Tim Cofer Appointed CEO & Board Member
Effective April 26; Bob Gamgort to Serve as Executive
Chairman
Following Strong Q1, Company Continues to Expect
On-Algorithm 2024 Net Sales and Adjusted EPS Growth
BURLINGTON, Mass. and FRISCO, Texas, April 25,
2024 /PRNewswire/ -- Keurig Dr Pepper Inc.
(NASDAQ: KDP) today reported results for the first quarter of 2024,
reaffirmed its full year guidance, and announced the completion of
its CEO succession process.
|
|
Reported GAAP Basis
|
|
Adjusted Basis1
|
|
|
Q1
|
|
|
Q1
|
Net Sales
|
|
$3.47 bn
|
|
|
$3.47 bn
|
% vs prior year
|
|
3.4 %
|
|
|
2.8 %
|
Diluted EPS
|
|
$0.33
|
|
|
$0.38
|
% vs prior year
|
|
— %
|
|
|
11.8 %
|
Commenting on this final step in the CEO transition, which began
in Fall 2023, Chairman and CEO Bob
Gamgort stated, "It has been a privilege to help establish
Keurig Dr Pepper into the formidable company it is today, and I
look forward to supporting its future growth as Executive Chairman.
As KDP enters its next phase, Tim and his leadership team are
activating an exciting, evolved strategy that I am confident will
extend our track record of success and continue to differentiate
KDP within the beverage industry."
Incoming CEO Tim Cofer added, "I
am honored to lead the next chapter of value creation as CEO of
Keurig Dr Pepper and excited to partner with Bob, our Board, and
all 28,000 colleagues to unlock our full potential as a beverage
industry leader. We have a unique and competitively advantaged
business, with a significant growth opportunity that we intend to
realize through our evolved strategy. I'm pleased with our strong
first quarter results, which reflect consistent execution across
the organization and demonstrate the health of our business. This
performance underscores our confidence in our 2024 outlook, which
is in-line with our long-term financial algorithm."
First Quarter Consolidated Results
Net sales for the first quarter increased 3.4% to
$3.5 billion. On a constant currency
basis, net sales advanced 2.8%, driven by net price realization of
3.1%, partly offset by lower volume/mix of 0.3%.
GAAP operating income increased 31.0% to $765 million. The growth was driven by strong
operating momentum, aided by a favorable year-over-year impact of
items affecting comparability.
Adjusted operating income increased 17.5% to
$825 million and totaled 23.8% as a
percent of net sales. Adjusted operating income growth was driven
by 9.7% Adjusted gross profit growth, translating to 350 basis
points of Adjusted gross margin expansion. Adjusted operating
income growth reflected higher net price realization and net
productivity, partly offset by higher SG&A costs, including
increased marketing investment, and the impact of the modest
volume/mix decline.
GAAP net income for the quarter decreased 2.8% to
$454 million, or $0.33 per diluted share. This performance
primarily reflected an unfavorable year-over-year impact of items
affecting comparability, partly offset by strong operating
momentum.
Adjusted net income for the quarter advanced
10.0% to $530 million, and Adjusted
diluted EPS increased 11.8% to $0.38.
The Adjusted diluted EPS growth was driven by the Adjusted
operating income growth and a lower share count, partly offset by a
higher non-GAAP tax rate and higher non-GAAP interest expense.
Operating cash flow for the first quarter was
$85 million and free cash flow
totaled $(73) million. Free cash flow
reflected carryover impacts of the Company's strategic reduction in
supplier financing during 2023, as well as front-loaded timing in
capital expenditures in 2024.
First Quarter Segment Results
U.S. Refreshment Beverages
Net sales for the first quarter increased 4.3% to
$2.1 billion, driven by net price
realization of 5.6%, partly offset by a decline in volume/mix of
1.3%. This performance reflected higher pricing compared to prior
year, continued manageable elasticities across most categories, and
the contribution from the Company's recently commenced Electrolit
partnership.
GAAP operating income increased 25.5% to
$615 million. Adjusted operating
income increased 22.4% to $622
million and totaled 29.7% as a percent of net sales, driven
by higher net price realization, net productivity, and an earned C4
performance incentive during the first quarter, partly offset by
lower volume/mix and higher SG&A costs, including increased
marketing investment.
U.S. Coffee
Net sales for the first quarter decreased 2.1% to
$0.9 billion, driven by a net price
decline of 1.8% and a modest volume/mix decline of 0.3%.
K-Cup® Pod shipments declined 1.1%, strengthening
on a sequential basis, reflecting improving market share trends
across the Company's owned & licensed portfolio.
Brewer shipments totaled 10.0 million for the
twelve months ending March 31, 2024,
declining 1.9% year-over-year. In the quarter, brewer shipments
grew strongly, reflecting Keurig market share momentum and timing
benefits.
GAAP operating income increased 6.9% to
$248 million, primarily reflecting a
favorable year-over-year impact of items affecting
comparability.
Adjusted operating income increased 1.4% to
$289 million, primarily driven by net
productivity, which more than offset the impacts of targeted price
reductions and increased marketing investment. Adjusted operating
income margin totaled 31.7% as a percent of net sales and expanded
110 basis points versus the prior year.
International
Net sales for the first quarter increased 11.8%
to $0.5 billion. On a constant
currency basis, net sales advanced 7.0%, driven by volume/mix
growth of 4.8% and net price realization of 2.2%. This strong
performance reflected continued momentum across markets.
GAAP operating income increased 40.0% to
$112 million, aided by favorable
year-over-year impacts from items affecting comparability and
currency translation.
Adjusted operating income increased 25.0% to
$109 million and totaled 23.5% as a
percent of net sales, driven by net sales growth and net
productivity, partially offset by increased marketing
investment.
2024 Guidance
The 2024 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.
KDP reaffirmed its fiscal 2024 guidance for
constant currency net sales growth in a mid-single-digit range and
Adjusted diluted EPS growth in a high-single-digit range.
________________________________________
|
1 Adjusted
financial metrics presented in this release are non-GAAP, excluding
items affecting comparability 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.
|
Investor Contacts:
Investor Relations
T: 888-340-5287 / IR@kdrp.com
Media Contact:
Katie Gilroy
T: 781-418-3345 / katie.gilroy@kdrp.com
ABOUT KEURIG DR PEPPER
Keurig Dr Pepper (Nasdaq: KDP) is a leading
beverage company in North America,
with a portfolio of more than 125 owned, licensed and partner
brands and powerful distribution capabilities to provide a beverage
for every need, anytime, anywhere. With annual revenue of
approximately $15 billion, we hold
leadership positions in beverage categories including soft drinks,
coffee, tea, water, juice and mixers, and have the #1 single serve
coffee brewing system in the U.S. and Canada. Our innovative partnership model
builds emerging growth platforms in categories such as premium
coffee, energy, sports hydration and ready-to-drink coffee. Our
brands include Keurig®, Dr Pepper®, Canada Dry®, Mott's®, A&W®,
Snapple®, Peñafiel®, 7UP®, Green Mountain Coffee Roasters®,
Clamato®, Core Hydration® and The Original Donut Shop®. Driven by a
purpose to Drink Well. Do Good., our 28,000 employees aim to
enhance the experience of every beverage occasion and to make a
positive impact for people, communities and the planet. For more
information, visit www.keurigdrpepper.com and follow us on
LinkedIn.
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, which differ from results using U.S. Generally Accepted
Accounting Principles (GAAP). These non-GAAP financial measures
should be considered as supplements to and should not be considered
replacements for, or superior to, the GAAP measures. These measures
may differ from similarly titled non-GAAP financial measures
presented by other companies, and other companies may not define
the non-GAAP financial measure in the same way. Non-GAAP financial
measures typically exclude certain charges, including one-time
costs that are not expected to occur routinely in future periods,
described by the Company as "items affecting comparability". Refer
to page A-5 for the Company's description of items affecting
comparability for each period presented. The Company uses non-GAAP
financial measures to evaluate our operating and financial
performance and to compare such performance to that of prior
periods and to the performance of our competitors. Additionally, we
use non-GAAP financial measures in making operational and financial
decisions and in our budgeting and planning process. We believe
that providing non-GAAP financial measures to investors helps
investors evaluate our operating performance, profitability and
business trends in a way that is consistent with how management
evaluates such performance.
Adjusted gross profit. Adjusted gross
profit is defined as Net sales less Cost of sales, as adjusted for
items affecting comparability as described on page A-5. Management
believes that Adjusted gross profit is useful for investors in
evaluating the Company's operating results and understanding the
Company's operating trends by adjusting certain items that can vary
significantly depending on specific underlying transactions or
events, thereby affecting comparability.
Adjusted operating income. Adjusted
operating income is defined as Income from operations, as adjusted
for items affecting comparability as described on page A-5.
Management believes that Adjusted operating income is useful for
investors in evaluating the Company's operating results and
understanding the Company's operating trends by adjusting certain
items that can vary significantly depending on specific underlying
transactions or events, thereby affecting comparability.
Adjusted net income attributable to KDP.
Adjusted net income attributable to KDP is defined as Net income
attributable to KDP, as adjusted for items affecting comparability
as described on page A-5. Management believes that Adjusted net
income is useful for investors in evaluating the Company's
operating results and understanding the Company's operating trends
by adjusting certain items that can vary significantly depending on
specific underlying transactions or events, thereby affecting
comparability.
Adjusted diluted EPS. Adjusted diluted EPS
is defined as Diluted EPS, as adjusted for items affecting
comparability as described on page A-5. Management believes that
Adjusted diluted EPS is useful for investors in providing
period-to-period comparisons of the results of our operations since
it adjusts for certain items affecting overall comparability.
Adjusted gross margin. Adjusted gross
margin is defined as Adjusted gross profit divided by Net sales.
Management believes that Adjusted gross margin is useful for
investors as supplemental measures to evaluate our operating
performance and ability to manage ongoing costs.
Adjusted operating margin. Adjusted
operating margin is defined as Adjusted Income from operations
divided by Net sales. Management believes that Adjusted operating
margin is useful for investors as supplemental measures to evaluate
our operating performance and ability to manage ongoing costs.
Adjusted interest expense. Adjusted
interest expense is defined as Interest expense, net, as adjusted
for items affecting comparability as described on page A-5.
Management believes that Adjusted interest expense is useful for
investors in evaluating our performance and establishing
expectations for the impacts of interest expenses.
Adjusted EBITDA. Adjusted EBITDA is
defined as EBITDA, as adjusted for items affecting comparability as
described on page A-5. EBITDA is defined as Net income attributable
to KDP as adjusted for interest expense, net; provision for income
taxes; depreciation expense; amortization of intangibles; and other
amortization. Management believes that Adjusted EBITDA is useful
for investors in evaluating the Company's operating results and
understanding the Company's operating trends by adjusting certain
items that can vary significantly depending on specific underlying
transactions or events, thereby affecting comparability.
Management leverage ratio. Management
leverage ratio is defined as KDP's total principal amounts of debt
less cash and cash equivalents, divided by Adjusted EBITDA.
Management believes that the Management leverage ratio is useful
for investors in evaluating the Company's liquidity and assessing
the Company's ability to meet its financial obligations.
Free cash flow. 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. Management uses this measure to evaluate the
company's performance and make resource allocation decisions.
Financial measures presented on a constant
currency basis. 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. Because our reporting currency is
the U.S. Dollar, the value of financial measures presented in U.S.
Dollar will be affected by changes in currency exchange rates.
Therefore, we present certain financial measures on a constant
currency basis for greater comparability.
KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
First
Quarter
|
(in millions,
except per share data)
|
2024
|
|
2023
|
Net
sales
|
$
3,468
|
|
$
3,353
|
Cost of
sales
|
1,528
|
|
1,609
|
Gross
profit
|
1,940
|
|
1,744
|
Selling, general, and
administrative expenses
|
1,176
|
|
1,165
|
Other operating income,
net
|
(1)
|
|
(5)
|
Income from
operations
|
765
|
|
584
|
Interest expense,
net
|
178
|
|
23
|
Other income,
net
|
(7)
|
|
(20)
|
Income before
provision for income taxes
|
594
|
|
581
|
Provision for income
taxes
|
140
|
|
114
|
Net
income
|
$
454
|
|
$
467
|
|
|
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
0.33
|
|
$
0.33
|
Diluted
|
0.33
|
|
0.33
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
1,380.7
|
|
1,406.2
|
Diluted
|
1,387.7
|
|
1,417.0
|
KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
|
|
|
March
31,
|
|
December
31,
|
(in millions,
except share and per share data)
|
2024
|
|
2023
|
Assets
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
317
|
|
$
267
|
Trade accounts
receivable, net
|
1,311
|
|
1,368
|
Inventories
|
1,204
|
|
1,142
|
Prepaid expenses and
other current assets
|
735
|
|
598
|
Total current
assets
|
3,567
|
|
3,375
|
Property, plant and
equipment, net
|
2,695
|
|
2,699
|
Investments in
unconsolidated affiliates
|
1,438
|
|
1,387
|
Goodwill
|
20,163
|
|
20,202
|
Other intangible
assets, net
|
23,251
|
|
23,287
|
Other non-current
assets
|
1,128
|
|
1,149
|
Deferred tax
assets
|
44
|
|
31
|
Total
assets
|
$
52,286
|
|
$
52,130
|
Liabilities and
Stockholders' Equity
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
3,187
|
|
3,597
|
Accrued
expenses
|
1,169
|
|
1,242
|
Structured
payables
|
111
|
|
117
|
Short-term borrowings
and current portion of long-term obligations
|
1,908
|
|
3,246
|
Other current
liabilities
|
629
|
|
714
|
Total current
liabilities
|
7,004
|
|
8,916
|
Long-term
obligations
|
12,929
|
|
9,945
|
Deferred tax
liabilities
|
5,784
|
|
5,760
|
Other non-current
liabilities
|
1,916
|
|
1,833
|
Total
liabilities
|
27,633
|
|
26,454
|
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,
1,355,571,438 and 1,390,446,043 shares issued and outstanding as of
March
31, 2024 and December 31, 2023, respectively
|
14
|
|
14
|
Additional paid-in
capital
|
19,661
|
|
20,788
|
Retained
earnings
|
4,721
|
|
4,559
|
Accumulated other
comprehensive income
|
257
|
|
315
|
Total stockholders'
equity
|
24,653
|
|
25,676
|
Total liabilities
and stockholders' equity
|
$
52,286
|
|
$
52,130
|
KEURIG DR PEPPER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
First
Quarter
|
(in
millions)
|
2024
|
|
2023
|
Operating
activities:
|
|
|
|
Net income
|
$
454
|
|
$
467
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
expense
|
101
|
|
107
|
Amortization of
intangibles
|
33
|
|
34
|
Other amortization
expense
|
36
|
|
45
|
Provision for sales
returns
|
14
|
|
10
|
Deferred income
taxes
|
21
|
|
—
|
Employee stock-based
compensation expense
|
28
|
|
29
|
Loss (gain) on
disposal of property, plant, and equipment
|
1
|
|
(5)
|
Unrealized loss (gain)
on foreign currency
|
8
|
|
(2)
|
Unrealized loss (gain)
on derivatives
|
10
|
|
(95)
|
Equity in earnings of
unconsolidated affiliates
|
(7)
|
|
(9)
|
Earned
equity
|
(45)
|
|
(2)
|
Other, net
|
3
|
|
(2)
|
Changes in assets and
liabilities:
|
|
|
|
Trade accounts
receivable
|
42
|
|
28
|
Inventories
|
(65)
|
|
(74)
|
Income taxes
receivable and payables, net
|
(10)
|
|
60
|
Other current and
non-current assets
|
(136)
|
|
(151)
|
Accounts payable and
accrued expenses
|
(398)
|
|
(391)
|
Other current and
non-current liabilities
|
(5)
|
|
22
|
Net change in
operating assets and liabilities
|
(572)
|
|
(506)
|
Net cash provided by
operating activities
|
85
|
|
71
|
Investing
activities:
|
|
|
|
Purchases of property,
plant, and equipment
|
(158)
|
|
(62)
|
Proceeds from sales of
property, plant, and equipment
|
—
|
|
7
|
Purchases of
intangibles
|
(31)
|
|
(51)
|
Investments in
unconsolidated affiliates
|
(6)
|
|
—
|
Other, net
|
2
|
|
1
|
Net cash used in
investing activities
|
(193)
|
|
(105)
|
Financing
activities:
|
|
|
|
Proceeds from issuance
of Notes
|
3,000
|
|
—
|
Repayments of
Notes
|
(1,150)
|
|
—
|
Net proceeds from
issuance of commercial paper
|
(188)
|
|
265
|
Proceeds from
structured payables
|
23
|
|
34
|
Repayments of
structured payables
|
(30)
|
|
(32)
|
Cash dividends
paid
|
(299)
|
|
(281)
|
Repurchases of common
stock
|
(1,105)
|
|
(231)
|
Tax withholdings
related to net share settlements
|
(41)
|
|
(31)
|
Payments on finance
leases
|
(31)
|
|
(24)
|
Other, net
|
(21)
|
|
(3)
|
Net cash provided by
(used in) financing activities
|
158
|
|
(303)
|
Cash and cash
equivalents:
|
|
|
|
Net change from
operating, investing and financing activities
|
50
|
|
(337)
|
Effect of exchange rate
changes
|
—
|
|
6
|
Beginning
balance
|
267
|
|
535
|
Ending
balance
|
$
317
|
|
$
204
|
KEURIG DR PEPPER INC.
RECONCILIATION OF SEGMENT
INFORMATION
(UNAUDITED)
|
|
|
First
Quarter
|
(in
millions)
|
2024
|
|
2023
|
Net
Sales
|
|
|
|
U.S. Refreshment
Beverages
|
$
2,093
|
|
$
2,007
|
U.S. Coffee
|
911
|
|
931
|
International
|
464
|
|
415
|
Total net
sales
|
$
3,468
|
|
$
3,353
|
|
|
|
|
Income from
Operations
|
|
|
|
U.S. Refreshment
Beverages
|
$
615
|
|
$
490
|
U.S. Coffee
|
248
|
|
232
|
International
|
112
|
|
80
|
Unallocated corporate
costs
|
(210)
|
|
(218)
|
Total income from
operations
|
$
765
|
|
$
584
|
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) transaction
costs for significant business combinations (completed or
abandoned); and (vii) other certain items that are excluded for
comparison purposes to prior year periods.
For the first quarter of 2024, the other certain items excluded
for comparison purposes include (i) productivity expenses, (ii)
restructuring expenses associated with the 2023 CEO Succession and
Associated Realignment, (iii) costs related to significant
non-routine legal matters, specifically the antitrust litigation,
and (iv) restructuring expenses associated with the 2024 Network
Optimization.
For the first quarter of 2023, the other certain items excluded
for comparison purposes include productivity expenses.
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 first quarter of 2024 and 2023, 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)
|
|
|
Gross
profit
|
|
Gross
margin
|
|
Income from
operations
|
|
Operating
margin
|
For the First
Quarter of 2024
|
|
|
|
|
|
|
|
Reported
|
$
1,940
|
|
55.9 %
|
|
$
765
|
|
22.1 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
Mark to
market
|
(3)
|
|
|
|
(19)
|
|
|
Amortization of
intangibles
|
—
|
|
|
|
33
|
|
|
Stock
compensation
|
—
|
|
|
|
4
|
|
|
Restructuring - 2023
CEO Succession and Associated Realignment
|
—
|
|
|
|
2
|
|
|
Productivity
|
14
|
|
|
|
36
|
|
|
Non-routine legal
matters
|
—
|
|
|
|
1
|
|
|
Transaction
costs
|
—
|
|
|
|
1
|
|
|
Restructuring - 2024
Network Optimization
|
—
|
|
|
|
2
|
|
|
Adjusted
|
$
1,951
|
|
56.3 %
|
|
$
825
|
|
23.8 %
|
Impact of foreign
currency
|
|
|
(0.1) %
|
|
|
|
— %
|
Constant currency
adjusted
|
|
|
56.2 %
|
|
|
|
23.8 %
|
|
|
|
|
|
|
|
|
For the First
Quarter of 2023
|
|
|
|
|
|
|
|
Reported
|
$
1,744
|
|
52.0 %
|
|
$
584
|
|
17.4 %
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
Mark to
market
|
(14)
|
|
|
|
(2)
|
|
|
Amortization of
intangibles
|
—
|
|
|
|
34
|
|
|
Stock
compensation
|
—
|
|
|
|
5
|
|
|
Productivity
|
38
|
|
|
|
78
|
|
|
Adjusted
|
$
1,768
|
|
52.7 %
|
|
$
699
|
|
20.8 %
|
Refer to pages A-8
and A-9 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, net
|
|
Income before
provision for
income taxes
|
|
Provision for
income taxes
|
|
Effective
tax
rate
|
|
Net
income
|
|
Diluted
earnings per
share
|
For the First
Quarter of 2024
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
178
|
|
$
594
|
|
$
140
|
|
23.6 %
|
|
$
454
|
|
$
0.33
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
(35)
|
|
18
|
|
2
|
|
|
|
16
|
|
0.01
|
Amortization of
intangibles
|
—
|
|
33
|
|
9
|
|
|
|
24
|
|
0.02
|
Amortization of fair
value debt adjustment
|
(4)
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Stock
compensation
|
—
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Restructuring - 2023
CEO Succession and Associated Realignment
|
—
|
|
2
|
|
1
|
|
|
|
1
|
|
—
|
Productivity
|
—
|
|
36
|
|
10
|
|
|
|
26
|
|
0.02
|
Non-routine legal
matters
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Transaction
costs
|
—
|
|
1
|
|
—
|
|
|
|
1
|
|
—
|
Restructuring - 2024
Network Optimization
|
—
|
|
2
|
|
1
|
|
|
|
1
|
|
—
|
Adjusted
|
$
139
|
|
$
695
|
|
$
165
|
|
23.7 %
|
|
$
530
|
|
$
0.38
|
Impact of foreign
currency
|
|
|
|
|
|
|
— %
|
|
|
|
|
Constant currency
adjusted
|
|
|
|
|
|
|
23.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the First
Quarter of 2023
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
$
23
|
|
$
581
|
|
$
114
|
|
19.6 %
|
|
$
467
|
|
$
0.33
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
93
|
|
(104)
|
|
(29)
|
|
|
|
(75)
|
|
(0.05)
|
Amortization of
intangibles
|
—
|
|
34
|
|
10
|
|
|
|
24
|
|
0.02
|
Amortization of fair
value of debt adjustment
|
(4)
|
|
4
|
|
1
|
|
|
|
3
|
|
—
|
Stock
compensation
|
—
|
|
5
|
|
2
|
|
|
|
3
|
|
—
|
Productivity
|
—
|
|
78
|
|
21
|
|
|
|
57
|
|
0.04
|
Adjusted
|
$
112
|
|
$
598
|
|
$
119
|
|
19.9 %
|
|
$
479
|
|
$
0.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Change -
adjusted
|
24.1 %
|
|
|
|
|
|
|
|
10.6 %
|
|
11.8 %
|
Impact of foreign
currency
|
— %
|
|
|
|
|
|
|
|
(0.6) %
|
|
— %
|
Change - Constant
currency adjusted
|
24.1 %
|
|
|
|
|
|
|
|
10.0 %
|
|
11.8 %
|
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)
|
|
|
U.S.
Refreshment
Beverages
|
|
U.S.
Coffee
|
|
International
|
|
Unallocated
corporate costs
|
|
Total
|
For the First
Quarter of 2024
|
|
|
|
|
|
|
|
|
|
Reported - Income from
Operations
|
$
615
|
|
$
248
|
|
$
112
|
|
$
(210)
|
|
$
765
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
—
|
|
—
|
|
(6)
|
|
(13)
|
|
(19)
|
Amortization of
intangibles
|
5
|
|
25
|
|
3
|
|
—
|
|
33
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
Restructuring - 2023
CEO Succession and Associated Realignment
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
Productivity
|
2
|
|
14
|
|
—
|
|
20
|
|
36
|
Non-routine legal
matters
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
Transaction
costs
|
—
|
|
—
|
|
—
|
|
1
|
|
1
|
Restructuring - 2024
Network Optimization
|
—
|
|
2
|
|
—
|
|
—
|
|
2
|
Adjusted - Income from
Operations
|
$
622
|
|
$
289
|
|
$
109
|
|
$
(195)
|
|
$
825
|
|
|
|
|
|
|
|
|
|
|
Change -
adjusted
|
22.4 %
|
|
1.4 %
|
|
29.8 %
|
|
9.6 %
|
|
18.0 %
|
Impact of foreign
currency
|
— %
|
|
— %
|
|
(4.8) %
|
|
— %
|
|
(0.5) %
|
Change - constant
currency adjusted
|
22.4 %
|
|
1.4 %
|
|
25.0 %
|
|
9.6 %
|
|
17.5 %
|
|
|
|
|
|
|
|
|
|
|
For the First
Quarter of 2023
|
|
|
|
|
|
|
|
|
|
Reported - Income from
Operations
|
$
490
|
|
$
232
|
|
$
80
|
|
$
(218)
|
|
$
584
|
Items Affecting
Comparability:
|
|
|
|
|
|
|
|
|
|
Mark to
market
|
—
|
|
—
|
|
—
|
|
(2)
|
|
(2)
|
Amortization of
intangibles
|
4
|
|
26
|
|
4
|
|
—
|
|
34
|
Stock
compensation
|
—
|
|
—
|
|
—
|
|
5
|
|
5
|
Productivity
|
14
|
|
27
|
|
—
|
|
37
|
|
78
|
Adjusted - Income from
Operations
|
$
508
|
|
$
285
|
|
$
84
|
|
$
(178)
|
|
$
699
|
KEURIG DR PEPPER INC.
RECONCILIATION OF CERTAIN FINANCIAL MEASURES BY
SEGMENT TO CONSTANT CURRENCY
ADJUSTED FINANCIAL MEASURES BY SEGMENT
(UNAUDITED)
|
|
|
|
Reported
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
|
For the first
quarter of 2024:
|
|
|
|
|
|
|
Net
sales
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
4.3 %
|
|
— %
|
|
4.3 %
|
U.S. Coffee
|
|
(2.1)
|
|
—
|
|
(2.1)
|
International
|
|
11.8
|
|
(4.8)
|
|
7.0
|
Total net
sales
|
|
3.4
|
|
(0.6)
|
|
2.8
|
|
|
Reported
|
|
Items
Affecting
Comparability
|
|
Adjusted
|
|
Impact of
Foreign
Currency
|
|
Constant
Currency
Adjusted
|
For the first
quarter of 2024:
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
29.4 %
|
|
0.3 %
|
|
29.7 %
|
|
— %
|
|
29.7 %
|
U.S. Coffee
|
|
27.2
|
|
4.5
|
|
31.7
|
|
—
|
|
31.7
|
International
|
|
24.1
|
|
(0.6)
|
|
23.5
|
|
0.1
|
|
23.6
|
Total operating
margin
|
|
22.1
|
|
1.7
|
|
23.8
|
|
—
|
|
23.8
|
|
|
Reported
|
|
Items
Affecting
Comparability
|
|
Adjusted
|
For the first
quarter of 2023:
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
U.S. Refreshment
Beverages
|
|
24.4 %
|
|
0.9 %
|
|
25.3 %
|
U.S. Coffee
|
|
24.9
|
|
5.7
|
|
30.6
|
International
|
|
19.3
|
|
0.9
|
|
20.2
|
Total operating
margin
|
|
17.4
|
|
3.4
|
|
20.8
|
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
|
$
2,168
|
Interest expense,
net
|
651
|
Provision for income
taxes
|
602
|
Depreciation
expense
|
396
|
Other
amortization
|
172
|
Amortization of
intangibles
|
136
|
EBITDA
|
$
4,125
|
Items affecting
comparability:
|
|
Impairment of
intangible assets
|
$
2
|
Restructuring - 2023
CEO Succession and Associated Realignment
|
37
|
Productivity
|
188
|
Restructuring - 2024
Network Optimization
|
2
|
Non-routine legal
matters
|
6
|
Stock
compensation
|
16
|
Transaction
costs
|
3
|
Mark to
market
|
(14)
|
Adjusted
EBITDA
|
$
4,365
|
|
|
|
March
31,
|
|
2024
|
Principal amounts
of:
|
|
Commercial paper
notes
|
$
1,908
|
Senior unsecured
notes
|
13,093
|
Total principal
amounts
|
15,001
|
Less: Cash and cash
equivalents
|
317
|
Total principal
amounts less cash and cash equivalents
|
$
14,684
|
|
|
March 31, 2024
Management Leverage Ratio
|
3.4
|
KEURIG DR PEPPER INC.
RECONCILIATION OF ADJUSTED EBITDA - LAST TWELVE
MONTHS
(UNAUDITED)
|
|
(in
millions)
|
SECOND
QUARTER OF
2023
|
|
THIRD
QUARTER OF
2023
|
|
FOURTH
QUARTER OF
2023
|
|
FIRST
QUARTER OF
2024
|
|
LAST TWELVE
MONTHS
|
Net
income
|
$
503
|
|
$
518
|
|
$
693
|
|
$
454
|
|
$
2,168
|
Interest expense,
net
|
172
|
|
237
|
|
64
|
|
178
|
|
651
|
Provision for income
taxes
|
110
|
|
146
|
|
206
|
|
140
|
|
602
|
Depreciation
expense
|
94
|
|
98
|
|
103
|
|
101
|
|
396
|
Other
amortization
|
46
|
|
45
|
|
45
|
|
36
|
|
172
|
Amortization of
intangibles
|
35
|
|
34
|
|
34
|
|
33
|
|
136
|
EBITDA
|
$
960
|
|
$
1,078
|
|
$
1,145
|
|
$
942
|
|
$
4,125
|
Items affecting
comparability:
|
|
|
|
|
|
|
|
|
|
Impairment of
intangible assets
|
—
|
|
$
2
|
|
$
—
|
|
$
—
|
|
$
2
|
Restructuring - 2023
CEO Succession
and Associated Realignment
|
—
|
|
27
|
|
8
|
|
2
|
|
37
|
Productivity
|
51
|
|
41
|
|
66
|
|
30
|
|
188
|
Restructuring - 2024
Network
Optimization
|
—
|
|
—
|
|
—
|
|
2
|
|
2
|
Nonroutine legal
matters
|
3
|
|
2
|
|
—
|
|
1
|
|
6
|
Stock
compensation
|
4
|
|
4
|
|
4
|
|
4
|
|
16
|
Transaction
costs
|
—
|
|
1
|
|
1
|
|
1
|
|
3
|
Mark to
market
|
(5)
|
|
(32)
|
|
40
|
|
(17)
|
|
(14)
|
Adjusted
EBITDA
|
$
1,013
|
|
$
1,123
|
|
$
1,264
|
|
$
965
|
|
$
4,365
|
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
quarter of 2024 and 2023, there were no certain items excluded for
comparison to prior year periods.
|
|
First
Quarter
|
(in
millions)
|
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
|
$
85
|
|
$
71
|
Purchases of property,
plant and equipment
|
|
(158)
|
|
(62)
|
Proceeds from sales of
property, plant and equipment
|
|
—
|
|
7
|
Free Cash
Flow
|
|
$
(73)
|
|
$
16
|
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SOURCE Keurig Dr Pepper Inc.