Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Entity File Number | 001-33829 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-0517725 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common stock | |
Security Exchange Name | NASDAQ | |
Trading Symbol | KDP | |
Entity Common Stock, Shares Outstanding | 1,403,776,408 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001418135 | |
Entity Registrant Name | Keurig Dr Pepper Inc. | |
Entity Address, Address Line One | 53 South Avenue | |
Entity Address, City or Town | Burlington | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01803 | |
City Area Code | (781) | |
Local Phone Number | 418-7000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 3,353,000,000 | $ 3,078,000,000 |
Cost of sales | 1,609,000,000 | 1,428,000,000 |
Gross profit | 1,744,000,000 | 1,650,000,000 |
Selling, general and administrative expenses | 1,165,000,000 | 1,018,000,000 |
Gain (Loss) Related to Litigation Settlement | 0 | (299,000,000) |
Other operating income, net | (5,000,000) | (35,000,000) |
Income from operations | 584,000,000 | 966,000,000 |
Interest expense | 23,000,000 | 188,000,000 |
Loss on early extinguishment of debt | 0 | 48,000,000 |
Equity Method Investment, Realized Gain (Loss) on Disposal | 0 | (50,000,000) |
Impairment of investments and note receivable | 0 | 6,000,000 |
Other (income) expense, net | (20,000,000) | 9,000,000 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total | 581,000,000 | 765,000,000 |
Provision for income taxes | 114,000,000 | 180,000,000 |
Net income including non-controlling interest | 467,000,000 | 585,000,000 |
Less: Net loss attributable to non-controlling interest | 0 | 0 |
Net income attributable to KDP | $ 467,000,000 | $ 585,000,000 |
Earnings per common share: | ||
Basic (in dollars per share) | $ 0.33 | $ 0.41 |
Diluted (in dollars per share) | $ 0.33 | $ 0.41 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 1,406,200,000 | 1,418,200,000 |
Diluted (in shares) | 1,417,000,000 | 1,429,700,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 467,000,000 | $ 585,000,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 108,000,000 | 99,000,000 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 0 | 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | (82,000,000) | 142,000,000 |
Other Comprehensive Income (Loss), Net of Tax | 26,000,000 | 241,000,000 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | 493,000,000 | 826,000,000 |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 0 | 0 |
Comprehensive income attributable to KDP | $ 493,000,000 | $ 826,000,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 204,000,000 | $ 535,000,000 |
Trade accounts receivable, net | 1,451,000,000 | 1,484,000,000 |
Inventories | 1,391,000,000 | 1,314,000,000 |
Prepaid expenses and other current assets | 540,000,000 | 471,000,000 |
Total current assets | 3,586,000,000 | 3,804,000,000 |
Property, plant and equipment, net | 2,480,000,000 | 2,491,000,000 |
Investments in unconsolidated affiliates | 1,009,000,000 | 1,000,000,000 |
Goodwill | 20,117,000,000 | 20,072,000,000 |
Other intangible assets, net | 23,273,000,000 | 23,183,000,000 |
Other non-current assets | 1,160,000,000 | 1,252,000,000 |
Deferred tax assets | 35,000,000 | 35,000,000 |
Total assets | 51,660,000,000 | 51,837,000,000 |
Current liabilities: | ||
Accounts payable | 4,947,000,000 | 5,206,000,000 |
Accrued expenses | 1,046,000,000 | 1,153,000,000 |
Structured payables | 137,000,000 | 137,000,000 |
Short-term borrowings and current portion of long-term obligations | 2,310,000,000 | 895,000,000 |
Other current liabilities | 687,000,000 | 685,000,000 |
Total current liabilities | 9,127,000,000 | 8,076,000,000 |
Long-term obligations | 9,929,000,000 | 11,072,000,000 |
Deferred tax liabilities | 5,739,000,000 | 5,739,000,000 |
Other non-current liabilities | 1,763,000,000 | 1,825,000,000 |
Total liabilities | 26,558,000,000 | 26,712,000,000 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued | 0 | 0 |
Common Stock, Value, Issued | 14,000,000 | 14,000,000 |
Additional paid-in capital | 21,210,000,000 | 21,444,000,000 |
Retained earnings | 3,724,000,000 | 3,539,000,000 |
Accumulated other comprehensive income | 155,000,000 | 129,000,000 |
Total stockholders' equity | 25,103,000,000 | 25,126,000,000 |
Non-controlling interest | (1,000,000) | (1,000,000) |
Total equity | 25,102,000,000 | 25,125,000,000 |
Total liabilities and equity | $ 51,660,000,000 | $ 51,837,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Common stock authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 1,403,720,858 | 1,408,394,293 |
Common stock outstanding (in shares) | 1,403,720,858 | 1,408,394,293 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock issued (in shares) | 1,403,720,858 | 1,408,394,293 |
Common stock outstanding (in shares) | 1,403,720,858 | 1,408,394,293 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities: | ||
Net income | $ 467,000,000 | $ 585,000,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 107,000,000 | 106,000,000 |
Amortization of intangibles | 34,000,000 | 34,000,000 |
Other amortization expense | 45,000,000 | 42,000,000 |
Provision for sales returns | 10,000,000 | 12,000,000 |
Deferred income taxes | 0 | 8,000,000 |
Employee stock-based compensation expense | 29,000,000 | (15,000,000) |
Loss on early extinguishment of debt | 0 | 48,000,000 |
Equity Method Investment, Realized Gain (Loss) on Disposal | 0 | (50,000,000) |
Gain (Loss) on Disposition of Property Plant Equipment | (5,000,000) | (38,000,000) |
Unrealized gain on foreign currency | 2,000,000 | 11,000,000 |
Unrealized gain on derivatives | (95,000,000) | 0 |
Equity in (earnings) loss of unconsolidated affiliates | 9,000,000 | (3,000,000) |
Impairment of investments and note receivable | 0 | 6,000,000 |
Other, net | (4,000,000) | 13,000,000 |
Changes in assets and liabilities: | ||
Trade accounts receivable | 28,000,000 | (73,000,000) |
Inventories | (74,000,000) | (147,000,000) |
Income taxes receivable and payables, net | 60,000,000 | 135,000,000 |
Other current and non-current assets | (151,000,000) | (284,000,000) |
Accounts payable and accrued expenses | (391,000,000) | 151,000,000 |
Other current and non-current liabilities | 22,000,000 | 138,000,000 |
Net change in operating assets and liabilities | (506,000,000) | (80,000,000) |
Net cash provided by operating activities | 71,000,000 | 663,000,000 |
Investing activities: | ||
Gain on Sale of Equity Method Investment | 0 | 50,000,000 |
Purchases of property, plant and equipment | (62,000,000) | (109,000,000) |
Proceeds from sales of property, plant and equipment | 7,000,000 | 78,000,000 |
Purchase of intangibles | (51,000,000) | (10,000,000) |
Issuance of related party note receivable | 0 | (6,000,000) |
Investments in unconsolidated affiliates | 0 | (3,000,000) |
Other, net | 1,000,000 | 3,000,000 |
Net cash (used in) provided by investing activities | (105,000,000) | 3,000,000 |
Financing activities: | ||
Repayments of Notes | 0 | (201,000,000) |
Proceeds from issuance of commercial paper | 3,523,000,000 | 0 |
Repayments of commercial paper | (3,258,000,000) | (149,000,000) |
Proceeds from structured payables | 34,000,000 | 38,000,000 |
Repayments of structured payables | (32,000,000) | (37,000,000) |
Cash dividends paid | (281,000,000) | (265,000,000) |
Repurchases of common stock | (231,000,000) | 0 |
Tax withholdings related to net share settlements | (31,000,000) | (5,000,000) |
Payments on finance leases | (24,000,000) | (20,000,000) |
Other, net | (3,000,000) | (5,000,000) |
Net cash used in financing activities | (303,000,000) | (644,000,000) |
Net change from operating, investing and financing activities | (337,000,000) | 22,000,000 |
Effect of exchange rate changes | 6,000,000 | 4,000,000 |
Beginning balance | 535,000,000 | 568,000,000 |
Ending balance | 204,000,000 | 594,000,000 |
Supplemental Cash Flow Information [Abstract] | ||
Capital expenditures included in accounts payable and accrued expenses | 222,000,000 | 139,000,000 |
Other Significant Noncash Transaction, Value of Consideration Given | 8,000,000 | 0 |
Dividends declared but not yet paid | 282,000,000 | 266,000,000 |
Cash paid for interest | 39,000,000 | 27,000,000 |
Cash paid for income taxes | $ 49,000,000 | $ 37,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock Issued | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Shares, Issued | 1,418,100,000 | ||||
Stockholders' Equity Attributable to Parent | $ 24,972,000,000 | $ 14,000,000 | $ 21,785,000,000 | $ 3,199,000,000 | $ (26,000,000) |
Non-controlling interest | 0 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 24,972,000,000 | ||||
Net income | 585,000,000 | 585,000,000 | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 241,000,000 | 241,000,000 | |||
Dividends declared, $0.20 per share | (266,000,000) | (266,000,000) | |||
Shares issued under employee stock-based compensation plans and other | 400,000 | ||||
Tax withholdings related to net share settlements | (5,000,000) | (5,000,000) | |||
Stock-based compensation and stock options exercised | (16,000,000) | (16,000,000) | |||
Less: Net loss attributable to non-controlling interest | 0 | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 585,000,000 | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.1875 | ||||
Shares, Issued | 1,418,500,000 | ||||
Stockholders' Equity Attributable to Parent | $ 25,511,000,000 | $ 14,000,000 | 21,764,000,000 | 3,518,000,000 | 215,000,000 |
Non-controlling interest | 0 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 25,511,000,000 | ||||
Shares, Issued | 1,408,400,000 | ||||
Stockholders' Equity Attributable to Parent | 25,126,000,000 | $ 14,000,000 | 21,444,000,000 | 3,539,000,000 | 129,000,000 |
Non-controlling interest | (1,000,000) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 25,125,000,000 | ||||
Net income | 467,000,000 | 467,000,000 | |||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 26,000,000 | 26,000,000 | |||
Dividends declared, $0.20 per share | (282,000,000) | (282,000,000) | |||
Shares issued under employee stock-based compensation plans and other | 1,900,000 | ||||
Tax withholdings related to net share settlements | (31,000,000) | (31,000,000) | |||
Stock-based compensation and stock options exercised | 29,000,000 | 29,000,000 | |||
Less: Net loss attributable to non-controlling interest | 0 | ||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 467,000,000 | ||||
Common Stock, Dividends, Per Share, Declared | $ 0.20 | ||||
Stock Repurchased During Period, Value | $ (232,000,000) | (232,000,000) | |||
Stock Repurchased During Period, Shares | (6,600,000) | ||||
Shares, Issued | 1,403,700,000 | ||||
Stockholders' Equity Attributable to Parent | $ 25,103,000,000 | $ 14,000,000 | $ 21,210,000,000 | $ 3,724,000,000 | $ 155,000,000 |
Non-controlling interest | (1,000,000) | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 25,102,000,000 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parentheticals) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Common Stock, Dividends, Per Share, Declared | $ 0.20 | $ 0.1875 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax | $ 0 | $ 0 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification, Tax | 21,000,000 | (48,000,000) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 467,000,000 | $ 585,000,000 |
Background and Basis of Present
Background and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | General ORGANIZATION References in this Quarterly Report on Form 10-Q to "KDP" or "the Company" refer to Keurig Dr Pepper Inc. and all entities included in the unaudited condensed consolidated financial statements. Definitions of terms used in this Quarterly Report on Form 10-Q are included within the Master Glossary. This Quarterly Report on Form 10-Q refers to some of KDP's owned or licensed trademarks, trade names and service marks, which are referred to as the Company's brands. All of the product names included herein are either KDP registered trademarks or those of the Company's licensors. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with KDP's consolidated financial statements and accompanying notes included in the Company's Annual Report. References to the "first quarter" indicate the Company's quarterly periods ended March 31, 2023 and 2022. USE OF ESTIMATES The process of preparing KDP's unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect reported amounts. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions the Company believes to be reasonable under the circumstances. These estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Changes in estimates are recorded in the period of change. Actual amounts may differ from these estimates. REPORTABLE SEGMENTS As of January 1, 2023, the Company revised its segment structure to align with changes in how the Company’s Chief Operating Decision Maker manages the business, assesses performance and allocates resources. This change had no impact on the Company’s consolidated results of operations or financial position. Prior period segment results have been recast to reflect the Company’s new reportable segments. Refer to Note 6 for additional information on the Company’s reportable segments and Note 7 for the Company’s disaggregated revenue portfolio for each reportable segment. The change in segment structure also resulted in a change to the Company’s reporting units. Refer to Note 3 for additional information on the Company’s reporting units. RECENTLY ADOPTED ACCOUNTING STANDARDS As of January 1, 2023, the Company adopted ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . The objective of ASU 2022-04 is to require entities to disclose information about the use of supplier finance programs in connection with the purchase of goods and services. While the adoption of ASU 2022-04 did not have a material impact on the Company’s unaudited condensed consolidated financial statements, it did impact the nature of the disclosures. The previous disclosure was specific to the amount of KDP’s outstanding payment obligations that were voluntarily elected by the supplier and sold to financial institutions as informed by the third party administrators. ASU 2022-04 instead requires disclosure of the amount of KDP’s outstanding obligations loaded into the supplier finance programs by the Company at each reporting period regardless of whether the outstanding obligation has been elected by the supplier to be sold to financial institutions. Refer to Note 13 for additional information on the Company’s obligations to participating suppliers. |
Long-term Obligations and Borro
Long-term Obligations and Borrowing Arrangements | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Obligations and Borrowing Arrangements | Long-term Obligations and Borrowing Arrangements The following table summarizes the Company 's long-term obligations: (in millions) March 31, 2023 December 31, 2022 Notes $ 11,575 $ 11,568 Less: current portion of long-term obligations (1,646) (496) Long-term obligations $ 9,929 $ 11,072 The following table summarizes the Company's short-term borrowings and current portion of long-term obligations: (in millions) March 31, 2023 December 31, 2022 Commercial paper notes $ 664 $ 399 Current portion of long-term obligations 1,646 496 Short-term borrowings and current portion of long-term obligations $ 2,310 $ 895 SENIOR UNSECURED NOTES The Company's Notes consisted of the following: (in millions, except %) Issuance Maturity Date Rate March 31, 2023 December 31, 2022 2023 Notes December 15, 2023 3.130% $ 500 $ 500 2024 Notes March 15, 2024 0.750% 1,150 1,150 2025 Merger Notes May 25, 2025 4.417% 529 529 2025 Notes November 15, 2025 3.400% 500 500 2026 Notes September 15, 2026 2.550% 400 400 2027 Notes June 15, 2027 3.430% 500 500 2028 Merger Notes May 25, 2028 4.597% 1,112 1,112 2029 Notes April 15, 2029 3.950% 1,000 1,000 2030 Notes May 1, 2030 3.200% 750 750 2031 Notes March 15, 2031 2.250% 500 500 2032 Notes April 15, 2032 4.050% 850 850 2038 Merger Notes May 25, 2038 4.985% 211 211 2045 Notes November 15, 2045 4.500% 550 550 2046 Notes December 15, 2046 4.420% 400 400 2048 Merger Notes May 25, 2048 5.085% 391 391 2050 Notes May 1, 2050 3.800% 750 750 2051 Notes March 15, 2051 3.350% 500 500 2052 Notes April 15, 2052 4.500% 1,150 1,150 Principal amount 11,743 11,743 Adjustment from principal amount to carrying amount (1) (168) (175) Carrying amount $ 11,575 $ 11,568 (1) The carrying amount includes unamortized discounts, debt issuance costs and fair value adjustments related to the DPS Merger. VARIABLE-RATE BORROWING ARRANGEMENTS Revolving Credit Agreement The following table summarizes information about the 2022 Revolving Credit Agreement: (in millions) March 31, 2023 December 31, 2022 Issuance Maturity Date Capacity Carrying Value Carrying Value 2022 Revolving Credit Agreement (1) February 23, 2027 $ 4,000 $ — $ — (1) The 2022 Revolving Credit Agreement has $200 million letters of credit available, none of which were utilized as of March 31, 2023. As of March 31, 2023, KDP was in compliance with its minimum interest coverage ratio relating to the 2022 Revolving Credit Agreement . Commercial Paper Program The following table provides information about the Company 's weighted average borrowings under its commercial paper program: First Quarter (in millions, except %) 2023 2022 Weighted average commercial paper borrowings $ 506 $ 45 Weighted average borrowing rates 4.86 % 0.30 % Letter of Credit Facility In addition to the portion of the 2022 Revolving Credit Agreement reserved for issuance of letters of credit, KDP has an incremental letter of credit facility. Under this facility, $150 million is available for the issuance of letters of credit, $68 million of which was utilized as of March 31, 2023 and $82 million of which remains available for use. FAIR VALUE DISCLOSURES The fair value of KDP's commercial paper approximates the carrying value and are considered Level 2 within the fair value hierarchy. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets GOODWILL Changes in the carrying amount of goodwill by reportable segment are as follows: (in millions) U.S. Refreshment Beverages U.S. Coffee International Total Balance as of January 1, 2023 $ 8,714 $ 8,622 $ 2,736 $ 20,072 Foreign currency translation — — 45 45 Balance as of March 31, 2023 $ 8,714 $ 8,622 $ 2,781 $ 20,117 INTANGIBLE ASSETS OTHER THAN GOODWILL The net carrying amounts of intangible assets other than goodwill with indefinite lives are as follows: (in millions) March 31, 2023 December 31, 2022 Brands (1) $ 19,363 $ 19,291 Trade names 2,480 2,480 Contractual arrangements 122 122 Distribution rights (2) 151 100 Total $ 22,116 $ 21,993 (1) The change in brands with indefinite lives was primarily driven by foreign currency translation of $72 million during the first quarter of 2023. (2) The Company acquired certain distribution rights from Nutrabolt during the first quarter of 2023 for approximately $51 million. The net carrying amounts of intangible assets other than goodwill with definite lives are as follows: March 31, 2023 December 31, 2022 (in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Acquired technology $ 1,146 $ (494) $ 652 $ 1,146 $ (475) $ 671 Customer relationships 638 (212) 426 638 (204) 434 Trade names 127 (104) 23 127 (101) 26 Brands 51 (20) 31 51 (19) 32 Contractual arrangements 24 (10) 14 24 (10) 14 Distribution rights 29 (18) 11 29 (16) 13 Total $ 2,015 $ (858) $ 1,157 $ 2,015 $ (825) $ 1,190 Amortization expense for intangible assets with definite lives was as follows: First Quarter (in millions) 2023 2022 Amortization expense $ 34 $ 34 Amortization expense of these intangible assets over the remainder of 2023 and the next five years is expected to be as follows: Remainder of 2023 For the Years Ending December 31, (in millions) 2024 2025 2026 2027 2028 Expected amortization expense $ 101 $ 127 $ 115 $ 111 $ 95 $ 87 IMPAIRMENT TESTING KDP conducts impairment tests on goodwill and all indefinite lived intangible assets annually, or more frequently if circumstances indicate that the carrying amount of an asset may not be recoverable. Changes to the Company’s operating segments effective January 1, 2023, as described in Note 6, resulted in a change to the Company’s reporting units. The Company’s reporting units are as follows: Reportable Segments Reporting Units U.S. Refreshment Beverages U.S. Beverage Concentrates U.S. WD DSD U.S. Coffee U.S. Coffee International Canada Beverage Concentrates Canada WD Canada Coffee Latin America Beverages Management performed a step 0 analysis as of the effective date of the goodwill for the impacted reporting units. The Company also performed an analysis as of March 31, 2023 to ensure that there were no additional triggering events which occurred during the quarter. As a result of these analyses, management did not identify any indications that the carrying amount of any goodwill or any intangible asset may not be recoverable. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives KDP is exposed to market risks arising from adverse changes in interest rates, commodity prices, and FX rates. KDP manages these risks through a variety of strategies, including the use of interest rate contracts, FX forward contracts, commodity forward, future, swap and option contracts and supplier pricing agreements. KDP does not hold or issue derivative financial instruments for trading or speculative purposes. KDP formally designates and accounts for certain foreign exchange forward contracts and interest rate contracts that meet established accounting criteria under U.S. GAAP as cash flow hedges. For such contracts, the effective portion of the gain or loss on the derivative instruments is recorded, net of applicable taxes, in AOCI. When net income is affected by the variability of the underlying transaction, the applicable offsetting amount of the gain or loss from the derivative instrument deferred in AOCI is reclassified to net income. Cash flows from derivative instruments designated in a qualifying hedging relationship are classified in the same category as the cash flows from the hedged items. If a cash flow hedge were to cease to qualify for hedge accounting, or were terminated, the derivatives would continue to be carried on the balance sheet at fair value until settled, and hedge accounting would be discontinued prospectively. If the underlying hedged transaction ceases to exist, any associated amounts reported in AOCI would be reclassified to earnings at that time. For derivatives that are not designated or for which the designated hedging relationship is discontinued, the gain or loss on the instrument is recognized in earnings in the period of change. The Company has exposure to credit losses from derivative instruments in an asset position in the event of nonperformance by the counterparties to the agreements. Historically, the Company has not experienced material credit losses as a result of counterparty nonperformance. The Company selects and periodically reviews counterparties based on credit ratings, limits its exposure to a single counterparty under defined guidelines and monitors the market position of the programs upon execution of a hedging transaction and at least on a quarterly basis. INTEREST RATES Economic Hedges KDP is exposed to interest rate risk related to its borrowing arrangements and obligations. The Company enters into interest rate contracts to provide predictability in the Company 's overall cost structure and to manage the balance of fixed-rate and variable-rate debt. KDP primarily enters into receive-fixed, pay-variable and receive-variable, pay-fixed swaps and swaption contracts. A natural hedging relationship exists in which changes in the fair value of the instruments act as an economic offset to changes in the fair value of the underlying items. Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are generally reported in interest expense in the unaudited Condensed Consolidated Statements of Income. As of March 31, 2023, economic interest rate derivative instruments have maturities ranging from February 2033 to December 2036. Cash Flow Hedges In order to hedge the variability in cash flows from interest rate changes associated with the Company’s planned future issuances of long-term debt, during the first quarter of 2021, the Company entered into forward starting swaps and designated them as cash flow hedges. During the first quarter of 2023, KDP terminated the remaining forward starting swaps which were designated as cash flow hedges. As the forecasted debt transaction associated with the terminated forward starting swaps was no longer considered probable, the realized gains associated with the termination were recorded in interest expense during the first quarter of 2023. FOREIGN EXCHANGE KDP is exposed to foreign exchange risk in its international subsidiaries or with certain counterparties in foreign jurisdictions, which may transact in currencies that are different from the functional currencies of KDP’s legal entities. Additionally, the balance sheets of each of the Company’s Canadian and Mexican businesses are subject to exposure from movements in exchange rates. Economic Hedges KDP holds FX forward contracts to economically manage the balance sheet exposures resulting from changes in the FX exchange rates described above. The intent of these FX contracts is to minimize the impact of FX risk associated with balance sheet positions not in local currency. In these cases, a hedging relationship exists in which changes in the fair value of the instruments act as an economic offset to changes in the fair value of the underlying items. Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are reported in the same caption of the unaudited Condensed Consolidated Statements of Income as the associated risk. As of March 31, 2023, these FX contracts have maturities ranging from April 2023 to September 2024. Cash Flow Hedges KDP designates certain FX forward contracts as cash flow hedges in order to manage the exposures resulting from changes in the FX rates described above. These designated FX forward contracts relate to either forecasted inventory purchases in U.S. dollars of the Canadian and Mexican businesses or forecasted capital expenditures of certain equipment in euros for KDP’s U.S. manufacturing facilities. The intent of these FX contracts is to provide predictability in the Company's overall cost structure. As of March 31, 2023, these FX contracts have maturities ranging from April 2023 to October 2024. COMMODITIES Economic Hedges KDP centrally manages the exposure to volatility in the prices of certain commodities used in its production process and transportation through various derivative contracts. The Company generally holds some combination of future, swap and option contracts that economically hedge certain of its risks. In these cases, a hedging relationship exists in which changes in the fair value of the instruments act as an economic offset to changes in the fair value of the underlying items or as an offset to certain costs of production. Changes in the fair value of these instruments are recorded in earnings throughout the term of the derivative instrument and are reported in the same line item of the unaudited Condensed Consolidated Statements of Income as the hedged transaction. Unrealized gains and losses are recognized as a component of unallocated corporate costs until the Company's reportable segments are affected by the completion of the underlying transaction, at which time the gain or loss is reflected as a component of the respective segment's income from operations. As of March 31, 2023, these commodity contracts have maturities ranging from April 2023 to June 2024. NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS The following table presents the notional amounts of KDP's outstanding derivative instruments by type: (in millions) March 31, 2023 December 31, 2022 Interest rate contracts Forward starting swaps, designated as cash flow hedges $ — $ 500 Forward starting swaps, not designated as hedging instruments 1,500 1,000 Receive-fixed, pay-variable interest rate swaps, not designated as hedging instruments 700 1,900 FX contracts Forward contracts, not designated as hedging instruments 589 490 Forward contracts, designated as cash flow hedges 472 511 Commodity contracts, not designated as hedging instruments (1) 529 754 (1) Notional value for commodity contracts is calculated as the expected volume times strike price per unit on a gross basis. FAIR VALUE OF DERIVATIVE INSTRUMENTS The fair values of commodity contracts, interest rate contracts and FX forward contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The fair value of commodity contracts are valued using the market approach based on observable market transactions, primarily underlying commodities futures or physical index prices, at the reporting date. Interest rate contracts are valued using models based primarily on readily observable market parameters, such as LIBOR or SOFR forward rates, for all substantial terms of the Company's contracts and credit risk of the counterparties. The fair value of FX forward contracts are valued using quoted forward FX prices at the reporting date. Therefore, the Company has categorized these contracts as Level 2. Not Designated as Hedging Instruments The following table summarizes the location of the fair value of the Company's derivative instruments which are not designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are considered level 2 within the fair value hierarchy. (in millions) Balance Sheet Location March 31, 2023 December 31, 2022 Assets: FX contracts Prepaid expenses and other current assets $ 5 $ 8 Commodity contracts Prepaid expenses and other current assets 7 6 Interest rate contracts Other non-current assets 36 49 FX contracts Other non-current assets 1 1 Commodity contracts Other non-current assets 1 1 Liabilities: Interest rate contracts Other current liabilities $ 22 $ 58 FX contracts Other current liabilities 1 — Commodity contracts Other current liabilities 46 51 Interest rate contracts Other non-current liabilities 123 194 Commodity contracts Other non-current liabilities 3 1 Designated as Hedging Instruments The following table summarizes the location of the fair value of the Company's derivative instruments which are designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are designated level 2 within the fair value hierarchy. (in millions) Balance Sheet Location March 31, 2023 December 31, 2022 Assets: FX contracts Prepaid expenses and other current assets $ 17 $ 21 FX contracts Other non-current assets 1 1 Interest rate contracts Other non-current assets — 88 Liabilities: FX contracts Other current liabilities $ 11 $ 3 IMPACT OF DERIVATIVE INSTRUMENTS NOT DESIGNATED AS HEDGING INSTRUMENTS The following table presents the amount of (gains) losses, net, recognized in the unaudited Condensed Consolidated Statements of Income related to derivative instruments not designated as hedging instruments under U.S. GAAP during the periods presented. Amounts include both realized and unrealized gains and losses. First Quarter (in millions) Income Statement Location 2023 2022 Interest rate contracts Interest expense $ (96) $ 67 FX contracts Cost of sales 1 5 FX contracts Other (income) expense, net — 8 Commodity contracts Cost of sales (15) (97) Commodity contracts SG&A expenses 14 (37) IMPACT OF CASH FLOW HEDGES The following table presents the amount of (gains) losses, net, reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income related to derivative instruments designated as cash flow hedging instruments during the periods presented: First Quarter (in millions) Income Statement Location 2023 2022 Interest rate contracts (1) Interest expense $ (68) $ — FX contracts Cost of sales (1) 3 (1) Amounts recognized during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million. KDP expects to reclassify approximately $8 million and $9 million of pre-tax net gains from AOCI into net income during the next twelve months related to interest rate contracts and FX contracts, respectively. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Lessee, Finance Leases | Leases The following table presents the components of lease cost: First Quarter (in millions) 2023 2022 Operating lease cost $ 39 $ 32 Finance lease cost Amortization of right-of-use assets 22 18 Interest on lease liabilities 6 6 Variable lease cost (1) 10 9 Total lease cost $ 77 $ 65 (1) Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation. The following table presents supplemental cash flow and other information about the Company's leases: First Quarter (in millions) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 36 $ 29 Operating cash flows from finance leases 6 6 Financing cash flows from finance leases 24 20 Right-of-use assets obtained in exchange for lease obligations: Operating leases 38 168 Finance leases 17 23 The following table presents information about the Company's weighted average discount rate and remaining lease term: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 5.1 % 5.0 % Finance leases 3.7 % 3.7 % Weighted average remaining lease term Operating leases 10 years 11 years Finance leases 9 years 9 years Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 were as follows: (in millions) Operating Leases Finance Leases Remainder of 2023 $ 98 $ 90 2024 141 116 2025 133 111 2026 121 148 2027 100 61 2028 78 47 Thereafter 519 264 Total future minimum lease payments 1,190 837 Less: imputed interest (275) (131) Present value of minimum lease payments $ 915 $ 706 SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED As of March 31, 2023, the Company has entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $208 million. These leases are expected to commence between the fourth quarter of 2023 and 2025, with initial lease terms ranging from 4 years to 10 years. ASSET SALE-LEASEBACK TRANSACTION The Company entered into a sale-leaseback transaction with the Veyron SPEs during the first quarter of 2023. The following table presents details of the transaction. The gain on the sale-leaseback is recorded in Other operating income, net, and the leaseback is accounted for as an operating lease. (in millions) Sale Proceeds Carrying Value Gain on Sale March 31, 2023 (1) $ 7 $ 1 $ 6 (1) The sale-leaseback transaction included one distribution property. The initial term of the leaseback is approximately 15 years, with two 10-year renewal options. The renewal options are not reasonably assured as (i) the Company's position that the dynamic environment in which it operates precludes the Company's ability to be reasonably certain of exercising the renewal options in the distant future and (ii) the options are contingent on the Company remaining investment grade and no change-in-control as of the end of the lease term. The leaseback has a RVG. Refer to Note 15 for additional information about the RVG associated with the asset sale-leaseback transaction. |
Lessee, Operating Leases | Leases The following table presents the components of lease cost: First Quarter (in millions) 2023 2022 Operating lease cost $ 39 $ 32 Finance lease cost Amortization of right-of-use assets 22 18 Interest on lease liabilities 6 6 Variable lease cost (1) 10 9 Total lease cost $ 77 $ 65 (1) Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation. The following table presents supplemental cash flow and other information about the Company's leases: First Quarter (in millions) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 36 $ 29 Operating cash flows from finance leases 6 6 Financing cash flows from finance leases 24 20 Right-of-use assets obtained in exchange for lease obligations: Operating leases 38 168 Finance leases 17 23 The following table presents information about the Company's weighted average discount rate and remaining lease term: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 5.1 % 5.0 % Finance leases 3.7 % 3.7 % Weighted average remaining lease term Operating leases 10 years 11 years Finance leases 9 years 9 years Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 were as follows: (in millions) Operating Leases Finance Leases Remainder of 2023 $ 98 $ 90 2024 141 116 2025 133 111 2026 121 148 2027 100 61 2028 78 47 Thereafter 519 264 Total future minimum lease payments 1,190 837 Less: imputed interest (275) (131) Present value of minimum lease payments $ 915 $ 706 SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED As of March 31, 2023, the Company has entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $208 million. These leases are expected to commence between the fourth quarter of 2023 and 2025, with initial lease terms ranging from 4 years to 10 years. ASSET SALE-LEASEBACK TRANSACTION The Company entered into a sale-leaseback transaction with the Veyron SPEs during the first quarter of 2023. The following table presents details of the transaction. The gain on the sale-leaseback is recorded in Other operating income, net, and the leaseback is accounted for as an operating lease. (in millions) Sale Proceeds Carrying Value Gain on Sale March 31, 2023 (1) $ 7 $ 1 $ 6 (1) The sale-leaseback transaction included one distribution property. The initial term of the leaseback is approximately 15 years, with two 10-year renewal options. The renewal options are not reasonably assured as (i) the Company's position that the dynamic environment in which it operates precludes the Company's ability to be reasonably certain of exercising the renewal options in the distant future and (ii) the options are contingent on the Company remaining investment grade and no change-in-control as of the end of the lease term. The leaseback has a RVG. Refer to Note 15 for additional information about the RVG associated with the asset sale-leaseback transaction. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | Segments Effective January 1, 2023, the Company revised its segment structure to align with changes in how the Company’s Chief Operating Decision Maker manages the business, assesses performance and allocates resources. The Company's reportable segments consist of the following: • The U.S. Refreshment Beverages segment reflects sales in the U.S. from the manufacture and distribution of branded concentrates, syrup and finished beverages, including the sales of the Company's own brands and third-party brands, to third-party bottlers, distributors and retailers. • The U.S. Coffee segment reflects sales in the U.S. from the manufacture and distribution of finished goods relating to the Company's K-Cup pods, single-serve brewers and accessories, and other coffee products to partners, retailers and directly to consumers through the Company’s Keurig.com website. • The International segment reflects sales in international markets, including the following: ◦ Sales in Canada, Mexico, the Caribbean and other international markets from the manufacture and distribution of branded concentrates, syrup and finished beverages, including sales of the Company's own brands and third-party brands, to third-party bottlers, distributors and retailers. ◦ Sales in Canada from the manufacture and distribution of finished goods relating to the Company’s single-serve brewers, K-Cup pods and other coffee products. Segment results are based on management reports. Net sales and income from operations are the significant financial measures used to assess the operating performance of the Company's reportable segments. Intersegment sales are recorded at cost and are eliminated in the unaudited Condensed Consolidated Statements of Income. “Unallocated corporate costs” are excluded from the Company's measurement of segment performance and include unrealized commodity derivative gains and losses, and certain general corporate expenses. Information about the Company's operations by reportable segment is as follows: First Quarter (in millions) 2023 2022 Segment Results – Net sales U.S. Refreshment Beverages $ 2,007 $ 1,781 U.S. Coffee 931 943 International 415 354 Net sales $ 3,353 $ 3,078 Segment Results – Income from operations U.S. Refreshment Beverages $ 490 $ 704 U.S. Coffee 232 255 International 80 64 Unallocated corporate costs (218) (57) Income from operations $ 584 $ 966 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition KDP recognizes revenue when obligations under the terms of a contract with the customer are satisfied. Branded product sales, which include LRB, K-Cup pods and appliances, occur once control is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that KDP expects to receive in exchange for transferring goods. The amount of consideration KDP receives and revenue KDP recognizes varies with changes in customer incentives that KDP offers to its customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Costs associated with shipping and handling activities, such as merchandising, are included in SG&A expenses as revenue is recognized. The following table disaggregates KDP's revenue by product portfolio and by reportable segment: (in millions) U.S. Refreshment Beverages U.S. Coffee International Total For the first quarter of 2023: LRB $ 1,970 $ — $ 253 $ 2,223 K-Cup pods — 771 117 888 Appliances — 125 12 137 Other 37 35 33 105 Net sales $ 2,007 $ 931 $ 415 $ 3,353 For the first quarter of 2022: LRB $ 1,753 $ — $ 203 $ 1,956 K-Cup pods — 749 106 855 Appliances — 161 17 178 Other 28 33 28 89 Net sales $ 1,781 $ 943 $ 354 $ 3,078 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the Company's basic and diluted EPS and shares outstanding. Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented. First Quarter (in millions, except per share data) 2023 2022 Net income attributable to KDP $ 467 $ 585 Weighted average common shares outstanding 1,406.2 1,418.2 Dilutive effect of stock-based awards 10.8 11.5 Weighted average common shares outstanding and common stock equivalents 1,417.0 1,429.7 Basic EPS $ 0.33 $ 0.41 Diluted EPS 0.33 0.41 Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation 1.0 0.9 |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The components of stock-based compensation expense are presented below: First Quarter (in millions) 2023 2022 Total stock-based compensation expense (1) $ 29 $ (15) Income tax (benefit) expense (5) 4 Stock-based compensation expense, net of tax $ 24 $ (11) (1) The Company recorded a one-time $40 million reduction to stock-based compensation expense as a result of the change in forfeiture policy in the first quarter of 2022. RESTRICTED SHARE UNITS The table below summarizes RSU activity : RSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding as of December 31, 2022 18,038,745 $ 27.46 1.6 $ 643 Granted 3,090,196 31.53 Vested and released (2,069,870) 23.41 71 Forfeited (184,830) 28.24 Outstanding as of March 31, 2023 18,874,241 $ 28.57 1.8 $ 666 As of March 31, 2023, there was $226 million of unrecognized compensation cost related to unvested RSUs that is expected to be recognized over a weighted average period of 3.4 years. |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in unconsolidated affiliates | Investments The following table summarizes investments in unconsolidated affiliates as of March 31, 2023 and December 31, 2022: (in millions) Ownership Interest March 31, 2023 December 31, 2022 Nutrabolt 29.8 % $ 885 $ 874 Tractor 19.2 % 48 49 Athletic Brewing 13.1 % 50 51 Dyla LLC 12.4 % 12 12 Force Holdings LLC (1) 33.3 % 4 4 Beverage startup companies (2) (various) 5 5 Other (various) 5 5 Investments in unconsolidated affiliates $ 1,009 $ 1,000 (1) Force Holdings LLC has a 14.1% ownership interest in Dyla LLC. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rates were as follows: First Quarter (in millions) 2023 2022 Effective tax rate 19.6 % 23.5 % |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table provides a summary of changes in AOCI, net of taxes: (in millions) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefit Liabilities Cash Flow Hedges Accumulated Other Comprehensive Income For the first quarter of 2023: Beginning balance $ (86) $ (10) $ 225 $ 129 Other comprehensive income (loss) 108 — (30) 78 Amounts reclassified from AOCI — — (52) (52) Total other comprehensive income (loss) 108 — (82) 26 Balance as of March 31, 2023 $ 22 $ (10) $ 143 $ 155 For the first quarter of 2022: Beginning balance $ 81 $ (4) $ (103) $ (26) Other comprehensive income 99 — 140 239 Amounts reclassified from AOCI — — 2 2 Total other comprehensive income 99 — 142 241 Balance as of March 31, 2022 $ 180 $ (4) $ 39 $ 215 The following table presents the amount of (gains) losses reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income: First Quarter (in millions) Income Statement Caption 2023 2022 Cash Flow Hedges: Interest rate contracts (1) Interest expense $ (68) $ — FX contracts Cost of sales — 3 Total (68) 3 Income tax (benefit) expense 16 (1) Total, net of tax $ (52) $ 2 (1) Amounts reclassified from AOCI into interest expense during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million. Refer to Note 4 for additional information on the terminated forward starting swaps. |
Other Financial Information
Other Financial Information | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Other Financial Information | Other Financial Information SELECTED BALANCE SHEET INFORMATION The tables below provide selected financial information from the unaudited Condensed Consolidated Balance Sheets: March 31, December 31, (in millions) 2023 2022 Inventories: Raw materials $ 471 $ 475 Work-in-progress 9 8 Finished goods 939 858 Total 1,419 1,341 Allowance for excess and obsolete inventories (28) (27) Total Inventories $ 1,391 $ 1,314 Prepaid expenses and other current assets: Other receivables $ 138 $ 167 Prepaid income taxes 15 49 Customer incentive programs 104 25 Derivative instruments 29 35 Prepaid marketing 39 19 Spare parts 94 89 Income tax receivable 17 17 Other 104 70 Total prepaid expenses and other current assets $ 540 $ 471 Other non-current assets: Operating lease right-of-use assets $ 892 $ 881 Customer incentive programs 40 46 Derivative instruments 39 140 Equity securities (1) 59 48 Equity securities without readily determinable fair values 1 1 Other 129 136 Total other non-current assets $ 1,160 $ 1,252 (1) Fair values of these equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1. Unrealized mark-to market gains and losses are recorded to Other (income) expense, net. For the first quarter of 2023 and 2022, the Company recorded an unrealized mark-to-market gain of $8 million and loss of $3 million, respectively, on its investment in Vita Coco. March 31, December 31, (in millions) 2023 2022 Accrued expenses: Accrued customer trade $ 352 $ 429 Accrued compensation 127 246 Insurance reserve 39 53 Accrued interest 152 76 Accrued professional fees 9 7 Other accrued expenses 367 342 Total accrued expenses $ 1,046 $ 1,153 Other current liabilities: Dividends payable $ 282 $ 281 Income taxes payable 110 87 Operating lease liability 105 100 Finance lease liability 95 95 Derivative instruments 80 112 Other 15 10 Total other current liabilities $ 687 $ 685 Other non-current liabilities: Operating lease liability $ 810 $ 803 Finance lease liability 611 618 Pension and post-retirement liability 38 37 Insurance reserves 70 69 Derivative instruments 126 195 Deferred compensation liability 32 30 Other 76 73 Total other non-current liabilities $ 1,763 $ 1,825 ACCOUNTS PAYABLE KDP has agreements with third party administrators which allow participating suppliers to track payment obligations from KDP, and if voluntarily elected by the supplier, to sell payment obligations from KDP to financial institutions. Suppliers can sell one or more of KDP's payment obligations at their sole discretion and the rights and obligations of KDP to its suppliers are not impacted. KDP has no economic interest in a supplier’s decision to enter into these agreements and no direct financial relationship with the financial institutions. KDP's obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted. The amount of the outstanding obligations confirmed as valid included in accounts payable |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies KDP is occasionally subject to litigation or other legal proceedings. Reserves are recorded for specific legal proceedings when the Company determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. As of March 31, 2023 and December 31, 2022, the Company had litigation reserves of $18 million and $12 million, respectively. KDP has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. The Company does not believe that the outcome of these, or any other, pending legal matters, individually or collectively, will have a material adverse effect on the results of operations, financial condition or liquidity of KDP. ANTITRUST LITIGATION In February 2014, TreeHouse Foods, Inc. and certain affiliated entities filed suit against KDP’s wholly-owned subsidiary, Keurig, in the U.S. District Court for the Southern District of New York (“SDNY”) (TreeHouse Foods, Inc. et al. v. Green Mountain Coffee Roasters, Inc. et al.). The TreeHouse complaint asserted claims under the federal antitrust laws and various state laws, contending that Keurig had monopolized alleged markets for single serve coffee brewers and single serve coffee pods. The TreeHouse complaint sought treble monetary damages, declaratory relief, injunctive relief and attorneys’ fees. In March 2014, JBR, Inc. filed suit against Keurig in the U.S. District Court for the Eastern District of California (JBR, Inc. v. Keurig Green Mountain, Inc.). The claims asserted and relief sought in the JBR complaint were substantially similar to the claims asserted and relief sought in the TreeHouse complaint. Beginning in 2014, a number of putative class actions asserting similar claims and seeking similar relief to the matters described above were filed on behalf of purported direct purchasers of Keurig’s products in various federal district courts. In June 2014, these various actions, including the TreeHouse and JBR suits, were transferred to a single judicial district for coordinated pre-trial proceedings (the “Multidistrict Antitrust Litigation”). A consolidated putative class action complaint by direct purchaser plaintiffs was filed in July 2014. In January 2019, McLane Company, Inc. filed suit against Keurig (McLane Company, Inc. v. Keurig Green Mountain, Inc.) in the SDNY asserting similar claims and was also transferred into the Multidistrict Antitrust Litigation. These actions are now pending in the SDNY (In re: Keurig Green Mountain Single-Serve Coffee Antitrust Litigation). Discovery in the Multidistrict Antitrust Litigation concluded in 2021, with plaintiffs collectively claiming more than $5 billion of monetary damages. Keurig strongly disputes the merits of the claims and the calculation of damages. As a result, Keurig has fully briefed a summary judgment motion that, if successful, would end the cases entirely. Keurig has also fully briefed other significant motions, including challenges to the validity of plaintiffs’ damages calculations. Keurig is also pursuing its opposition to direct purchaser plaintiffs’ motion for class certification. In July 2021, BJ’s Wholesale Club, Inc. filed suit against Keurig (BJ’s Wholesale Club, Inc. v. Keurig Green Mountain, Inc.) in the U.S. District Court for the Eastern District of New York (“EDNY”) asserting similar claims and also was transferred into the Multidistrict Antitrust Litigation. In August 2021, Winn-Dixie Stores, Inc. and Bi-Lo Holding LLC filed suit against Keurig (Winn-Dixie Stores, Inc. et al. v. Keurig Green Mountain, Inc. et al.) in the EDNY asserting similar claims and was also transferred into the Multidistrict Antitrust Litigation. These cases remain in the early stages of discovery. A number of putative class actions asserting similar claims and seeking similar relief were previously filed on behalf of purported indirect purchasers of Keurig’s products. In July 2020, Keurig reached an agreement with the putative indirect purchaser class plaintiffs in the Multidistrict Antitrust Litigation to settle the claims asserted for $31 million. The settlement class consists of individuals and entities in the United States that purchased, from persons other than Keurig and not for purposes of resale, Keurig manufactured or licensed single serve beverage portion packs during the applicable class period (beginning in September 2010 for most states). The court granted preliminary approval of the settlement in December 2020, and the Company paid the settlement amount in January 2021. In June 2021, the Court granted final approval of the settlement, entered final judgment, and dismissed the indirect purchasers’ claims. Separate from the U.S. actions described above, a statement of claim was filed in September 2014 against Keurig and Keurig Canada Inc. in Ontario, Canada, by Club Coffee L.P., a Canadian manufacturer of single serve beverage pods, asserting a breach of competition law and false and misleading statements by Keurig. To date, this plaintiff has not taken substantive action to prosecute its claims. KDP intends to vigorously defend the remaining lawsuits described above. At this time, the Company is unable to predict the outcome of these lawsuits, the potential loss or range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations. Accordingly, the Company has not accrued for a loss contingency. Additionally, as the timelines in these cases may be beyond our control, we cannot assure you if or when there will be material developments in these matters. |
Transactions with Variable Inte
Transactions with Variable Interest Entities | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity Disclosure | 15. Transactions with Variable Interest Entities TRANSACTIONS WITH VEYRON SPEs The Company has a number of leasing arrangements and one licensing arrangement with special purpose entities associated with the same sponsor, which are referred to as the Veyron SPEs. The Veyron SPEs are VIEs for which KDP is not the primary beneficiary, as KDP has limited power based on the contractual agreements to direct the activities that most significantly impact the VIEs’ performance. Leasing Arrangements As of March 31, 2023, the Company has entered into sixteen lease transactions with the Veyron SPEs, fifteen of which were associated with asset sale-leaseback transactions. Refer to Note 5 for additional information about the current period asset sale-leaseback transaction. Each lease has a RVG based on a percentage of Veyron SPEs’s purchase price; however, the Company concluded it was not probable that the Company will owe an amount at the end of each individual lease term, as the fair values of the properties are not expected to fall below the RVGs at the end of each individual lease term. As such, the Company recorded each lease obligation excluding the associated RVG. The aggregate maximum undiscounted RVG associated with the leasing arrangements as of March 31, 2023 and December 31, 2022 were $653 million and $650 million, respectively. This aggregate maximum value assumes that the fair value of each property at the end of either the original lease term or renewal term is equal to zero, which the Company has concluded is not probable. The following table provides the carrying amounts of the right-to-use assets and lease obligations recorded on the Company’s Consolidated Balance Sheets associated with these leasing arrangements related to the VIEs as of March 31, 2023 and December 31, 2022. (in millions) March 31, 2023 (1) December 31, 2022 (2) Non-current assets $ 430 $ 430 Current liabilities 22 22 Non-current liabilities 419 419 (1) The leasing agreements included as of March 31, 2023 include nine manufacturing sites, five distribution centers and our Frisco, Texas headquarters. (2) The leasing agreements included as of December 31, 2022 include nine manufacturing sites, four distribution centers and our Frisco, Texas headquarters. Licensing Arrangement ABC, a wholly-owned subsidiary of KDP, has provided a guarantee in connection with its distribution agreement with the Veyron SPEs to be paid only in the event the Veyron SPEs sell specific distribution rights and the value of those distribution rights does not exceed $142 million, which is the maximum undiscounted amount that KDP could pay under the guarantee. All obligations with respect to the guarantee will cease upon termination of the distribution agreement, which would occur upon notice by ABC not to renew the distribution agreement, KDP no longer being investment grade at the end of the term, or the sale of the distribution rights by the Veyron SPEs. As of March 31, 2023, KDP has not recorded a liability as it is not probable that the Company will have to make any payments required under the residual value guarantee, as the fair value of the distribution rights is not expected to fall below $142 million over the term of the agreement. As of March 31, 2023, KDP had $98 million in fixed service fee commitments related to the 15-year distribution agreement which was effective on December 28, 2020, with Veyron SPEs. These commitments were used to assist the Veyron SPEs in obtaining financing. Such fixed service fee payments began on January 1, 2021. Fixed service fees over the next five years are expected to be as follows: Remainder of 2023 For the Years Ending December 31, (in millions) 2024 2025 2026 2027 2028 Fixed service fees $ 5 $ 8 $ 8 $ 7 $ 8 $ 8 |
Restructuring and Integration C
Restructuring and Integration Costs | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Integration Costs | Restructuring Liabilities Restructuring liabilities that qualify as exit and disposal costs under U.S. GAAP are included in accounts payable and accrued expenses on the unaudited condensed consolidated financial statements. Restructuring liabilities, primarily consisting of workforce reduction costs, were as follows: (in millions) Restructuring Liabilities Balance as of January 1, 2023 $ 55 Charges to expense — Cash payments (29) Balance as of March 31, 2023 $ 26 |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting principally of normal recurring adjustments, considered necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with KDP's consolidated financial statements and accompanying notes included in the Company's Annual Report. References to the "first quarter" indicate the Company's quarterly periods ended March 31, 2023 and 2022. |
Use of Estimates | The process of preparing KDP's unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect reported amounts. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions the Company believes to be reasonable under the circumstances. These estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Changes in estimates are recorded in the period of change. Actual amounts may differ from these estimates |
New Accounting Pronouncements, Policy | RECENTLY ADOPTED ACCOUNTING STANDARDS As of January 1, 2023, the Company adopted ASU 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations . The objective of ASU 2022-04 is to require entities to disclose information about the use of supplier finance programs in connection with the purchase of goods and services. While the adoption of ASU 2022-04 did not have a material impact on the Company’s unaudited condensed consolidated financial statements, it did impact the nature of the disclosures. The previous disclosure was specific to the amount of KDP’s outstanding payment obligations that were voluntarily elected by the supplier and sold to financial institutions as informed by the third party administrators. ASU 2022-04 instead requires disclosure of the amount of KDP’s outstanding obligations loaded into the supplier finance programs by the Company at each reporting period regardless of whether the outstanding obligation has been elected by the supplier to be sold to financial institutions. Refer to Note 13 for additional information on the Company’s obligations to participating suppliers. |
Long-term Obligations and Bor_2
Long-term Obligations and Borrowing Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | The following table provides information about the Company 's weighted average borrowings under its commercial paper program: First Quarter (in millions, except %) 2023 2022 Weighted average commercial paper borrowings $ 506 $ 45 Weighted average borrowing rates 4.86 % 0.30 % |
Schedule of debt | The following table summarizes the Company 's long-term obligations: (in millions) March 31, 2023 December 31, 2022 Notes $ 11,575 $ 11,568 Less: current portion of long-term obligations (1,646) (496) Long-term obligations $ 9,929 $ 11,072 The following table summarizes the Company's short-term borrowings and current portion of long-term obligations: (in millions) March 31, 2023 December 31, 2022 Commercial paper notes $ 664 $ 399 Current portion of long-term obligations 1,646 496 Short-term borrowings and current portion of long-term obligations $ 2,310 $ 895 |
Schedule of long-term debt instruments | The Company's Notes consisted of the following: (in millions, except %) Issuance Maturity Date Rate March 31, 2023 December 31, 2022 2023 Notes December 15, 2023 3.130% $ 500 $ 500 2024 Notes March 15, 2024 0.750% 1,150 1,150 2025 Merger Notes May 25, 2025 4.417% 529 529 2025 Notes November 15, 2025 3.400% 500 500 2026 Notes September 15, 2026 2.550% 400 400 2027 Notes June 15, 2027 3.430% 500 500 2028 Merger Notes May 25, 2028 4.597% 1,112 1,112 2029 Notes April 15, 2029 3.950% 1,000 1,000 2030 Notes May 1, 2030 3.200% 750 750 2031 Notes March 15, 2031 2.250% 500 500 2032 Notes April 15, 2032 4.050% 850 850 2038 Merger Notes May 25, 2038 4.985% 211 211 2045 Notes November 15, 2045 4.500% 550 550 2046 Notes December 15, 2046 4.420% 400 400 2048 Merger Notes May 25, 2048 5.085% 391 391 2050 Notes May 1, 2050 3.800% 750 750 2051 Notes March 15, 2051 3.350% 500 500 2052 Notes April 15, 2052 4.500% 1,150 1,150 Principal amount 11,743 11,743 Adjustment from principal amount to carrying amount (1) (168) (175) Carrying amount $ 11,575 $ 11,568 |
Schedule of line of credit facilities | The following table summarizes information about the 2022 Revolving Credit Agreement: (in millions) March 31, 2023 December 31, 2022 Issuance Maturity Date Capacity Carrying Value Carrying Value 2022 Revolving Credit Agreement (1) February 23, 2027 $ 4,000 $ — $ — (1) The 2022 Revolving Credit Agreement has $200 million letters of credit available, none of which were utilized as of March 31, 2023. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill by reportable segment | Changes in the carrying amount of goodwill by reportable segment are as follows: (in millions) U.S. Refreshment Beverages U.S. Coffee International Total Balance as of January 1, 2023 $ 8,714 $ 8,622 $ 2,736 $ 20,072 Foreign currency translation — — 45 45 Balance as of March 31, 2023 $ 8,714 $ 8,622 $ 2,781 $ 20,117 |
Schedule of net carrying amounts of intangible assets other than goodwill with indefinite lives | The net carrying amounts of intangible assets other than goodwill with indefinite lives are as follows: (in millions) March 31, 2023 December 31, 2022 Brands (1) $ 19,363 $ 19,291 Trade names 2,480 2,480 Contractual arrangements 122 122 Distribution rights (2) 151 100 Total $ 22,116 $ 21,993 (1) The change in brands with indefinite lives was primarily driven by foreign currency translation of $72 million during the first quarter of 2023. (2) The Company acquired certain distribution rights from Nutrabolt during the first quarter of 2023 for approximately $51 million. |
Schedule of net carrying amounts of intangible assets other than goodwill with definite lives | The net carrying amounts of intangible assets other than goodwill with definite lives are as follows: March 31, 2023 December 31, 2022 (in millions) Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Acquired technology $ 1,146 $ (494) $ 652 $ 1,146 $ (475) $ 671 Customer relationships 638 (212) 426 638 (204) 434 Trade names 127 (104) 23 127 (101) 26 Brands 51 (20) 31 51 (19) 32 Contractual arrangements 24 (10) 14 24 (10) 14 Distribution rights 29 (18) 11 29 (16) 13 Total $ 2,015 $ (858) $ 1,157 $ 2,015 $ (825) $ 1,190 |
Schedule of amortization expense for intangible assets with definite lives | Amortization expense for intangible assets with definite lives was as follows: First Quarter (in millions) 2023 2022 Amortization expense $ 34 $ 34 |
Schedule of future amortization expense | Amortization expense of these intangible assets over the remainder of 2023 and the next five years is expected to be as follows: Remainder of 2023 For the Years Ending December 31, (in millions) 2024 2025 2026 2027 2028 Expected amortization expense $ 101 $ 127 $ 115 $ 111 $ 95 $ 87 |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Notional Amounts of Derivative Instruments | NOTIONAL AMOUNTS OF DERIVATIVE INSTRUMENTS The following table presents the notional amounts of KDP's outstanding derivative instruments by type: (in millions) March 31, 2023 December 31, 2022 Interest rate contracts Forward starting swaps, designated as cash flow hedges $ — $ 500 Forward starting swaps, not designated as hedging instruments 1,500 1,000 Receive-fixed, pay-variable interest rate swaps, not designated as hedging instruments 700 1,900 FX contracts Forward contracts, not designated as hedging instruments 589 490 Forward contracts, designated as cash flow hedges 472 511 Commodity contracts, not designated as hedging instruments (1) 529 754 (1) Notional value for commodity contracts is calculated as the expected volume times strike price per unit on a gross basis. |
Schedule of derivative instruments in statement of financial position, fair value | Not Designated as Hedging Instruments The following table summarizes the location of the fair value of the Company's derivative instruments which are not designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are considered level 2 within the fair value hierarchy. (in millions) Balance Sheet Location March 31, 2023 December 31, 2022 Assets: FX contracts Prepaid expenses and other current assets $ 5 $ 8 Commodity contracts Prepaid expenses and other current assets 7 6 Interest rate contracts Other non-current assets 36 49 FX contracts Other non-current assets 1 1 Commodity contracts Other non-current assets 1 1 Liabilities: Interest rate contracts Other current liabilities $ 22 $ 58 FX contracts Other current liabilities 1 — Commodity contracts Other current liabilities 46 51 Interest rate contracts Other non-current liabilities 123 194 Commodity contracts Other non-current liabilities 3 1 Designated as Hedging Instruments The following table summarizes the location of the fair value of the Company's derivative instruments which are designated as hedging instruments within the unaudited Condensed Consolidated Balance Sheets. All such instruments are designated level 2 within the fair value hierarchy. (in millions) Balance Sheet Location March 31, 2023 December 31, 2022 Assets: FX contracts Prepaid expenses and other current assets $ 17 $ 21 FX contracts Other non-current assets 1 1 Interest rate contracts Other non-current assets — 88 Liabilities: FX contracts Other current liabilities $ 11 $ 3 |
Schedule of derivative instruments not designated as hedging instruments | The following table presents the amount of (gains) losses, net, recognized in the unaudited Condensed Consolidated Statements of Income related to derivative instruments not designated as hedging instruments under U.S. GAAP during the periods presented. Amounts include both realized and unrealized gains and losses. First Quarter (in millions) Income Statement Location 2023 2022 Interest rate contracts Interest expense $ (96) $ 67 FX contracts Cost of sales 1 5 FX contracts Other (income) expense, net — 8 Commodity contracts Cost of sales (15) (97) Commodity contracts SG&A expenses 14 (37) |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table presents the amount of (gains) losses, net, reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income related to derivative instruments designated as cash flow hedging instruments during the periods presented: First Quarter (in millions) Income Statement Location 2023 2022 Interest rate contracts (1) Interest expense $ (68) $ — FX contracts Cost of sales (1) 3 (1) Amounts recognized during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | The following table presents the components of lease cost: First Quarter (in millions) 2023 2022 Operating lease cost $ 39 $ 32 Finance lease cost Amortization of right-of-use assets 22 18 Interest on lease liabilities 6 6 Variable lease cost (1) 10 9 Total lease cost $ 77 $ 65 (1) Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation. |
Supplemental Cash Flow Information for Leases [Table Text Block] | The following table presents supplemental cash flow and other information about the Company's leases: First Quarter (in millions) 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 36 $ 29 Operating cash flows from finance leases 6 6 Financing cash flows from finance leases 24 20 Right-of-use assets obtained in exchange for lease obligations: Operating leases 38 168 Finance leases 17 23 |
Schedule of Weighted Average Lease Disclosures [Table Text Block] | The following table presents information about the Company's weighted average discount rate and remaining lease term: March 31, 2023 December 31, 2022 Weighted average discount rate Operating leases 5.1 % 5.0 % Finance leases 3.7 % 3.7 % Weighted average remaining lease term Operating leases 10 years 11 years Finance leases 9 years 9 years |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 were as follows: (in millions) Operating Leases Finance Leases Remainder of 2023 $ 98 $ 90 2024 141 116 2025 133 111 2026 121 148 2027 100 61 2028 78 47 Thereafter 519 264 Total future minimum lease payments 1,190 837 Less: imputed interest (275) (131) Present value of minimum lease payments $ 915 $ 706 |
Finance Lease, Liability, Fiscal Year Maturity [Table Text Block] | Future minimum lease payments for non-cancellable leases that have commenced and are reflected on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2023 were as follows: (in millions) Operating Leases Finance Leases Remainder of 2023 $ 98 $ 90 2024 141 116 2025 133 111 2026 121 148 2027 100 61 2028 78 47 Thereafter 519 264 Total future minimum lease payments 1,190 837 Less: imputed interest (275) (131) Present value of minimum lease payments $ 915 $ 706 |
Schedule of Sale Leaseback Transactions | (in millions) Sale Proceeds Carrying Value Gain on Sale March 31, 2023 (1) $ 7 $ 1 $ 6 (1) The sale-leaseback transaction included one distribution property. |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Information about the Company's operations by reportable segment is as follows: First Quarter (in millions) 2023 2022 Segment Results – Net sales U.S. Refreshment Beverages $ 2,007 $ 1,781 U.S. Coffee 931 943 International 415 354 Net sales $ 3,353 $ 3,078 Segment Results – Income from operations U.S. Refreshment Beverages $ 490 $ 704 U.S. Coffee 232 255 International 80 64 Unallocated corporate costs (218) (57) Income from operations $ 584 $ 966 |
Reconciliation of operating profit (loss) from segments to consolidated | Information about the Company's operations by reportable segment is as follows: First Quarter (in millions) 2023 2022 Segment Results – Net sales U.S. Refreshment Beverages $ 2,007 $ 1,781 U.S. Coffee 931 943 International 415 354 Net sales $ 3,353 $ 3,078 Segment Results – Income from operations U.S. Refreshment Beverages $ 490 $ 704 U.S. Coffee 232 255 International 80 64 Unallocated corporate costs (218) (57) Income from operations $ 584 $ 966 |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | (in millions) March 31, 2023 December 31, 2022 Identifiable operating assets U.S. Refreshment Beverages $ 28,991 $ 28,987 U.S. Coffee 14,155 14,220 International 6,903 6,873 Segment total 50,049 50,080 Unallocated corporate assets 602 757 Total identifiable operating assets 50,651 50,837 Investments in unconsolidated affiliates 1,009 1,000 Total assets $ 51,660 $ 51,837 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table disaggregates KDP's revenue by product portfolio and by reportable segment: (in millions) U.S. Refreshment Beverages U.S. Coffee International Total For the first quarter of 2023: LRB $ 1,970 $ — $ 253 $ 2,223 K-Cup pods — 771 117 888 Appliances — 125 12 137 Other 37 35 33 105 Net sales $ 2,007 $ 931 $ 415 $ 3,353 For the first quarter of 2022: LRB $ 1,753 $ — $ 203 $ 1,956 K-Cup pods — 749 106 855 Appliances — 161 17 178 Other 28 33 28 89 Net sales $ 1,781 $ 943 $ 354 $ 3,078 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table presents the Company's basic and diluted EPS and shares outstanding. Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented. First Quarter (in millions, except per share data) 2023 2022 Net income attributable to KDP $ 467 $ 585 Weighted average common shares outstanding 1,406.2 1,418.2 Dilutive effect of stock-based awards 10.8 11.5 Weighted average common shares outstanding and common stock equivalents 1,417.0 1,429.7 Basic EPS $ 0.33 $ 0.41 Diluted EPS 0.33 0.41 Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation 1.0 0.9 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock based compensation expense | The components of stock-based compensation expense are presented below: First Quarter (in millions) 2023 2022 Total stock-based compensation expense (1) $ 29 $ (15) Income tax (benefit) expense (5) 4 Stock-based compensation expense, net of tax $ 24 $ (11) (1) The Company recorded a one-time $40 million reduction to stock-based compensation expense as a result of the change in forfeiture policy in the first quarter of 2022. |
Schedule of share-based compensation, restricted stock and restricted stock units activity | The table below summarizes RSU activity : RSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding as of December 31, 2022 18,038,745 $ 27.46 1.6 $ 643 Granted 3,090,196 31.53 Vested and released (2,069,870) 23.41 71 Forfeited (184,830) 28.24 Outstanding as of March 31, 2023 18,874,241 $ 28.57 1.8 $ 666 |
Investments in Unconsolidated_2
Investments in Unconsolidated Affiliates (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity method investments | The following table summarizes investments in unconsolidated affiliates as of March 31, 2023 and December 31, 2022: (in millions) Ownership Interest March 31, 2023 December 31, 2022 Nutrabolt 29.8 % $ 885 $ 874 Tractor 19.2 % 48 49 Athletic Brewing 13.1 % 50 51 Dyla LLC 12.4 % 12 12 Force Holdings LLC (1) 33.3 % 4 4 Beverage startup companies (2) (various) 5 5 Other (various) 5 5 Investments in unconsolidated affiliates $ 1,009 $ 1,000 (1) Force Holdings LLC has a 14.1% ownership interest in Dyla LLC. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The Company’s effective tax rates were as follows: First Quarter (in millions) 2023 2022 Effective tax rate 19.6 % 23.5 % The change in the effective tax rate was largely driven by the tax benefit received from favorable adjustments upon foreign tax return filing and excess tax deductions that were generated from the vesting of RSUs during the first quarter of 2023. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Accumulated other comprehensive income (loss), net of taxes | The following table provides a summary of changes in AOCI, net of taxes: (in millions) Foreign Currency Translation Adjustments Pension and Post-Retirement Benefit Liabilities Cash Flow Hedges Accumulated Other Comprehensive Income For the first quarter of 2023: Beginning balance $ (86) $ (10) $ 225 $ 129 Other comprehensive income (loss) 108 — (30) 78 Amounts reclassified from AOCI — — (52) (52) Total other comprehensive income (loss) 108 — (82) 26 Balance as of March 31, 2023 $ 22 $ (10) $ 143 $ 155 For the first quarter of 2022: Beginning balance $ 81 $ (4) $ (103) $ (26) Other comprehensive income 99 — 140 239 Amounts reclassified from AOCI — — 2 2 Total other comprehensive income 99 — 142 241 Balance as of March 31, 2022 $ 180 $ (4) $ 39 $ 215 |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amount of (gains) losses reclassified from AOCI into the unaudited Condensed Consolidated Statements of Income: First Quarter (in millions) Income Statement Caption 2023 2022 Cash Flow Hedges: Interest rate contracts (1) Interest expense $ (68) $ — FX contracts Cost of sales — 3 Total (68) 3 Income tax (benefit) expense 16 (1) Total, net of tax $ (52) $ 2 (1) Amounts reclassified from AOCI into interest expense during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million. Refer to Note 4 for additional information on the terminated forward starting swaps. |
Other Financial Information (Ta
Other Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of other assets and other liabilities | The tables below provide selected financial information from the unaudited Condensed Consolidated Balance Sheets: March 31, December 31, (in millions) 2023 2022 Inventories: Raw materials $ 471 $ 475 Work-in-progress 9 8 Finished goods 939 858 Total 1,419 1,341 Allowance for excess and obsolete inventories (28) (27) Total Inventories $ 1,391 $ 1,314 Prepaid expenses and other current assets: Other receivables $ 138 $ 167 Prepaid income taxes 15 49 Customer incentive programs 104 25 Derivative instruments 29 35 Prepaid marketing 39 19 Spare parts 94 89 Income tax receivable 17 17 Other 104 70 Total prepaid expenses and other current assets $ 540 $ 471 Other non-current assets: Operating lease right-of-use assets $ 892 $ 881 Customer incentive programs 40 46 Derivative instruments 39 140 Equity securities (1) 59 48 Equity securities without readily determinable fair values 1 1 Other 129 136 Total other non-current assets $ 1,160 $ 1,252 (1) Fair values of these equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1. Unrealized mark-to market gains and losses are recorded to Other (income) expense, net. For the first quarter of 2023 and 2022, the Company recorded an unrealized mark-to-market gain of $8 million and loss of $3 million, respectively, on its investment in Vita Coco. March 31, December 31, (in millions) 2023 2022 Accrued expenses: Accrued customer trade $ 352 $ 429 Accrued compensation 127 246 Insurance reserve 39 53 Accrued interest 152 76 Accrued professional fees 9 7 Other accrued expenses 367 342 Total accrued expenses $ 1,046 $ 1,153 Other current liabilities: Dividends payable $ 282 $ 281 Income taxes payable 110 87 Operating lease liability 105 100 Finance lease liability 95 95 Derivative instruments 80 112 Other 15 10 Total other current liabilities $ 687 $ 685 Other non-current liabilities: Operating lease liability $ 810 $ 803 Finance lease liability 611 618 Pension and post-retirement liability 38 37 Insurance reserves 70 69 Derivative instruments 126 195 Deferred compensation liability 32 30 Other 76 73 Total other non-current liabilities $ 1,763 $ 1,825 |
Transactions with Variable In_2
Transactions with Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity, Not Primary Beneficiary, Schedule of Assets and Liabilities Associated with VIE Relationship | The following table provides the carrying amounts of the right-to-use assets and lease obligations recorded on the Company’s Consolidated Balance Sheets associated with these leasing arrangements related to the VIEs as of March 31, 2023 and December 31, 2022. (in millions) March 31, 2023 (1) December 31, 2022 (2) Non-current assets $ 430 $ 430 Current liabilities 22 22 Non-current liabilities 419 419 (1) The leasing agreements included as of March 31, 2023 include nine manufacturing sites, five distribution centers and our Frisco, Texas headquarters. (2) The leasing agreements included as of December 31, 2022 include nine manufacturing sites, four distribution centers and our Frisco, Texas headquarters. |
Unrecorded Unconditional Purchase Obligations Text Block | Licensing Arrangement ABC, a wholly-owned subsidiary of KDP, has provided a guarantee in connection with its distribution agreement with the Veyron SPEs to be paid only in the event the Veyron SPEs sell specific distribution rights and the value of those distribution rights does not exceed $142 million, which is the maximum undiscounted amount that KDP could pay under the guarantee. All obligations with respect to the guarantee will cease upon termination of the distribution agreement, which would occur upon notice by ABC not to renew the distribution agreement, KDP no longer being investment grade at the end of the term, or the sale of the distribution rights by the Veyron SPEs. As of March 31, 2023, KDP has not recorded a liability as it is not probable that the Company will have to make any payments required under the residual value guarantee, as the fair value of the distribution rights is not expected to fall below $142 million over the term of the agreement. As of March 31, 2023, KDP had $98 million in fixed service fee commitments related to the 15-year distribution agreement which was effective on December 28, 2020, with Veyron SPEs. These commitments were used to assist the Veyron SPEs in obtaining financing. Such fixed service fee payments began on January 1, 2021. Fixed service fees over the next five years are expected to be as follows: Remainder of 2023 For the Years Ending December 31, (in millions) 2024 2025 2026 2027 2028 Fixed service fees $ 5 $ 8 $ 8 $ 7 $ 8 $ 8 TRANSACTION WITH NUTRABOLT The Company has a preferred equity investment in Nutrabolt, which will earn the greater of (i) a 5% annual coupon on the preferred equity units plus any accretion for amounts not yet paid or (ii) KDP’s share of Nutrabolt’s earnings as if KDP’s preferred equity was converted into common units. As the other investors of Nutrabolt have to share in Nutrabolt's earnings with KDP if in excess of the 5% annual coupon, the other investors lack certain characteristics of a controlling financial interest, which qualifies Nutrabolt as a VIE. KDP is not the primary beneficiary of the VIE and therefore is not required to consolidate Nutrabolt, as the primary shareholder of the VIE has control over the board and decision-making for the activities that most significantly impact the VIE’s economic performance, including sales, marketing, and operations. KDP has no obligation to provide additional funding to Nutrabolt, and thus the Company’s maximum exposure and risk of loss related to Nutrabolt is limited to the carrying value of KDP’s investment. Refer to Note 10 for the carrying value of the Company’s investment in Nutrabolt. |
Restructuring and Integration_2
Restructuring and Integration Costs (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of restructuring reserve by type of cost | Restructuring liabilities, primarily consisting of workforce reduction costs, were as follows: (in millions) Restructuring Liabilities Balance as of January 1, 2023 $ 55 Charges to expense — Cash payments (29) Balance as of March 31, 2023 $ 26 |
Background and Basis of Prese_3
Background and Basis of Presentation Background and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Effect on Previously Reported Segment Information for Change in Composition of Reportable Segments | REPORTABLE SEGMENTSAs of January 1, 2023, the Company revised its segment structure to align with changes in how the Company’s Chief Operating Decision Maker manages the business, assesses performance and allocates resources. This change had no impact on the Company’s consolidated results of operations or financial position. Prior period segment results have been recast to reflect the Company’s new reportable segments. Refer to Note 6 for additional information on the Company’s reportable segments and Note 7 for the Company’s disaggregated revenue portfolio for each reportable segment. The change in segment structure also resulted in a change to the Company’s reporting units. Refer to Note 3 for additional information on the Company’s reporting units. |
Long-term Obligations and Bor_3
Long-term Obligations and Borrowing Arrangements - Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term Debt, Current Maturities | $ (1,646) | $ (496) |
Long-term obligations | 9,929 | 11,072 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | 11,575 | 11,568 |
Long-term Debt, Current Maturities | $ (1,646) | $ (496) |
Long-term Obligations and Bor_4
Long-term Obligations and Borrowing Arrangements - Current Debt (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Short-term Debt [Line Items] | ||
Current portion of long-term debt | $ 1,646 | $ 496 |
Short-term borrowings and current portion of long-term obligations | 2,310 | 895 |
Commercial Paper | ||
Short-term Debt [Line Items] | ||
Short-term debt | 664 | 399 |
Senior Notes | ||
Short-term Debt [Line Items] | ||
Current portion of long-term debt | $ 1,646 | $ 496 |
Long-term Obligations and Bor_5
Long-term Obligations and Borrowing Arrangements - Senior Unsecured Notes (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | ||||
Gain (Loss) on Extinguishment of Debt | $ 0 | $ (48) | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Long term debt, carrying value | 11,743 | $ 11,743 | ||
Unamortized debt issuance costs | [1] | (168) | (175) | |
Long-term debt | $ 11,575 | 11,568 | ||
Senior Notes | 2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.13% | |||
Long term debt, carrying value | $ 500 | 500 | ||
Senior Notes | 2024 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 0.75% | |||
Long term debt, carrying value | $ 1,150 | 1,150 | ||
Senior Notes | 2025 Merger Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.417% | |||
Long term debt, carrying value | $ 529 | 529 | ||
Senior Notes | 2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.40% | |||
Long term debt, carrying value | $ 500 | 500 | ||
Senior Notes | 2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.55% | |||
Long term debt, carrying value | $ 400 | 400 | ||
Senior Notes | 2027 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.43% | |||
Long term debt, carrying value | $ 500 | 500 | ||
Senior Notes | 2028 Merger Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.597% | |||
Long term debt, carrying value | $ 1,112 | 1,112 | ||
Senior Notes | 2029 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.95% | |||
Long term debt, carrying value | $ 1,000 | 1,000 | ||
Senior Notes | 2030 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.20% | |||
Long term debt, carrying value | $ 750 | 750 | ||
Senior Notes | 2031 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.25% | |||
Long term debt, carrying value | $ 500 | 500 | ||
Senior Notes | 2032 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.05% | |||
Long term debt, carrying value | $ 850 | 850 | ||
Senior Notes | 2038 Merger Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.985% | |||
Long term debt, carrying value | $ 211 | 211 | ||
Senior Notes | 2045 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.50% | |||
Long term debt, carrying value | $ 550 | 550 | ||
Senior Notes | 2046 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.42% | |||
Long term debt, carrying value | $ 400 | 400 | ||
Senior Notes | 2048 Merger Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.085% | |||
Long term debt, carrying value | $ 391 | 391 | ||
Senior Notes | 2050 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.80% | |||
Long term debt, carrying value | $ 750 | 750 | ||
Senior Notes | 2051 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.35% | |||
Long term debt, carrying value | $ 500 | 500 | ||
Senior Notes | 2052 Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.50% | |||
Long term debt, carrying value | $ 1,150 | $ 1,150 | ||
[1]The carrying amount includes unamortized discounts, debt issuance costs and fair value adjustments related to the DPS Merger. |
Long-term Obligations and Bor_6
Long-term Obligations and Borrowing Arrangements - Borrowing Arrangements (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Debt Instrument [Line Items] | ||||
Gain (Loss) on Extinguishment of Debt | $ 0 | $ (48) | ||
2022 Revolving Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | [1] | 4,000 | ||
Long-term Line of Credit | 0 | $ 0 | ||
Letter of Credit Subfacility [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 200 | |||
Letters of credit outstanding | $ 0 | |||
[1]The 2022 Revolving Credit Agreement has $200 million letters of credit available, none of which were utilized as of March 31, 2023. |
Long-term Obligations and Bor_7
Long-term Obligations and Borrowing Arrangements - Commercial Paper Program (Details) - Commercial Paper - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Short-term Debt [Line Items] | ||
Average outstanding amount | $ 506 | $ 45 |
Weighted average interest rate over time | 4.86% | 0.30% |
Long-term Obligations and Bor_8
Long-term Obligations and Borrowing Arrangements - Letter of Credit Facilities (Details) - Letter of Credit $ in Millions | Mar. 31, 2023 USD ($) |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 150 |
Letters of credit outstanding | 68 |
Remaining borrowing capacity | $ 82 |
Long-term Obligations and Bor_9
Long-term Obligations and Borrowing Arrangements - Fair Values (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Nonrecurring | Level 2 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, fair value | $ 10,777 | $ 10,495 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Change in goodwill by operating segments [Abstract] | |
Balance as of January 1, 2023 | $ 20,072 |
Foreign currency impact | 45 |
Balance as of March 31, 2023 | 20,117 |
U.S. Refreshment Beverages | |
Change in goodwill by operating segments [Abstract] | |
Balance as of January 1, 2023 | 8,714 |
Foreign currency impact | 0 |
Balance as of March 31, 2023 | 2,781 |
U.S. Refreshment Beverages | |
Change in goodwill by operating segments [Abstract] | |
Balance as of January 1, 2023 | 8,622 |
Foreign currency impact | 0 |
Balance as of March 31, 2023 | 8,622 |
International | |
Change in goodwill by operating segments [Abstract] | |
Balance as of January 1, 2023 | 2,736 |
Foreign currency impact | 45 |
U.S. Coffee | |
Change in goodwill by operating segments [Abstract] | |
Balance as of March 31, 2023 | $ 8,714 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Change in intangible assets other than goodwill [Abstract] | ||||
Indefinite-lived intangible assets (excluding goodwill) | $ 22,116 | $ 21,993 | ||
Finite-lived intangible assets, gross | 2,015 | 2,015 | ||
Accumulated Amortization | (858) | (825) | ||
Finite-lived intangible assets, net | 1,157 | 1,190 | ||
Amortization expense | 34 | $ 34 | ||
Amortization expense of intangible assets [Abstract] | ||||
Remainder of year | 101 | |||
Year one | 127 | |||
Year two | 115 | |||
Year three | 111 | |||
Year four | 95 | |||
Year five | 87 | |||
Acquired technology | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 1,146 | 1,146 | ||
Accumulated Amortization | (494) | (475) | ||
Finite-lived intangible assets, net | 652 | 671 | ||
Customer relationships | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 638 | 638 | ||
Accumulated Amortization | (212) | (204) | ||
Finite-lived intangible assets, net | 426 | 434 | ||
Trade Names | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 127 | 127 | ||
Accumulated Amortization | (104) | (101) | ||
Finite-lived intangible assets, net | 23 | 26 | ||
Brands | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 51 | 51 | ||
Accumulated Amortization | (20) | (19) | ||
Finite-lived intangible assets, net | 31 | 32 | ||
Distribution rights | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 29 | 29 | ||
Accumulated Amortization | (18) | (16) | ||
Finite-lived intangible assets, net | 11 | 13 | ||
Contractual arrangements | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Finite-lived intangible assets, gross | 24 | 24 | ||
Accumulated Amortization | (10) | (10) | ||
Finite-lived intangible assets, net | 14 | 14 | ||
Brands | ||||
Indefinite and Finite-Lived Intangible Assets by Major Class [Line Items] | ||||
Indefinite-lived Intangible Assets, Foreign Currency Translation Gain (Loss) | 72 | |||
Change in intangible assets other than goodwill [Abstract] | ||||
Indefinite-lived intangible assets (excluding goodwill) | [1] | 19,363 | 19,291 | |
Trade Names | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Indefinite-lived intangible assets (excluding goodwill) | 2,480 | 2,480 | ||
Contractual arrangements | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Indefinite-lived intangible assets (excluding goodwill) | 122 | 122 | ||
Distribution rights | ||||
Change in intangible assets other than goodwill [Abstract] | ||||
Indefinite-lived intangible assets (excluding goodwill) | [2] | 151 | $ 100 | |
Amortization expense of intangible assets [Abstract] | ||||
Indefinite-lived Intangible Assets Acquired | $ 51 | |||
[1]The change in brands with indefinite lives was primarily driven by foreign currency translation of $72 million during the first quarter of 2023.[2]The Company acquired certain distribution rights from Nutrabolt during the first quarter of 2023 for approximately $51 million. |
Derivatives - Notional and Matu
Derivatives - Notional and Maturity Information (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | |
Interest Rate Contract | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | $ 1,500 | $ 1,000 | |
Interest Rate Contract | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | 0 | 500 | |
Foreign Exchange Forward | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | 589 | 490 | |
Foreign Exchange Forward | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | 472 | 511 | |
Commodity Contract | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | [1] | 529 | 754 |
Receive-Fixed Pay-Variable Interest Rate Swaps | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Notional amounts of derivative instruments | $ 700 | $ 1,900 | |
[1]Notional value for commodity contracts is calculated as the expected volume times strike price per unit on a gross basis. |
Derivatives - Fair Value (Detai
Derivatives - Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | $ 29 | $ 35 |
Derivative Asset, Noncurrent | 39 | 140 |
Derivative Liability, Current | 80 | 112 |
Derivative Liability, Noncurrent | 126 | 195 |
Notional amounts of derivative instruments | 1,160 | 1,252 |
Recurring | Level 2 | Interest Rate Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Noncurrent | 36 | 49 |
Derivative Liability, Current | 22 | 58 |
Derivative Liability, Noncurrent | 123 | 194 |
Recurring | Level 2 | Interest Rate Contract | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Noncurrent | 0 | 88 |
Recurring | Level 2 | Foreign Exchange Forward | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 5 | 8 |
Derivative Asset, Noncurrent | 1 | 1 |
Derivative Liability, Current | 1 | 0 |
Recurring | Level 2 | Foreign Exchange Forward | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 17 | 21 |
Derivative Asset, Noncurrent | 1 | 1 |
Derivative Liability, Current | 11 | 3 |
Recurring | Level 2 | Commodity Contract | Not Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Current | 7 | 6 |
Derivative Asset, Noncurrent | 1 | 1 |
Derivative Liability, Current | 46 | 51 |
Derivative Liability, Noncurrent | $ 3 | $ 1 |
Derivatives - Impact on Net Inc
Derivatives - Impact on Net Income (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Commodity Contract | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Gain) Loss Recognized in Income | $ (15) | $ (97) |
Commodity Contract | SG&A expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Gain) Loss Recognized in Income | 14 | (37) |
Interest Rate Contract | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Gain) Loss Recognized in Income | (96) | 67 |
Foreign Exchange Forward | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Gain) Loss Recognized in Income | 1 | 5 |
Foreign Exchange Forward | Other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Gain) Loss Recognized in Income | $ 0 | $ 8 |
Derivatives - Impact of Cash Fl
Derivatives - Impact of Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Foreign Exchange Forward | |||
Derivative [Line Items] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | $ (1) | $ 3 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | (9) | ||
Interest Rate Contract | |||
Derivative [Line Items] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | (68) | [1] | $ 0 |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | (8) | ||
Derivative, Cash Received on Hedge | $ 66 | ||
[1]Amounts recognized during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Lease, Cost [Abstract] | ||||
Operating lease cost | $ 39 | $ 32 | ||
Amortization of right-of-use assets | 22 | 18 | ||
Interest on lease liabilities | 6 | 6 | ||
Variable lease cost(1) | [1] | 10 | 9 | |
Total lease cost | 77 | 65 | ||
Cash Flow, Operating Activities, Lessee [Abstract] | ||||
Operating cash flows from operating leases | 36 | 29 | ||
Operating cash flows from finance leases | 6 | 6 | ||
Cash Flow, Financing Activities, Lessee [Abstract] | ||||
Financing cash flows from finance leases | 24 | 20 | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 38 | 168 | ||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | $ 17 | $ 23 | ||
Lessee, Operating Lease, Description [Abstract] | ||||
Operating Lease, Weighted Average Discount Rate, Percent | 5.10% | 5% | ||
Operating Lease, Weighted Average Remaining Lease Term | 10 years | 11 years | ||
Lessee, Finance Lease, Description [Abstract] | ||||
Finance Lease, Weighted Average Discount Rate, Percent | 3.70% | 3.70% | ||
Finance Lease, Weighted Average Remaining Lease Term | 9 years | 9 years | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Lessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year | $ 98 | |||
Lessee, Operating Lease, Liability, to be Paid, Year One | 141 | |||
Lessee, Operating Lease, Liability, to be Paid, Year Two | 133 | |||
Lessee, Operating Lease, Liability, to be Paid, Year Three | 121 | |||
Lessee, Operating Lease, Liability, to be Paid, Year Four | 100 | |||
Lessee, Operating Lease, Liability, to be Paid, Year Five | 78 | |||
Lessee, Operating Lease, Liability, to be Paid, after Year Five | 519 | |||
Lessee, Operating Lease, Liability, to be Paid | 1,190 | |||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (275) | |||
Operating Lease, Liability | 915 | |||
Finance Lease, Liability, Payment, Due [Abstract] | ||||
Finance Lease, Liability, to be Paid, Remainder of Fiscal Year | 90 | |||
Finance Lease, Liability, to be Paid, Year One | 116 | |||
Finance Lease, Liability, to be Paid, Year Two | 111 | |||
Finance Lease, Liability, to be Paid, Year Three | 148 | |||
Finance Lease, Liability, to be Paid, Year Four | 61 | |||
Finance Lease, Liability, to be Paid, Year Five | 47 | |||
Finance Lease, Liability, to be Paid, after Year Five | 264 | |||
Finance Lease, Liability, Payment, Due | 837 | |||
Finance Lease, Liability, Undiscounted Excess Amount | (131) | |||
Finance Lease, Liability | 706 | |||
Lessee, Lease, Description [Line Items] | ||||
Leases not yet commenced, estimated obligation | $ 208 | |||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease not yet commenced, term | 4 years | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease not yet commenced, term | 10 years | |||
[1]Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation. |
Leases - Sale Leaseback Transac
Leases - Sale Leaseback Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Leases [Abstract] | |||
Proceeds from sales of property, plant and equipment | $ 7 | $ 78 | |
Sale Leaseback Transaction [Line Items] | |||
Proceeds from sales of property, plant and equipment | 7 | $ 78 | |
Veyron SPE March 31, 2023 SLB Transaction | |||
Leases [Abstract] | |||
Proceeds from sales of property, plant and equipment | [1] | 7 | |
Sale Leaseback Transaction, Net Book Value | [1] | 1 | |
Sale and Leaseback Transaction, Gain (Loss), Net | [1] | 6 | |
Sale Leaseback Transaction [Line Items] | |||
Proceeds from sales of property, plant and equipment | [1] | 7 | |
Sale Leaseback Transaction, Net Book Value | [1] | 1 | |
Sale and Leaseback Transaction, Gain (Loss), Net | [1] | $ 6 | |
[1]The sale-leaseback transaction included one distribution property. |
Segments (Details)
Segments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,353 | $ 3,078 | |
Income from operations | 584 | 966 | |
Identifiable operating assets | 50,651 | $ 50,837 | |
Equity Method Investments | 1,009 | 1,000 | |
Assets | 51,660 | 51,837 | |
U.S. Refreshment Beverages | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,007 | 1,781 | |
Identifiable operating assets | 28,991 | 28,987 | |
U.S. Coffee | |||
Segment Reporting Information [Line Items] | |||
Net sales | 931 | 943 | |
Identifiable operating assets | 14,155 | 14,220 | |
International | |||
Segment Reporting Information [Line Items] | |||
Net sales | 415 | 354 | |
Identifiable operating assets | 6,903 | 6,873 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Identifiable operating assets | 50,049 | 50,080 | |
Operating Segments | U.S. Refreshment Beverages | |||
Segment Reporting Information [Line Items] | |||
Income from operations | 490 | 704 | |
Operating Segments | U.S. Coffee | |||
Segment Reporting Information [Line Items] | |||
Income from operations | 232 | 255 | |
Operating Segments | International | |||
Segment Reporting Information [Line Items] | |||
Income from operations | 80 | 64 | |
Corporate Unallocated | |||
Segment Reporting Information [Line Items] | |||
Income from operations | (218) | $ (57) | |
Identifiable operating assets | $ 602 | $ 757 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 3,353 | $ 3,078 |
LRB | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,223 | 1,956 |
K-cup pods | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 888 | 855 |
Appliances | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 137 | 178 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 105 | 89 |
U.S. Refreshment Beverages | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,007 | 1,781 |
U.S. Refreshment Beverages | LRB | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,970 | 1,753 |
U.S. Refreshment Beverages | K-cup pods | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
U.S. Refreshment Beverages | Appliances | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
U.S. Refreshment Beverages | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 37 | 28 |
U.S. Coffee | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 931 | 943 |
U.S. Coffee | LRB | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 0 | 0 |
U.S. Coffee | K-cup pods | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 771 | 749 |
U.S. Coffee | Appliances | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 125 | 161 |
U.S. Coffee | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 35 | 33 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 415 | 354 |
International | LRB | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 253 | 203 |
International | K-cup pods | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 117 | 106 |
International | Appliances | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 12 | 17 |
International | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 33 | $ 28 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic EPS: | ||
Net income | $ 467,000,000 | $ 585,000,000 |
Weighted average common shares outstanding (in shares) | 1,406,200,000 | 1,418,200,000 |
Earnings per common share - basic (in dollars per share) | $ 0.33 | $ 0.41 |
Diluted EPS: | ||
Weighted average common shares outstanding (in shares) | 1,406,200,000 | 1,418,200,000 |
Effect of dilutive securities (in shares) | 10,800,000 | 11,500,000 |
Weighted average common shares outstanding and common stock equivalents (in shares) | 1,417,000,000 | 1,429,700,000 |
Earnings per common share - diluted (in dollars per share) | $ 0.33 | $ 0.41 |
Anti-dilutive shares excluded from the diluted weighted average shares outstanding calculation (in shares) | 1,000,000 | 900,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | ||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Total stock-based compensation expense(1) | $ 29 | $ (15) | [1] | |
Income tax (benefit) expense | (5) | 4 | ||
Stock-based compensation expense, net of tax | 24 | (11) | ||
Aggregate Intrinsic Value (in millions) | ||||
Payment, Tax Withholding, Share-based Payment Arrangement | 31 | 5 | ||
Total stock-based compensation expense(1) | $ 29 | (15) | [1] | |
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Share-based Payment Arrangement, Additional Disclosure [Abstract] | ||||
Total stock-based compensation expense(1) | 40 | |||
Aggregate Intrinsic Value (in millions) | ||||
Total stock-based compensation expense(1) | $ 40 | |||
Restricted Stock Units (RSUs) [Member] | ||||
RSUs | ||||
Outstanding as of beginning of the period (in shares) | 18,038,745 | |||
Granted (in shares) | 3,090,196 | |||
Vested and released (in shares) | (2,069,870) | |||
Forfeited (in shares) | (184,830) | |||
Outstanding as of end of the period (in shares) | 18,874,241 | |||
Unrecognized compensation costs related to nonvested awards | $ 226 | |||
Weighted average recognition period of unrecognized compensation costs | 3 years 4 months 24 days | |||
Weighted Average Grant Date Fair Value | ||||
Outstanding as of the beginning of the period (in dollars per share) | $ 27.46 | |||
Granted (in dollars per share) | 31.53 | |||
Vested and released (in dollars per share) | 23.41 | |||
Forfeited (in dollars per share) | 28.24 | |||
Outstanding as of the end of the period (in dollars per share) | $ 28.57 | |||
Weighted Average Remaining Contractual Term (Years) | ||||
Outstanding | 1 year 9 months 18 days | 1 year 7 months 6 days | ||
Aggregate Intrinsic Value (in millions) | ||||
Outstanding as of the beginning of the period | $ 643 | |||
Vested and released | 71 | |||
Outstanding as of the end of the period | $ 666 | |||
[1]The Company recorded a one-time $40 million reduction to stock-based compensation expense as a result of the change in forfeiture policy in the first quarter of 2022. |
Investments In Unconsolidated_3
Investments In Unconsolidated Affiliates (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliates | $ 1,009 | $ 1,000 | |
Dyla LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 12.40% | ||
Investments in unconsolidated affiliates | $ 12 | 12 | |
Force Holding LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | [1] | 33.30% | |
Investments in unconsolidated affiliates | [1] | $ 4 | 4 |
Beverage startup companies | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliates | [2] | 5 | 5 |
Other | |||
Schedule of Equity Method Investments [Line Items] | |||
Investments in unconsolidated affiliates | $ 5 | 5 | |
Tractor | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 19.20% | ||
Investments in unconsolidated affiliates | $ 48 | 49 | |
Nutrabolt | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 29.80% | ||
Investments in unconsolidated affiliates | $ 885 | 874 | |
Athletic Brewing | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 13.10% | ||
Investments in unconsolidated affiliates | $ 50 | $ 51 | |
[1]Force Holdings LLC has a 14.1% ownership interest in Dyla LLC.[2]Beverage startup companies represent equity method investments in development stage entities and may include entities which are pre-revenue, in test markets, or in early operations. |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 19.60% | 23.50% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Total stockholders' equity at beginning of period | $ 25,126,000,000 | $ 24,972,000,000 | |
Total stockholders' equity at end of period | 25,103,000,000 | 25,511,000,000 | |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 26,000,000 | 241,000,000 | |
Reclassification from AOCI, Current Period, Tax | 16,000,000 | (1,000,000) | |
Foreign Exchange Forward | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | (1,000,000) | 3,000,000 | |
Interest Rate Contract | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | (68,000,000) | [1] | 0 |
Accumulated Other Comprehensive Income | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Total stockholders' equity at beginning of period | 129,000,000 | (26,000,000) | |
Other comprehensive income (loss) | 78,000,000 | 239,000,000 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (52,000,000) | ||
Total stockholders' equity at end of period | 155,000,000 | 215,000,000 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, before Tax | 2,000,000 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 26,000,000 | 241,000,000 | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Total stockholders' equity at beginning of period | (86,000,000) | 81,000,000 | |
Other comprehensive income (loss) | 108,000,000 | 99,000,000 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | ||
Total stockholders' equity at end of period | 22,000,000 | 180,000,000 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, before Tax | 0 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 108,000,000 | 99,000,000 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Total stockholders' equity at beginning of period | (10,000,000) | (4,000,000) | |
Other comprehensive income (loss) | 0 | 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | ||
Total stockholders' equity at end of period | (10,000,000) | (4,000,000) | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, before Tax | 0 | ||
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (52,000,000) | 2,000,000 | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Total stockholders' equity at beginning of period | 225,000,000 | (103,000,000) | |
Other comprehensive income (loss) | (30,000,000) | 140,000,000 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | (52,000,000) | ||
Total stockholders' equity at end of period | 143,000,000 | 39,000,000 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, before Tax | 2,000,000 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | (82,000,000) | 142,000,000 | |
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | (68,000,000) | 3,000,000 | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Foreign Exchange Forward | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | 0 | 3,000,000 | |
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Interest Rate Contract | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent | $ (68,000,000) | [2] | $ 0 |
[1]Amounts recognized during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million[2]Amounts reclassified from AOCI into interest expense during the first quarter of 2023 include the realized gains associated with the termination of forward starting swaps designated as cash flow hedges of approximately $66 million. Refer to Note 4 for additional information on the terminated forward starting swaps. |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | ||
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 471 | $ 475 | ||
Work-in-progress | 9 | 8 | ||
Finished goods | 939 | 858 | ||
Inventory, Gross | 1,419 | 1,341 | ||
Inventory Valuation Reserves | 28 | 27 | ||
Total | 1,391 | 1,314 | ||
Prepaid expenses and other current assets: | ||||
Other receivables | 138 | 167 | ||
Prepaid income taxes | 15 | 49 | ||
Customer incentive programs | 104 | 25 | ||
Derivative Asset, Current | 29 | 35 | ||
Prepaid marketing | 39 | 19 | ||
Spare parts | 94 | 89 | ||
Income tax receivable | 17 | 17 | ||
Other | 104 | 70 | ||
Prepaid expenses and other current assets | 540 | 471 | ||
Other non-current assets: | ||||
Customer incentive programs | 40 | 46 | ||
Operating lease right-of-use assets | 892 | 881 | ||
Derivative Asset, Noncurrent | 39 | 140 | ||
Equity securities without readily determinable fair values | [1] | 59 | 48 | |
Equity Securities without Readily Determinable Fair Value, Amount | 1 | 1 | ||
Other | 129 | 136 | ||
Total other non-current assets | 1,160 | 1,252 | ||
Accrued expenses: | ||||
Customer rebates & incentives | 352 | 429 | ||
Accrued compensation | 127 | 246 | ||
Insurance reserve | 39 | 53 | ||
Interest accrual | 152 | 76 | ||
Accrued professional fees | 9 | 7 | ||
Other accrued expenses | 367 | 342 | ||
Total accrued expenses | 1,046 | 1,153 | ||
Other current liabilities: | ||||
Dividends payable | 282 | 281 | ||
Income taxes payable | 110 | 87 | ||
Operating lease liability | 105 | 100 | ||
Finance lease liability | 95 | 95 | ||
Derivative instruments | 80 | 112 | ||
Other | 15 | 10 | ||
Total other current liabilities | 687 | 685 | ||
Other non-current liabilities: | ||||
Long-term pension and postretirement liability | 38 | 37 | ||
Insurance reserves | 70 | 69 | ||
Operating lease liability | 810 | 803 | ||
Finance lease liability | 611 | 618 | ||
Derivative instruments | 126 | 195 | ||
Deferred compensation liability | 32 | 30 | ||
Other | 76 | 73 | ||
Other non-current liabilities | $ 1,763 | $ 1,825 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other current liabilities | Total other current liabilities | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total other current liabilities | Total other current liabilities | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | Other non-current liabilities | ||
Unrealized Gain (Loss) on Investments | $ (8) | $ (3) | ||
Supplier Finance Program, Obligation, Current | $ 3,903 | $ 4,113 | ||
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Accounts payable | |||
[1]Fair values of these equity securities are determined using quoted market prices from daily exchange traded markets, based on the closing price as of the balance sheet date, and are classified as Level 1. Unrealized mark-to market gains and losses are recorded to Other (income) expense, net. For the first quarter of 2023 and 2022, the Company recorded an unrealized mark-to-market gain of $8 million and loss of $3 million, respectively, on its investment in Vita Coco. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | ||
Jul. 31, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | |||
Loss Contingency Accrual | $ 18,000,000 | $ 12,000,000 | |
Antitrust Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Litigation Settlement, Amount Awarded to Other Party | $ 31,000,000 |
Transactions with Variable In_3
Transactions with Variable Interest Entities - Leasing Arrangements (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | ||
Variable Interest Entity [Line Items] | ||||
Assets, Current | $ 3,586 | $ 3,804 | ||
Liabilities, Current | 9,127 | 8,076 | ||
Variable Interest Entity, Not Primary Beneficiary | ||||
Variable Interest Entity [Line Items] | ||||
Assets, Noncurrent | 430 | [1] | 430 | [2] |
Liabilities, Current | 22 | [1] | 22 | [2] |
Liabilities, Noncurrent | 419 | [1] | 419 | [2] |
Variable Interest Entity, Not Primary Beneficiary | Leasing Arrangements [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | $ 653 | $ 650 | ||
[1]The leasing agreements included as of March 31, 2023 include nine manufacturing sites, five distribution centers and our Frisco, Texas headquarters.[2]The leasing agreements included as of December 31, 2022 include nine manufacturing sites, four distribution centers and our Frisco, Texas headquarters. |
Transactions with Variable In_4
Transactions with Variable Interest Entities - Licensing Arrangement (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Variable Interest Entity [Line Items] | |
Remainder of 2022 | $ 5 |
2023 | 8 |
2024 | 8 |
2025 | 7 |
2026 | 8 |
2027 | 8 |
Variable Interest Entity, Not Primary Beneficiary | Licensing Arrangements [Member] | |
Variable Interest Entity [Line Items] | |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount | 142 |
Fixed fee service commitments | $ 98 |
Transactions with Variable In_5
Transactions with Variable Interest Entities - Nutrabolt (Details) | Mar. 31, 2023 |
Nutrabolt | |
Variable Interest Entity [Line Items] | |
Equity Method Investment Annual Coupon Rate | 0.05 |
Restructuring and Integration_3
Restructuring and Integration Costs - Restructuring Liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Charges to expense | $ 0 |
Cash payments | (29) |
Restructuring Liabilities | |
Restructuring Reserve [Roll Forward] | |
Balance at beginning of period | 55 |
Balance at end of period | $ 26 |