Strong Q2 Net Sales Growth Led by U.S.
Refreshment Beverages and International
Full Year Net Sales Outlook Increased to 5% to
6%
BURLINGTON,
Mass. and FRISCO, Texas , July 27,
2023 /PRNewswire/ -- Keurig Dr Pepper Inc.
(NASDAQ: KDP) today reported results for the second quarter ended
June 30, 2023, raised its full year
constant currency net sales growth outlook to 5% to 6% and
reaffirmed its guidance for Adjusted diluted EPS growth of 6% to
7%.
|
|
Reported GAAP Basis
|
|
Adjusted Basis1
|
|
|
Q2
|
|
YTD
|
|
Q2
|
|
YTD
|
Net Sales
|
|
$3.79 bn
|
|
$7.14 bn
|
|
$3.79 bn
|
|
$7.14 bn
|
% vs prior year
|
|
6.6 %
|
|
7.7 %
|
|
6.1 %
|
|
7.4 %
|
Diluted EPS
|
|
$0.36
|
|
$0.69
|
|
$0.42
|
|
$0.76
|
% vs prior year
|
|
140.0 %
|
|
23.2 %
|
|
7.7 %
|
|
5.6 %
|
Commenting on the announcement, Chairman and CEO Bob Gamgort stated, "Our second quarter results
demonstrated the strength of KDP's brand portfolio and our
high-quality retail execution. We saw continued momentum in the
U.S. Refreshment Beverages and International segments, as well as
encouraging intraquarter developments in U.S. Coffee, where we
expect a sequential recovery in revenue and a meaningful inflection
in margins in the back half. On a consolidated basis, we continue
to drive healthy growth while reinvesting in our business and are
increasingly confident in our full year outlook, which now reflects
even stronger underlying EPS results."
Second Quarter Consolidated Results
Net sales for the second quarter of 2023 increased 6.6% to
$3.79 billion, compared to
$3.55 billion in the year-ago period.
On a constant currency basis, net sales advanced 6.1%, reflecting
net price realization of 8.2%, only slightly offset by lower
volume/mix of 2.1%. The resilient volume/mix performance reflected
the continued strength of the Company's brand portfolio and
in-market execution, as well as continued modest elasticities
across most categories.
KDP in-market performance in the U.S. Liquid Refreshment
Beverages (LRB) category remained strong, with retail dollar
consumption2 advancing 10.7% and market share gains in
categories representing approximately 85% of the Company's cold
beverage retail sales base. The performance was led by
CSDs3, seltzers, coconut waters, energy, apple juice and
fruit drinks and was driven by Dr Pepper and Squirt in CSDs, as
well as Polar seltzers, Evian, Vita
Coco, C4 Energy, Mott's and Hawaiian Punch.
U.S. retail dollar consumption2 of KDP Manufactured
K-Cup® Pods decreased 2.3% in IRi tracked channels in the quarter,
and KDP Manufactured dollar share was approximately 79%. Total
at-home coffee category trends during the second quarter continued
to be impacted by greater consumer mobility versus the prior year,
though the Company observed sequential improvement in category
consumption towards the end of the second quarter, which continued
into the third quarter. The single serve segment continued to gain
volume share of the at-home coffee category throughout the
period.
GAAP operating income increased 34.4% to $769 million, compared to $572 million in the year-ago period, reflecting
growth in gross profit, as the strong net sales growth and
productivity more than offset continued input cost inflation. Also
impacting the comparison was the favorable year-over-year impact of
items affecting comparability.
Excluding items affecting comparability, Adjusted operating
income increased 4.4% to $873
million, including a strong double-digit increase in
marketing investment, reflecting the strong growth in net sales and
Adjusted gross profit, which more than offset transportation,
warehousing and labor inflation. On a percent of net sales basis,
Adjusted operating income was 23.0%.
GAAP net income for the quarter increased 130.7% to $503 million, or $0.36 per diluted share, compared to $218 million, or $0.15 per diluted share, in the year-ago period.
This performance reflected a favorable year-over-year impact of
items affecting comparability and the increase in Adjusted
operating income, partially offset by a higher GAAP effective tax
rate. Excluding items affecting comparability, Adjusted net income
for the quarter advanced 7.0% to $596
million, and Adjusted diluted EPS increased 7.7% to
$0.42.
Free cash flow for the second quarter was $295 million, reflecting lower operating cash
flow and higher capital expenditures versus prior year.
During the quarter, the Company repurchased approximately 7
million KDP shares at a weighted average price per share of
$32.34, totaling approximately
$226 million. The Company has
approximately $3.2 billion remaining
under its share repurchase authorization expiring on December 31, 2025.
_________________________________________
|
1 Adjusted
financial metrics presented in this release are non-GAAP and with
growth rates presented on a constant currency basis. See
reconciliations of GAAP results to Adjusted results on a constant
currency basis in the accompanying tables.
2 Retail consumption data based on Keurig Dr Pepper's
custom IRi category definitions for the 13-week period ending
7/2/2023.
3 CSDs refer to "Carbonated Soft Drinks".
|
Second Quarter Segment Results
U.S. Refreshment Beverages
Net sales for the second quarter increased 11.8% to $2.3 billion, compared to $2.1 billion in the year-ago period, reflecting
net price realization of 12.0% and a slight decrease in volume/mix
of 0.2%. This strong performance continued to reflect the strength
of the portfolio, including incrementality from recent innovation,
and exceptional in-market execution, as well as the contribution
from our sales and distribution partnership with Nutrabolt for C4
Energy.
GAAP operating income increased a very strong 19.1% to
$629 million, compared to
$528 million in the year-ago period,
reflecting the net sales growth, productivity and a modest
year-over-year benefit from items affecting comparability. These
drivers were partially offset by continued broad-based input cost
inflation and a significant increase in marketing investment.
Excluding items affecting comparability, Adjusted operating income
increased 18.1% to $646 million and,
on a percent of net sales basis, totaled 27.7%.
U.S. Coffee
Net sales for the second quarter decreased 5.7% to $970 million, compared to $1,029 million in the year-ago period, reflecting
net price realization of 1.6% and a volume/mix decline of
7.3%.
At-home coffee consumption in the quarter continued to be
impacted by year-over-year changes in mobility, with sequential
improvement in category volume trends observable each month of the
quarter. Pod revenue declined 4.6%, driven by a shipment decline of
7.7% that primarily reflected mobility-driven category softness,
the exit of some lower-margin private label contracts and an
unfavorable comparison in the prior year during which the Company
rebuilt trade inventory levels following supply chain constraints.
On a trailing twelve-month basis versus the pre-pandemic Q2 2019
period, at-home pod shipments grew 16.9%, representing a mid-single
digit compound annual growth rate (CAGR).
Brewer shipments totaled 9.9 million for the twelve months
ending June 30, 2023, representing an
11.0% decline year-over-year. Compared against pre-pandemic levels
represented by the twelve months ending June
30, 2019, brewer shipments grew 17.8%, representing a
mid-single digit CAGR. Brewer shipments in the second quarter
continued to be impacted by trade inventory adjustments, which the
Company believes are now mostly complete, and slower discretionary
spending for small appliances.
GAAP operating income decreased 15.3% to $250 million, compared to $295 million in the year-ago period, reflecting
broad-based inflationary pressures, the decline in volume/mix and a
significant increase in marketing investment. Partially offsetting
these drivers were the benefits of productivity, higher net price
realization and a modest year-over-year benefit of items affecting
comparability. Excluding these items, Adjusted operating income
decreased 14.6% to $292 million and,
on a percent of net sales basis, totaled 30.1%.
International
Net sales for the second quarter increased 10.9% to $489 million, compared to $441 million in the year-ago period and, on a
constant currency basis, net sales advanced 7.0%. This strong
performance was driven by higher net price realization of 6.1% and
volume/mix growth of 0.9%, and reflected broad-based momentum in
both Mexico and Canada.
GAAP operating income increased a strong 14.3% to $112 million, compared to $98 million in the year-ago period, largely
reflecting the benefits of the higher net sales, increased
productivity and the year-over-year benefit of items affecting
comparability, partially offset by inflationary pressures and a
significant increase in marketing investment. Excluding items
affecting comparability, Adjusted operating income increased 7.7%
to $116 million and, on a percent of
net sales basis, totaled 23.7%.
2023 Guidance
The 2023 guidance provided below is presented on a constant
currency, non-GAAP basis. The Company does not
provide reconciliations of such forward-looking non-GAAP
measures to GAAP measures, due to the inability to predict the
amount and timing of impacts outside of the Company's control on
certain items, such as non-cash gains or losses resulting from
mark-to-market adjustments of derivative instruments, among others,
which could be material.
On a constant currency basis, KDP now expects net sales growth
of 5% to 6% for 2023. The company's outlook for Adjusted diluted
EPS growth of 6% to 7% in 2023 remains unchanged.
Investor Contacts:
Jane Gelfand
T: 888-340-5287 / jane.gelfand@kdrp.com
Chethan Mallela
T: 888-340-5287 / chethan.mallela@kdrp.com
Media Contact:
Katie Gilroy
T: 781-418-3345 / katie.gilroy@kdrp.com
ABOUT KEURIG DR PEPPER
Keurig Dr Pepper (KDP) is a leading beverage company in
North America, with annual revenue
of more than $14 billion and
approximately 28,000 employees. KDP holds leadership positions in
liquid refreshment beverages, including soft drinks, specialty
coffee and tea, water, juice and juice drinks and mixers, and
markets the #1 single serve coffee brewing system in the U.S. and
Canada. The Company's portfolio of
more than 125 owned, licensed and partner brands is designed to
satisfy virtually any consumer need, any time, and includes
Keurig®, Dr Pepper®, Canada Dry®, Clamato®, CORE®, Green Mountain
Coffee Roasters®, Mott's®, Snapple®, and The Original Donut Shop®.
Through its powerful sales and distribution network, KDP can
deliver its portfolio of hot and cold beverages to nearly every
point of purchase for consumers. The Company's Drink Well. Do Good.
corporate responsibility platform is focused on the greatest
opportunities for impact in the environment, its supply chain, the
health and well-being of consumers and with its people and
communities. For more information, visit
www.keurigdrpepper.com.
FORWARD LOOKING STATEMENTS
Certain statements contained herein are "forward-looking
statements" within the meaning of applicable securities laws and
regulations. These forward-looking statements can generally be
identified by the use of words such as "outlook," "guidance,"
"anticipate," "expect," "believe," "could," "estimate," "feel,"
"forecast," "intend," "may," "plan," "potential," "project,"
"should," "target," "will," "would," and similar words.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. These statements are based on
the current expectations of our management, are not predictions of
actual performance, and actual results may differ materially.
Forward-looking statements are subject to a number of risks and
uncertainties, including the factors disclosed in our Annual Report
on Form 10-K and subsequent filings with the SEC. We are under no
obligation to update, modify or withdraw any forward-looking
statements, except as required by applicable law.
NON-GAAP FINANCIAL MEASURES
This release includes certain non-GAAP financial measures
including Adjusted gross profit, Adjusted operating income,
Adjusted net income, Adjusted diluted EPS, free cash flow and
financial measures presented on a constant currency basis, which
differ from results using U.S. Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures should be
considered as supplements to the GAAP reported measures, should not
be considered replacements for, or superior to, the GAAP measures
and may not be comparable to similarly named measures used by other
companies. Non-GAAP financial measures typically exclude certain
charges, including one-time costs that are not expected to occur
routinely in future periods. The Company uses non-GAAP financial
measures internally to focus management on performance excluding
these special charges to gauge our business operating performance.
Management believes this information is helpful to investors
because it increases transparency and assists investors in
understanding the underlying performance of the Company and in the
analysis of ongoing operating trends. Additionally, management
believes that non-GAAP financial measures are frequently used by
analysts and investors in their evaluation of companies, and their
continued inclusion provides consistency in financial reporting and
enables analysts and investors to perform meaningful comparisons of
past, present and future operating results. The most directly
comparable GAAP financial measures and reconciliations to non-GAAP
financial measures are set forth in the appendix to this release
and included in the Company's filings with the SEC.
To the extent that the Company provides guidance, it does so
only on a non-GAAP basis and does not provide reconciliations of
such forward-looking non-GAAP measures to GAAP due to the inability
to predict the amount and timing of impacts outside of the
Company's control on certain items, such as non-cash gains or
losses resulting from mark-to-market adjustments of derivative
instruments, among others, which could be material.
KEURIG DR
PEPPER INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED)
|
|
|
Second
Quarter
|
|
First Six
Months
|
(in millions,
except per share data)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
sales
|
$
3,789
|
|
$
3,554
|
|
$
7,142
|
|
$
6,632
|
Cost of
sales
|
1,748
|
|
1,778
|
|
3,357
|
|
3,206
|
Gross
profit
|
2,041
|
|
1,776
|
|
3,785
|
|
3,426
|
Selling, general and
administrative expenses
|
1,272
|
|
1,204
|
|
2,437
|
|
2,222
|
Gain on litigation
settlement
|
—
|
|
—
|
|
—
|
|
(299)
|
Other operating income,
net
|
—
|
|
—
|
|
(5)
|
|
(35)
|
Income from
operations
|
769
|
|
572
|
|
1,353
|
|
1,538
|
Interest
expense
|
172
|
|
175
|
|
195
|
|
363
|
Loss on early
extinguishment of debt
|
—
|
|
169
|
|
—
|
|
217
|
Gain on sale of equity
method investment
|
—
|
|
—
|
|
—
|
|
(50)
|
Impairment of
investments and note receivable
|
—
|
|
6
|
|
—
|
|
12
|
Other (income) expense,
net
|
(16)
|
|
9
|
|
(36)
|
|
18
|
Income before
provision for income taxes
|
613
|
|
213
|
|
1,194
|
|
978
|
Provision (benefit) for
income taxes
|
110
|
|
(5)
|
|
224
|
|
175
|
Net income including
non-controlling interest
|
503
|
|
218
|
|
970
|
|
803
|
Less: Net loss
attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
—
|
Net income
attributable to KDP
|
$
503
|
|
$
218
|
|
$
970
|
|
$
803
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
0.36
|
|
$
0.15
|
|
$
0.69
|
|
$
0.57
|
Diluted
|
0.36
|
|
0.15
|
|
0.69
|
|
0.56
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
1,400.3
|
|
1,417.5
|
|
1,403.2
|
|
1,417.8
|
Diluted
|
1,409.1
|
|
1,428.6
|
|
1,413.1
|
|
1,429.2
|
KEURIG DR
PEPPER INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
|
June
30,
|
|
December
31,
|
(in millions,
except share and per share data)
|
2023
|
|
2022
|
Assets
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
278
|
|
$
535
|
Trade accounts
receivable, net
|
1,311
|
|
1,484
|
Inventories
|
1,384
|
|
1,314
|
Prepaid expenses and
other current assets
|
597
|
|
471
|
Total current
assets
|
3,570
|
|
3,804
|
Property, plant and
equipment, net
|
2,489
|
|
2,491
|
Investments in
unconsolidated affiliates
|
1,019
|
|
1,000
|
Goodwill
|
20,194
|
|
20,072
|
Other intangible
assets, net
|
23,344
|
|
23,183
|
Other non-current
assets
|
1,153
|
|
1,252
|
Deferred tax
assets
|
32
|
|
35
|
Total
assets
|
$
51,801
|
|
$
51,837
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
4,601
|
|
5,206
|
Accrued
expenses
|
1,030
|
|
1,153
|
Structured
payables
|
126
|
|
137
|
Short-term borrowings
and current portion of long-term obligations
|
2,635
|
|
895
|
Other current
liabilities
|
664
|
|
685
|
Total current
liabilities
|
9,056
|
|
8,076
|
Long-term
obligations
|
9,934
|
|
11,072
|
Deferred tax
liabilities
|
5,736
|
|
5,739
|
Other non-current
liabilities
|
1,808
|
|
1,825
|
Total
liabilities
|
26,534
|
|
26,712
|
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, 1,396,909,564 and
1,408,394,293 shares issued and outstanding as of June 30, 2023 and
December 31, 2022, respectively
|
14
|
|
14
|
Additional paid-in
capital
|
21,009
|
|
21,444
|
Retained
earnings
|
3,948
|
|
3,539
|
Accumulated other
comprehensive income
|
297
|
|
129
|
Total stockholders'
equity
|
25,268
|
|
25,126
|
Non-controlling
interest
|
(1)
|
|
(1)
|
Total
equity
|
25,267
|
|
25,125
|
Total liabilities
and stockholders' equity
|
$
51,801
|
|
$
51,837
|
KEURIG DR
PEPPER INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
First Six
Months
|
(in
millions)
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
Net income attributable
to KDP
|
$
970
|
|
$
803
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
expense
|
201
|
|
205
|
Amortization of
intangibles
|
69
|
|
67
|
Other amortization
expense
|
91
|
|
86
|
Provision for sales
returns
|
26
|
|
25
|
Deferred income
taxes
|
(26)
|
|
(52)
|
Employee stock-based
compensation expense
|
57
|
|
12
|
Loss on early
extinguishment of debt
|
—
|
|
217
|
Gain on sale of equity
method investment
|
—
|
|
(50)
|
Gain on disposal of
property, plant and equipment
|
(2)
|
|
(33)
|
Unrealized (gain) loss
on foreign currency
|
(13)
|
|
2
|
Unrealized (gain) loss
on derivatives
|
(31)
|
|
187
|
Settlements of
interest rate contracts
|
—
|
|
125
|
Equity in (earnings)
loss of unconsolidated affiliates
|
(14)
|
|
5
|
Impairment on
investments and note receivable of unconsolidated
affiliates
|
—
|
|
12
|
Other, net
|
(9)
|
|
22
|
Changes in assets and
liabilities:
|
|
|
|
Trade accounts
receivable
|
162
|
|
(206)
|
Inventories
|
(61)
|
|
(346)
|
Income taxes
receivable and payables, net
|
(70)
|
|
(245)
|
Other current and
non-current assets
|
(147)
|
|
(340)
|
Accounts payable and
accrued expenses
|
(762)
|
|
680
|
Other current and
non-current liabilities
|
11
|
|
163
|
Net change in
operating assets and liabilities
|
(867)
|
|
(294)
|
Net cash provided by
operating activities
|
452
|
|
1,339
|
Investing
activities:
|
|
|
|
Proceeds from sale of
investment in unconsolidated affiliates
|
—
|
|
50
|
Purchases of property,
plant and equipment
|
(149)
|
|
(186)
|
Proceeds from sales of
property, plant and equipment
|
8
|
|
78
|
Purchases of
intangibles
|
(55)
|
|
(10)
|
Issuance of related
party note receivable
|
—
|
|
(18)
|
Investments in
unconsolidated affiliates
|
(8)
|
|
(48)
|
Other, net
|
1
|
|
3
|
Net cash (used in)
provided by investing activities
|
(203)
|
|
(131)
|
Financing
activities:
|
|
|
|
Proceeds from issuance
of Notes
|
—
|
|
3,000
|
Repayments of
Notes
|
—
|
|
(3,365)
|
Proceeds from issuance
of commercial paper
|
18,187
|
|
500
|
Repayments of
commercial paper
|
(17,598)
|
|
(649)
|
Proceeds from
structured payables
|
61
|
|
79
|
Repayments of
structured payables
|
(72)
|
|
(75)
|
Cash dividends
paid
|
(563)
|
|
(531)
|
Repurchases of common
stock
|
(457)
|
|
(88)
|
Tax withholdings
related to net share settlements
|
(32)
|
|
(8)
|
Payments on finance
leases
|
(49)
|
|
(41)
|
Other, net
|
—
|
|
(43)
|
Net cash used in
financing activities
|
(523)
|
|
(1,221)
|
Cash, cash
equivalents, and restricted cash and cash
equivalents:
|
|
|
|
Net change from
operating, investing and financing activities
|
(274)
|
|
(13)
|
Effect of exchange rate
changes
|
17
|
|
(1)
|
Beginning
balance
|
535
|
|
568
|
Ending
balance
|
$
278
|
|
$
554
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
SEGMENT INFORMATION
|
(UNAUDITED)
|
|
|
Second
Quarter
|
|
First Six
Months
|
(in
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
Sales
|
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
2,330
|
|
$
2,084
|
|
$
4,337
|
|
$
3,865
|
U.S. Coffee
|
970
|
|
1,029
|
|
1,901
|
|
1,972
|
International
|
489
|
|
441
|
|
904
|
|
795
|
Total net
sales
|
$
3,789
|
|
$
3,554
|
|
$
7,142
|
|
$
6,632
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
629
|
|
$
528
|
|
$
1,119
|
|
$
1,232
|
U.S. Coffee
|
250
|
|
295
|
|
482
|
|
550
|
International
|
112
|
|
98
|
|
192
|
|
162
|
Unallocated corporate
costs
|
(222)
|
|
(349)
|
|
(440)
|
|
(406)
|
Total income from
operations
|
$
769
|
|
$
572
|
|
$
1,353
|
|
$
1,538
|
KEURIG DR PEPPER INC.
RECONCILIATION
OF CERTAIN NON-GAAP INFORMATION
(UNAUDITED)
The company reports its financial results in accordance with
U.S. GAAP. However, management believes that certain non-GAAP
financial measures that reflect the way management evaluates the
business may provide investors with additional information
regarding the company's results, trends and ongoing performance on
a comparable basis.
Specifically, investors should consider the following with
respect to our financial results:
Adjusted: Defined as certain financial statement captions
and metrics adjusted for certain items affecting comparability.
Items affecting comparability: Defined as certain items
that are excluded for comparison to prior year periods, adjusted
for the tax impact as applicable. Tax impact is determined based
upon an approximate rate for each item. For each period, management
adjusts for (i) the unrealized mark-to-market impact of derivative
instruments not designated as hedges in accordance with U.S. GAAP
that do not have an offsetting risk reflected within the financial
results, as well as the unrealized mark-to-market impact of our
Vita Coco investment; (ii) the
amortization associated with definite-lived intangible assets;
(iii) the amortization of the deferred financing costs associated
with the DPS Merger; (iv) the amortization of the fair value
adjustment of the senior unsecured notes obtained as a result of
the DPS Merger; (v) stock compensation expense and the associated
windfall tax benefit attributable to the matching awards made to
employees who made an initial investment in KDP; (vi) non-cash
changes in deferred tax liabilities related to goodwill and other
intangible assets as a result of tax rate or apportionment changes;
and (vii) other certain items that are excluded for comparison
purposes to prior year periods.
For the second quarter and first six months of 2023, the other
certain items excluded for comparison purposes include (i)
productivity expenses and (ii) costs related to significant
non-routine legal matters, specifically the antitrust litigation.
Additionally, the non-cash changes in deferred tax liabilities
related to goodwill and other intangible assets included an
immaterial correction of an error during the second quarter of
2023 related to the valuation of the foreign deferred tax
liabilities related to goodwill and other intangible assets.
For the second quarter and first six months of 2022, the other
certain items excluded for comparison purposes include (i)
restructuring and integration expenses related to significant
business combinations; (ii) productivity expenses; (iii) costs
related to significant non-routine legal matters, specifically the
antitrust litigation; (iv) the loss on early extinguishment of debt
related to the redemption of debt; (v) incremental costs to our
operations related to risks associated with the COVID-19 pandemic,
which were incurred to either maintain the health and safety of our
front-line employees or temporarily increase compensation to such
employees to ensure essential operations continue during the
pandemic; (vi) the gain on the sale of our investment in BodyArmor
as a result of the settlement of the associated holdback liability;
(vii) the gain on the settlement of our prior litigation with
BodyArmor, excluding recoveries of previously incurred litigation
expenses which were included in our adjusted results; (viii) losses
recognized with respect to our equity method investment in Bedford
as a result of funding our share of their wind-down costs; (ix)
transaction costs for significant business combinations (completed
or abandoned); and (x) foundational projects, which are
transformative and non-recurring in nature.
Constant currency adjusted: Defined as certain financial
statement captions and metrics adjusted for certain items affecting
comparability, calculated on a constant currency basis by
converting our current period local currency financial results
using the prior period foreign currency exchange rates.
For the second quarter and first six months of 2023 and 2022,
the supplemental financial data set forth below includes
reconciliations of adjusted and constant currency adjusted
financial measures to the applicable financial measure presented in
the unaudited condensed consolidated financial statements for the
same period.
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP INFORMATION
|
(UNAUDITED)
|
|
|
Cost of
sales
|
|
Gross
profit
|
|
Gross
margin
|
|
Selling, general
and
administrative
expenses
|
|
Other
operating
income, net
|
|
Income
from
operations
|
|
Operating
margin
|
For the Second
Quarter of 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
1,748
|
|
$
2,041
|
|
53.9 %
|
|
$
1,272
|
|
$
—
|
|
$
769
|
|
20.3 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(9)
|
|
9
|
|
|
|
5
|
|
—
|
|
4
|
|
|
Amortization of
intangibles
|
—
|
|
—
|
|
|
|
(35)
|
|
—
|
|
35
|
|
|
Stock
compensation
|
—
|
|
—
|
|
|
|
(4)
|
|
—
|
|
4
|
|
|
Productivity
|
(26)
|
|
26
|
|
|
|
(32)
|
|
—
|
|
58
|
|
|
Non-routine legal
matters
|
—
|
|
—
|
|
|
|
(3)
|
|
—
|
|
3
|
|
|
Adjusted
|
$
1,713
|
|
$
2,076
|
|
54.8 %
|
|
$
1,203
|
|
$
—
|
|
$
873
|
|
23.0 %
|
Impact of foreign
currency
|
|
|
|
|
(0.1) %
|
|
|
|
|
|
|
|
— %
|
Constant currency
adjusted
|
|
|
|
|
54.7 %
|
|
|
|
|
|
|
|
23.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Second
Quarter of 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
1,778
|
|
$
1,776
|
|
50.0 %
|
|
$
1,204
|
|
$
—
|
|
$
572
|
|
16.1 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(138)
|
|
138
|
|
|
|
—
|
|
—
|
|
138
|
|
|
Amortization of
intangibles
|
—
|
|
—
|
|
|
|
(33)
|
|
—
|
|
33
|
|
|
Stock
compensation
|
—
|
|
—
|
|
|
|
(5)
|
|
—
|
|
5
|
|
|
Restructuring and
integration costs
|
—
|
|
—
|
|
|
|
(23)
|
|
1
|
|
22
|
|
|
Productivity
|
(28)
|
|
28
|
|
|
|
(24)
|
|
—
|
|
52
|
|
|
Non-routine legal
matters
|
—
|
|
—
|
|
|
|
(3)
|
|
—
|
|
3
|
|
|
COVID-19
|
(3)
|
|
3
|
|
|
|
(1)
|
|
—
|
|
4
|
|
|
Transaction
costs
|
—
|
|
—
|
|
|
|
(1)
|
|
—
|
|
1
|
|
|
Foundational
projects
|
—
|
|
—
|
|
|
|
(2)
|
|
—
|
|
2
|
|
|
Adjusted
|
$
1,609
|
|
$
1,945
|
|
54.7 %
|
|
$
1,112
|
|
$
1
|
|
$
832
|
|
23.4 %
|
|
Refer to page
A-8 for reconciliations of reported net sales to
constant currency net sales and adjusted income from operations to
constant currency adjusted income from operations.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP INFORMATION
|
(UNAUDITED)
|
|
|
Interest
expense
|
|
Loss on early
extinguishment
of debt
|
|
Impairment of
investments and
note receivable
|
|
Other
(income)
expense, net
|
|
Income before
provision for
income taxes
|
|
Provision
(benefit) for
income taxes
|
|
Effective
tax rate
|
|
Net income
attributable to
KDP
|
|
Diluted
earnings per
share
|
For the Second
Quarter of 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$ 172
|
|
$
—
|
|
$
—
|
|
$
(16)
|
|
$
613
|
|
$
110
|
|
17.9 %
|
|
$
503
|
|
$
0.36
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(53)
|
|
—
|
|
—
|
|
9
|
|
48
|
|
15
|
|
|
|
33
|
|
0.02
|
Amortization of
intangibles
|
—
|
|
—
|
|
—
|
|
—
|
|
35
|
|
6
|
|
|
|
29
|
|
0.02
|
Amortization of
deferred financing costs
|
(1)
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Amortization of fair
value debt adjustment
|
(5)
|
|
—
|
|
—
|
|
—
|
|
5
|
|
1
|
|
|
|
4
|
|
—
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Productivity
|
—
|
|
—
|
|
—
|
|
—
|
|
58
|
|
12
|
|
|
|
46
|
|
0.03
|
Non-routine legal
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
1
|
|
|
|
2
|
|
—
|
Change in deferred tax
liabilities related to
goodwill and other intangible assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25
|
|
|
|
(25)
|
|
(0.02)
|
Adjusted
|
$ 113
|
|
$
—
|
|
$
—
|
|
$
(7)
|
|
$
767
|
|
$
171
|
|
22.3 %
|
|
$
596
|
|
$
0.42
|
Impact of foreign
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.2) %
|
|
|
|
|
Constant currency
adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
22.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Second
Quarter of 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$ 175
|
|
$
169
|
|
$
6
|
|
$
9
|
|
$
213
|
|
$
(5)
|
|
(2.3) %
|
|
$
218
|
|
$
0.15
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(63)
|
|
—
|
|
—
|
|
1
|
|
200
|
|
49
|
|
|
|
151
|
|
0.11
|
Amortization of
intangibles
|
—
|
|
—
|
|
—
|
|
—
|
|
33
|
|
8
|
|
|
|
25
|
|
0.02
|
Amortization of
deferred financing costs
|
(1)
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Amortization of fair
value of debt adjustment
|
(4)
|
|
—
|
|
—
|
|
—
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
(2)
|
|
|
|
7
|
|
—
|
Restructuring and
integration costs
|
—
|
|
—
|
|
—
|
|
—
|
|
22
|
|
5
|
|
|
|
17
|
|
0.01
|
Productivity
|
—
|
|
—
|
|
—
|
|
—
|
|
52
|
|
10
|
|
|
|
42
|
|
0.03
|
Impairment of
investment
|
—
|
|
—
|
|
(6)
|
|
—
|
|
6
|
|
—
|
|
|
|
6
|
|
—
|
Loss on early
extinguishment of debt
|
—
|
|
(169)
|
|
—
|
|
—
|
|
169
|
|
43
|
|
|
|
126
|
|
0.09
|
Non-routine legal
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
1
|
|
|
|
2
|
|
—
|
COVID-19
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Transaction
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Foundational
projects
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
|
2
|
|
—
|
Change in deferred tax
liabilities related to
goodwill and other intangible assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
|
|
|
(50)
|
|
(0.03)
|
Adjusted
|
$ 107
|
|
$
—
|
|
$
—
|
|
$
10
|
|
$
715
|
|
$
161
|
|
22.5 %
|
|
$
554
|
|
$
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change -
adjusted
|
5.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.6 %
|
|
7.7 %
|
Impact of foreign
currency
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.6) %
|
|
— %
|
Change - constant
currency adjusted
|
5.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.0 %
|
|
7.7 %
|
|
Diluted earnings per common share may not foot due to
rounding.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP INFORMATION
|
(UNAUDITED)
|
|
(in
millions)
|
Reported
|
|
Items Affecting
Comparability
|
|
Adjusted
|
For the second
quarter of 2023
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
629
|
|
$
17
|
|
$
646
|
U.S. Coffee
|
250
|
|
42
|
|
292
|
International
|
112
|
|
4
|
|
116
|
Unallocated corporate
costs
|
(222)
|
|
41
|
|
(181)
|
Total income from
operations
|
$
769
|
|
$
104
|
|
$
873
|
|
|
|
|
|
|
For the second
quarter of 2022
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
528
|
|
$
19
|
|
$
547
|
U.S. Coffee
|
295
|
|
47
|
|
342
|
International
|
98
|
|
6
|
|
104
|
Unallocated corporate
costs
|
(349)
|
|
188
|
|
(161)
|
Total income from
operations
|
$
572
|
|
$
260
|
|
$
832
|
|
|
Reported
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
|
For the second
quarter of 2023
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
11.8 %
|
|
— %
|
|
11.8 %
|
U.S. Coffee
|
|
(5.7)
|
|
—
|
|
(5.7)
|
International
|
|
10.9
|
|
(3.9)
|
|
7.0
|
Total net
sales
|
|
6.6
|
|
(0.5)
|
|
6.1
|
|
|
Adjusted
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
Adjusted
|
For the second
quarter of 2023
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
18.1 %
|
|
— %
|
|
18.1 %
|
U.S. Coffee
|
|
(14.6)
|
|
—
|
|
(14.6)
|
International
|
|
11.5
|
|
(3.8)
|
|
7.7
|
Total income from
operations
|
|
4.9
|
|
(0.5)
|
|
4.4
|
|
|
Reported
|
|
Items Affecting
Comparability
|
|
Adjusted
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
Adjusted
|
For the second
quarter of 2023
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
27.0 %
|
|
0.7 %
|
|
27.7 %
|
|
— %
|
|
27.7 %
|
U.S. Coffee
|
|
25.8
|
|
4.3
|
|
30.1
|
|
—
|
|
30.1
|
International
|
|
22.9
|
|
0.8
|
|
23.7
|
|
—
|
|
23.7
|
Total operating
margin
|
|
20.3
|
|
2.7
|
|
23.0
|
|
—
|
|
23.0
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP INFORMATION
|
(UNAUDITED)
|
|
|
Cost of
sales
|
|
Gross
profit
|
|
Gross
margin
|
|
Selling, general
and administrative
expenses
|
|
Gain on
litigation
settlement
|
|
Other operating
income, net
|
|
Income from
operations
|
|
Operating
margin
|
For the First Six
Months of 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
3,357
|
|
$
3,785
|
|
53.0 %
|
|
$
2,437
|
|
$
—
|
|
$
(5)
|
|
$
1,353
|
|
18.9 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
5
|
|
(5)
|
|
|
|
(7)
|
|
—
|
|
—
|
|
2
|
|
|
Amortization of
intangibles
|
—
|
|
—
|
|
|
|
(69)
|
|
—
|
|
—
|
|
69
|
|
|
Stock
compensation
|
—
|
|
—
|
|
|
|
(9)
|
|
—
|
|
—
|
|
9
|
|
|
Productivity
|
(64)
|
|
64
|
|
|
|
(72)
|
|
—
|
|
—
|
|
136
|
|
|
Non-routine legal
matters
|
—
|
|
—
|
|
|
|
(3)
|
|
—
|
|
—
|
|
3
|
|
|
Adjusted
|
$
3,298
|
|
$
3,844
|
|
53.8 %
|
|
$
2,277
|
|
$
—
|
|
$
(5)
|
|
$
1,572
|
|
22.0 %
|
Impact of foreign
currency
|
|
|
|
|
— %
|
|
|
|
|
|
|
|
|
|
— %
|
Constant currency
adjusted
|
|
|
|
|
53.8 %
|
|
|
|
|
|
|
|
|
|
22.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the First Six
Months of 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
3,206
|
|
$
3,426
|
|
51.7 %
|
|
$
2,222
|
|
$
(299)
|
|
$
(35)
|
|
$
1,538
|
|
23.2 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(79)
|
|
79
|
|
|
|
26
|
|
—
|
|
—
|
|
53
|
|
|
Amortization of
intangibles
|
—
|
|
—
|
|
|
|
(67)
|
|
—
|
|
—
|
|
67
|
|
|
Stock
compensation
|
—
|
|
—
|
|
|
|
2
|
|
—
|
|
—
|
|
(2)
|
|
|
Restructuring and
integration costs
|
—
|
|
—
|
|
|
|
(56)
|
|
—
|
|
(2)
|
|
58
|
|
|
Productivity
|
(56)
|
|
56
|
|
|
|
(46)
|
|
—
|
|
—
|
|
102
|
|
|
Non-routine legal
matters
|
—
|
|
—
|
|
|
|
(7)
|
|
—
|
|
—
|
|
7
|
|
|
COVID-19
|
(7)
|
|
7
|
|
|
|
(2)
|
|
—
|
|
—
|
|
9
|
|
|
Gain on
litigation
|
—
|
|
—
|
|
|
|
—
|
|
271
|
|
—
|
|
(271)
|
|
|
Transaction
costs
|
—
|
|
—
|
|
|
|
(1)
|
|
—
|
|
—
|
|
1
|
|
|
Foundational
projects
|
—
|
|
—
|
|
|
|
(2)
|
|
—
|
|
—
|
|
2
|
|
|
Adjusted
|
$
3,064
|
|
$
3,568
|
|
53.8 %
|
|
$
2,069
|
|
$
(28)
|
|
$
(37)
|
|
$
1,564
|
|
23.6 %
|
|
Refer to page
A-11 for reconciliations of reported net sales to
constant currency net sales and adjusted income from operations to
constant currency adjusted income from operations.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN NON-GAAP INFORMATION
|
(UNAUDITED)
|
|
|
Interest
expense
|
|
Loss on early
extinguishment
of debt
|
|
Gain on sale of
equity method
investment
|
|
Impairment of
investments and
note receivable
|
|
Other
(income)
expense, net
|
|
Income before
provision for
income taxes
|
|
Provision
(benefit) for
income taxes
|
|
Effective
tax rate
|
|
Net income
attributable
to KDP
|
|
Diluted
earnings
per share
|
For the First Six
Months of 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$ 195
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(36)
|
|
$
1,194
|
|
$
224
|
|
18.8 %
|
|
$
970
|
|
$
0.69
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
40
|
|
—
|
|
—
|
|
—
|
|
18
|
|
(56)
|
|
(14)
|
|
|
|
(42)
|
|
(0.03)
|
Amortization of
intangibles
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
69
|
|
16
|
|
|
|
53
|
|
0.04
|
Amortization of
deferred financing costs
|
(1)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Amortization of fair
value debt adjustment
|
(9)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
2
|
|
|
|
7
|
|
0.01
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
3
|
|
|
|
6
|
|
—
|
Productivity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
136
|
|
33
|
|
|
|
103
|
|
0.07
|
Non-routine legal
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
1
|
|
|
|
2
|
|
—
|
Change in deferred tax
liabilities related to
goodwill and other intangible assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
25
|
|
|
|
(25)
|
|
(0.02)
|
Adjusted
|
$ 225
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
(18)
|
|
$
1,365
|
|
$
290
|
|
21.2 %
|
|
$ 1,075
|
|
$
0.76
|
Impact of foreign
currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.1 %
|
|
|
|
|
Constant currency
adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the First Six
Months of 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$ 363
|
|
$
217
|
|
$
(50)
|
|
$
12
|
|
$
18
|
|
$
978
|
|
$
175
|
|
17.9 %
|
|
$
803
|
|
$
0.56
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(134)
|
|
—
|
|
—
|
|
—
|
|
(2)
|
|
189
|
|
47
|
|
|
|
142
|
|
0.10
|
Amortization of
intangibles
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
67
|
|
17
|
|
|
|
50
|
|
0.04
|
Amortization of
deferred financing costs
|
(2)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
|
2
|
|
—
|
Amortization of fair
value of debt adjustment
|
(9)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
2
|
|
|
|
7
|
|
—
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2)
|
|
(3)
|
|
|
|
1
|
|
—
|
Restructuring and
integration costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
58
|
|
14
|
|
|
|
44
|
|
0.03
|
Productivity
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
102
|
|
22
|
|
|
|
80
|
|
0.06
|
Impairment of
investment
|
—
|
|
—
|
|
—
|
|
(12)
|
|
—
|
|
12
|
|
—
|
|
|
|
12
|
|
—
|
Loss on early
extinguishment of debt
|
—
|
|
(217)
|
|
—
|
|
—
|
|
—
|
|
217
|
|
54
|
|
|
|
163
|
|
0.12
|
Non-routine legal
matters
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7
|
|
2
|
|
|
|
5
|
|
—
|
COVID-19
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9
|
|
2
|
|
|
|
7
|
|
—
|
Gain on
litigation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(271)
|
|
(68)
|
|
|
|
(203)
|
|
(0.14)
|
Gain on sale of
equity-method investment
|
—
|
|
—
|
|
50
|
|
—
|
|
—
|
|
(50)
|
|
(12)
|
|
|
|
(38)
|
|
(0.03)
|
Transaction
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Foundational
projects
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
|
|
2
|
|
—
|
Change in deferred tax
liabilities related to
goodwill and other intangible assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
50
|
|
|
|
(50)
|
|
(0.03)
|
Adjusted
|
$ 218
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
16
|
|
$
1,330
|
|
$
302
|
|
22.7 %
|
|
$ 1,028
|
|
$
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change -
adjusted
|
3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.6 %
|
|
5.6 %
|
Impact of foreign
currency
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.5) %
|
|
— %
|
Change - Constant
currency adjusted
|
3.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1 %
|
|
5.6 %
|
|
Diluted earnings per common share may not foot due to
rounding.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
CERTAIN FINANCIAL MEASURES BY SEGMENT TO CONSTANT CURRENCY
ADJUSTED FINANCIAL MEASURES BY SEGMENT
|
(UNAUDITED)
|
|
(in
millions)
|
Reported
|
|
Items Affecting
Comparability
|
|
Adjusted
|
For the first six
months of 2023:
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
1,119
|
|
$
35
|
|
$
1,154
|
U.S. Coffee
|
482
|
|
95
|
|
577
|
International
|
192
|
|
8
|
|
200
|
Unallocated corporate
costs
|
(440)
|
|
81
|
|
(359)
|
Total income from
operations
|
$
1,353
|
|
$
219
|
|
$
1,572
|
|
|
|
|
|
|
For the first six
months of 2022:
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
$
1,232
|
|
$
(230)
|
|
$
1,002
|
U.S. Coffee
|
550
|
|
93
|
|
643
|
International
|
162
|
|
13
|
|
175
|
Unallocated corporate
costs
|
(406)
|
|
150
|
|
(256)
|
Total income from
operations
|
$
1,538
|
|
$
26
|
|
$
1,564
|
|
|
Reported
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
|
For the first six
months of 2023:
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
12.2 %
|
|
— %
|
|
12.2 %
|
U.S. Coffee
|
|
(3.6)
|
|
—
|
|
(3.6)
|
International
|
|
13.7
|
|
(2.4)
|
|
11.3
|
Total net
sales
|
|
7.7
|
|
(0.3)
|
|
7.4
|
|
|
Adjusted
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
Adjusted
|
For the first six
months of 2023:
|
|
|
|
|
|
|
Income from
operations
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
15.2 %
|
|
— %
|
|
15.2 %
|
U.S. Coffee
|
|
(10.3)
|
|
—
|
|
(10.3)
|
International
|
|
14.3
|
|
(2.3)
|
|
12.0
|
Total income from
operations
|
|
0.5
|
|
(0.2)
|
|
0.3
|
|
|
Reported
|
|
Items
Affecting
Comparability
|
|
Adjusted
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
Adjusted
|
For the first six
months of 2023:
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
25.8 %
|
|
0.8 %
|
|
26.6 %
|
|
— %
|
|
26.6 %
|
U.S. Coffee
|
|
25.4
|
|
5.0
|
|
30.4
|
|
—
|
|
30.4
|
International
|
|
21.2
|
|
0.9
|
|
22.1
|
|
—
|
|
22.1
|
Total operating
margin
|
|
18.9
|
|
3.1
|
|
22.0
|
|
—
|
|
22.0
|
|
Diluted earnings per common share may not foot due to
rounding.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
ADJUSTED EBITDA AND MANAGEMENT LEVERAGE RATIO
|
(UNAUDITED)
|
|
(in millions,
except for ratio)
|
|
ADJUSTED EBITDA
RECONCILIATION - LAST TWELVE MONTHS
|
|
Net income
attributable to KDP
|
$
1,603
|
Interest
expense
|
525
|
Provision for income
taxes
|
333
|
Other (income)
expense, net
|
(40)
|
Depreciation
expense
|
395
|
Other
amortization
|
177
|
Amortization of
intangibles
|
140
|
EBITDA
|
$
3,133
|
Items affecting
comparability:
|
|
Impairment of
intangible assets
|
$
477
|
Restructuring and
integration expenses
|
114
|
Productivity
|
225
|
Non-routine legal
matters
|
9
|
Stock
compensation
|
16
|
COVID-19
|
5
|
Foundational
projects
|
2
|
Mark to
market
|
99
|
Adjusted
EBITDA
|
$
4,080
|
|
|
|
June
30,
|
|
2023
|
Principal amounts
of:
|
|
Commercial paper
notes
|
$
988
|
Senior unsecured
notes
|
11,743
|
Total principal
amounts
|
12,731
|
Less: Cash and cash
equivalents
|
278
|
Total principal
amounts less cash and cash equivalents
|
$
12,453
|
|
|
June 30, 2023
Management Leverage Ratio
|
3.1
|
|
Diluted earnings per common share may not foot due to
rounding.
|
KEURIG DR
PEPPER INC.
|
RECONCILIATION OF
ADJUSTED EBITDA - LAST TWELVE MONTHS
|
(UNAUDITED)
|
|
(in
millions)
|
THIRD
QUARTER OF
2022
|
|
FOURTH
QUARTER OF
2022
|
|
FIRST SIX
MONTHS OF
2023
|
|
LAST TWELVE
MONTHS
|
Net income
attributable to KDP
|
$
180
|
|
$
453
|
|
$
970
|
|
$
1,603
|
Interest
expense
|
207
|
|
123
|
|
195
|
|
525
|
Provision for income
taxes
|
4
|
|
105
|
|
224
|
|
333
|
Other (income)
expense, net
|
4
|
|
(8)
|
|
(36)
|
|
(40)
|
Depreciation
expense
|
96
|
|
98
|
|
201
|
|
395
|
Other
amortization
|
43
|
|
43
|
|
91
|
|
177
|
Amortization of
intangibles
|
33
|
|
38
|
|
69
|
|
140
|
EBITDA
|
$
567
|
|
$
852
|
|
$
1,714
|
|
$
3,133
|
Items affecting
comparability:
|
|
|
|
|
|
|
|
Impairment of
intangible assets
|
$
311
|
|
$
166
|
|
$
—
|
|
$
477
|
Restructuring and
integration expenses
|
33
|
|
81
|
|
—
|
|
114
|
Productivity
|
50
|
|
64
|
|
111
|
|
225
|
Nonroutine legal
matters
|
2
|
|
4
|
|
3
|
|
9
|
Stock
compensation
|
5
|
|
2
|
|
9
|
|
16
|
COVID-19
|
5
|
|
—
|
|
—
|
|
5
|
Foundational
projects
|
1
|
|
1
|
|
—
|
|
2
|
Mark to
market
|
106
|
|
(9)
|
|
2
|
|
99
|
Adjusted
EBITDA
|
$
1,080
|
|
$
1,161
|
|
$
1,839
|
|
$
4,080
|
|
Diluted earnings per common share may not foot due to
rounding.
|
KEURIG DR PEPPER INC.
RECONCILIATION
OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH
FLOW
(UNAUDITED)
Free cash flow is defined as net cash provided by operating
activities adjusted for purchases of property, plant and equipment,
proceeds from sales of property, plant and equipment, and certain
items excluded for comparison to prior year periods. For the first
six months of 2023 and 2022, there were no certain items excluded
for comparison to prior year periods.
|
|
First Six
Months
|
(in
millions)
|
|
2023
|
|
2022
|
Net cash provided by
operating activities
|
|
$
452
|
|
$
1,339
|
Purchases of property,
plant and equipment
|
|
(149)
|
|
(186)
|
Proceeds from sales of
property, plant and equipment
|
|
8
|
|
78
|
Free Cash
Flow
|
|
$
311
|
|
$
1,231
|
|
Diluted earnings per common share may not foot due to
rounding.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/keurig-dr-pepper-reports-q2-2023-results-raises-full-year-net-sales-outlook-and-reaffirms-eps-guidance-301886846.html
SOURCE Keurig Dr Pepper Inc.