What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-25 · 545 added, 625 removed, 1314 unchanged (47% of the section changed)

8 unchanged sentences

Significant Accounting Policies

JDE Peet's Acquisition and Related Transactions

Other Acquisitions

Long-Term Obligations and Borrowing Arrangements

Goodwill and Other Intangible Assets

Revenue Recognition

Goodwill and Intangible Assets

Earnings per Share

1 unchanged sentence

Stock-Based Compensation

Equity Method Investments

Accumulated Other Comprehensive Income (Loss)

Property, Plant, and Equipment

Other Financial Information

Commitments and Contingencies

Transactions with Variable Interest Entities

Restructuring and Integration Costs

Restructuring

Related Parties

10 unchanged sentences

Impairment of goodwill — 306 —

Impairment of other intangible assets 412 2 477

Gain on litigation settlement — — ( 299 )

Other operating expense (income), net 207 ( 26 ) ( 105 )

Impairment of intangible assets 78 412 2

Other operating (income) expense, net ( 5 ) 207 ( 26 )

Income from operations 3,575 2,591 3,192

Interest expense, net 754 735 496

Loss on early extinguishment of debt — — 217

Gain on sale of equity method investment — — ( 50 )

Impairment of investments and note receivable 2 — 12

Other (income) expense, net ( 60 ) ( 61 ) 14

Other expense (income), net 134 ( 58 ) ( 61 )

Income before provision for income taxes 2,687 1,914 2,757

Provision for income taxes 608 473 576

Net income including non-controlling interest 1,441 2,181 1,435

Net loss attributable to non-controlling interest — — ( 1 )

Net income $ 2,079 $ 1,441 $ 2,181

10 unchanged sentences

(in millions) 2025 2024 2023

Net income including non-controlling interest $ 1,441 $ 2,181 $ 1,435

Net income $ 2,079 $ 1,441 $ 2,181

Other comprehensive income

4 unchanged sentences

( 21 ) 21 ( 98 )

Total other comprehensive (loss) income ( 591 ) 186 155

Total other comprehensive income (loss) 378 ( 591 ) 186

Comprehensive income 2,457 850 2,367

Comprehensive income attributable to non-controlling interest — — —

Comprehensive income attributable to KDP $ 850 $ 2,367 $ 1,590

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

10 unchanged sentences

Property, plant, and equipment, net 3,230 2,964

Investments in unconsolidated affiliates 1,543 1,387

Equity method investments 1,660 1,543

Goodwill 20,247 20,053

Other intangible assets, net 23,634 23,287

Other non-current assets 1,200 1,149

Intangible assets, net 23,725 23,634

Deferred tax assets 36 39

Other non-current assets 1,295 1,200

Total assets $ 55,459 $ 53,430

11 unchanged sentences

Total liabilities 29,943 29,187

Commitments and contingencies

Stockholders' equity:

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

Preferred stock, $ 0.01 par value, 15,000,000 shares authorized, no shares issued as of December 31, 2025 and 2024

Common stock, $ 0.01 par value, 2,000,000,000 shares authorized, 1,358,663,795 and 1,356,664,609 shares issued and outstanding as of December 31, 2025 and 2024, respectively

1 unchanged sentence

Retained earnings 5,622 4,793

Accumulated other comprehensive (loss) income ( 276 ) 315

Accumulated other comprehensive income (loss) 102 ( 276 )

Total stockholders' equity 25,516 24,243

14 unchanged sentences

Employee stock-based compensation expense 97 98 116

Loss on early extinguishment of debt — — 217

Gain on sale of equity method investment — — ( 50 )

Loss (gain) on disposal of property, plant, and equipment 16 ( 1 ) ( 80 )

Unrealized loss (gain) on foreign currency 33 ( 13 ) 26

Unrealized loss on derivatives 91 31 383

(Gain) loss on disposal of property, plant, and equipment ( 2 ) 16 ( 1 )

Unrealized (gain) loss on foreign currency ( 6 ) 33 ( 13 )

Unrealized (gain) loss on derivatives ( 1 ) 91 31

Settlements of interest rate contracts — — 54

Equity in (earnings) loss of unconsolidated affiliates ( 42 ) ( 33 ) 5

Earnings of equity method investments ( 81 ) ( 42 ) ( 33 )

Earned equity from distribution arrangements ( 54 ) ( 94 ) ( 44 )

1 unchanged sentence

Impairment of intangible assets 78 412 2

Impairment of investments and note receivable of unconsolidated affiliate 2 — 12

Other, net 26 — 6

2 unchanged sentences

Inventories ( 405 ) ( 92 ) 182

Income taxes receivable and payables, net 133 ( 199 ) ( 105 )

Income taxes receivable and payable, net ( 141 ) 133 ( 199 )

Other current and non-current assets ( 216 ) ( 227 ) ( 192 )

5 unchanged sentences

Acquisitions of businesses, net of cash acquired ( 149 ) ( 1,000 ) —

Proceeds from sale of investment in unconsolidated affiliates — — 50

Purchases of property, plant, and equipment ( 486 ) ( 563 ) ( 425 )

1 unchanged sentence

Purchases of intangibles ( 17 ) ( 59 ) ( 56 )

Issuance of related party note receivable — — ( 18 )

Investments in unconsolidated affiliates ( 7 ) ( 316 ) ( 962 )

Investments in equity method investments ( 1 ) ( 7 ) ( 316 )

Other, net 66 11 4

7 unchanged sentences

Proceeds from issuance of Notes $ 2,000 $ 3,000 $ —

Repayment of Notes ( 1,150 ) ( 500 ) ( 3,365 )

Net (repayment) issuance of commercial paper ( 480 ) 1,697 250

Repayments of Notes ( 1,029 ) ( 1,150 ) ( 500 )

Net issuance (repayment) of commercial paper 594 ( 480 ) 1,697

Proceeds from term loan — 990 —

Repayment of term loan ( 990 ) — —

Proceeds from structured payables 31 49 130

Payments on structured payables ( 129 ) ( 148 ) ( 158 )

Repayments of structured payables ( 47 ) ( 129 ) ( 148 )

Cash dividends paid ( 1,250 ) ( 1,194 ) ( 1,142 )

Repurchases of common stock ( 1,110 ) ( 706 ) ( 379 )

Repurchases of common stock, inclusive of excise tax obligation ( 9 ) ( 1,110 ) ( 706 )

Tax withholdings related to net share settlements ( 31 ) ( 61 ) ( 62 )

Payments on finance leases ( 129 ) ( 115 ) ( 95 )

Deferred financing charges paid ( 134 ) ( 16 ) —

Other, net ( 5 ) ( 7 ) ( 6 )

7 unchanged sentences

Capital expenditures included in accounts payable and accrued expenses $ 204 $ 220 $ 276

Earned equity from distribution arrangements 94 44 —

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

Acquisitions of businesses — 98 —

Transaction costs included in accounts payable and accrued expenses — 6 8

Conversion of note receivable to equity method investment — — 6

Non-cash purchases of intangibles — — 19

Dividends declared but not yet paid 312 312 299

Mandatory redemption liability 689 — —

Accrued excise tax on net share repurchases 9 5 —

Mandatory redemption liability at acquisition — 689 —

Supplemental cash flow disclosures:

Cash paid for interest 594 494 443

Cash paid for income taxes 331 507 686

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

2 unchanged sentences

Common Stock Issued Additional

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

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

Stockholders' Equity Non-Controlling Interest Total Equity

1 unchanged sentence

Balance as of December 31, 2022

1,408.4 $ 14 $ 21,444 $ 3,539 $ 129 $ 25,126 $ ( 1 ) $ 25,125

Net income — — — 2,181 — 2,181 — 2,181

2 unchanged sentences

— — — ( 1,160 ) — ( 1,160 ) — ( 1,160 )

Repurchases of common stock ( 10.6 ) — ( 379 ) — — (379) — (379)

Repurchases of common stock, inclusive of excise tax obligation ( 21.7 ) — ( 711 ) — — ( 711 ) — ( 711 )

Shares issued under employee stock-based compensation plans and other 3.7 — — — — — — —

1 unchanged sentence

Stock-based compensation and stock options exercised — — 117 — — 117 — 117

Non-controlling interest surrender of shares — — — ( 1 ) — ( 1 ) 1 —

Balance as of December 31, 2023

1,390.4 14 20,788 4,559 315 25,676 — 25,676

Net income — — — 1,441 — 1,441 — 1,441

Other comprehensive income — — — — 186 186 — 186

Other comprehensive loss — — — — ( 591 ) ( 591 ) — ( 591 )

Dividends declared, $ 0.89 per share

4 unchanged sentences

Stock-based compensation and stock options exercised — — 99 — — 99 — 99

Non-controlling interest surrender of shares — — — ( 1 ) — ( 1 ) 1 —

Balance as of December 31, 2024

1,356.7 14 19,712 4,793 ( 276 ) 24,243 — 24,243

Net income — — — 2,079 — 2,079 — 2,079

Other comprehensive loss — — — — ( 591 ) ( 591 ) — ( 591 )

Other comprehensive income — — — — 378 378 — 378

Dividends declared, $ 0.92 per share

— — — ( 1,250 ) — ( 1,250 ) — ( 1,250 )

Repurchases of common stock, inclusive of excise tax obligation ( 38.0 ) — ( 1,114 ) — — ( 1,114 ) — ( 1,114 )

Shares issued under employee stock-based compensation plans and other 2.0 — — — — — — —

Tax withholdings related to net share settlements — — ( 31 ) — — ( 31 ) — ( 31 )

Stock-based compensation and stock options exercised — — 99 — — 99 — 99

Stock-based compensation

— — 97 — — 97 — 97

Balance as of December 31, 2025

1,358.7 $ 14 $ 19,778 $ 5,622 $ 102 $ 25,516 $ — $ 25,516

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

14 unchanged sentences

Our fiscal year end is December 31, and our interim fiscal quarters are March 31, June 30, and September 30.

KDP's significant subsidiary, Maple Parent Holdings Corp., has a fiscal year end of the last Saturday in December, and its interim fiscal quarters end every thirteenth Saturday.

One of our significant subsidiaries, Maple Parent Holdings Corp., has a fiscal year end of the last Saturday in December, and its interim fiscal quarters end every thirteenth Saturday.

The fiscal year for Maple Parent Holdings Corp.

includes 52 weeks for the years ended December 31, 2024 and 2023 and 53 weeks for the year ended December 31, 2022.

includes 52 weeks for the years ended December 31, 2025, 2024, and 2023.

We do not adjust for the difference in fiscal year, as the difference is within the range permitted by the Exchange Act.

5 unchanged sentences

However, if the investment agreement contains a mandatorily redeemable financial instrument for the non-controlling interests, such mandatorily redeemable interests are recorded as a liability, rather than equity, in the Consolidated Balance Sheets, and no earnings are attributable to the non-controlling interests.

We would be required to consolidate VIEs for which KDP has been determined to be the primary beneficiary.

We would be required to consolidate VIEs for which we have been determined to be the primary beneficiary.

To determine if we are the primary beneficiary, we assess specific criteria and use judgment when determining if we have the power to direct the significant activities of the VIE and the obligation to absorb losses or receive benefits from the VIE that may be significant to the VIE.

Factors considered include risk and reward sharing, voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE’s governance structure, existence of unilateral kick-out rights exclusive of protective rights or voting rights, and level of economic disproportionality between KDP and the VIE’s other partner(s).

Factors considered include risk and reward sharing, voting rights, involvement in day-to-day capital and operating decisions, representation on a VIE's governance structure, existence of unilateral kick-out rights exclusive of protective rights or voting rights, and level of economic disproportionality between us and the VIE's other partner(s).

We have determined that we are not the primary beneficiary of any VIEs.

1 unchanged sentence

We use the equity method to account for investments in companies if the investment provides us with the ability to exercise significant influence over operating and financial policies of the investee.

Consolidated net income includes KDP's proportionate share of the net income or loss of these companies.

Consolidated net income includes our proportionate share of the net income or loss of these companies.

Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the Board or similar governing body, participation in policy-making decisions, and material intercompany transactions.

We eliminate from our financial results all intercompany transactions between entities included in the consolidated financial statements.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We eliminate from our financial results all intercompany transactions between entities included in the consolidated financial statements.

RECLASSIFICATIONS

We reclassified amounts in the Financing Activities section of the consolidated Statement of Cash Flows for the years ended December 31, 2023 and 2022 in order to conform to current year presentation, as maturities for our commercial paper program in both periods are 90 days or less.

Year Ended December 31,

(in millions) Prior Presentation 2023 2022

Net (repayment) issuance of commercial paper Proceeds from issuance of commercial paper $ 36,940 $ 1,198

Net (repayment) issuance of commercial paper Repayments of commercial paper ( 35,243 ) ( 948 )

We reclassified certain current and prior period amounts within the Consolidated Statements of Income and Consolidated Statements of Cash Flows in order to conform to current year presentation.

These reclassifications had no impact on our net income or total cash, cash equivalents, restricted cash, and restricted cash equivalents, respectively.

Significant Accounting Policies

18 unchanged sentences

These values represent the estimated amounts we would pay or receive to terminate agreements, taking into consideration current market rates and creditworthiness.

As of December 31, 2023, we did not have any assets or liabilities measured on a recurring basis without observable market values that would require a high level of judgment to determine fair value (Level 3).

As of December 31, 2024, the mandatory redemption liability for GHOST is a liability measured on a recurring basis that is considered Level 3 within the fair value hierarchy.

The mandatory redemption liability for GHOST is a liability measured on a recurring basis that is considered Level 3 within the fair value hierarchy.

Refer to the Mandatory Redemption Liability section below for further information.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Transfers between levels are recognized at the end of each reporting period.

There were no transfers of financial instruments between the three levels of fair value hierarchy during the years ended December 31, 2024, 2023, and 2022.

There were no transfers of financial instruments between the levels of fair value hierarchy during the years ended December 31, 2025, 2024, and 2023.

We evaluate the facts and circumstances of each acquisition to determine whether the transaction should be accounted for as an asset acquisition or a business combination.

2 unchanged sentences

Direct transaction costs associated with asset acquisitions are capitalized.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

9 unchanged sentences

These charges primarily include direct third-party professional fees for advisory and consulting services and other incremental costs related to the acquisition.

Cash and Cash Equivalents

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

Cash and cash equivalents include cash and investments in short-term, highly liquid securities, with original maturities of three months or less.

3 unchanged sentences

however, these deposits typically are redeemable upon demand and, therefore, we believe the financial risks associated with these financial instruments are minimal.

The carrying value of cash, cash equivalents, restricted cash, and restricted cash equivalents is valued as of the balance sheet date equating fair value and is classified as Level 1.

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

(in millions) 2025 2024

Cash and cash equivalents $ 1,026 $ 510

Restricted cash and restricted cash equivalents (1)

Non-current restricted cash and restricted cash equivalents (2)

Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 1,044 $ 608

(1) Restricted cash and restricted cash equivalents consists primarily of amounts held in escrow in connection with the acquisition of GHOST as of December 31, 2025 and 2024, as well as Kalil Acquisition as of December 31, 2024, with a corresponding holdback liability recorded in Other current liabilities.

Refer to Note 4 for additional information.

(2) Non-current restricted cash and restricted cash equivalents, reported within Other non-current assets in the Consolidated Balance Sheets, consists of amounts held in escrow in connection with the acquisition of GHOST as of December 31, 2024, with a corresponding holdback liability recorded in Other non-current liabilities.

Refer to Note 4 for additional information .

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Trade Accounts Receivable and Allowance for Expected Credit Losses

5 unchanged sentences

Amounts are charged against the allowance when it is determined that expected credit losses may occur.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Activity in the allowance for expected credit loss accounts was as follows:

For the Year Ended December 31,

(in millions) 2024 2023 2022

Balance, beginning of the period $ 10 $ 9 $ 7

Charges to (reversals of) bad debt expense — 3 3

Write-offs and adjustments ( 1 ) ( 2 ) ( 1 )

Balance, end of the period $ 9 $ 10 $ 9

Activity in the allowance for expected credit loss accounts was not significant for the years ended December 31, 2025, 2024, and 2023.

Concentration of credit risk with respect to accounts receivable is limited due to the large number of customers in various channels comprising our customer base.

Walmart is a major customer as described in Note 9.

As of December 31, 2024 and 2023, Walmart accounted for approximatel y $ 205 million and $ 204 million of trade receivables, respectively, which exceeded 10% of KDP's total trade accounts receivabl e.

Inventories consist of raw materials, work in process, and finished goods.

As of December 31, 2025 and 2024, Walmart accounted for approximatel y $ 186 million and $ 205 million of trade receivables, respectively, which exceeded 10% of our total trade accounts receivabl e.

Inventories consist of raw materials, WIP, and finished goods.

Raw materials include various commodity costs for our ingredients and materials sourced from various providers.

3 unchanged sentences

Cost is measured using standard cost, which approximates first-in, first-out.

We regularly review whether the net realizable value of inventory is lower than its carrying value.

If the valuation shows that the net realizable value is lower than the carrying value, we take a charge to cost of sales and directly reduce the carrying value of the inventory.

We estimate any required write downs for inventory obsolescence by examining inventories on a quarterly basis to determine if there are indicators that the carrying values exceed net realizable value.

Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products, and products at the end of their life cycles.

While management believes that inventory is appropriately stated, judgment is involved in determining the net realizable value of inventory.

Adjustments for excess and obsolete inventories are based on an assessment of slow-moving and obsolete inventories, determined by historical usage and demand.

We make a djustments for excess and obsolete inventories based on an assessment of slow-moving and obsolete inventories, determined by historical usage and demand.

The following table summarizes our inventories:

(in millions) 2025 2024

Raw materials $ 706 $ 520

Finished goods 1,019 770

Total $ 1,733 $ 1,299

Property, Plant, and Equipment, Net

2 unchanged sentences

We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use, which are included in property, plant, and equipment.

When property, plant, and equipment is sold, the costs and the related accumulated depreciation are removed from the accounts, and any net gain or loss is recorded in Other operating expense (income), net in the Consolidated Statements of Income.

When property, plant, and equipment is sold, the costs and the related accumulated depreciation are removed from the accounts, and any net gain or loss is recorded in Other operating (income) expense, net in the Consolidated Statements of Income.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For financial reporting purposes, depreciation is computed on the straight-line method over the estimated useful asset lives as follows:

6 unchanged sentences

Estimated useful lives are periodically reviewed and, when warranted, are updated.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We periodically review long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

In order to assess recoverability, we compare the estimated undiscounted future pre-tax cash flows from the use of the group of assets, as defined, to the carrying amount of such assets.

Measurement of an impairment loss is based on the excess of the carrying amount of the group of assets over the long-lived asset's fair value, and any impairment loss i s recorded in Other operating expense (income), net, in the Consolidated Statements of Income .

Measurement of an impairment loss is based on the excess of the carrying amount of the group of assets over the long-lived asset's fair value, and any impairment loss i s recorded in Other operating (income) expense, net, in the Consolidated Statements of Income .

For the years ended December 31, 2025, 2024, and 2023, no impairment loss was recorded related to these assets.

3 unchanged sentences

Our lease agreements do not contain any material restrictive covenants.

Certain leases of manufacturing and distribution properties and our Frisco headquarters contain an RVG at the end of the term.

Certain leases with VIEs, which include manufacturing and distribution properties and our Frisco headquarters, contain an RVG at the end of the term.

Refer to Note 19 for additional information about RVGs.

1 unchanged sentence

Finance leases are included within Property, plant, and equipment, net, Other current liabilities, and Other non-current liabilities.

Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets.

Leases with an initial term of 12 months or less are not recognized in the Consolidated Balance Sheets.

Right of use assets and lease liabilities are recognized in the Consolidated Balance Sheets at the present value of future minimum lease payments over the lease term on the commencement date.

7 unchanged sentences

Rental payments under such transactions are recognized as a reduction of the financing obligation and as interest expense using an effective interest method.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Compensation Plan

3 unchanged sentences

The rabbi trust consists of readily marketable equity securities, which are included in Other non-current assets in the Consolidated Balance Sheets.

Gains or losses from such investments are charged to Other (income) expense, net in the Consolidated Statements of Income.

Gains or losses from such investments are charged to Other expense (income), net in the Consolidated Statements of Income.

The corresponding deferred compensation liability is included in Other non-current liabilities in the Consolidated Balance Sheets, with changes in this obligation recognized as adjustments to compensation expense and recorded in SG&A expenses.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Investments in Other Equity Securities

3 unchanged sentences

On July 31, 2023, the remaining shareholders of Revive surrendered their ownership interests.

As a result, KDP holds 100% ownership interest in Revive and has eliminated the Non-controlling interest component within the Consolidated Statements of Changes in Stockholders’ Equity.

As of December 31, 2024, we hold a majority interest in GHOST.

Effective December 31, 2024, we hold a majority interest in GHOST.

This investment contains a mandatorily redeemable financial instrument for the non-controlling interests.

3 unchanged sentences

Equity method investments are reported at cost, which includes third-party transaction costs, and are adjusted each period for dividends paid, if any, as well as our share of the investee's net income or loss, unless the investment agreement indicates an alternative allocation of earnings or losses.

Our share of the net income or loss resulting from these investments is recorded in Other (income) expense, net in the Consolidated Statements of Income.

To the extent we earn additional equity in these investments from achieving certain contractual milestones in our distribution activities, the earned equity is recorded as a reduction in Cost of sales and included in the Earned equity from distribution arrangements line on the Consolidated Statements of Cash Flows.

Our share of the net income or loss resulting from these investments is recorded in Other expense (income), net in the Consolidated Statements of Income.

Any gains and losses resulting from the sale of these investments are recorded in Gain on sale of equity method investment.

The carrying value of our equity method investments is reported in Investments in unconsolidated affiliates in the Consolidated Balance Sheets.

Distributions received from equity method investments are classified using the cumulative earnings approach on the Consolidated Statements of Cash Flows.

Investments with readily determinable fair values for which we do not have the ability to exercise significant influence are measured at fair value and reported in Other non-current assets in the Consolidated Balance Sheets.

As of December 31, 2024 and 2023, all such investments were categorized as Level 1.

Unrealized gains and losses on these investments are recorded in Other (income) expense, net in the Consolidated Statements of Income.

Investments without readily determinable fair values for which we do not have the ability to exercise significant influence are accounted for at cost and reported in Other non-current assets in the Consolidated Balance Sheets.

Any gains or losses resulting from the sales of these investments are recorded in Other operating expense (income), net, in the Consolidated Statements of Income.

The carrying value of our equity method investments is reported in Equity method investments in the Consolidated Balance Sheets.

Distributions received from equity method investments are classified using the cumulative earnings approach in the Consolidated Statements of Cash Flows.

Our equity method investments in certain privately held entities do not have readily determinable fair values and are periodically evaluated for impairment.

An impairment loss would be recorded whenever a decline in value of an investment below its carrying amount is determined to be other than temporary.

We recorded impairment charges of $ 2 million and $ 12 million for the years ended December 31, 2024 and 2022, respectively, on the Impairment of investments and note receivable line in the Consolidated Statements of Income.

No impairment charges were recorded for the year ended December 31, 2023.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Intangible Assets

Other intangible assets are classified into two categories:

Investments with readily determinable fair values for which we do not have the ability to exercise significant influence are measured at fair value.

Fair values of these equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1 and reported in Other non-current assets in the Consolidated Balance Sheets.

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

The following table presents the amount of unrealized mark-to-market losses (gains), net, on our Vita Coco investment recognized in the Consolidated Statements of Income related to these securities during the periods presented:

For the Year Ended December 31,

(in millions) 2025 2024 2023

Unrealized mark-to-market losses (gains) (1)

$ 32 $ ( 17 ) $ ( 16 )

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

Goodwill and Intangible Assets

Intangible assets are classified into two categories:

• intangible assets with definite lives subject to amortization, and

6 unchanged sentences

Identifiable intangible assets deemed to have determinable finite useful lives are amortized on a straight-line basis over the period of which the expected economic benefit is derived.

Amortization expense is recorded in Selling, general, and administrative expenses i n the Consolidated Statements of Income.

Amortization expense is recorded in SG&A expenses i n the Consolidated Statements of Income.

The estimated useful lives of intangible assets with definite lives are as follows:

1 unchanged sentence

Acquired technology 20 years

Brands 5 years

Brands 5 to 10 years

Contractual arrangements 10 to 20 years

2 unchanged sentences

Trade names 10 years

Other 3 to 10 years

For intangible assets with definite lives, tests for impairment are performed if conditions exist that indicate the carrying value may not be recoverable.

1 unchanged sentence

We also conduct tests for impairment annually on the first day of the fourth quarter, or more frequently if events or circumstances indicate the carrying amount may not be recoverable.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For both goodwill and other indefinite lived intangible assets, we have the option to first assess qualitative factors to determine whether the fair value of either the reporting unit or indefinite lived intangible asset is "more likely than not" less than its carrying value, also known as a Step 0 analysis.

4 unchanged sentences

Discount rates are based on a weighted average cost of equity and cost of debt, adjusted with various risk premiums.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill is assigned to reporting units for purposes of impairment testing.

A reporting unit is the same as an operating segment or one level below an operating segment.

As of October 1, 2024, KDP's reporting units were as follows:

As of October 1, 2025, our reporting units were as follows:

Reportable Segments Reporting Units

7 unchanged sentences

Capitalized Customer Incentive Programs

KDP provides support to certain customers to cover various programs and initiatives to increase net sales, including contributions to customers or vendors for cold drink equipment used to market and sell our products.

These programs and initiatives generally directly benefit KDP over a period of time.

We provide support to certain customers to cover various programs and initiatives to increase net sales, including contributions to customers or vendors for cold drink equipment used to market and sell our products.

These programs and initiatives generally directly benefit us over a period of time.

Accordingly, costs of these programs and initiatives are recorded in Prepaid expenses and other current assets and Other non-current assets in the Consolidated Balance Sheets.

Refer to Note 17 for additional information.

The costs for these programs are amortized over the period to be directly benefited based upon a methodology consistent with our contractual rights under these arrangements.

Accounts Payable

We have agreements with third party administrators which allow participating suppliers to track payment obligations from KDP, and, if voluntarily elected by the supplier, to sell payment obligations from KDP to financial institutions.

Suppliers can sell one or more of KDP's payment obligations at their sole discretion, and the rights and obligations of KDP to its suppliers are not impacted.

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

KDP's obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted.

We have agreements with third-party administrators which allow participating suppliers to track our payment obligations, and, if voluntarily elected by the supplier, to sell our payment obligations to financial institutions.

Suppliers can sell one or more of our payment obligations at their sole discretion, and our rights and obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted.

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

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The table below summarizes activity in our outstanding obligations under supplier financing arrangements, which are confirmed as valid and included in accounts payable :

(in millions) For the Year Ended December 31, 2024

Balance as of December 31, 2023 $ 2,389

For the Year Ended December 31,

(in millions) 2025 2024

Balance, beginning of the period $ 1,740 $ 2,389

Additions 3,424 2,999

1 unchanged sentence

Effect of exchange rate changes 5 ( 9 )

Balance as of December 31, 2024 $ 1,740

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance, end of the period $ 1,378 $ 1,740

Structured Payables

We have entered into an agreement with a supply chain payment processing intermediary, for the intermediary to act as a virtual credit card sponsor, whereby the card sponsor pays amounts on behalf of KDP and sells the amounts due from KDP to a participating financial institution.

The card sponsor then bills KDP the original payment amount, effectively financing the transaction.

The agreement permits us to utilize the third party and participating financial institutions to make a broad range of payments, including commercial payables to suppliers, business acquisitions, purchases of property, plant, and equipment, and employee-related payments.

Additionally, we have commercial arrangements with suppliers who use third party administrators to sell payment obligations from KDP to financial institutions.

We evaluate these commercial arrangements with suppliers to determine if they are more representative of debt or accounts payable classification.

If we determine these commercial arrangements are more representative of a financing transaction, then we record those payment obligations as structured payables.

In the event that we determine that a commercial arrangement described above is more representative of a financing transaction, the payment obligation would be reclassified to structured payables.

Additionally, we have entered into an agreement with a supply chain payment processing intermediary, for the intermediary to act as a virtual credit card sponsor.

The card sponsor bills us the original payment amount, effectively financing the transaction.

The agreement permits us to utilize the third party to make a broad range of payments.

Structured payables have equal priority with accounts payable and are treated as non-recourse obligations.

We record interest for the period the structured payables obligation is outstanding and reflect the proceeds and payments related to these transactions as a financing activity on the Consolidated Statements of Cash Flows.

Mandatory Redemption Liability

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Subsequent to the date of acquisition, if future payments are expected to differ from our estimate as of the date of acquisition, any related fair value adjustments are recognized in the period that such expectation is considered probable.

Changes in the fair value of payments are recorded within Other nonoperating (income) expense, net, in the Consolidated Statements of Operations.

Changes in the fair value of payments are recorded within Other expense (income), net in the Consolidated Statements of Income.

For the year ended December 31 , 2025 , the fair value of our mandatory redemption liability for GHOST was estimated using the Monte Carlo simulation method, which incorporates significant inputs not observable in the market (Level 3 inputs) including forecasted EBITDA expectations, adjusting for market risks and volatility, calculating redemption prices, discounting to present terms with the cost of debt, and averaging results across scenarios to determine fair value, incorporating the market price of risk and volatility estimates from similar companies.

Mandatory redemption liabilities are included within Other non-current liabilities within the Consolidated Balance Sheets.

Refer to Note 17 for additional information.

As of December 31, 2025 and 2024, the fair value of our m andatory redemption liability associated with GHOST was $ 880 million and $ 689 million, respectively, and is included within Other non-current liabilities within the Consolidated Balance Sheets.

Pension and Post-retirement Medical Benefits

and foreign pension and PRMB plans which provide benefits to a defined group of employees who satisfy age and length of service requirements at the discretion of KDP.

As of December 31, 2024, KDP has several stand-alone non-contributory defined benefit plans and PRMB plans.

and foreign pension and PRMB plans which provide benefits to a defined group of employees who satisfy age and length of service requirements at our discretion.

As of December 31 , 2025 , we have several stand-alone non-contributory defined benefit plans and PRMB plans.

Depending on the plan, pension and PRMB benefits are based on a combination of factors, which may include salary, age, and years of service.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee pension and PRMB plan obligations and the associated expense included in the consolidated financial statements are determined from actuarial analyses based on plan assumptions, employee demographic data, years of service, compensation, benefits and claims paid, and employer contributions.

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defined pension plans exceed the estimated annual interest and service costs.

The components of net periodic benefit cost other than the service cost component are included in Other (income) expense, net, in the Consolidated Statements of Income.

The components of net periodic benefit cost other than the service cost component are included in Other expense (income), net, in the Consolidated Statements of Income.

The service cost component is included in either Cost of sales or SG&A expenses, depending on the classification of the employee's other compensation costs.

The objective with respect to the funding of our pension plans is to provide adequate assets for the payment of future benefits.

Pursuant to this objective, KDP will fund the pension plans as required by governmental regulations and may consider discretionary contributions as conditions warrant.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

KDP participates in several multi-employer pension plans and makes contributions to those plans, which are recorded in either Cost of sales or SG&A expenses, depending on the classification of the employee's other compensation costs.

Pursuant to this objective, we will fund the pension plans as required by governmental regulations and may consider discretionary contributions as conditions warrant.

We participate in several multi-employer pension plans and makes contributions to those plans, which are recorded in either Cost of sales or SG&A expenses, depending on the classification of the employee's other compensation costs.

Risk Management Programs

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Any change will impact income tax expense in the period in which such determination is made.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative Instruments

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

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

We manage these risks through a variety of strategies, including the use of interest rate contracts, FX forward contracts, commodity forward, future, swap, and option contracts, and supplier pricing agreements.

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

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We formally designate and account for certain foreign exchange forward contracts and interest rate 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.

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Historically, we have not experienced material credit losses as a result of counterparty nonperformance.

We select and periodically review our counterparties based on credit ratings, limit our exposure to a single counterparty under defined guidelines and monitor the market position of the programs upon execution of a hedging transaction and at least on a quarterly basis.

We select and periodically review our counterparties based on credit ratings, limit our exposure to a single counterparty under defined guidelines, and monitor the market position of the derivative instruments upon execution of a hedging transaction and at least on a quarterly basis.

Loss Contingencies

Legal Matters

KDP is involved from time to time in various claims, proceedings, and litigation, including those described in Note 18.

We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

From time to time, we are involved in various claims, proceedings, and litigation, including those described in Note 18.

We accrue for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

Management has also identified certain other legal matters where it believes an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made, and where applicable, provides disclosure of such legal matters in Note 18.

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The estimate for warranties requires assumptions relating to expected warranty claims which are based on historical claims and known current year factors.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Balance Sheet Information

The following table provides supplemental financial information from the Consolidated Balance Sheets:

(in millions) 2025 2024

Prepaid expenses $ 334 $ 173

Other current assets 484 433

Total prepaid expenses and other current assets $ 818 $ 606

Accrued customer trade $ 444 $ 439

Accrued termination fees (1)

Other accrued expenses 935 920

Total accrued expenses $ 1,379 $ 1,584

(1) We paid the termination fee related to the GHOST Transactions in full in the first quarter of 2025.

Refer to Note 4 for additional information.

Revenue Recognition

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

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of Sales

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Prepaid advertising and marketing costs are recorded as Other current and Other non-current assets in the Consolidated Balance Sheets.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Research and Development Costs

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Compensation cost is based on the grant-date fair value.

The fair value of RSUs is determined based on the number of units granted and the grant date price of common stock.

The fair value of PSUs is estimated at the date of grant using a Monte-Carlo simulation.

The fair value of RSUs and PSUs is determined based on the number of units granted and the grant date price of common stock.

Restructuring and Integration Costs

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Restructuring liabilities that qualify as exit and disposal costs under U.S.

GAAP are included in accounts payable and accrued expenses on the consolidated financial statements.

GAAP are included in accounts payable and accrued expenses in the consolidated financial statements.

We also incur expenses that are an integral component of, and directly attributable to, the restructuring activities, which do not qualify as exit and disposal costs, such as accelerated depreciation, asset impairments, IT implementation costs, and other incremental costs.

We have recorded these costs within SG&A expenses on the Consolidated Statements of Income, and these costs are held within unallocated corporate costs.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency Translation and Transaction

We have recorded these costs within SG&A expenses in the Consolidated Statements of Income, and these costs are held within unallocated corporate costs.

Foreign Currency Translation and Transactions

We translate assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S.

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Assets and liabilities resulting from these transactions are translated at the rate of exchange in effect at the balance sheet date.

Such differences are recorded in Cost of sales or Other (income) expense, net in the Consolidated Statements of Income, depending on the nature of the underlying transaction .

Such differences are recorded in Cost of sales or Other expense (income), net in the Consolidated Statements of Income, depending on the nature of the underlying transaction .

Earnings per Share

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Shares repurchased under authorized share repurchase programs are retired, and the excess purchase price over the par value is recorded to additional paid-in capital.

The IRA imposes a 1% excise tax on net share repurchases that occur after December 31, 2022.

The tax associated with shares repurchased is recorded to additional paid-in capital.

Cash paid related to the excise tax on net share repurchases is included in the Repurchases of common stock line in the Consolidated Statements of Cash Flows.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 1% excise tax associated with shares repurchased is recorded to additional paid-in capital.

Cash paid related to the excise tax on net share repurchases is included in the Repurchases of common stock, inclusive of excise tax obligation line in the Consolidated Statements of Cash Flows.

RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The objective of ASU 2023-09 is to enhance disclosures related to income taxes, including specific thresholds for inclusion within the tabular disclosure of income tax rate reconciliation and specified information about income taxes paid.

ASU 2023-09 is effective for public companies starting in annual periods beginning after December 15, 2024.

We are currently evaluating ASU 2023-09 but expect the impact of the disclosures to be immaterial to KDP’s consolidated financial statements.

In February 2024, the FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) .

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ASU 2024-03 is effective for public companies starting in annual periods beginning after December 15, 2026 and in interim periods beginning after December 15, 2027.

We are currently evaluating ASU 2024-03 and the impact of the disclosures to KDP’s consolidated financial statements.

We are currently evaluating ASU 2024-03 and the impact of the disclosures to our consolidated financial statements.

RECENTLY ADOPTED PROVISIONS OF U.S.

As of January 1, 2024 we adopted ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The objective of ASU 2023-07 is to require entities to provide enhanced disclosures on significant segment expenses.

ASU 2023-07 is effective for public companies in annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

Refer to Note 8 for additional information on our segment related disclosures.

As of January 1, 2025 we prospectively adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 is effective for public companies starting in annual periods beginning after December 15, 2024.

Refer to Note 15 for additional information on our income tax related disclosures.

JDE Peet's Acquisition and Related Transactions

JDE PEET'S ACQUISITION

On August 24, 2025, we entered into the JDE Peet's Acquisition Agreement, and on January 16, 2026, pursuant to JDE Peet's Acquisition Agreement, KDP commenced a tender offer to acquire all of the issued ordinary shares, excluding ordinary shares in treasury, of JDE Peet's for a cash offer price of € 31.85 per share, without interest.

JDE Peet's is a global pure-play coffee company with a portfolio of leading brands including Jacobs, L'OR, and Peet's.

The JDE Peet's Acquisition is expected to occur early in the second quarter of 2026 and is subject to the satisfaction or waiver of closing conditions, including the acceptance of the offer by the shareholders of JDE Peet's.

We additionally entered into a series of transactions in order to fund a portion of the consideration of the JDE Peet's Acquisition, as described below.

The JV Investment and Preferred Investment are subject to customary closing conditions, including the substantially concurrent closing of the JDE Peet's Acquisition.

BORROWING ARRANGEMENTS

In connection with the JDE Peet's Acquisition, we entered into the Bridge Credit Agreement and the Delayed Draw Term Loan Agreement.

Refer to Note 5 for additional information on these borrowing arrangements.

JV INVESTMENT

On October 26, 2025, we entered into the JV Commitment Letter, 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.

Further, the JV Commitment Letter names each of Apollo Global Securities, LLC and KKR Capital Markets, LLC as a joint lead arranger with respect to certain of the transactions.

On February 23, 2026, the JV Transaction Agreement was executed.

Refer to Note 22 for additional information on the significant terms of the JV Transaction Agreement .

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PREFERRED INVESTMENT

On October 27, 2025, we entered into the Preferred Investment Agreement with the KKR Investor and the Apollo Investor.

Under the Preferred Investment Agreement, we agreed to issue and sell to the Preferred Investors, and the Preferred Investors agreed to purchase from us, 3 million shares of our Convertible Preferred Stock, with a par value of $ 0.01 per share, for a purchase price of $ 1,000 per share and an aggregate purchase price of $ 3 billion.

The transaction is exempt from the registration requirements of the Securities Act of 1933, as amended.

On February 23, 2026, we amended the Preferred Investment Agreement, under which the Preferred Investors agreed to purchase an additional 1.5 million shares of our Convertible Preferred Stock.

Refer to Note 22 for additional information .

The Convertible Preferred Stock will rank senior to our common stock with respect to dividend and distribution on liquidation rights.

The Convertible Preferred Stock will have a liquidation preference of $ 1,000 per share.

The holders of the Convertible Preferred Stock will be entitled to dividends at a rate of 4.75 % per annum, subject to increase in certain cases, and 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.

Dividends on the Convertible Preferred Stock will be paid in cash.

We may choose to defer payment of all or part of any dividends due on the Convertible Preferred Stock;

however, we will accrue additional dividends until paid in cash and we will not be able to declare or pay any dividends on or make repurchases of our common stock, subject to certain conditions.

The Convertible Preferred Stock will be convertible into shares of our common stock, at our election or, in certain specified circumstances, the election of the Preferred Investors, at an initial conversion price of $ 37.25 (which will be subject to anti-dilution adjustments, as well as an adjustment in the event that we complete the Separation).

Holders may convert up to, in the aggregate, 50% of the Convertible Preferred Stock allocated among such holders and their permitted transferees pro rata at any time, and may convert the remainder following the earliest of the closing of the Separation, the 18-month anniversary of the issuance of the Convertible Preferred Stock, upon foreclosure by a lender under a bona fide loan or other financing arrangement or the 12-month anniversary of any initial public offering of the remaining beverage business if the Separation has not yet occurred.

We may require, at any time after the 3-year anniversary of the issuance of the Convertible Preferred Stock to be converted if the closing price per share of our common stock exceeds 150% of the conversion price then in effect for at least twenty trading days in any period of thirty consecutive trading days.

After the seventh anniversary of the issue date, we will have the option to redeem the Convertible Preferred Stock at the then-applicable redemption price.

In the case of a fundamental change, we will be required to offer to repurchase the Convertible Preferred Stock at a specified price.

Preferred Investors will vote with holders of our common stock on an as-converted basis, following the satisfaction of certain conditions.

The Preferred Investment is subject to customary closing conditions, including, among others:

(i) the continued accuracy of the representations and warranties contained in the Preferred Investment Agreement; (ii) the performance in all material respects by each party of its respective covenants and agreements under the Preferred Investment Agreement; (iii) the expiration of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

and (iv) the substantially concurrent closing of the JDE Peet's Acquisition.

Other Acquisitions

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.

We paid $ 72 million in cash, net of our previous ownership interest, in order to complete the acquisition.

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

In the third quarter of 2025, we finalized our allocation of consideration exchanged in the Dyla acquisition, with no significant measurement period adjustments recorded.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

GHOST TRANSACTIONS

On December 31, 2024, we acquired a 60 % ownership interest in GHOST for aggregate consideration of $ 999 million.

GHOST is a lifestyle sports nutrition business with a portfolio anchored by GHOST Energy, a leading RTD energy brand.

As part of the GHOST Transactions, we also entered into an agreement which requires us to purchase the remaining equity interests in GHOST in 2028.

Additionally, we executed an agreement with GHOST and ABI which terminated the distribution rights for certain GHOST products by ABI, effective March 3, 2025, for a termination payment to ABI of $ 225 million, after which, we assumed the distribution of such products.

The termination payment was accrued as of December 31, 2024 and paid in the first quarter of 2025, with the corresponding expense included within Other operating (income) expense, net in the Consolidated Statements of Income.

Under the acquisition method of accounting, total consideration was as follows:

(in millions) Total Consideration

Initial payment to acquire 60% of GHOST $ 999

Fair value of mandatory redemption liability for the remainder of the business on December 31, 2024 (1)

Total consideration $ 1,688

(1) Refer to Note 2 for additional information on the estimation of fair value of our mandatory redemption liability.

The initial payment of $ 999 million was funded primarily by proceeds drawn from the Term Loan Agreement.

Refer to Note 5 for additional information.

The following is a summary of the allocation of consideration based on estimated fair values of assets acquired and liabilities assumed in the GHOST Transactions as of December 31, 2024:

(in millions) Fair Value

Brand $ 1,146

Assets acquired, net of liabilities assumed 82

Customer relationships 23

Total consideration 1,688

Holdback placed in escrow (2)

Acquisition of business $ 1,598

(1) The goodwill created in the GHOST Transactions is expected to be deductible for tax purposes and is included in our U.S.

Refreshment Beverages segment.

(2) Amount includes both the current and non-current portion of the holdback liability as of December 31, 2024.

Refer to Note 2 for additional information.

In the first quarter of 2025, we finalized our allocation of consideration, with no significant measurement period adjustments recorded.

KALIL ACQUISITION

On August 9, 2024, we acquired all of Kalil's production, sales, and distribution assets for total consideration of $ 103 million.

Kalil is an independent bottler with bottling and distribution rights in Arizona to key KDP brands, including Canada Dry, 7UP, A&W, Snapple, and Core Hydration.

Upon completion of the Kalil Acquisition, approximately $ 8 million of cash was held back and placed in escrow, which was released in the fourth quarter of 2025.

In 2025, we finalized our allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in the Kalil Acquisition, which was primarily allocated to property, plant, and equipment and other intangible assets, based on estimated fair values as of August 9, 2024.

No significant measurement period adjustments recorded.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term Obligations and Borrowing Arrangements

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Current portion of long-term obligations:

Notes 1,026 1,150

Short-term borrowings and current portion of long-term obligations $ 3,105 $ 2,642

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Issuance Maturity Date Rate 2025 2024

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

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

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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)

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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

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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

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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

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(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.

On March 7, 2024, we completed the issuance of the 2027-B Notes, the 2027-C Notes, the 2029-B Notes, the 2031-B Notes, and the 2034 Notes, with an aggregate principal amount of $ 3 billion.

(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 0.58 % and 0.88 % 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 our share repurchase program, to repay outstanding commercial paper, and to repay the 2024 Notes at maturity, with the remainder intended for general corporate purposes.

Notes, among other things, contain customary default provisions and limit our ability to incur indebtedness secured by principal properties, to enter into certain sale and leaseback transactions, and to enter into certain mergers or transfers of substantially all of KDP‘s assets.

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

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

The Notes are fully and unconditionally guaranteed by certain of our direct and indirect subsidiaries.

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VARIABLE-RATE BORROWING ARRANGEMENTS

Delayed Draw Term Loan Agreement

In connection with the JDE Peet's Acquisition, we entered into the Delayed Draw Term Loan Agreement on December 18, 2025, among KDP, as borrower, the lenders party thereto, and Morgan Stanley Senior Funding, Inc.

as administrative agent.

We incurred approximately $ 15 million in deferred financing fees related to the issuance, which were capitalized and are being amortized to Interest expense, net through February 2027.

The Delayed Draw Term Loan Agreement provides for a 364-day senior unsecured term loan facility in an aggregate amount not to exceed € 10.35 billion, the proceeds of which may be used to fund the JDE Peet's Acquisition, as well as related fees and expenses.

Borrowings under the Delayed Draw Term Loan Agreement will bear interest at a rate per annum equal to EURIBOR plus a margin of 0.750 % to 1.750 % depending on the rating of certain of our index debt.

The undrawn commitments under the facility are subject to a commitment fee which commenced on December 23, 2025 at a per annum rate of 0.060 % to 0.200 % depending on the rating of certain of our index debt.

The Delayed Draw Term Loan Agreement contains customary representations and warranties for investment grade financings.

The Delayed Draw Term Loan Agreement also contains (i) certain affirmative covenants, including those that impose reporting and/or operating obligations on us and our subsidiaries, (ii) certain negative covenants that generally limit, subject to exceptions, us and our subsidiaries from taking certain actions, including incurring liens and consummating certain fundamental changes, (iii) financial covenants in the form of a minimum interest coverage ratio of 3.25 to 1.00 that will apply after the initial funding date and a maximum total net leverage ratio of 6.25 to 1.00 that will apply after the initial funding date only upon a downgrade in the ratings of certain of our index debt, and (iv) events of default customary for financings of this type.

As of December 31 , 2025 , the full amount of the Delayed Draw Term Loan Agreement remains available and undrawn.

Bridge Credit Agreement

In connection and concurrently with the entry into the JDE Peet's Acquisition Agreement, we entered into the Bridge Credit Agreement, a 364-day senior unsecured bridge loan facility in an aggregate amount not to exceed € 16.2 billion, on August 24, 2025, among KDP, as borrower, with the lenders party thereto, and Morgan Stanley Senior Funding, Inc.

as administrative agent.

We incurred approximately $ 91 million in deferred financing fees related to the issuance, which were capitalized and are being amortized to Interest expense, net through February 2027.

We paid additional fees of $ 15 million on December 23, 2025, as the facility remained undrawn.

Borrowings under the Bridge Credit Agreement will bear interest at a rate per annum equal to EURIBOR plus a margin of 0.750 % to 2.500 % depending on the rating of certain of our index debt and the period for which the bridge loan remains outstanding after the initial funding date.

The undrawn commitments under the facility are subject to a commitment fee, which commenced on December 23, 2025, at a per annum rate of 0.060 % to 0.200 % depending on the rating of certain of our index debt.

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

The Bridge Credit Agreement also contains (i) certain affirmative covenants, including those that impose reporting and/or operating obligations on us and our subsidiaries, (ii) certain negative covenants that generally limit, subject to exceptions, us and our subsidiaries from taking certain actions, including incurring liens and consummating certain fundamental changes, (iii) financial covenants in the form of a minimum interest coverage ratio of 3.25 to 1.00 that will apply after the initial funding date and a maximum total net leverage ratio of 6.25 to 1.00 that will apply after the initial funding date only upon a downgrade in the ratings of certain of our index debt, and (iv) events of default customary for financings of this type.

On December 18, 2025, the Bridge Credit Agreement facility was reduced to € 5.85 billion as a result of the execution of the Delayed Draw Term Loan Agreement, as discussed above.

As of December 31 , 2025 , the remaining amount of the Bridge Credit Agreement remains available and undrawn.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Term Loan Agreement

On October 25, 2024, we entered into the Term Loan Agreement among KDP, as borrower, the lenders party thereto and Bank of America, N.A., as administrative agent.

The deferred financing fees incurred in connection with the Term Loan Agreement were insignificant.

The Term Loan Agreement provides for a delayed draw term loan facility in an aggregate principal amount of $ 1.25 billion, available in a first tranche of up to $ 1 billion and second tranche of up to $ 250 million.

The proceeds of the Term Loan Agreement may be used by KDP for general corporate purposes, including to finance acquisitions (including the payment of any fees and expenses incurred in connection therewith).

Borrowings under the Term Loan Agreement are unsecured.

Borrowings under the first tranche and second tranche must be repaid on April 25, 2026, and February 23, 2027, respectively, but may be repaid earlier without penalty.

On December 31, 2024, we drew $ 990 million on the first tranche of the Term Loan Agreement, and the remaining capacity of the first tranche was forfeited.

As of December 31, 2024, the second tranche of up to $ 250 million remains available.

The interest rate applicable to borrowings under the Term Loan Agreement ranges from (i) a rate equal to SOFR plus a spread adjustment of 0.100 % and a margin of 0.875 % to 1.500 % to (ii) a rate equal to a base rate plus a margin of 0.000 % to 0.500 %, in each case depending on our credit rating as determined by Moody’s and S&P.

The Term Loan Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on KDP and its subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, KDP and its subsidiaries from taking certain actions, including, without limitation, incurring liens, consummating certain fundamental changes, and entering into transactions with affiliates, (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 December 31, 2024, we were in compliance with our minimum interest coverage ratio relating to the Term Loan Agreement .

On December 31, 2024, we drew $ 990 million on the first tranche of the Term Loan Agreement and used the proceeds to fund the GHOST Transactions.

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 the Term Loan Agreement.

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

Revolving Credit Agreement

On February 23, 2022, we entered into the Revolving Credit Agreement among KDP, as borrower, the lenders from time to time party thereto and JPMorgan Chase, Bank, N.A., as administrative agent.

On March 31, 2025, we entered into the 2025 Revolving Credit Agreement among KDP, as borrower, the lenders from time to time party thereto and JPMorgan Chase, Bank, N.A., as administrative agent.

We incurred approximately $ 4 million in deferred financing fees related to the issuance.

On September 30, 2025, the 2025 Revolving Credit Agreement was amended to increase the capacity to $ 4.3 billion.

The following table summarizes information about the 2025 Revolving Credit Agreement:

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2025 Revolving Credit Agreement (1)

February 23, 2027 $ 4,000 $ — $ —

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

Borrowings under the Revolving Credit Agreement will bear interest at a rate per annum equal to, at KDP's option, an adjusted SOFR rate plus a margin of 0.875 % to 1.500 % or a base rate plus a margin of 0.000 % to 0.500 %, in each case, depending on the rating of certain index debt of KDP.

March 31, 2030 $ 4,300 $ — $ —

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

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 Revolving Credit Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on KDP and its subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, KDP and its subsidiaries from taking certain actions, including, without limitation, incurring liens, consummating certain fundamental changes and entering into transactions with affiliates, (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 December 31, 2024, we were in compliance with our minimum interest coverage ratio relating to the Revolving Credit Agreement .

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Commercial Paper Program

KDP has a commercial paper program, under which we may issue unsecured commercial paper notes on a private placement basis.

Effective November 10, 2023, the maximum aggregate amount available under the facility was increased to $ 4,000 million.

We have a commercial paper program, under which we may issue unsecured commercial paper notes on a private placement basis.

The maximum aggregate amount available under the facility is $ 4 billion.

The maturities of the commercial paper notes vary, but commercial paper notes are classified as short-term, as maturities do not exceed one year.

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Weighted average borrowing rates 4.54 % 5.42 % 5.41 %

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Letters of Credit Facility

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The fair value of our Notes was $ 13,196 million and $ 12,036 million as of December 31, 2025 and 2024, respectively.

GHOST TRANSACTIONS

On October 23, 2024, we entered into a definitive agreement with GHOST, and certain other parties named therein, to acquire a controlling interest in GHOST.

Founded in 2016, GHOST is a lifestyle sports nutrition business with a portfolio anchored by GHOST Energy, a leading ready-to-drink energy brand.

Under the terms of the agreement, we initially purchased a 60 % stake in GHOST for aggregate consideration of $ 999 million, which included customary adjustments.

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

Separately from the above transaction, we also executed an agreement with GHOST and ABI which terminates the distribution rights for certain GHOST products by ABI, effective March 3, 2025, for a termination payment to ABI of $ 225 million.

At that time, we will assume the distribution of such products.

The termination payment was accrued as of December 31, 2024, with the corresponding expense included within Other operating expense (income), net in the Consolidated Statements of Income.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Under the acquisition method of accounting, total consideration was as follows:

(in millions) Total Consideration

Initial payment to acquire 60% of GHOST $ 999

Fair value of mandatory redemption liability for the remainder of the business on December 31, 2024 (1)

Total consideration $ 1,688

(1) The fair value of our mandatory redemption liability is estimated using the Monte Carlo simulation method which includes forecasted EBITDA expectations, adjusting for market risks and volatility, calculating redemption prices, discounting to present terms with the cost of debt, and averaging results across scenarios to determine fair value, incorporating the market price of risk and volatility estimates from similar companies.

The initial payment of $ 999 million was funded primarily by proceeds drawn from the Term Loan Agreement.

Refer to Note 3 for additional information.

Allocation of Consideration

Our preliminary allocation of consideration to the net tangible and intangible assets acquired and liabilities assumed in the GHOST Transactions is based on estimated fair values as of December 31, 2024.

The following is a summary of the preliminary allocation of consideration to the estimated fair values of assets acquired and liabilities assumed in the GHOST Transactions as of December 31, 2024:

(in millions) Fair Value

Brand $ 1,146

Assets acquired, net of liabilities assumed 82

Customer relationships 23

Total consideration 1,688

Holdback placed in escrow (1)

Acquisition of business $ 1,598

(1) Amount includes both the current and non-current portion of the holdback liability.

Refer to Note 17 for additional information.

The GHOST Transactions preliminarily resulted in $ 437 million of goodwill.

The goodwill to be recognized is attributable to revenue synergies, driven by a strong portfolio of brands with exposure to higher growth segments and the ability to leverage our collective distribution strength, as well as operational and general and administrative cost synergies.

The goodwill created in the GHOST Transactions is expected to be deductible for tax purposes.

All of the goodwill is included in our U.S.

Refreshment Beverages segment.

We have not presented estimated unaudited pro forma results of operations for the GHOST Transactions or the actual results of GHOST because it is not material to our consolidated financial statements.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OTHER IMMATERIAL ACQUISITIONS

Kalil Acquisition

On May 30, 2024, we entered into an agreement with Kalil, under which we agreed to acquire all of Kalil’s production, sales, and distribution assets for total consideration of $ 103 million, subject to certain adjustments outlined in the agreement.

Kalil is an independent bottler with bottling and distribution rights in Arizona to key KDP brands, including Canada Dry, 7UP, A&W, Snapple, and Core Hydration.

On August 9, 2024, we completed the Kalil Acquisition, and approximately $ 8 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 in the Kalil Acquisition is based on estimated fair values as of August 9, 2024, and the consideration was primarily allocated to property, plant, and equipment and other intangible assets.

We spent $ 6 million in connection with an immaterial acquisition during the year ended December 31, 2024.

Goodwill and Other Intangible Assets

Goodwill and Intangible Assets

Changes in the carrying amount of goodwill by reportable segment are as follows:

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Balance as of December 31, 2023

$ 8,714 $ 8,622 $ 2,866 $ 20,202

Foreign currency translation — — ( 290 ) ( 290 )

Balance as of December 31, 2023 8,714 8,622 2,866 20,202

Acquisitions (1)

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( 306 ) — — ( 306 )

Balance as of December 31, 2024 (3)

8,855 8,622 2,576 20,053

Foreign currency translation — — 179 179

Acquisitions (1)

Balance as of December 31, 2025 (3)

$ 8,870 $ 8,622 $ 2,755 $ 20,247

(1) Acquisition activity during the year ended December 31, 2024 represents goodwill recorded as a result of the 2024 acquisitions.

Refer to Note 4 for additional information.

(1) Refer to Note 4 for additional information on acquisitions.

(2) Impairment activity during the year ended December 31, 2024 represents impairment of our U.S.

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Refer to Impairment Analysis - 2024 Impairment Analysis below for further information.

(3) As of December 31, 2024, goodwill for the U.S.

(3) As of December 31, 2025 and 2024, goodwill for the U.S.

Refreshment Beverages segment is inclusive of accumulated impairment losses of $ 306 million.

There were no accumulated impairment losses for goodwill as of December 31, 2023 or 2022.

There were no accumulated impairment losses for goodwill as of December 31, 2023.

KEURIG DR PEPPER INC.

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Distribution rights 162 ( 35 ) 127 66 ( 23 ) 43

Other 25 ( 3 ) 22 — — —

Total intangible assets with definite lives $ 2,364 $ ( 1,229 ) $ 1,135 $ 2,199 $ ( 1,091 ) $ 1,108

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Total intangible assets with indefinite lives 22,590 22,526

Other intangible assets, net $ 23,634 $ 23,287

(1) The change in brands with indefinite lives was driven by the acquisition of the GHOST brand in the amount of $ 1,146 million, which was partially offset by non-cash impairment charges of $ 412 million and unfavorable foreign currency translation impacts of $ 362 million during the year ended December 31, 2024.

Refer to Impairment Analysis - 2024 Impairment Analysis below for further information.

(2) The increase in distribution rights with indefinite lives during the year ended December 31, 2024 was primarily driven by acquired distribution rights related to Electrolit of $ 49 million .

Total intangible assets, net $ 23,725 $ 23,634

(1) The change in brands with indefinite lives was driven by favorable foreign currency translation impacts of $ 223 million, which was partially offset by non-cash impairment charges of $ 78 million during the year ended December 31, 2025.

Refer to 2025 Impairment Analysis below for further information.

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

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Expected amortization expense $ 134 $ 117 $ 109 $ 106 $ 100

GOODWILL AND INTANGIBLE ASSETS IMPAIRMENT

2025 Impairment Analysis

For the year ended December 31, 2025, we performed a Step 0 analysis for certain indefinite lived intangible assets, including trade names and certain distribution rights, and did not identify any indicators of impairment.

For goodwill, indefinite lived brands, and reacquired distribution rights, we performed a Step 1 analysis.

As a result, non-cash impairment charges of $ 78 million were recorded specific to certain brands in the U.S.

Refreshment Beverages segment.

The primary factor that led to the brand impairment determination as of October 1, 2025 was an increase in our discount rate.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

GOODWILL AND OTHER INTANGIBLE ASSETS IMPAIRMENT

2024 Impairment Analysis

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No impairments were recorded as a result of these analyses.

2022 Impairment Analysis

In the third quarter of 2022, management identified specific performance and margin challenges for the Bai brand and performed a Step 1 quantitative discounted cash flow analysis using the income approach.

As a result of this analysis, we recorded an impairment charge of $ 311 million in the U.S.

Refreshment Beverages segment.

During our annual impairment analysis, we performed a Step 0 analysis for certain indefinite lived intangible assets, including trade names, contractual arrangements, and distribution rights, and did not identify any indicators of impairment.

For goodwill and the primary indefinite-lived brands, we performed a Step 1 analysis which resulted in non-cash impairment charges of $ 161 million were recorded specific to certain brands during the year.

The primary factors that led to the brand impairment determination as of October 1, 2022, driven primarily by Schweppes, were the change in the macroeconomic environment leading to increases in discount rates, as well as supply chain disruptions within third-party distribution networks.

Additional Impairment Considerations

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Royalty rates (1)

1.0 % 1.0 % 1.0 % 10.0 % N/A N/A

1.0 % 1.0 % 1.0 % 1.0 % 1.0 % 10.0 %

(1) Royalty rates were used in a Step 1 quantitative analysis of certain non-priority brands for the years ended December 31, 2025, 2024, and 2023, and trade names for the year ended December 31, 2023.

For the year ended December 31, 2022, royalty rates were not used, as we performed a Step 0 qualitative analysis for both trade names and certain non-priority brands.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The results of the impairment analyses of our indefinite lived brands as of October 1, 2024, 2023, and 2022 are as follows:

The results of the impairment analyses of our indefinite lived priority brands as of October 1, 2025, 2024, and 2023 were as follows:

2025 2024 2023

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(1) Carrying value reflects the results of the annual impairment analysis recognized during the years ended December 31, 2025 and 2024.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INTEREST RATES

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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 Consolidated Statements of Income.

As of December 31, 2024, economic interest rate derivative instruments have maturities ranging from May 2035 to July 2043.

As of December 31 , 2025 , economic interest rate derivative instruments have maturities ranging from March 2027 to November 2046.

Cash Flow Hedges

In April 2022, KDP terminated $ 1.5 billion of notional amount of its $ 2.5 billion forward starting swaps, which had been designated as cash flow hedges.

Upon termination, KDP received $ 125 million to settle the contracts with the counterparties, which is amortized to Interest expense, net over the respective terms of the issued Notes.

On September 30, 2022, KDP de-designated $ 500 million of notional amount of the forward starting swaps.

As the forecasted debt transaction was still probable to occur, the fair value of the these instruments as of the de-designation was recorded to AOCI.

Changes in fair value of the these instruments from the point of de-designation were recorded as unrealized gains or losses in Interest expense, net in the Consolidated Statements of Income until the instruments were terminated in the third quarter of 2023, at which time the realized gains in excess of the fair value as of the date of de-designation were recorded in Interest expense, net .

The fair value of the instruments as of the date of de-designation remained in AOCI until March 2024, when the forecasted debt transaction took place with the issuance of the 2034 Notes, and the fair value of the instruments began amortizing to Interest expense, net over the term of the 2034 Notes.

During the first quarter of 2023, KDP terminated the remaining forward starting swaps which were designated as cash flow hedges.

As the forecasted debt transaction associated with the terminated forward starting swaps was no longer considered probable, the realized gains associated with the termination were recorded in Interest expense, net during the first quarter of 2023.

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.

In October 2025, in order to hedge the variability in cash flows from interest rate changes associated with our planned future issuances of long-term debt, we entered into forward starting swaps with terms ranging from 5 to 30 years and designated them as cash flow hedges.

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.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Economic Hedges

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In these cases, a hedging relationship exists in which changes in the fair value of the instruments act as an economic offset to changes in the fair value of the underlying items.

Additionally, we have significant anticipated Euro-denominated cash outflows resulting from the intended JDE Peet's Acquisition, as described in Note 3.

To reduce our exposure to exchange rate fluctuations associated with the planned acquisition consideration and related financing, we entered into FX forward contracts during the third quarter of 2025.

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 Consolidated Statements of Income as the associated risk.

As of December 31, 2024, these FX contracts have maturities ranging from January 2025 to September 2026.

As of December 31 , 2025 , these FX contracts have maturities ranging from January 2026 to October 2026.

Cash Flow Hedges

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

dollars of our Canadian and Mexican businesses.

dollars of our foreign subsidiaries.

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

As of December 31, 2024, these FX contracts have maturities ranging from January 2025 to December 2025.

As of December 31 , 2025 , these FX contracts have maturities ranging from January 2026 to June 2027.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Economic Hedges

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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 December 31, 2024, these commodity contracts have maturities ranging from January 2025 to July 2026.

As of December 31 , 2025 , these commodity contracts have maturities ranging from January 2026 to January 2028.

NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS

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

Swaptions, not designated as hedging instruments — 3,200

Forward starting swaps, designated as cash flow hedges 1,500 —

Forward contracts, not designated as hedging instruments (1)

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Commodity contracts, not designated as hedging instruments (2)

(1) Includes € 10 billion of FX forward contracts entered into during the third quarter of 2025 in connection with the planned JDE Peet's Acquisition.

(2) Notional value for commodity contracts is calculated as the expected volume times strike price per unit on a gross basis.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE OF DERIVATIVE INSTRUMENTS

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Therefore, we have categorized these contracts as Level 2.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Not Designated as Hedging Instruments

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Interest rate contracts Other non-current liabilities 381 345

FX forward contracts Other non-current liabilities — 4

Commodity contracts Other non-current liabilities 23 3

Designated as Hedging Instruments

The following table summarizes the fair value hierarchy and the location of the fair value of our derivative instruments which are designated as hedging instruments within the Consolidated Balance Sheets.

The following table summarizes the location of the fair value of our derivative instruments which are designated as hedging instruments within the Consolidated Balance Sheets.

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

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FX contracts Prepaid expenses and other current assets $ 2 $ 41

FX contracts Other non-current assets 1 —

Interest rate contracts Other non-current assets 37 —

FX contracts Other current liabilities $ 16 $ —

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Interest rate contracts Other current liabilities 2 —

IMPACT OF DERIVATIVE INSTRUMENTS NOT DESIGNATED AS HEDGING INSTRUMENTS

The following table presents the amount of (gains) losses recognized in the Consolidated Statements of Income related to derivative instruments not designated as hedging instruments under U.S.

The following table presents the amount of losses (gains) recognized in the Consolidated Statements of Income related to derivative instruments not designated as hedging instruments under U.S.

GAAP during the periods presented.

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Interest rate contracts Interest expense, net $ 2 $ 63 $ ( 26 )

Interest rate contracts Loss on early extinguishment of debt — — 31

FX forward contracts Cost of sales ( 4 ) ( 6 ) ( 2 )

FX forward contracts Other (income) expense, net ( 10 ) 5 ( 9 )

FX forward contracts Other expense (income), net 36 ( 10 ) 5

Commodity contracts Cost of sales ( 117 ) 28 22

Commodity contracts SG&A expenses 1 10 17

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

IMPACT OF CASH FLOW HEDGES

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

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

For the Year Ended December 31,

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(1) Amounts recognized during the year ended December 31, 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $ 66 million .

We expect to reclassify approximately $ 13 million and $ 38 million of pre-tax net gains from AOCI into net income during the next twelve months related to interest rate contracts and FX contracts, respectively.

We expect to reclassify approximately $ 14 million of pre-tax net gains and $ 10 million of pre-tax net losses from AOCI into net income during the next twelve months related to interest rate contracts and FX contracts, respectively.

The following table presents the components of lease cost:

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(1) Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation.

The following tables present supplemental information about our leases:

(in millions) Balance Sheet Location 2025 2024

Operating lease right-of-use assets

Other non-current assets $ 845 $ 880

Finance lease right-of-use assets (1)

Property, plant, and equipment, net 919 784

Operating lease liability Other current liabilities $ 127 $ 128

Finance lease liability Other current liabilities 179 125

Operating lease liability Other non-current liabilities 764 790

Finance lease liability Other non-current liabilities 745 677

(1) Amounts are presented net of accumulated amortization of $ 426 million and $ 334 million as of December 31, 2025 and 2024, respectively.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

For the Year Ended December 31,

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Operating leases (1)

$ 126 $ 118 $ 112

Finance leases (2)

(1) Includes impacts from lease modifications of $ 16 million during the year ended December 31, 2025.

(2) Includes impacts from lease modifications of $ 45 million during the year ended December 31, 2025 .

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

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SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

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

Future minimum lease payments for non-cancellable leases that have commenced and are reflected in the Consolidated Balance Sheets as of December 31 , 2025 were as follows:

(in millions) Operating Leases Finance Leases

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As of December 31 , 2025 , we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $ 157 million.

These leases will commence between 2025 and 2027, with initial lease terms ranging from 1 year to 7 years.

These leases will commence in 2026 and 2027, with initial lease terms ranging from 5 years to 10 years.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ASSET SALE-LEASEBACK TRANSACTIONS

In 2022 and 2023, we entered into a number of asset sale-leaseback transactions with a single sponsor, the Veyron SPEs.

Gains on the sale-leasebacks are recorded in Other operating expense (income), net, and the leasebacks are accounted for as operating leases.

Gains on sale-leaseback transactions were as follows:

For the Year Ended December 31,

(in millions) 2024 2023 2022

Gain on sale $ — $ 6 82

The initial term of each leaseback is 15 years, with two 10-year renewal options.

The renewal options are not reasonably assured as (i) KDP’s position that the dynamic environment in which we operate precludes our ability to be reasonably certain of exercising the renewal options in the distant future and (ii) the options are contingent on KDP remaining investment grade and no change-in-control as of the end of the lease term.

Each leaseback has an RVG.

Refer to Note 19 for additional information about RVGs associated with asset sale-leaseback transactions.

Effective January 1, 2023, we revised our segment structure to align with changes in how our CODM manages the business, assesses performance and allocates resources.

The prior period segment disclosures reflect the revised presentation.

Our operating and reportable segments consist of the following:

ASSET SALE-LEASEBACK TRANSACTION

In 2023, we entered into an asset sale-leaseback transaction with the Veyron SPEs.

A gain on the sale-leaseback of $ 6 million was recorded in Other operating (income) expense, net during the year ended December 31, 2023, and the leaseback is accounted for as an operating lease.

The initial term of the leaseback is 15 years, with two 10-year renewal options.

The renewal options are not reasonably assured as (i) our position that the dynamic environment in which we operate precludes our ability to be reasonably certain of exercising the renewal options in the distant future and (ii) the options are contingent on us remaining investment grade and no change-in-control as of the end of the lease term.

The leaseback has an RVG.

Refer to Note 19 for additional information about RVGs associated with the asset sale-leaseback transaction.

Our three 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, finished beverages, and other consumables, 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.

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• 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 single serve brewers, K-Cup pods, and other coffee products.

Segment results are based on management reports provided to the CODM, which is Tim Cofer, our CEO.

Net sales and income from operations are the significant financial measures used to assess the operating performance of KDP's operating segments.

Net sales and income from operations are the significant financial measures used to assess the operating performance of our operating segments.

The CODM periodically monitors our actual results and remaining forecast versus our annual budget for these financial measures, and this information is used to assess performance of the reportable segments, determine the payout of short-term incentive plan compensation, and to establish management's base salaries.

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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 expense (income)” 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”.

"Other segment expense (income)" includes Other operating (income) expense, 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.

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Other segment expense (income) (1)

941 ( 6 ) ( 9 )

Income from operations - reportable segments $ 2,939 $ 962 $ 546 $ 4,447

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Interest expense, net 754

Impairment of investments and note receivable 2

Other (income) expense, net ( 60 )

Other expense, net 134

Income before provision for income taxes $ 2,687

(1) During the year ended December 31, 2025, Other segment items within the U.S.

Refreshment Beverages segment primarily consisted of non-cash impairment charges of $ 412 million recorded specific to certain indefinite-lived brand assets and $ 306 million recorded to the WD reporting unit goodwill.

Refreshment Beverages segment primarily consisted of non-cash impairment charges of $ 78 million recorded specific to certain indefinite lived brand assets.

Refer to Note 6 for additional information about these non-cash impairment charges.

Other segment items within the U.S.

Refreshment Beverages segment also included the $ 225 million termination payment to ABI for distribution rights related to the GHOST Transactions.

Refer to Note 4 for additional information.

(in millions) U.S.

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SG&A expenses 2,904 684 521

Other segment income ( 8 ) ( 6 ) ( 8 )

Other segment expense (income) (1)

941 ( 6 ) ( 9 )

Income from operations - reportable segments $ 1,878 $ 1,079 $ 545 $ 3,502

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Interest expense, net 735

Other (income) expense, net ( 61 )

Other income, net ( 58 )

Income before provision for income taxes $ 1,914

(1) During the year ended December 31, 2024, Other segment items within the U.S.

Refreshment Beverages segment primarily consisted of non-cash impairment charges of $ 412 million recorded specific to certain indefinite lived brand assets and $ 306 million recorded to the WD reporting unit goodwill.

Refer to Note 6 for additional information about these non-cash impairment charges.

Other segment items within the U.S.

Refreshment Beverages segment also included the $ 225 million termination payment to ABI for distribution rights related to the GHOST Transactions.

Refer to Note 4 for additional information.

KEURIG DR PEPPER INC.

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SG&A expenses 2,810 691 476

Other segment expense (income) (1)

167 ( 54 ) ( 14 )

Other segment income ( 8 ) ( 6 ) ( 8 )

Income from operations - reportable segments $ 2,483 $ 1,158 $ 475 $ 4,116

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Interest expense, net 496

Loss on early extinguishment of debt 217

Gain on sale of equity method investment ( 50 )

Impairment of investments and note receivable 12

Other (income) expense, net 14

Other income, net ( 61 )

Income before provision for income taxes $ 2,757

(1) During the year ended December 31, 2022, Other segment items under the U.S.

Refreshment Beverages segment primarily consisted of noncash impairment charges of $ 472 million recorded specific to certain indefinite-lived brand assets.

Refer to Note 5 for additional information.

This was offset by a $ 271 million gain on litigation settlement.

Other segment items under the U.S.

Coffee segment primarily consisted of a $ 30 million gain on sale related to asset sale-leaseback transaction.

GEOGRAPHIC DATA

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Total property, plant, and equipment, net $ 3,230 $ 2,964

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAJOR CUSTOMER

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Additionally, customers in our U.S.

Refreshment Beverages and International segments buy concentrate from KDP, which is used in finished goods sold by our third party bottlers to Walmart.

Refreshment Beverages and International segments buy concentrate from us, which is used in finished goods sold by our third-party bottlers to Walmart.

These indirect sales further increase the concentration of risk associated with our consolidated net sales as it relates to Walmart.

Revenue Recognition

The following table disaggregates our revenue by portfolio:

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table disaggregates our net sales by portfolio:

(in millions) U.S.

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

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Share

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Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation 1.3 0.8 1.0

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Employee Benefit Plans

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Treasury Bill rates, plus 1%, with a required minimum rate of 5%.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additionally, accrued benefits for non-union employees in another of our U.S.

defined benefit pension plans were frozen effective November 1, 2025.

No additional benefits related to future services or salary increases were accrued for these certain non-union participants after October 31, 2025.

This freeze resulted in no curtailment gain or loss.

Financial Statement Impact

The following table sets forth amounts recognized in our financial statements and the pension plans' funded status:

As of December 31,

(in millions) 2025 2024

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Interest cost 9 9

Actuarial (gains) losses, net ( 5 ) 11

Actuarial losses (gains), net 6 ( 5 )

Benefits paid ( 5 ) ( 5 )

Impact of changes in FX rates 3 ( 4 )

Plan amendments 1 —

Settlements ( 9 ) ( 8 )

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Non-current liability ( 34 ) ( 31 )

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accumulated benefit obligations for all defined benefit pension plans were $ 161 million and $ 156 million as of December 31, 2025 and 2024, respectively.

The following table summarizes key pension plan information regarding plans whose accumulated benefit obligations exceed the fair value of their respective plan assets:

As of December 31,

(in millions) 2025 2024

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Total net periodic benefit costs $ 7 $ 7 $ 5

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We use the corridor approach for amortization of actuarial gains or losses.

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The following table summarizes amounts included in AOCI for our defined benefit plans:

As of December 31,

(in millions) 2025 2024

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Estimated future benefit payments $ 15 $ 13 $ 13 $ 14 $ 14 $ 75

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Actuarial Assumptions

Our pension expense was calculated based upon a number of actuarial assumptions including discount rates, retirement age, mortality rates, compensation rate increases and expected long-term rate of return on plan assets for pension benefits.

Our pension expense was calculated based upon a number of actuarial assumptions including discount rates, retirement age, mortality rates, and expected long-term rate of return on plan assets for pension benefits.

The following information is provided for our U.S.

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plans, we used the Pri-2012 mortality tables and the Mortality Improvement Scale MP-2021, published by the Society of Actuaries' Retirement Plans Experience Committee, for the years ended December 31, 2025 and 2024.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the weighted-average actuarial assumptions used to determine benefit obligations at the plan measurement dates for U.S.

As of December 31,

The following table summarizes the weighted-average actuarial assumption used to determine benefit obligations at the plan measurement dates for U.S.

Discount rate 5.35 % 5.60 %

Rate of increase in compensation levels 3.00 % 3.00 %

The following table summarizes the weighted-average actuarial assumptions used to determine the net periodic benefit costs for U.S.

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Discount rate 5.35 % 5.60 % 5.10 %

Rate of increase in compensation levels 3.00 % 3.00 % 3.00 %

Expected long-term rate of return 5.00 % 4.95 % 4.75 %

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We actively manage the investments in our portfolio, with periodic review of investment performance both by investment manager and asset class, as well as review of overall market conditions and consideration of our long-term investment objectives.

The equity and fixed income investments under our sponsored pension plan assets are currently well diversified.

The investments under our sponsored pension plan assets are currently well diversified.

The plans' asset allocation policy is reviewed at least annually.

Factors considered when determining the appropriate asset allocation include changes in plan liabilities, an evaluation of market conditions, tolerance for risk and cash requirements for benefit payments.

As of December 31, 2023, we were in compliance with the investment policy for the U.S.

defined benefit pension plans, which contained allowable ranges in asset mix of 5 - 15 % for U.S.

equity securities, 5 - 15 % for international equity securities, and 70 - 90 % for fixed income securities.

During the year ended December 31, 2024, we revised our investment policy for our U.S.

defined benefit pension plans.

As of December 31, 2024, we were in compliance with the investment policy, which allows for a varying asset allocation dependent on each plan’s funded status, as follows:

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 and 2024, we were in compliance with the investment policy for our U.S.

defined benefit pension, which allows for a varying asset allocation dependent on each plan's funded status, as follows:

Target Allocation

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(2) Liability-hedging assets consist of common collective trust funds comprised of a mix of fixed income securities and hedging instruments aimed to achieve a target interest rate.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE OF THE PENSION ASSETS

Assets contributed by KDP to our pension plans become the property of the individual plans.

Assets contributed by us to our pension plans become the property of the individual plans.

Even though we no longer have control over these assets, we are indirectly impacted by subsequent fair value adjustments to these assets.

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As such, we use a variety of valuation techniques depending on the type of instrument in order to measure the fair value of assets held by our pension plans.

In conjunction with the revised investment policy discussed above, we implemented changes to the structure of assets held by our pension plans.

With the exception of Cash and cash equivalents, all pension assets are comprised of common collective trust funds, which are valued using NAV as a practical expedient.

Such assets have not been categorized in the fair value hierarchy.

The following table presents the total fair value of major categories of the pension plan assets for the year ended December 31, 2024:

(in millions) Level 1 NAV Total

Cash and cash equivalents $ 23 $ — $ 23

The following table presents the total fair value of major categories of the pension plan assets for the years ended December 31, 2025 and 2024:

(in millions) Fair Value Hierarchy Level

Cash and cash equivalents Level 1 $ 3 $ 23

Investments measured at NAV (1)

Total fair value of plan assets $ 131 $ 127

(1) Primarily consists of common collective trust funds, which are valued at NAV based on the fair value of the underlying investments.

The following table presents the total fair value of major categories of the pension plan assets for the year ended December 31, 2023:

(in millions) Level 1 Level 2 Total

Cash and cash equivalents $ 1 $ — $ 1

equity securities (1)(2)

International equity securities (1)(2)

Fixed income securities (3)

Total fair value of plan assets $ 1 $ 133 $ 134

(1) Equity securities are comprised of actively managed U.S.

and international index funds.

(2) The NAV is based on the fair value of the underlying assets owned by the equity index fund or fixed income investment vehicle per share, multiplied by the number of units held as of the measurement date.

(3) Fixed income securities are comprised of domestic and international corporate bonds and U.S.

government securities.

Investments are provided by the investment managers using a unit price or NAV based on the fair value of the underlying investments.

(1) Primarily consists of common collective trust funds, which are valued using NAV as a practical expedient.

We have several non-contributory defined benefit PRMB plans, each having a measurement date of December 31.

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Expiration dates of collective bargaining agreements (1)

March 20, 2025 through May 3, 2027

May 6, 2026 through March 1, 2028

Financial Improvement Plan/Rehabilitation Plan status pending/implemented Implemented

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The largest agreement, which is set to expire February 28, 2027, covers approximately 59 % of the employees included in Central States.

Two of the collective bargaining agreements are set to expire during 2025, covering approximately 22 % of the employees included in Central States.

In January 2024, one union decertified, triggering a partial withdrawal liability.

The impact was immaterial to our consolidated financial statements.

One of the collective bargaining agreements is set to expire during 2026, covering approximately 10 % of the employees included in Central States.

The most recent Pension Protection Act zone status available as of December 31 , 2025 is for the plan's year-end as of December 31, 2024.

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We incurred contribution expense of $ 69 million, $ 67 million, and $ 64 million to the defined contribution plans for the years ended December 31, 2025, 2024, and 2023, respectively.

We also sponsor a non-qualified defined contribution plan for employees which is maintained in a rabbi trust and is not readily available to us.

The fair value of the securities within this plan was $ 33 million and $ 32 million as of December 31, 2024 and 2023, respectively.

Refer to Note 17 for additional information on mark-to-market activity for the deferred defined compensation plan.

We also sponsor a non-qualified defined contribution plan for certain employees which is maintained in a rabbi trust and is not readily available to us.

The fair value of the securities within this plan was $ 33 million as of both December 31, 2025 and 2024.

There were $ 4 million, $ 4 million, and $ 6 million in gains associated with these trading securities during the years ended December 31, 2025, 2024, and 2023, respectively.

Stock-Based Compensation

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Total stock-based compensation expense $ 97 $ 98 $ 116

$ 98 $ 116 $ 52

Income tax benefit recognized in the Consolidated Statements of Income

( 16 ) ( 19 ) ( 7 )

Income tax benefit ( 18 ) ( 16 ) ( 19 )

Stock-based compensation expense, net of tax $ 79 $ 82 $ 97

(1) Effective January 1, 2022, we changed our accounting policy election to record expense only for awards expected to vest.

The cumulative effect of this change in accounting policy was recorded effective January 1, 2022, as the impact of forfeitures on stock-based compensation has historically been insignificant.

We recorded a one-time $ 40 million reduction to stock-based compensation expense as a result of the change in forfeiture policy in the year ended December 31, 2022.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DESCRIPTION OF STOCK-BASED COMPENSATION PLANS

We previously adopted the 2009 Incentive Plan, under which employees and non-employee directors could be granted stock options, stock appreciation rights, stock awards, RSUs, and PSUs.

Grants subsequent to the DPS Merger and prior to the adoption of the 2019 Incentive Plan were granted under the 2009 Incentive Plan.

The 2019 Incentive Plan was adopted in 2019, expires in 2029, and contains substantially similar provisions to the 2009 Incentive Plan.

Together, these incentive plans provide for the issuance of up to an aggregate of 27,425,720 shares of our common stock in stock-based compensation awards.

DESCRIPTION OF STOCK-BASED COMPENSATION PLAN

The 2019 Incentive Plan, under which employees and non-employee directors can be granted stock options, stock appreciation rights, stock awards, RSUs, and PSUs, was adopted in 2019 and expires in 2029.

This incentive plan provides for the issuance of up to an aggregate of 27,425,720 shares of our common stock in stock-based compensation awards.

RSUs generally vest on the following schedule:

Period Granted Vesting Terms

RSUs granted after the DPS Merger through 2019 5 -year term with cliff-vesting at the end of the term

RSUs granted in 2020 through 2024 5 -year term with graded vesting as follows:

0% in year 1, 0% in year 2, 60% in year 3, 20% in year 4, 20% in year 5

RSUs granted in 2025 4 -year term with ratable vesting

However, from time to time, we grant RSUs outside of the normal grant cycle which have different terms and vesting conditions.

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The table below summarizes RSU activity:

RSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions)

Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions)

Balance as of December 31, 2024 12,488,799 $ 29.70 2.0 $ 401

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PERFORMANCE SHARE UNITS

In 2020, the Compensation Committee of the Board approved a PSU grant.

Each PSU is equivalent in value to one share of our common stock.

The PSUs vested three years from the beginning date of a predetermined performance period, to the extent that the performance criteria is met during the performance period.

The performance criteria includes a specified market condition which compares total shareholder return to that of certain indices.

Additionally, the PSUs are required to be held by the grantee for one year after the awards have vested.

The maximum payout percentage for all PSUs granted by KDP is 100%.

The PSUs are valued using a Monte Carlo simulation model, which requires certain assumptions, including the risk-free interest rate, expected volatility, and the estimated dividend yield.

The risk-free interest rate used in the Monte Carlo simulation model is based on zero-coupon yields implied by U.S.

Treasury issues with remaining terms similar to the performance period on the PSUs.

The performance period of the PSUs represents the period of time between the PSU grant date and the end of the performance period.

Expected volatility is based on historical data of KDP and certain indices over the most recent time period equal to the performance period.

In March 2025, the Remuneration & Nomination Committee of the Board approved PSU grants.

Each PSU represents the right to receive one share of our common stock.

The PSUs vest 3 years from the grant date, to the extent that the performance metrics are achieved during a predetermined performance period.

The performance metrics include net sales growth and adjusted diluted EPS growth, as defined in the respective grant agreement, and are measured on a constant currency basis.

The payout percentage for all PSUs granted ranges from 0% to 200%.

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.

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The table below summarizes PSU activity :

PSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions)

Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions)

Balance as of December 31, 2024

— $ — 0.0 $ —

Granted 464,354 30.61

Vested and released — — —

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Balance as of December 31 , 2025

As of December 31, 2024, there was no remaining unrecognized compensation cost related to unvested PSUs.

STOCK OPTIONS

The table below summarizes stock option activity :

Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions)

Balance as of December 31, 2023 37,452 $ 14.76 3.2 $ 1

Exercised ( 37,452 ) 14.76 1

Outstanding as of December 31, 2024 — — 0.0 —

Exercisable as of December 31, 2024 — — 0.0 —

The following table summarizes our investments in unconsolidated affiliates:

446,818 30.60 2.2 13

As of December 31 , 2025 , there was $ 10 million of unrecognized compensation cost related to unvested PSUs that is expected to be recognized over a weighted average period of 2.2 years.

Equity Method Investments

The following table summarizes our equity method investments:

(in millions) 2025 2024

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Athletic Brewing (4)

Beverage startup companies (5)

Investments in unconsolidated affiliates $ 1,543 $ 1,387

(1) KDP holds a 35.8 % interest on an as-converted basis in Nutrabolt, consisting of 31.1 % in Class A preferred shares acquired through our December 2022 investment, which are treated as in-substance common stock, and 4.7 % in Class B common shares earned through the achievement of certain milestones included in the distribution agreement with Nutrabolt.

(2) KDP holds a 5.0 % interest in Chobani.

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

In exchange, we received additional equity interests, raising our total interest to 22.5 % as of December 31, 2024.

(4) KDP holds an 11.6 % interest in Athletic Brewing.

(5) Beverage startup companies represent equity method investments in development stage entities and may include entities which are pre-revenue, in test markets, or in early operations .

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Chobani Investment

In August 2023, we invested $ 300 million in exchange for common shares in La Colombe that represented a 33.3 % ownership interest.

We additionally capitalized $ 7 million of incremental third-party costs into the investment balance.

In December 2023, La Colombe merged with a wholly-owned subsidiary of Chobani.

Our investment in La Colombe was exchanged for common units in Chobani.

Total equity method investments $ 1,660 $ 1,543

(1) We hold a 35.8 % interest on an as-converted basis in Nutrabolt, consisting of 30.4 % in Class A preferred shares acquired through our initial investment, which are treated as in-substance common stock, and 5.4 % in Class B common shares earned through the achievement of certain milestones included in the distribution agreement with Nutrabolt.

(2) We hold a 5.9 % interest in Chobani, reflecting additional equity interests issued through the achievement of certain milestones included in the distribution agreement with Chobani.

(3) We hold a 21.9 % interest in Tractor.

(4) We hold a 11.7 % interest in Athletic Brewing, reflecting additional equity interests received in the first quarter of 2025 in accordance with our investment agreement.

This earned equity is recorded in Other expense (income), net in the Consolidated Statements of Income.

Nutrabolt Investment

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Total $ 2,687 $ 1,914 $ 2,757

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The provision for income taxes has the following components:

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Total provision for income taxes $ 608 $ 473 $ 576

The following tables reconcile the provision for income taxes computed at the U.S.

federal statutory tax rate to the provision for income taxes reported in the Consolidated Statements of Income:

For the Year Ended December 31, 2025

($ in millions) Amount Percentage

Statutory federal income tax rate $ 564 21.0 %

State income taxes, net (1)

Impact of foreign operations

Statutory tax rate difference between Ireland and U.S.

( 71 ) ( 2.6 )

Other foreign jurisdictions 21 0.8

Effect of cross-border tax laws 9 0.3

Tax credits ( 28 ) ( 1.0 )

Nontaxable or nondeductible items 12 0.4

Changes in unrecognized tax benefits 22 0.8

Total provision for income taxes $ 608 22.6 %

(1) California, Tennessee, New Jersey, Florida, Illinois, and Texas comprise more than 50% of State income taxes, net.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a reconciliation of the provision for income taxes computed at the U.S.

federal statutory tax rate to the provision for income taxes reported in the Consolidated Statements of Income:

For the Year Ended December 31,

(in millions) 2024 2023 2022

Statutory federal income tax rate 21.0 % 21.0 %

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Other 1.2 ( 0.4 )

Total provision for income taxes 24.7 % 20.9 % 16.5 %

Effective tax rate 24.7 % 20.9 %

Deferred tax assets and liabilities were comprised of the following:

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Accrued termination fees 52 56

Other 107 121

Total deferred tax assets 598 680

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CASH PAID FOR INCOME TAXES

For the year ended December 31, 2025, our cash paid for income taxes, net of refunds received, consisted of the following:

(in millions) For the Year Ended December 31, 2025

Federal $ 103

Other foreign jurisdictions 26

Total cash paid for income taxes, net of refunds received

We paid $ 331 million and $ 507 million in cash for income taxes, net of refunds received, during the years ended December 31, 2024 and 2023, respectively.

CARRYFORWARDS

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Of the $ 24 million of net operating loss carryforwards as of December 31 , 2025 , $ 21 million will not expire, $ 1 million related to state income tax will begin to expire in 2027, and the remaining $ 2 million related to foreign income tax will begin to expire in the year 2035.

As of both December 31, 2024 and 2023, we had $ 10 million of credit carryforwards.

As of December 31 , 2025 and 2024, we had $ 5 million and $ 10 million of credit carryforwards, respectively.

As of December 31 , 2025 , the $ 5 million of state tax credit carryforwards will begin to expire in the year 2027.

VALUATION ALLOWANCES

For the tax year ended December 31, 2024, the Company recognized a net decrease of $ 26 million in its valuation allowances, primarily due to net decreases in the deferred tax assets and related valuation allowances on certain equity method investments.

For the year ended December 31 , 2025 , the changes in our valuation allowances were insignificant.

UNDISTRIBUTED FOREIGN EARNINGS

For the tax year ended December 31, 2024, undistributed earnings in foreign subsidiaries for which no deferred taxes have been provided totaled approximately $ 879 million.

An actual repatriation from our foreign subsidiaries could still be subject to additional foreign withholding taxes.

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Canadian and Mexican income tax returns are generally open for audit for tax years 2020 and forward, and Ireland income tax returns are open for audit for tax years 2021 and forward.

We previously had a tax holiday in Singapore, which was effective through June 2024, whereby the local statutory rate is significantly reduced if certain conditions are met.

The impact of the tax holiday increased net income by approximately $ 2 million, $ 4 million, and $ 6 million for the years ended December 31, 2024, 2023, and 2022, respectively, resulting in no impact to basic and diluted EPS for each of the years ended December 31, 2024, 2023, and 2022.

On August 16, 2022, the IRA was signed into law in the United States.

The IRA added new tax provisions allowing certain taxpayers to elect to transfer an eligible credit to an unrelated transferee taxpayer where the transferee taxpayer is then able to use the transferred tax credit against its own taxable income for taxable years after December 31, 2022.

During the years ended December 31, 2024 and 2023, we executed agreements with eligible taxpayers to purchase federal tax credits of $ 260 million and $ 270 million, respectively, which will be used against KDP’s federal tax liability.

The discounts negotiated for the transfer of eligible federal tax credits of $ 20 million and $ 16 million were recorded as an income tax benefit on the Consolidated Statements of Income for the years ended December 31, 2024 and 2023, respectively.

Certain taxpayers may elect to transfer an eligible credit to an unrelated transferee taxpayer where the transferee taxpayer is then able to use the transferred tax credit against its own taxable income.

During the years ended December 31, 2025, 2024, and 2023, we executed agreements with eligible taxpayers to purchase federal tax credits of $ 266 million, $ 260 million, and $ 270 million, respectively, which will be used against our federal tax liability.

The discounts negotiated for the transfer of eligible federal tax credits of $ 23 million, $ 20 million, and $ 16 million were recorded as an income tax benefit in the Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023, respectively.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The OBBB resulted in no significant impacts to our consolidated financial statements.

UNRECOGNIZED TAX BENEFITS

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Increases related to tax positions taken during the current year 3 2 3

(Decreases) increases related to tax positions taken during the prior year ( 1 ) ( 2 ) 3

Decreases related to settlements with taxing authorities — — ( 3 )

Increases (decreases) related to tax positions taken during the prior year 17 ( 1 ) ( 2 )

Decreases related to lapse of applicable statute of limitations — ( 2 ) ( 3 )

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The total amount of unrecognized tax benefits that would reduce the effective tax rate if recognized is $ 28 million after considering the federal impact of state income taxes.

KDP does not expect a significant change to its unrecognized tax benefits, but it is reasonably possible that a change in the unrecognized tax benefits may occur within the next twelve months related to the settlement of audits or the lapse of applicable statutes of limitations.

KDP accrues interest and penalties on its uncertain tax positions as a component of its provision for income taxes.

We recognized $ 1 million of expense related to interest and penalties for uncertain tax positions for each of the years ended December 31, 2024 and 2023 and no expense for the year ended December 31, 2022.

We had a total of $ 3 million accrued for interest and penalties for our uncertain tax positions reported as part of other non-current liabilities as of both December 31, 2024 and 2023.

We accrue interest and penalties on our uncertain tax positions as a component of our provision for income taxes.

We recognized $ 5 million, $ 1 million, and $ 1 million of expense related to interest and penalties for uncertain tax positions for each of the years ended December 31, 2025, 2024, and 2023, respectively.

We had a total of $ 9 million and $ 3 million accrued for interest and penalties for our uncertain tax positions reported as part of other non-current liabilities as of both December 31, 2025 and 2024.

Accumulated Other Comprehensive Income (Loss)

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Balance as of December 31, 2022

Other comprehensive (loss) income ( 167 ) ( 6 ) 329 156

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

Total other comprehensive (loss) income ( 167 ) ( 6 ) 328 155

Balance as of December 31, 2022 ( 86 ) ( 10 ) 225 129

$ ( 86 ) $ ( 10 ) $ 225 $ 129

Other comprehensive income (loss) 288 ( 5 ) ( 41 ) 242

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Balance as of December 31, 2023

202 ( 14 ) 127 315

Other comprehensive (loss) income ( 612 ) ( 1 ) 33 ( 580 )

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Balance as of December 31, 2024

( 410 ) ( 14 ) 148 ( 276 )

Other comprehensive income (loss) 401 ( 3 ) 2 400

Amounts reclassified from AOCI — 1 ( 23 ) ( 22 )

Total other comprehensive income (loss) 401 ( 2 ) ( 21 ) 378

Balance as of December 31, 2025

$ ( 9 ) $ ( 16 ) $ 127 $ 102

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

For the Year Ended December 31,

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Interest rate contracts (1)

Interest expense $ ( 12 ) $ ( 74 ) $ ( 6 )

Interest expense, net $ ( 13 ) $ ( 12 ) $ ( 74 )

FX contracts Cost of sales ( 17 ) ( 3 ) —

Total ( 30 ) ( 15 ) ( 74 )

Income tax expense (benefit) 3 17 —

Income tax expense 7 3 17

Total, net of tax $ ( 23 ) $ ( 12 ) $ ( 57 )

(1) Amounts reclassified from AOCI into interest expense during the year ended December 31, 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $ 66 million.

Refer to Note 6 for additional information on the terminated forward starting swaps.

Property, Plant, and Equipment

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Property, plant, and equipment, gross 5,833 5,216

accumulated depreciation and amortization ( 2,252 ) ( 1,964 )

accumulated depreciation ( 2,603 ) ( 2,252 )

Property, plant, and equipment, net $ 3,230 $ 2,964

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Financial Information

CASH AND CASH EQUIVALENTS

The carrying value of cash, cash equivalents, restricted cash, and restricted cash equivalents is valued as of the balance sheet date equating fair value and is classified as Level 1.

(in millions) 2024 2023

Cash and cash equivalents $ 510 $ 267

Restricted cash and restricted cash equivalents (1)

Non-current restricted cash and restricted cash equivalents (2)

Total cash, cash equivalents, restricted cash, and restricted cash equivalents $ 608 $ 267

(1) Restricted cash and restricted cash equivalents consists primarily of amounts held in escrow in connection with the acquisitions of GHOST and Kalil, and have a corresponding holdback liability recorded in Other current liabilities, as shown below.

Refer to Note 4 for additional information.

(2) Non-current restricted cash and restricted cash equivalents, reported within Non-current assets on the Consolidated Balance Sheets, consists of amounts held in escrow in connection with the acquisition of GHOST, and has a corresponding holdback liability recorded in Other non-current liabilities.

Refer to Note 4 for additional information.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SELECTED BALANCE SHEET INFORMATION

The following tables provide selected financial information from the Consolidated Balance Sheets:

(in millions) 2024 2023

Raw materials $ 524 $ 409

Work-in-progress 9 12

Finished goods 798 742

Total 1,331 1,163

Allowance for excess and obsolete inventories ( 32 ) ( 21 )

Total inventories $ 1,299 $ 1,142

Prepaid expenses and other current assets:

Other receivables $ 146 $ 135

Prepaid income taxes 33 196

Customer incentive programs 18 24

Derivative instruments 80 15

Prepaid marketing 29 20

Spare parts 126 111

Income tax receivable 75 16

Total prepaid expenses and other current assets $ 606 $ 598

Other non-current assets:

Operating lease right-of-use assets $ 880 $ 876

Customer incentive programs 45 45

Derivative instruments 6 3

Equity securities 89 69

Non-current restricted cash and restricted cash equivalents 18 —

Other 162 156

Total other non-current assets $ 1,200 $ 1,149

Equity Securities

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

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

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

For the Year Ended December 31,

(in millions) 2024 2023 2022

Unrealized mark-to-market (gains) losses

Vita Coco $ ( 17 ) $ ( 16 ) $ 4

Rabbi trust ( 4 ) ( 6 ) 8

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions) 2024 2023

Accrued expenses:

Accrued customer trade $ 439 $ 477

Accrued compensation 235 208

Insurance reserve 57 50

Interest accrual 107 72

Accrued termination fees (1)

Accrued transferable tax credits 130 152

Other accrued expenses 391 283

Total accrued expenses $ 1,584 $ 1,242

Other current liabilities:

Dividends payable $ 312 $ 299

Income taxes payable 67 29

Operating lease liability 128 114

Finance lease liability 125 106

Derivative instruments 108 150

Holdback liability 80 —

Total other current liabilities $ 835 $ 714

Other non-current liabilities:

Operating lease liability $ 790 $ 793

Finance lease liability 677 620

Mandatory redemption liability (2)

Pension and post-retirement liability 31 35

Insurance reserves 95 85

Derivative instruments 348 201

Deferred compensation liability 33 32

Holdback liability 18 —

Total other non-current liabilities $ 2,753 $ 1,833

(1) In connection with the GHOST Transactions, we executed an agreement which terminates the distribution rights for certain GHOST products by ABI, effective March 3, 2025, for a termination fee of $ 225 million.

Refer to Note 4 for additional information.

(2) The fair value of our mandatory redemption liability is estimated using the Monte Carlo simulation method which includes forecasted EBITDA expectations, adjusting for market risks and volatility, calculating redemption prices, discounting to present terms with the cost of debt, and averaging results across scenarios to determine fair value, incorporating the market price of risk and volatility estimates from similar companies.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

We are occasionally subject to litigation or other legal proceedings.

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 and $ 12 million as of December 31, 2024 and 2023, respectively.

We accrue 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, and such accruals were $ 3 million and $ 2 million as of December 31, 2025 and 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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In February 2014, TreeHouse Foods, Inc.

and certain affiliated entities filed suit against KDP’s wholly-owned subsidiary, Keurig (formerly known as Green Mountain Coffee Roasters, Inc.), in the U.S.

and certain affiliated entities filed suit against our wholly-owned subsidiary, Keurig (formerly known as Green Mountain Coffee Roasters, Inc.), in the U.S.

District Court for the Southern District of New York ("SDNY") (TreeHouse Foods, Inc.

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The settlement was approved and paid, and the indirect purchasers' claims have been dismissed.

Discovery in all remaining matters pending in the Multidistrict Antitrust Litigation is concluded, with the plaintiffs collectively claiming more than $ 5 billion of monetary damages.

In October 2025, the SDNY court denied the direct purchasers plaintiffs' motion for class certification.

While the court’s order does not preclude individual purchasers from pursuing their own direct claims, the court found that the plaintiffs did not meet the federal requirements to pursue their case on a classwide basis.

The direct purchaser plaintiffs have filed a petition with the United States Court of Appeals for the Second Circuit, seeking to appeal the SDNY court’s decision.

Discovery in all remaining matters pending in the Multidistrict Antitrust Litigation is concluded, with the plaintiffs (which no longer include the purported direct purchaser class) collectively claiming approximately $ 1.5 billion of monetary damages.

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

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

Keurig intends to continue vigorously defending the remaining lawsuits.

At this time, we are unable to predict the outcome of these lawsuits, the potential loss or range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on KDP or its operations.

Accordingly, we have not accrued for a loss contingency.

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

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS

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However, the nature of our business exposes us to the risk of claims with respect to environmental, health, and safety matters, and there can be no assurance that material costs or liabilities will not be incurred in connection with such claims.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as the Superfund law, as well as similar state laws, generally impose joint and several liability for cleanup and enforcement costs on current and former owners and operators of a site without regard to fault or the legality of the original conduct.

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Transactions with Variable Interest Entities

INVESTMENTS IN UNCONSOLIDATED AFFILIATES WHICH QUALIFY AS VIEs

EQUITY METHOD INVESTMENTS WHICH QUALIFY AS VIES

Certain of our equity investments are in entities which qualify as VIEs.

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OTHER TRANSACTIONS WITH VIES

We have a number of leasing arrangements and one licensing arrangement with special purpose entities for which KDP is not the primary beneficiary, as KDP has limited power based on the contractual agreements to direct the activities that most significantly impact the VIEs’ performance.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have a number of leasing arrangements and one licensing arrangement with special purpose entities for which we are not the primary beneficiary, as we have limited power based on the contractual agreements to direct the activities that most significantly impact the VIEs' performance.

Leasing Arrangements

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This aggregate maximum value assumes that the fair value of each property at the end of either the original lease term or renewal term is equal to zero, which we have concluded is not probable.

The following table provides the carrying amounts of the right-to-use assets and lease obligations recorded on the Consolidated Balance Sheets associated with these leasing arrangements related to the VIEs as of December 31, 2024 and 2023:

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the carrying amounts of the right-to-use assets and lease obligations recorded in the Consolidated Balance Sheets associated with these leasing arrangements related to the VIEs as of December 31, 2025 and 2024:

(in millions) 2025 2024

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Licensing Arrangement

ABC, a wholly-owned subsidiary of KDP, has provided a guarantee in connection with its distribution agreement with the Veyron SPEs to be paid only in the event the Veyron SPEs sell specific distribution rights and the value of those distribution rights does not exceed $ 142 million, which is the maximum undiscounted amount that KDP could pay under the RVG.

All obligations with respect to the guarantee will cease upon termination of the distribution agreement, which would occur upon notice by ABC not to renew the distribution agreement, KDP no longer being investment grade at the end of the term, or the sale of the distribution rights by the Veyron SPEs.

ABC, a wholly-owned subsidiary of ours, has provided a guarantee in connection with its distribution agreement with the Veyron SPEs to be paid only in the event the Veyron SPEs sell specific distribution rights and the value of those distribution rights does not exceed $ 142 million, which is the maximum undiscounted amount that we could pay under the RVG.

All obligations with respect to the guarantee will cease upon termination of the distribution agreement, which would occur upon notice by ABC not to renew the distribution agreement, us no longer being investment grade at the end of the term, or the sale of the distribution rights by the Veyron SPEs.

As of December 31 , 2025 , we have not recorded a liability as it is not probable that we will have to make any payments required under the RVG, as the fair value of the distribution rights is not expected to fall below $ 142 million over the term of the agreement.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restructuring and Integration Costs

Restructuring

RESTRUCTURING PROGRAMS

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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 begin in the first 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 quarter 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 $ 170 million to $ 190 million through 2026, primarily comprised of asset related costs.

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 have 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.

DPS Integration Program

As part of the DPS Merger, we developed a program to deliver $ 600 million in synergies over a three-year period through supply chain optimization, reduction of indirect spend through new economies of scale, elimination of duplicative support functions, and advertising and promotion optimization.

Although the program was initially expected to be completed in 2021, as a result of delays due to COVID-19, we continued to recognize expenditures for certain initiatives which began during the integration period through December 31, 2022.

The restructuring and integration program resulted in cumulative pre-tax charges of approximately $ 962 million, primarily consisting of professional fees related to the integration and transformation and costs associated with severance and employee terminations.

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 $ 80 million, primarily driven by severance costs, which were substantially completed as of December 31, 2024, and the sign-on bonus for our CEO.

RESTRUCTURING CHARGES

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2023 CEO Succession and Associated Realignment 1 40 35

DPS Integration — — 172

Total restructuring and integration charges $ 91 $ 35 $ 172

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total restructuring charges $ 63 $ 91 $ 35

RESTRUCTURING LIABILITIES

Restructuring liabilities that qualify as exit and disposal costs under U.S.

GAAP are included in accounts payable and accrued expenses on the consolidated financial statements.

GAAP are included in accounts payable and accrued expenses in the consolidated financial statements.

Restructuring liabilities, primarily consisting of workforce reduction costs, were as follows:

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Balance as of December 31, 2025 $ 8

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Related Parties

IDENTIFICATION OF RELATED PARTIES

Prior to August 19, 2020, we were indirectly controlled by JAB, a privately held investor group.

Since August 19, 2020, JAB continues to hold a significant but non-controlling interest in KDP.

As of December 31, 2024, JAB beneficially owned approximately 16 % of our outstanding common stock.

Prior to February 28, 2025, JAB held a significant but non-controlling interest in KDP and representation on our Board.

JAB and its affiliates also hold investments in a number of other companies that have commercial relationships with us.

These commercial relationships may take the form of our purchase of raw materials, our license of the companies' trademarks for use in the manufacturing of K-Cup pods, our sale of products for resale to retail customers, or our manufacture or distribution of products to, or on behalf of, these companies.

Prior to February 28, 2025, JAB and its affiliates were included in our disclosures of related party transactions.

On February 28, 2025, JAB BevCo B.V., a subsidiary of JAB, sold 87 million shares of our common stock through an underwritten secondary offering.

Following this sale, JAB beneficially owned less than 10% of our outstanding common stock and the members of the Board affiliated with JAB resigned.

Effective February 28, 2025, these disclosures are no longer applicable to JAB and its affiliates, and they are no longer included in our tabular disclosures below.

Other Related Parties

We hold investments in certain brand ownership companies, and in certain instances, we also have rights in specified territories to bottle and/or distribute the brands owned by such companies.

We purchase inventory from these brand ownership companies and sell finished product to third-party customers, primarily in the U.S.

Additionally, any transactions with significant partners in these investments, such as ABI, are considered related party transactions.

ABI purchases Clamato from us and pays us a royalty for use of the brand name.

Refer to Note 13 for additional information about our investments in unconsolidated affiliates.

Refer to Note 14 for additional information about our equity method investments.

OPERATING TRANSACTIONS WITH RELATED PARTIES

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Expenses associated with related parties (1)

(1) Expenses associated with related parties includes a reduction of $ 93 million and $ 42 million related to earned equity for the achievement of certain milestones included in our distribution agreement with related parties, which were recognized as a reduction of cost of sales on the Consolidated Statements of Income for the years ended December 31, 2024 and 2023, respectively.

(1) Expenses associated with related parties includes a reduction of $ 53 million, $ 93 million, and $ 42 million related to earned equity for the achievement of certain milestones included in our distribution agreement with related parties, which were recognized as a reduction of Cost of sales in the Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023, respectively.

OTHER TRANSACTIONS WITH RELATED PARTIES

We made payments to Nutrabolt totaling $ 2 million, $ 8 million, and $ 52 million to acquire certain distribution rights during the years ended December 31, 2025, 2024, and 2023, respectively.

KEURIG DR PEPPER INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OTHER TRANSACTIONS WITH RELATED PARTIES

In March 2024, JAB BevCo B.V., a subsidiary of JAB, sold 100 million shares of KDP’s common stock through an underwritten secondary offering.

In connection with this offering, we repurchased 35 million shares at the per-share price paid by the underwriter, for a total of $ 1,012 million, which was effected under our existing share repurchase program.

Transactions with Related Parties for Distribution Rights

We executed an agreement between KDP, GHOST, and ABI, which terminates the distribution rights for certain GHOST products by ABI, effective March 3, 2025, for $ 225 million, which was accrued as of December 31, 2024, and is expected to be paid during the first quarter of 2025.

Refer to Note 4 for additional information.

We made payments to Nutrabolt totaling $ 8 million and $ 52 million to acquire certain distribution rights during the years ended December 31, 2024 and 2023, respectively.

Refer to Note 5 for additional information.

Subsequent Events

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

JV INVESTMENT

In connection with the previously announced JV Commitment Letter, as described in Note 3, on February 23, 2026, we entered into the JV Transaction Agreement with the Pod Manufacturing JV, certain of our subsidiaries, and the JV Investor Partner.

Following completion of the transactions contemplated by the JV Transaction Agreement, the Pod Manufacturing JV will own or otherwise have access to our manufacturing assets and facilities used in the manufacturing of K-Cup pods and other unbrewed single-serve beverages in the United States and Canada.

Following the closing of the JV Investment, the Pod Manufacturing JV intends to use the net proceeds from this transaction to fund a portion of the JDE Peet's Acquisition.

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, including with respect to the limited partner committee (a majority of the members of which will be appointed by us), certain unanimous approval rights in favor of the JV Investor Partner, mechanisms for capital contributions to be made to the Pod Manufacturing JV, limitations on transfers by the partners, a call right exercisable by us beginning on the eighth anniversary of the closing of the JV Investment and ending on the fifteenth anniversary of the closing (or earlier upon the occurrence of certain triggering events), a conversion right exercisable by the JV Investor Partner after the fifteenth anniversary of the closing but before the thirtieth anniversary of the closing whereby the JV Investor Partner may elect to convert its interest in the Pod Manufacturing JV into shares of our common stock or its successor, based on the JV Investor Partner’s remaining economic interest (subject to the call right), and tag-along rights for the JV Investor Partner if we desire to transfer our units.

The Pod Manufacturing JV Agreement also sets forth distribution mechanics, pursuant to which the Pod Manufacturing JV shall make quarterly distributions of available cash (subject to certain limitations, including for operating costs and reserves) to its partners generally in proportion to their ownership interests.

The closing of the JV Transaction Agreement is subject to limited customary conditions.

The parties expect to close the transactions substantially concurrently with the completion of the JDE Peet's Acquisition.

The JV Transaction Agreement provides certain termination rights for both us and the JV Investor Partner, including if the JV Investment does not occur on or before March 3, 2027, if there is a material breach of the JV Transaction Agreement by the other party that is not cured within the applicable cure period, or if a law or order prevents the consummation of the transactions.

PREFERRED INVESTMENT

On February 23, 2026, we amended the Preferred Investment Agreement, under which the Preferred Investors agreed to purchase an additional 1.5 million shares of Convertible Preferred Stock, resulting in a total purchase of 4.5 million shares.

Refer to Note 3 for additional information on the Preferred Investment Agreement.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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The Company's evaluation of brand assets and goodwill for impairment is performed annually as of October 1, or more frequently if events or circumstances indicate the carrying amount may not be recoverable and involves the comparison of the fair value of each brand asset or reporting unit to its carrying value.

For the year ended December 31, 2024, the Company recorded an impairment charge of $412 million related to certain brand assets and an impairment charge of $306 million recorded to goodwill, both in the U.S.

Refreshment Beverages segment.

The Company used the income approach and a combination of income and market based approaches to estimate the fair value of brand assets and reporting units, respectively.

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Those procedures included, but were not limited to, the following:

• We tested the effectiveness of controls over the Company’s brand assets and goodwill impairment review process which include controls related to management’s selection of the discount rate and forecasts of future revenues.

• We tested the effectiveness of controls over the Company's brand assets and goodwill impairment review process.

• We evaluated the reasonableness of management's ability to forecast revenue growth and margins by considering:

– Historical revenue and margins.

– Analysis of current and future business strategies to the projected periods.

– Analysis of current and future business strategies for the projected periods.

– Information in industry reports.

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/s/ Deloitte & Touche LLP

Dallas, Texas

February 24, 2026

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 24, 2026, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control over Financial Reporting, appearing under Item 9A, management excluded from its assessment the internal control over financial reporting at Ghost Lifestyle LLC which was acquired on December 31, 2024 and whose financial statements constitute less than 3% of total assets of the consolidated financial statement amounts as of December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting at Ghost Lifestyle LLC.

BASIS FOR OPINION

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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 8. Financial Statements and Supplementary Data