 1,390,446,043 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 19,683 20,788

7 unchanged sentences

( UNAUDITED )

First Quarter

First Six Months

(in millions) 2024 2023

12 unchanged sentences

Equity in earnings of unconsolidated affiliates ( 17 ) ( 14 )

Earned equity ( 45 ) ( 2 )

Earned equity from distribution arrangements ( 45 ) ( 2 )

Other, net 5 ( 7 )

19 unchanged sentences

( UNAUDITED, CONTINUED)

First Quarter

First Six Months

(in millions) 2024 2023

10 unchanged sentences

Other, net ( 22 ) —

Net cash provided by (used in) financing activities 158 ( 303 )

Net cash used in financing activities ( 222 ) ( 523 )

Cash and cash equivalents:

5 unchanged sentences

Capital expenditures included in accounts payable and accrued expenses $ 173 $ 214

Earned equity 45 2

Earned equity from distribution arrangements 45 2

Equity received in exchange for modification of related party contract 19 —

Transaction costs included in accounts payable and accrued expenses — 6

10 unchanged sentences

Common Stock Issued Additional

Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Total Stockholders' Equity

Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity

(in millions, except per share data) Shares Amount

1 unchanged sentence

Net income — — — 454 — 454

Other comprehensive income — — — — ( 58 ) ( 58 )

Other comprehensive loss — — — — ( 58 ) ( 58 )

Dividends declared, $ 0.215 per share

6 unchanged sentences

1,355.6 $ 14 $ 19,661 $ 4,721 $ 257 $ 24,653

Net income — — — 515 — 515

Other comprehensive loss — — — — ( 180 ) ( 180 )

Dividends declared, $ 0.215 per share

— — — ( 292 ) — ( 292 )

Shares issued under employee stock-based compensation plans and other 0.2 — — — — —

Tax withholdings related to net share settlements — — ( 2 ) — — ( 2 )

Stock-based compensation and stock options exercised — — 24 — — 24

Balance as of June 30, 2024

1,355.8 $ 14 $ 19,683 $ 4,944 $ 77 $ 24,718

Common Stock Issued Additional

13 unchanged sentences

1,403.7 $ 14 $ 21,210 $ 3,724 $ 155 $ 25,103 $ ( 1 ) $ 25,102

Net income — — — 503 — 503 — 503

Other comprehensive income — — — — 142 142 — 142

Dividends declared, $ 0.20 per share

— — — ( 279 ) — ( 279 ) — ( 279 )

Repurchases of common stock, inclusive of excise tax obligation ( 7.0 ) — ( 229 ) — — ( 229 ) — ( 229 )

Shares issued under employee stock-based compensation plans and other 0.2 — — — — — — —

Tax withholdings related to net share settlements — — ( 1 ) — — ( 1 ) — ( 1 )

Stock-based compensation and stock options exercised — — 29 — — 29 — 29

Balance as of June 30, 2023

1,396.9 $ 14 $ 21,009 $ 3,948 $ 297 $ 25,268 $ ( 1 ) $ 25,267

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

13 unchanged sentences

These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and accompanying notes included in our Annual Report.

References to the "first quarter" indicate the quarterly periods ended March 31, 2024 and 2023.

References to the "second quarter" indicate the quarterly periods ended June 30, 2024 and 2023.

USE OF ESTIMATES

6 unchanged sentences

RECLASSIFICATIONS

We reclassified amounts in the Financing Activities section of the unaudited condensed consolidated Statement of Cash Flows for the first quarter of 2023 in order to conform to current year presentation, as maturities for the Company’s commercial paper program in both periods are 90 days or less.

(in millions) Prior Presentation First Quarter of 2023

We reclassified amounts in the Financing Activities section of the unaudited condensed consolidated Statement of Cash Flows for the first six months of 2023 in order to conform to current year presentation, as maturities for the Company’s commercial paper program in both periods are 90 days or less.

(in millions) Prior Presentation First Six Months of 2023

Net (repayment) issuance of commercial paper Proceeds from issuance of commercial paper $ 18,187

2 unchanged sentences

The following table summarizes our long-term obligations:

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

$ 12,935 $ 11,095

5 unchanged sentences

The following table summarizes our short-term borrowings and current portion of long-term obligations:

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Commercial paper notes $ 1,870 $ 2,096

3 unchanged sentences

Our Notes consisted of the following:

(in millions, except %) Maturity Date Rate March 31, 2024 December 31, 2023

(in millions, except %) Maturity Date Rate June 30, 2024 December 31, 2023

2024 Notes March 15, 2024 0.750 % $ — $ 1,150

36 unchanged sentences

Amounts Outstanding

(in millions) Maturity Date Capacity March 31, 2024 December 31, 2023

(in millions) Maturity Date Capacity June 30, 2024 December 31, 2023

Revolving Credit Agreement (1)

February 23, 2027 $ 4,000 $ — $ —

(1) The Revolving Credit Agreement has $ 200 million letters of credit available, none of which were utilized as of March 31, 2024.

As of March 31, 2024, KDP was in compliance with its minimum interest coverage ratio relating to the Revolving Credit Agreement .

(1) The Revolving Credit Agreement has $ 200 million letters of credit available, none of which were utilized as of June 30, 2024.

As of June 30, 2024, KDP was in compliance with its minimum interest coverage ratio relating to the Revolving Credit Agreement .

Commercial Paper Program

The following table provides information about our weighted average borrowings under our commercial paper program:

First Quarter

Second Quarter First Six Months

(in millions, except %) 2024 2023 2024 2023

3 unchanged sentences

In addition to the portion of the Revolving Credit Agreement reserved for issuance of letters of credit, KDP has an incremental letter of credit facility.

Under this facility, $ 150 million is available for the issuance of letters of credit, $ 57 million of which was utilized as of March 31, 2024 and $ 93 million of which remains available for use.

Under this facility, $ 150 million is available for the issuance of letters of credit, $ 56 million of which was utilized as of June 30, 2024 and $ 94 million of which remains available for use.

FAIR VALUE DISCLOSURES

2 unchanged sentences

The difference between the fair value and the carrying value represents the theoretical net premium or discount that would be paid or received to retire all the Notes and related unamortized costs to be incurred at such date.

The fair value of our Notes was $ 12,085 million and $ 10,486 million as of March 31, 2024 and December 31, 2023, respectively.

The fair value of our Notes was $ 12,027 million and $ 10,486 million as of June 30, 2024 and December 31, 2023, respectively.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Goodwill and Other Intangible Assets

5 unchanged sentences

Foreign currency translation — — ( 121 ) ( 121 )

Balance as of March 31, 2024 $ 8,714 $ 8,622 $ 2,827 $ 20,163

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Balance as of June 30, 2024 $ 8,714 $ 8,622 $ 2,745 $ 20,081

INTANGIBLE ASSETS OTHER THAN GOODWILL

The net carrying amounts of intangible assets other than goodwill with indefinite lives are as follows:

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

$ 19,321 $ 19,476

2 unchanged sentences

Total $ 21,999 $ 22,109

(1) The change in brands with indefinite lives was primarily driven by foreign currency translation of $ 33 million during the first quarter of 2024.

(1) The change in brands with indefinite lives was driven by foreign currency translation of $ 155 million during the first six months of 2024.

(2) The change in distribution rights with indefinite lives was primarily driven by acquired distribution rights related to Electrolit of $ 49 million.

The net carrying amounts of intangible assets other than goodwill with definite lives are as follows:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount

7 unchanged sentences

Amortization expense for intangible assets with definite lives was as follows:

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

Amortization expense $ 34 $ 35 $ 67 $ 69

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

KDP is exposed to market risks arising from adverse changes in interest rates, commodity prices, and FX rates.

9 unchanged sentences

For derivatives that are not designated or for which the designated hedging relationship is discontinued, the gain or loss on the instrument is recognized in earnings in the period of change.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

We have exposure to credit losses from derivative instruments in an asset position in the event of nonperformance by the counterparties to the agreements.

8 unchanged sentences

Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are generally reported in interest expense in the unaudited Condensed Consolidated Statements of Income.

As of March 31, 2024, economic interest rate derivative instruments have maturities ranging from April 2024 to July 2043.

As of June 30, 2024, economic interest rate derivative instruments have maturities ranging from September 2024 to July 2043.

Cash Flow Hedges

5 unchanged sentences

Additionally, the balance sheets of our Canadian and Mexican businesses are subject to exposure from movements in exchange rates.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Economic Hedges

3 unchanged sentences

Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are reported in the same caption of the unaudited Condensed Consolidated Statements of Income as the associated risk.

As of March 31, 2024, these FX contracts have maturities ranging from April 2024 to February 2025.

As of June 30, 2024, these FX contracts have maturities ranging from July 2024 to March 2025.

Cash Flow Hedges

3 unchanged sentences

The intent of these FX contracts is to provide predictability in the Company's overall cost structure.

As of March 31, 2024, these FX contracts have maturities ranging from April 2024 to June 2025.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

As of June 30, 2024, these FX contracts have maturities ranging from July 2024 to December 2025.

Economic Hedges

4 unchanged sentences

Unrealized gains and losses are recognized as a component of unallocated corporate costs until our reportable segments are affected by the completion of the underlying transaction, at which time the gain or loss is reflected as a component of the respective segment's income from operations.

As of March 31, 2024, these commodity contracts have maturities ranging from April 2024 to January 2026.

As of June 30, 2024, these commodity contracts have maturities ranging from July 2024 to January 2026.

NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS

The following table presents the notional amounts of our outstanding derivative instruments by type:

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Interest rate contracts

17 unchanged sentences

All such instruments are considered level 2 within the fair value hierarchy.

(in millions) Balance Sheet Location March 31, 2024 December 31, 2023

(in millions) Balance Sheet Location June 30, 2024 December 31, 2023

FX contracts Prepaid expenses and other current assets $ 7 $ 5

Commodity contracts Prepaid expenses and other current assets 22 9

FX contracts Other non-current assets 2 —

Commodity contracts Other non-current assets 3 3

8 unchanged sentences

All such instruments are designated level 2 within the fair value hierarchy.

(in millions) Balance Sheet Location March 31, 2024 December 31, 2023

(in millions) Balance Sheet Location June 30, 2024 December 31, 2023

FX contracts Prepaid expenses and other current assets $ 10 $ 1

FX contracts Other non-current assets 2 —

FX contracts Other current liabilities 2 14

FX contracts Other non-current liabilities 1 —

IMPACT OF DERIVATIVE INSTRUMENTS NOT DESIGNATED AS HEDGING INSTRUMENTS

2 unchanged sentences

Amounts include both realized and unrealized gains and losses.

First Quarter

(in millions) Income Statement Location 2024 2023

Income Statement Location Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

Interest rate contracts Interest expense, net $ 26 $ 41 $ 52 $ ( 55 )

8 unchanged sentences

The following table presents the amount of (gains) losses, net, reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income related to derivative instruments designated as cash flow hedging instruments during the periods presented:

First Quarter

(in millions) Income Statement Location 2024 2023

Income Statement Location Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

Interest rate contracts Interest expense, net $ ( 4 ) $ ( 2 ) $ ( 6 ) $ ( 70 )

FX contracts Cost of sales 2 ( 4 ) 2 ( 5 )

We expect to reclassify approximately $ 13 million of pre-tax net gains and $ 10 million of pre-tax net losses from AOCI into net income during the next twelve months related to interest rate contracts and FX contracts, respectively.

We expect to reclassify approximately $ 13 million and $ 7 million of pre-tax net gains from AOCI into net income during the next twelve months related to interest rate contracts and FX contracts, respectively.

The following table presents the components of lease cost:

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

8 unchanged sentences

The following table presents supplemental cash flow and other information about our leases:

First Quarter

First Six Months

(in millions) 2024 2023

7 unchanged sentences

The following table presents information about our weighted average discount rate and remaining lease term:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Weighted average discount rate

7 unchanged sentences

(UNAUDITED, CONTINUED)

Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 were as follows:

Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 were as follows:

(in millions) Operating Leases Finance Leases

5 unchanged sentences

SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED

As of March 31, 2024, we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $ 197 million.

These leases are expected to commence between the third quarter of 2024 through 2027, with initial lease terms ranging from 5 years to 10 years.

As of June 30, 2024, we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $ 238 million.

These leases are expected to commence between the third quarter of 2024 through 2027, with initial lease terms ranging from 1 year to 10 years.

Our operating and reportable segments consist of the following:

14 unchanged sentences

Information about our operations by reportable segment is as follows:

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

12 unchanged sentences

We recognize revenue when obligations under the terms of a contract with the customer are satisfied.

Branded product sales, which include LRB, K-Cup pods and appliances, occur once control is transferred upon delivery to the customer.

Branded product sales, which include LRB, K-Cup pods and appliances, occur once control is transferred.

Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods.

2 unchanged sentences

Costs associated with shipping and handling activities, such as merchandising, are included in SG&A expenses as revenue is recognized.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

The following table disaggregates our revenue by product portfolio and by reportable segment:

2 unchanged sentences

Coffee International Total

For the first quarter of 2024:

For the second quarter of 2024:

$ 2,372 $ 10 $ 394 $ 2,776

3 unchanged sentences

Net sales $ 2,407 $ 950 $ 565 $ 3,922

For the first quarter of 2023:

For the second quarter of 2023:

$ 2,296 $ — $ 331 $ 2,627

3 unchanged sentences

Net sales $ 2,330 $ 970 $ 489 $ 3,789

For the first six months of 2024:

$ 4,434 $ 14 $ 693 $ 5,141

K-Cup pods — 1,492 233 1,725

Appliances — 293 30 323

Other 66 62 73 201

Net sales $ 4,500 $ 1,861 $ 1,029 $ 7,390

For the first six months of 2023:

$ 4,266 $ — $ 584 $ 4,850

K-Cup pods — 1,532 225 1,757

Appliances — 301 26 327

Other 71 68 69 208

Net sales $ 4,337 $ 1,901 $ 904 $ 7,142

LRB represents net sales of owned, licensed, and partner brands within our portfolio and includes branded concentrates, syrup, and finished beverages, including contract manufacturing of our branded products for our bottlers and distributors.

6 unchanged sentences

The following table presents basic and diluted EPS and shares outstanding:

First Quarter

Second Quarter First Six Months

(in millions, except per share data) 2024 2023 2024 2023

8 unchanged sentences

The components of stock-based compensation expense are presented below:

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

10 unchanged sentences

Forfeited ( 666,231 ) 30.14

Outstanding as of March 31, 2024 15,041,763 $ 29.48 2.4 $ 461

As of March 31, 2024, there was $ 233 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 3.5 years.

Outstanding as of June 30, 2024 14,486,522 $ 29.49 2.2 $ 484

As of June 30, 2024, there was $ 211 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 3.4 years.

KEURIG DR PEPPER INC.

2 unchanged sentences

The following table summarizes our investments in unconsolidated affiliates:

March 31, December 31,

June 30, December 31,

(in millions) 2024 2023

2 unchanged sentences

Chobani 308 307

Tractor 42 44

Athletic Brewing 50 50

2 unchanged sentences

(1) We hold a 34.9 % interest on an as-converted basis in Nutrabolt, consisting of 32.0 % in Class A preferred shares acquired through our December 2022 investment, which are treated as in-substance common stock, and 2.9 % in Class B common shares earned through the achievement of certain milestones included in our distribution agreement with Nutrabolt.

(2) In May 2024, we modified our sales agent contract with Tractor.

In exchange, we received additional equity interests, raising our total interest to 23.0 % as of June 30, 2024.

Our effective tax rates were as follows:

First Quarter

Second Quarter First Six Months

2024 2023 2024 2023

Effective tax rate 23.4 % 17.9 % 23.5 % 18.8 %

The change in the effective tax rate was largely driven by a shift in the mix of income from lower tax jurisdictions to higher tax jurisdictions and the unfavorable comparison to the prior year tax benefit received from favorable adjustments upon foreign tax return filing.

The change in our effective tax rate was largely driven by a shift in the mix of income from lower tax jurisdictions to higher tax jurisdictions and the unfavorable comparison to the prior year tax benefit received from a non-cash adjustment.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Accumulated Other Comprehensive Income

1 unchanged sentence

(in millions) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefit Liabilities Cash Flow Hedges Accumulated Other Comprehensive Income

For the first quarter of 2024:

For the second quarter of 2024:

Beginning balance $ 146 $ ( 14 ) $ 125 $ 257

Other comprehensive loss ( 56 ) — — ( 56 )

Other comprehensive (loss) income ( 201 ) — 22 ( 179 )

Amounts reclassified from AOCI — — ( 1 ) ( 1 )

Total other comprehensive loss ( 56 ) — ( 2 ) ( 58 )

Balance as of March 31, 2024 $ 146 $ ( 14 ) $ 125 $ 257

For the first quarter of 2023:

Total other comprehensive (loss) income ( 201 ) — 21 ( 180 )

Balance as of June 30, 2024 $ ( 55 ) $ ( 14 ) $ 146 $ 77

For the second quarter of 2023:

Beginning balance $ 22 $ ( 10 ) $ 143 $ 155

2 unchanged sentences

Total other comprehensive income (loss) 159 — ( 17 ) 142

Balance as of March 31, 2023 $ 22 $ ( 10 ) $ 143 $ 155

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Balance as of June 30, 2023 $ 181 $ ( 10 ) $ 126 $ 297

For the first six months of 2024:

Beginning balance $ 202 $ ( 14 ) $ 127 $ 315

Other comprehensive (loss) income ( 257 ) — 22 ( 235 )

Amounts reclassified from AOCI — — ( 3 ) ( 3 )

Total other comprehensive (loss) income ( 257 ) — 19 ( 238 )

Balance as of June 30, 2024 $ ( 55 ) $ ( 14 ) $ 146 $ 77

For the first six months of 2023:

Beginning balance $ ( 86 ) $ ( 10 ) $ 225 $ 129

Other comprehensive income (loss) 267 — ( 41 ) 226

Amounts reclassified from AOCI — — ( 58 ) ( 58 )

Total other comprehensive income (loss) 267 — ( 99 ) 168

Balance as of June 30, 2023 $ 181 $ ( 10 ) $ 126 $ 297

The following table presents the amount of (gains) losses reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income:

First Quarter

Second Quarter First Six Months

(in millions) Income Statement Caption 2024 2023 2024 2023

2 unchanged sentences

Interest expense $ ( 4 ) $ ( 2 ) $ ( 6 ) $ ( 70 )

FX contracts Cost of sales 2 ( 4 ) 2 ( 5 )

Total ( 2 ) ( 6 ) ( 4 ) ( 75 )

Income tax expense 1 1 1 17

Total, net of tax $ ( 1 ) $ ( 5 ) $ ( 3 ) $ ( 58 )

(1) Amounts reclassified from AOCI into interest expense during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $ 66 million.

(1) Amounts reclassified from AOCI into interest expense during the first six months of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $ 66 million.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Other Financial Information

1 unchanged sentence

The tables below provide selected financial information from the unaudited Condensed Consolidated Balance Sheets:

March 31, December 31,

June 30, December 31,

(in millions) 2024 2023

21 unchanged sentences

Total other non-current assets $ 1,144 $ 1,149

(1) Fair values of these equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1.

Equity Securities

Fair values of equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1.

Unrealized mark-to-market gains and losses are recorded to Other income, net.

For the first quarter of 2024 and 2023, we recorded unrealized mark-to-market losses of $ 2 million and gains of $ 8 million, respectively, on our investment in Vita Coco .

The following table presents the amount of unrealized mark-to-market (gains) losses, net, on our equity securities recognized in the unaudited Condensed Consolidated Statements of Income related to these securities during the periods presented.

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

Unrealized mark-to-market (gains) losses

Vita Coco $ ( 5 ) $ ( 9 ) $ ( 3 ) $ ( 17 )

Rabbi trust — ( 2 ) ( 2 ) ( 4 )

KEURIG DR PEPPER INC.

1 unchanged sentence

(UNAUDITED, CONTINUED)

March 31, December 31,

June 30, December 31,

(in millions) 2024 2023

25 unchanged sentences

We have no economic interest in a supplier’s decision to enter into these agreements and no direct financial relationship with the financial institutions.

Outstanding obligations confirmed as valid included in accounts payable as of March 31, 2024 and December 31, 2023 were $ 1,999 million and $ 2,389 million, respectively.

Outstanding obligations confirmed as valid included in accounts payable as of June 30, 2024 and December 31, 2023 were $ 1,815 million and $ 2,389 million, respectively.

KEURIG DR PEPPER INC.

4 unchanged sentences

Reserves are recorded for specific legal proceedings when the Company determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

We had litigation reserves of $ 8 million and $ 12 million, respectively, as of March 31, 2024 and December 31, 2023.

We had litigation reserves of $ 8 million and $ 12 million, respectively, as of June 30, 2024 and December 31, 2023.

We have 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.

32 unchanged sentences

In 2023, we began to enact several organization movements to ensure succession plans, to reinforce enterprise capabilities to support growth, and to control costs.

A key component of the program was the appointment of Tim Cofer as Chief Operating Officer, effective November 6, 2023, with the expectation that Mr.

Cofer will succeed Robert Gamgort as our CEO during the second quarter of 2024.

A key component of the program was the appointment of Tim Cofer as Chief Operating Officer, effective November 6, 2023, with Mr.

Cofer succeeding Robert Gamgort as our CEO during the second quarter of 2024.

We are also realigning our executive and operating leadership structure to enable faster decision making and to better support various strategic initiatives.

3 unchanged sentences

In March 2024, we announced the closure of our manufacturing facility in Williston, Vermont, with operations and employees to be relocated to other existing manufacturing locations, in order to more effectively and efficiently meet the needs of consumers and customers.

The relocation is expected to take place during the second and third quarters of 2024, and the restructuring program is expected to incur pre-tax restructuring charges in an estimated range of $ 30 million to $ 40 million , primarily comprised of asset related costs.

The relocation began during the second quarter of 2024, and the restructuring program is expected to incur pre-tax restructuring charges in an estimated range of $ 30 million to $ 40 million , primarily comprised of asset related costs, through the third quarter of 2024.

RESTRUCTURING CHARGES

Restructuring and integration expenses for the defined programs during the periods presented were as follows:

First Quarter

Second Quarter First Six Months

(in millions) 2024 2023 2024 2023

7 unchanged sentences

Balance as of January 1, 2024 $ 27

Charges (credits) to expense ( 3 )

Charges to expense 6

Cash payments ( 6 )

Balance as of March 31, 2024 $ 21

Balance as of June 30, 2024 $ 27

Transactions with Related Parties

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements