Keurig Dr Pepper 10-Q 2026-06-30

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 JUNE 30, 2026

OR

☐ 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

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

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 August 6, 2026, there were 1,360,826,038 shares of the registrant's common stock, par value $0.01 per share, outstanding.

KEURIG DR PEPPER INC.

FORM 10-Q

TABLE OF CONTENTS

KEURIG DR PEPPER INC.

FORM 10-Q

MASTER GLOSSARY

i

KEURIG DR PEPPER INC.

FORM 10-Q

MASTER GLOSSARY

ii

PART I - FINANCIAL INFORMATION

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

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)

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

KEURIG DR PEPPER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

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The following discussion should be read in conjunction with our audited consolidated financial statements and notes thereto in our Annual Report.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, including, in particular, statements about the impact of future events, future financial performance, plans, strategies, business combinations, expectations, prospects, competitive environment, regulation, labor matters, supply chain issues, tariffs or trade wars and related uncertainty, inflation, and availability of raw materials. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as "outlook," "guidance," "anticipate," "enable," "expect," "believe," "could," "confident," "estimate," "feel," "continue," "ongoing," "forecast," "intend," "may," "on track," "plan," "positioned," "potential," "project," "should," "target," "will," "would," and similar words, phrases, or expressions and variations or negatives of these words in this Quarterly Report on Form 10-Q. We have based these forward-looking statements on our current views with respect to future events and financial performance.

Our actual financial performance could differ materially from those projected in the forward-looking statements due to a variety of factors, including the inherent uncertainty of estimates, forecasts, and projections; global economic uncertainty or economic downturns; tariffs or the imposition of new tariffs, trade wars, barriers, or restrictions, sanctions, geopolitical disturbances and conflicts, or threats of such actions and related uncertainty; the risk that our financial performance may be better or worse than anticipated; risks related to the completion of the Separation in the anticipated timeframe, or at all; our incurrence of significant debt or our entry into other funding alternatives, in each case, which funded the acquisition of JDE Peet's, which may result in dilution to our stockholders or introduce complexity to our capital structure; additional risks associated with the JDE Peet's Acquisition and those geographies, countries, and associated governments where JDE Peet's currently operates; our ability to successfully integrate JDE Peet's into our business, or that such integration may be more difficult, time-consuming, or costly than expected; constraints on management's attention to operating and growing our business during the execution of the integration of JDE Peet's and the Separation; the potential downgrade of our credit ratings as a result of debt incurred and/or assumed in connection with the JDE Peet's Acquisition; the possibility of negative impacts on business relationships in connection with the JDE Peet's Acquisition and the Separation; the risk that the Separation incurs significant additional costs; the risk of potential litigation and regulatory actions; negative effects of the JDE Peet's Acquisition and pendency of the Separation on our share price; and the ability to achieve the anticipated strategic and financial benefits from the Separation. Given these uncertainties, you should not put undue reliance on any forward-looking statements. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q, as well as our subsequent filings with the SEC. Forward-looking statements represent our estimates and assumptions only as of the date that they were made. We do not undertake any duty to update the forward-looking statements, and the estimates and assumptions associated with them, after the date of this Quarterly Report on Form 10-Q, except to the extent required by applicable securities laws.

This Quarterly Report on Form 10-Q contains the names of some of our owned or licensed trademarks, trade names, and service marks, which we refer to as our brands. All of the product names included in this Quarterly Report on Form 10-Q are either our registered trademarks or those of our licensors.

OVERVIEW

KDP is a leading beverage company with more than 150 owned, licensed, and partner brands, that meet a wide range of needs and occasions. Our North American refreshment beverage business holds leadership positions across carbonated soft drinks, water, juice, and mixers, with a portfolio of iconic brands, such as Dr Pepper, Canada Dry, Mott's, A&W, Peñafiel, GHOST, 7UP, Snapple, Clamato, and Core Hydration. Our global coffee business spans more than 100 markets and includes the leading Keurig single‑serve brewing system in the U.S. and Canada, along with powerhouse brands such as Peet's, L'OR, and Jacobs, and other regional coffee leaders. On April 1, 2026, we acquired JDE Peet's, which contributed to our results beginning in the second quarter of 2026.

Our four operating and reportable segments are U.S. Refreshment Beverages, U.S. Coffee, KDP International, and JDE Peet's.

VOLUME

In evaluating our performance, we use different volume measures for LRB, coffee and related products, and appliances.

For LRB, we measure our sales volume in 288 fluid ounce equivalent cases.

• For beverage concentrates, we measure our sales volume as concentrate case sales for concentrates sold by us to our bottlers and distributors. A concentrate case is the amount of concentrate needed to make one case of 288 fluid ounces of finished beverage, the equivalent of 24 twelve-ounce servings. It does not include any other component of the finished beverage other than concentrate.

• For packaged beverages, we measure volume as case sales to customers. A case sale represents a unit of measurement equal to 288 fluid ounces of packaged beverage sold by us. Case sales include both our owned brands and certain brands licensed to and/or distributed by us.

For coffee and related products, which includes single serve, ground, instant, and whole bean coffee, as well as related products, including tea and cocoa, we measure our sales volume in metric tons.

For appliances, we measure sales volume in individual units.

EXECUTIVE SUMMARY

Results of Operations

Second Quarter of 2026 as compared to Second Quarter of 2025

(in millions, except Diluted EPS)

JDE PEET'S ACQUISITION

On January 15, 2026, we commenced a tender offer to acquire all of the issued and outstanding ordinary shares of JDE Peet's for a cash offer price of €31.85 per share, without interest. We substantially completed the tender offer on April 1, 2026. The aggregate cash paid for tendered shares was approximately €15.1 billion, or $17.4 billion.

During the first six months of 2026, we completed a series of transactions in order to obtain funding for the consideration of the JDE Peet's Acquisition:

• Delayed Draw Term Loan of $3.6 billion

• Senior Unsecured Notes of approximately $6 billion

• JV Investment of $4 billion

• Issuance of Convertible Preferred Stock of $4.5 billion

Refer to Notes 2, 3, 4, and 5 of the Notes to our unaudited Condensed Consolidated Financial Statements for further information about these transactions and the closing of the JDE Peet's Acquisition.

We have incurred acquisition, integration, and financing costs associated with the acquisition of JDE Peet's and planned Separation, which include costs to obtain proceeds to close the JDE Peet's acquisition and costs to manage the FX risk associated with the purchase price. These costs were primarily recorded to Selling, general, and administrative expenses, Interest expense, net, and Other expense (income), net, and aggregated to a pre-tax impact of approximately $624 million during the first six months of 2026.

References in the financial tables to percentage changes that are not meaningful are denoted by "NM".

We acquired JDE Peet's on April 1, 2026, which contributed to our results beginning in the second quarter of 2026. Percentage changes for consolidated results disclosed below include the impact of the acquisition.

Second Quarter of 2026 Compared to Second Quarter of 2025

Consolidated Operations

Sales Volumes

Net Sales Drivers

(1)The JDE Peet’s Acquisition contributed 67.3% of the volume / mix growth in the quarter.

Gross profit increased 36.0% to $3,066 million for the second quarter of 2026, as compared to $2,255 million for the second quarter of 2025. The benefits to gross profit of the JDE Peet’s Acquisition (45 percentage points) and legacy KDP net sales growth (10 percentage points) were partially offset by the impact of the JDE Peet’s inventory step-up recognized in cost of sales in the second quarter of 2026 (14 percentage points) and the net impact from changes in ingredients, materials, and productivity, inclusive of tariffs (4 percentage points).

SG&A expenses increased 76.8% to $2,397 million for the second quarter of 2026, as compared to $1,356 million for the second quarter of 2025, primarily driven by the inclusion of JDE Peet’s SG&A expenses (53 percentage points) and transaction and integration costs associated with the JDE Peet’s Acquisition and the Separation (20 percentage points).

Other operating expense, net was $41 million for the second quarter of 2026, as compared to $1 million for the second quarter of 2025, primarily reflecting non-cash write-offs of certain intellectual property assets in the current quarter.

Income from operations decreased 30.1% to $628 million for the second quarter of 2026, as compared to $898 million for the second quarter of 2025, as increased gross profit was outpaced by increased SG&A and other operating expenses.

Interest expense, net was $336 million for the second quarter of 2026, as compared to $180 million for the second quarter of 2025, driven by increased debt and higher financing costs, including debt acquired in the JDE Peet's Acquisition.

The effective tax rate increased 730 bps to 31.1% for the second quarter of 2026, compared to 23.8% for the second quarter of 2025, primarily driven by a non-cash revaluation of state deferred tax liabilities as a result of the JDE Peet's Acquisition (920 bps).

Net income was $210 million for the second quarter of 2026, as compared to $547 million for the second quarter of 2025, driven by reduced income from operations, increased interest expense, and the increased effective tax rate. Net income attributable to KDP was $142 million for the second quarter of 2026, including the dilutive impact of $68 million of net income attributable to non-controlling interests in the current quarter, primarily the Pod Manufacturing JV.

Diluted EPS was $0.04 per diluted share for the second quarter of 2026 as compared to $0.40 in the second quarter of 2025, driven by reduced net income attributable to KDP and dividends allocated to preferred shareholders. Refer to Note 6 of the Notes to our Unaudited Consolidated Financial Statements for the computation of diluted EPS.

Results of Operations by Segment

The following tables provide certain results of operations for our reportable segments for the second quarter of 2026 and 2025.

(1)As we acquired JDE Peet’s on April 1, 2026, comparative information is not applicable for the second quarter of 2025.

Sales Volumes

Net Sales Drivers

U.S. Refreshment Beverages

Sales volume increased 2.4% in the second quarter of 2026, led by growth in energy and sports hydration drinks, partially offset by declines in the balance of our portfolio.

Net sales increased 10.0% to $2,925 million for the second quarter of 2026, driven by volume / mix growth and higher net price realization.

Income from operations increased 14.9% to $857 million for the second quarter of 2026. This performance was led by the benefit to gross profit of net sales growth (21 percentage points) and a favorable comparison to Ghost integration expenses in the second quarter of 2025 (3 percentage points), partially offset by a net unfavorable change in ingredients, materials, and productivity, inclusive of tariffs (5 percentage points) and increased transportation and warehousing expenses (2 percentage points).

U.S. Coffee

Appliance volume increased 2.1%. Coffee and related products volume decreased 12.8%, reflecting price elasticity impacts, single serve category softness, and a temporary reporting shift of Peet’s K-cup pods into the JDE Peet’s segment.

Net sales decreased 3.2% to $918 million for the second quarter of 2026, led by unfavorable volume / mix, which was partially offset by favorable net price realization.

Income from operations decreased 36.1% to $149 million for the second quarter of 2026, driven primarily by costs associated with the integration of JDE Peet’s and the Separation (22 percentage points), a net unfavorable change in ingredients, materials, and productivity, inclusive of tariffs (17 percentage points), and the gross profit impact of the decline in net sales (7 percentage points).

KDP International

LRB sales volume increased 4.5%. Appliance volumes increased 6.3%. Coffee and related products volume decreased 2.0%.

Net sales increased 19.6% to $664 million in the second quarter of 2026, reflecting favorable FX translation, volume / mix growth, and higher net price realization.

Income from operations increased 6.3%, to $152 million for the second quarter of 2026, as the benefits from the gross profit impact of the higher net price realization and favorable net FX translation were partially offset by increased IEPS taxes in Mexico and a net unfavorable impact from changes in ingredients, materials, and productivity.

JDE Peet's

JDE Peet’s sales volumes, net sales, and loss from operations were wholly incremental to KDP as a result of the JDE Peet’s Acquisition.

The loss from operations in the second quarter of 2026 included a $314 million increase in cost of sales due to the impact of the inventory step-up to fair value in connection with the JDE Peet’s Acquisition and the subsequent sale of that inventory.

First Six Months of 2026 Compared to First Six Months of 2025

Consolidated Operations

Sales Volumes

Net Sales Drivers

(1)The JDE Peet’s Acquisition contributed 35.9% of the volume / mix growth in the quarter.

Gross profit increased 21.8% to $5,164 million for the first six months of 2026. The benefits to gross profit of the JDE Peet’s Acquisition (24 percentage points) and legacy KDP net sales growth (11 percentage points) were partially offset by the impact of the JDE Peet’s inventory step-up recognized in cost of sales in the first six months of 2026 (7 percentage points) and a net unfavorable impact from changes in ingredients, materials, and productivity, inclusive of tariffs (5 percentage points).

SG&A expenses increased 46.7% to $3,739 million for the first six months of 2026, driven by the inclusion of JDE Peet’s SG&A expenses (28 percentage points), transaction and integration costs associated with the JDE Peet's Acquisition and the Separation (14 percentage points), and higher labor costs (2 percentage points).

Other operating expense (income), net was expense of $41 million for the first six months of 2026, as compared to income of $7 million for the first six months of 2025, primarily reflecting non-cash write-offs of certain intellectual property assets in the current year-to-date period.

Income from operations decreased 18.5% to $1,384 million for the first six months of 2026, as increased gross profit was more than offset by higher SG&A and other operating expenses.

Interest expense, net increased 88.1% to $617 million for the first six months of 2026, driven by increased debt and higher financing costs, including debt acquired in the JDE Peet's Acquisition.

Other (income) expense, net reflected expense of $105 million for the first six months of 2026, primarily driven by realized losses on FX forward contracts related to the funding of the JDE Peet’s Acquisition. This compared to income of $7 million in the first six months of 2025.

The effective tax rate increased 470 bps to 27.5% for the first six months of 2026, compared to 22.8% in the first six months of 2025, primarily driven by a non-cash revaluation of state deferred tax liabilities as a result of the JDE Peet's Acquisition (420 bps), partially offset by discrete tax impacts associated with the completion of the JV Investment and the creation of the Pod Manufacturing JV (70 bps).

Net income decreased 54.9% to $480 million for the first six months of 2026, driven by reduced income from operations, increased interest expense, and the increased effective tax rate. Net income attributable to KDP was $412 million for the first six months of 2026, including the dilutive impact of $68 million of net income attributable to non-controlling interests, primarily the Pod Manufacturing JV.

Diluted EPS decreased 69.2% to $0.24 per diluted share for the first six months of 2026 as compared to $0.78 in the first six months of 2025, driven by reduced net income attributable to KDP and dividends allocated to preferred shareholders. Refer to Note 6 of the Notes to our Unaudited Consolidated Financial Statements for the computation of diluted EPS.

Results of Operations by Segment

The following tables provide certain results of operations for our reportable segments for the first six months of 2026 and 2025.

(1)As we acquired JDE Peet’s on April 1, 2026, comparative information is not applicable for the first six months of 2025.

Sales Volumes

Net Sales Drivers

U.S. Refreshment Beverages

Sales volume increased 1.0%, led by growth in energy and sports hydration drinks, partially offset by declines in the balance of our portfolio.

Net sales increased 10.9% to $5,524 million for the first six months of 2026, driven by volume / mix growth and higher net price realization.

Income from operations increased 12.7% to $1,578 million for the first six months of 2026. This performance was driven by the gross profit impact of net sales growth (24 percentage points), which was partially offset by a net unfavorable impact from changes in ingredients, materials, and productivity, inclusive of tariffs (7 percentage points), increased transportation and warehousing expenses (3 percentage points), and higher labor costs (2 percentage points).

U.S. Coffee

Appliance volume decreased 2.7%, reflecting price elasticity impacts. Coffee and related products volume decreased 9.7%, reflecting price elasticity impacts and single serve category softness.

Net sales decreased 2.7% to $1,775 million for the first six months of 2026, as higher net price realization was more than offset by unfavorable volume / mix.

Income from operations decreased 29.0% to $309 million for the first six months of 2026, driven by a net unfavorable impact from changes in ingredients, materials, and productivity, inclusive of tariffs (22 percentage points), costs associated with the integration of JDE Peet’s and the Separation (12 percentage points) and increased marketing expenses (3 percentage points).

KDP International

LRB sales volume increased 0.9%. Appliance volumes increased 0.4%. Coffee and related products volume decreased 2.0%.

Net sales increased 19.6% to $1,184 million in the first six months of 2026, reflecting favorable FX translation, higher net price realization, and favorable volume / mix.

Income from operations increased 1.7% to $237 million for the first six months of 2026, as the benefit from higher net price realization was partially offset by increased IEPS taxes in Mexico and a net unfavorable impact from changes in ingredients, materials, and productivity.

JDE Peet's

JDE Peet’s sales volumes, net sales, and loss from operations were wholly incremental to KDP as a result of the JDE Peet’s Acquisition.

The loss from operations in the first six months of 2026 included a $314 million increase in cost of sales due to the impact of the inventory step-up to fair value in connection with the JDE Peet’s Acquisition and the subsequent sale of that inventory.

CRITICAL ACCOUNTING ESTIMATES

The process of preparing our consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses. Critical accounting estimates are both fundamental to the portrayal of a company's financial condition and results and require difficult, subjective, or complex estimates and assessments. These estimates and judgments are based on historical experience, future expectations, and other factors and assumptions we believe to be reasonable under the circumstances. The most significant estimates and judgments are reviewed on an ongoing basis and revised when necessary. These critical accounting estimates are discussed in greater detail in Part II, Item 7 of our Annual Report.

LIQUIDITY AND CAPITAL RESOURCES

Overview

We believe our financial condition and liquidity remain strong. We manage all aspects of our business, including monitoring the financial health of our customers, suppliers, and other third-party relationships, implementing gross margin enhancement strategies through our productivity initiatives, and developing new opportunities for growth, such as innovation and agreements with partners to distribute brands that are accretive to our portfolio.

Cash generated by our foreign operations is generally repatriated to the U.S. periodically. We do not expect restrictions or taxes on repatriation of cash held outside the U.S. to have a material effect on our overall business, liquidity, financial condition, or results of operations for the foreseeable future.

Principal Sources of Capital Resources

Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from our operations, and borrowing capacity currently available under our 2025 Revolving Credit Agreement. Additionally, we have an uncommitted commercial paper program where we can issue unsecured commercial paper notes on a private placement basis. Based on our current and anticipated level of operations, we believe that our operating cash flows will be sufficient to meet our anticipated obligations related to our normal course of business for the next twelve months and thereafter for the foreseeable future. To the extent that our operating cash flows are not sufficient to meet our liquidity needs, we may utilize cash on hand or amounts available under our financing arrangements. From time to time, we may seek additional deleveraging, refinancing, or liquidity enhancing transactions, including entering into transactions to repurchase or redeem outstanding indebtedness or otherwise seek transactions to reduce interest expense, extend debt maturities, and improve our capital and liquidity structure.

Sources of Liquidity - Operations

Net cash provided by operating activities increased $536 million for the first six months of 2026, as compared to the first six months of 2025, driven by the favorable comparison in working capital as compared to the prior period.

Sources of Liquidity - Financing

Refer to Note 3 of the Notes to our Unaudited Consolidated Financial Statements for management's discussion of our financing arrangements.

As of June 30, 2026, we were in compliance with all debt covenants and we have no reason to believe that we will be unable to satisfy these covenants.

We also have an active shelf registration statement, filed with the SEC on August 15, 2025, which allows us to issue an indeterminate number or amount of common stock, preferred stock, debt securities, and warrants from time to time in one or more offerings at the direction of our Board.

Credit Ratings

Our credit ratings are as follows:

Following the announcement of the JDE Peet's Acquisition and the corresponding financing arrangements entered into for the transaction, our credit ratings were downgraded by Moody's and S&P but remain investment grade. The downgrade of both our long-term debt and commercial paper ratings may have adverse effects on our borrowing costs, access to capital markets, liquidity, flexibility in responding to changing market conditions, and, as a result, our financial performance.

JDE Peet's Acquisition

We entered into various transactions in order to finance the JDE Peet's Acquisition. Refer to Note 2 of the Notes to our Unaudited Consolidated Financial Statements for additional information.

Principal Uses of Capital Resources

Our capital allocation priorities are investing to grow our business both organically and inorganically, strengthening our balance sheet, and returning cash to shareholders through regular quarterly dividends. We dynamically adjust our cash deployment plans based on the specific opportunities available in a given period, but over time we allocate capital to balance each of these priorities.

Dividends

We have declared total dividends to common shareholders of $0.46 per share in both the first six months of 2026 and 2025. Additionally, we have paid total dividends of $54 million to the holders of our Convertible Preferred Stock in the first six months of 2026.

Acquisitions of Businesses and Purchases of Intangible Assets

From time to time, we acquire brand ownership companies to expand our portfolio. We also invest in the expansion of our DSD network through transactions with strategic independent bottlers or third-party brand ownership companies to enhance competitive distribution scale. These transactions could be accounted for either as an acquisition of a business or, if the majority of the transaction price represents the acquisition of a single intangible asset, as an asset acquisition. In the second quarter of 2026, we completed the JDE Peet's Acquisition, which was the primary driver for the change in Net cash used in investing activities as compared to the prior period. Refer to Note 2 of the Notes to our Unaudited Consolidated Financial Statements for additional information. Other purchases of intangible assets were $4 million and $16 million for the first six months of 2026 and 2025, respectively.

Capital Expenditures

Purchases of property, plant, and equipment were $297 million and $226 million for the first six months of 2026 and 2025, respectively. Capital expenditures included in accounts payable and accrued expenses were $207 million and $155 million for the first six months of 2026 and 2025, respectively.

Capital expenditures, which includes both purchases of property, plant, and equipment and amounts included in accounts payable and accrued expenses, primarily related to investments in manufacturing capabilities, both in the U.S. and internationally, for the first six months of 2026 and 2025.

Equity Method Investments

From time to time, we invest in beverage startup companies or in brand ownership companies to grow our presence in certain product categories, or enter into various licensing and distribution agreements to expand our product portfolio. Our investments may involve acquiring a minority interest in equity securities of a company, in certain cases with a protected path to ownership at our future option.

Uncertainties and Trends Affecting Liquidity

Disruptions in financial and credit markets, including those caused by inflation; global economic uncertainty; international conflicts; economic downturns; fluctuations in interest rates; the imposition of new tariffs or changes to existing tariffs; trade wars, barriers, or restrictions, or threats of such actions, and related uncertainty, may impact our ability to manage normal commercial relationships with our customers, suppliers, and creditors, and may also impact our ability to access liquidity through financial markets in a timely and cost-effective manner. These disruptions could have a negative impact on the ability of our customers to timely pay their obligations to us, thus reducing our cash flow, or the ability of our vendors to timely supply materials.

Customer and consumer demand for our products may also be impacted by the risk factors discussed herein, as well as subsequent filings with the SEC, that could have a material effect on production, delivery, and consumption of our products, which could result in a reduction in our sales volume.

SUPPLEMENTAL GUARANTOR FINANCIAL INFORMATION

The KDP Notes are fully and unconditionally guaranteed by certain of our direct and indirect subsidiaries (the "Guarantors"), as defined in the indentures governing the KDP Notes. The Guarantors, other than JDE Peet’s, are 100% owned either directly or indirectly by us and jointly and severally guarantee, subject to the release provisions described below, our obligations under the KDP Notes. We have acquired 97.75% of the issued and outstanding ordinary shares of JDE Peet's, and intend to acquire the remaining shares through completion of the demerger process.

On May 21, 2026, JDE Peet's agreed to fully and unconditionally guarantee, on a joint and several basis with KDP and the other Guarantors, the obligations of Maple in respect of the Maple Notes and the delayed draw term loan facility, and to fully and unconditionally guarantee, on a joint and several basis with Maple and the other Guarantors, the obligations of KDP in respect of its existing outstanding senior notes and revolving credit facility. JDE Peet's guarantees of KDP’s obligations provide that, in addition to the events specified in the applicable indentures and credit agreements governing such indebtedness, such guarantees shall automatically terminate upon the Separation.

In addition, on May 21, 2026, Maple, KDP and the Guarantors agreed to fully and unconditionally guarantee, on a joint and several basis with each other, the obligations of JDE Peet's in respect of the JDE Peet's Notes. KDP and the Guarantors’ guarantees (excluding the guarantees of Maple) of the JDE Peet's Notes provide that, in addition to the events specified in the applicable agreements governing such indebtedness, such guarantees shall automatically terminate upon the Separation.

None of our subsidiaries organized outside of the U.S., any of the subsidiaries held by Maple prior to the DPS Merger, or any of the subsidiaries acquired after the DPS Merger (collectively, the "Non-Guarantors") guarantee the KDP Notes, with the exception of Maple, which became a Guarantor effective March 6, 2026, and JDE Peet's, which became a Guarantor on May 21, 2026, as described above. The subsidiary guarantees with respect to the KDP Notes are subject to release upon the occurrence of certain events, including the sale of all or substantially all of a subsidiary's assets, the release of the subsidiary's guarantee of our other indebtedness, our exercise of the legal defeasance option with respect to the Notes, and the discharge of our obligations under the applicable indenture.

The following schedules present the summarized financial information for Keurig Dr Pepper Inc. (the "Parent") and the Guarantors on a combined basis after intercompany eliminations; the Parent and the Guarantors' amounts due from and amounts due to Non-Guarantors are disclosed separately. The consolidating schedules are provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the issuer and guarantor subsidiaries. The following schedules include Maple as a Guarantor effective March 6, 2026 and JDE Peet's as a Guarantor effective May 21, 2026.

Summarized financial information for the Parent and Guarantors is as follows:

(1)Includes $8 million of intercompany receivables due to the Parent and Guarantors from the Non-Guarantors as of June 30, 2026.

(2)Includes $2,872 million of intercompany payables due to the Non-Guarantors from the Parent and Guarantors as of June 30, 2026.

In addition to the risks disclosed in our Annual Report, our market risk exposure has changed as a result of the JDE Peet's Acquisition. See below for a discussion of the incremental risks to our business, which should be considered in addition to the items discussed in Part II, Item 7A of our Annual Report.

FOREIGN EXCHANGE RISK

Due to the expanded geographic diversity of our operations as a result of the JDE Peet's Acquisition, we have increased exposure with respect to foreign exchange rate fluctuations. The primary exposures of JDE Peet's to foreign exchange rates are the Euro versus U.S. dollar and various other currencies. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in earnings as incurred.

JDE Peet's uses foreign currency derivative instruments such as foreign exchange forward contracts and cross-currency interest rate contracts to manage a portion of our exposure to changes in foreign exchange rates. As of June 30, 2026, JDE Peet's had foreign currency derivative contracts outstanding with notional values of $5,906 million, which mature at various dates through February 2034. The impact of a 10% weakening in the Euro is estimated to decrease the fair value of instruments such instrument by approximately $73 million. Any increase or decrease in the value of these foreign currency derivatives would have an approximately offsetting change in the underlying hedged risk.

INTEREST RATE RISK

We manage our debt portfolio through the use of interest rate contracts and monitor our mix of fixed-rate and variable-rate debt. As of June 30, 2026, the face value of our fixed-rate and variable-rate JDE Peet's Notes were $4,506 million and $686 million, respectively. From time to time, JDE Peet's also enters into interest rate contracts that effectively result in variable-rate interest payments or receipts. These derivative instruments are generally based on SOFR or EURIBOR, plus a credit spread. There is a limited impact of fluctuations in interest rates on our interest expense associated with variable rate interest payments on JDE Peet’s Notes.

COMMODITY RISK

We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be limited by the competitive environment in which we operate. Our principal commodities risks for JDE Peet's relate to our purchases of coffee beans.

We utilize commodities derivative instruments and supplier pricing agreements to hedge the risk of movements in commodity prices for limited time periods for certain commodities. As of June 30, 2026, JDE Peet's had derivative contracts outstanding with a notional value of $269 million maturing at various dates through January 2028. The fair market value of these contracts as of June 30, 2026 was a net asset of $25 million. As of June 30, 2026, a 10% change (up or down) in commodity prices is estimated to increase or decrease the fair value of these derivative instruments by approximately $27 million. Any change in the value of the commodities derivatives instruments would have an approximately offsetting change in the underlying hedged risk.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Based on evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that, as of June 30, 2026, our disclosure controls and procedures are effective to (i) provide reasonable assurance that information required to be disclosed in the Exchange Act filings is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and (ii) ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act are accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

The JDE Peet's Acquisition, which was completed on April 1, 2026, had a material impact on our financial position, results of operations, and cash flows from the date of acquisition through June 30, 2026. The JDE Peet's Acquisition also resulted in material changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act). We are in the process of designing and integrating policies, processes, operations, technology, and other components of internal controls over financial reporting of JDE Peet's. Management will monitor the implementation of new controls and test the operating effectiveness when instances are available in future periods.

Under guidelines established by the SEC, companies are allowed to exclude an acquired business from management's report on internal control over financial reporting for the first year subsequent to the acquisition while integrating the acquired operations. Accordingly, management will exclude JDE Peet's from its annual report on internal control over financial reporting as of December 31, 2026.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are occasionally subject to litigation or other legal proceedings relating to our business. See Note 17 of the Notes to our Unaudited Consolidated Financial Statements for more information related to commitments and contingencies, which is incorporated herein by reference.

In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the following risk factors, which have been updated from the risk factors set forth in Part I, Item 1A in our Annual Report.

RISK FACTORS SUMMARY

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

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

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

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

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

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

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

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

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

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

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

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

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

• A significant interruption at one of our production facilities could disrupt our supply of the affected products.

• Our efforts to secure an adequate supply of quality or sustainable coffee may be unsuccessful.

• If we are unable to manage our inventory and forecasting systems effectively, our business, financial condition, or results of operations could be adversely affected.

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

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

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

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

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

• Equity method investments are managed independently of us and may have different interests than we do. Their decisions could impact our financial performance.

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

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

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

• National and international laws and regulations could adversely affect our business.

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

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

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

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

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

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

• Water scarcity and quality could adversely affect our business.

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

• Fluctuations in foreign currency exchange rates relative to the U.S. dollar could have a material adverse effect on our financial results.

• The market price of our common stock may decline if we do not achieve the expected benefits and synergies of the JDE Peet’s Acquisition.

• Legal proceedings in connection with the JDE Peet's Acquisition could expose us to substantial costs.

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

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

• Our acquisition of JDE Peet’s exposes us to significant geopolitical, regulatory, and operational risks in Russia, including the potential loss of those operations, that could adversely affect our business.

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

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

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

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

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

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

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

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

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

RISKS RELATED TO OUR OPERATIONS

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

We have experienced, and could continue to experience, disruptions in our supply chain and our manufacturing and distribution operations, which could have a material adverse effect on our business. Some raw materials and supplies used in the production of our products, including packaging materials

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During the second quarter of 2026, no directors or executive officers of KDP adopted, modified, or terminated any contract, instruction, or written plan for the purchase or sale of KDP securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement," as defined in Item 408 of Regulation S-K.