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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 261 added, 52 removed, 295 unchanged (51% of the section changed)

In addition to the other information set forth in this Annual Report, the following factors should be considered, which could materially affect our business, financial condition, and results of operations.

The risks described below are not the only risks we face.

Risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse affect on our business, financial condition, or results of operations.

RISK FACTORS SUMMARY

• Disruption of our manufacturing and distribution operations or supply chain, including increased input costs, may adversely affect our financial condition or results of operations.

• We operate in highly competitive categories, and any inability to compete effectively could adversely impact our business.

• We may not effectively respond to changing consumer preferences and shopping behavior, which could impact our financial results.

• Concerns about the safety, quality, or health effects of our products could negatively affect our business.

• Damage to our reputation or brand image can adversely affect our business.

• If we do not successfully manage our acquisitions of and investments in new businesses or brands, our operating results may adversely be affected.

• Failure to realize benefits or successfully manage the potential negative consequences of our productivity initiatives can adversely affect our financial performance.

• Our facilities and operations may require substantial investment and upgrading, and such investments may not achieve the intended financial benefits.

• We depend on key information systems, and our use of information technology exposes us to business disruptions that could adversely affect us.

• Our intellectual property rights could be infringed or we could infringe the intellectual property rights of others, and adverse events regarding licensed intellectual property could harm our business.

• Failure to attract, retain, develop, and motivate a highly skilled and diverse workforce, or failure to effectively manage changes in our workforce, could significantly impact our operations.

• We may not be able to renew collective bargaining agreements on satisfactory terms, or we could experience union activity, including new unionization, labor disputes, or work stoppages.

• Increases in our cost of employee benefits in the future could reduce our profitability.

• We negotiate with our suppliers to optimize our terms and conditions, including payment terms, and reductions in our payment terms with our suppliers could adversely affect our liquidity.

• An impairment of the value of our goodwill and other indefinite lived intangible assets could have a material adverse effect on our financial statements.

• We depend on third-party bottling and distribution companies for a significant portion of our business.

• Changes in the retail landscape or in sales to any key customer can adversely affect our business.

• Failure to maintain strategic relationships with brand owners and private label brands could adversely impact our future growth and business, potentially resulting in the termination of those agreements.

• Equity method investments are managed independently of us and may have different interests than we do.

Their decisions could impact our financial performance.

• The use of information technology by our third-party commercial partners and service providers exposes us to business disruptions or other negative impacts that could adversely affect us.

• We rely on the performance of a limited number of suppliers and manufacturers for our brewers, and a limited number of order fulfillment companies for our brewers, beverage concentrates, and syrups.

• Our financial results may be negatively impacted by unfavorable economic and geopolitical conditions.

and international laws and regulations could adversely affect our business.

• Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.

• Increased concerns related to the use or disposal of plastics or other packaging materials can adversely affect our business and financial performance.

• Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected products.

• Our use of information technology and third-party service providers exposes us to cybersecurity breaches and other business disruptions that could adversely affect us.

• Failure to comply with personal data protection and privacy laws can adversely affect our business.

• Climate change or related legislation could adversely affect our business.

• Water scarcity and quality could adversely affect our business.

• Fluctuations in our effective tax rate may result in volatility in our financial results.

• We may not complete the proposed JDE Peet's Acquisition within the time frame we anticipate, or at all, which could adversely affect our business.

• The market price of our common stock may decline as a result the JDE Peet's Acquisition.

• We will incur significant direct and indirect costs as a result of the JDE Peet's Acquisition.

• The JDE Peet's Acquisition will expose us to inherent risks in JDE Peet's' business and those geographies where JDE Peet's currently operates, which could adversely affect our business.

• If our due diligence investigation of JDE Peet's was inadequate or if unexpected risks related to JDE Peet's and its business materialize, it could have a material adverse effect on our business.

• We may not successfully integrate JDE Peet's into our business, or such integration may be more difficult, time-consuming, or costly than expected, which could adversely affect our business.

• We will be subject to business uncertainties related to the JDE Peet's Acquisition.

• We will incur and assume significant debt as a result of the JDE Peet's Acquisition, which could adversely affect our financial performance.

• In connection with the JDE Peet's Acquisition, we expect to consummate the JV Investment, which could restrict our operational and corporate flexibility, impact our cash resources, and/or depress the market price of our common stock.

• The issuance of Convertible Preferred Stock in connection with the JDE Peet's Acquisition may adversely affect the rights and market price of our common stock as well as our capital resources.

• We may issue additional equity securities in the future to raise proceeds to fund the JDE Peet's Acquisition, which may result in further dilution to our existing shareholders.

• The Separation may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, expenses, and resources, which could adversely affect our business.

• We may be unable to achieve some or all of the anticipated strategic and financial benefits from the Separation.

• Following the Separation, we may not maintain a satisfactory credit rating, which could adversely affect the financial performance of our businesses.

• Following the Separation, the price of our common stock may decline and may experience greater volatility.

RISKS RELATED TO OUR OPERATIONS

Disruption of our manufacturing and distribution operations or supply chain, including increased commodity, raw material, packaging, energy, transportation, and other input costs may adversely affect our financial condition or results of operations.

Disruption of our manufacturing and distribution operations or supply chain, including increased input costs, may adversely affect our financial condition or results of operations.

We have experienced, and could continue to experience, disruptions in our supply chain and our manufacturing and distribution operations, which could have a material adverse effect on our business.

Some raw materials and supplies used in the production of our products, including packaging materials, are available from a limited number of suppliers or from a sole supplier, or are in short supply when seasonal demand is at its peak.

Certain raw materials and supplies used directly or indirectly in the production of our products are sourced from countries experiencing civil unrest, political instability, or unfavorable economic conditions.

Certain raw materials and supplies used in the production of our products are sourced from countries experiencing civil unrest, political instability, or unfavorable economic conditions.

Adverse weather conditions may affect the supply of agricultural commodities from which key ingredients for our products are derived.

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Any sustained or significant disruption to the manufacturing or sourcing of raw materials could increase our costs and interrupt product supply, which could adversely impact our business.

The raw materials and other supplies, including agricultural commodities (such as coffee, apples, and corn), fuel and packaging materials, transportation, and other supply chain inputs that we use for the manufacturing, production, and distribution of our products are subject to price volatility and fluctuations in availability caused by many factors, which include changes in supply and demand;

Additionally, if demand increases beyond our production capabilities, we may need to expand our capacity.

Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more than existing facilities, or may take a significant time to start production, each of which could negatively affect our business and financial performance.

changes in supply and demand;

supplier capacity constraints;

weather conditions (including the effects of climate change);

wildfires and other natural disasters;

natural disasters;

disease or pests;

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or fluctuations in foreign currency exchange rates.

Many of these factors could also cause a significant disruption at our manufacturing and distribution facilities or the facilities of our bottlers, contract manufacturers, or distributors, which could have a material adverse effect on our business.

We have been affected by a number of these factors, led by inflationary pressures on input and other costs, which may continue.

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In our coffee business, the quality of the coffee we seek tends to trade on a negotiated basis at a premium above the "C" price of coffee.

This premium depends upon the supply and demand at the time of purchase, and the amount of the premium can vary significantly.

Volatility in coffee prices can impact our ability to enter into fixed-price purchase commitments, and we frequently enter into “price-to-be-fixed” supply contracts in which the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and therefore price, at which the base coffee commodity price component will be fixed has not yet been established.

This premium depends upon the supply and demand at the time of purchase and can vary significantly.

Volatility in coffee prices can impact our ability to enter into fixed-price purchase commitments.

We frequently enter into "price-to-be-fixed" supply contracts with defined quality, quantity, delivery, and other negotiated terms, but the date, and therefore price, at which the base coffee commodity price component will be fixed has not yet been established.

When input prices increase unexpectedly or significantly, we may be unwilling or unable to increase our product prices or unable to effectively hedge against price increases to offset these increased costs without suffering reduced volume, revenue, margins, and operating results.

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In addition, price decreases in commodities that we have effectively hedged could also increase our cost of goods sold for mark-to-market changes in the derivative instruments.

We operate in intensely competitive categories, and our potential inability to compete effectively could adversely impact our business.

We operate in highly competitive categories, and any inability to compete effectively could adversely impact our business.

The beverage industry is highly competitive and continues to evolve in response to changing consumer preferences.

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Our sales of beverages, Keurig brewers, K-Cup pods, and other products may be negatively affected by numerous factors including our inability to maintain or increase prices, our inability to effectively promote our products, new entrants into the market, the decision of wholesalers, retailers, or consumers to purchase competitors' products instead of ours, increased marketing costs, and higher in-store placement and slotting fees driven by our competitors' willingness to spend aggressively.

In addition, the rapid growth of e-commerce may create additional consumer price deflation by, among other things, facilitating comparison shopping, and could potentially threaten the value of some of our legacy route-to-market strategies and thus negatively affect revenues.

In addition, the continued growth of e-commerce may create additional consumer price deflation by, among other things, facilitating comparison shopping, and could potentially threaten the value of some of our legacy route-to-market strategies and thus negatively affect revenues.

If we are unable to effectively compete, our business and our financial results would be negatively affected.

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Consumer shopping behavior is also rapidly evolving.

Changes in mobility, travel, and leisure activity patterns, the acceleration of e-commerce and other methods of purchasing products, inflation and economic uncertainty, and pandemics, epidemics or other disease outbreaks, among others, have impacted and could continue to impact consumer shopping behavior and demand for our products.

Changes in mobility, travel, and leisure activity patterns, the acceleration of e-commerce, inflation and economic uncertainty, and pandemics, epidemics, or other disease outbreaks, among others, have impacted and could continue to impact consumer shopping behavior and demand for our products.

If we are unable to meet the consumer where and when they desire their products or if we are unable to respond to changes in distribution channels, our financial results could be adversely impacted.

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The success of our business depends in part on our ability to maintain consumer confidence in the safety and quality of all of our products, including beverage products, their ingredients, their packaging, and our brewers.

A failure or perceived failure to meet our quality, health, or safety standards, particularly as we expand our product offerings through innovation, partnerships or acquisitions into new beverage categories, including product contamination or tampering, undeclared allergens or allegations of mislabeling, whether actual or perceived, could occur in our operations or those of our bottlers, manufacturers, distributors or suppliers.

A failure or perceived failure to meet our quality, health, or safety standards, particularly as we expand our product offerings through innovation, partnerships, or acquisitions into new beverage categories, including product contamination or tampering, undeclared allergens, or allegations of mislabeling, whether actual or perceived, has occurred, and may in the future occur, in our operations or those of our bottlers, manufacturers, distributors, or suppliers.

This could result in time-consuming and expensive production interruptions, recalls, market withdrawals, product liability claims, and negative publicity.

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Moreover, negative publicity may result from false, unfounded, or nominal liability claims or limited recalls.

In addition, adverse public opinion, third-party studies, or other allegations, whether or not valid, regarding the perceived or potential negative health effects of processing or ingredients in our beverage products, such as concerns about the caloric intake associated with soft drinks or the use of synthetic colors, nutritive and non-nutritive sweeteners or other additives in our beverages, or chemicals of concern or other substances in our ingredients or materials, may contribute to actual or threatened legal action against us, negative consumer perception of our products, new or increased taxes on our products, or additional government regulation, including new or changing restrictions on the inclusion of our products in benefit programs, such as the U.S.

In addition, adverse public opinion, third-party studies, or other allegations, whether or not valid, regarding the perceived or potential negative health effects of processing or ingredients in our beverage products, such as concerns about the caloric intake associated with soft drinks or the use of synthetic colors, nutritive and non-nutritive sweeteners or other additives in our beverages, or chemicals of concern or other substances in our ingredients or materials, may contribute to actual or threatened legal action against us, negative consumer perception of our products, new or increased taxes on our products, or additional government regulation, including new or increased restrictions on the inclusion of our products in benefit programs, such as the U.S.

supplemental nutrition assistance program known as SNAP, any of which could result in decreased demand for our products or reformulations of existing products to remove such ingredients or substances, which may be costly and reduce their appeal.

Such risks may be increased if government officials make public statements about alleged risks purportedly associated with processing, particular ingredients used in our products, or unintentional contaminants that may be present in the water supply.

Any or all of these events may lead to a loss of consumer confidence and trust, could damage the reputation of our brands and may cause consumers to choose other products and could negatively affect our business and financial performance.

Any or all of these events may lead to a loss of consumer confidence and trust, could damage the reputation of our brands, and may cause consumers to choose other products, which could negatively affect our business and financial performance.

Damage to our reputation or brand image can adversely affect our business.

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any failure to comply with laws and regulations;

consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media and our response to political and social issues or catastrophic events;

or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing.

and consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media, and our response to political and social issues or catastrophic events or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing.

Damage to our reputation or brand image could decrease demand for our products, thereby adversely affecting our business.

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From time to time, we acquire or invest in businesses or brands, form joint ventures, and enter into licensing and distribution agreements.

If we are unable to complete such transactions or successfully integrate and develop acquired businesses, including the effective management of integration activities, we could fail to achieve the expected increases in revenues and operating results or the anticipated synergies and cost savings.

Additional acquisition risks include the diversion of management attention from our existing business, potential loss of key employees, suppliers, or customers from the acquired business, assumption of unforeseen risks and liabilities, and greater than anticipated operating costs of the acquired business.

Any of these factors could adversely affect our financial results.

Our quality management protocols, which are designed to ensure product quality and safety, may not be sufficiently robust to fully manage the expanded range of product offerings introduced through new investments, licensing or distribution agreements, which may increase our costs or subject us to negative publicity.

If we are unable to complete such transactions or successfully integrate and develop acquired businesses, we could fail to achieve the expected increases in revenues and operating results or the anticipated synergies and cost savings.

Additional acquisition risks which could adversely affect our financial results include the diversion of management attention from our existing business, potential loss of key employees, suppliers, or customers from the acquired business, assumption of unforeseen risks and liabilities, and greater than anticipated operating costs of the acquired business, among others.

Our quality management protocols, which are designed to ensure product quality and safety, may not be sufficiently robust to fully manage the expanded range of product offerings introduced through new investments or licensing or distribution agreements, which may increase our costs or subject us to negative publicity.

In addition, we may also experience delays in extending our respective internal control over financial reporting to new acquisitions or investments, which may increase the risk of misstatements in our financial records and in our consolidated financial statements.

In evaluating strategic transactions, we are required to make difficult judgments regarding the value of business strategies, opportunities, technologies and other assets, and the risks and cost of potential liabilities.

In the past we have been, and in the future we may be, unable to realize the expected benefits of acquisitions, investments, or licensing or distribution agreements;

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Our ability to manage and improve the performance of acquired businesses or brands and our other investments and ventures will impact our financial performance.

We may not achieve the strategic and financial objectives for such transactions.

If we are unable to achieve such objectives, our consolidated results could be negatively affected.

If we are unable to achieve the strategic and financial objectives for such transactions, our consolidated results could be negatively affected.

Refer to the Risks Related to the JDE Peet's Acquisition section for risks specific to the JDE Peet's Acquisition.

Failure to realize benefits or successfully manage the potential negative consequences of our productivity initiatives can adversely affect our financial performance.

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These strategic initiatives have included investments in new technologies and optimization of certain processes and of our manufacturing footprint.

Some of our productivity initiatives may result in unintended consequences, such as business disruptions, distraction of management and employees, reduced morale and productivity, inability to obtain expected savings to reinvest into the business, an inability to attract or retain employees, negative publicity and disruption of the internal control structures of the affected business operations.

Some of our productivity initiatives may result in unintended consequences, such as business disruptions, distraction of management and employees, reduced morale and productivity, inability to obtain expected savings to reinvest into the business, inability to attract or retain employees, negative publicity, and disruption of the internal control structures of the affected business operations.

If we are unable to successfully implement our productivity initiatives as planned, or do not achieve expected savings as a result of these initiatives, we may not realize all or any of the anticipated benefits, resulting in adverse effects on our financial performance.

Our facilities and operations may require substantial investment and upgrading, including investments in new technologies and digital transformation, and such investments may not achieve the intended financial benefits.

Our facilities and operations may require substantial investment and upgrading, and such investments may not achieve the intended financial benefits.

We continue to incur significant costs to maintain or upgrade various technologies, facilities, and equipment or restructure our operations, including closing existing facilities or opening new ones.

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If the cost of our investments is higher than anticipated, the investments and upgrades are not sufficient to meet our near-term future business needs, our business does not develop as anticipated to appropriately utilize new or upgraded facilities, or third parties fail to complete the construction or renovation of facilities or production equipment in a timely manner or in accordance with our specifications, we may be delayed in realizing the intended benefits or our costs and financial performance could be negatively affected.

We have ongoing programs to invest and upgrade our manufacturing, distribution and other facilities, including expansive investments in our manufacturing facility in Spartanburg, South Carolina.

We have ongoing programs to invest and upgrade our manufacturing, distribution, and other facilities.

These investments require us to rely on third parties for the construction and renovation of our facilities and manufacturing of our production equipment.

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Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers, or other business disruptions, all of which could negatively affect our business and financial performance.

Our users’ data and customer information may be improperly accessed, used or disclosed if we fail to adopt or adhere to adequate information security practices, or fail to comply with their respective online policies, or in the event of a breach of our networks, which could subject us to legal action, reputational harm, or otherwise negatively impact our business and financial performance.

Substantial disruption at our manufacturing and distribution facilities could occur.

A disruption at our manufacturing and distribution facilities could have a material adverse effect on our business, as could a disruption at the facilities of our bottlers, contract manufacturers or distributors.

Disruptions could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, widespread illness, strikes, labor shortages, transportation or supply interruption, contractual dispute, government regulation, cybersecurity attacks or terrorism.

Moreover, if demand increases beyond our production capabilities, we would need to expand our capabilities internally or acquire additional capacity.

Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more than existing facilities or may take a significant time to start production, each of which could negatively affect our business and financial performance.

Our users' data and customer information may be improperly accessed, used, or disclosed if we fail to adopt or adhere to adequate information security practices, or in the event of a breach of our networks, which could subject us to legal action, reputational harm, or otherwise negatively impact our business and financial performance.

Our intellectual property rights could be infringed or we could infringe the intellectual property rights of others, and adverse events regarding licensed intellectual property could harm our business.

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Adverse events affecting those third parties or their products could also negatively impact our brands.

Failure to attract, retain, develop and motivate a highly skilled and diverse workforce, or failure to effectively manage changes in our workforce such as labor shortages, employee turnover and increases in wages, could significantly impact our operations.

Failure to attract, retain, develop, and motivate a highly skilled and diverse workforce, or failure to effectively manage changes in our workforce, could significantly impact our operations.

The labor market has experienced and may continue to experience labor shortages, inflation in labor costs, and increased employee turnover, which has impacted and may continue to impact our ability to attract and retain a highly skilled and diverse workforce.

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Excluding our suppliers who require cash at date of purchase or sale, our current payment terms with our suppliers generally range from 10 to 360 days.

The length of our payment terms has been reduced in recent periods and will continue to be reduced, including as a result of a supplier being replaced, renegotiation of a supplier’s contract during the procurement process, through efforts to increase the overall pool of potential suppliers for selection, or in order to receive favorable pricing or other terms during commercial negotiations.

Reductions in our payment terms have negatively affected, and could continue to negatively affect, our liquidity and our ability to maintain our cash conversion cycle to maximize our working capital.

The length of our payment terms has been reduced in recent periods and may continue to be reduced, including as a result of a supplier being replaced, renegotiation of a supplier's contract during the procurement process, through efforts to increase the overall pool of potential suppliers for selection, or in order to receive favorable pricing or other terms during commercial negotiations.

Reductions in our payment terms have negatively affected, and could continue to negatively affect, our liquidity and our ability to maximize our working capital.

Reduced payment terms have contributed to, and could continue to contribute to, our need to utilize various financing arrangements for short-term liquidity.

We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long-term stockholder value.

In October 2021, our Board authorized KDP to repurchase up to $4 billion of our outstanding common stock over a four-year period, beginning on January 1, 2022, potentially enabling us to return value to shareholders.

Our repurchase program does not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares.

Under the terms of our share repurchase program, shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act) in accordance with federal securities laws.

We may fund our share repurchases through cash flow from operations, borrowings, a combination of the two, or other sources of liquidity.

The actual manner, timing, amount, value and counterparties of any repurchases under the program will be determined at our discretion and will depend on a number of factors, including the market price of our common stock, trading volume, other capital management objectives and opportunities, applicable legal requirements, applicable tax effects, and general market and economic conditions.

We cannot guarantee that we will repurchase shares (or the terms or amount of any such repurchase) or conduct future share repurchase programs, and we cannot guarantee that any such programs will result in long-term increases to shareholder value.

The existence of our stock repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock.

Additionally, significant changes in laws or regulations may reduce our ability or inclination to take advantage of our share repurchase program.

Determinations in the future that a significant impairment of the value of our goodwill and other indefinite-lived intangible assets has occurred could have a material adverse effect on our financial statements.

As of December 31, 2024, we had $53,430 million of total assets, of which $20,053 million were goodwill and $23,634 million were other intangible assets.

Intangible assets include both definite and indefinite-lived intangible assets in connection with brands, trade names, acquired technology, customer relationships, and contractual arrangements.

An impairment of the value of our goodwill and other indefinite lived intangible assets could have a material adverse effect on our financial statements.

As of December 31, 2025, we had $55 billion of total assets, of which approximately $20 billion were goodwill and approximately $24 billion were intangible assets.

Intangible assets include both definite and indefinite lived intangible assets in connection with brands, trade names, acquired technology, customer relationships, contractual arrangements, and distribution rights.

We conduct impairment tests on goodwill and all indefinite lived intangible assets annually, as of October 1, or more frequently if circumstances indicate that all or a portion of the carrying amount of an asset may not be recoverable.

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The loss of strategic partners could also adversely impact our future profitability and growth, awareness of Keurig brewers, our ability to attract additional brands or private label parties to do business with us or our ability to attract new consumers to buy Keurig brewers.

We also regularly enter into strategic relationships for the manufacture and/or distribution of beverage products from partner brand owners, including in emerging or fast-growing segments in which we may not currently have a brand presence.

We also regularly enter into strategic relationships for the manufacturing and/or distribution of beverage products from partner brand owners, including in emerging or fast-growing segments in which we may not currently have a brand presence.

If our partner brands terminate their agreements with us, it could negatively affect our revenues and results of operations.

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We recognize a portion of our investees' financial results within our net income based upon our ownership interest, unless the investment agreement indicates an alternative allocation of earnings or losses.

We also assess our equity method investments as and when required by GAAP to determine whether they are impaired and, if they are, we record appropriate impairment charges.

We also assess our equity method investments as and when required by U.S.

GAAP to determine whether they are impaired and, if they are, we record appropriate impairment charges.

Our equity method investees also perform similar recoverability and impairment tests, and we record our share of impairment charges recorded by them, if any, adjusted, as appropriate, for the impact of items such as basis differences, deferred taxes, and deferred gains.

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GENERAL RISK FACTORS

Our financial results may be negatively impacted by recession, financial and credit market disruptions and other political, social or economic conditions.

Our financial results may be negatively impacted by unfavorable economic and geopolitical conditions.

Changes in economic and financial conditions in the U.S., Canada, Mexico, or other geographies where we do business may negatively impact consumer confidence and consumer spending, which could result in a reduction in our sales volume and/or switching to lower price offerings.

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We cannot predict how current or future economic conditions will affect our business partners, including financial institutions with whom we do business, and any negative impact on any of the foregoing may also have an adverse impact on our business.

Disruptions in financial and credit markets could also have a negative effect on our ability to raise capital through the issuance of unsecured commercial paper or senior notes.

Disruptions in financial and credit markets could also have a negative effect on our ability to raise capital, including through the issuance of unsecured commercial paper or senior notes.

In addition, declines in the securities and credit markets could affect our pension and PRMB assets and obligations, which in turn could increase our funding requirements.

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Restrictions on business activities, which have been or may be imposed or expanded as a result of political and economic instability, deterioration of economic relations between countries, such as changes in or terminations of existing trade agreements, or the imposition of tariffs (including recent U.S.

tariffs imposed or threatened to be imposed on Canada, Mexico, China, and other countries, and any retaliatory actions taken by such countries), or otherwise, could impact our profitability or otherwise have an adverse effect on our business.

We have no operations in Russia, Ukraine, or the Middle East, but due to the impact of the ongoing conflicts in those regions on the global economy, we have experienced and may continue to experience supply chain constraints;

tariffs imposed or threatened to be imposed on Canada, Mexico, China, Brazil, and other countries, and any retaliatory actions taken by such countries), or otherwise, has and could continue to impact our profitability or otherwise have an adverse effect on our business.

We do not currently have operations in Russia, Ukraine, or the Middle East, but due to the impact of the ongoing conflicts in those regions on the global economy, we have experienced and may continue to experience supply chain constraints;

inflation in input costs, logistics, manufacturing, and labor costs;

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Plaintiffs in class action litigation may seek to recover amounts that are large and may be indeterminable for some period of time.

We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses, and we establish a reserve as appropriate based upon assessments and estimates in accordance with our accounting policies.

We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses, and we establish an accrual as appropriate based upon assessments and estimates in accordance with our accounting policies.

We base our assessments, estimates and disclosures on the information available to us at the time and rely on legal and management judgment.

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The results of audits or related disputes could have a material adverse effect on our financial statements for the period or periods for which the applicable final determinations are made and for periods for which the statute of limitations is open.

RISKS RELATED TO THE JDE PEET'S ACQUISITION

We may not complete the proposed JDE Peet's Acquisition within the time frame we anticipate, or at all, which could adversely affect our business.

On August 24, 2025, we entered into the JDE Peet's Acquisition Agreement, and on January 16, 2026, pursuant to the terms of the JDE Peet's Acquisition Agreement, we commenced a tender offer to acquire all of the issued ordinary shares of JDE Peet's.

The JDE Peet's Acquisition is expected to close in the first half of 2026 and will depend on a number of conditions being satisfied, including receiving the minimum number of tenders and other closing conditions.

Our ability to complete the proposed JDE Peet's Acquisition in the anticipated timeline, or at all, could be impacted by any or all of the following events, which may have an adverse impact on our business:

The requisite number of JDE Peet's shareholders may not tender their shares.

The JDE Peet's Acquisition Agreement provides that the completion of the proposed JDE Peet's Acquisition will be subject to the satisfaction or waiver of certain conditions, including the minimum tender of at least 95% of the shares of JDE Peet's, which will be reduced if the shareholders of JDE Peet's adopt resolutions for the implementation of certain post-closing measures and such resolutions are in full force and effect on the tender offer closing date.

Pursuant to the JDE Peet's Acquisition Agreement, the board of directors of JDE Peet's has recommended our offer to purchase JDE Peet's for acceptance by shareholders.

Concurrently with the entry into the JDE Peet's Acquisition Agreement, we obtained irrevocable undertakings from Acorn Holdings B.V.

and certain directors of JDE Peet's, who collectively hold in the aggregate, as of the date of such undertakings, approximately 69% of the shares of JDE Peet's.

Pursuant to the terms of the irrevocable undertakings, Acorn and JDE Peet's directors have committed to tender their shares of JDE Peet's in the offer and to vote in favor of the resolutions proposed at the JDE Peet's Extraordinary General Meeting.

Accordingly, additional shareholders of JDE Peet's will need to tender their shares in the offer for the offer to reach the minimum acceptance threshold and we cannot guarantee we will be successful in obtaining 100% of shares of JDE Peet's.

If we are unable to obtain the requisite acceptance threshold of shares of JDE Peet's, additional measures may be performed to enable us to acquire the remaining shares, which may delay or impact our ability to complete the JDE Peet's Acquisition.

There could be legal proceedings in connection with the JDE Peet's Acquisition, the outcomes of which are uncertain, could result in substantial costs, and which could delay or prevent the completion of the JDE Peet's Acquisition.

In connection with the JDE Peet's Acquisition, plaintiffs may file lawsuits against us, JDE Peet's, and/or the directors and officers of either company.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements.

Even if such a lawsuit is unsuccessful, defending against these claims can result in substantial costs.

An adverse judgment could also result in monetary damages.

Both defense costs and adverse judgments could have a negative impact on our liquidity and financial condition.

Such legal proceedings could also prevent or delay the completion of the JDE Peet's Acquisition and result in additional costs to us.

The market price of our common stock may decline as a result the JDE Peet's Acquisition.

The market price of our common stock may decline as a result of the JDE Peet's Acquisition if, among other things, we are unable to achieve the expected benefits and synergies of the JDE Peet's Acquisition, if the JDE Peet's Acquisition is not completed within the anticipated timeframe, or if the transaction costs related to the JDE Peet's Acquisition are greater than expected.

The market price of our common stock also may decline if we do not achieve the expected benefits and synergies of the JDE Peet's Acquisition as rapidly or to the extent anticipated by financial or industry analysts, or if the effect of the JDE Peet's Acquisition on our financial position, results of operations, or cash flows is not consistent with the expectations of financial or industry analysts.

The market price declined following the announcement of the JDE Peet's Acquisition and the Separation.

We will incur significant direct and indirect costs as a result of the JDE Peet's Acquisition.

We have incurred and expect to incur a number of costs associated with the JDE Peet's Acquisition, including legal, accounting, consulting, and other advisory fees, financing costs, and other transaction-related costs.

The JDE Peet's Acquisition will require significant management and employee resources, which could impact our ability to grow our business and pursue additional strategic opportunities.

Certain costs related to the JDE Peet's Acquisition will be incurred regardless of whether the acquisition is completed, which may provide no benefit if such acquisition fails to be completed.

While we have assumed that a certain level of transaction expenses will be incurred, factors beyond our control could affect the total amount or the timing of these expenses.

Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately.

These costs could restrict our resources and adversely affect our financial condition and results of operations leading up to, and following, the JDE Peet's Acquisition.

The JDE Peet's Acquisition will expose us to inherent risks in JDE Peet's' business and those geographies where JDE Peet's currently operates, which could adversely affect our business.

If consummated successfully, the JDE Peet's Acquisition would represent a significant transformation of our coffee business and will expand our operations to those geographies where JDE Peet's currently operates, including Russia, which represented 6% of consolidated revenue and 1% of total assets for JDE Peet's in both 2024 and 2023, as reported in their 2024 annual report.

Upon completion of the JDE Peet's Acquisition, we would be subject to a variety of risks associated with JDE Peet's' business, in addition to those we already face in our current business.

These risks include changes in consumer preferences, volatility in the prices of raw materials, consumer perceptions of the brands, competition in the retail market place, additional legal and regulatory regimes, and other risks.

In addition, we will be exposed to risks inherent in operating in a significant number of geographies in which we have not operated or have been less present in the past, including countries that are experiencing significant unstable geopolitical conditions.

These risks include, among others:

• the difficulty of managing and staffing foreign offices;

• the increased travel, infrastructure, legal, and compliance costs associated with new international locations;

• tariffs, sanctions, such as those imposed in response to the Russia and Ukraine conflict, trade barriers, trade disputes, and other regulatory or contractual limitations on our ability to operate in new foreign markets;

• exposure to foreign currency exchange risk;

• adaptation to different business cultures, languages, and market structures;

• military conflicts, such as the Russia and Ukraine conflict, and other geopolitical issues.

As we expand our business, our success will depend, in large part, on our ability to anticipate and effectively manage these risks and other risks associated with growing international operations.

We cannot predict how such conditions may affect our business, or those with whom we do business, and any ongoing or new conflicts could adversely impact our business.

If our due diligence investigation of JDE Peet's was inadequate or if unexpected risks related to JDE Peet's and its business materialize, it could have a material adverse effect on our business.

We conducted a due diligence review related to our planned acquisition of JDE Peet's.

However, we cannot be sure that our diligence surfaced all material issues that may be present inside JDE Peet's or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of JDE Peet's and its business and outside of its control will not arise later.

If any such material issues arise, they may materially and adversely impact our ongoing business and our shareholders' investment.

We may not successfully integrate JDE Peet's into our business, or such integration may be more difficult, time-consuming, or costly than expected, which could adversely affect our business.

The combination of two businesses is a complex, costly, and time-consuming process.

As a result, we will be required to devote significant management attention and resources to combining JDE Peet's' operations, processes, policies, and systems with our business.

The failure to meet the challenges involved in combining the businesses and to realize the anticipated benefits of the JDE Peet's Acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect the results of our operations.

The overall combination of JDE Peet's' and our businesses may also result in material unanticipated expenses, liabilities, competitive responses, losses of customer and other business relationships, and other unexpected issues.

The difficulties of combining the operations of the businesses include, among others:

• the diversion of management attention to integration matters;

• difficulties in integrating operations and systems;

• challenges in conforming standards, controls, procedures, accounting and other policies, business cultures, and compensation structures between the two companies;

• difficulties in assimilating employees and in attracting and retaining key personnel;

• challenges in keeping existing customers and obtaining new customers;

• difficulties in managing the expanded operations of a large company which operates in additional geographic markets;

• integrating the companies' financial reporting and internal control systems, including compliance by the combined company with Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and the rules promulgated by the SEC;

• potential unknown liabilities, adverse consequences, and unforeseen increased expenses associated with the integration.

Many of these factors may be outside of the control of KDP and JDE Peet's, and any one of them could result in increased costs, decreased expected revenues, and diversion of management time and energy, which could materially impact our business, financial condition, and results of operations.

In addition, even if JDE Peet's' business operations are successfully integrated with ours, the full benefits of the JDE Peet's Acquisition may not be realized, including expected cost synergies and sales or growth opportunities.

Moreover, many of the integration expenses that we expect to incur are, by their nature, difficult to estimate accurately.

These expenses could, particularly in the near term, exceed the savings that we expect to achieve.

As a result, it cannot be assured that the integration of JDE Peet's will result in the realization of the full anticipated benefits anticipated from the JDE Peet's Acquisition within the anticipated time frames, or at all.

Further, the success of the JDE Peet's Acquisition will depend in part on the retention of key employees.

We may not be able to retain senior executives or key personnel.

Furthermore, uncertainty about the effect of the JDE Peet's Acquisition on JDE Peet's employees may impair its ability to retain and motivate key personnel until and after the completion of the JDE Peet's Acquisition.

If such key employees are not retained, we may not realize the anticipated benefits of the JDE Peet's Acquisition.

We will be subject to business uncertainties related to the JDE Peet's Acquisition.

Uncertainty about the effects of the JDE Peet's Acquisition may have an adverse effect on us, both prior and subsequent to completion of the acquisition.

These uncertainties could disrupt our business or the business of JDE Peet's, and cause our collective customers, suppliers, vendors, partners, among others, to defer entering into contracts with the two companies, seek to change or cancel existing business relationships, or make other decisions concerning us and JDE Peet's that may be unfavorable to us.

These uncertainties about the various effects of the JDE Peet's Acquisition on our business have caused, and may continue to cause, declines and greater volatility in the price of our common stock.

We cannot guarantee that our stock price will fully recover from such declines after the JDE Peet's Acquisition is completed.

Retention and motivation of certain employees, both at KDP and JDE Peet's, may be challenging during the pendency of the JDE Peet's Acquisition due to uncertainty about their future roles and difficulty of integration.

If key employees depart because of issues related to the uncertainty and difficulty of integration or a desire not to remain with us, our business following the JDE Peet's Acquisition could be negatively impacted.

Additionally, as discussed below, we expect to incur significant debt related to fund this transaction, and the resulting leverage level of our business may lead to a decline in our common stock price.

We may also pursue other funding alternatives that may create dilution in our stock price, including the issuance of shares of our common stock, sale of certain assets, and reductions in the net income available to our shareholders, among others.

We will incur and assume significant debt as a result of the JDE Peet's Acquisition, which could adversely affect our financial performance.

We currently maintain investment grade credit ratings with Moody's and S&P for both our long-term debt and commercial paper.

However, we will take on a significant amount of debt in order to complete the JDE Peet's Acquisition, as well as assume the existing debt of JDE Peet's, which could impact our credit ratings.

We cannot provide assurances that our current credit ratings will remain in effect or that the ratings will not be lowered by Moody's and S&P.

Increased indebtedness and any actual or anticipated downgrade of our credit ratings may have adverse effects on our borrowing costs, access to capital markets, liquidity, flexibility in responding to changing market conditions in the event of a general downturn in economic conditions or our business, and, as a result, our financial performance.

Additionally, the agreements that will govern any debt incurred or assumed in connection with the JDE Peet's Acquisition may contain various covenants that may, subject to certain significant exceptions, restrict our ability to, among other things, respond to market conditions, take advantage of business opportunities, incur debt, have liens on our property, and/or sell or convey certain of our assets.

Our ability to comply with these provisions may be affected by events beyond our control.

Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations and could result in a default and acceleration under other agreements containing cross-default provisions.

Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, which may adversely impact our business.

In an effort to limit our potential leverage in connection with the completion of the JDE Peet's Acquisition, we may elect to pursue alternative financing arrangements, which may include, but are not limited to, the issuance of junior hybrid securities, equity-linked securities, or other financing options.

While these instruments may improve our leverage level and help preserve our credit ratings, each of these alternatives may involve other downsides.

If these alternative financing strategies do not achieve their intended results, or if the market reacts negatively to their specific terms, this may have an adverse effect on our business or stock price.

In connection with the JDE Peet's Acquisition, we expect to consummate the JV Investment, which could restrict our operational and corporate flexibility, impact our cash resources, and/or depress the market price of our common stock.

In connection with the previously announced JV Commitment Letter, we entered into the JV Transaction Agreement, under which we will contribute the Coffee Production Assets, as well as certain of our related coffee assets (including sales and distribution) in Canada to the Pod Manufacturing JV, and the JV Investors will contribute, through the JV Investor Partner, $4 billion in cash in exchange for a 49% interest in the Pod Manufacturing JV.

The remaining 51% ownership interest will remain under our ownership.

The JV Transaction Agreement provides that, at the closing of the JV Investment, we and the JV Investor Partner will enter into the Pod Manufacturing JV Agreement, which sets forth each partner's rights and responsibilities with respect to the Pod Manufacturing JV.

A portion of all distributions by the Pod Manufacturing JV will be paid to the JV Investors, thereby reducing distributions to us.

The JV Investor Partner will also have certain governance and consent rights that will restrict our operational and corporate flexibility with respect to the Pod Manufacturing JV.

In addition, we may be required to contribute additional resources, including cash, to the Pod Manufacturing JV, which would reduce our cash available for other purposes.

In the event of a change of control, the Pod Manufacturing JV would be required to redeem the interests of the JV Investors, which would reduce the cash available for distributions to us.

Under certain circumstances, the interests of the JV Investors may be converted into shares of our common stock (or following the Separation, the common stock of the separated global coffee business), which could have a dilutive impact on holders of our existing common stock.

Any sales of such common stock, or the perception that such shares may be sold, could depress the market price of our common stock.

Furthermore, if we materially breach our obligations to the Pod Manufacturing JV, we may be required to pay monetary damages, or the JV Investors may be entitled to replace us as the operator of the Pod Manufacturing JV.

The issuance of Convertible Preferred Stock in connection with the JDE Peet's Acquisition may adversely affect the rights and market price of our common stock as well as our capital resources.

Under the Preferred Investment Agreement, we agreed to issue and sell shares of Convertible Preferred Stock to the Preferred Investors, subject to customary closing conditions.

When issued, the Convertible Preferred Stock will rank senior to our common stock, meaning that, in the event of our liquidation, dissolution, or winding up, holders of the Convertible Preferred Stock would be paid in full prior to any proceeds being paid to holders of our common stock.

Preferred Investors will be entitled to dividends at a rate of 4.75% per annum, subject to increase in certain cases.

They will also be entitled to participate in dividends paid to holders of our common stock on an as-converted basis, provided that any such dividends received on an as-converted basis will reduce, on a dollar-for-dollar basis, the dividends holders are entitled to receive on the Convertible Preferred Stock.

Such dividends will reduce our cash available for other purposes, including working capital, strategic activities, and returning cash to holders of our common stock.

Preferred Investors will be entitled to vote, on an as-converted basis, together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, effectively reducing the relative voting power of the holders of our common stock.

In addition, the conversion of the Convertible Preferred Stock to common stock would dilute the ownership interest of existing holders of our common stock, and any sales in the public market of the common stock issuable upon conversion of the Convertible Preferred Stock could adversely affect prevailing market prices of our common stock.

We will grant certain Preferred Investors customary registration rights in respect of their Convertible Preferred Stock, and any shares of common stock issued upon conversion of the Convertible Preferred Stock.

These registration rights would facilitate the resale of such securities into the public market, and any such resale would increase the number of shares available for public trading.

Sales by the Preferred Investors of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock.

In the event of a fundamental change, as defined in the document governing the Convertible Preferred Stock, we will be required to offer to repurchase the Convertible Preferred Stock, which would reduce the amount of cash available to us for other purposes.

Certain Preferred Investors will also have certain preemptive rights, which may impact our ability to raise capital in the future.

Our obligations to the Preferred Investors could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.

The rights of the Preferred Investors could also result in divergent interests between the Preferred Investors and holders of our common stock.

The Preferred Investment Agreement provides that, prior to the closing of the JDE Peet's Acquisition, we (i) will use reasonable best efforts to operate our business in the ordinary course in all material respects (without restricting our activities with respect to the JDE Peet's Acquisition, the Preferred Investment, the JV Investment, the Separation, and the related transactions), and (ii) unless the KKR Investor and the Apollo Investor otherwise consent in writing (such consent not to be unreasonably withheld, conditioned, or delayed), not take any other action that, if taken following the issuance of the Preferred Investment, would require the prior written consent of the holders of the Convertible Preferred Stock or result in an adjustment to the conversion price unless such adjustment is effected in connection with the issuance of the Convertible Preferred Stock.

In addition, the Preferred Investment Agreement provides that, without the prior written consent of the KKR Investor or the Apollo Investor (so long as the KKR Investor or the Apollo Investor owns at least 50% of its initial Preferred Investment), we (i) will not amend the JDE Peet's Acquisition Agreement in a manner that would be materially adverse to the KKR Investor or the Apollo Investor, and (ii) will not permit the Separation to be consummated if (A) our pro forma total net leverage, as defined in the Preferred Investment Agreement, immediately following the Separation is greater than 4.00 to 1.00, if a Qualified IPO shall have been consummated on or prior to the Separation, or 4.25 to 1.00, if a Qualified IPO shall not have been consummated on or prior to the Separation, or (B) the corporate rating of either of the separated businesses, on a pro forma basis at the time of the Separation, would be less than investment grade from either Moody's or S&P.

For so long as the Convertible Preferred Stock is outstanding, in the event of a ratings downgrade by either Moody's or S&P, we will be subject to additional negative covenants that would restrict our operational flexibility.

We may issue additional equity securities in the future to raise proceeds to fund the JDE Peet's Acquisition, which may result in further dilution to our existing shareholders.

If we raise additional capital in order to fund the JDE Peet's Acquisition, or to reduce our leverage after the JDE Peet's Acquisition, through the issuance of additional equity securities, our existing shareholders may experience further dilution.

The terms of the securities we issue in the future may be more favorable to our new investors and introduce additional complexity to our capital structure.

RISKS RELATED TO THE SEPARATION

The Separation may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, expenses, and resources, which could adversely affect our business.

On August 25, 2025, we announced our intention to separate our beverage and coffee portfolios into two independent, publicly traded companies via a tax-free spin-off of our coffee business.

The anticipated Separation is expected to occur subsequent to the completion of the JDE Peet's Acquisition.

We cannot assure that the Separation will be completed on the anticipated timeline, if at all, or that the terms of the Separation will not change.

The transaction will follow the satisfaction of customary conditions, including reviews and final approval by our Board, relevant tax opinions with respect to the tax-free nature of the transaction, effectiveness of appropriate filings with the SEC, and acceptance of the spin-off company for listing by a national securities exchange approved by our Board, the completion of audited financials of the new independent company, among others.

The failure to satisfy any of the required conditions could delay the completion of the Separation for a significant period of time or prevent it from occurring at all.

Unanticipated developments, including changes in the competitive conditions of our markets, possible delays in obtaining various tax opinions or rulings or failure of the spin-off transaction to qualify for non-recognition treatment for U.S.

federal income tax purposes, the filing and effectiveness of appropriate filings with the SEC and the listing on a stock exchange, negotiating challenges, the uncertainty of the financial markets, changes in the law, and challenges in executing the Separation, could delay or prevent the completion of the Separation, or cause the Separation to occur on terms or conditions that are different or less favorable than initially expected.

Any changes to the Separation or delay in completing the Separation could cause us not to realize some or all of the expected benefits, or realize them on a different timeline than initially expected.

Further, our Board could decide, either because of a failure of conditions or because of market or other factors, to abandon the Separation.

No assurance can be given as to whether and when the Separation will occur.

Whether or not we complete the Separation, our ongoing business may be adversely affected, and we may be subject to certain risks and consequences as a result of pursuing the separation of our two businesses, including the following:

• We anticipate that the process of completing the Separation will be time-consuming and involve significant additional costs and expenses, which may not yield a discernible benefit if the Separation is not completed.

Additionally, if the Separation is not completed, we will still be required to pay certain costs and expenses incurred in connection therewith, such as professional fees.

• Executing the Separation will require significant time and attention from our senior management and employees, which may impact management's attention to operating and growing our business and could adversely affect our business.

Our employees may also be distracted due to uncertainty about their future roles with the separate companies pending completion of the Separation.

• We may also experience increased difficulties in attracting, retaining, and motivating employees leading up to, and following, completion of the Separation, which could harm our businesses.

• Some of our customers or suppliers may delay or defer decisions or may end their relationships with us.

• We may experience negative reactions from the financial markets if we fail to complete the Separation or fail to complete it on a timely basis.

• We could incur substantial additional costs and experience temporary business interruptions.

• Transfer or assignment to us of some contracts and other assets will require the consent of a third party.

If such consent is not given, we may not be entitled to the benefit of such contracts, investments, and other assets in the future.

• The announcement and pendency of the Separation may cause some investors to sell shares of our common stock, which could create greater volatility or decline in the price of our shares.

Any of the above factors could cause the Separation, or the failure to execute the Separation, to have an adverse effect on our business and financial performance.

We may be unable to achieve some or all of the anticipated strategic and financial benefits from the Separation.

We may not realize the anticipated strategic, financial, operational, or other benefits from the Separation.

We also cannot predict with certainty when the expected benefits will occur or the extent to which they will be achieved.

If the Separation is completed, our operational and financial profile will change and we will face new risks.

As two independent, publicly traded companies, our beverage and coffee businesses will each be smaller, less-diversified companies and may be more vulnerable to changing market conditions.

There is no assurance that each separate company will be successful.

The announcement and/or completion of the Separation may cause uncertainty for or disruptions with our customers, partners, suppliers, and employees, which may negatively impact these relationships or our operations.

In addition, we will incur costs in connection with, or as a result of, the spin-offs, including costs of operating as independent, publicly-traded companies that the two businesses will no longer be able to share.

Those costs may exceed our estimates or could negate some of the benefits we expect to realize.

Significant unexpected costs or failure to realize the intended benefits of the Separation could result in a material adverse effect on the business, financial condition, results of operations, and trading price of us or the separated businesses.

Following the Separation, we may not maintain a satisfactory credit rating, which could adversely affect the financial performance of our businesses.

It is management's intent to structure each stand-alone business in a way to achieve investment grade credit ratings upon completion of the Separation.

If we are not able to achieve or maintain satisfactory credit ratings post-separation, whether as a result of our actions or factors which are beyond our control, the independent businesses may face increased borrowing costs and limited access to raise funds in capital markets.

A failure to achieve or maintain investment grade ratings could also impact business relationships with vendors, suppliers, regulators, and other business partners.

There is no guarantee that we will be able to achieve or maintain our targeted credit ratings, and failure to do so may adversely affect the liquidity and financial performance of the businesses following the proposed Separation.

Following the Separation, the price of our common stock may decline and may experience greater volatility.

Upon completion of the Separation, the price of our common stock may decline compared to its level immediately prior to, as it will no longer include the value of the separated business.

In addition, the price of our common stock may experience greater volatility until the market has fully analyzed our value without the separated business.

We can not guarantee that the combined value of the shares of the two resulting companies will be equal to or greater than what the value of our common stock would have been had the proposed Separation not occurred.

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-K

Item 1A. Risk Factors