Cover and table of contents

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Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission file number 001-33829

Keurig Dr Pepper Inc.

(Exact name of registrant as specified in its charter)


Delaware						98-0517725
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification number)

53 South Avenue

Burlington, Massachusetts

01803

(Address of principal executive offices)

(781) 418-7000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class						Trading Symbol						Name of each exchange on which registered
Common stock						KDP						The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Securities Exchange Act of 1934.

Large Accelerated Filer ☒ Accelerated Filer ☐ Non-Accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

As of October 26, 2021, there were 1,417,961,594 shares of the registrant's common stock, par value $0.01 per share, outstanding.

KEURIG DR PEPPER INC.

FORM 10-Q

TABLE OF CONTENTS


				Page
Part I.	Financial Information
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Statements of Income		1
		Condensed Consolidated Statements of Comprehensive Income		2
		Condensed Consolidated Balance Sheets		3
		Condensed Consolidated Statements of Cash Flows		4
		Condensed Consolidated Statements of Changes in Stockholders' Equity		6
		Notes to Condensed Consolidated Financial Statements		8
		1	General	8
		2	Long-Term Obligations and Borrowing Arrangements	9
		3	Goodwill and Other Intangible Assets	12
		4	Restructuring and Integration Costs	13
		5	Derivatives	14
		6	Leases	17
		7	Segments	19
		8	Earnings Per Share	20
		9	Stock-Based Compensation	20
		10	Revenue Recognition	21
		11	Income Taxes	22
		12	Investments in Unconsolidated Affiliates	22
		13	Other Financial Information	22
		14	Accumulated Other Comprehensive Income (Loss)	25
		15	Commitments and Contingencies	26
		16	Related Parties	27
		17	Subsequent Event	27
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		28
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		55
	Item 4.	Controls and Procedures		56

Part II.	Other Information
	Item 1.	Legal Proceedings		56
	Item 1A.	Risk Factors		56
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		56
	Item 6.	Exhibits		57

s-i

KEURIG DR PEPPER INC.

MASTER GLOSSARY


Term						Definition


2019 KDP Term Loan						$2 billion aggregate principal amount, with the ability to make voluntary and mandatory prepayments, due on February 8, 2023
2020 364-Day Credit Agreement						The Company's $1,500 million credit agreement, which was entered into on April 12, 2020 and terminated on March 26, 2021
2021 364-Day Credit Agreement						The Company's $1,500 million credit agreement, which was entered into on March 26, 2021 and contains a term-out option
A Shoc						A Shoc Beverage LLC, an equity method investment of KDP, or Adrenaline Shoc energy drinks
ABC						The American Bottling Company, a wholly-owned subsidiary of KDP
ABI						Anheuser-Busch InBev SA/NV
Annual Report						Annual Report on Form 10-K for the year ended December 31, 2020
AOCI						Accumulated other comprehensive income or loss
ASU						Accounting Standards Update
Bedford						Bedford Systems, LLC, an equity method investment of KDP and the maker of Drinkworks
BodyArmor						BA Sports Nutrition, LLC, an equity method investment of KDP
bps						basis points
CSD						Carbonated soft drink
DIO						Days inventory outstanding
DPO						Days of payables outstanding
DPS						Dr Pepper Snapple Group, Inc.
DPS Merger						The combination of the business operations of Keurig and DPS that was consummated on July 9, 2018 through a reverse merger transaction, whereby a wholly-owned special purpose merger subsidiary of DPS merged with and into the direct parent of Keurig
DSD						Direct Store Delivery, the operating segment whereby finished beverages are delivered directly to retailers
DSO						Days sales outstanding
EPS						Earnings per share
Exchange Act						Securities Exchange Act of 1934, as amended
FFS						Fountain Foodservice, an operating segment of KDP which serves the fountain channel, such as restaurants
FASB						Financial Accounting Standards Board
FX						Foreign exchange
GILTI						Global intangible low-taxed income
Goldman						Goldman Sachs & Co. LLC
IRi						Information Resources, Inc.
JAB						JAB Holding Company S.a.r.l. and affiliates
KDP						Keurig Dr Pepper Inc.
KDP Credit Agreements						Collectively, the KDP Revolver, the 2020 364-Day Credit Agreement, the 2021 364-Day Credit Agreement, and the 2019 KDP Term Loan
KDP Revolver						The Company's $2,400 million revolving credit facility, which was entered into on February 28, 2018
Keurig						Keurig Green Mountain, Inc., and the brand of our brewers
LIBOR						London Interbank Offered Rate
LifeFuels						LifeFuels, Inc., an equity method investment
NCB						Non-carbonated beverage
Notes						Collectively, the Company's senior unsecured notes
Peet's						Peet's Coffee & Tea, Inc.
PET						Polyethylene terephthalate, which is used to make the Company's plastic bottles
Proposition 65						The State of California's Safe Drinking Water and Toxic Enforcement Act of 1986
RSU						Restricted share unit
RTD						Ready to drink
SEC						Securities and Exchange Commission
SG&A						Selling, general and administrative
U.S. GAAP						Accounting principles generally accepted in the U.S.

Vita Coco						The Vita Coco Company, Inc.
WD						Warehouse Direct, the operating segment whereby finished beverages are shipped to retailer warehouses, and then delivered by the retailer through its own delivery system to its stores

s-ii

Table of Contents

PART I - FINANCIAL INFORMATION

Next: Item 1. Financial Statements (Unaudited)