AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Dr Pepper's sustained share gains and number-two position demonstrate brand differentiation, reinforced by contractual restrictions on imitative products. Distribution supports the franchise without proving comparative cost superiority.
durability · 3/4 · Nine consecutive years of reported Dr Pepper share expansion support demonstrated persistence. Multi-year coffee partnerships add contractual continuity, but distributor exit rights and geographic trademark fragmentation limit breadth and certainty.
customer dependency · 2/4 · Brand preference and multi-year partner agreements support recurring demand indirectly. Coffee pod declines attributed to elasticity and distributor termination rights contradict strong customer dependence.
erosion resilience · 2/4 · Dr Pepper share gains and refreshment-beverage growth demonstrate resilience, while realized coffee demand and profit declines reveal uneven protection. Retail bargaining and integration risks are vulnerabilities, not assumed realized moat failures.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Positive price realization is demonstrated over multiple years, including 7.0% in 2023 and 1.2% in 2024. However, coffee price increases coincided with falling volume and eventually declining sales, making overall pricing power mixed.
retention · 2/4 · Assessed from indirect demand evidence: Dr Pepper's share record and 2024 consolidated volume/mix growth support consumer persistence, while 2025 and early-2026 pod declines show price sensitivity. No retention rate is inferred.
margin resilience · 2/4 · The 2023 gross-margin improvement and first-half 2026 International operating-income growth show some ability to absorb costs. Coffee operating-income declines in 2025 and early 2026 demonstrate incomplete protection despite higher pricing.
contractual freedom · 1/4 · Actual customer incentives and distributor termination rights establish commercial concessions and asymmetric contractual dependence. Disclosed pass-through limitations further constrain pricing discretion; no broad contractual right to recover input inflation is established.
Predictability97
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 2.74
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 5.08
Financial strength9
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 15.44
- interestCoverageGrade
- 21.38
- currentRatioGrade
- 0.00
- Debt / FCF (x)
- 10.72
- Net debt / operating income (x)
- 4.23
- Current ratio (x)
- 0.64
- cashInterestPaid
- 594.00
- cashInterestCoverage
- 3.35
Capital allocation76
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 8.03
- 3-year average dilution (%)
- -1.40
- 3-year average SBC / revenue (%)
- 0.67
- cashConversionGrade
- 71.30
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual capital spending and completed financing demonstrate assessable capital deployment. The large debt and preferred issuance, sale of a JV minority interest and prior goodwill impairment temper confidence. Successful GHOST expansion is positive, but JDE Peet's returns remain unproven.
incentive alignment · 3/4 · Existing ownership and holding requirements, multi-year equity vesting, below-target actual incentive payouts and anti-hedging rules provide strong demonstrated alignment mechanisms. Retirement of the investment program and time-based transformation awards limit performance sensitivity; unvested awards are not treated as earned.
execution · 2/4 · Dr Pepper's share gains, reported GHOST integration and acquisition completion demonstrate achievements. Coffee volume and profit declines make execution mixed. Assessment uses operating outcomes indirectly; acquisition completion does not prove integration success, and inventory-step-up costs complicate early acquired-business results.
governance · 3/4 · Disclosed independent directors, an independent Chair, an entirely independent Audit Committee and restrictions on executive hedging establish strong oversight structures. These are actual governance disclosures, although they do not prove exceptional oversight effectiveness or justify assuming approval of proposed plan terms.
Evidence
As consumer-obsessed brand builders, we launched industry-leading innovation with Dr Pepper Blackberry, which contributed to our ninth consecutive year of market share expansion, while Dr Pepper maintained its position as the number two soda in the U.S.
Proxy statement / Strong Performance in 2025 / Dr Pepper market share · Filed 24/04/2026
These agreements prohibit bottlers and distributors from selling the licensed products outside their exclusive territory and from selling any imitative products in that territory.
Business / bottling and distribution territorial and imitative-product restrictions · Filed 25/02/2025
In our DSD network, we have strategically located distribution capabilities that enable us to better align our operations with our customers and sales channels, ensure our products are available to meet consumer demand, reduce transportation costs, and have greater control over the timing and coordination of new product launches.
Business / DSD route-to-market capabilities · Filed 24/02/2026
Our primary competitors include Coca-Cola, PepsiCo, Starbucks Corporation, The J.M.
Business / named primary competitors · Filed 25/02/2025
Net sales increased 11.9% to $10,439 million for the year ended December 31, 2025, led by volume / mix growth, including a benefit from the acquisition of GHOST, as well as higher net price realization.
MD&A / 2025 U.S. Refreshment Beverages net sales · Filed 24/02/2026
The channels in which we sell our products, including retailers, grocery, mass merchandise, club, e-commerce, and other retail channels, are experiencing continued consolidation of ownership and purchasing power, resulting in large retailers or buying groups with increased purchasing power and leverage in negotiations, which impact our ability to compete.
Risk factors / retailer consolidation and purchasing leverage · Filed 10/08/2026
In most cases, they are able to terminate their bottling and distribution arrangements with us without cause.
Risk factors / bottler and distributor termination rights · Filed 10/08/2026
For example, the Dr Pepper trademark and formula is owned by Coca-Cola in some countries outside North America.
Risk factors / geographic ownership of Dr Pepper trademark and formula · Filed 10/08/2026
K-Cup pod volume decreased 6.8%, reflecting price elasticity impacts and retailer inventory adjustments.
MD&A / first-quarter 2026 U.S. Coffee pod volume · Filed 23/04/2026
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.
Forward-looking statements / acquisition financing, integration and separation risks · Filed 10/08/2026
Consumers’ preferences continually evolve due to a variety of factors, including changing demographics of the population, social trends, changes in consumer lifestyles and consumption patterns, including from the use of weight loss drugs, concerns or perceptions regarding the health effects or environmental impact of our products or packaging, concerns regarding the location of origin or source of ingredients and products, changes in consumers' spending habits, negative publicity, economic downturn, or other factors.
Risk factors / evolving consumer preferences · Filed 25/02/2025
This performance reflected favorable net price realization of 7.0% and favorable FX translation of 0.5%, partially offset by unfavorable volume/mix of 2.1%.
MD&A / 2023 consolidated net price realization and volume/mix · Filed 22/02/2024
This performance reflected volume/mix growth of 2.7% and favorable net price realization of 1.2%, slightly offset by unfavorable impacts from FX translation of 0.3%.
MD&A / 2024 consolidated net price realization and volume/mix · Filed 25/02/2025
K-Cup pod volume decreased 4.8%, reflecting price elasticity impacts.
MD&A / 2025 U.S. Coffee pod volume and price elasticity · Filed 24/02/2026
Net sales increased 0.6% to $3,990 million for the year ended December 31, 2025, driven by higher net price realization, partially offset by unfavorable volume / mix.
MD&A / 2025 U.S. Coffee net sales and pricing · Filed 24/02/2026
Income from operations decreased 10.8% to $962 million for the year ended December 31, 2025, driven by a net unfavorable change in ingredients, materials, and productivity, inclusive of tariffs (22 percentage points), partially offset by the benefit of net sales growth (11 percentage points).
MD&A / 2025 U.S. Coffee operating income and input costs · Filed 24/02/2026
Net sales decreased 2.3% to $857 million for the first quarter of 2026, as higher net price realization was more than offset by unfavorable volume / mix.
MD&A / first-quarter 2026 U.S. Coffee net sales · Filed 23/04/2026
Income from operations decreased 20.8% to $160 million for the first quarter of 2026, driven by a net unfavorable impact from changes in ingredients, materials, and productivity, inclusive of tariffs (28 percentage points), the volume / mix decline (20 percentage points) and increased marketing expenses (3 percentage points), partially offset by the benefit of higher net price realization (26 percentage points).
MD&A / first-quarter 2026 U.S. Coffee operating-income drivers · Filed 23/04/2026
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.
MD&A / first-half 2026 International operating income, pricing and taxes · Filed 10/08/2026
Gross margin increased 240 bps versus the prior year to 54.5%.
MD&A / 2023 consolidated gross-margin change · Filed 22/02/2024
These incentives and discounts, which are recorded as a reduction of revenue, include cash discounts, price allowances, volume-based rebates, product placement fees, and other financial support for items such as trade promotions, displays, new products, consumer incentives, and advertising assistance.
Accounting policies / revenue reductions for customer incentives and discounts · Filed 24/02/2026
We may need to increase support for our brands in certain territories to maintain our route-to-market and may not be able to pass price increases through to third-party bottlers and distributors.
Risk factors / limitations on price pass-through to bottlers and distributors · Filed 10/08/2026
We have differentiated ourselves and the Keurig brand through our ability to create and sustain partnerships with other leading coffee, tea, and beverage brand companies through multi-year licensing and manufacturing agreements that best suit each brand's interests and strengths.
Business / multi-year coffee licensing and manufacturing agreements · Filed 25/02/2025
In addition, some of our production processes are not proprietary, and competitors may be able to duplicate them, which could harm our competitive position.
Risk factors / nonproprietary production processes · Filed 10/08/2026
on May 1, 2026 JDE Peet's Acquisition The acquisition of JDE Peet's on April 1, 2026 JDE Peet's Acquisition Agreement The merger protocol between KDP and JDE Peet's, whereby KDP agreed to commence a tender offer to acquire all of the issued ordinary shares, excluding ordinary shares held in treasury, of JDE Peet's JDE Peet's Notes Collectively, the notes issued by JDE Peet's JV Committee The committee managing the business of the Pod Manufacturing JV JV Investment The minority investment made by the JV Investor Partner into the Pod Manufacturing JV JV Investor Partner The holding company through which the JV Investors contributed cash to the Pod Manufacturing JV JV Investors Certain funds or accounts managed, advised, or sub-advised by each of Apollo Capital Management, Inc., KKR & Co.
Master glossary / April 1, 2026 acquisition completion · Filed 10/08/2026
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.
Acquisition note / completed $3.6 billion term-loan financing · Filed 10/08/2026
•Senior Unsecured Notes of approximately $6 billion.
Acquisition note / approximately $6 billion senior unsecured notes · Filed 10/08/2026
•Issuance of Convertible Preferred Stock of $4.5 billion.
Acquisition note / $4.5 billion convertible preferred issuance · Filed 10/08/2026
We contributed the Coffee Production Assets, as well as certain of our related coffee assets (including sales and distribution) in Canada to the Pod Manufacturing JV, and the JV Investors contributed $4 billion in cash through the JV Investor Partner, in exchange for a 49% interest in the Pod Manufacturing JV.
Pod Manufacturing JV / assets contributed and 49% interest exchanged for cash · Filed 23/04/2026
Impairment of goodwill in the prior year reflected a non-cash impairment charge of $306 million within the U.S.
MD&A / prior-year $306 million goodwill impairment · Filed 24/02/2026
Purchases of property, plant, and equipment were $116 million and $120 million for the first quarter of 2026 and 2025, respectively.
Capital resources / actual first-quarter property, plant and equipment purchases · Filed 23/04/2026
We successfully integrated the recently acquired GHOST business to build out our Energy portfolio – a high growth, on-trend category in which we’ve gone from a less than 1% share a few years ago to approximately 8% today.
Proxy statement / GHOST integration and energy-category share · Filed 24/04/2026
Element Description Objective Base Salary Fixed cash paid regularly during the year See page 29 for more information To attract and retain highly qualified executives by offering salaries that are competitive with market opportunities and that reflect each executive’s position, role, responsibility and experience Short-Term Incentive Plan Variable performance-based cash payment earned upon achievement of annual performance goals, paid during the first quarter of the subsequent year See page 29 for more information To motivate and reward executives for meeting challenging, objective performance goals across three categories: growth, profit and cash Annual Long-Term Incentive Plan Awards Time-based restricted stock units (“RSUs”) that vest over five years, or, for grants in 2025 and beyond, four years Beginning in 2025, performance-based restricted stock units (“PSUs”) that cliff vest after three years based on achievement of performance goals See page 31 for more information To reward performance over the longer term by encouraging focus on the long-term value of our stock while discouraging excessive risk taking that overemphasizes short-term and non-sustainable performance Elite Investment Program Required purchases of significant levels of KDP common stock coupled with a one-for-one matching award of RSUs (“Matching RSUs”) that generally cliff vest in five years This program has been retired beginning in November 2025 See page 32 for more information To directly align the interests of executives with stockholders by requiring significant personal investment in the Company over an extended period of time Competitive Pay Tied Closely to Long-Term Performance To retain high-quality talent to drive KDP’s success, and to align the interests of our NEOs with our stockholders, a significant portion of executive compensation is tied to Company performance in the form of annual cash incentives and equity awards and, through 2025, required participation in our Elite Investment Program.
Compensation discussion / existing incentive structure and retirement of Elite Investment Program · Filed 24/04/2026
All NEOs and other senior executives are subject to a stock ownership requirement, and through 2025, were obligated to participate in the Elite Investment Program, which requires substantial investment in our Company and maintaining that entire investment for at least five years until associated Matching RSUs fully vest.
Compensation governance / executive stock-ownership and holding requirements · Filed 24/04/2026
NEO Target 2025 STIP Payouts ($) Actual 2025 STIP Payout ($) Timothy Cofer(1) 1,999,110 1,719,234 Anthony DiSilvestro(2) 101,370 87,178 Eric Gorli(1) 554,023 487,541 Roger Johnson 560,000 481,600 Anthony Shoemaker(1) 545,479 469,112 Robert Gamgort(2) 312,329 268,603 Sudhanshu Priyadarshi(1) 951,671 818,437 (1) Reflects proration for base salary and STIP target changes during 2025.
Compensation discussion / actual 2025 incentive payouts versus targets · Filed 24/04/2026
To align Mr. Cofer’s interests with stockholders’ long-term interests over a transformational period for the Company, the Transformation Incentive Award vests over a five-year period: 60% on the third anniversary of the grant date and 20% on each of the fourth and fifth anniversaries.
Compensation discussion / granted Transformation Incentive Award vesting schedule · Filed 24/04/2026
Based on these standards, the Board has determined that the following directors are independent: Oray Boston, Brian Driscoll, Juliette Hickman, William Newlands, Pamela Patsley, Debra Sandler, Robert Singer, Amie Thuener, Michael Van de Ven and Lawson Whiting.
Director independence / Board independence determinations · Filed 24/04/2026
Patsley’s role as Chair also includes promoting the independence of the Board and assisting in annual Board self-evaluations.
Board leadership / independent Chair responsibilities · Filed 24/04/2026
2026 PROXY STATEMENT 51 Table of Contents Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee, which consists entirely of independent directors, is directly responsible for the appointment, compensation, retention, and oversight of the work of KDP’s independent registered public accounting firm.
Audit oversight / independent Audit Committee responsibilities · Filed 24/04/2026
Under our Insider Trading Policy, all employees and members of the Board are prohibited from engaging in any speculative transactions in KDP securities, including engaging in short sales, transactions involving put options, call options or other derivative securities, or any other forms of hedging transactions, such as collars or forward sale contracts.
Insider Trading Policy / prohibition on hedging and speculative transactions · Filed 24/04/2026
This Plan is effective June 16, 2026 (the “Effective Date”), subject to approval by the shareholders of the Company.
Proposed 2026 Omnibus Incentive Plan / effectiveness conditional on shareholder approval · Filed 24/04/2026
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.
MD&A / acquired coffee operating loss includes inventory fair-value step-up · Filed 10/08/2026
