Item 1. Financial Statements (Unaudited)

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

									First Quarter
(in millions, except per share data)															2025						2024
Net sales															$	3,635					$	3,468
Cost of sales															1,650						1,528
Gross profit															1,985						1,940
Selling, general, and administrative expenses															1,192						1,176
Other operating income, net															(8)						(1)
Income from operations															801						765
Interest expense, net															148						178
Other income, net															(7)						(7)
Income before provision for income taxes															660						594
Provision for income taxes															143						140
Net income															$	517					$	454
Earnings per common share:
Basic															$	0.38					$	0.33
Diluted															0.38						0.33
Weighted average common shares outstanding:
Basic															1,357.1						1,380.7
Diluted															1,362.2						1,387.7

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

									First Quarter
(in millions)															2025						2024
Net income															$	517					$	454
Other comprehensive income (loss):
Foreign currency translation adjustments															13						(56)
Net change in cash flow hedges, net of tax of $1 and $—, respectively															(12)						(2)
Total other comprehensive income (loss)															1						(58)
Comprehensive income															$	518					$	396

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

			March 31,						December 31,
(in millions, except share and per share data)			2025						2024
Assets
Current assets:
Cash and cash equivalents			$	653					$	510
Restricted cash and restricted cash equivalents			80						80
Trade accounts receivable, net			1,329						1,502
Inventories			1,539						1,299
Prepaid expenses and other current assets			745						606
Total current assets			4,346						3,997
Property, plant, and equipment, net			2,951						2,964
Investments in unconsolidated affiliates			1,568						1,543
Goodwill			20,062						20,053
Other intangible assets, net			23,616						23,634
Other non-current assets			1,116						1,200
Deferred tax assets			40						39
Total assets			$	53,699					$	53,430
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable			$	3,154					$	2,985
Accrued expenses			1,201						1,584
Structured payables			31						41
Short-term borrowings and current portion of long-term obligations			3,999						2,642
Other current liabilities			786						835
Total current liabilities			9,171						8,087
Long-term obligations			11,927						12,912
Deferred tax liabilities			5,430						5,435
Other non-current liabilities			2,724						2,753
Total liabilities			29,252						29,187
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued			—						—
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 1,358,162,801 and 1,356,664,609 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively			14						14
Additional paid-in capital			19,711						19,712
Retained earnings			4,997						4,793
Accumulated other comprehensive loss			(275)						(276)
Total stockholders' equity			24,447						24,243
Total liabilities and stockholders’ equity			$	53,699					$	53,430

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

			First Quarter
(in millions)			2025						2024
Operating activities:
Net income			$	517					$	454
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			106						101
Amortization of intangibles			34						33
Other amortization expense			23						36
Provision for sales returns			11						14
Deferred income taxes			(6)						21
Employee stock-based compensation expense			22						28
(Gain) loss on disposal of property, plant, and equipment			(6)						1
Unrealized loss on foreign currency			—						8
Unrealized (gain) loss on derivatives			(62)						10
Equity in earnings of unconsolidated affiliates			(10)						(7)
Earned equity from distribution arrangements			(10)						(45)
Other, net			(2)						3
Changes in assets and liabilities, excluding the effects of business acquisitions:
Trade accounts receivable			164						42
Inventories			(239)						(65)
Income taxes receivable and payables, net			(27)						(10)
Other current and non-current assets			(110)						(136)
Accounts payable and accrued expenses			(173)						(398)
Other current and non-current liabilities			(23)						(5)
Net change in operating assets and liabilities			(408)						(572)
Net cash provided by operating activities			209						85
Investing activities:
Purchases of property, plant, and equipment			(120)						(158)
Proceeds from sales of property, plant, and equipment			13						—
Purchases of intangibles			(14)						(31)
Investments in unconsolidated affiliates			—						(6)
Other, net			64						2
Net cash used in investing activities			$	(57)					$	(193)

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, CONTINUED)

			First Quarter
(in millions)			2025						2024
Financing activities:
Proceeds from issuance of Notes			$	—					$	3,000
Repayments of Notes			—						(1,150)
Net issuance (repayment) of commercial paper			1,356						(188)
Repayment of term loan			(990)						—
Proceeds from structured payables			8						23
Repayments of structured payables			(18)						(30)
Cash dividends paid			(312)						(299)
Repurchases of common stock			—						(1,105)
Tax withholdings related to net share settlements			(23)						(41)
Payments on finance leases			(25)						(31)
Other, net			(3)						(21)
Net cash (used in) provided by financing activities			(7)						158
Cash, cash equivalents, restricted cash, and restricted cash equivalents:
Net change from operating, investing, and financing activities			145						50
Effect of exchange rate changes			(2)						—
Beginning balance			608						267
Ending balance			$	751					$	317
Supplemental cash flow disclosures of non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued expenses			$	176					$	189
Earned equity from distribution arrangements			10						45
Dividends declared but not yet paid			313						292
Accrued excise tax on net share repurchases			9						14
Supplemental cash flow disclosures:
Cash paid for interest			93						24
Cash paid for income taxes			60						26

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(UNAUDITED)

			Common Stock Issued												Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Loss						Total Stockholders' Equity
(in millions, except per share data)			Shares						Amount
Balance as of December 31, 2024			1,356.7						$	14					$	19,712					$	4,793					$	(276)					$	24,243
Net income			—						—						—						517						—						517
Other comprehensive income			—						—						—						—						1						1
Dividends declared, $0.23 per share			—						—						—						(313)						—						(313)
Shares issued under employee stock-based compensation plans and other			1.5						—						—						—						—						—
Tax withholdings related to net share settlements			—						—						(23)						—						—						(23)
Stock-based compensation and stock options exercised			—						—						22						—						—						22
Balance as of March 31, 2025			1,358.2						$	14					$	19,711					$	4,997					$	(275)					$	24,447

			Common Stock Issued												Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income						Total Stockholders' Equity
(in millions, except per share data)			Shares						Amount
Balance as of December 31, 2023			1,390.4						$	14					$	20,788					$	4,559					$	315					$	25,676
Net income			—						—						—						454						—						454
Other comprehensive loss			—						—						—						—						(58)						(58)
Dividends declared, $0.215 per share			—						—						—						(292)						—						(292)
Repurchases of common stock, inclusive of excise tax obligation			(38.0)						—						(1,114)						—						—						(1,114)
Shares issued under employee stock-based compensation plans and other			3.2						—						—						—						—						—
Tax withholdings related to net share settlements			—						—						(41)						—						—						(41)
Stock-based compensation and stock options exercised			—						—						28						—						—						28
Balance as of March 31, 2024			1,355.6						$	14					$	19,661					$	4,721					$	257					$	24,653

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. General

ORGANIZATION

References in this Quarterly Report on Form 10-Q to "KDP", "we", “us”, and "our", refer to Keurig Dr Pepper Inc. and all wholly-owned subsidiaries included in the unaudited condensed consolidated financial statements. Definitions of terms used in this Quarterly Report on Form 10-Q are included within the Master Glossary.

This Quarterly Report on Form 10-Q refers to some of our owned or licensed trademarks, trade names, and service marks, which are referred to as our brands. All of the product names included herein are either KDP registered trademarks or those of our licensors.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and accompanying notes included in our Annual Report.

References to the "first quarter" indicate the quarterly periods ended March 31, 2025 and 2024.

USE OF ESTIMATES

The process of preparing our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect reported amounts. These estimates and judgments are based on historical experience, future expectations, and other factors and assumptions we believe to be reasonable under the circumstances. These estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Changes in estimates are recorded in the period of change. Actual amounts may differ from these estimates.

2. Long-term Obligations and Borrowing Arrangements

The following table summarizes our long-term obligations:

(in millions)			March 31, 2025						December 31, 2024
Notes			$	12,954					$	12,948
Term loan			—						990
Less: current portion of long-term obligations			(1,027)						(1,026)
Long-term obligations			$	11,927					$	12,912

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

(in millions)			March 31, 2025						December 31, 2024
Commercial paper notes			$	2,972					$	1,616
Current portion of long-term obligations:
Notes			1,027						1,026
Short-term borrowings and current portion of long-term obligations			$	3,999					$	2,642

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

SENIOR UNSECURED NOTES

(in millions, except %)			Maturity Date						Rate						March 31, 2025						December 31, 2024
2025 Merger Notes			May 25, 2025						4.417%						$	529					$	529
2025 Notes			November 15, 2025						3.400%						500						500
2026 Notes			September 15, 2026						2.550%						400						400
2027-B Notes			March 15, 2027						Floating(2)						350						350
2027-C Notes			March 15, 2027						5.100%						750						750
2027 Notes			June 15, 2027						3.430%						500						500
2028 Merger Notes			May 25, 2028						4.597%						1,112						1,112
2029-B Notes			March 15, 2029						5.050%						750						750
2029 Notes			April 15, 2029						3.950%						1,000						1,000
2030 Notes			May 1, 2030						3.200%						750						750
2031 Notes			March 15, 2031						2.250%						500						500
2031-B Notes			March 15, 2031						5.200%						500						500
2032 Notes			April 15, 2032						4.050%						850						850
2034 Notes			March 15, 2034						5.300%						650						650
2038 Merger Notes			May 25, 2038						4.985%						211						211
2045 Notes			November 15, 2045						4.500%						550						550
2046 Notes			December 15, 2046						4.420%						400						400
2048 Merger Notes			May 25, 2048						5.085%						391						391
2050 Notes			May 1, 2050						3.800%						750						750
2051 Notes			March 15, 2051						3.350%						500						500
2052 Notes			April 15, 2052						4.500%						1,150						1,150
Principal amount															13,093						13,093
Adjustment from principal amount to carrying amount(1)															(139)						(145)
Carrying amount															$	12,954					$	12,948

(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.

VARIABLE-RATE BORROWING ARRANGEMENTS

Term Loan Agreement

On January 31, 2025, we repaid the first tranche of the Term Loan Agreement using proceeds from commercial paper. As of March 31, 2025, the second tranche of up to $250 million remains available and undrawn.

Revolving Credit Agreement

On March 31, 2025, we entered into the 2025 Revolving Credit Agreement among KDP, as borrower, the lenders and issuing banks party thereto, and JPMorgan Chase, Bank, N.A., as administrative agent. We incurred approximately $4 million in deferred financing fees related to the issuance.

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

															Amounts Outstanding
(in millions)			Maturity Date						Capacity						March 31, 2025						December 31, 2024
2025 Revolving Credit Agreement(1)			March 31, 2030						$	4,000					$	—					$	—

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

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Borrowings under the 2025 Revolving Credit Agreement will bear interest at a rate per annum equal to, at our option, the term SOFR rate plus a margin of 0.750% to 1.250% or the alternative base rate plus a margin of zero to 0.250%, in each case, depending on the rating of certain of our index debt. The 2025 Revolving Credit Agreement contains customary representations and warranties for investment grade financings. The 2025 Revolving Credit Agreement also contains (i) certain customary affirmative covenants, including those that impose certain reporting and/or performance obligations on us and our subsidiaries, (ii) certain customary negative covenants that generally limit, subject to various exceptions, us and our subsidiaries from taking certain actions, including, without limitation, incurring liens and consummating certain fundamental changes, (iii) a financial covenant in the form of a minimum interest coverage ratio of 3.25 to 1.00, and (iv) customary events of default (including a change of control) for financings of this type.

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

Commercial Paper Program

									First Quarter
(in millions, except %)															2025						2024
Weighted average commercial paper borrowings															$	2,682					$	2,430
Weighted average borrowing rates															4.63		%				5.62		%

Letter of Credit Facility

In addition to the portion of the 2025 Revolving Credit Agreement reserved for issuance of letters of credit, we have an incremental letter of credit facility. Under this facility, $150 million is available for the issuance of letters of credit, $72 million of which was utilized as of March 31, 2025 and $78 million of which remains available for use.

FAIR VALUE DISCLOSURES

The fair value of our commercial paper approximates the carrying value and is considered Level 2 within the fair value hierarchy.

The fair values of our Notes are based on current market rates available to us and are considered Level 2 within the fair value hierarchy. The difference between the fair value and the carrying value represents the theoretical net premium or discount that would be paid or received to retire all the Notes and related unamortized costs to be incurred at such date. The fair value of our Notes was $12,151 million and $12,036 million as of March 31, 2025 and December 31, 2024, respectively.

3. Acquisitions

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. Under the terms of the agreement, we initially purchased a 60% stake in GHOST for aggregate consideration of $999 million, which included customary adjustments, and closed on December 31, 2024. We also entered into an agreement which requires us to purchase the remaining equity interests in GHOST in 2028.

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

4. Goodwill and Other Intangible Assets

GOODWILL

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

(in millions)			U.S. Refreshment Beverages						U.S. Coffee						International												Total
Balance as of December 31, 2024			$	8,855					$	8,622					$	2,576											$	20,053
Foreign currency translation			—						—						9												9
Balance as of March 31, 2025			$	8,855					$	8,622					$	2,585											$	20,062

INTANGIBLE ASSETS OTHER THAN GOODWILL

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

			March 31, 2025																		December 31, 2024
(in millions)			Gross Amount						Accumulated Amortization						Net Amount						Gross Amount						Accumulated Amortization						Net Amount
Intangible assets with definite lives:
Acquired technology			$	1,146					$	(639)					$	507					$	1,146					$	(621)					$	525
Customer relationships			666						(277)						389						666						(270)						396
Contractual arrangements			145						(24)						121						144						(21)						123
Trade names			126						(126)						—						126						(124)						2
Brands			51						(34)						17						51						(32)						19
Distribution rights			66						(26)						40						66						(23)						43
Total			$	2,200					$	(1,126)					$	1,074					$	2,199					$	(1,091)					$	1,108
Intangible assets with indefinite lives:
Brands															$	19,852																	$	19,848
Trade names															2,478																		2,478
Distribution rights															212																		200
Total intangible assets with indefinite lives															22,542																		22,526
Other intangible assets, net															$	23,616																	$	23,634

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

									First Quarter
(in millions)															2025						2024
Amortization expense															$	34					$	33

5. Derivatives

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. We do not hold or issue derivative financial instruments for trading or speculative purposes.

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

We formally designate and account for certain interest rate contracts and foreign exchange forward contracts that meet established accounting criteria under U.S. GAAP as cash flow hedges. For such contracts, the effective portion of the gain or loss on the derivative instruments is recorded, net of applicable taxes, in AOCI. When net income is affected by the variability of the underlying transaction, the applicable offsetting amount of the gain or loss from the derivative instrument deferred in AOCI is reclassified to net income. Cash flows from derivative instruments designated in a qualifying hedging relationship are classified in the same category as the cash flows from the hedged items. If a cash flow hedge were to cease to qualify for hedge accounting, or were terminated, the derivatives would continue to be carried on the balance sheet at fair value until settled, and hedge accounting would be discontinued prospectively. If the underlying hedged transaction ceases to exist, any associated amounts reported in AOCI would be reclassified to earnings at that time.

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

We have exposure to credit losses from derivative instruments in an asset position in the event of nonperformance by the counterparties to the agreements. Historically, we have not experienced material credit losses as a result of counterparty nonperformance. We select and periodically review 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.

INTEREST RATES

Economic Hedges

We are exposed to interest rate risk related to our borrowing arrangements and obligations. We enter into interest rate contracts to provide predictability in our overall cost structure and to manage the balance of fixed-rate and variable-rate debt. We primarily enter into receive-fixed, pay-variable and receive-variable, pay-fixed swaps, and swaption contracts. A natural 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. Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are generally reported in Interest expense, net in the unaudited Condensed Consolidated Statements of Income. As of March 31, 2025, economic interest rate derivative instruments have maturities ranging from April 2025 to November 2046.

Cash Flow Hedges

From time to time, we designate certain interest rate contracts as cash flow hedges in order to manage the exposures resulting from changes in interest rates as described above. We had no such contracts outstanding as of March 31, 2025.

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

Economic Hedges

We hold FX forward contracts to economically manage the balance sheet exposures resulting from changes in the FX rates described above. The intent of these FX contracts is to minimize the impact of FX risk associated with balance sheet positions not in local currency. 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. Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are reported in the same caption of the unaudited Condensed Consolidated Statements of Income as the associated risk. As of March 31, 2025, these FX contracts have maturities ranging from April 2025 to September 2026.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Cash Flow Hedges

We designate certain FX forward contracts as cash flow hedges in order to manage the exposures resulting from changes in the FX rates described above. These designated FX forward contracts relate to forecasted inventory purchases in U.S. dollars of our foreign subsidiaries. The intent of these FX contracts is to provide predictability in our overall cost structure. As of March 31, 2025, these FX contracts have maturities ranging from April 2025 to March 2026.

COMMODITIES

Economic Hedges

We centrally manage the exposure to volatility in the prices of certain commodities used in our production process and transportation through various derivative contracts. We generally hold some combination of future, swap, and option contracts that economically hedge certain of our risks. 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 or as an offset to certain costs of production. 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 line item of the unaudited Condensed Consolidated Statements of Income as the hedged transaction. Unrealized gains and losses are recognized as a component of unallocated corporate costs until our reportable segments are affected by the completion of the underlying transaction, at which time the gain or loss is reflected as a component of the respective segment's income from operations. As of March 31, 2025, these commodity contracts have maturities ranging from April 2025 to January 2027.

NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS

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

(in millions)			March 31, 2025						December 31, 2024
Interest rate contracts
Forward starting swaps, not designated as hedging instruments			$	1,950					$	1,700
Swaptions, not designated as hedging instruments			1,100						—
FX contracts
Forward contracts, not designated as hedging instruments			511						490
Forward contracts, designated as cash flow hedges			408						486
Commodity contracts, not designated as hedging instruments(1)			503						515

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

FAIR VALUE OF DERIVATIVE INSTRUMENTS

The fair values of commodity contracts, interest rate contracts, and FX forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The fair value of commodity contracts are valued using the market approach based on observable market transactions, primarily underlying commodities futures or physical index prices, at the reporting date. Interest rate contracts are valued using models based primarily on readily observable market parameters, such as SOFR forward rates, for all substantial terms of our contracts and credit risk of the counterparties. FX forward contracts are valued using quoted forward FX prices at the reporting date. Therefore, we have categorized these contracts as Level 2.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Not Designated as Hedging Instruments

The following table summarizes the location of the fair value of our derivative instruments which are not designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are considered Level 2 within the fair value hierarchy.

(in millions)			Balance Sheet Location						March 31, 2025						December 31, 2024
Assets:
FX contracts			Prepaid expenses and other current assets						$	2					$	7
Commodity contracts			Prepaid expenses and other current assets						22						32
FX contracts			Other non-current assets						3						4
Commodity contracts			Other non-current assets						—						2
Liabilities:
Interest rate contracts			Other current liabilities						12						22
FX contracts			Other current liabilities						1						4
Commodity contracts			Other current liabilities						28						82
Interest rate contracts			Other non-current liabilities						332						345
Commodity contracts			Other non-current liabilities						3						3

Designated as Hedging Instruments

The following table summarizes the location of the fair value of our derivative instruments which are designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are considered Level 2 within the fair value hierarchy.

(in millions)			Balance Sheet Location						March 31, 2025						December 31, 2024
Assets:
FX contracts			Prepaid expenses and other current assets						$	28					$	41

IMPACT OF DERIVATIVE INSTRUMENTS NOT DESIGNATED AS HEDGING INSTRUMENTS

The following table presents the amount of (gains) losses, net, recognized in the unaudited Condensed Consolidated Statements of Income related to derivative instruments not designated as hedging instruments under U.S. GAAP during the periods presented. Amounts include both realized and unrealized gains and losses.

			Income Statement Location												First Quarter
(in millions)																		2025						2024
Interest rate contracts			Interest expense, net																		$	(32)					$	26
FX contracts			Cost of sales																		(1)						(1)
FX contracts			Other income, net																		3						(6)
Commodity contracts			Cost of sales																		(17)						15
Commodity contracts			SG&A expenses																		(2)						(12)

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

IMPACT OF CASH FLOW HEDGES

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

			Income Statement Location												First Quarter
(in millions)																		2025						2024
Interest rate contracts			Interest expense, net																		$	(3)					$	(2)
FX contracts			Cost of sales																		(5)						—

We expect to reclassify approximately $13 million and $23 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.

6. Leases

The following table presents the components of lease cost:

									First Quarter
(in millions)															2025						2024
Operating lease cost															$	44					$	42
Finance lease cost
Amortization of right-of-use assets															28						30
Interest on lease liabilities															9						7
Variable lease cost(1)															9						10
Short-term lease cost															—						1
Total lease cost															$	90					$	90

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

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

			First Quarter
(in millions)			2025						2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases			$	42					$	39
Operating cash flows from finance leases			9						7
Financing cash flows from finance leases			25						31
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			4						15
Finance leases			44						26

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

			March 31, 2025						December 31, 2024
Weighted average discount rate
Operating leases			5.3		%				5.3		%
Finance leases			4.5		%				4.5		%
Weighted average remaining lease term
Operating leases			9 years						9 years
Finance leases			9 years						9 years

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

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

(in millions)			Operating Leases						Finance Leases
Remainder of 2025			$	117					$	124
2026			163						202
2027			140						109
2028			109						96
2029			101						90
2030			81						77
Thereafter			417						280
Total future minimum lease payments			1,128						978
Less: imputed interest			(235)						(159)
Present value of minimum lease payments			$	893					$	819

SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED

As of March 31, 2025, we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $149 million. These leases are expected to commence between the second quarter of 2025 through 2027, with initial lease terms ranging from 3 years to 7 years.

7. Segments

Our operating and reportable segments consist of the following:

• The U.S. 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.

• The U.S. Coffee segment reflects sales in the U.S. from the manufacture and distribution of finished goods relating to our K-Cup pods, single-serve brewers, and accessories, and other coffee products to partners, retailers, and directly to consumers through the Keurig.com website.

• 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 from the manufacture and distribution of finished goods relating to our K-Cup pods, single-serve brewers, 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 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.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

Intersegment sales are recorded at cost and are eliminated in the unaudited Condensed Consolidated Statements of Income. We have not provided disclosures of intersegment sales or total assets for each reportable segment, as our CODM does not review and is not provided with this information. “Other segment (income) expense” includes Other operating income, net, as well as other financial statement captions for infrequent charges, such as impairment of goodwill or intangible assets, used to arrive at “Income from operations - reportable segments”. “Unallocated corporate costs” are excluded from our measurement of segment performance and include unrealized commodity derivative gains and losses and certain general corporate expenses.

Information about our operations and significant expenses by reportable segment is as follows:

(in millions)			U.S. Refreshment Beverages						U.S. Coffee						International						Total
For the first quarter of 2025:
Net sales			$	2,323					$	877					$	435					$	3,635
Cost of sales			937						523						228
SG&A expenses			733						151						119
Other segment (income) expense			(1)						1						(2)
Income from operations - reportable segments			$	654					$	202					$	90					$	946
Unallocated corporate costs																					(145)
Income from operations																					801
Interest expense, net																					148
Other income, net																					(7)
Income before provision for income taxes																					$	660

(in millions)			U.S. Refreshment Beverages						U.S. Coffee						International						Total
For the first quarter of 2024:
Net sales			$	2,093					$	911					$	464					$	3,468
Cost of sales			800						497						228
SG&A expenses			679						166						123
Other segment (income) expense			(1)						—						1
Income from operations - reportable segments			$	615					$	248					$	112					$	975
Unallocated corporate costs																					(210)
Income from operations																					765
Interest expense, net																					178
Other income, net																					(7)
Income before provision for income taxes																					$	594

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

8. Revenue

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

(in millions)			U.S. Refreshment Beverages						U.S. Coffee						International						Total
For the first quarter of 2025:
LRB			$	2,263					$	13					$	277					$	2,553
K-Cup pods			—						717						116						833
Appliances			—						116						8						124
Other			60						31						34						125
Net sales			$	2,323					$	877					$	435					$	3,635
For the first quarter of 2024:
LRB			$	2,062					$	4					$	299					$	2,365
K-Cup pods			—						747						115						862
Appliances			—						128						13						141
Other			31						32						37						100
Net sales			$	2,093					$	911					$	464					$	3,468

LRB represents net sales of owned and partner brands within our portfolio and includes branded concentrates, syrup, and finished beverages, including contract manufacturing of KDP branded products for our bottlers and distributors. K-Cup pods represents net sales from owned brands, partner brands, and private label owners. Net sales for partner brands and private label owners are contractual and long-term in nature.

9. Earnings Per Share

									First Quarter
(in millions, except per share data)															2025						2024
Net income															$	517					$	454
Weighted average common shares outstanding															1,357.1						1,380.7
Dilutive effect of stock-based awards															5.1						7.0
Weighted average common shares outstanding and common stock equivalents															1,362.2						1,387.7
Basic EPS															$	0.38					$	0.33
Diluted EPS															0.38						0.33
Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation															0.8						2.1

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

10. Stock-Based Compensation

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

									First Quarter
(in millions)															2025						2024
Total stock-based compensation expense															$	22					$	28
Income tax benefit															(5)						(4)
Stock-based compensation expense, net of tax															$	17					$	24

RESTRICTED SHARE UNITS

The table below summarizes RSU activity:

			RSUs						Weighted Average Grant Date Fair Value						Weighted Average Remaining Contractual Term (Years)						Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2024			12,488,799						$	29.70					2.0						$	401
Granted(1)			2,744,772						31.14
Vested and released			(2,093,792)						31.09												70
Forfeited			(617,618)						29.92
Outstanding as of March 31, 2025			12,522,161						$	29.77					2.2						$	429

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

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

PERFORMANCE SHARE UNITS

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.

The table below summarizes PSU activity:

			PSUs						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			443,933						30.71
Forfeited or expired			(1,314)						30.71
Balance as of March 31, 2025			442,619						$	30.71					2.9						$	15

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

11. Investments

The following table summarizes our investments in unconsolidated affiliates:

(in millions)			March 31, 2025						December 31, 2024
Nutrabolt(1)			$	1,120					$	1,097
Chobani			312						313
Tractor			54						56
Athletic Brewing(2)			53						47
Other			29						30
Investments in unconsolidated affiliates			$	1,568					$	1,543

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

(2)During the first quarter of 2025, we received additional equity interests in Athletic Brewing in accordance with our investment agreement, raising our total interest to 12.2% as of March 31, 2025. This earned equity is recorded in Other income, net in the unaudited Condensed Consolidated Statements of Income.

12. Income Taxes

Our effective tax rates were as follows:

									First Quarter
															2025						2024
Effective tax rate															21.7		%				23.6		%

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

13. Accumulated Other Comprehensive (Loss) Income

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

(in millions)			Foreign Currency Translation Adjustments						Pension and Post-Retirement Benefit Liabilities						Cash Flow Hedges						Accumulated Other Comprehensive (Loss) Income
For the first quarter of 2025:
Beginning balance			$	(410)					$	(14)					$	148					$	(276)
Other comprehensive income (loss)			13						—						(7)						6
Amounts reclassified from AOCI			—						—						(5)						(5)
Total other comprehensive income (loss)			13						—						(12)						1
Balance as of March 31, 2025			$	(397)					$	(14)					$	136					$	(275)
For the first quarter of 2024:
Beginning balance			$	202					$	(14)					$	127					$	315
Other comprehensive loss			(56)						—						—						(56)
Amounts reclassified from AOCI			—						—						(2)						(2)
Total other comprehensive loss			(56)						—						(2)						(58)
Balance as of March 31, 2024			$	146					$	(14)					$	125					$	257

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

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

			Income Statement Caption												First Quarter
(in millions)																		2025						2024
Cash Flow Hedges:
Interest rate contracts			Interest expense, net																		$	(3)					$	(2)
FX contracts			Cost of sales																		(5)						—
Total																					(8)						(2)
Income tax expense																					3						—
Total, net of tax																					$	(5)					$	(2)

14. Other Financial Information

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

(in millions)			March 31, 2025						December 31, 2024
Cash and cash equivalents			$	653					$	510
Restricted cash and restricted cash equivalents			80						80
Non-current restricted cash and restricted cash equivalents			18						18
Total cash, cash equivalents, restricted cash, and restricted cash equivalents			$	751					$	608

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

SELECTED BALANCE SHEET INFORMATION

			March 31,						December 31,
(in millions)			2025						2024
Inventories:
Raw materials			$	615					$	524
Work-in-progress			10						9
Finished goods			944						798
Total			1,569						1,331
Allowance for excess and obsolete inventories			(30)						(32)
Total inventories			$	1,539					$	1,299
Prepaid expenses and other current assets:
Other receivables			$	160					$	146
Prepaid income taxes			69						33
Customer incentive programs			84						18
Derivative instruments			52						80
Prepaid marketing			30						29
Spare parts			127						126
Income tax receivable			71						75
Other			152						99
Total prepaid expenses and other current assets			$	745					$	606
Other non-current assets:
Operating lease right-of-use assets			$	852					$	880
Customer incentive programs			44						45
Derivative instruments			3						6
Equity securities(1)			31						89
Non-current restricted cash and restricted cash equivalents			18						18
Other			168						162
Total other non-current assets			$	1,116					$	1,200

(1)Fair values of equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1. During the first quarter of 2025, we recorded a realized gain of $34 million on the sale of our investment in Vita Coco.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

			March 31,						December 31,
(in millions)			2025						2024
Accrued expenses:
Accrued customer trade			$	356					$	439
Accrued compensation			150						235
Insurance reserve			65						57
Accrued interest			162						107
Accrued termination fees(1)			—						225
Accrued transferable tax credits			119						130
Other accrued expenses			349						391
Total accrued expenses			$	1,201					$	1,584
Other current liabilities:
Dividends payable			$	313					$	312
Income taxes payable			71						67
Operating lease liability			130						128
Finance lease liability			138						125
Derivative instruments			41						108
Holdback liability			80						80
Other			13						15
Total other current liabilities			$	786					$	835
Other non-current liabilities:
Operating lease liability			$	763					$	790
Finance lease liability			681						677
Mandatory redemption liability			700						689
Pension and post-retirement liability			28						31
Insurance reserves			98						95
Derivative instruments			335						348
Deferred compensation liability			31						33
Holdback liability			18						18
Other			70						72
Total other non-current liabilities			$	2,724					$	2,753

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

Supplier Financing Arrangements

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

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

15. 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 as of both March 31, 2025 and December 31, 2024. 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. We do not believe that the outcome of these, or any other, pending legal matters, individually or collectively, will have a material adverse effect on our results of operations, financial condition, or liquidity.

ANTITRUST LITIGATION

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. District Court for the Southern District of New York (“SDNY”) (TreeHouse Foods, Inc. et al. v. Green Mountain Coffee Roasters, Inc. et al.). The TreeHouse complaint asserted claims under the federal antitrust laws and various state laws, contending that Keurig had monopolized alleged markets for single serve coffee brewers and single serve coffee pods. The TreeHouse complaint sought treble monetary damages, declaratory relief, injunctive relief and attorneys’ fees. In the months that followed, a number of additional actions, including claims from another coffee manufacturer (JBR, Inc.), as well as putative class actions on behalf of direct and indirect purchasers of Keurig’s products, were filed in various federal district courts, asserting claims and seeking relief substantially similar to the claims asserted and relief sought in the TreeHouse complaint. Additional similar actions were filed by individual direct purchasers (including McLane Company, Inc., BJ’s Wholesale Club, Inc., Winn-Dixie Stores Inc., and Bi-Lo Holding LLC) in 2019 and in 2021. All of these actions were transferred to the SDNY for coordinated pre-trial proceedings (In re: Keurig Green Mountain Single-Serve Coffee Antitrust Litigation) (the “Multidistrict Antitrust Litigation”).

In July 2020, Keurig reached an agreement with one of the plaintiff groups in the Multidistrict Antitrust Litigation, the putative indirect purchaser class, to settle the claims asserted for $31 million. The settlement class consisted of individuals and entities in the United States that purchased, from persons other than Keurig and not for purposes of resale, Keurig manufactured or licensed single serve beverage portion packs during the applicable class period (beginning in September 2010 for most states). 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. 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 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 us or our results of operations. Accordingly, we have not accrued for a loss contingency. Additionally, as the timelines in these cases may be beyond our control, we can provide no assurance as to whether or when there will be material developments in these matters.

KEURIG DR PEPPER INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED, CONTINUED)

16. Restructuring

RESTRUCTURING PROGRAMS

2024 Network Optimization

In March 2024, we announced a restructuring program designed to more effectively and efficiently meet the needs of consumers and customers. The program initially included the closure of our manufacturing facility in Williston, Vermont, with operations and employees relocating to other existing manufacturing locations. The relocation began during the second quarter of 2024 and was completed in the third quarter of 2024. In July 2024, we also announced the closure of our Windsor, Virginia manufacturing facility, which is expected to be completed in the second quarter of 2025. Our restructuring program also encompasses other costs intended to optimize our manufacturing and distribution footprint throughout our operations.

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

2023 CEO Succession and Associated Realignment

In 2023, we began to enact several organization movements to ensure succession plans, to reinforce enterprise capabilities to support growth, and to control costs. A key component of the program was the appointment of Tim Cofer as Chief Operating Officer, effective November 6, 2023, with Mr. Cofer succeeding Robert Gamgort as our CEO during the second quarter of 2024. We also realigned our executive and operating leadership structure to enable faster decision making and to better support various strategic initiatives. The program is expected to incur charges of approximately $85 million, primarily driven by severance costs, which were substantially completed as of December 31, 2024, and the sign-on bonus for Mr. Cofer.

RESTRUCTURING CHARGES

Restructuring expenses for the defined programs were as follows:

									First Quarter
(in millions)															2025						2024
2024 Network Optimization															$	2					$	2
2023 CEO Succession and Associated Realignment															(1)						2

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 unaudited condensed consolidated financial statements. Restructuring liabilities, primarily consisting of workforce reduction costs, were as follows:

(in millions)			Restructuring Liabilities
Balance as of December 31, 2024			$	44
Charges to expense and other adjustments			(3)
Cash payments			(5)
Balance as of March 31, 2025			$	36

17. Related Parties

In February 2025, JAB BevCo B.V., a subsidiary of JAB, sold approximately 87 million shares of our common stock through an underwritten secondary offering. Upon completion of the offering on February 28, 2025, JAB beneficially owned less than 10% of our outstanding common stock, and the three members of our Board affiliated with JAB resigned. Prior to these transactions, JAB and its affiliates were included in our disclosures of related party transactions. Effective February 28, 2025, these disclosures are no longer applicable to JAB and its affiliates.