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Item 1. Financial Statements

2025-07-24 compared with 2025-04-24 · 222 added, 134 removed, 638 unchanged (36% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

First Quarter

Second Quarter First Six Months

(in millions, except per share data) 2025 2024 2025 2024

3 unchanged sentences

Selling, general, and administrative expenses 1,356 1,295 2,548 2,471

Other operating income, net ( 8 ) ( 1 )

Other operating expense (income), net 1 16 ( 7 ) 15

Income from operations 898 861 1,699 1,626

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

First Quarter

Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

3 unchanged sentences

Net change in cash flow hedges, net of tax of $ 5 , $ 1 , $ 6 , and $ 1 , respectively

( 34 ) 21 ( 46 ) 19

Total other comprehensive income (loss) 285 ( 180 ) 286 ( 238 )

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, December 31,

(in millions, except share and per share data) 2025 2024

(in millions, except share and per share data) June 30, 2025 December 31, 2024

Current assets:

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, 1,358,162,801 and 1,356,664,609 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.01 par value, 2,000,000,000 shares authorized, 1,358,413,413 and 1,356,664,609 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 19,729 19,712

Retained earnings 5,232 4,793

Accumulated other comprehensive loss ( 275 ) ( 276 )

Accumulated other comprehensive income (loss) 10 ( 276 )

Total stockholders' equity 24,985 24,243

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

First Quarter

First Six Months

(in millions) 2025 2024

9 unchanged sentences

(Gain) loss on disposal of property, plant, and equipment ( 6 ) 18

Unrealized loss on foreign currency — 8

Unrealized (gain) loss on foreign currency ( 6 ) 16

Unrealized (gain) loss on derivatives ( 56 ) 36

12 unchanged sentences

Investing activities:

Acquisitions of businesses, net of cash acquired ( 111 ) —

Purchases of property, plant, and equipment ( 226 ) ( 273 )

8 unchanged sentences

(UNAUDITED, CONTINUED)

First Quarter

First Six Months

(in millions) 2025 2024

1 unchanged sentence

Proceeds from issuance of Notes

$ 2,000 $ 3,000

Repayments of Notes

Net issuance (repayment) of commercial paper 1,356 ( 188 )

( 529 ) ( 1,150 )

Net repayment of commercial paper ( 139 ) ( 226 )

Repayment of term loan ( 990 ) —

2 unchanged sentences

Cash dividends paid ( 625 ) ( 591 )

Repurchases of common stock — ( 1,105 )

Repurchases of common stock, inclusive of excise tax obligation ( 9 ) ( 1,105 )

Tax withholdings related to net share settlements ( 28 ) ( 43 )

1 unchanged sentence

Other, net ( 16 ) ( 22 )

Net cash (used in) provided by financing activities ( 7 ) 158

Net cash used in financing activities ( 409 ) ( 222 )

Cash, cash equivalents, restricted cash, and restricted cash equivalents:

6 unchanged sentences

Earned equity from distribution arrangements 10 45

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

Dividends declared but not yet paid 312 292

7 unchanged sentences

Common Stock Issued Additional

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

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

(in millions, except per share data) Shares Amount

9 unchanged sentences

1,358.2 $ 14 $ 19,711 $ 4,997 $ ( 275 ) $ 24,447

Net income — — — 547 — 547

Other comprehensive income — — — — 285 285

Dividends declared, $ 0.23 per share

— — — ( 312 ) — ( 312 )

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

Tax withholdings related to net share settlements — — ( 5 ) — — ( 5 )

Stock-based compensation and stock options exercised — — 23 — — 23

Balance as of June 30, 2025

1,358.4 $ 14 $ 19,729 $ 5,232 $ 10 $ 24,985

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED, CONTINUED)

Common Stock Issued Additional

12 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

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, 2025 and 2024.

References to the "second quarter" indicate the quarterly periods ended June 30, 2025 and 2024.

USE OF ESTIMATES

7 unchanged sentences

The following table summarizes our long-term obligations:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

$ 14,419 $ 12,948

3 unchanged sentences

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

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Commercial paper notes $ 1,477 $ 1,616

5 unchanged sentences

SENIOR UNSECURED NOTES

(in millions, except %) Maturity Date Rate March 31, 2025 December 31, 2024

(in millions, except %) Maturity Date Rate June 30, 2025 December 31, 2024

2025 Merger Notes May 25, 2025 4.417 % $ — $ 529

1 unchanged sentence

2026 Notes September 15, 2026 2.550 % 400 400

2026-B Notes November 15, 2026 Floating (2)

2027-B Notes March 15, 2027 Floating (2)

1 unchanged sentence

2027 Notes June 15, 2027 3.430 % 500 500

2028 Notes May 15, 2028 4.350 % 500 —

2028 Merger Notes May 25, 2028 4.597 % 1,112 1,112

2 unchanged sentences

2030 Notes May 1, 2030 3.200 % 750 750

2030-B Notes May 15, 2030 4.600 % 500 —

2031 Notes March 15, 2031 2.250 % 500 500

2 unchanged sentences

2034 Notes March 15, 2034 5.300 % 650 650

2035 Notes May 15, 2035 5.150 % 500 —

2038 Merger Notes May 25, 2038 4.985 % 211 211

10 unchanged sentences

(1) The carrying amount includes unamortized discounts, debt issuance costs, and fair value adjustments related to the DPS Merger.

(2) The 2027-B Notes bear interest at a rate equal to Compounded SOFR (as defined in the respective supplemental indenture) plus 0.88 % per annum, and the rate is reassessed quarterly.

(2) Our floating rate notes bear interest at a rate equal to Compounded SOFR (as defined in the respective supplemental indenture) plus a spread of 0.580 % and 0.880 % for the 2026-B Notes and the 2027-B Notes, respectively.

On May 5, 2025, we completed the issuance of the 2026-B Notes, 2028 Notes, 2030-B Notes, and 2035 Notes, with an aggregate principal amount of $ 2 billion.

The discount associated with these notes was approximately $ 4 million, and we incurred $ 10 million in debt issuance costs.

The proceeds from the issuance were used for the repayment of outstanding commercial paper borrowings.

The 2025 Merger Notes were repaid at maturity using proceeds from commercial paper.

VARIABLE-RATE BORROWING ARRANGEMENTS

Term Loan Agreement

On January 31, 2025, we repaid the first tranche of the Term Loan Agreement using proceeds from commercial paper.

As of March 31, 2025, the second tranche of up to $ 250 million remains available and undrawn.

On January 31, 2025, we repaid the amount outstanding under the Term Loan Agreement using proceeds from commercial paper.

On May 7, 2025, we terminated our Term Loan Agreement.

We had no outstanding loan balances as of the termination date.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Revolving Credit Agreement

3 unchanged sentences

Amounts Outstanding

(in millions) Maturity Date Capacity March 31, 2025 December 31, 2024

(in millions) Maturity Date Capacity June 30, 2025 December 31, 2024

2025 Revolving Credit Agreement (1)

March 31, 2030 $ 4,000 $ — $ —

(1) The 2025 Revolving Credit Agreement has a $ 200 million letter of credit limit, with none utilized as of March 31, 2025.

(1) The 2025 Revolving Credit Agreement has a $ 200 million letter of credit limit, with none utilized as of June 30, 2025 .

The 2025 Revolving Credit Agreement replaced our previous revolving credit agreement.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Borrowings under the 2025 Revolving Credit Agreement will bear interest at a rate per annum equal to, at our option, the term SOFR rate plus a margin of 0.750 % to 1.250 % or the alternative base rate plus a margin of zero to 0.250 % , in each case, depending on the rating of certain of our index debt.

The 2025 Revolving Credit Agreement contains customary representations and warranties for investment grade financings.

The 2025 Revolving Credit Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on us and our subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, us and our subsidiaries from taking certain actions, including, without limitation, incurring liens and consummating certain fundamental changes, (iii) a financial covenant in the form of a minimum interest coverage ratio of 3.25 to 1.00, and (iv) customary events of default (including a change of control) for financings of this type.

As of March 31, 2025, we were in compliance with our minimum interest coverage ratio with respect to the 2025 Revolving Credit Agreement .

T he 2025 Revolving Credit Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on us and our subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, us and our subsidiaries from taking certain actions, including, without limitation, incurring liens and consummating certain fundamental changes, (iii) a financial covenant in the form of a minimum interest coverage ratio of 3.25 to 1.00 , and (iv) customary events of default (including a change of control) for financings of this type.

As of June 30, 2025 , we were in compliance with our minimum interest coverage ratio with respect to the 2025 Revolving Credit Agreement .

Commercial Paper Program

First Quarter

Second Quarter First Six Months

(in millions, except %) 2025 2024 2025 2024

3 unchanged sentences

In addition to the portion of the 2025 Revolving Credit Agreement reserved for issuance of letters of credit, we have an incremental letter of credit facility.

Under this facility, $ 150 million is available for the issuance of letters of credit, $ 72 million of which was utilized as of March 31, 2025 and $ 78 million of which remains available for use.

Under this facility, $ 150 million is available for the issuance of letters of credit, $ 72 million of which was utilized as of June 30, 2025 and $ 78 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 $ 12,151 million and $ 12,036 million as of March 31, 2025 and December 31, 2024, respectively.

The fair value of our Notes was $ 13,714 million and $ 12,036 million as of June 30, 2025 and December 31, 2024, respectively.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

DYLA ACQUISITION

On June 2, 2025, we completed the acquisition of Dyla for aggregate consideration of $ 98 million.

Dyla is a leading player in powdered drink mixes and liquid water enhancers.

Prior to the acquisition, we held direct and indirect ownership interests in Dyla and accounted for the investment as an equity method investment.

In order to complete the acquisition of Dyla, net of our previous ownership interest, we paid $ 69 million in cash, and approximately $ 3 million of cash was held back and placed in escrow.

Our preliminary allocation of consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed is based on estimated fair values as of June 2, 2025, and the consideration w as primarily allocated to intangible assets and goodwill.

GHOST TRANSACTIONS

2 unchanged sentences

We also entered into an agreement which requires us to purchase the remaining equity interests in GHOST in 2028.

As of March 31, 2025, we have finalized our allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in the GHOST Transactions based on estimated fair values as of December 31, 2024.

There were no significant measurement period adjustments recorded during the first quarter of 2025.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

In the first quarter of 2025, we finalized our allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in the GHOST Transactions based on estimated fair values as of December 31, 2024, with no significant measurement period adjustments recorded.

Goodwill and Other Intangible Assets

4 unchanged sentences

Balance as of December 31, 2024 $ 8,855 $ 8,622 $ 2,576 $ 20,053

Acquisitions (1)

Foreign currency translation — — 159 159

Balance as of March 31, 2025

Balance as of June 30, 2025

$ 8,871 $ 8,622 $ 2,735 $ 20,228

(1) Acquisition activity during the first six months of 2025 represents the goodwill recorded as a result of the Dyla Acquisition.

Refer to Note 3 for additional information.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

INTANGIBLE ASSETS OTHER THAN GOODWILL

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

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

6 unchanged sentences

Distribution rights 68 ( 29 ) 39 66 ( 23 ) 43

Other 25 — 25 — — —

Total $ 2,270 $ ( 1,160 ) $ 1,110 $ 2,199 $ ( 1,091 ) $ 1,108

6 unchanged sentences

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

First Quarter

Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

4 unchanged sentences

All derivative instruments are recorded on a gross basis, including those subject to master netting arrangements.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

We formally designate and account for certain interest rate contracts and foreign exchange forward contracts that meet established accounting criteria under U.S.

We formally designate and account for certain interest rate contracts and FX forward contracts that meet established accounting criteria under U.S.

GAAP as cash flow hedges.

5 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, net in the unaudited Condensed Consolidated Statements of Income.

As of March 31, 2025, economic interest rate derivative instruments have maturities ranging from April 2025 to November 2046.

As of June 30, 2025 , economic interest rate derivative instruments have maturities ranging from March 2027 to November 2046.

Cash Flow Hedges

From time to time, we designate certain interest rate contracts as cash flow hedges in order to manage the exposures resulting from changes in interest rates as described above.

We had no such contracts outstanding as of March 31, 2025.

We had no such contracts outstanding as of June 30, 2025 .

FOREIGN EXCHANGE

We are exposed to foreign exchange risk in our foreign subsidiaries and with certain counterparties in foreign jurisdictions, which may transact in currencies that are different from the functional currencies of our legal entities.

We are exposed to FX risk in our foreign subsidiaries and with certain counterparties in foreign jurisdictions, which may transact in currencies that are different from the functional currencies of our legal entities.

Additionally, the balance sheets of these subsidiaries are subject to exposure from movements in exchange rates.

4 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, 2025, these FX contracts have maturities ranging from April 2025 to September 2026.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

As of June 30, 2025 , these FX contracts have maturities ranging from July 2025 to September 2026.

Cash Flow Hedges

We designate certain FX forward contracts as cash flow hedges in order to manage the exposures resulting from changes in the FX rates described above.

These designated FX forward contracts relate to forecasted inventory purchases in U.S.

dollars of our foreign subsidiaries.

These designated FX forward contracts relate to forecasted inventory purchases of our foreign subsidiaries in U.S.

The intent of these FX contracts is to provide predictability in our overall cost structure.

As of March 31, 2025, these FX contracts have maturities ranging from April 2025 to March 2026.

As of June 30, 2025 , these FX contracts have maturities ranging from July 2025 to May 2027.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

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, 2025, these commodity contracts have maturities ranging from April 2025 to January 2027.

As of June 30, 2025 , these commodity contracts have maturities ranging from July 2025 to July 2027.

NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS

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

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Interest rate contracts

Forward starting swaps, not designated as hedging instruments $ 2,300 $ 1,700

Swaptions, not designated as hedging instruments 1,100 —

Forward contracts, not designated as hedging instruments 593 490

14 unchanged sentences

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

(in millions) Balance Sheet Location March 31, 2025 December 31, 2024

(in millions) Balance Sheet Location June 30, 2025 December 31, 2024

Interest rate contracts Prepaid expenses and other current assets $ 1 $ —

FX contracts Prepaid expenses and other current assets 4 7

6 unchanged sentences

Interest rate contracts Other non-current liabilities 342 345

FX contracts Other non-current liabilities 8 —

Commodity contracts Other non-current liabilities 4 3

2 unchanged sentences

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

(in millions) Balance Sheet Location March 31, 2025 December 31, 2024

(in millions) Balance Sheet Location June 30, 2025 December 31, 2024

FX contracts Prepaid expenses and other current assets $ 4 $ 41

FX contracts Other current liabilities 7 —

IMPACT OF DERIVATIVE INSTRUMENTS NOT DESIGNATED AS HEDGING INSTRUMENTS

2 unchanged sentences

Amounts include both realized and unrealized gains and losses.

Income Statement Location First Quarter

Income Statement Location Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

9 unchanged sentences

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

Income Statement Location First Quarter

Income Statement Location Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

3 unchanged sentences

The following table presents the components of lease cost:

First Quarter

Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

8 unchanged sentences

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

First Quarter

First Six Months

(in millions) 2025 2024

7 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Weighted average discount rate

8 unchanged sentences

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

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, 2025 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, 2025 were as follows:

(in millions) Operating Leases Finance Leases

5 unchanged sentences

SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED

As of March 31, 2025, we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $ 149 million.

These leases are expected to commence between the second quarter of 2025 through 2027, with initial lease terms ranging from 3 years to 7 years.

As of June 30, 2025 , we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $ 176 million.

These leases are expected to commence between the third quarter of 2025 through 2027, with initial lease terms ranging from 3 years to 10 years.

Our operating and reportable segments consist of the following:

Refreshment Beverages segment reflects sales in the U.S.

from the manufacture and distribution of branded concentrates, syrup, and finished beverages, including the sales of our own brands and third-party brands, to third-party bottlers, distributors, and retailers.

from the manufacture and distribution of branded concentrates, syrups, and finished beverages, including the sales of our own brands and third-party brands, to third-party bottlers, distributors, and retailers.

Coffee segment reflects sales in the U.S.

1 unchanged sentence

• The International segment reflects sales in international markets, including the following:

◦ Sales in Canada, Mexico, the Caribbean, and other international markets from the manufacture and distribution of branded concentrates, syrup, and finished beverages, including sales of our own brands and third-party brands, to third-party bottlers, distributors, and retailers.

◦ Sales in Canada, Mexico, the Caribbean, and other international markets from the manufacture and distribution of branded concentrates, syrups, and finished beverages, including sales of our own brands and third-party brands, to third-party bottlers, distributors, and retailers.

◦ Sales in Canada from the manufacture and distribution of finished goods relating to our K-Cup pods, single-serve brewers, and other coffee products.

7 unchanged sentences

We have not provided disclosures of intersegment sales or total assets for each reportable segment, as our CODM does not review and is not provided with this information.

“Other segment (income) expense” includes Other operating income, net, as well as other financial statement captions for infrequent charges, such as impairment of goodwill or intangible assets, used to arrive at “Income from operations - reportable segments”.

“Other segment (income) expense” includes Other operating expense (income), net, as well as other financial statement captions for infrequent charges, such as impairment of goodwill or intangible assets, used to arrive at “Income from operations - reportable segments”.

“Unallocated corporate costs” are excluded from our measurement of segment performance and include unrealized commodity derivative gains and losses and certain general corporate expenses.

3 unchanged sentences

Coffee International Total

For the first quarter of 2025:

Second Quarter of 2025

Net sales $ 2,660 $ 948 $ 555 $ 4,163

6 unchanged sentences

Interest expense, net 180

Income before provision for income taxes $ 718

Second Quarter of 2024

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

Cost of sales 950 526 267

SG&A expenses 740 179 149

Other segment (income) expense — 17 ( 1 )

Income from operations - reportable segments $ 717 $ 228 $ 150 $ 1,095

Unallocated corporate costs ( 234 )

Income from operations 861

Interest expense, net 204

Other income, net ( 15 )

Income before provision for income taxes $ 672

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

(in millions) U.S.

1 unchanged sentence

Coffee International Total

For the first quarter of 2024:

First Six Months of 2025

Net sales $ 4,983 $ 1,825 $ 990 $ 7,798

8 unchanged sentences

Income before provision for income taxes $ 1,378

First Six Months of 2024

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

Cost of sales 1,750 1,023 495

SG&A expenses 1,419 345 272

Other segment (income) expense ( 1 ) 17 —

Income from operations - reportable segments $ 1,332 $ 476 $ 262 $ 2,070

Unallocated corporate costs ( 444 )

Income from operations 1,626

Interest expense, net 382

Other income, net ( 22 )

Income before provision for income taxes $ 1,266

KEURIG DR PEPPER INC.

5 unchanged sentences

Coffee International Total

For the first quarter of 2025:

Second Quarter of 2025

$ 2,589 $ 15 $ 374 $ 2,978

3 unchanged sentences

Net sales $ 2,660 $ 948 $ 555 $ 4,163

For the first quarter of 2024:

Second Quarter of 2024

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

3 unchanged sentences

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

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

First Six Months of 2025

$ 4,852 $ 28 $ 651 $ 5,531

K-Cup pods — 1,490 248 1,738

Appliances — 238 20 258

Other 131 69 71 271

Net sales $ 4,983 $ 1,825 $ 990 $ 7,798

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

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

K-Cup pods represents net sales from owned brands, partner brands, and private label owners.

Net sales for partner brands and private label owners are contractual and long-term in nature.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Earnings Per Share

First Quarter

Second Quarter First Six Months

(in millions, except per share data) 2025 2024 2025 2024

6 unchanged sentences

Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation 0.4 0.9 0.4 0.9

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Stock-Based Compensation

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

First Quarter

Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

10 unchanged sentences

Forfeited ( 1,040,196 ) 29.87

Outstanding as of March 31, 2025 12,522,161 $ 29.77 2.2 $ 429

Outstanding as of June 30, 2025 12,307,572 $ 29.81 2.2 $ 407

(1) Beginning in 2025, new RSUs granted vest ratably over 4 years.

As of March 31, 2025, there was $ 205 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 3.3 years.

As of June 30, 2025 , there was $ 193 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 3.2 years.

PERFORMANCE SHARE UNITS

5 unchanged sentences

Beginning in 2025, the fair value of PSUs is determined based on the number of units granted and the grant date price of common stock.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

The table below summarizes PSU activity:

3 unchanged sentences

Forfeited or expired ( 1,314 ) 30.71

Balance as of March 31, 2025 442,619 $ 30.71 2.9 $ 15

As of March 31, 2025, there was $ 9 million of unrecognized compensation cost related to unvested PSUs that is expected to be recognized over a weighted average period of 2.9 years.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Balance as of June 30, 2025 450,878 $ 30.71 2.7 $ 15

As of June 30, 2025 , there was $ 9 million of unrecognized compensation cost related to unvested PSUs that is expected to be recognized over a weighted average period of 2.7 years.

The following table summarizes our investments in unconsolidated affiliates:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Nutrabolt (1)

5 unchanged sentences

(1) We hold a 36.0 % interest on an as-converted basis in Nutrabolt, consisting of 30.9 % in Class A preferred shares acquired through our December 2022 investment, which are treated as in-substance common stock, and 5.1 % in Class B common shares earned through the achievement of certain milestones included in our distribution agreement with Nutrabolt.

(2) During the first quarter of 2025, we received additional equity interests in Athletic Brewing in accordance with our investment agreement, raising our total interest to 12.2 % as of March 31, 2025.

(2) During the first quarter of 2025, we received additional equity interests in Athletic Brewing in accordance with our investment agreement, raising our total interest to 12.2 %.

This earned equity is recorded in Other income, net in the unaudited Condensed Consolidated Statements of Income.

Our effective tax rates were as follows:

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

Effective tax rate 23.8 % 23.4 % 22.8 % 23.5 %

For the first quarter of 2025, the change in our effective tax rate was largely driven by a non-cash revaluation of state deferred tax liabilities and a shift in the mix of income from higher tax jurisdictions to lower tax jurisdictions.

Accumulated Other Comprehensive (Loss) Income

For the second quarter of 2025, the change in our effective tax rate was driven by an increase in uncertain tax positions and an unfavorable comparison to a non-cash revaluation of state deferred tax liabilities in the second quarter of 2024, which was largely offset by a shift in the mix of income from higher tax jurisdictions to lower tax jurisdictions.

For the first six months of 2025, the change in our effective tax rate was primarily driven by a shift in the mix of income from higher tax jurisdictions to lower tax jurisdictions, partially offset by an increase in uncertain tax positions.

On July 4, 2025, the OBBB was signed into law in the U.S., which includes a broad range of tax reform provisions.

We are currently evaluating the impact of the OBBB.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Accumulated Other Comprehensive Income (Loss)

The following table provides a summary of changes in AOCI, net of taxes:

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

For the first quarter of 2025:

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

Second Quarter of 2025

Beginning balance $ ( 397 ) $ ( 14 ) $ 136 $ ( 275 )

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Total other comprehensive income (loss) 319 — ( 34 ) 285

Balance as of March 31, 2025 $ ( 397 ) $ ( 14 ) $ 136 $ ( 275 )

For the first quarter of 2024:

Balance as of June 30, 2025 $ ( 78 ) $ ( 14 ) $ 102 $ 10

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

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

Income Statement Caption First Quarter

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

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

First Six Months of 2025

Beginning balance $ ( 410 ) $ ( 14 ) $ 148 $ ( 276 )

Other comprehensive income (loss) 332 — ( 32 ) 300

Amounts reclassified from AOCI — — ( 14 ) ( 14 )

Total other comprehensive income (loss) 332 — ( 46 ) 286

Balance as of June 30, 2025 $ ( 78 ) $ ( 14 ) $ 102 $ 10

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

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

Income Statement Caption Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

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Total, net of tax $ ( 9 ) $ ( 1 ) $ ( 14 ) $ ( 3 )

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Other Financial Information

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The following table provides a reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within the unaudited Condensed Consolidated Balance Sheets to the total of the same amounts shown in the unaudited Condensed Consolidated Statements of Cash Flows:

(in millions) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Cash and cash equivalents $ 509 $ 510

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Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 565 $ 608

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

SELECTED BALANCE SHEET INFORMATION

March 31, December 31,

(in millions) 2025 2024

(in millions) June 30, 2025 December 31, 2024

Raw materials $ 691 $ 524

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Total other non-current assets $ 1,095 $ 1,200

(1) 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.

During the first quarter of 2025, we recorded a realized gain of $ 34 million on the sale of our investment in Vita Coco.

(1) We sold our investment in Vita Coco and recorded a realized gain of $ 34 million in the first quarter of 2025.

KEURIG DR PEPPER INC.

1 unchanged sentence

(UNAUDITED, CONTINUED)

March 31, December 31,

(in millions) 2025 2024

(in millions) June 30, 2025 December 31, 2024

Accrued expenses:

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Supplier Financing Arrangements

Outstanding obligations under supplier financing arrangements, which are confirmed as valid and included in accounts payable as of March 31, 2025 and December 31, 2024, were $ 1,759 million and $ 1,740 million, respectively.

Outstanding obligations under supplier financing arrangements, which are confirmed as valid and included in accounts payable as of June 30, 2025 and December 31, 2024, were $ 1,668 million and $ 1,740 million, respectively.

KEURIG DR PEPPER INC.

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Reserves are recorded 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.

We had litigation reserves of $ 2 million as of both March 31, 2025 and December 31, 2024.

We had litigation reserves of $ 3 million and $ 2 million as of June 30, 2025 and December 31, 2024, respectively.

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.

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Keurig strongly disputes the merits of the claims and the calculation of damages.

In 2021, the parties filed motions challenging the validity of certain of the other parties’ proposed expert opinions.

In January 2025, the court issued a ruling on these motions, granting challenges to certain expert testimony - including Keurig’s challenge to JBR, Inc.’s damages expert - but largely denying the parties’ motions.

Keurig has also fully briefed summary judgment motions that, if successful, would end the cases entirely.

Keurig has fully briefed summary judgment motions that, if successful, would end the cases entirely.

Keurig is also pursuing its opposition to direct purchaser plaintiffs’ motion for class certification.

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Additionally, as the timelines in these cases may be beyond our control, we can provide no assurance as to whether or when there will be material developments in these matters.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Restructuring

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In March 2024, we announced a restructuring program designed to more effectively and efficiently meet the needs of consumers and customers.

The program initially included the closure of our manufacturing facility in Williston, Vermont, with operations and employees relocating to other existing manufacturing locations.

The relocation began during the second quarter of 2024 and was completed in the third quarter of 2024.

In July 2024, we also announced the closure of our Windsor, Virginia manufacturing facility, which is expected to be completed in the second quarter of 2025.

Our restructuring program also encompasses other costs intended to optimize our manufacturing and distribution footprint throughout our operations.

The restructuring program is expected to incur pre-tax restructuring charges in an estimated range of $ 125 million to $ 145 million, primarily comprised of asset related costs, through the second half of 2025.

Our restructuring program includes the closure of certain facilities and other costs intended to optimize our manufacturing and distribution footprint throughout our operations.

The restructuring program is expected to incur pre-tax restructuring charges in an estimated range of $ 150 million to $ 170 million through 2026, primarily comprised of asset related costs.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

2023 CEO Succession and Associated Realignment

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 Mr.

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

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

The program is expected to incur charges of approximately $ 85 million, primarily driven by severance costs, which were substantially completed as of December 31, 2024, and the sign-on bonus for Mr.

RESTRUCTURING CHARGES

In 2023, we began to implement succession planning for our CEO, including a realignment of our executive and operating leadership team, in order to reinforce enterprise capabilities to support growth and to control costs.

The program is expected to incur charges of approximately $ 85 million, primarily driven by severance costs, which were substantially completed as of December 31, 2024, and the sign-on bonus for our CEO.

RESTRUCTURING EXPENSES

Restructuring expenses for the defined programs were as follows:

First Quarter

Second Quarter First Six Months

(in millions) 2025 2024 2025 2024

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Cash payments ( 17 )

Balance as of March 31, 2025 $ 36

Balance as of June 30, 2025 $ 23

Related Parties

4 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