KDPKeurig Dr Pepper

Income from Operations. Income from operations decreased $605 million, or 24.4%, 10.8% to $1,878 $962 million for the year ended December 31, 2024 compared to $2,483 million for the prior year period. This decrease was primarily 2025, driven by the non-cash goodwill and intangible impairment charges (29 percentage points) and the accrued termination fee associated with ABI (9 percentage points). Other drivers include the benefit to gross profit of net sales growth (13 percentage points), a net benefit from changes unfavorable change in ingredients, materials, and productivity (3 percentage points), and earned equity from the achievement productivity, inclusive of milestones associated with certain distribution agreements (3 tariffs (22 percentage points), partially offset by increased transportation and warehousing expenses (3 the benefit of net sales growth (11 percentage points).

Consumers’ Consumers' preferences continually evolve due to a variety of factors, including changing demographics of the population, social trends, changes in consumer lifestyles and consumption patterns, including from the use of weight loss drugs, concerns or perceptions regarding the health effects or environmental impact of our products or packaging, concerns regarding the location of origin or source of ingredients and products, changes in consumers' spending habits, negative publicity, economic downturn, or other factors. If we do not effectively anticipate and respond to changing trends and consumer beverage preferences, including through innovation and renovation, our sales and growth could suffer. Addressing changes in consumer preferences may require successful development, introduction, and marketing of new products and line extensions. There are inherent risks associated with new product or packaging innovation, including uncertainties about trade and consumer acceptance or potential impacts on our existing product offerings. Successful innovation may depend on our ability to obtain, protect, and maintain necessary intellectual property rights and to avoid infringing upon the intellectual property rights of others. Failure to innovate successfully could compromise our competitive position and impact our product sales, financial condition, and operating results.

Investments without with readily determinable fair values for which we do not have the ability to exercise significant influence are accounted for measured at cost fair value. 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 and reported in Other non-current assets in the Consolidated Balance Sheets. Any Unrealized mark-to-market gains or and losses resulting from the sales of these investments are recorded in to Other operating expense (income), net. The following table presents the amount of unrealized mark-to-market losses (gains), net, on our Vita Coco investment recognized in the Consolidated Statements of Income. Income related to these securities during the periods presented:

Discovery in all remaining matters pending in the Multidistrict Antitrust Litigation is concluded, with the plaintiffs (which no longer include the purported direct purchaser class) collectively claiming more than $5 approximately $1.5 billion of monetary damages. Keurig strongly disputes the merits of the claims and the calculation of damages. In 2021, the parties filed motions challenging the validity of certain of the other parties’ proposed expert opinions. In January 2025, the court issued a ruling on these motions, granting challenges to certain expert testimony—including Keurig’s challenge to JBR, Inc.’s damages expert—but largely denying the parties’ motions. Keurig has also fully briefed summary judgment motions that, if successful, would end the cases entirely. Keurig is also pursuing its opposition to direct purchaser plaintiffs’ motion for class certification.