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Delaware
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98-0517725
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(State or other jurisdiction of
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(I.R.S. employer
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incorporation or organization)
|
|
identification number)
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53 South Avenue, Burlington, Massachusetts
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01803
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(Address of principal executive offices)
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(Zip code)
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(781) 418-7000
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(Registrant's telephone number, including area code)
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Large Accelerated Filer
x
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Accelerated Filer
o
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Non-Accelerated Filer
o
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Smaller Reporting Company
o
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Emerging Growth Company
o
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Page
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PART III
|
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Category
|
Major Brands
|
North America Market Position
|
CSDs
|
Dr Pepper
|
#1 in its flavor category and #2 overall flavored CSD in the U.S.
|
|
Canada Dry
|
#1 ginger ale in the U.S. and Canada
|
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Squirt
|
#1 grapefruit CSD in the U.S. and a leading grapefruit CSD in Mexico
|
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Peñafiel
|
#1 carbonated mineral water in Mexico
|
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Crush
|
#3 orange flavored CSD in the U.S.
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7UP
|
#2 lemon-lime CSD in the U.S.
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A&W
|
#1 root beer in the U.S.
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Schweppes
|
#2 ginger ale in the U.S. and Canada
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Sunkist soda
|
#1 orange flavored CSD in the U.S.
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NCBs
|
Snapple
|
#2 premium shelf stable ready-to-drink tea in the U.S.
|
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Hawaiian Punch
|
#1 branded shelf-stable fruit punch in the U.S.
|
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Mott's
|
#1 branded multi-serve apple juice and apple sauce in the U.S.
|
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Clamato
|
A leading spicy tomato juice in the U.S., Canada and Mexico
|
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Bai
|
#3 enhanced water in the U.S.
|
Single Serve Coffee
|
Green Mountain
|
#2 K-cup pod in the U.S.
|
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The Original Donut Shop
|
#5 K-cup pod in the U.S.
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Van Houtte
|
#2 K-cup pod in Canada
|
Single Serve Brewing Systems
|
Keurig
|
#1 single serve brewing system in the U.S.
|
Competitor
|
Categories
|
PepsiCo
|
CSDs, NCBs
|
Coca-Cola
|
CSDs, NCBs
|
Monster Energy
|
CSDs (Energy)
|
Red Bull
|
CSDs (Energy)
|
The Campbell Soup Company ("Campbell")
|
NCBs (Juice)
|
Ocean Spray Cranberries, Inc.
|
NCBs (Juice)
|
Welch's
|
NCBs (Juice)
|
Nestlé S.A. ("Nestle")
|
NCBs (Water), Packaged Coffee
|
The Kraft Heinz Company ("Kraft Heinz")
|
Packaged Coffee
|
The J.M. Smucker Company ("Smucker")
|
Packaged Coffee
|
•
|
Designing our packaging to enhance circular material use, including recyclability and recoverability;
|
•
|
Driving initiatives with industry, government and community partners to educate consumers on recycling behaviors, develop infrastructure and processing capabilities and increase packaging recycling rates;
|
•
|
Expanding responsible sourcing practices with suppliers and growers across our supply chain;
|
•
|
Working through partnerships in coffee-growing communities to engage more people in our supply chain, with the goal of significantly improving their lives;
|
•
|
Identifying opportunities to reduce energy consumption in our fleet and in our facilities while also building climate resiliency across our value chain;
|
•
|
Reducing waste sent from our manufacturing facilities to landfills; and
|
•
|
Supporting freshwater protection and restoration projects in watersheds where we have production facilities, while increasing the efficiency of our water use for beverage production.
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Beverage Concentrates
|
|
Packaged Beverages
|
|
Latin America Beverages
|
|
Coffee Systems
|
|
Total
|
||||||||||||||||||||
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
||||||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production facilities
|
1
|
|
|
—
|
|
|
12
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
16
|
|
|
8
|
|
Warehouse and distribution facilities
|
—
|
|
|
—
|
|
|
33
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
|
34
|
|
|
65
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production facilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
1
|
|
|
8
|
|
|
1
|
|
Warehouse and distribution facilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
23
|
|
|
2
|
|
|
36
|
|
|
5
|
|
|
59
|
|
Total
|
1
|
|
|
—
|
|
|
45
|
|
|
67
|
|
|
7
|
|
|
23
|
|
|
10
|
|
|
43
|
|
|
63
|
|
|
133
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||||||||||
(in millions, except per share data)
|
Year Ended December 31, 2018
|
|
Three Months Ended December 31, 2017
|
|
Fiscal Year Ended September 30, 2017
|
|
December 4, 2015 through September 24, 2016
|
|
September 27, 2015 through March 2, 2016
|
|
Fiscal Year Ended September 26, 2015
|
|
Fiscal Year Ended September 27, 2014
|
||||||||||||||
Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net sales
|
$
|
7,442
|
|
|
$
|
1,170
|
|
|
$
|
4,269
|
|
|
$
|
2,293
|
|
|
$
|
2,025
|
|
|
$
|
4,520
|
|
|
$
|
4,708
|
|
Gross profit
|
3,882
|
|
|
527
|
|
|
2,044
|
|
|
1,073
|
|
|
800
|
|
|
1,608
|
|
|
1,816
|
|
|||||||
Income from operations
|
1,237
|
|
|
229
|
|
|
897
|
|
|
393
|
|
|
147
|
|
|
765
|
|
|
947
|
|
|||||||
Net income
(2)
|
589
|
|
|
619
|
|
|
383
|
|
|
109
|
|
|
100
|
|
|
499
|
|
|
597
|
|
|||||||
Basic earnings per share
(1)
|
$
|
0.54
|
|
|
$
|
0.77
|
|
|
$
|
0.48
|
|
|
$
|
0.19
|
|
|
$
|
0.66
|
|
|
$
|
3.17
|
|
|
$
|
3.80
|
|
Diluted earnings per share
(1)
|
0.53
|
|
|
0.77
|
|
|
0.47
|
|
|
0.18
|
|
|
0.66
|
|
|
3.14
|
|
|
3.74
|
|
|||||||
Dividends declared per share
(3)
|
0.30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.33
|
|
|
1.15
|
|
|
1.00
|
|
|||||||
Statements of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating activities
|
$
|
1,613
|
|
|
$
|
385
|
|
|
$
|
1,749
|
|
|
$
|
280
|
|
|
$
|
837
|
|
|
$
|
755
|
|
|
$
|
719
|
|
Investing activities
|
(19,131
|
)
|
|
(18
|
)
|
|
180
|
|
|
(13,772
|
)
|
|
(75
|
)
|
|
(498
|
)
|
|
(472
|
)
|
|||||||
Financing activities
|
17,577
|
|
|
(620
|
)
|
|
(2,026
|
)
|
|
13,937
|
|
|
(647
|
)
|
|
(972
|
)
|
|
253
|
|
(1)
|
The weighted average number of shares of common stock outstanding used in the calculation of earnings per share ("EPS") during the year ended December 31, 2018 was impacted by the issuance of KDP common stock and the shares retained by the DPS stockholders. Refer to the Consolidated Statements of Changes in Stockholders' Equity and
Note 1 of the Notes to our Audited Consolidated Financial Statements
for further information. Additionally, the EPS for periods owned by the predecessor were computed under the predecessor's ownership structure and were not adjusted as a result of the DPS Merger.
|
(2)
|
For the three months ended December 31, 2017, net income, basic earnings per share, and diluted earnings per share were impacted by the initial impact of the legislation commonly referred to as the Tax Cuts and Jobs Act of 2017. Refer to
Note 6 of the Notes to our Audited Consolidated Financial Statements
for further information.
|
(3)
|
During the periods of the Three Months Ended December 31, 2017, Fiscal Year Ended September 30, 2017 and the Successor period of
December 4, 2015 through September 24, 2016
the Company did not declare dividends on a per share basis, as Maple was a privately-held company. The Company did declare and pay dividends of
$10 million
,
$54 million
and
$10 million
in the respective periods. Additionally, during the year ended December 31, 2018, prior to the DPS Merger, the Company declared and paid
$23 million
in dividends.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||||||
|
December 31,
|
|
September 30, 2017
|
|
September 24, 2016
|
|
September 26, 2015
|
|
September 27, 2014
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
|
|
|
||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill and other intangible assets, net
|
$
|
43,978
|
|
|
$
|
13,653
|
|
|
$
|
13,691
|
|
|
$
|
14,060
|
|
|
$
|
1,171
|
|
|
$
|
1,121
|
|
Total assets
|
48,918
|
|
|
15,744
|
|
|
16,107
|
|
|
16,609
|
|
|
4,002
|
|
|
4,797
|
|
||||||
Short-term borrowings and current portion of long-term obligations
|
1,458
|
|
|
219
|
|
|
219
|
|
|
186
|
|
|
—
|
|
|
19
|
|
||||||
Current portion of capital lease and financing obligations
|
26
|
|
|
6
|
|
|
6
|
|
|
3
|
|
|
3
|
|
|
2
|
|
||||||
Structured payables
|
526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long-term obligations
|
14,201
|
|
|
4,879
|
|
|
5,475
|
|
|
7,322
|
|
|
331
|
|
|
141
|
|
||||||
Capital lease and financing obligations, less current
|
305
|
|
|
97
|
|
|
99
|
|
|
111
|
|
|
117
|
|
|
116
|
|
||||||
Total stockholders’ equity
|
22,533
|
|
|
7,398
|
|
|
6,828
|
|
|
6,510
|
|
|
2,709
|
|
|
3,459
|
|
•
|
Net sales growth of approximately 2%, consistent with our long-term merger target of 2-3%, despite the impact of the changes in partner brands in the Packaged Beverage segment.
|
•
|
Merger synergies of $200 million for the year ending December 31, 2019, consistent with our long-term merger target for $200 million per year over the 2019-2021 period.
|
•
|
Other (income) expense, net
is expected to be approximately $30 million of expense for the year ending December 31, 2019 and assumes no gains related to changes in our Packaged Beverages partner brands, such as the impacts during the year ended December 31, 2018 from BODYARMOR and Core Nutrition, LLC ("Core"), which recorded gains of
$24 million
and
$12 million
, respectively.
|
•
|
The Adjusted effective tax rate is expected to be in the range of 25.0% - 25.5%.
|
•
|
Adjusted interest expense is expected to be in the range of $570 million - $590 million, reflecting ongoing deleveraging and the continued benefit of unwinding swaps.
|
•
|
Shares outstanding of approximately 1,420 million.
|
•
|
The Beverage Concentrates segment reflects sales of the Company's branded concentrates and syrup to third-party bottlers, primarily in the U.S. and Canada. Most of the brands in this segment are CSDs.
|
•
|
The Packaged Beverages segment reflects sales in the U.S. and Canada from the manufacture and distribution of finished beverages and other products, including sales of the Company's own brands and third-party brands, through our DSD and WD systems.
|
•
|
The Latin America Beverages segment reflects sales in Mexico, the Caribbean, and other international markets from the manufacture and distribution of concentrates, syrup and finished beverages.
|
•
|
The Coffee Systems segment reflects sales in the U.S. and Canada of the manufacture and distribution of finished goods relating to the Company's single-serve brewing system,
K-Cup pod
s and other coffee products.
|
•
|
The following table details our net income and diluted earnings per share for 2018 compared to the year ended December 31, 2017:
|
|
For the Year Ended December 31,
|
|
Dollar
|
|
Percent
|
|||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|||||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
847
|
|
|
$
|
(261
|
)
|
|
(31
|
)%
|
Diluted EPS
|
0.53
|
|
|
1.07
|
|
|
(0.54
|
)
|
|
(50
|
)%
|
•
|
During the last six months of 2018, we paid down approximately $938 million of our Term Loan, Commercial Paper and Revolver since the DPS Merger.
|
•
|
In late October 2018, we entered into a long-term distribution agreement with Danone Waters of America to sell, distribute and merchandise evian, the leading global brand of premium natural spring water, across the U.S.
|
•
|
On November 30, 2018, we completed our acquisition of Core, a rapidly-growing brand that participates in the premium enhanced water segment.
|
•
|
On December 3, 2018, we announced that our Board of Directors declared a quarterly dividend of $0.15 per share, which was paid on January 18, 2019, to shareholders of record on January 4, 2019.
|
•
|
On February 14, 2019, we announced that our Board of Directors declared a quarterly dividend of $0.15 per share, which will be paid on April 19, 2019 to shareholders of record on April 5, 2019.
|
•
|
year ended December 31, 2018 ("2018"), which also includes 176 days of the results of operations of
DPS
subsequent to the
DPS Merger
, which was completed on July 9, 2018,
|
•
|
three months ended December 31, 2017 ("Transition 2017"),
|
•
|
fiscal year ended September 30, 2017 ("Fiscal 2017"), and
|
•
|
the period of December 4, 2015 through September 24, 2016 ("Successor 2016").
|
|
2018
|
|
For the Year Ended December 31, 2017
(1)
|
||||||||||
($ in millions)
|
Dollars
|
|
Percent of Net Sales
|
|
Dollars
|
|
Percent of Net Sales
|
||||||
Net sales
|
$
|
7,442
|
|
|
100.0
|
%
|
|
$
|
4,226
|
|
|
100.0
|
%
|
Cost of sales
|
3,560
|
|
|
47.8
|
|
|
2,201
|
|
|
52.1
|
|
||
Gross profit
|
3,882
|
|
|
52.2
|
|
|
2,025
|
|
|
47.9
|
|
||
Selling, general and administrative expenses
|
2,635
|
|
|
35.4
|
|
|
1,163
|
|
|
27.5
|
|
||
Other operating (income) expense, net
|
10
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||
Income from operations
|
1,237
|
|
|
16.6
|
|
|
862
|
|
|
20.4
|
|
||
Interest expense
|
401
|
|
|
5.4
|
|
|
86
|
|
|
2.0
|
|
||
Interest expense - related party
|
51
|
|
|
0.7
|
|
|
100
|
|
|
2.4
|
|
||
Loss on early extinguishment of debt
|
13
|
|
|
0.2
|
|
|
59
|
|
|
1.4
|
|
||
Other (income) expense, net
|
(19
|
)
|
|
(0.3
|
)
|
|
95
|
|
|
2.2
|
|
||
Income before provision (benefit) for income taxes
|
791
|
|
|
10.6
|
|
|
522
|
|
|
12.4
|
|
||
Provision (benefit) for income taxes
|
202
|
|
|
2.7
|
|
|
(335
|
)
|
|
(7.9
|
)
|
||
Net income
|
589
|
|
|
7.9
|
|
|
857
|
|
|
20.3
|
|
||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
3
|
|
|
—
|
|
|
10
|
|
|
0.2
|
|
||
Net income attributable to KDP
|
$
|
586
|
|
|
7.9
|
%
|
|
$
|
847
|
|
|
20.0
|
%
|
|
|
|
|
|
|
|
|
||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.54
|
|
|
|
|
$
|
1.07
|
|
|
|
||
Diluted
|
0.53
|
|
|
|
|
1.07
|
|
|
|
||||
Effective tax rate
|
25.5
|
%
|
|
|
|
(64.2
|
)%
|
|
|
(1)
|
The calendar year ended December 31, 2017 was prepared in order to populate the unaudited pro forma combined financial information for calendar
year ended December 31, 2017
which will then provide a comparable period to 2018. See
Reconciliation of Calendar Year Statement of Income for the Year Ended December 31, 2017
for the full reconciliation of the calendar year ended December 31, 2017.
|
(in millions)
|
|
||
Segment Results — Net sales
|
2018
|
||
Beverage Concentrates
|
$
|
669
|
|
Packaged Beverages
|
2,415
|
|
|
Latin America Beverages
|
244
|
|
|
Coffee Systems
|
4,114
|
|
|
Net sales
|
$
|
7,442
|
|
|
|
||
(in millions)
|
2018
|
||
Segment Results — Income from Operations
|
|
||
Beverage Concentrates
|
$
|
430
|
|
Packaged Beverages
|
257
|
|
|
Latin America Beverages
|
29
|
|
|
Coffee Systems
|
1,163
|
|
|
Unallocated corporate costs
|
642
|
|
|
Income from operations
|
1,237
|
|
|
Interest expense
|
401
|
|
|
Interest expense - related party
|
51
|
|
|
Loss on early extinguishment of debt
|
13
|
|
|
Other (income) expense, net
|
(19
|
)
|
|
Income before provision for income taxes
|
$
|
791
|
|
|
2018
|
|||||
(in millions)
|
Dollars
|
|
Percent of Net Sales
|
|||
Net sales
|
$
|
669
|
|
|
100.0
|
%
|
Income from operations
|
430
|
|
|
64.3
|
%
|
CSDs
|
99
|
%
|
NCBs
|
1
|
%
|
|
2018
|
|||||
(in millions)
|
Dollars
|
|
Percent of Net Sales
|
|||
Net sales
|
$
|
2,415
|
|
|
100.0
|
%
|
Income from operations
|
257
|
|
|
10.6
|
%
|
(1)
|
Includes contract manufacturing
|
|
2018
|
|||||
(in millions)
|
Dollars
|
|
Percent of Net Sales
|
|||
Net sales
|
$
|
244
|
|
|
100.0
|
%
|
Income from operations
|
29
|
|
|
11.9
|
%
|
CSDs
|
88
|
%
|
NCBs
|
12
|
%
|
Total Latin America Beverages volume
|
100
|
%
|
|
|
|
2018
|
|
For the Year Ended December 31, 2017
|
||||||||||
(in millions)
|
Dollars
|
|
Percent of Net Sales
|
|
Dollars
|
|
Percent of Net Sales
|
||||||
Net sales
|
$
|
4,114
|
|
|
100.0
|
%
|
|
$
|
4,226
|
|
|
100.0
|
%
|
Income from operations
|
1,163
|
|
|
28.3
|
%
|
|
1,039
|
|
|
24.6
|
%
|
|
|
|
|
|
Three Months Ended December 31, 2016
|
|
|
|
|
|||||||||||
|
Transition 2017
|
|
(unaudited)
|
|
|
|
|
|||||||||||||
(in millions)
|
Dollars
|
|
Percent of Net Sales
|
|
Dollars
|
|
Percent of Net Sales
|
|
Dollar Change
|
|
Percentage Change
|
|||||||||
Net sales
|
$
|
1,170
|
|
|
100.0
|
%
|
|
$
|
1,213
|
|
|
100.0
|
%
|
|
$
|
(43
|
)
|
|
(3.5
|
)%
|
Cost of sales
|
643
|
|
|
55.0
|
%
|
|
667
|
|
|
55.0
|
%
|
|
(24
|
)
|
|
(3.6
|
)%
|
|||
Gross profit
|
527
|
|
|
45.0
|
%
|
|
546
|
|
|
45.0
|
%
|
|
(19
|
)
|
|
(3.5
|
)%
|
|||
Selling, general and administrative expenses
|
298
|
|
|
25.5
|
%
|
|
282
|
|
|
23.2
|
%
|
|
16
|
|
|
5.7
|
%
|
|||
Other operating (income) expense, net
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
NM
|
||||
Income from operations
|
229
|
|
|
19.6
|
%
|
|
264
|
|
|
21.8
|
%
|
|
(35
|
)
|
|
(13.3
|
)%
|
|||
Interest expense
|
10
|
|
|
0.9
|
%
|
|
25
|
|
|
2.1
|
%
|
|
(15
|
)
|
|
(60.0
|
)%
|
|||
Interest expense - related party
|
25
|
|
|
2.1
|
%
|
|
25
|
|
|
2.1
|
%
|
|
—
|
|
|
—
|
%
|
|||
Loss on early extinguishment of debt
|
5
|
|
|
0.4
|
%
|
|
31
|
|
|
2.6
|
%
|
|
(26
|
)
|
|
(83.9
|
)%
|
|||
Other (income) expense, net
|
7
|
|
|
0.6
|
%
|
|
(44
|
)
|
|
(3.6
|
)%
|
|
51
|
|
|
NM
|
||||
Income before provision (benefit) for income taxes
|
182
|
|
|
15.6
|
%
|
|
227
|
|
|
18.7
|
%
|
|
(45
|
)
|
|
(19.8
|
)%
|
|||
Provision (benefit) for income taxes
|
(437
|
)
|
|
(37.4
|
)%
|
|
82
|
|
|
6.8
|
%
|
|
(519
|
)
|
|
NM
|
||||
Net income
|
619
|
|
|
52.9
|
%
|
|
145
|
|
|
12.0
|
%
|
|
474
|
|
|
326.9
|
%
|
|||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
7
|
|
|
0.6
|
%
|
|
2
|
|
|
0.2
|
%
|
|
5
|
|
|
NM
|
||||
Net income attributable to KDP
|
$
|
612
|
|
|
52.3
|
%
|
|
$
|
143
|
|
|
11.8
|
%
|
|
469
|
|
|
328.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
0.77
|
|
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|||||
Diluted
|
0.77
|
|
|
|
|
0.18
|
|
|
|
|
|
|
|
|||||||
Effective tax rate
|
(240.1
|
)%
|
|
|
|
36.1
|
%
|
|
|
|
|
|
|
•
|
Unfavorable rate, primarily driven by strategic price alignment and increased trade spend with our pod business partners, which decreased net sales by 5%;
|
•
|
Unfavorable product mix, which lowered net sales by 3%; and
|
•
|
Increase in sales volume, which increased net sales by 4%.
|
•
|
Unfavorable pod net price realization which reduced gross margin by approximately 360 basis points;
|
•
|
Unfavorable pod mix due to a higher mix of partner and private label brands, which reduced gross margin by approximately 60 basis points; and
|
•
|
Approximately 340 basis points improvement driven primarily by ongoing pod and brewer productivity improvements.
|
|
Fiscal 2017
|
|||||
($ in millions)
|
Dollars
|
|
Percent
|
|||
Net sales
|
$
|
4,269
|
|
|
100.0
|
%
|
Cost of sales
|
2,225
|
|
|
52.1
|
|
|
Gross profit
|
2,044
|
|
|
47.9
|
|
|
Selling, general and administrative expenses
|
1,147
|
|
|
26.9
|
|
|
Other operating (income) expense, net
|
—
|
|
|
—
|
|
|
Income from operations
|
897
|
|
|
21.0
|
|
|
Interest expense
|
101
|
|
|
2.4
|
|
|
Interest expense - related party
|
100
|
|
|
2.3
|
|
|
Loss on early extinguishment of debt
|
85
|
|
|
2.0
|
|
|
Other (income) expense, net
|
44
|
|
|
1.0
|
|
|
Income before provision (benefit) for income taxes
|
567
|
|
|
13.3
|
|
|
Provision (benefit) for income taxes
|
184
|
|
|
4.3
|
|
|
Net income
|
383
|
|
|
9.0
|
|
|
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
5
|
|
|
0.1
|
|
|
Net income attributable to KDP
|
$
|
378
|
|
|
8.9
|
%
|
|
|
|
|
|||
Earnings per common share:
|
|
|
|
|||
Basic
|
$
|
0.48
|
|
|
NM
|
|
Diluted
|
$
|
0.47
|
|
|
NM
|
|
Effective tax rate
|
32.5
|
%
|
|
NM
|
|
|
Successor 2016
|
|||||
($ in millions)
|
Dollars
|
|
Percent
|
|||
Net sales
|
$
|
2,293
|
|
|
100.0
|
%
|
Cost of sales
|
1,220
|
|
|
53.2
|
|
|
Gross profit
|
1,073
|
|
|
46.8
|
|
|
Selling, general and administrative expenses
|
680
|
|
|
29.7
|
|
|
Other operating (income) expense, net
|
—
|
|
|
—
|
|
|
Income from operations
|
393
|
|
|
17.1
|
|
|
Interest expense
|
163
|
|
|
7.1
|
|
|
Interest expense - related party
|
60
|
|
|
2.6
|
|
|
Loss on early extinguishment of debt
|
5
|
|
|
0.2
|
|
|
Other (income) expense, net
|
1
|
|
|
—
|
|
|
Income before provision (benefit) for income taxes
|
164
|
|
|
7.2
|
|
|
Provision (benefit) for income taxes
|
55
|
|
|
2.4
|
|
|
Net income
|
$
|
109
|
|
|
4.8
|
|
|
|
|
|
|||
Earnings per common share:
|
|
|
|
|||
Basic
|
$
|
0.19
|
|
|
NM
|
|
Diluted
|
$
|
0.18
|
|
|
NM
|
|
Effective tax rate
|
33.5
|
%
|
|
NM
|
|
|
Predecessor 2016
|
|||||
($ in millions)
|
Dollars
|
|
Percent
|
|||
Net sales
|
$
|
2,025
|
|
|
100.0
|
%
|
Cost of sales
|
1,225
|
|
|
60.5
|
|
|
Gross profit
|
800
|
|
|
39.5
|
|
|
Selling, general and administrative expenses
|
653
|
|
|
32.2
|
|
|
Other operating (income) expense, net
|
—
|
|
|
—
|
|
|
Income from operations
|
147
|
|
|
7.3
|
|
|
Interest expense
|
3
|
|
|
0.1
|
|
|
Interest expense - related party
|
—
|
|
|
—
|
|
|
Loss on early extinguishment of debt
|
6
|
|
|
0.3
|
|
|
Other (income) expense, net
|
(1
|
)
|
|
—
|
|
|
Income before provision (benefit) for income taxes
|
139
|
|
|
6.9
|
|
|
Provision (benefit) for income taxes
|
39
|
|
|
1.9
|
|
|
Net income
|
$
|
100
|
|
|
4.9
|
|
|
|
|
|
|||
Earnings per common share:
|
|
|
|
|||
Basic
|
$
|
0.66
|
|
|
NM
|
|
Diluted
|
$
|
0.66
|
|
|
NM
|
|
Effective tax rate
|
28.1
|
%
|
|
NM
|
|
•
|
our intention to drive significant cash flow generation to enable rapid deleveraging within two to three years from the DPS Merger;
|
•
|
our ability to issue unsecured commercial paper notes ("Commercial Paper") on a private placement basis up to a maximum aggregate amount outstanding at any time of $2,400 million;
|
•
|
our integration of DPS;
|
•
|
our continued payment of dividends;
|
•
|
our continued capital expenditures;
|
•
|
seasonality of our operating cash flows, which includes our payable extension program and structured payables, which could impact short-term liquidity;
|
•
|
fluctuations in our tax obligations;
|
•
|
future equity investments; and
|
•
|
future mergers or acquisitions of brand ownership companies, regional bottling companies, distributors and/or distribution rights to further extend our geographic coverage.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Net cash provided by operating activities
|
$
|
1,613
|
|
|
$
|
385
|
|
|
$
|
1,749
|
|
|
$
|
280
|
|
|
$
|
837
|
|
Net cash (used in) provided by investing activities
|
(19,131
|
)
|
|
(18
|
)
|
|
180
|
|
|
(13,772
|
)
|
|
(75
|
)
|
|||||
Net cash provided by (used in) financing activities
|
17,577
|
|
|
(620
|
)
|
|
(2,026
|
)
|
|
13,937
|
|
|
(647
|
)
|
Rating Agency
|
Long-Term Debt Rating
|
Commercial Paper Rating
|
Outlook
|
Date of Last Change
|
Moody's
|
Baa2
|
P-2
|
Negative
|
May 11, 2018
|
S&P
|
BBB
|
A-2
|
Stable
|
May 14, 2018
|
|
Payments Due in Year
|
||||||||||||||||||||||||||
(in millions)
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
After 2023
|
||||||||||||||
Long-term obligations
(1)
|
$
|
14,808
|
|
|
$
|
385
|
|
|
$
|
385
|
|
|
$
|
2,385
|
|
|
$
|
385
|
|
|
$
|
4,543
|
|
|
$
|
6,725
|
|
Interest payments
|
5,453
|
|
|
571
|
|
|
536
|
|
|
514
|
|
|
467
|
|
|
386
|
|
|
2,979
|
|
|||||||
Capital leases
(2)
|
281
|
|
|
34
|
|
|
34
|
|
|
33
|
|
|
32
|
|
|
29
|
|
|
119
|
|
|||||||
Operating leases
(3)
|
312
|
|
|
58
|
|
|
53
|
|
|
44
|
|
|
34
|
|
|
25
|
|
|
98
|
|
|||||||
Purchase obligations
(4)
|
1,841
|
|
|
1,124
|
|
|
241
|
|
|
149
|
|
|
129
|
|
|
77
|
|
|
121
|
|
|||||||
Payable to Mondelēz
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Financing obligations
(5)
|
112
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
10
|
|
|
62
|
|
|||||||
Total
|
$
|
22,822
|
|
|
$
|
2,197
|
|
|
$
|
1,259
|
|
|
$
|
3,135
|
|
|
$
|
1,057
|
|
|
$
|
5,070
|
|
|
$
|
10,104
|
|
(1)
|
Amounts represent payments for the senior unsecured notes issued by us and the term loan credit agreement. Please refer to
Note 8 of the Notes to our Audited Consolidated Financial Statements
for additional information.
|
(2)
|
Amounts represent our contractual payment obligations for our lease arrangements classified as capital leases. These amounts exclude renewal options, which were not yet executed but were included in the lease term to determine capital lease obligation as the lease imposes a penalty on us in such amount that the renewal appeared reasonably assured at lease inception.
Refer to Note 13 for additional information
.
|
(3)
|
Amounts represent minimum rental commitments under our non-cancelable operating leases.
Refer to Note 13 for additional information
|
(4)
|
Amounts represent payments under agreements to purchase goods or services that are legally binding and that specify all significant terms, including capital obligations and long-term contractual obligations.
|
(5)
|
Amounts represent our contractual payment obligations for our build-to-suit financing lease obligations.
Refer to Note 13 for additional information
.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
||||||||||||||||
Revenue Recognition
|
|
|
|
|
|
|
|
|
|
|
||||||||||
We recognize revenue when performance obligations under the terms of a contract with the customer are satisfied.
Accruals for customer incentives, sales returns and marketing programs are established for the expected payout based on contractual terms, volume-based metrics and/or historical trends.
|
|
Our customer incentives, sales returns and marketing accrual methodology contains uncertainties because it requires management to make assumptions and to apply judgment regarding our contractual terms in order to estimate our customer participation and volume performance levels which impact the expense recognition. Our estimates are based primarily on a combination of known or historical transaction experiences. Differences between estimated expenses and actual costs are normally insignificant and are recognized to earnings in the period differences are determined.
Further judgment is required to ensure the classification of the spend is correctly recorded as either a reduction from gross sales or advertising and marketing expense, which is a component of our SG&A expenses.
|
|
A 10% change in the accrual for our customer incentives, sales returns and marketing programs as of December 31, 2018, would have affected our income from operations by $34 million for the year ended December 31, 2018.
|
||||||||||||||||
|
|
|
|
|
||||||||||||||||
Income Taxes
|
|
|
|
|
|
|
|
|
|
|
||||||||||
We establish income tax liabilities to remove some or all of the income tax benefit of any of our income tax positions based upon one of the following: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount, or (3) the tax position is “more likely than not” to be sustained , but not in the financial period in which the tax position was originally taken.
We assess the likelihood of realizing our deferred tax assets. Valuation allowances reduce deferred tax assets to the amount more likely than not to be realized.
|
|
Our liability for uncertain tax positions contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various tax positions.
We base our judgment of the recoverability of our deferred tax assets primarily on historical earnings, our estimate of current and expected future earnings and prudent and feasible tax planning strategies.
|
|
Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. These audits include questions regarding our tax positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. As these audits progress, events may occur that cause us to change our liability for uncertain tax positions.
To the extent we prevail in matters for which a liability for uncertain tax positions has been established, or are required to pay amounts in excess of our established liability, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement generally would require use of our cash and may result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement may be recognized as a reduction in our effective tax rate in the period of resolution.
If results differ from our assumptions, a valuation allowance against deferred tax assets may be increased or decreased which would impact our effective tax rate.
|
||||||||||||||||
|
|
|
|
|
||||||||||||||||
Business Combinations
|
|
|
|
|
|
|
|
|
|
|
||||||||||
We record acquisitions using the purchase method of accounting. All of the assets acquired and liabilities assumed are recorded at fair value as of the acquisition date. The excess of the purchase price over the estimated fair values of the net tangible and intangible assets acquired is recorded as goodwill.
|
|
The application of the purchase method of accounting for business combinations requires management to make significant estimates and assumptions in the determination of the fair value of assets acquired and liabilities assumed, in order to properly allocate purchase price consideration between assets that are depreciated and amortized from goodwill. The fair value assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Significant assumptions and estimates include, but are not limited to, the cash flows that an asset is expected to generate in the future, the appropriate weighted-average cost of capital, and the cost savings expected to be derived from acquiring an asset, if applicable.
|
|
If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements may be exposed to potential impairment of the intangible assets and goodwill, as discussed in the
Goodwill and Other Indefinite Lived Intangible Assets
critical accounting estimate section.
|
•
|
Application of the acquisition method of accounting;
|
•
|
The issuance of Maple common stock to JAB in connection with the equity investments;
|
•
|
The conversion of Maple Parent Corporation into KDP shares in accordance with the Merger Agreement;
|
•
|
The pre-closing Maple share conversion;
|
•
|
The exchange of one share of KDP common stock for each share of DPS common stock;
|
•
|
The change in year-end for Maple; and
|
•
|
The alignment of accounting policies.
|
|
|
||||||||||||||
(in millions, except per share data)
|
Fiscal 2017
|
|
Add:
Transition 2017
|
|
Deduct:
Three Months Ended December 30, 2016
(1)
|
|
Calendar Year Ended December 31, 2017
|
||||||||
Net sales
|
$
|
4,269
|
|
|
$
|
1,170
|
|
|
$
|
1,213
|
|
|
$
|
4,226
|
|
Cost of sales
|
2,225
|
|
|
643
|
|
|
667
|
|
|
2,201
|
|
||||
Gross profit
|
2,044
|
|
|
527
|
|
|
546
|
|
|
2,025
|
|
||||
Selling, general and administrative expenses
|
1,147
|
|
|
298
|
|
|
282
|
|
|
1,163
|
|
||||
Other operating income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income from operations
|
897
|
|
|
229
|
|
|
264
|
|
|
862
|
|
||||
Interest expense
|
101
|
|
|
10
|
|
|
25
|
|
|
86
|
|
||||
Interest expense - related party
|
100
|
|
|
25
|
|
|
25
|
|
|
100
|
|
||||
Loss on early extinguishment of debt
|
85
|
|
|
5
|
|
|
31
|
|
|
59
|
|
||||
Other (income) expense, net
|
44
|
|
|
7
|
|
|
(44
|
)
|
|
95
|
|
||||
Income before provision (benefit) for income taxes
|
567
|
|
|
182
|
|
|
227
|
|
|
522
|
|
||||
Provision (benefit) for income taxes
|
184
|
|
|
(437
|
)
|
|
82
|
|
|
(335
|
)
|
||||
Net income
|
383
|
|
|
619
|
|
|
145
|
|
|
857
|
|
||||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
5
|
|
|
7
|
|
|
2
|
|
|
10
|
|
||||
Net income attributable to KDP
|
$
|
378
|
|
|
$
|
612
|
|
|
$
|
143
|
|
|
$
|
847
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.48
|
|
|
$
|
0.77
|
|
|
$
|
0.18
|
|
|
$
|
1.07
|
|
Diluted
|
0.47
|
|
|
0.77
|
|
|
0.18
|
|
|
1.07
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
790.5
|
|
|
790.5
|
|
|
790.5
|
|
|
790.5
|
|
||||
Diluted
|
790.5
|
|
|
790.5
|
|
|
790.5
|
|
|
790.5
|
|
(1)
|
Refer to Note 23 to our Audited Consolidated Financial Statements for further information.
|
(in millions, except per share data)
|
Reported KDP
(1)
|
|
DPS
January 1 - July 8, 2018
(2)
|
|
Pro Forma Adjustments
(3)
|
|
Pro Forma Combined
|
||||||||
Net sales
|
$
|
7,442
|
|
|
$
|
3,605
|
|
|
$
|
(27
|
)
|
|
$
|
11,020
|
|
Cost of sales
|
3,560
|
|
|
1,529
|
|
|
(150
|
)
|
|
4,939
|
|
||||
Gross profit
|
3,882
|
|
|
2,076
|
|
|
123
|
|
|
6,081
|
|
||||
Selling, general and administrative expenses
|
2,635
|
|
|
1,639
|
|
|
(367
|
)
|
|
3,907
|
|
||||
Other operating expense (income), net
|
10
|
|
|
(14
|
)
|
|
2
|
|
|
(2
|
)
|
||||
Income from operations
|
1,237
|
|
|
451
|
|
|
488
|
|
|
2,176
|
|
||||
Interest expense
|
401
|
|
|
88
|
|
|
182
|
|
|
671
|
|
||||
Interest expense - related party
|
51
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
||||
Loss on early extinguishment of debt
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Other (income) expense, net
|
(19
|
)
|
|
5
|
|
|
—
|
|
|
(14
|
)
|
||||
Income before provision for income taxes
|
791
|
|
|
358
|
|
|
357
|
|
|
1,506
|
|
||||
Provision for income taxes
|
202
|
|
|
82
|
|
|
114
|
|
|
398
|
|
||||
Net income
|
589
|
|
|
276
|
|
|
243
|
|
|
1,108
|
|
||||
Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
3
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
276
|
|
|
$
|
246
|
|
|
$
|
1,108
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.54
|
|
|
|
|
|
|
$
|
0.80
|
|
||||
Diluted
|
0.53
|
|
|
|
|
|
|
0.79
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,086.3
|
|
|
|
|
303.5
|
|
|
1,389.8
|
|
|||||
Diluted
|
1,097.6
|
|
|
|
|
303.5
|
|
|
1,401.1
|
|
(1)
|
Refer to the
Statements of Income
, which includes DPS activity subsequent to the Merger Date.
|
(2)
|
Refers to DPS activity during the year ended December 31, 2018 prior to the Merger Date.
|
(3)
|
Refer to
Summary of Pro Forma Adjustments
.
|
(in millions, except per share data)
|
Historical DPS
(1)
|
|
Reported KDP
(2)
|
|
Reclassifications
(3)
|
|
Pro Forma Adjustments
(4)
|
|
Pro Forma Combined
|
||||||||||
Net sales
|
$
|
6,690
|
|
|
$
|
4,226
|
|
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
10,775
|
|
Cost of sales
|
2,695
|
|
|
2,201
|
|
|
—
|
|
|
(60
|
)
|
|
4,836
|
|
|||||
Gross profit
|
3,995
|
|
|
2,025
|
|
|
—
|
|
|
(81
|
)
|
|
5,939
|
|
|||||
Selling, general and administrative expenses
|
2,556
|
|
|
1,163
|
|
|
102
|
|
|
(14
|
)
|
|
3,807
|
|
|||||
Depreciation and amortization
|
102
|
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
—
|
|
|||||
Other operating income, net
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|||||
Income from operations
|
1,388
|
|
|
862
|
|
|
—
|
|
|
(67
|
)
|
|
2,183
|
|
|||||
Interest expense
|
164
|
|
|
86
|
|
|
—
|
|
|
366
|
|
|
616
|
|
|||||
Interest expense - related party
|
—
|
|
|
100
|
|
|
—
|
|
|
(100
|
)
|
|
—
|
|
|||||
Interest income
|
(3
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt
|
62
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
121
|
|
|||||
Other (income) expense, net
|
(8
|
)
|
|
95
|
|
|
(1
|
)
|
|
(3
|
)
|
|
83
|
|
|||||
Income before provision for income taxes
|
1,173
|
|
|
522
|
|
|
(2
|
)
|
|
(330
|
)
|
|
1,363
|
|
|||||
Provision for income taxes
|
95
|
|
|
(335
|
)
|
|
—
|
|
|
(124
|
)
|
|
(364
|
)
|
|||||
Income before equity in loss of unconsolidated subsidiaries
|
1,078
|
|
|
857
|
|
|
(2
|
)
|
|
(206
|
)
|
|
1,727
|
|
|||||
Equity in loss of unconsolidated subsidiaries, net of tax
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income
|
1,076
|
|
|
857
|
|
|
—
|
|
|
(206
|
)
|
|
1,727
|
|
|||||
Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
—
|
|
|
10
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||||
Net income attributable to KDP
|
$
|
1,076
|
|
|
$
|
847
|
|
|
$
|
—
|
|
|
$
|
(196
|
)
|
|
$
|
1,727
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
5.91
|
|
|
|
|
|
|
|
|
$
|
1.25
|
|
||||||
Diluted
|
5.89
|
|
|
|
|
|
|
|
|
1.25
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
182.0
|
|
|
|
|
|
|
1,206.4
|
|
|
1,386.5
|
|
|||||||
Diluted
|
182.8
|
|
|
|
|
|
|
1,203.7
|
|
|
1,386.5
|
|
(1)
|
Refer to the DPS Annual Report on Form 10-K as filed on February 14, 2018, for the year ended December 31, 2017.
|
(2)
|
Refer to
Reconciliation of Calendar Year Statement of Income for the Year Ended December 31, 2017
.
|
(3)
|
Refer to
Summary of Reclassifications
.
|
(4)
|
Refer to
Summary of Pro Forma Adjustments
.
|
a.
|
A decrease in Net sales to remove the historical deferred revenue associated with DPS' arrangements with PepsiCo, Inc. and The Coca-Cola Company, which were eliminated in the fair value adjustments for DPS as part of purchase price accounting.
|
b.
|
An increase in Net sales to remove the historical amortization of certain capitalized upfront customer incentive program payments. These were eliminated in the fair value adjustments for DPS as these upfront payments were revalued within the customer relationship intangible assets recorded in purchase price accounting.
|
c.
|
Adjustment to remove the impact of the step-up of inventory recorded in purchase price accounting.
|
d.
|
Adjustments to SG&A expenses due to changes in amortization as a result of the fair value adjustments for DPS' intangible assets with definite lives as part of purchase price accounting.
|
e.
|
Adjustments to SG&A expenses due to changes in depreciation as a result of the fair value adjustments for DPS' property, plant and equipment as part of purchase price accounting.
|
f.
|
A decrease to SG&A expenses for both DPS and Maple to remove non-recurring transaction costs as a result of the DPS Merger.
|
g.
|
Removal of the Interest expense - related party caption for Maple, as the related party debt was capitalized into Additional paid-in capital immediately prior to the DPS Merger.
|
h.
|
Adjustments to Interest expense to remove the historical amortization of deferred debt issuance costs, discounts and premiums and to record incremental amortization as a result of the fair value adjustments for DPS' senior unsecured notes as part of purchase price accounting.
|
i.
|
Adjustments to Interest expense to record incremental interest expense and amortization of deferred debt issuance costs for borrowings related to the DPS Merger.
|
j.
|
Removal of the Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards caption as the Maple non-controlling interest was eliminated to reflect the capital structure of KDP.
|
k.
|
Adjustments to SG&A expenses to remove accelerated stock-based compensation expense as a result of the DPS Merger.
|
l.
|
As a result of the change in year-end for Maple, the Company has removed the 53rd week from its Pro Forma Condensed Combined Statement of Income as it would not be representative of the Company if the DPS Merger had occurred on December 31, 2016.
|
a.
|
Foreign currency transaction gains and losses were reclassified from Cost of sales and SG&A expenses in the historical DPS Statements of Income to Other (income) expense, net.
|
b.
|
Depreciation and amortization expenses were reclassified from Depreciation and amortization in the historical DPS Statements of Income to SG&A expenses.
|
c.
|
Interest income was reclassified from Interest income in the historical DPS Statements of Income to Other (income) expense, net.
|
(in millions)
|
Reported KDP
(1)
|
|
DPS
January 1 - July 8, 2018
(2)
|
|
Pro Forma Adjustments
(3)
|
|
Pro Forma Combined
|
||||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Beverage Concentrates
|
$
|
669
|
|
|
$
|
689
|
|
|
$
|
(27
|
)
|
|
$
|
1,331
|
|
Packaged Beverages
|
2,415
|
|
|
2,654
|
|
|
—
|
|
|
5,069
|
|
||||
Latin America Beverages
|
244
|
|
|
262
|
|
|
—
|
|
|
506
|
|
||||
Coffee Systems
|
4,114
|
|
|
—
|
|
|
—
|
|
|
4,114
|
|
||||
Total net sales
|
$
|
7,442
|
|
|
$
|
3,605
|
|
|
$
|
(27
|
)
|
|
$
|
11,020
|
|
|
|
|
|
|
|
|
|
||||||||
Income from Operations
|
|
|
|
|
|
|
|
||||||||
Beverage Concentrates
|
$
|
430
|
|
|
$
|
438
|
|
|
$
|
(15
|
)
|
|
$
|
853
|
|
Packaged Beverages
|
257
|
|
|
297
|
|
|
123
|
|
|
677
|
|
||||
Latin America Beverages
|
29
|
|
|
40
|
|
|
10
|
|
|
79
|
|
||||
Coffee Systems
|
1,163
|
|
|
—
|
|
|
—
|
|
|
1,163
|
|
||||
Unallocated Corporate
|
(642
|
)
|
|
(324
|
)
|
|
370
|
|
|
(596
|
)
|
||||
Total income from operations
|
$
|
1,237
|
|
|
$
|
451
|
|
|
$
|
488
|
|
|
$
|
2,176
|
|
|
|
|
|
|
|
|
|
||||||||
|
Reported KDP
|
|
Historical DPS
(4)
|
|
Pro Forma Adjustments
(3)
|
|
Pro Forma Combined
|
||||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Net Sales
|
|
|
|
|
|
|
|
||||||||
Beverage Concentrates
|
$
|
—
|
|
|
$
|
1,332
|
|
|
$
|
(50
|
)
|
|
$
|
1,282
|
|
Packaged Beverages
|
—
|
|
|
4,871
|
|
|
—
|
|
|
4,871
|
|
||||
Latin America Beverages
|
—
|
|
|
487
|
|
|
—
|
|
|
487
|
|
||||
Coffee Systems
|
4,226
|
|
|
—
|
|
|
(91
|
)
|
|
4,135
|
|
||||
Total net sales
|
$
|
4,226
|
|
|
$
|
6,690
|
|
|
$
|
(141
|
)
|
|
$
|
10,775
|
|
|
|
|
|
|
|
|
|
||||||||
Income from Operations
|
|
|
|
|
|
|
|
||||||||
Beverage Concentrates
|
$
|
—
|
|
|
$
|
865
|
|
|
$
|
(50
|
)
|
|
$
|
815
|
|
Packaged Beverages
|
—
|
|
|
743
|
|
|
8
|
|
|
751
|
|
||||
Latin America Beverages
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||
Coffee Systems
|
1,039
|
|
|
—
|
|
|
(28
|
)
|
|
1,011
|
|
||||
Unallocated Corporate
|
(177
|
)
|
|
(284
|
)
|
|
3
|
|
|
(458
|
)
|
||||
Total income from operations
|
$
|
862
|
|
|
$
|
1,388
|
|
|
$
|
(67
|
)
|
|
$
|
2,183
|
|
(1)
|
Refer to the
Statements of Income
, which includes DPS activity subsequent to the Merger Date.
|
(2)
|
Refers to DPS activity during the year ended December 31, 2018 prior to the Merger Date.
|
(3)
|
Refer to
Summary of Pro Forma Adjustments
.
|
(4)
|
Agrees to the DPS Annual Report on Form 10-K as filed on February 14, 2018 for the year ended December 31, 2017. These numbers have been adjusted for the allocation of other operating income, net.
|
|
For the Twelve Months Ended December 31, 2018
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
Amortization of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Pro Forma
|
|
Mark to Market
|
|
Intangibles
|
|
Deferred Financing Costs
|
|
Stock Compensation
|
|
Restructuring and Integration Expenses
|
|
Productivity
|
|
Transaction Costs
|
|
Step-up of acquired inventory
|
|
Provision for Settlements
|
|
Loss on Early Payment of Debt
|
|
Tax Reform
|
|
Adjusted
|
||||||||||||||||||||||||||
Net sales
|
$
|
11,020
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,024
|
|
Cost of sales
|
4,939
|
|
|
(53
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,870
|
|
|||||||||||||
Gross profit
|
6,081
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
12
|
|
|
—
|
|
|
2
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
6,154
|
|
|||||||||||||
Gross margin
|
55.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55.8
|
%
|
||||||||||||||||||||||||
Selling, general and administrative expenses
|
$
|
3,907
|
|
|
$
|
(19
|
)
|
|
$
|
(121
|
)
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
|
$
|
(160
|
)
|
|
$
|
(14
|
)
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
(18
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,550
|
|
Other operating income, net
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||||||||||
Income from operations
|
2,176
|
|
|
72
|
|
|
121
|
|
|
—
|
|
|
21
|
|
|
170
|
|
|
32
|
|
|
4
|
|
|
2
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
2,620
|
|
|||||||||||||
Operating margin
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.8
|
%
|
||||||||||||||||||||||||
Interest expense
|
$
|
671
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
657
|
|
Loss on early extinguishment of debt
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|||||||||||||
Other income, net
|
(14
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||||||||||
Income before provision for income taxes
|
1,506
|
|
|
72
|
|
|
121
|
|
|
9
|
|
|
21
|
|
|
170
|
|
|
30
|
|
|
8
|
|
|
2
|
|
|
22
|
|
|
13
|
|
|
—
|
|
|
1,974
|
|
|||||||||||||
Provision for income taxes
|
398
|
|
|
16
|
|
|
31
|
|
|
3
|
|
|
4
|
|
|
43
|
|
|
9
|
|
|
3
|
|
|
—
|
|
|
6
|
|
|
3
|
|
|
7
|
|
|
523
|
|
|||||||||||||
Effective tax rate
|
26.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26.5
|
%
|
||||||||||||||||||||||||
Net income
|
$
|
1,108
|
|
|
$
|
56
|
|
|
$
|
90
|
|
|
$
|
6
|
|
|
$
|
17
|
|
|
$
|
127
|
|
|
$
|
21
|
|
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
16
|
|
|
$
|
10
|
|
|
$
|
(7
|
)
|
|
$
|
1,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Pro Forma EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Adjusted EPS
|
||||||||||||||||||||||||||
Diluted earnings per common share
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.04
|
|
||||||||||||||||||||||
Shares
|
1,401.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,401.1
|
|
|
For the Twelve Months Ended December 31, 2017
|
||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
Amortization of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
|
Pro Forma
|
|
Mark to Market
|
|
Intangibles
|
|
Deferred Financing Costs
|
|
Stock Compensation
|
|
Restructuring and Integration Expenses
|
|
Productivity
|
|
Transaction Costs
|
|
Provision for Settlements
|
|
Loss on Early Payment of Debt
|
|
Tax Reform
|
|
Adjusted
|
||||||||||||||||||||||||
Net sales
|
$
|
10,775
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,775
|
|
Cost of sales
|
4,836
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,841
|
|
||||||||||||
Gross profit
|
5,939
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,934
|
|
||||||||||||
Gross margin
|
55.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55.1
|
%
|
||||||||||||||||||||||
Selling, general and administrative expenses
|
$
|
3,807
|
|
|
$
|
—
|
|
|
$
|
(111
|
)
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
(55
|
)
|
|
$
|
(55
|
)
|
|
$
|
(23
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,533
|
|
Other operating income, net
|
(51
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
||||||||||||
Income from operations
|
2,183
|
|
|
(25
|
)
|
|
111
|
|
|
—
|
|
|
32
|
|
|
70
|
|
|
64
|
|
|
23
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
2,456
|
|
||||||||||||
Operating margin
|
20.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22.8
|
%
|
||||||||||||||||||||||
Interest expense
|
$
|
616
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
680
|
|
Loss on early extinguishment of debt
|
121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
—
|
|
||||||||||||
Other income, net
|
83
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||||||||||
Income before provision for income taxes
|
1,363
|
|
|
(95
|
)
|
|
111
|
|
|
24
|
|
|
32
|
|
|
54
|
|
|
64
|
|
|
23
|
|
|
(2
|
)
|
|
121
|
|
|
—
|
|
|
1,695
|
|
||||||||||||
Provision for income taxes
|
(364
|
)
|
|
(28
|
)
|
|
32
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
27
|
|
|
8
|
|
|
(1
|
)
|
|
37
|
|
|
781
|
|
|
513
|
|
||||||||||||
Effective tax rate
|
(26.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30.3
|
%
|
||||||||||||||||||||||
Net income
|
$
|
1,727
|
|
|
$
|
(67
|
)
|
|
$
|
79
|
|
|
$
|
17
|
|
|
$
|
25
|
|
|
$
|
47
|
|
|
$
|
37
|
|
|
$
|
15
|
|
|
$
|
(1
|
)
|
|
$
|
84
|
|
|
$
|
(781
|
)
|
|
$
|
1,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Pro Forma EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Adjusted EPS
|
||||||||||||||||||||||||
Diluted earnings per common share
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.85
|
|
||||||||||||||||||||
Shares
|
1,386.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,386.5
|
|
(in millions)
|
Pro Forma
|
|
Items Affecting Comparability
|
|
Adjusted Pro Forma
|
||||||
For the Year Ended December 31, 2018
|
|
|
|
|
|
||||||
Net Sales
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
1,331
|
|
|
$
|
—
|
|
|
$
|
1,331
|
|
Packaged Beverages
|
5,069
|
|
|
—
|
|
|
5,069
|
|
|||
Latin America Beverages
|
506
|
|
|
—
|
|
|
506
|
|
|||
Coffee Systems
|
4,114
|
|
|
4
|
|
|
4,118
|
|
|||
Total net sales
|
$
|
11,020
|
|
|
$
|
4
|
|
|
$
|
11,024
|
|
|
|
|
|
|
|
||||||
Income from Operations
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
853
|
|
|
$
|
5
|
|
|
$
|
858
|
|
Packaged Beverages
|
677
|
|
|
11
|
|
|
688
|
|
|||
Latin America Beverages
|
79
|
|
|
3
|
|
|
82
|
|
|||
Coffee Systems
|
1,163
|
|
|
166
|
|
|
1,329
|
|
|||
Unallocated Corporate
|
(596
|
)
|
|
259
|
|
|
(337
|
)
|
|||
Total income from operations
|
$
|
2,176
|
|
|
$
|
444
|
|
|
$
|
2,620
|
|
|
|
|
|
|
|
||||||
For the Year Ended December 31, 2017
|
|
|
|
|
|
||||||
Net Sales
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
1,282
|
|
|
$
|
—
|
|
|
$
|
1,282
|
|
Packaged Beverages
|
4,871
|
|
|
—
|
|
|
4,871
|
|
|||
Latin America Beverages
|
487
|
|
|
—
|
|
|
487
|
|
|||
Coffee Systems
|
4,135
|
|
|
—
|
|
|
4,135
|
|
|||
Total net sales
|
$
|
10,775
|
|
|
$
|
—
|
|
|
$
|
10,775
|
|
|
|
|
|
|
|
||||||
Income from Operations
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
815
|
|
|
$
|
1
|
|
|
$
|
816
|
|
Packaged Beverages
|
751
|
|
|
12
|
|
|
763
|
|
|||
Latin America Beverages
|
64
|
|
|
—
|
|
|
64
|
|
|||
Coffee Systems
|
1,011
|
|
|
204
|
|
|
1,215
|
|
|||
Unallocated Corporate
|
(458
|
)
|
|
56
|
|
|
(402
|
)
|
|||
Total income from operations
|
$
|
2,183
|
|
|
$
|
273
|
|
|
$
|
2,456
|
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||
(in millions)
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percentage Change
|
|||||||
Adjusted pro forma net sales
|
$
|
11,024
|
|
|
$
|
10,775
|
|
|
$
|
249
|
|
|
2.3
|
%
|
Adjusted pro forma income from operations
|
2,620
|
|
|
2,456
|
|
|
164
|
|
|
6.7
|
%
|
|||
Adjusted pro forma net income
|
1,451
|
|
|
1,182
|
|
|
269
|
|
|
22.8
|
%
|
|||
Adjusted pro forma diluted EPS
|
1.04
|
|
|
0.85
|
|
|
0.19
|
|
|
22.4
|
%
|
|||
Adjusted pro forma operating margin
|
23.8
|
%
|
|
22.8
|
%
|
|
|
|
100 bps
|
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||
(in millions)
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percentage Change
|
|||||||
Adjusted pro forma net sales
|
$
|
1,331
|
|
|
$
|
1,282
|
|
|
$
|
49
|
|
|
3.8
|
%
|
Adjusted pro forma income from operations
|
858
|
|
|
816
|
|
|
42
|
|
|
5.1
|
%
|
|||
Adjusted pro forma operating margin
|
64.5
|
%
|
|
63.7
|
%
|
|
|
|
80 bps
|
|
CSDs
|
0.5
|
%
|
NCBs
|
30.3
|
%
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||
(in millions)
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percentage Change
|
|||||||
Adjusted pro forma net sales
|
$
|
5,069
|
|
|
$
|
4,871
|
|
|
$
|
198
|
|
|
4.1
|
%
|
Adjusted pro forma income from operations
|
688
|
|
|
763
|
|
|
(75
|
)
|
|
(9.8
|
)%
|
|||
Adjusted pro forma operating margin
|
13.6
|
%
|
|
15.7
|
%
|
|
|
|
(210) bps
|
|
CSDs
|
Flat
|
|
NCBs
|
1.6
|
%
|
Other
|
20.1
|
%
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||
(in millions)
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percentage Change
|
|||||||
Adjusted pro forma net sales
|
$
|
506
|
|
|
$
|
487
|
|
|
$
|
19
|
|
|
3.9
|
%
|
Adjusted pro forma income from operations
|
82
|
|
|
64
|
|
|
18
|
|
|
28.1
|
%
|
|||
Adjusted pro forma operating margin
|
16.2
|
%
|
|
13.1
|
%
|
|
|
|
310 bps
|
|
CSDs
|
(0.4
|
)%
|
NCBs
|
(3.4
|
)%
|
|
For the Year Ended December 31,
|
|
|
|
|
|||||||||
(in millions)
|
2018
|
|
2017
|
|
Dollar Change
|
|
Percentage Change
|
|||||||
Adjusted pro forma net sales
|
$
|
4,118
|
|
|
$
|
4,135
|
|
|
$
|
(17
|
)
|
|
(0.4
|
)%
|
Adjusted pro forma income from operations
|
1,329
|
|
|
1,215
|
|
|
114
|
|
|
9.4
|
%
|
|||
Adjusted pro forma operating margin
|
32.3
|
%
|
|
29.4
|
%
|
|
|
|
290 bps
|
|
Appliances
|
(1.5
|
)%
|
Pods
|
7.4
|
%
|
|
|
|
Hypothetical Change in Interest Rates
(1)
|
|
Annual Impact to Interest Expense
|
1-percent decrease
|
|
$26 million decrease
|
1-percent increase
|
|
$26 million increase
|
(1)
|
We pay an average floating rate, which fluctuates periodically, based on LIBOR and a credit spread, as a result of certain derivative instruments and variable rate debt instruments. See Notes
8
and
9
of the Notes to our
Consolidated
Financial Statements for further information.
|
|
|
Page Number
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions, except per share data)
|
Year Ended December 31, 2018
|
|
Three Months Ended December 31, 2017
|
|
Fiscal Year Ended September 30, 2017
|
|
December 4, 2015 through September 24, 2016
|
|
September 27, 2015 through March 2, 2016
|
||||||||||
Net sales
|
$
|
7,442
|
|
|
$
|
1,170
|
|
|
$
|
4,269
|
|
|
$
|
2,293
|
|
|
$
|
2,025
|
|
Cost of sales
|
3,560
|
|
|
643
|
|
|
2,225
|
|
|
1,220
|
|
|
1,225
|
|
|||||
Gross profit
|
3,882
|
|
|
527
|
|
|
2,044
|
|
|
1,073
|
|
|
800
|
|
|||||
Selling, general and administrative expenses
|
2,635
|
|
|
298
|
|
|
1,147
|
|
|
680
|
|
|
653
|
|
|||||
Other operating (income) expense, net
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Income from operations
|
1,237
|
|
|
229
|
|
|
897
|
|
|
393
|
|
|
147
|
|
|||||
Interest expense
|
401
|
|
|
10
|
|
|
101
|
|
|
163
|
|
|
3
|
|
|||||
Interest expense - related party
|
51
|
|
|
25
|
|
|
100
|
|
|
60
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt
|
13
|
|
|
5
|
|
|
85
|
|
|
5
|
|
|
6
|
|
|||||
Other (income) expense, net
|
(19
|
)
|
|
7
|
|
|
44
|
|
|
1
|
|
|
(1
|
)
|
|||||
Income before provision (benefit) for income taxes
|
791
|
|
|
182
|
|
|
567
|
|
|
164
|
|
|
139
|
|
|||||
Provision (benefit) for income taxes
|
202
|
|
|
(437
|
)
|
|
184
|
|
|
55
|
|
|
39
|
|
|||||
Net income
|
589
|
|
|
619
|
|
|
383
|
|
|
109
|
|
|
100
|
|
|||||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
3
|
|
|
7
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
612
|
|
|
$
|
378
|
|
|
$
|
109
|
|
|
$
|
100
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.54
|
|
|
$
|
0.77
|
|
|
$
|
0.48
|
|
|
$
|
0.19
|
|
|
$
|
0.66
|
|
Diluted
|
0.53
|
|
|
0.77
|
|
|
0.47
|
|
|
0.18
|
|
|
0.66
|
|
|||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
1,086.3
|
|
|
790.5
|
|
|
790.5
|
|
|
590.3
|
|
|
150.5
|
|
|||||
Diluted
|
1,097.6
|
|
|
790.5
|
|
|
790.5
|
|
|
590.3
|
|
|
151.2
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
Year Ended December 31, 2018
|
|
Three Months Ended December 31, 2017
|
|
Fiscal Year Ended September 30, 2017
|
|
December 4, 2015 through September 24, 2016
|
|
September 27, 2015 through March 2, 2016
|
||||||||||
Net income
|
$
|
589
|
|
|
$
|
619
|
|
|
$
|
383
|
|
|
$
|
109
|
|
|
$
|
100
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
(225
|
)
|
|
(7
|
)
|
|
81
|
|
|
26
|
|
|
(9
|
)
|
|||||
Net change in pension and post-retirement liability, net of tax of $1
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total other comprehensive (loss) income
|
(229
|
)
|
|
(7
|
)
|
|
81
|
|
|
26
|
|
|
(9
|
)
|
|||||
Comprehensive income
|
360
|
|
|
612
|
|
|
464
|
|
|
135
|
|
|
91
|
|
|||||
Comprehensive income attributable to non-controlling interest
|
(3
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||||
Foreign currency translation adjustments attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|||||
Comprehensive income attributable to KDP
|
$
|
357
|
|
|
$
|
605
|
|
|
$
|
458
|
|
|
$
|
135
|
|
|
$
|
91
|
|
|
December 31,
|
||||||
(in millions, except share and per share data)
|
2018
|
|
2017
|
||||
Assets
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
83
|
|
|
$
|
90
|
|
Restricted cash and restricted cash equivalents
|
46
|
|
|
5
|
|
||
Trade accounts receivable, net
|
1,150
|
|
|
483
|
|
||
Inventories
|
626
|
|
|
384
|
|
||
Prepaid expenses and other current assets
|
254
|
|
|
94
|
|
||
Total current assets
|
2,159
|
|
|
1,056
|
|
||
Property, plant and equipment, net
|
2,310
|
|
|
790
|
|
||
Investments in unconsolidated subsidiaries
|
186
|
|
|
97
|
|
||
Goodwill
|
20,011
|
|
|
9,819
|
|
||
Other intangible assets, net
|
23,967
|
|
|
3,834
|
|
||
Other non-current assets
|
259
|
|
|
121
|
|
||
Deferred tax assets
|
26
|
|
|
27
|
|
||
Total assets
|
$
|
48,918
|
|
|
$
|
15,744
|
|
Liabilities and Stockholders' Equity
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,300
|
|
|
$
|
1,580
|
|
Accrued expenses
|
1,012
|
|
|
201
|
|
||
Structured payables
|
526
|
|
|
—
|
|
||
Short-term borrowings and current portion of long-term obligations
|
1,458
|
|
|
219
|
|
||
Current portion of capital lease and financing obligations
|
26
|
|
|
6
|
|
||
Other current liabilities
|
380
|
|
|
12
|
|
||
Total current liabilities
|
5,702
|
|
|
2,018
|
|
||
Long-term obligations
|
14,201
|
|
|
3,064
|
|
||
Long-term obligations, related party
|
—
|
|
|
1,815
|
|
||
Capital lease and financing obligations, less current
|
305
|
|
|
97
|
|
||
Deferred tax liabilities
|
5,923
|
|
|
1,031
|
|
||
Other non-current liabilities
|
254
|
|
|
56
|
|
||
Total liabilities
|
26,385
|
|
|
8,081
|
|
||
Commitments and contingencies
|
|
|
|
||||
Employee redeemable non-controlling interest and mezzanine equity awards
|
—
|
|
|
265
|
|
||
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 and 800,000,000 shares authorized, 1,405,944,922 and 790,478,141 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively
|
14
|
|
|
8
|
|
||
Additional paid-in capital
|
21,471
|
|
|
6,377
|
|
||
Retained earnings
|
1,178
|
|
|
914
|
|
||
Accumulated other comprehensive (loss) income
|
(130
|
)
|
|
99
|
|
||
Total stockholders' equity
|
22,533
|
|
|
7,398
|
|
||
Total liabilities and stockholders' equity
|
$
|
48,918
|
|
|
$
|
15,744
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
Year Ended December 31, 2018
|
|
Three Months Ended December 31, 2017
|
|
Fiscal Year Ended September 30, 2017
|
|
December 4, 2015 through September 24, 2016
|
|
September 27, 2015 through March 2, 2016
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
589
|
|
|
$
|
619
|
|
|
$
|
383
|
|
|
$
|
109
|
|
|
$
|
100
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation expense
|
233
|
|
|
33
|
|
|
142
|
|
|
70
|
|
|
103
|
|
|||||
Amortization expense
|
229
|
|
|
33
|
|
|
114
|
|
|
68
|
|
|
22
|
|
|||||
Provision for sales returns
|
54
|
|
|
19
|
|
|
65
|
|
|
46
|
|
|
55
|
|
|||||
Deferred income taxes
|
(81
|
)
|
|
(484
|
)
|
|
16
|
|
|
(24
|
)
|
|
(6
|
)
|
|||||
Employee stock based compensation expense
|
35
|
|
|
15
|
|
|
58
|
|
|
6
|
|
|
141
|
|
|||||
Loss on early extinguishment of debt
|
13
|
|
|
5
|
|
|
85
|
|
|
5
|
|
|
6
|
|
|||||
Gain on step acquisition of unconsolidated subsidiaries
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Unrealized (gain) or loss on foreign currency
|
28
|
|
|
4
|
|
|
(41
|
)
|
|
(6
|
)
|
|
(16
|
)
|
|||||
Unrealized (gain) or loss on derivatives
|
49
|
|
|
(19
|
)
|
|
4
|
|
|
14
|
|
|
(1
|
)
|
|||||
Other, net
|
25
|
|
|
13
|
|
|
27
|
|
|
7
|
|
|
9
|
|
|||||
Changes in assets and liabilities, net of effects of acquisition:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts receivable
|
82
|
|
|
(55
|
)
|
|
(54
|
)
|
|
(84
|
)
|
|
41
|
|
|||||
Inventories
|
185
|
|
|
89
|
|
|
108
|
|
|
(43
|
)
|
|
175
|
|
|||||
Income taxes receivable, prepaid and payables, net
|
71
|
|
|
20
|
|
|
(16
|
)
|
|
(32
|
)
|
|
41
|
|
|||||
Other current and non current assets
|
(49
|
)
|
|
(5
|
)
|
|
(9
|
)
|
|
7
|
|
|
44
|
|
|||||
Accounts payable and accrued expenses
|
206
|
|
|
98
|
|
|
861
|
|
|
128
|
|
|
136
|
|
|||||
Other current and non current liabilities
|
(38
|
)
|
|
—
|
|
|
6
|
|
|
9
|
|
|
(13
|
)
|
|||||
Net change in operating assets and liabilities
|
457
|
|
|
147
|
|
|
896
|
|
|
(15
|
)
|
|
424
|
|
|||||
Net cash provided by operating activities
|
1,613
|
|
|
385
|
|
|
1,749
|
|
|
280
|
|
|
837
|
|
|||||
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisitions of businesses
|
(19,114
|
)
|
|
—
|
|
|
—
|
|
|
(13,717
|
)
|
|
—
|
|
|||||
Cash acquired in acquisitions
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of related party note receivable
|
(11
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
(39
|
)
|
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from capital distributions from investments in unconsolidated subsidiaries
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchases of property, plant and equipment
|
(180
|
)
|
|
(11
|
)
|
|
(66
|
)
|
|
(33
|
)
|
|
(79
|
)
|
|||||
Other, net
|
9
|
|
|
(7
|
)
|
|
2
|
|
|
(22
|
)
|
|
4
|
|
|||||
Net cash (used in) provided by investing activities
|
(19,131
|
)
|
|
(18
|
)
|
|
180
|
|
|
(13,772
|
)
|
|
(75
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of common stock
|
9,000
|
|
|
—
|
|
|
—
|
|
|
6,385
|
|
|
—
|
|
|||||
Proceeds from unsecured credit facility
|
1,900
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from senior unsecured notes
|
8,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from term loan
|
2,700
|
|
|
—
|
|
|
1,200
|
|
|
5,947
|
|
|
—
|
|
|||||
Proceeds from related party note
|
—
|
|
|
—
|
|
|
—
|
|
|
1,815
|
|
|
—
|
|
|||||
Net issuance of Commercial Paper
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Proceeds from structured payables
|
526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repayment of unsecured credit facility
|
(1,900
|
)
|
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(330
|
)
|
|||||
Repayment of term loan
|
(3,447
|
)
|
|
(505
|
)
|
|
(3,168
|
)
|
|
(147
|
)
|
|
—
|
|
|||||
Payments on capital leases
|
(17
|
)
|
|
(4
|
)
|
|
(15
|
)
|
|
(1
|
)
|
|
(37
|
)
|
|||||
Deferred financing charges paid
|
(55
|
)
|
|
—
|
|
|
(5
|
)
|
|
(122
|
)
|
|
—
|
|
|||||
Proceeds from issuance of common stock under compensation plans
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Cash contributions (distributions) from (to) redeemable NCI shareholders
|
18
|
|
|
—
|
|
|
4
|
|
|
60
|
|
|
(4
|
)
|
|||||
Cash dividends paid
|
(232
|
)
|
|
(11
|
)
|
|
(55
|
)
|
|
(10
|
)
|
|
(93
|
)
|
|||||
Share repurchases
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|||||
Cross currency swap
|
—
|
|
|
—
|
|
|
(87
|
)
|
|
13
|
|
|
—
|
|
|||||
Other, net
|
1
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
35
|
|
|||||
Net cash provided by (used in) financing activities
|
17,577
|
|
|
(620
|
)
|
|
(2,026
|
)
|
|
13,937
|
|
|
(647
|
)
|
|||||
Cash, cash equivalents, restricted cash and restricted cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating, investing and financing activities
|
59
|
|
|
(253
|
)
|
|
(97
|
)
|
|
445
|
|
|
115
|
|
|||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
|
(15
|
)
|
|
(1
|
)
|
|
8
|
|
|
(7
|
)
|
|
17
|
|
|||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
95
|
|
|
349
|
|
|
438
|
|
|
—
|
|
|
59
|
|
|||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
$
|
139
|
|
|
$
|
95
|
|
|
$
|
349
|
|
|
$
|
438
|
|
|
$
|
191
|
|
|
Common Stock Issued
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total
Stockholders' Equity
|
|||||||||||||
(in millions)
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance as of December 4, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Proceeds from issuance of common stock
|
790.5
|
|
|
8
|
|
|
6,377
|
|
|
—
|
|
|
—
|
|
|
6,385
|
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
26
|
|
|||||
Balance as of September 24, 2016
|
790.5
|
|
|
$
|
8
|
|
|
$
|
6,377
|
|
|
$
|
99
|
|
|
$
|
26
|
|
|
$
|
6,510
|
|
Adjustment of non-controlling interests to fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
(86
|
)
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|||||
Net income attributable to KDP
|
—
|
|
|
—
|
|
|
—
|
|
|
378
|
|
|
—
|
|
|
378
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
|||||
Balance as of September 30, 2017
|
790.5
|
|
|
$
|
8
|
|
|
$
|
6,377
|
|
|
$
|
337
|
|
|
$
|
106
|
|
|
$
|
6,828
|
|
Adjustment of non-controlling interests to fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(25
|
)
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Net income income attributable to KDP
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
—
|
|
|
612
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Balance as of December 31, 2017
|
790.5
|
|
|
$
|
8
|
|
|
$
|
6,377
|
|
|
$
|
914
|
|
|
$
|
99
|
|
|
$
|
7,398
|
|
Adoption of new accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Net income attributable to KDP
|
—
|
|
|
—
|
|
|
—
|
|
|
586
|
|
|
—
|
|
|
586
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
|
(229
|
)
|
|||||
Issuance of common stock
|
407.0
|
|
|
4
|
|
|
8,996
|
|
|
—
|
|
|
—
|
|
|
9,000
|
|
|||||
Acquisition of Dr Pepper Snapple Group, Inc.
|
182.5
|
|
|
2
|
|
|
3,641
|
|
|
|
|
|
|
3,643
|
|
|||||||
Conversion of subsidiary shares
|
7.9
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
172
|
|
|||||
Capitalization of loans with related parties
|
—
|
|
|
—
|
|
|
1,815
|
|
|
—
|
|
|
—
|
|
|
1,815
|
|
|||||
Adjustment of non-controlling interests to fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
|
|
(16
|
)
|
||||||
Reclassification of historical Maple Parent Corporation employee redeemable non-controlling interest and mezzanine equity awards
|
—
|
|
|
—
|
|
|
9
|
|
|
139
|
|
|
—
|
|
|
148
|
|
|||||
Acquisition of Core Nutrition, LLC
|
16.7
|
|
|
—
|
|
|
441
|
|
|
—
|
|
|
—
|
|
|
441
|
|
|||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(441
|
)
|
|
—
|
|
|
(441
|
)
|
|||||
Shares issued under employee stock-based compensation plans and other
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Balance as of December 31, 2018
|
1,405.9
|
|
|
$
|
14
|
|
|
$
|
21,471
|
|
|
$
|
1,178
|
|
|
$
|
(130
|
)
|
|
$
|
22,533
|
|
|
Common Stock Issued
|
|
Additional
Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Total
Stockholders' Equity
|
||||||||||||
(in millions)
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||
Balance as of September 26, 2015
|
153.2
|
|
|
$
|
15
|
|
|
$
|
880
|
|
|
$
|
2,015
|
|
|
$
|
(199
|
)
|
|
2,711
|
|
Shares issued under employee stock-based compensation plans
|
0.8
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Stock-based compensation, net of tax of $5
|
—
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
||||
Reclassification of stock-based compensation to liability
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||
Dividends paid
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
||||
Repurchase of common stock
|
(4.4
|
)
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
||||
Balance as of March 2, 2016
|
149.6
|
|
|
$
|
15
|
|
|
$
|
643
|
|
|
$
|
2,066
|
|
|
$
|
(208
|
)
|
|
2,516
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||
(in millions)
|
Prior Presentation
|
|
Revised Presentation
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||
Transportation and warehouse costs
|
Transportation and warehouse costs
|
|
Selling, general and administrative ("SG&A") expenses
|
|
$
|
66
|
|
|
$
|
250
|
|
|
$
|
135
|
|
|
$
|
—
|
|
Transportation and warehouse costs
|
Cost of sales
|
|
SG&A expenses
|
|
14
|
|
|
21
|
|
|
—
|
|
|
129
|
|
||||
Transaction costs
|
Transaction costs
|
|
SG&A expenses
|
|
—
|
|
|
—
|
|
|
102
|
|
|
187
|
|
||||
Restructuring expenses
|
Restructuring expenses
|
|
SG&A expenses
|
|
6
|
|
|
45
|
|
|
4
|
|
|
3
|
|
||||
Gains and losses on foreign currency
|
(Gain) loss on foreign currency, net
|
|
Other (income) expense, net
|
|
5
|
|
|
(32
|
)
|
|
(5
|
)
|
|
2
|
|
||||
Commodity contracts
|
(Gain) loss on financial instruments, net
|
|
Cost of sales
|
|
1
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Interest rate contracts
|
(Gain) loss on financial instruments, net
|
|
Interest expense
|
|
(19
|
)
|
|
(74
|
)
|
|
6
|
|
|
—
|
|
||||
FX contracts
|
(Gain) loss on financial instruments, net
|
|
Other (income) expense, net
|
|
(2
|
)
|
|
53
|
|
|
8
|
|
|
(1
|
)
|
(in millions)
|
Prior Presentation
|
|
Revised Presentation
|
|
December 31, 2017
|
||
Income taxes receivable
|
Income taxes receivable
|
|
Prepaid expenses and other current assets
|
|
$
|
45
|
|
Deferred revenue
|
Deferred revenue
|
|
Other current liabilities
|
|
3
|
|
|
Income taxes payable
|
Income taxes payable
|
|
Other current liabilities
|
|
3
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||
(in millions)
|
Prior Presentation
|
|
Revised Presentation
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||
Amortization of deferred financing fees
|
Amortization of deferred financing fees
|
|
Amortization expense
|
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
13
|
|
|
$
|
1
|
|
Asset impairment and non-cash restructuring
|
Asset impairment and non-cash restructuring
|
|
Other, net
|
|
6
|
|
|
16
|
|
|
—
|
|
|
8
|
|
||||
Excess tax benefits from equity based compensation plans
|
Excess tax benefits from equity based compensation plans
|
|
Other, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
||||
Provision for doubtful accounts
|
Provision for doubtful accounts
|
|
Other, net
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Acquisition Costs
|
Acquisition costs
|
|
Accounts payable and accrued expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
||||
Working Capital: Acquisition Costs
|
Payment of acquisition related costs
|
|
Accounts payable and accrued expenses
|
|
—
|
|
|
(10
|
)
|
|
(59
|
)
|
|
—
|
|
||||
Working capital: Other current assets
|
Other current assets
|
|
Other current and non-current assets
|
|
(9
|
)
|
|
(9
|
)
|
|
21
|
|
|
43
|
|
||||
Working capital: Other non-current assets
|
Other non-current assets
|
|
Other current and non-current assets
|
|
4
|
|
|
—
|
|
|
(14
|
)
|
|
1
|
|
||||
Working capital: Other short-term liabilities
|
Other short-term liabilities
|
|
Other current and non-current liabilities
|
|
—
|
|
|
(6
|
)
|
|
(8
|
)
|
|
—
|
|
||||
Working capital: Other long-term liabilities
|
Other long-term liabilities
|
|
Other current and non-current liabilities
|
|
—
|
|
|
12
|
|
|
17
|
|
|
(13
|
)
|
|
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||
(in millions)
|
Prior Presentation
|
|
Revised Presentation
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||
Related party note receivable
|
Other investing activities
|
|
Issuance of related party note receivable
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||
(in millions)
|
Prior Presentation
|
|
Revised Presentation
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||
Excess tax benefits from equity based compensation plans
|
Excess tax benefits from equity based compensation plans
|
|
Operating Section: Other, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Balance, beginning of the period
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Charges to bad debt expense
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|||||
Write-offs and adjustments
|
1
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
|||||
Balance, end of the period
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Financial Statement Caption
|
|
December 31,
|
||||||
(in millions)
|
|
2018
|
|
2017
|
|||||
Inventories
|
|
|
|
|
|
||||
Excess and obsolete inventory
|
Inventories
|
|
$
|
13
|
|
|
$
|
10
|
|
Capitalized Customer Incentive Programs
|
|
|
|
|
|
||||
Capitalized customer incentive programs asset, net of amortization
|
Prepaid expenses and other current assets and Non-current assets
|
|
46
|
|
|
4
|
|
||
Risk Management Programs
|
|
|
|
|
|
||||
Risk management program retained risk accrued expenses
|
Accrued expenses and Other long term liabilities
|
|
94
|
|
|
8
|
|
||
Risk management program insurance recovery receivables
|
Prepaid expenses and other current assets and Non-current assets
|
|
10
|
|
|
—
|
|
||
Advertising and Marketing Expense
|
|
|
|
|
|
||||
Prepaid advertising and marketing programs
|
Prepaid expenses and other current assets and non-current assets
|
|
32
|
|
|
7
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
Financial Statement Caption
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Capitalized Customer Incentive Programs
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization expense
|
Net Sales
|
$
|
79
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization expense
|
SG&A Expenses
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Property, Plant and Equipment, Net
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment loss
|
Other (income) expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Goodwill and Other Intangible Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Impairment loss
|
Other (income) expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Transportation and Warehousing Costs
|
SG&A Expenses
|
695
|
|
|
79
|
|
|
261
|
|
|
135
|
|
|
129
|
|
|||||
Advertising and Marketing Expense
|
SG&A Expenses
|
411
|
|
|
58
|
|
|
140
|
|
|
67
|
|
|
62
|
|
|||||
Research and Development Costs
|
SG&A Expenses
|
64
|
|
|
16
|
|
|
56
|
|
|
30
|
|
|
31
|
|
(1)
|
As a result of the
DPS Merger
, all
DPS
unvested stock option awards,
RSUs
and preferred share units ("PSUs") (the "Legacy Stock Awards") vested immediately as a result of the Change in Control (as defined in the terms of each individual award agreement). All Legacy Stock Awards, except for the stock option awards and certain
RSUs
not yet released to the employee, received the special cash dividend of
$103.75
per share, subject to any withholding of taxes required by law. These amounts were included within the special cash dividend.
|
(2)
|
The fair value of replacement equity awards includes the Company issued replacement stock option awards for
DPS
stock option awards that were fully vested as of July 9, 2018 but not yet exercised by the employee, the DPS stock option awards that were fully vested as of July 9, 2018 and converted to cash by the employee and certain
RSUs
not yet released to the employee as a result of certain Internal Revenue Code requirements.
|
•
|
A
$9,000 million
equity investment from
JAB
.
|
•
|
The issuance by the
Company
of
$8,000 million
of senior unsecured notes under a private offering Rule 144A.
Refer to Note 8 for additional information
.
|
•
|
Proceeds of
$2,700 million
borrowed under the term loan agreement and proceeds of
$1,900 million
borrowed under the revolving credit facility.
Refer to Note 8 for additional information
.
|
•
|
Proceeds of
$124 million
from the
Company
's structured payables.
|
•
|
The remainder of the total consideration exchanged in the
DPS Merger
was funded by cash on hand.
|
(in millions)
|
Initial Allocation of Consideration
|
|
Measurement Period Adjustments
|
|
December 31, 2018
|
||||||
Cash and cash equivalents
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
147
|
|
Investments in unconsolidated subsidiaries
(1)
|
90
|
|
|
—
|
|
|
90
|
|
|||
Property, plant and equipment
(2)
|
1,549
|
|
|
(39
|
)
|
|
1,510
|
|
|||
Other intangible assets
|
20,404
|
|
|
(536
|
)
|
|
19,868
|
|
|||
Long-term obligations
(3)
|
(4,049
|
)
|
|
—
|
|
|
(4,049
|
)
|
|||
Capital lease and financing obligations
|
(214
|
)
|
|
9
|
|
|
(205
|
)
|
|||
Acquired assets, net of assumed liabilities
(4)
|
107
|
|
|
(25
|
)
|
|
82
|
|
|||
Deferred tax liabilities, net of deferred tax assets
(5)
|
(4,959
|
)
|
|
(18
|
)
|
|
(4,977
|
)
|
|||
Goodwill
|
9,407
|
|
|
609
|
|
|
10,016
|
|
|||
Total consideration exchanged
|
22,482
|
|
|
—
|
|
|
22,482
|
|
|||
Fair value of stock and replacement equity awards not converted to cash
(6)
|
3,643
|
|
|
—
|
|
|
3,643
|
|
|||
Acquisition of business
|
$
|
18,839
|
|
|
$
|
—
|
|
|
$
|
18,839
|
|
(1)
|
The
Company
preliminarily valued investments in unconsolidated subsidiaries using a market approach, specifically the guideline public company method.
|
(2)
|
The
Company
preliminarily valued personal property using a combination of the market approach and the cost approach, which is based upon current replacement or reproduction cost of the asset as newly adjusted for any depreciation attributable to physical, functional and economic factors. The
Company
assigned personal property a useful life ranging from
1 year
to
24 years
. We preliminarily valued real property using the cost approach and land using the sales comparison approach. The
Company
assigned real property a useful life between
1 year
and
41 years
.
|
(3)
|
The fair value amounts of long-term obligations (current and long-term) were based on current market rates available to the
Company
.
|
(4)
|
The
Company
used existing carrying values to value trade receivables and payables, as well as certain other current and non-current assets and liabilities, as the
Company
determined that they represented the fair value of those items as of the
Merger Date
. The
Company
preliminarily valued work-in-process ("WIP") and finished goods inventory using a net realizable value approach resulting in a step-up of
$131 million
which was recognized in the cost of goods sold in 2018, as the related inventory was sold during the year. Raw materials were carried at net book value.
|
(5)
|
Net deferred tax liabilities represented the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases. The
Company
used a preliminary consolidated tax rate to determine the net deferred tax liabilities. The
Company
will record measurement period adjustments as the
Company
applies the appropriate tax rate for each legal entity within
DPS
.
|
(6)
|
A portion of
DPS
' vested options were treated as replacement equity awards for purposes of valuation but were converted to cash as of the
Merger Date
. As a result, in order to determine the cash paid for the
DPS Merger
, the
Company
reduced the fair value of the related replacement equity awards originally presented in the total consideration exchanged table above by
$21 million
.
|
(1)
|
The
Company
preliminarily valued the brand portfolio primarily utilizing the multi-period excess earnings method, a form of the income approach.
|
(2)
|
The
Company
preliminarily valued contractual arrangements with bottlers and distributors utilizing the distributor method, a form of the income approach.
|
(3)
|
The
Company
identified two types of customer relationships, retail and food service. We preliminarily valued retail and food service customer relationships utilizing the distributor method, a form of the income approach.
|
(4)
|
The
Company
preliminarily valued favorable leases utilizing the income approach.
|
|
For the Year Ended December 31,
|
||||||
(Unaudited, in millions)
|
2018
|
|
2017
|
||||
Net sales
|
$
|
11,020
|
|
|
$
|
10,775
|
|
Net income
|
1,108
|
|
|
1,447
|
|
(in millions)
|
Initial Allocation of Consideration
|
|
Measurement Period Adjustments
|
|
December 31, 2018
|
||||||
Cash and cash equivalents
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Other intangible assets
|
240
|
|
|
—
|
|
|
240
|
|
|||
Assumed liabilities, net of acquired assets
(1)
|
(28
|
)
|
|
2
|
|
|
(26
|
)
|
|||
Goodwill
|
89
|
|
|
—
|
|
|
89
|
|
|||
Total consideration exchanged
(2)
|
304
|
|
|
2
|
|
|
306
|
|
|||
Less: Company's previous ownership interest
|
22
|
|
|
—
|
|
|
22
|
|
|||
Less: Holdback placed in Escrow
|
15
|
|
|
—
|
|
|
15
|
|
|||
Acquisition of business
|
$
|
267
|
|
|
$
|
2
|
|
|
$
|
269
|
|
(1)
|
The
Company
preliminarily valued WIP and finished goods inventory using a net realizable value approach resulting in a step-up of
$2 million
which was recognized in the cost of goods sold for the
year ended December 31, 2018
as the related inventory was sold during that period. Raw materials were carried at net book value.
|
(2)
|
The
Company
paid
$2 million
in additional consideration during the fourth quarter of 2018 as a result of working capital adjustments determined pursuant to the terms of the
Big Red Acquisition Agreement
.
|
(1)
|
The
Company
preliminarily valued the brand portfolio utilizing the multi-period excess earnings method, a form of the income approach.
|
(2)
|
The
Company
have identified two types of customer relationships, retail and industrial. We preliminarily valued retail and industrial customer relationships utilizing the distributor method, a form of the income approach.
|
(3)
|
The
Company
preliminarily valued contractual arrangements with bottlers and distributors utilizing the distributor method, a form of the income approach.
|
(in millions)
|
|
Fair Value
|
||
Cash and cash equivalents
|
|
$
|
10
|
|
Other intangible assets
|
|
273
|
|
|
Assumed liabilities, net of acquired assets
(1)
|
|
(12
|
)
|
|
Goodwill
|
|
236
|
|
|
Total consideration exchanged
|
|
507
|
|
|
Company's previous ownership interest
|
|
31
|
|
|
Less: Holdback placed in Escrow
|
|
27
|
|
|
Acquisition of business
|
|
$
|
449
|
|
(1)
|
The
Company
preliminarily valued WIP and finished goods inventory using a net realizable value approach resulting in a step-up of
$4 million
, of which
$1 million
was recognized in cost of goods sold in 2018, as the related inventory was sold during the year. Raw materials were carried at net book value.
|
(1)
|
The
Company
preliminarily valued the brand portfolio utilizing the multi-period excess earnings method, a form of the income approach.
|
(2)
|
The
Company
preliminarily valued contractual arrangements utilizing the distributor method, a form of the income approach.
|
(in millions)
|
|
Fair Value
|
||
Cash and cash equivalents
|
|
$
|
215
|
|
Plant, property and equipment
(1)
|
|
991
|
|
|
Other intangible assets
|
|
4,102
|
|
|
Goodwill
|
|
9,946
|
|
|
Deferred tax liabilities
|
|
(1,555
|
)
|
|
Assets acquired, net of liabilities assumed
|
|
226
|
|
|
Acquisition of business
|
|
$
|
13,925
|
|
(1)
|
The
Company
primarily valued personal property using the cost approach and applying the reproduction or replacement cost method. The
Company
assigned personal property a useful life ranging from
3 years
to
11 years
. The Company primarily valued real property using the cost approach, which was supported by the market approach or income approach as appropriate. The Company assigned real property a useful life between
3 years
and
48 years
.
|
(1)
|
The
Company
valued acquired technology using the relief-from-royalty method, a form of the income approach.
|
(2)
|
The Company valued retail relationships using the distributor method, a form of the income approach. The Company valued digital and other customer relationships using the excess earnings method, a form of the income approach.
|
(3)
|
The Company valued leases using the discounted cash flow method, a form of the income approach.
|
(4)
|
The
Company
valued definite-lived and indefinite-lived trade names using the relief-from-royalty method, a form of the income approach.
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
DPS Merger
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Keurig Acquisition
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102
|
|
|
187
|
|
|||||
Other transaction expenses
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total transaction expenses incurred
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
187
|
|
|
|
|
|
December 31,
|
|||||||
(in millions)
|
|
Ownership Interest
|
|
2018
|
|
2017
|
|||||
BA Sports Nutrition, LLC ("BODYARMOR")
(1)(2)
|
|
15.5
|
%
|
|
$
|
62
|
|
|
$
|
—
|
|
Bedford Systems, LLC ("Bedford")
(3)
|
|
30.0
|
%
|
|
79
|
|
|
95
|
|
||
Dyla LLC
|
|
12.6
|
%
|
|
15
|
|
|
—
|
|
||
Force Holdings LLC
|
|
33.3
|
%
|
|
6
|
|
|
—
|
|
||
LifeFuels, Inc.
|
|
26.7
|
%
|
|
19
|
|
|
—
|
|
||
Other
|
|
(various)
|
|
|
5
|
|
|
2
|
|
||
Investments in unconsolidated subsidiaries
|
|
|
|
$
|
186
|
|
|
$
|
97
|
|
(1)
|
The investment in BODYARMOR was acquired as part of the DPS Merger on July 9, 2018. Refer to the purchase price allocation above.
|
(2)
|
On August 14, 2018, it was announced that The Coca-Cola Company ("Coca-Cola") took a minority interest in BODYARMOR and would obtain the
Company
's current distribution rights. On August 19, 2018, the Company received a distribution from BODYARMOR of approximately
$35 million
. This distribution reduced the Company's investment by approximately
$11 million
and resulted in a gain of approximately
$24 million
, which was recorded to Other (income) expense, net in the
Consolidated
Statements of Income. The
Company
continues to account for its interest in BODYARMOR as an equity method investment at the ownership level prior to the Coca-Cola announcement as an updated ownership interest percentage has not yet been provided to the
Company
.
|
(3)
|
The investment in Bedford represents a joint venture formed with Anheuser-Busch InBev ("ABI") on March 3, 2017 to develop and launch an in-home alcoholic beverage system. Under the terms of the transaction agreement, the
Company
contributed its existing Kold assets and liabilities along with all outstanding shares of MDS Holdings p.l.c. (Bevyz) with a net book value of
$357 million
to Bedford in exchange for a
30%
interest. ABI contributed
$250 million
to the investment, which was immediately distributed to
Maple
, in exchange for a
70%
interest.
|
(in millions)
|
Beverage Concentrates
|
|
Packaged Beverages
|
|
Latin America Beverages
|
|
Coffee Systems
|
|
Total
|
||||||||||
2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
CSD
(1)
|
$
|
656
|
|
|
$
|
1,084
|
|
|
$
|
174
|
|
|
$
|
—
|
|
|
$
|
1,914
|
|
NCB
(1)
|
6
|
|
|
1,153
|
|
|
69
|
|
|
—
|
|
|
1,228
|
|
|||||
Pods
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
3,249
|
|
|
3,249
|
|
|||||
Appliances
|
—
|
|
|
—
|
|
|
—
|
|
|
643
|
|
|
643
|
|
|||||
Other
|
7
|
|
|
178
|
|
|
1
|
|
|
222
|
|
|
408
|
|
|||||
Net sales
|
$
|
669
|
|
|
$
|
2,415
|
|
|
$
|
244
|
|
|
$
|
4,114
|
|
|
$
|
7,442
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Transition 2017
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
CSD
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NCB
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pods
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
856
|
|
|
856
|
|
|||||
Appliances
|
—
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|
257
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
57
|
|
|||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,170
|
|
|
$
|
1,170
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2017
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
CSD
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NCB
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pods
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
3,415
|
|
|
3,415
|
|
|||||
Appliances
|
—
|
|
|
—
|
|
|
—
|
|
|
646
|
|
|
646
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
208
|
|
|
208
|
|
|||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,269
|
|
|
$
|
4,269
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Successor 2016
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
CSD
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NCB
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pods
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,822
|
|
|
1,822
|
|
|||||
Appliances
|
—
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
359
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
112
|
|
|||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,293
|
|
|
$
|
2,293
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Predecessor 2016
(3)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
CSD
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NCB
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pods
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,696
|
|
|
1,696
|
|
|||||
Appliances
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
|
225
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
104
|
|
|||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,025
|
|
|
$
|
2,025
|
|
(1)
|
Represents net sales of owned and partner brands within the Company's portfolio.
|
(2)
|
Represents net sales from owned brands,
partner brands and private label owners. Net sales for partner brands and private label owners are contractual and long term in nature.
|
(3)
|
Prior period amounts were not adjusted for the adoption of revenue recognition under ASC 606.
|
|
Beverage Concentrates
|
|
Packaged Beverages
|
|
Latin America Beverages
|
|
Coffee Systems
|
|
Corporate Unallocated
|
|
Total
|
||||||||||||
Balance as of September 24, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,012
|
|
|
$
|
—
|
|
|
$
|
10,012
|
|
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
64
|
|
||||||
Adjustments
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
—
|
|
|
(45
|
)
|
||||||
Disposals
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(202
|
)
|
|
—
|
|
|
(202
|
)
|
||||||
Balance as of September 30, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
9,829
|
|
|
—
|
|
|
9,829
|
|
||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||
Balance as of December 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
9,819
|
|
|
—
|
|
|
9,819
|
|
||||||
Foreign currency translation
|
(13
|
)
|
|
(26
|
)
|
|
(18
|
)
|
|
(94
|
)
|
|
—
|
|
|
(151
|
)
|
||||||
Acquisitions
(3)
|
4,278
|
|
|
4,904
|
|
|
636
|
|
|
—
|
|
|
525
|
|
|
10,343
|
|
||||||
Balance as of December 31, 2018
|
$
|
4,265
|
|
|
$
|
4,878
|
|
|
$
|
618
|
|
|
$
|
9,725
|
|
|
$
|
525
|
|
|
$
|
20,011
|
|
(1)
|
Represents measurement period adjustments recorded in the year following the acquisition of Keurig by Maple.
|
(2)
|
Represents the write-off of goodwill associated with the sale of Kold assets.
|
(3)
|
Represents the goodwill recorded as a result of the
DPS Merger
, the
Big Red Acquisition
, and the
Core Acquisition
.
Refer to Note 3 for additional information
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Brands
(1)
|
|
$
|
19,712
|
|
|
$
|
—
|
|
Contractual arrangements
(2)
|
|
119
|
|
|
—
|
|
||
Trade names
|
|
2,479
|
|
|
2,479
|
|
||
Total
|
|
$
|
22,310
|
|
|
$
|
2,479
|
|
(1)
|
The Company recorded
$19,357 million
,
$220 million
and
$254 million
of indefinite-lived brand assets as a result of the
DPS Merger
, the
Big Red Acquisition
and the
Core Acquisition
, respectively.
Refer to Note 3 for additional information
. The remaining change during the period was due to foreign currency translation.
|
(2)
|
The Company recorded
$120 million
of indefinite-lived contractual arrangements with certain bottlers and distributors as a result of the
DPS Merger
.
Refer to Note 3 for additional information
. The remaining change during the period was due to foreign currency translation.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(in millions)
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net Amount
|
||||||||||||
Acquired technology
|
$
|
1,146
|
|
|
$
|
(182
|
)
|
|
$
|
964
|
|
|
$
|
1,146
|
|
|
$
|
(109
|
)
|
|
$
|
1,037
|
|
Customer relationships
(1)(2)
|
629
|
|
|
(67
|
)
|
|
562
|
|
|
247
|
|
|
(41
|
)
|
|
206
|
|
||||||
Trade names
|
127
|
|
|
(40
|
)
|
|
87
|
|
|
129
|
|
|
(24
|
)
|
|
105
|
|
||||||
Favorable leases
(1)
|
13
|
|
|
(3
|
)
|
|
10
|
|
|
8
|
|
|
(2
|
)
|
|
6
|
|
||||||
Brands
(2)
|
9
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Contractual arrangements
(2)(3)
|
26
|
|
|
(1
|
)
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
1,950
|
|
|
$
|
(293
|
)
|
|
$
|
1,657
|
|
|
$
|
1,531
|
|
|
$
|
(176
|
)
|
|
$
|
1,355
|
|
(1)
|
As a result of the
DPS Merger
, the
Company
recorded definite-lived customer relationships of
$386 million
and definite-lived net favorable leases of
$5 million
.
Refer to Note 3 for additional information
.
|
(2)
|
As a result of the
Big Red Acquisition
, the
Company
recorded definite-lived brands of
$9 million
, definite-lived customer relationships of
$4 million
and definite-lived contractual arrangements of
$7 million
.
Refer to Note 3 for additional information
.
|
(3)
|
As a result of the
Core Acquisition
, the
Company
recorded definite-lived contractual arrangements of
$19 million
.
Refer to Note 3 for additional information
.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Amortization expense for intangible assets with definite lives
|
$
|
121
|
|
|
$
|
29
|
|
|
$
|
96
|
|
|
$
|
55
|
|
|
$
|
21
|
|
|
For the Years Ending December 31,
|
||||||||||||||||||
(in millions)
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Expected amortization expense for intangible assets with definite lives
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
130
|
|
|
$
|
129
|
|
|
$
|
124
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
U.S.
|
$
|
635
|
|
|
$
|
110
|
|
|
$
|
392
|
|
|
$
|
73
|
|
|
$
|
89
|
|
International
|
156
|
|
|
72
|
|
|
175
|
|
|
91
|
|
|
50
|
|
|||||
Total
|
$
|
791
|
|
|
$
|
182
|
|
|
$
|
567
|
|
|
$
|
164
|
|
|
$
|
139
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Current:
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal
|
$
|
183
|
|
|
$
|
32
|
|
|
$
|
87
|
|
|
$
|
50
|
|
|
$
|
30
|
|
State
|
62
|
|
|
6
|
|
|
15
|
|
|
7
|
|
|
(7
|
)
|
|||||
International
|
38
|
|
|
13
|
|
|
67
|
|
|
22
|
|
|
17
|
|
|||||
Total current provision
|
$
|
283
|
|
|
$
|
51
|
|
|
$
|
169
|
|
|
$
|
79
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred:
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal
|
$
|
(24
|
)
|
|
$
|
(488
|
)
|
|
$
|
17
|
|
|
$
|
(21
|
)
|
|
$
|
(1
|
)
|
State
|
(50
|
)
|
|
1
|
|
|
(3
|
)
|
|
(3
|
)
|
|
3
|
|
|||||
International
|
(7
|
)
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
(3
|
)
|
|||||
Total deferred provision
|
$
|
(81
|
)
|
|
$
|
(488
|
)
|
|
$
|
15
|
|
|
$
|
(24
|
)
|
|
$
|
(1
|
)
|
Total provision for income taxes
|
$
|
202
|
|
|
$
|
(437
|
)
|
|
$
|
184
|
|
|
$
|
55
|
|
|
$
|
39
|
|
|
Successor
|
|
Predecessor
|
|||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
|||||
Statutory federal income tax rate
|
21.0
|
%
|
|
24.5
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net
|
5.4
|
%
|
|
4.7
|
%
|
|
3.7
|
%
|
|
3.3
|
%
|
|
3.2
|
%
|
U.S. federal domestic manufacturing benefit
|
(1.5
|
)%
|
|
(2.3
|
)%
|
|
(3.7
|
)%
|
|
(2.8
|
)%
|
|
(2.3
|
)%
|
Impact of non-US Operations
|
0.1
|
%
|
|
(0.4
|
)%
|
|
(0.5
|
)%
|
|
(6.0
|
)%
|
|
(2.6
|
)%
|
Tax credits
|
(0.9
|
)%
|
|
(0.2
|
)%
|
|
(35.5
|
)%
|
|
(2.0
|
)%
|
|
(3.6
|
)%
|
Valuation allowance for deferred tax assets
|
2.0
|
%
|
|
—
|
%
|
|
3.7
|
%
|
|
—
|
%
|
|
—
|
%
|
U.S. taxation of foreign earnings
|
1.8
|
%
|
|
—
|
%
|
|
30.3
|
%
|
|
0.8
|
%
|
|
0.2
|
%
|
Deferred rate change
|
(4.9
|
)%
|
|
—
|
%
|
|
(1.2
|
)%
|
|
(3.4
|
)%
|
|
1.1
|
%
|
State refund
|
(0.4
|
)%
|
|
—
|
%
|
|
(0.2
|
)%
|
|
—
|
%
|
|
(14.8
|
)%
|
Uncertain tax positions
|
0.6
|
%
|
|
0.3
|
%
|
|
2.7
|
%
|
|
11.6
|
%
|
|
7.4
|
%
|
U.S. Federal Provision to Return
|
(0.3
|
)%
|
|
—
|
%
|
|
(2.7
|
)%
|
|
—
|
%
|
|
(2.3
|
)%
|
Transaction Costs
|
1.4
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(4.1
|
)%
|
|
4.6
|
%
|
Impact of the TCJA
|
0.5
|
%
|
|
(265.2
|
)%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Other
|
0.7
|
%
|
|
(1.5
|
)%
|
|
0.9
|
%
|
|
1.1
|
%
|
|
2.2
|
%
|
Total provision for income taxes
|
25.5
|
%
|
|
(240.1
|
)%
|
|
32.5
|
%
|
|
33.5
|
%
|
|
28.1
|
%
|
–
|
A reduction of the U.S. federal statutory tax rate from 35% to 21%;
|
–
|
Required companies to pay a one-time transition tax on earnings of certain foreign subsidiaries,
|
–
|
Created new taxes on certain foreign sourced earnings,
|
–
|
Repealed the domestic manufacturing deduction; however, under the transition rules the Company was able to continue to benefit from the domestic manufacturing deduction during the first nine months of 2018, and
|
–
|
allowed for full expensing of certain capital purchases from September 28, 2017 through December 31, 2022.
|
•
|
An income tax expense of
$2 million
and benefit of
$493 million
primarily due to reducing its net U.S. deferred tax liabilities for the 14% decrease in the U.S. federal statutory tax rate as of
December 31, 2018 and 2017
, respectively.
|
•
|
Income tax benefit of
$7 million
and expense of
$9 million
due to the one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred from U.S. federal income taxation as of
December 31, 2018 and 2017
, respectively.
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Equity method investments
|
$
|
—
|
|
|
$
|
48
|
|
Net operating loss
|
53
|
|
|
53
|
|
||
Tax credit carryforwards
|
58
|
|
|
30
|
|
||
Accrued expenses
|
96
|
|
|
14
|
|
||
Share-based compensation
|
21
|
|
|
14
|
|
||
Multi-year upfront payments
|
21
|
|
|
—
|
|
||
Other
|
39
|
|
|
12
|
|
||
Total deferred tax assets
|
288
|
|
|
171
|
|
||
Valuation allowances
|
(79
|
)
|
|
(44
|
)
|
||
Total deferred tax assets, net of valuation allowances
|
$
|
209
|
|
|
$
|
127
|
|
Deferred tax liabilities:
|
|
|
|
||||
Brands, Trademarks and other intangible assets
|
$
|
(5,757
|
)
|
|
$
|
(1,008
|
)
|
Property, plant and equipment
|
(277
|
)
|
|
(88
|
)
|
||
Derivative instruments
|
(56
|
)
|
|
(30
|
)
|
||
Equity method investments
|
(8
|
)
|
|
—
|
|
||
Other
|
(8
|
)
|
|
(5
|
)
|
||
Total deferred tax liabilities
|
(6,106
|
)
|
|
(1,131
|
)
|
||
Net deferred tax liabilities
|
$
|
(5,897
|
)
|
|
$
|
(1,004
|
)
|
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
||||||
Balance, beginning of the period
|
$
|
35
|
|
|
$
|
33
|
|
|
$
|
21
|
|
Increases related to tax positions taken during the current year
|
1
|
|
|
—
|
|
|
18
|
|
|||
Increases (decreases) related to tax positions taken during the prior year
|
12
|
|
|
2
|
|
|
(6
|
)
|
|||
Increases related to tax positions from acquisitions
|
13
|
|
|
—
|
|
|
—
|
|
|||
Decreases related to settlements with taxing authorities
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
Decreases related to lapse of applicable statute of limitations
|
(3
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, end of the period
|
$
|
50
|
|
|
$
|
35
|
|
|
$
|
33
|
|
(in millions)
|
2018
|
||
Projected Benefit Obligations
|
|
||
Beginning balance
|
$
|
—
|
|
Additions as a result of the DPS Merger
|
222
|
|
|
Service cost
|
1
|
|
|
Interest cost
|
5
|
|
|
Actuarial (gains) losses, net
|
(7
|
)
|
|
Benefits paid
|
(1
|
)
|
|
Impact of changes in FX rates
|
(1
|
)
|
|
Settlements
|
(13
|
)
|
|
Ending balance
|
$
|
206
|
|
|
|
||
Fair Value of Plan Assets
|
|
||
Beginning balance
|
$
|
—
|
|
Additions as a result of the DPS Merger
|
200
|
|
|
Actual return on plan assets
|
(8
|
)
|
|
Employer contributions
|
1
|
|
|
Benefits paid
|
(1
|
)
|
|
Impact of changes in FX rates
|
(1
|
)
|
|
Settlements
|
(13
|
)
|
|
Ending balance
|
$
|
178
|
|
|
|
||
Net liability recognized
|
$
|
(28
|
)
|
Current liability
|
$
|
(1
|
)
|
Non-current liability
|
(27
|
)
|
|
As of December 31,
|
||
(in millions)
|
2018
|
||
Aggregate projected benefit obligation
|
$
|
203
|
|
Aggregate accumulated benefit obligation
|
201
|
|
|
Aggregate fair value of plan assets
|
175
|
|
(in millions)
|
2018
|
||
Service cost
|
1
|
|
|
Interest cost
|
5
|
|
|
Expected return on assets
|
(5
|
)
|
|
Total net periodic benefit costs
|
$
|
1
|
|
(in millions)
|
As of December 31, 2018
|
||
Net actuarial loss
|
5
|
|
|
Prior service cost
|
—
|
|
|
Total
|
$
|
5
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024-2028
|
||||||
Estimated future benefit payments
|
11
|
|
|
11
|
|
|
12
|
|
|
12
|
|
|
13
|
|
|
63
|
|
|
2018
|
|
Fixed income securities:
|
|
|
Asset allocation assumption
|
80
|
%
|
Expected long-term rate of return
|
4.6
|
%
|
|
|
|
Equity securities:
|
|
|
Asset allocation assumption
|
20
|
%
|
Expected long-term rate of return
|
7.6
|
%
|
|
U.S. Pension Plans
|
|
|
2018
|
|
Weighted average discount rate
|
4.25
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
|
U.S. Pension Plans
|
|
|
2018
|
|
Weighted average discount rate
|
4.25
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
Expected long-term rate of return
|
5.25
|
%
|
(in millions)
|
Fair Value Hierarchy Level
|
|
Pension Assets
|
|
PRMB Assets
|
||||
As of December 31, 2018
|
|
|
|
|
|
||||
Cash and cash equivalents
|
Level 1
|
|
$
|
3
|
|
|
$
|
—
|
|
U.S. equity securities
(1)(2)
|
Level 2
|
|
16
|
|
|
1
|
|
||
International equity securities
(1)(2)
|
Level 2
|
|
13
|
|
|
—
|
|
||
International fixed income securities
(2)
|
Level 2
|
|
14
|
|
|
—
|
|
||
Fixed income securities
(3)
|
Level 2
|
|
132
|
|
|
5
|
|
||
Total
|
|
|
178
|
|
|
6
|
|
(1)
|
Equity securities are comprised of actively managed U.S. index funds and Europe, Australia, Far East index funds.
|
(2)
|
The NAV is based on the fair value of the underlying assets owned by the equity index fund or fixed income investment vehicle per share, multiplied by the number of units held as of the measurement date.
|
(3)
|
Fixed income securities are comprised of a diversified portfolio of investment-grade corporate and government securities. Investments are provided by the investment managers using a unit price or NAV based on the fair value of the underlying investments.
|
(in millions)
|
2018
|
||
Contributions to individually significant multi-employer plan
|
1
|
|
|
Contributions to all other multi-employer plans
|
1
|
|
|
Total
|
$
|
2
|
|
Plan's employer identification number
|
36-6044243
|
Plan number
|
001
|
Expiration dates of collective bargaining agreements
(1)
|
March 2, 2019 through March 3, 2021
|
FIP/RP status pending/implemented
(2)
|
Implemented
|
Pension Protection Act ("PPA") zone status
|
Red
|
Surcharge imposed
|
Yes
|
(1)
|
Central States includes
seven
collective bargaining agreements. The largest agreement, which is set to expire
February 29, 2020
, covers approximately
56%
of the employees included in Central States. Two of the collective bargaining agreements are set to expire during 2019, covering approximately
16%
of the employees included in Central States.
|
(2)
|
Indicates a plan for which a financial improvement plan ("FIP") or rehabilitation plan ("RP") is either pending or implemented.
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Future estimated contributions to Central States
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
(in millions)
|
Fair Value Hierarchy
|
|
As of December 31, 2018
|
||
Marketable securities - trading
|
Level 1
|
|
$
|
44
|
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Senior unsecured notes
|
$
|
12,019
|
|
|
$
|
—
|
|
Revolving credit facilities
|
—
|
|
|
—
|
|
||
Term loans
|
2,561
|
|
|
3,283
|
|
||
Term loans - related party
|
—
|
|
|
1,815
|
|
||
Subtotal
|
14,580
|
|
|
5,098
|
|
||
Less - current portion
|
(379
|
)
|
|
(219
|
)
|
||
Long-term obligations
|
$
|
14,201
|
|
|
$
|
4,879
|
|
|
|
|
December 31,
|
||||||||||||||
|
Fair Value Hierarchy Level
|
|
2018
|
|
2017
|
||||||||||||
(in millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
Commercial paper
|
2
|
|
$
|
1,079
|
|
|
$
|
1,079
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current portion of long-term obligations:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior unsecured notes
|
2
|
|
250
|
|
|
250
|
|
|
—
|
|
|
—
|
|
||||
Term loans
|
2
|
|
129
|
|
|
129
|
|
|
219
|
|
|
219
|
|
||||
Short-term borrowings and current portion of long-term obligations
|
|
|
$
|
1,458
|
|
|
$
|
1,458
|
|
|
$
|
219
|
|
|
$
|
219
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||||||||
(in millions)
|
|
|
|
|
|
Fair Value Hierarchy Level
|
|
2018
|
|
2017
|
||||||||||||
Issuance
|
|
Maturity Date
|
|
Rate
|
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
2019 Notes
(1)
|
|
January 15, 2019
|
|
2.600%
|
|
2
|
|
$
|
250
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2020 Notes
(1)
|
|
January 15, 2020
|
|
2.000%
|
|
2
|
|
250
|
|
|
245
|
|
|
—
|
|
|
—
|
|
||||
2021-A Notes
(1)
|
|
November 15, 2021
|
|
3.200%
|
|
2
|
|
250
|
|
|
244
|
|
|
—
|
|
|
—
|
|
||||
2021-B Notes
(1)
|
|
November 15, 2021
|
|
2.530%
|
|
2
|
|
250
|
|
|
240
|
|
|
—
|
|
|
—
|
|
||||
2022 Notes
(1)
|
|
November 15, 2022
|
|
2.700%
|
|
2
|
|
250
|
|
|
237
|
|
|
—
|
|
|
—
|
|
||||
2023 Notes
(1)
|
|
December 15, 2023
|
|
3.130%
|
|
2
|
|
500
|
|
|
474
|
|
|
—
|
|
|
—
|
|
||||
2025 Notes
(1)
|
|
November 15, 2025
|
|
3.400%
|
|
2
|
|
500
|
|
|
467
|
|
|
—
|
|
|
—
|
|
||||
2026 Notes
(1)
|
|
September 15, 2026
|
|
2.550%
|
|
2
|
|
400
|
|
|
346
|
|
|
—
|
|
|
—
|
|
||||
2027 Notes
(1)
|
|
June 15, 2027
|
|
3.430%
|
|
2
|
|
500
|
|
|
458
|
|
|
—
|
|
|
—
|
|
||||
2038 Notes
(1)
|
|
May 1, 2038
|
|
7.450%
|
|
2
|
|
125
|
|
|
151
|
|
|
—
|
|
|
—
|
|
||||
2045 Notes
(1)
|
|
November 15, 2045
|
|
4.500%
|
|
2
|
|
550
|
|
|
478
|
|
|
—
|
|
|
—
|
|
||||
2046 Notes
(1)
|
|
December 15, 2046
|
|
4.420%
|
|
2
|
|
400
|
|
|
342
|
|
|
—
|
|
|
—
|
|
||||
2021 Merger Notes
(2)
|
|
May 25, 2021
|
|
3.551%
|
|
2
|
|
1,750
|
|
|
1,742
|
|
|
—
|
|
|
—
|
|
||||
2023 Merger Notes
(2)
|
|
May 25, 2023
|
|
4.057%
|
|
2
|
|
2,000
|
|
|
1,988
|
|
|
—
|
|
|
—
|
|
||||
2025 Merger Notes
(2)
|
|
May 25, 2025
|
|
4.417%
|
|
2
|
|
1,000
|
|
|
999
|
|
|
—
|
|
|
—
|
|
||||
2028 Merger Notes
(2)
|
|
May 25, 2028
|
|
4.597%
|
|
2
|
|
2,000
|
|
|
1,981
|
|
|
—
|
|
|
—
|
|
||||
2038 Merger Notes
(2)
|
|
May 25, 2038
|
|
4.985%
|
|
2
|
|
500
|
|
|
483
|
|
|
—
|
|
|
—
|
|
||||
2048 Merger Notes
(2)
|
|
May 25, 2048
|
|
5.085%
|
|
2
|
|
750
|
|
|
716
|
|
|
—
|
|
|
—
|
|
||||
Principal amount
|
|
|
|
|
|
|
|
$
|
12,225
|
|
|
$
|
11,841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unamortized debt issuance costs and fair value adjustment for Notes assumed in the DPS Merger
|
|
|
|
(206
|
)
|
|
|
|
—
|
|
|
|
||||||||||
Carrying amount
|
|
|
|
|
|
|
|
$
|
12,019
|
|
|
|
|
$
|
—
|
|
|
|
(1)
|
As a result of the
DPS Merger
, the
Company
assumed the liabilities of
DPS
existing senior unsecured notes.
|
(2)
|
On May 25, 2018, the
Company
issued
$8,000 million
of senior unsecured notes, consisting of
six
different tranches (the "
DPS Merger Notes
") in a private offering under Rule 144A under the Securities Act of 1933, as amended. The
DPS Merger Notes
were issued at par and had debt issuance costs related to the issuance of approximately
$46 million
.
|
|
|
|
|
|
|
December 31,
|
||||||||||||||
(in millions)
|
|
|
|
Fair Value Hierarchy Level
|
|
2018
|
|
2017
|
||||||||||||
Issuance
|
|
Maturity Date
|
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
KDP Term Loan
(1)
|
|
February 2023
|
|
2
|
|
$
|
2,583
|
|
|
$
|
2,583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
KDP Revolver
|
|
February 2023
|
|
2
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Term Loan A
|
|
|
|
2
|
|
—
|
|
|
—
|
|
|
3,329
|
|
|
3,329
|
|
||||
Principal amount
|
|
|
|
|
|
$
|
2,583
|
|
|
$
|
2,583
|
|
|
$
|
3,329
|
|
|
$
|
3,329
|
|
Unamortized debt issuance costs
|
|
|
(22
|
)
|
|
|
|
(46
|
)
|
|
|
|||||||||
Carrying amount
|
|
|
|
|
|
$
|
2,561
|
|
|
|
|
$
|
3,283
|
|
|
|
(1)
|
On December 31, 2018 the
Company
made a
$50 million
voluntary prepayment on the
KDP Term Loan
, which resulted in an insignificant loss on early extinguishment of debt.
|
•
|
A new term loan agreement among the
Company
, the lenders party thereto (the "
Term Lenders
"), the other financial institutions party thereto and
JP Morgan
, as administrative agent (the "
KDP Term Loan Agreement
"), pursuant to which the
Term Lenders
have committed to provide
$2,700 million
of the
KDP Term Loan
for the purposes of funding the
DPS Merger
and fees and expenses related to the
DPS Merger
; and
|
•
|
A new credit agreement among the
Company
, the lenders party thereto (the "
Revolving Lenders
"), the other financial institutions party thereto and
JP Morgan
, as administrative agent (the "KDP Credit Agreement” and, together with the KDP Term Loan Agreement, the “
KDP Credit Agreements
”), pursuant to which the
Revolving Lenders
have committed to provide
$2,400 million
of a revolving credit facility (the "
KDP Revolver
"), for the purpose of funding (i) the
DPS Merger
, (ii) fees and expenses related to the
DPS Merger
, (iii) repayment of the
Company
's previous revolving credit facility (as discussed below) and (iv) general corporate needs.
|
(in millions)
|
Amount Utilized
|
|
Balances Available
|
||||
KDP Revolver
(1)
|
$
|
—
|
|
|
$
|
2,400
|
|
Letters of credit
|
—
|
|
|
200
|
|
(1)
|
In order to fund the
DPS Merger
, the
Company
drew down
$1,900 million
of the
KDP Revolver
on July 9, 2018. Subsequent to the
DPS Merger
, the
Company
repaid the revolver through issuance of
$1,660 million
of
Commercial Paper
through the commercial paper program and with
$240 million
in cash on hand.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Loss on early extinguishment of debt
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
85
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||||||||
(in millions)
|
|
|
|
|
|
Fair Value Hierarchy Level
|
|
2018
|
|
2017
|
||||||||||||
Issuance
|
|
Maturity Date
|
|
Rate
|
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
(2)
|
|||||||||
Term Loan Maple B.V.
(1)
|
|
February 27, 2023
|
|
5.50%
|
|
2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,375
|
|
|
$
|
1,375
|
|
Term Loan Mondelez
(1)
|
|
February 27, 2023
|
|
5.50%
|
|
2
|
|
—
|
|
|
—
|
|
|
440
|
|
|
440
|
|
||||
Principal amount
|
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,815
|
|
|
$
|
1,815
|
|
(1)
|
As a result of the
DPS Merger
, the
Company
converted certain related party term loans into equity, as shown in the
Consolidated
Statement of Changes in Stockholders' Equity.
|
(2)
|
The term loans with related parties occurred as an arms length transaction and reflected an interest rate consistent with the current industry and market. As such, the carrying value approximates fair value as of December 31, 2017.
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Interest rate contracts
|
|
|
|
||||
Receive-fixed, pay-variable interest rate swaps
|
$
|
1,070
|
|
|
$
|
—
|
|
Receive-variable, pay-fixed interest rate swaps
(1)
|
2,125
|
|
|
2,850
|
|
||
FX forward contracts
|
348
|
|
|
410
|
|
||
Commodity contracts
|
296
|
|
|
273
|
|
(1)
|
During the year ended December 31, 2018, the Company elected to terminate
$575 million
notional amount of receive-variable, pay-fixed interest rate swaps and received cash of
$21 million
.
|
|
|
|
|
|
December 31,
|
||||||
(in millions)
|
Fair Value Hierarchy
|
|
Balance Sheet Location
|
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
2
|
|
Prepaid expenses and other current assets
|
|
$
|
2
|
|
|
$
|
—
|
|
FX forward contracts
|
2
|
|
Prepaid expenses and other current assets
|
|
4
|
|
|
—
|
|
||
Commodity contracts
|
2
|
|
Prepaid expenses and other current assets
|
|
3
|
|
|
—
|
|
||
Interest rate contracts
|
2
|
|
Other non-current assets
|
|
77
|
|
|
87
|
|
||
FX forward contracts
|
2
|
|
Other non-current assets
|
|
15
|
|
|
—
|
|
||
Commodity contracts
|
2
|
|
Other non-current assets
|
|
3
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||
Interest rate contracts
|
2
|
|
Other current liabilities
|
|
$
|
7
|
|
|
$
|
—
|
|
FX forward contracts
|
2
|
|
Other current liabilities
|
|
—
|
|
|
5
|
|
||
Commodity contracts
|
2
|
|
Other current liabilities
|
|
27
|
|
|
1
|
|
||
Interest rate contracts
|
2
|
|
Other non-current liabilities
|
|
6
|
|
|
—
|
|
||
Commodity contracts
|
2
|
|
Other non-current liabilities
|
|
10
|
|
|
—
|
|
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
|
Location of (Gains) Losses in the Consolidated Statements of Income
|
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Commodity contracts
|
|
Cost of sales
|
|
$
|
42
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity contracts
|
|
SG&A expenses
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest rate contracts
|
|
Interest expense
|
|
6
|
|
|
(19
|
)
|
|
(74
|
)
|
|
6
|
|
|
—
|
|
|||||
FX forward contracts
|
|
Other (income) expense, net
|
|
(27
|
)
|
|
(2
|
)
|
|
6
|
|
|
(16
|
)
|
|
—
|
|
|||||
Cross currency swaps
|
|
Other (income) expense, net
|
|
—
|
|
|
—
|
|
|
47
|
|
|
24
|
|
|
(1
|
)
|
|||||
Total
|
|
|
|
$
|
41
|
|
|
$
|
(20
|
)
|
|
$
|
(14
|
)
|
|
$
|
14
|
|
|
$
|
(1
|
)
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Total stock-based compensation expense
|
$
|
35
|
|
|
$
|
15
|
|
|
$
|
58
|
|
|
$
|
6
|
|
|
$
|
140
|
|
Income tax benefit recognized in the Statements of Income
|
(7
|
)
|
|
(3
|
)
|
|
(16
|
)
|
|
—
|
|
|
(55
|
)
|
|||||
Stock-based compensation expense, net of tax
|
$
|
28
|
|
|
$
|
12
|
|
|
$
|
42
|
|
|
$
|
6
|
|
|
$
|
85
|
|
|
RSUs
(1)
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Balance as of January 1, 2018
|
15,462,778
|
|
|
$
|
11.51
|
|
|
2.77
|
|
$
|
342
|
|
Granted
|
6,934,249
|
|
|
23.81
|
|
|
|
|
||||
Vested and released
|
(968,715
|
)
|
|
10.42
|
|
|
|
23
|
|
|||
Forfeited
|
(2,802,414
|
)
|
|
14.55
|
|
|
|
|
||||
Balance as of December 31, 2018
|
18,625,898
|
|
|
15.68
|
|
3.54
|
|
478
|
|
(1)
|
RSUs
have been converted from
Maple
RSUs
to
Company
RSUs
using the
exchange ratio
established as part of the
DPS Merger
.
|
|
Stock Options
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
||||||
Balance as of January 1, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
1,319,014
|
|
|
11.92
|
|
|
|
|
|||||
Exercised
|
(235,339
|
)
|
|
11.70
|
|
|
|
|
3
|
|
|||
Outstanding as of December 31, 2018
|
1,083,675
|
|
|
11.97
|
|
6.55
|
|
|
15
|
|
|||
Exercisable as of December 31, 2018
|
1,083,675
|
|
|
11.97
|
|
6.55
|
|
|
15
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions, except per share data)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
612
|
|
|
$
|
378
|
|
|
$
|
109
|
|
|
$
|
100
|
|
Weighted average common shares outstanding
|
1,086.3
|
|
|
790.5
|
|
|
790.5
|
|
|
590.3
|
|
|
150.5
|
|
|||||
Earnings per common share — basic
|
$
|
0.54
|
|
|
$
|
0.77
|
|
|
$
|
0.48
|
|
|
$
|
0.19
|
|
|
$
|
0.66
|
|
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
612
|
|
|
$
|
378
|
|
|
$
|
109
|
|
|
$
|
100
|
|
Less: Impact of dilutive securities in Maple Parent Corporation
|
—
|
|
|
7
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|||||
Total
|
$
|
586
|
|
|
$
|
605
|
|
|
$
|
375
|
|
|
$
|
108
|
|
|
$
|
100
|
|
Weighted average common shares outstanding
|
1,086.3
|
|
|
790.5
|
|
|
790.5
|
|
|
590.3
|
|
|
150.5
|
|
|||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
RSUs
|
10.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Weighted average common shares outstanding and common stock equivalents
|
1,097.6
|
|
|
790.5
|
|
|
790.5
|
|
|
590.3
|
|
|
151.2
|
|
|||||
Earnings per common share — diluted
|
$
|
0.53
|
|
|
$
|
0.77
|
|
|
$
|
0.47
|
|
|
$
|
0.18
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation
|
1.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(in millions)
|
Foreign Currency Translation Adjustments
|
|
Net Change in Pension and PRMB Liability
|
|
Accumulated Other Comprehensive (Loss) Income
|
||||||
Balance as of March 3, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
OCI before reclassifications
|
26
|
|
|
—
|
|
|
26
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current period other comprehensive income
|
26
|
|
|
—
|
|
|
26
|
|
|||
Balance as of September 24, 2016
|
26
|
|
|
—
|
|
|
26
|
|
|||
OCI before reclassifications
|
80
|
|
|
—
|
|
|
80
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current period other comprehensive income
|
80
|
|
|
—
|
|
|
80
|
|
|||
Balance as of September 30, 2017
|
106
|
|
|
—
|
|
|
106
|
|
|||
OCI before reclassifications
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current period other comprehensive loss
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Balance as of December 31, 2017
|
99
|
|
|
—
|
|
|
99
|
|
|||
OCI before reclassifications
|
(225
|
)
|
|
(4
|
)
|
|
(229
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net current period other comprehensive loss
(1)
|
(225
|
)
|
|
(4
|
)
|
|
(229
|
)
|
|||
Balance as of December 31, 2018
|
$
|
(126
|
)
|
|
$
|
(4
|
)
|
|
$
|
(130
|
)
|
(1)
|
The net current period other comprehensive loss attributable to foreign currency translation adjustments during the year ended December 31, 2018 includes the impact of foreign currency as a result of the DPS Merger.
|
(in millions)
|
Accumulated Other Comprehensive
(Loss) Income
|
||
Balance as of September 26, 2015
|
$
|
(199
|
)
|
OCI before reclassifications
|
(9
|
)
|
|
Amounts reclassified from accumulated other comprehensive income
|
—
|
|
|
Net current period other comprehensive income
|
(9
|
)
|
|
Balance as of March 2, 2016
|
$
|
(208
|
)
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Operating lease expense
|
|
$
|
48
|
|
|
$
|
7
|
|
|
$
|
23
|
|
|
$
|
13
|
|
|
$
|
16
|
|
(in millions)
|
|
Operating Leases
|
|
Capital Leases
|
|
Financing Obligations
|
||||||
2019
|
|
$
|
58
|
|
|
$
|
35
|
|
|
$
|
10
|
|
2020
|
|
53
|
|
|
34
|
|
|
10
|
|
|||
2021
|
|
44
|
|
|
33
|
|
|
10
|
|
|||
2022
|
|
34
|
|
|
33
|
|
|
10
|
|
|||
2023
|
|
25
|
|
|
30
|
|
|
10
|
|
|||
Thereafter
|
|
98
|
|
|
189
|
|
|
62
|
|
|||
Total minimum lease payments
|
|
$
|
312
|
|
|
$
|
354
|
|
|
$
|
112
|
|
Less imputed interest
|
|
|
|
(98
|
)
|
|
(37
|
)
|
||||
Present value of minimum lease payments
|
|
|
|
$
|
256
|
|
|
$
|
75
|
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Land
|
$
|
138
|
|
|
$
|
10
|
|
Buildings and improvements
|
723
|
|
|
307
|
|
||
Machinery and equipment
|
1,412
|
|
|
508
|
|
||
Cold drink equipment
|
276
|
|
|
—
|
|
||
Software
|
231
|
|
|
156
|
|
||
Construction-in-progress
|
206
|
|
|
62
|
|
||
Gross property, plant and equipment
|
2,986
|
|
|
1,043
|
|
||
Less: accumulated depreciation and amortization
|
(676
|
)
|
|
(253
|
)
|
||
Net property, plant and equipment
|
$
|
2,310
|
|
|
$
|
790
|
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Cost of sales
|
|
$
|
123
|
|
|
$
|
19
|
|
|
$
|
88
|
|
|
$
|
49
|
|
|
$
|
80
|
|
SG&A expenses
|
|
110
|
|
|
14
|
|
|
54
|
|
|
21
|
|
|
23
|
|
|||||
|
|
$
|
233
|
|
|
$
|
33
|
|
|
$
|
142
|
|
|
$
|
70
|
|
|
$
|
103
|
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Buildings and improvements
|
$
|
162
|
|
|
$
|
124
|
|
Machinery and equipment
|
152
|
|
|
—
|
|
||
Gross property, plant and equipment under capital lease and financing obligations
|
314
|
|
|
124
|
|
||
Less: accumulated depreciation and amortization
|
(38
|
)
|
|
(17
|
)
|
||
Net property, plant and equipment under capital lease and financing obligations
|
$
|
276
|
|
|
$
|
107
|
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Inventories:
|
|
|
|
||||
Raw materials
|
$
|
204
|
|
|
$
|
121
|
|
Work in process
|
7
|
|
|
1
|
|
||
Finished goods
|
415
|
|
|
262
|
|
||
Total inventories
|
$
|
626
|
|
|
$
|
384
|
|
Prepaid expenses and other current assets:
|
|
|
|
||||
Other receivables
|
$
|
51
|
|
|
$
|
7
|
|
Customer incentive programs
|
12
|
|
|
2
|
|
||
Derivative instruments
|
9
|
|
|
—
|
|
||
Prepaid marketing
|
29
|
|
|
7
|
|
||
Spare parts
|
43
|
|
|
10
|
|
||
Assets held for sale
|
8
|
|
|
—
|
|
||
Income tax receivable
|
22
|
|
|
45
|
|
||
Other
|
80
|
|
|
23
|
|
||
Total prepaid expenses and other current assets
|
$
|
254
|
|
|
$
|
94
|
|
Other non-current assets:
|
|
|
|
||||
Customer incentive programs
|
$
|
34
|
|
|
$
|
—
|
|
Marketable securities - trading
|
44
|
|
|
—
|
|
||
Derivative instruments
|
95
|
|
|
87
|
|
||
Equity securities without readily determinable fair values
|
1
|
|
|
6
|
|
||
Non-current restricted cash and restricted cash equivalents
|
10
|
|
|
—
|
|
||
Related party notes receivable
(1)
|
17
|
|
|
6
|
|
||
Other
|
58
|
|
|
22
|
|
||
Total other non-current assets
|
$
|
259
|
|
|
$
|
121
|
|
(1)
|
Refer to Note 20 for additional information
.
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Accrued expenses:
|
|
|
|
||||
Customer rebates & incentives
|
$
|
342
|
|
|
$
|
8
|
|
Accrued compensation
|
214
|
|
|
46
|
|
||
Insurance reserve
|
37
|
|
|
8
|
|
||
Interest accrual
|
77
|
|
|
3
|
|
||
Accrued professional fees
|
113
|
|
|
19
|
|
||
Other accrued expenses
|
229
|
|
|
117
|
|
||
Total accrued expenses
|
$
|
1,012
|
|
|
$
|
201
|
|
Other current liabilities:
|
|
|
|
||||
Dividends payable
|
$
|
209
|
|
|
$
|
—
|
|
Income taxes payable
|
60
|
|
|
3
|
|
||
Derivative instruments
|
34
|
|
|
6
|
|
||
Holdback liability
(1)
|
44
|
|
|
—
|
|
||
Other
|
33
|
|
|
3
|
|
||
Total other current liabilities
|
$
|
380
|
|
|
$
|
12
|
|
Other non-current liabilities:
|
|
|
|
||||
Long-term pension and postretirement liability
|
$
|
30
|
|
|
$
|
—
|
|
Insurance reserves
|
57
|
|
|
—
|
|
||
Derivative instruments
|
16
|
|
|
—
|
|
||
Deferred compensation liability
|
44
|
|
|
—
|
|
||
Other
|
107
|
|
|
56
|
|
||
Total other non-current liabilities
|
$
|
254
|
|
|
$
|
56
|
|
(1)
|
This represents the holdback liability recorded for the Big Red Acquisition and Core Acquisition related to the respective liability to the shareholders.
Refer to Note 3 for additional information
.
|
|
Fair Value Hierarchy Level
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
(in millions)
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
Cash and cash equivalents
|
1
|
|
$
|
83
|
|
|
$
|
83
|
|
|
$
|
90
|
|
|
$
|
90
|
|
Restricted cash and restricted cash equivalents
(1)
|
1
|
|
46
|
|
|
46
|
|
|
5
|
|
|
5
|
|
||||
Non-current restricted cash and restricted cash equivalents included in Other non-current assets
|
1
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
||||
Total cash, cash equivalents, restricted cash and restricted cash equivalents shown in the Consolidated Statement of Cash Flows
|
|
|
$
|
139
|
|
|
$
|
139
|
|
|
$
|
95
|
|
|
$
|
95
|
|
(1)
|
Restricted cash and cash equivalents represent amounts held in escrow in connection with the Big Red Acquisition and the Core Acquisition.
Refer to Note 3 for additional information
.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Supplemental cash flow disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalization of related party debt into additional paid-in-capital
|
$
|
(1,815
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value of stock and replacement equity awards not converted to cash
|
(3,643
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of common stock for acquisition of business
|
(441
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared but not yet paid
|
211
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital expenditures included in accounts payable and accrued expenses
|
102
|
|
|
19
|
|
|
6
|
|
|
18
|
|
|
12
|
|
|||||
Holdback liability for acquisition of business
(1)
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease additions
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash paid for interest
|
180
|
|
|
25
|
|
|
167
|
|
|
156
|
|
|
5
|
|
|||||
Cash paid for related party interest
|
51
|
|
|
25
|
|
|
125
|
|
|
34
|
|
|
—
|
|
|||||
Cash paid for income taxes
|
210
|
|
|
26
|
|
|
159
|
|
|
92
|
|
|
17
|
|
(1)
|
The holdback liability has a current and non-current liability component.
Refer to Note 15 for additional information
.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Castroville closure
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Business realignment
|
2
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|||||
Keurig 2.0 exit
|
12
|
|
|
6
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|||||
Integration program
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other restructuring programs
|
1
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
3
|
|
|||||
Total restructuring and integration charges
|
$
|
170
|
|
|
$
|
6
|
|
|
$
|
44
|
|
|
$
|
4
|
|
|
$
|
3
|
|
(in millions)
|
Workforce Reduction Costs
|
|
Other
(1)
|
|
Total
|
||||||
Balance as of September 25, 2016
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Charges to expense
|
16
|
|
|
29
|
|
|
45
|
|
|||
Cash payments
|
(11
|
)
|
|
(5
|
)
|
|
(16
|
)
|
|||
Non-cash adjustment items
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
|||
Balance as of September 30, 2017
|
7
|
|
|
5
|
|
|
12
|
|
|||
Charges to expense
|
—
|
|
|
6
|
|
|
6
|
|
|||
Cash payments
|
(6
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|||
Non-cash adjustment items
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||
Balance as of December 31, 2017
|
1
|
|
|
3
|
|
|
4
|
|
|||
Charges to expense
|
64
|
|
|
—
|
|
|
64
|
|
|||
Cash payments
|
(34
|
)
|
|
(1
|
)
|
|
(35
|
)
|
|||
Non-cash adjustment items
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||
Balance as of December 31, 2018
|
$
|
28
|
|
|
$
|
1
|
|
|
$
|
29
|
|
(1)
|
Primarily reflects activities associated with the closure of certain facilities, excluding contract termination costs, which include any associated asset write-downs and accelerated depreciation.
|
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
||||||||
Beginning balance
|
$
|
265
|
|
|
$
|
219
|
|
|
$
|
66
|
|
|
$
|
—
|
|
Net income attributable to non-controlling interests
|
3
|
|
|
7
|
|
|
5
|
|
|
—
|
|
||||
Stock based compensation
|
24
|
|
|
15
|
|
|
58
|
|
|
6
|
|
||||
Proceeds from (cash distributions to) redeemable NCI shareholders
|
18
|
|
|
—
|
|
|
5
|
|
|
60
|
|
||||
Adjustment of non-controlling interests to redemption value
|
16
|
|
|
25
|
|
|
86
|
|
|
—
|
|
||||
Dividends paid to NCI shareholders, currency translation adjustment, and other
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Impact of the DPS Merger
|
(326
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
$
|
—
|
|
|
$
|
265
|
|
|
$
|
219
|
|
|
$
|
66
|
|
(in millions)
|
Accrued Product Warranties
|
||
Balance as of September 24, 2016
|
$
|
16
|
|
Accruals for warranties issued
|
14
|
|
|
Settlements
|
(20
|
)
|
|
Balance as of September 30, 2017
|
$
|
10
|
|
Accruals for warranties issued
|
7
|
|
|
Settlements
|
(4
|
)
|
|
Balance as of December 31, 2017
|
$
|
13
|
|
Accruals for warranties issued
|
10
|
|
|
Settlements
|
(15
|
)
|
|
Balance as of December 31, 2018
|
$
|
8
|
|
•
|
Coffee Transactions include transactions with Peet's Coffee ("Peet's"), Caribou Coffee ("Caribou"), Panera Bread ("Panera"), Einstein Bros Bagels ("Einstein Bros") and Krispy Kreme Doughnuts ("Krispy Kreme"). The Company manufactures portion packs containing a selection of coffee and tea varieties under Peet’s brands for sale in the U.S. and Canada. As part of this agreement, Peet’s issues purchase orders to the Company for portion packs to be supplied to Peet’s and sold in select channels. In turn, the Company places purchase orders for Peet’s raw materials to manufacture portion packs for sale by the Company in select channels. The Company licenses the Caribou and Krispy Kreme trademarks for use in the Keurig system in the Company owned channels.
|
•
|
Restaurant Transactions include transactions with Caribou, Panera, Einstein Bros and Krispy Kreme. The Company sells various beverage concentrates and packaged beverages to these companies.
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Receipts from related parties
|
|
$
|
214
|
|
|
$
|
12
|
|
|
$
|
59
|
|
|
$
|
36
|
|
|
$
|
15
|
|
Payments to related parties
|
|
150
|
|
|
10
|
|
|
31
|
|
|
32
|
|
|
18
|
|
•
|
The
Beverage Concentrates
segment reflects sales of the
Company
's branded concentrates and syrup to third-party bottlers primarily in the U.S. and Canada. Most of the brands in this segment are carbonated soft drink brands.
|
•
|
The
Packaged Beverages
segment reflects sales in the U.S. and Canada from the manufacture and distribution of finished beverages and other products, including sales of the
Company
's own brands and third-party brands, through both the Direct Store Delivery system and the Warehouse Direct system.
|
•
|
The
Latin America Beverages
segment reflects sales in Mexico, the Caribbean, and other international markets from the manufacture and distribution of concentrates, syrup and finished beverages.
|
•
|
The
Coffee Systems
segment reflects sales in the U.S. and Canada of the manufacture and distribution of finished goods relating to the
Company
's coffee systems, pods and brewers.
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
(1)
|
|
Predecessor 2016
(1)
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
||||||||||
Beverage Concentrates
|
$
|
669
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Packaged Beverages
|
2,415
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Latin America Beverages
|
244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Coffee Systems
|
4,114
|
|
|
1,170
|
|
|
4,269
|
|
|
2,293
|
|
|
2,025
|
|
|||||
Total net sales
|
$
|
7,442
|
|
|
$
|
1,170
|
|
|
$
|
4,269
|
|
|
$
|
2,293
|
|
|
$
|
2,025
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Beverage Concentrates
|
$
|
430
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Packaged Beverages
|
257
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Latin America Beverages
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Coffee Systems
|
1,163
|
|
|
261
|
|
|
1,087
|
|
|
393
|
|
|
147
|
|
|||||
Total income from operations - segments
|
1,879
|
|
|
261
|
|
|
1,087
|
|
|
393
|
|
|
147
|
|
|||||
Unallocated corporate costs
|
642
|
|
|
32
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|||||
Income from operations
|
1,237
|
|
|
229
|
|
|
897
|
|
|
393
|
|
|
147
|
|
|||||
Interest expense
|
401
|
|
|
10
|
|
|
101
|
|
|
163
|
|
|
3
|
|
|||||
Interest expense - related party
|
51
|
|
|
25
|
|
|
100
|
|
|
60
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt
|
13
|
|
|
5
|
|
|
85
|
|
|
5
|
|
|
6
|
|
|||||
Other (income) expense, net
|
(19
|
)
|
|
7
|
|
|
44
|
|
|
1
|
|
|
(1
|
)
|
|||||
Income before provision (benefit) for income taxes
|
$
|
791
|
|
|
$
|
182
|
|
|
$
|
567
|
|
|
$
|
164
|
|
|
$
|
139
|
|
(1)
|
As a result of the DPS Merger, the Company now reports on a segment level and unallocated corporate costs. The Company has reflected its results through Fiscal 2017; however, the Company has concluded it is impracticable to separately report the Coffee Systems segment from unallocated corporate costs for the Successor 2016 and Predecessor 2016 periods.
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Identifiable operating assets
|
|
|
|
||||
Beverage Concentrates
|
$
|
19,916
|
|
|
$
|
—
|
|
Packaged Beverages
|
10,791
|
|
|
—
|
|
||
Latin America Beverages
|
1,820
|
|
|
—
|
|
||
Coffee Systems
|
15,117
|
|
|
15,294
|
|
||
Segment total
|
47,644
|
|
|
15,294
|
|
||
Unallocated corporate assets
|
1,088
|
|
|
353
|
|
||
Total identifiable operating assets
|
48,732
|
|
|
15,647
|
|
||
Investments in unconsolidated subsidiaries
|
186
|
|
|
97
|
|
||
Total assets
|
$
|
48,918
|
|
|
$
|
15,744
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
6,608
|
|
|
$
|
1,034
|
|
|
$
|
3,802
|
|
|
$
|
2,039
|
|
|
$
|
1,811
|
|
International
|
834
|
|
|
136
|
|
|
467
|
|
|
254
|
|
|
214
|
|
|||||
Net sales
|
$
|
7,442
|
|
|
$
|
1,170
|
|
|
$
|
4,269
|
|
|
$
|
2,293
|
|
|
$
|
2,025
|
|
|
December 31,
|
||||||
(in millions)
|
2018
|
|
2017
|
||||
Property, plant and equipment, net
|
|
|
|
||||
U.S.
|
$
|
2,073
|
|
|
$
|
707
|
|
International
|
237
|
|
|
83
|
|
||
Total property, plant and equipment, net
|
$
|
2,310
|
|
|
$
|
790
|
|
|
Successor
|
|
Predecessor
|
||||||||||||||||
(in millions)
|
2018
|
|
Transition 2017
|
|
Fiscal 2017
|
|
Successor 2016
|
|
Predecessor 2016
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
||||||||||
Walmart Inc.
|
$
|
1,053
|
|
|
$
|
178
|
|
|
$
|
625
|
|
|
$
|
499
|
|
|
$
|
347
|
|
Costco Wholesale Corporation
(1)
|
—
|
|
|
147
|
|
|
544
|
|
|
414
|
|
|
232
|
|
|
Condensed Consolidating Statements of Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2018
|
||||||||||||||||||
(in millions)
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
3,053
|
|
|
$
|
4,449
|
|
|
$
|
(60
|
)
|
|
$
|
7,442
|
|
Cost of sales
|
—
|
|
|
1,367
|
|
|
2,253
|
|
|
(60
|
)
|
|
3,560
|
|
|||||
Gross profit
|
—
|
|
|
1,686
|
|
|
2,196
|
|
|
—
|
|
|
3,882
|
|
|||||
Selling, general and administrative expenses
|
(5
|
)
|
|
1,200
|
|
|
1,440
|
|
|
—
|
|
|
2,635
|
|
|||||
Other operating (income) expense, net
|
(6
|
)
|
|
1
|
|
|
15
|
|
|
—
|
|
|
10
|
|
|||||
Income from operations
|
11
|
|
|
485
|
|
|
741
|
|
|
—
|
|
|
1,237
|
|
|||||
Interest expense
|
439
|
|
|
63
|
|
|
128
|
|
|
(229
|
)
|
|
401
|
|
|||||
Interest expense - related party
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
|||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Other (income) expense, net
|
(86
|
)
|
|
(166
|
)
|
|
4
|
|
|
229
|
|
|
(19
|
)
|
|||||
Income before provision (benefit) for income taxes
|
(342
|
)
|
|
588
|
|
|
545
|
|
|
—
|
|
|
791
|
|
|||||
Provision (benefit) for income taxes
|
(45
|
)
|
|
112
|
|
|
135
|
|
|
—
|
|
|
202
|
|
|||||
Income before equity in earnings of consolidated subsidiaries
|
(297
|
)
|
|
476
|
|
|
410
|
|
|
—
|
|
|
589
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
883
|
|
|
19
|
|
|
—
|
|
|
(902
|
)
|
|
—
|
|
|||||
Net income
|
586
|
|
|
495
|
|
|
410
|
|
|
(902
|
)
|
|
589
|
|
|||||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Net income attributable to KDP
|
$
|
586
|
|
|
$
|
495
|
|
|
$
|
407
|
|
|
$
|
(902
|
)
|
|
$
|
586
|
|
|
Condensed Consolidating Statements of Comprehensive Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2018
|
||||||||||||||||||
(in millions)
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net income
|
$
|
586
|
|
|
$
|
495
|
|
|
$
|
410
|
|
|
$
|
(902
|
)
|
|
$
|
589
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income impact from consolidated subsidiaries
|
(229
|
)
|
|
(153
|
)
|
|
—
|
|
|
382
|
|
|
—
|
|
|||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
(225
|
)
|
|
—
|
|
|
(225
|
)
|
|||||
Net change in pension and post-retirement liability, net of tax of $1
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
(229
|
)
|
|
(157
|
)
|
|
(225
|
)
|
|
382
|
|
|
(229
|
)
|
|||||
Total comprehensive income (loss)
|
357
|
|
|
338
|
|
|
185
|
|
|
(520
|
)
|
|
360
|
|
|||||
Less: comprehensive income (loss) attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Comprehensive income (loss) attributable to KDP
|
$
|
357
|
|
|
$
|
338
|
|
|
$
|
182
|
|
|
$
|
(520
|
)
|
|
$
|
357
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||||||
|
As of December 31, 2018
|
||||||||||||||||||
(in millions)
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
83
|
|
Restricted cash and restricted cash equivalents
|
42
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
46
|
|
|||||
Trade accounts receivable, net
|
—
|
|
|
596
|
|
|
554
|
|
|
—
|
|
|
1,150
|
|
|||||
Related party receivable
|
189
|
|
|
71
|
|
|
76
|
|
|
(336
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
226
|
|
|
400
|
|
|
—
|
|
|
626
|
|
|||||
Prepaid expenses and other current assets
|
569
|
|
|
110
|
|
|
132
|
|
|
(557
|
)
|
|
254
|
|
|||||
Total current assets
|
800
|
|
|
1,024
|
|
|
1,228
|
|
|
(893
|
)
|
|
2,159
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,351
|
|
|
959
|
|
|
—
|
|
|
2,310
|
|
|||||
Investments in consolidated subsidiaries
|
40,119
|
|
|
4,882
|
|
|
—
|
|
|
(45,001
|
)
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
—
|
|
|
63
|
|
|
123
|
|
|
—
|
|
|
186
|
|
|||||
Goodwill
|
50
|
|
|
8,371
|
|
|
11,590
|
|
|
—
|
|
|
20,011
|
|
|||||
Other intangible assets, net
|
—
|
|
|
16,583
|
|
|
7,384
|
|
|
—
|
|
|
23,967
|
|
|||||
Long-term receivable, related parties
|
5,503
|
|
|
7,827
|
|
|
—
|
|
|
(13,330
|
)
|
|
—
|
|
|||||
Other non-current assets
|
64
|
|
|
41
|
|
|
154
|
|
|
—
|
|
|
259
|
|
|||||
Deferred tax assets
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|||||
Total assets
|
$
|
46,536
|
|
|
$
|
40,142
|
|
|
$
|
21,464
|
|
|
$
|
(59,224
|
)
|
|
$
|
48,918
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
497
|
|
|
$
|
1,803
|
|
|
$
|
—
|
|
|
$
|
2,300
|
|
Accrued expenses
|
78
|
|
|
610
|
|
|
324
|
|
|
—
|
|
|
1,012
|
|
|||||
Structured payable
|
—
|
|
|
47
|
|
|
479
|
|
|
—
|
|
|
526
|
|
|||||
Related party payable
|
65
|
|
|
106
|
|
|
165
|
|
|
(336
|
)
|
|
—
|
|
|||||
Short-term borrowings and current portion of long-term obligations
|
1,458
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,458
|
|
|||||
Current portion of capital lease and financing obligations
|
—
|
|
|
18
|
|
|
8
|
|
|
—
|
|
|
26
|
|
|||||
Other current liabilities
|
278
|
|
|
608
|
|
|
51
|
|
|
(557
|
)
|
|
380
|
|
|||||
Total current liabilities
|
1,879
|
|
|
1,886
|
|
|
2,830
|
|
|
(893
|
)
|
|
5,702
|
|
|||||
Long-term obligations to third parties
|
14,201
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,201
|
|
|||||
Long-term obligations to related parties
|
7,827
|
|
|
3,369
|
|
|
2,134
|
|
|
(13,330
|
)
|
|
—
|
|
|||||
Capital lease and financing obligations, less current
|
—
|
|
|
206
|
|
|
99
|
|
|
—
|
|
|
305
|
|
|||||
Deferred tax liabilities
|
46
|
|
|
4,075
|
|
|
1,802
|
|
|
—
|
|
|
5,923
|
|
|||||
Other non-current liabilities
|
50
|
|
|
131
|
|
|
73
|
|
|
—
|
|
|
254
|
|
|||||
Total liabilities
|
24,003
|
|
|
9,667
|
|
|
6,938
|
|
|
(14,223
|
)
|
|
26,385
|
|
|||||
Total stockholders' equity
|
22,533
|
|
|
30,475
|
|
|
14,526
|
|
|
(45,001
|
)
|
|
22,533
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
46,536
|
|
|
$
|
40,142
|
|
|
$
|
21,464
|
|
|
$
|
(59,224
|
)
|
|
$
|
48,918
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
For the Year Ended December 31, 2018
|
||||||||||||||||||
(in millions)
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(181
|
)
|
|
$
|
938
|
|
|
$
|
911
|
|
|
$
|
(55
|
)
|
|
$
|
1,613
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisitions of businesses
|
(19,114
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,114
|
)
|
|||||
Cash acquired in acquisitions
|
—
|
|
|
125
|
|
|
44
|
|
|
—
|
|
|
169
|
|
|||||
Issuance of related party note receivable
|
(2,260
|
)
|
|
(1,045
|
)
|
|
(11
|
)
|
|
3,305
|
|
|
(11
|
)
|
|||||
Investments in unconsolidated subsidiaries
|
—
|
|
|
(1
|
)
|
|
(38
|
)
|
|
—
|
|
|
(39
|
)
|
|||||
Proceeds from capital distributions from investments in unconsolidated and consolidated subsidiaries
|
—
|
|
|
35
|
|
|
(24
|
)
|
|
24
|
|
|
35
|
|
|||||
Purchases of property, plant and equipment
|
—
|
|
|
(62
|
)
|
|
(118
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
Other, net
|
6
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
9
|
|
|||||
Net cash provided by (used in) investing activities
|
$
|
(21,368
|
)
|
|
$
|
(946
|
)
|
|
$
|
(146
|
)
|
|
$
|
3,329
|
|
|
$
|
(19,131
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from related party long-term debt
|
1,045
|
|
|
—
|
|
|
2,260
|
|
|
(3,305
|
)
|
|
—
|
|
|||||
Proceeds from issuance of common stock private placement
|
—
|
|
|
—
|
|
|
9,000
|
|
|
—
|
|
|
9,000
|
|
|||||
Intercompany contributions
|
17,162
|
|
|
—
|
|
|
(17,116
|
)
|
|
(46
|
)
|
|
—
|
|
|||||
Proceeds from unsecured credit facility
|
1,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,900
|
|
|||||
Proceeds from senior unsecured notes
|
—
|
|
|
—
|
|
|
8,000
|
|
|
—
|
|
|
8,000
|
|
|||||
Proceeds from term loan
|
2,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,700
|
|
|||||
Net Issuance of Commercial Paper
|
1,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,080
|
|
|||||
Proceeds from structured payables
|
—
|
|
|
48
|
|
|
478
|
|
|
—
|
|
|
526
|
|
|||||
Repayment of unsecured credit facility
|
(1,900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,900
|
)
|
|||||
Repayment of term loan
|
(118
|
)
|
|
—
|
|
|
(3,329
|
)
|
|
—
|
|
|
(3,447
|
)
|
|||||
Payments on capital leases
|
—
|
|
|
(9
|
)
|
|
(8
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Deferred financing charges paid
|
(55
|
)
|
|
—
|
|
|
(46
|
)
|
|
46
|
|
|
(55
|
)
|
|||||
Proceeds from stock options exercised
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Cash contributions from redeemable NCI shareholders
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Cash dividends paid
|
(208
|
)
|
|
—
|
|
|
(55
|
)
|
|
31
|
|
|
(232
|
)
|
|||||
Other, net
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|||||
Net cash provided by (used in) financing activities
|
$
|
21,608
|
|
|
$
|
39
|
|
|
$
|
(796
|
)
|
|
$
|
(3,274
|
)
|
|
$
|
17,577
|
|
Cash and cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating, investing and financing activities
|
59
|
|
|
31
|
|
|
(31
|
)
|
|
—
|
|
|
59
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(17
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
|
(15
|
)
|
|||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|||||
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period
|
$
|
42
|
|
|
$
|
31
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
139
|
|
|
Three Months Ended
|
||||||||||||||
(unaudited, in millions)
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
December 31, 2018
|
||||||||
Net sales
|
$
|
948
|
|
|
$
|
949
|
|
|
$
|
2,732
|
|
|
$
|
2,813
|
|
Cost of sales
|
467
|
|
|
458
|
|
|
1,367
|
|
|
1,268
|
|
||||
Gross profit
|
481
|
|
|
491
|
|
|
1,365
|
|
|
1,545
|
|
||||
Selling, general and administrative expenses
|
300
|
|
|
321
|
|
|
1,028
|
|
|
986
|
|
||||
Other operating (income) expense, net
|
3
|
|
|
3
|
|
|
(8
|
)
|
|
12
|
|
||||
Income from operations
|
178
|
|
|
167
|
|
|
345
|
|
|
547
|
|
||||
Interest expense
(1)
|
(2
|
)
|
|
51
|
|
|
172
|
|
|
180
|
|
||||
Interest expense - related party
|
25
|
|
|
26
|
|
|
—
|
|
|
—
|
|
||||
Loss on early extinguishment of debt
|
2
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Other (income) expense, net
|
13
|
|
|
(8
|
)
|
|
(33
|
)
|
|
9
|
|
||||
Income before provision for income taxes
|
140
|
|
|
98
|
|
|
195
|
|
|
358
|
|
||||
Provision for income taxes
|
51
|
|
|
13
|
|
|
46
|
|
|
92
|
|
||||
Net income
|
89
|
|
|
85
|
|
|
149
|
|
|
266
|
|
||||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
1
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to KDP
|
$
|
88
|
|
|
$
|
83
|
|
|
$
|
149
|
|
|
$
|
266
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.10
|
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
Diluted
|
0.11
|
|
|
0.10
|
|
|
0.11
|
|
|
0.19
|
|
(1)
|
Interest expense includes the mark-to-market impact of interest rate swaps.
Refer to Note 9 for additional information
.
|
|
Three Months Ended
|
||||||||||||||
(unaudited, in millions)
|
March 31, 2017
|
|
June 24, 2017
|
|
September 30, 2017
|
|
December 31, 2017
|
||||||||
Net sales
|
$
|
968
|
|
|
$
|
948
|
|
|
$
|
1,140
|
|
|
$
|
1,170
|
|
Cost of sales
|
479
|
|
|
499
|
|
|
580
|
|
|
643
|
|
||||
Gross profit
|
489
|
|
|
449
|
|
|
560
|
|
|
527
|
|
||||
Selling, general and administrative expenses
|
266
|
|
|
276
|
|
|
323
|
|
|
298
|
|
||||
Other operating (income) expense, net
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Income from operations
|
222
|
|
|
173
|
|
|
238
|
|
|
229
|
|
||||
Interest expense
(1)
|
(11
|
)
|
|
59
|
|
|
28
|
|
|
10
|
|
||||
Interest expense - related party
|
25
|
|
|
25
|
|
|
25
|
|
|
25
|
|
||||
Loss on early extinguishment of debt
|
52
|
|
|
—
|
|
|
2
|
|
|
5
|
|
||||
Other (income) expense, net
|
68
|
|
|
—
|
|
|
20
|
|
|
7
|
|
||||
Income before provision (benefit) for income taxes
|
88
|
|
|
89
|
|
|
163
|
|
|
182
|
|
||||
Provision (benefit) for income taxes
|
28
|
|
|
28
|
|
|
46
|
|
|
(437
|
)
|
||||
Net income
|
60
|
|
|
61
|
|
|
117
|
|
|
619
|
|
||||
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
1
|
|
|
1
|
|
|
1
|
|
|
7
|
|
||||
Net income attributable to KDP
|
$
|
59
|
|
|
$
|
60
|
|
|
$
|
116
|
|
|
$
|
612
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.07
|
|
|
$
|
0.08
|
|
|
$
|
0.15
|
|
|
$
|
0.77
|
|
Diluted
|
0.07
|
|
|
0.07
|
|
|
0.14
|
|
|
0.77
|
|
(1)
|
Interest expense includes the mark-to-market impact of interest rate swaps.
Refer to Note 9 for additional information
.
|
|
Three Months Ended December 24, 2016
|
||
(unaudited, in millions)
|
|
||
Net sales
|
$
|
1,213
|
|
Cost of sales
|
667
|
|
|
Gross profit
|
546
|
|
|
Selling, general and administrative expenses
|
282
|
|
|
Other operating (income) expense, net
|
—
|
|
|
Income from operations
|
264
|
|
|
Interest expense
|
25
|
|
|
Interest expense - related party
|
25
|
|
|
Loss on early extinguishment of debt
|
31
|
|
|
Other (income) expense, net
|
(44
|
)
|
|
Income before provision for income taxes
|
227
|
|
|
Provision for income taxes
|
82
|
|
|
Net income
|
145
|
|
|
Less: Net income attributable to employee redeemable non-controlling interest and mezzanine equity awards
|
2
|
|
|
Net income attributable to KDP
|
$
|
143
|
|
|
|
||
Earnings per common share:
|
|
||
Basic
|
$
|
0.18
|
|
Diluted
|
0.18
|
|
•
|
Consolidated Statements of Income for the Periods
|
•
|
Consolidated Statements of Comprehensive Income for the Periods
|
•
|
Consolidated Balance Sheets as of
December 31, 2018 and 2017
|
•
|
Consolidated Statements of Cash Flows for the Periods
|
•
|
Consolidated Statements of Changes in Stockholders' Equity for the Periods
|
•
|
Notes to Consolidated Financial Statements for the Periods.
|
Third Supplemental Indenture, dated as of November 15, 2011, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
|
2.60% Senior Note due 2019 (in global form), dated November 15, 2011, in the principal amount of $250 million (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
|
3.20% Senior Note due 2021 (in global form), dated November 15, 2011, in the principal amount of $250 million (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
|
Fourth Supplemental Indenture, dated as of November 20, 2012, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on November 20, 2012) and incorporated herein by reference).
|
|
2.00% Senior Note due 2020 (in global form), dated November 20, 2012, in the principal amount of $250 million (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on November 20, 2012) and incorporated herein by reference).
|
|
2.70% Senior Note due 2022 (in global form), dated November 20, 2012, in the principal amount of $250 million (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on November 20, 2012) and incorporated herein by reference).
|
|
Fifth Supplemental Indenture, dated as of November 9, 2015, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on November 10, 2015) and incorporated herein by reference).
|
|
3.40% Senior Note due 2025 (in global form), dated November 9, 2015, in the principal amount of $500,000,000 (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on November 10, 2015) and incorporated herein by reference).
|
|
4.50% Senior Note due 2045 (in global form), dated November 9, 2015, in the principal amount of $250,000,000 (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on November 10, 2015) and incorporated herein by reference).
|
|
Sixth Supplemental Indenture, dated as of September 16, 2016, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on September 16, 2016) and incorporated herein by reference).
|
|
2.55% Senior Note due 2026 (in global form), dated September 16, 2016, in the principal amount of $400,000,000 (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on September 16, 2016) and incorporated herein by reference).
|
|
Seventh Supplemental Indenture, dated as of December 14, 2016, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on December 14, 2016) and incorporated herein by reference).
|
|
2.53% Senior Note due 2021 (in global form), dated December 14, 2016, in the principal amount of $250,000,000 (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on December 14, 2016) and incorporated herein by reference).
|
|
3.13% Senior Note due 2023 (in global form), dated December 14, 2016, in the principal amount of $500,000,000 (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on December 14, 2016) and incorporated herein by reference).
|
|
3.43% Senior Note due 2027 (in global form), dated December 14, 2016, in the principal amount of $400,000,000 (filed as Exhibit 4.4 to the Company's Current Report on Form 8-K (filed on December 14, 2016) and incorporated herein by reference).
|
|
4.42% Senior Note due 2046 (in global form), dated December 14, 2016, in the principal amount of $400,000,000 (filed as Exhibit 4.5 to the Company's Current Report on Form 8-K (filed on December 14, 2016) and incorporated herein by reference).
|
|
Eighth Supplemental Indenture, dated as of January 31, 2017, among Bai Brands LLC, a New Jersey limited liability company, 184 Innovations Inc., a Delaware corporation (each as a new subsidiary guarantor under the Indenture dated April 30, 2008 (as referenced in Item 4.1 in this Exhibit Index), Dr Pepper Snapple Group, Inc., each other then-existing Guarantor under the Indenture) and Wells Fargo, National Bank, N.A., as trustee (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on February 2, 2017) and incorporated herein by reference).
|
|
Ninth Supplemental Indenture, dated as of June 15, 2017, among Dr Pepper Snapple Group, Inc., the guarantors party thereto, and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on June 15, 2017) and incorporated herein by reference).
|
|
Investor Rights Agreement by and among Keurig Dr Pepper Inc. and The Holders Listed on Schedule A thereto, dated as of July 9, 2018 (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Base Indenture, dated as of May 25, 2018 between Maple Escrow Subsidiary and Wells Fargo Bank, N.A. as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
First Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2021 Notes (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
Second Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2023 Notes (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Third Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2025 Notes (filed as Exhibit 4.4 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Fourth Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2028 Notes (filed as Exhibit 4.5 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Fifth Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2038 Notes (filed as Exhibit 4.6 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Sixth Supplemental Indenture (including the form of note), dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and Maple Parent Holdings Corp. as parent guarantor, and Wells Fargo Bank, N.A., as trustee relating to the 2048 Notes (filed as Exhibit 4.7 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Seventh Supplemental Indenture, dated as of July 9, 2018, among Keurig Dr Pepper Inc., the subsidiary guarantors thereto, and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.8 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Registration Rights Agreement, dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs & Co. LLC and Citigroup Global Markets Inc., as representative of the several purchasers of the Notes (filed as Exhibit 4.9 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Joinder to the Registration Rights Agreement, dated as of May 25, 2018, among Maple Escrow Subsidiary, Inc. and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs & Co. LLC and Citigroup Global Markets Inc., as representative of the several purchasers of the Notes (filed as Exhibit 4.10 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Term Loan Agreement, dated as of February 28, 2018, among Maple Parent Holdings Corp., the banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Term Loan Agreement, dated as of February 8, 2019, among Keurig Dr Pepper Inc., the banks party thereto and JPMorgan Chase, Bank, N.A., as administrative agent (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on February [11], 2019) and incorporated herein by reference).
|
|
Credit Agreement, dated as of February 28, 2018, among Maple Parent Holdings Corp., the banks and issuers of credit party thereto and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Borrower Joinder (Term Loan Agreement), dated as of July 9, 2018, among Keurig Dr Pepper Inc., Maple Parent Holdings Corp. and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.3 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Borrower Joinder (Credit Agreement), dated as of July 9, 2018, among Keurig Dr Pepper Inc., Maple Parent Holdings Corp. and JPMorgan Chase Bank, N.A. as administrative agent (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K (filed on July 9, 2018) and incorporated herein by reference).
|
|
Amended and Restated Employment Agreement, dated as of July 2, 2018, by and between Keurig Green Mountain, Inc. and Robert J. Gamgort (filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q (filed on November 7, 2018) and incorporated herein by reference).++
|
|
Employment Agreement, dated as of April 12, 2016, by and between Keurig Green Mountain, Inc. and Ozan Dokmecioglu (filed as Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q (filed on November 7, 2018) and incorporated herein by reference).++
|
|
Restricted Stock Unit Award Terms and Conditions under the Keurig Dr Pepper Omnibus Incentive Plan of 2009 (filed as Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q (filed on November 7, 2018) and incorporated herein by reference).++
|
|
Matching Restricted Stock Unit Award Terms and Conditions under the Keurig Dr Pepper Omnibus Incentive Plan of 2009 (filed as Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q (filed on November 7, 2018) and incorporated herein by reference).++
|
|
Directors' Restricted Stock Unit Award Terms and Conditions under the Keurig Dr Pepper Omnibus Incentive Plan of 2009 (filed as Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q (filed on November 7, 2018) and incorporated herein by reference).++
|
|
21.1
*
|
List of Subsidiaries of Keurig Dr Pepper Inc.
|
23.1
*
|
Consent of Deloitte & Touche LLP
|
31.1
*
|
Certification of Chief Executive Officer of Keurig Dr Pepper Inc. pursuant to Rule 13a-14(a) or 15d-14(a) promulgated under the Exchange Act.
|
31.2
*
|
Certification of Chief Financial Officer of Keurig Dr Pepper Inc. pursuant to Rule 13a-14(a) or 15d-14(a) promulgated under the Exchange Act.
|
32.1
**
|
Certification of Chief Executive Officer of Keurig Dr Pepper Inc. pursuant to Rule 13a-14(b) or 15d-14(b) promulgated under the Exchange Act, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
32.2
**
|
Certification of Chief Financial Officer of Keurig Dr Pepper Inc. pursuant to Rule 13a-14(b) or 15d-14(b) promulgated under the Exchange Act, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
101*
|
The following financial information from Keurig Dr Pepper Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income for the year ended December 31, 2018, three months ended December 31, 2017, the fiscal year ended September 30, 2017, the period of December 4, 2015 through September 24, 2016, and the predecessor period of September 25, 2015 through March 2, 2016, (ii) Consolidated Statements of Comprehensive Income for the year ended December 31, 2018, three months ended December 31, 2017, the fiscal year ended September 30, 2017, the period of December 4, 2015 through September 24, 2016, and the predecessor period of September 25, 2015 through March 2, 2016, (iii) Consolidated Balance Sheets as of December 31, 2018 and 2017, (iv) Consolidated Statements of Cash Flows for the year ended December 31, 2018, three months ended December 31, 2017, the fiscal year ended September 30, 2017, the period of December 4, 2015 through September 24, 2016, and the predecessor period of September 25, 2015 through March 2, 2016, (v) Consolidated Statement of Changes in Stockholders' Equity for the year ended December 31, 2018, three months ended December 31, 2017, the fiscal year ended September 30, 2017, the period of December 4, 2015 through September 24, 2016, and the predecessor period of September 25, 2015 through March 2, 2016, and (vi) the Notes to Condensed Consolidated Financial Statements.
|
|
Keurig Dr Pepper Inc.
|
|
||
|
By:
|
/s/ Ozan Dokmecioglu
|
|
|
|
|
|
|
|
|
Name:
|
|
Ozan Dokmecioglu
|
|
|
Title:
|
|
Chief Financial Officer of Keurig Dr Pepper Inc.
|
|
|
|
|
(Principal Financial Officer)
|
|
Date: February 28, 2019
|
|
|
|
|
By:
|
/s/ Robert J. Gamgort
|
By:
|
/s/ Ozan Dokmecioglu
|
||||
|
Name:
|
|
Robert J. Gamgort
|
|
Name:
|
|
Ozan Dokmecioglu
|
|
Title:
|
|
Chief Executive Officer, President and Executive Chairman of the Board of Directors
|
|
Title:
|
|
Chief Financial Officer
|
|
|
|
Keurig Dr Pepper Inc.
|
|
|
|
Keurig Dr Pepper Inc.
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Angela A. Stephens
|
By:
|
/s/ Olivier Goudet
|
||||
|
Name:
|
|
Angela A. Stephens
|
|
Name:
|
|
Olivier Goudet
|
|
Title:
|
|
Senior Vice President and Controller
|
|
Title:
|
|
Director
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Peter Harf
|
By:
|
/s/ Genevieve Hovde
|
||||
|
Name:
|
|
Peter Harf
|
|
Name:
|
|
Genevieve Hovde
|
|
Title:
|
|
Director
|
|
Title:
|
|
Director
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Anna-Lena Kamenetzky
|
By:
|
/s/ Paul S. Michaels
|
||||
|
Name:
|
|
Anna-Lena Kamenetzky
|
|
Name:
|
|
Paul S. Michaels
|
|
Title:
|
|
Director
|
|
Title:
|
|
Director
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Pamela Patsley
|
By:
|
/s/ Gerhard Pleuhs
|
||||
|
Name:
|
|
Pamela Patsley
|
|
Name:
|
|
Gerhard Pleuhs
|
|
Title:
|
|
Director
|
|
Title:
|
|
Director
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Fabien Simon
|
By:
|
/s/ Robert Singer
|
||||
|
Name:
|
|
Fabien Simon
|
|
Name:
|
|
Robert Singer
|
|
Title:
|
|
Director
|
|
Title:
|
|
Director
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
|
|
|
|
|
|
|
|
By:
|
/s/ Dirk Van de Put
|
By:
|
/s/ Larry Young
|
||||
|
Name:
|
|
Dirk Van de Put
|
|
Name:
|
|
Larry Young
|
|
Title:
|
|
Director
|
|
Title:
|
|
Director
|
|
Date:
|
|
February 28, 2019
|
|
Date:
|
|
February 28, 2019
|
Name of Subsidiary
|
|
Jurisdiction of Formation
|
|
1
|
234DP Aviation, LLC
|
|
Delaware
|
2
|
A&W Concentrate Company
|
|
Delaware
|
3
|
All Sport, LLC
|
|
Delaware
|
4
|
All Sport Distributing, Inc.
|
|
Delaware
|
5
|
Americas Beverages Management GP
|
|
Nevada
|
6
|
Bai Brands LLC
|
|
New Jersey
|
7
|
Beverages Delaware Inc.
|
|
Delaware
|
8
|
Big Red, LLC
|
|
Texas
|
9
|
BR HyDrive, LLC
|
|
Texas
|
10
|
Core Nutrition, LLC
|
|
Delaware
|
11
|
DP Beverages Inc.
|
|
Delaware
|
12
|
DPS Americas Beverages, LLC
|
|
Delaware
|
13
|
DPS Beverages, Inc.
|
|
Delaware
|
14
|
DPS Holdings Inc.
|
|
Delaware
|
15
|
Dr Pepper Snapple Group Employee Relief Fund
|
|
Texas
|
16
|
Dr Pepper/Seven Up Beverage Sales Company
|
|
Texas
|
17
|
Dr Pepper/Seven Up Manufacturing Company
|
|
Delaware
|
18
|
Dr Pepper/Seven Up, Inc.
|
|
Delaware
|
19
|
G Pure, Inc.
|
|
Texas
|
20
|
Keurig Corporation Inc.
|
|
Delaware
|
21
|
Keurig Green Mountain, Inc.
|
|
Delaware
|
22
|
Keurig Manufacturing Inc.
|
|
Delaware
|
23
|
Maple Parent Holdings Corp.
|
|
Delaware
|
24
|
Mott's Delaware LLC
|
|
Delaware
|
25
|
Mott's LLP
|
|
Delaware
|
26
|
MSSI LLC
|
|
Delaware
|
27
|
Nantucket Allserve, LLC
|
|
Delaware
|
28
|
New Perfection Beverage Co., Inc.
|
|
Texas
|
29
|
North American Beverages, LLC
|
|
Texas
|
30
|
Snapple Beverage Corp.
|
|
Delaware
|
31
|
Splash Transport, Inc.
|
|
Delaware
|
32
|
The American Bottling Company
|
|
Delaware
|
33
|
Thomas Kemper Acquisition Co. Inc.
|
|
Texas
|
34
|
Xyience Beverage Company, LLC
|
|
Texas
|
35
|
Xyience Contracts Company, LLC
|
|
Texas
|
36
|
Xyience Supplements Company, LLC
|
|
Texas
|
37
|
Canada Dry Mott's Inc.
|
|
Canada
|
38
|
Keurig Canada Inc.
|
|
Canada
|
39
|
Van Houtte Coffee Services Inc.
|
|
Canada
|
40
|
Keurig International Sàrl
|
|
Luxembourg
|
41
|
Bebidas Americas Investments B.V.
|
|
Netherlands
|
42
|
Keurig Switzerland GmbH
|
|
Switzerland
|
43
|
Keurig Trading Sàrl
|
|
Switzerland
|
44
|
Keurig UK Limited
|
|
United Kingdom
|
45
|
Big Red Mexico S de RL
|
|
Mexico
|
46
|
Comercializadora de Bebidas, SA de CV
|
|
Mexico
|
47
|
Keurig Mexico S de RL de CV
|
|
Mexico
|
48
|
Peñafiel Aguas Minerales SA de CV
|
|
Mexico
|
49
|
Peñafiel Bebidas SA de CV
|
|
Mexico
|
50
|
Peñafiel Servicios Comerciales, S.A. de C.V.
|
|
Mexico
|
51
|
Peñafiel Servicios S.A. de C.V.
|
|
Mexico
|
52
|
Manantiales Penafiel, S.A. de C.V.
|
|
Mexico
|
53
|
Snapple Beverage de Mexico, S.A. de C.V.
|
|
Mexico
|
54
|
Green Mountain Electrical Appliances Technical Consulting (Shenzhen) Company Limited
|
|
China
|
55
|
Green Mountain Hong Kong Limited
|
|
Hong Kong
|
56
|
Keurig Korea Ltd.
|
|
Korea
|
57
|
Keurig Malaysia Sdn. Bhd.
|
|
Malaysia
|
58
|
Keurig Singapore Pte. Ltd.
|
|
Singapore
|
59
|
Snapple Beverage Corporation Singapore Pte. Ltd.
|
|
Singapore
|
|
/s/ Robert J. Gamgort
|
|
Date: February 28, 2019
|
Robert J. Gamgort
|
|
|
Chief Executive Officer and President of
Keurig Dr Pepper Inc.
|
|
1.
|
I have reviewed this
Annual
Report on Form
10-K
of Keurig Dr Pepper Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Ozan Dokmecioglu
|
|
Date: February 28, 2019
|
Ozan Dokmecioglu
|
|
|
Chief Financial Officer of Keurig Dr Pepper Inc.
|
|
(1)
|
the
Annual
Report on Form
10-K
of the Company for the
fiscal year
ended
December 31, 2018
, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Robert J. Gamgort
|
|
Date: February 28, 2019
|
Robert J. Gamgort
|
|
|
Chief Executive Officer and President of
Keurig Dr Pepper Inc.
|
|
(1)
|
the
Annual
Report on Form
10-K
of the Company for the
fiscal year
ended
December 31, 2018
, as filed with the Securities and Exchange Commission (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Ozan Dokmecioglu
|
|
Date: February 28, 2019
|
Ozan Dokmecioglu
|
|
|
Chief Financial Officer of Keurig Dr Pepper Inc.
|