KDPKeurig Dr Pepper

Where you describe two or more business reasons that contributed to a material change in a financial statement line item between periods, please quantify, where possible, the extent to which each factor contributed to the overall change in that line item. Please apply this comment to both your consolidated and segment results of operations.

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As an example, your disclosures on page 30 attribute the increase in selling, general and administrative expenses to higher logistics costs, inflation, volume/mix impacts, increases in labor, and unfavorable mark to market losses and only the mark to market loss is quantified. See Item 303 of Regulation S-K and SEC Release No. 33-8350.

The Company respectfully acknowledges the Staff’s comment and will endeavor in future filings to enhance its discussion by quantifying certain factors that result in material changes to the Company’s consolidated and segment results of operations to the extent such information is both available and appropriate to enhance investors’ understanding of the magnitude and relative impact of each factor.

Presented below for illustrative purposes is an example of the Company’s proposed revised disclosure (comparing the fiscal years ended December 31, 2022 and 2021) that includes enhanced

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quantitative detail. The revisions are marked with underlines or strikethroughs to facilitate the Staff’s review.

Selling, General and Administrative Expenses. SG&A expenses increased $492 million, or 11.8%, to $4,645 million for the year ended December 31, 2022 compared to $4,153 million in the prior year. The increase primarily reflected higher logistics costs (6.8%), driven by both inflation and volume/mix impacts, increases in labor costs (1.8%) and other operating expenses, and an unfavorable comparison of unrealized mark-to-market losses of $55 million on commodity contracts (1.3%).

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We note that the summarized financial information disclosed for the Parent and Guarantors includes net sales, income from operations and net income attributable to KDP. Please revise your disclosure in future filings to include the disclosure of gross profit. See Rule 13-01(a)(4) and Rule 1-02(bb)(1)(ii) of Regulation S-X.

The Company respectfully acknowledges the Staff’s comment. The Company intends to include gross profit within its disclosure of summarized financial information for the Parent and Guarantors (as defined in the relevant filing) in future filings. Read in the reply ↗

We note that several of your adjusted measures include an adjustment for productivity. Please tell us the nature of these productivity expenses adjustments and explain to us why you do not believe these costs represent normal operating costs. See Question 100.01 in the SEC Staff's Compliance & Disclosure Interpretations on Non-GAAP Financial Measures.

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Financial Statements Notes to Consolidated Financial Statements 3. Goodwill and Other Intangible Assets

The Company respectfully acknowledges the Staff’s comment and advises that it considered the guidance set forth in Question 100.01 in the SEC Staff’s Compliance and Disclosure Interpretations on Non-GAAP Financial Measures. In determining that these productivity adjustments were appropriate, the Company followed a careful and rigorous process, with clear and consistent guidelines, that it uses for all non-GAAP financial presentations.

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Specifically, the Company has an Adjustment Committee, which includes the Chief Financial Officer and Principal Accounting Officer, that evaluates potential adjustments that may result in the presentation of a non-GAAP financial measure. The Committee uses Question 100.01, along with other relevant rules, regulations and Staff guidance relating to the presentation of non-GAAP financial measures, in determining whether an adjustment is appropriate. The Company defines its productivity adjustment as a group of discrete, non-recurring strategic projects that are transformative in nature and that are expected to generate significant cost savings (productivity) over time. These projects are both expected to occur over a multi-year time period and are outside of the Company’s ordinary business expenses. These productivity expenses are therefore not normal, recurring, cash operating expenses necessary to operate the Company’s business.

The following information is provided to the Staff in response to their comment. Furthermore, the Company will include greater disclosure in future filings to enhance the investors’ understanding of the discrete, non-recurring projects included within its productivity adjustment.

For the year ended December 31, 2022, we had four main projects included within the productivity adjustment. The first project represents the construction of a coffee manufacturing facility comprised of next-generation manufacturing lines utilizing innovative technology never before installed or used by coffee manufacturers. This facility is targeted to save the Company significant production costs and thereby decrease its cost per K-cup pod. These lines are being installed on a phased approach in coordination with the lead times required for assembly and installation associated with a third-party foreign manufacturer. During the COVID-19 pandemic, our third-party manufacturer’s focus shifted to ensuring safety of their workers, combined with mandatory foreign government shut-downs, such that the timeline for completion was significantly delayed. The Company intends to reduce the amount of the adjustment as each line is installed and becomes operational. All manufacturing lines are expected to be completed in 2025.

The second project represents the construction of a beverage manufacturing and distribution facility using next-generation aseptic lines and robotic capabilities. This facility is targeted to save the Company significant production and distribution costs and thereby decrease its overall cost per case. Once the facility is fully operational, which is currently expected in 2023, the adjustment will end.

Our third project relates to consulting fees for strategic initiatives incurred from two external consulting firms to provide specialized expertise for two distinct transformative projects, one related to supply chain strategy and the other to our long-term growth strategy. The expenses incurred in connection with these discrete strategic initiatives are outside of day-to-day business and the projects, by their nature, are not expected to reoccur or be necessary again in the foreseeable future. The majority of the consulting occurred in 2022, with a small tail expected to occur in 2023.

Our fourth project relates to the construction of a second beverage concentrate manufacturing facility, intended to create redundancy to the Company’s single existing plant, coupled with the creation of a procurement center of excellence that reorients the Company’s previous strategy. This second manufacturing facility was located in an international jurisdiction where no operations existed previously. Additionally, this facility is targeted to provide the Company overall cash flow savings. Once the facility is fully operational, which is expected to occur in 2023, the adjustment will cease.

Accordingly, the Company and the Adjustment Committee believes that these adjustments are not normal, recurring, cash operating expenses necessary to operate the Company’s business.

Financial Statements

Notes to Consolidated Financial Statements

3. Goodwill and Other Intangible Assets

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We note that you performed an interim impairment analysis as of September 30, 2022, recording a $311 million impairment and also performed your annual impairment analysis as of October 1, 2022, recording a $161 million impairment. Please address the following: • Summarize for us the changes in circumstances and/or assumptions that led to the multiple impairment charges over a relatively short period of time.

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• Explain the timing for recognizing the $161 million impairment and provide your basis for concluding that this additional impairment did not exist as of September 30, 2022. • Tell us whether your valuation assumptions changed between your September 30, 2022 and October 1, 2022 impairment tests. Notes to Condensed Consolidated Financial Statements 1. General

The Company respectfully acknowledges the Staff’s comment.

Overview:

The Company recorded impairment charges in two different quarters in 2022. The impairment charge in the third quarter of 2022 was identified by a triggering event specific to a singular brand led by margin deterioration and declining performance, which occurred during the quarter as compared to the prior period forecast.

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As a result of the triggering event identified and subsequent quantitative analysis performed, a $311 million impairment charge was recorded during the third quarter of 2022.

The additional $161 million impairment charge recorded in the fourth quarter of 2022 was identified in our normal annual impairment process driven primarily from increasing discount rate trends related to three of our brands (Schweppes, Crush and SunDrop) as opposed to any specific triggering event(s). The following explanation provides additional detail into these analyses.

Triggering Event Analysis - Third Quarter of 2022:

In accordance with ASC 350-20-35-3C, the Company performed its customary triggering event analysis considering all relevant events and circumstances that could affect the significant inputs used to determine the fair value of its indefinite-lived intangible assets and concluded that the Bai brand exhibited indicators that it was more likely than not impaired. At the end of the first quarter of 2022, the Company renewed its third-party manufacturing agreement for the majority of Bai products, which significantly increased its costs after no changes since 2018. The Company proceeded to increase pricing on Bai beginning in the third quarter of 2022 to offset these and other inflationary cost pressures. After experiencing greater-than-originally-forecasted volume declines starting in the same quarter, these circumstances led to a reevaluation and reduction in Bai’s forecasted future cash flows, which created a triggering event. Once the Company determined that a triggering event had occurred in the period, a quantitative Step 1 analysis was performed for the Bai brand with the assistance of external valuation specialists, which resulted in an impairment charge of $311 million being recorded. No other indefinite-lived intangible assets were determined to be more likely than not impaired as a result of our triggering event analysis, and therefore, a Step 1 quantitative analysis was not deemed to be necessary for any other indefinite-lived intangible assets as of September 30, 2022, in accordance with ASC 350-30-35-18E.

In the overarching triggering event analysis performed as of September 30, 2022, the Company identified the overall challenges in the macroeconomic environment with increases in the treasury yield rates stemming from national supply chain constraints and inflation as a risk. However, in accordance with ASC 350-30-35-18C, we further considered mitigating events such as the Company’s ability to successfully manage these challenges by increasing the prices for its products while maintaining material volumes for all brands (excluding Bai). Additionally, other compensating factors were considered such as (i) the increase in the Company’s market cap between the prior annual impairment testing date of October 1, 2021 and September 30, 2022, and (ii) the headroom on the majority of its indefinite-lived intangible assets. Based on the macroeconomic environment as well as mitigating factors, the Company concluded that the inflationary impact in the overall rising discount rate environment was not considered to be a triggering event requiring further detailed quantitative analysis as of September 30, 2022, as the Company did not believe this singular input used to determine fair value resulted in its brand assets being more likely than not impaired.

Annual Impairment Analysis - Fourth Quarter of 2022:

In accordance with ASC 350-30-35-18, the Company performs impairment tests on goodwill and all indefinite-lived intangible assets annually on October 1. The Company performed a Step 1 quantitative analysis on all of its goodwill and primary indefinite-lived intangible brands during the fourth quarter of 2022, and engaged external valuation specialists to assist in the fair value determinations using market participant assumptions in accordance with ASC 350. No key valuation assumptions changed from September 30, 2022 to October 1, 2022 specific to Bai; however, as a result of the analysis performed, the Company concluded that additional impairment charges of $161 million were necessary for three of its other brands (Schweppes, Crush and SunDrop). The annual impairment charge was primarily driven by an increase in discount rates applied in the fair value analyses due to increased Company-specific forecast risk specific to each brand as compared to the prior year and a higher weighted average cost of capital.

Notes to Condensed Consolidated Financial Statements

1. General

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We note that effective January 1, 2023, you revised your segment structure to align with changes in how the CODM manages the business, assesses performance and allocate resources. We further note that the change resulted in three reportable segments from the former four reportable segments. Please explain to us in detail, the events that led to the change in reportable segments.

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For example, please tell us if there was a change in segment managers that report to the CODM, level of detail of the financial information reviewed by the CODM, or other factors that led to this change. As part of your response, please also tell us, and revise future filings to disclose, if in this new structure, any operating segments have been aggregated into any of the reportable segments. See guidance in ASC 280-10-50-21. If you have aggregated certain operating segments, please provide us with a detailed analysis as to why you believe aggregation is consistent with the criteria in ASC 280-10-50-11. 7. Revenue Recognition, page 19

The Company respectfully acknowledges the Staff’s comment. The resegmentation occurred at the time of a management transition and reflected the incoming management’s strategic focus for the Company. As previously disclosed, Robert Gamgort returned to the Company as Chief Executive Officer (“CEO”) in November 2022 after the Company’s previous CEO resigned. Mr.

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Gamgort, as the Company’s singular Chief Operating Decision Maker (“CODM”), evaluated how the Company should be organized and managed to align with his strategic vision, simplify the representation of the Cold business and to more closely reconcile with how investors evaluated the business. In the first few months after returning to the role of CEO, the Company worked to implement changes to the materials reviewed by the CODM, as further discussed below, to align with these views for prospectively managing the business. This new alignment became effective during the first quarter ended March 31, 2023.

In accordance with ASC 280-10-50-1, management determined that the materials reviewed by the CODM to make resource allocation decisions and assess performance contained income statement results specific to the following areas of the Company’s business: Consolidated KDP, U.S. Refreshment Beverages, U.S. Coffee, International, and Unallocated Corporate. Each of these components constitutes a business with revenues and expenses (with the exception of Unallocated Corporate), and has discrete financial information. The Company also considered other types of information the CODM reviews to allocate resources and assess performance in addition to the CODM package such as (1) the level at which budgets are prepared and reviewed, (2) the basis upon which incentive-based compensation is determined, and (3) information provided to the Board. This information is reviewed at the level of U.S. Refreshment Beverages, U.S. Coffee, and International, thus supporting three operating segments going forward.

In accordance with ASC 280-10-50-11, the Company then assessed whether any of the operating segments have the ability to aggregate into a separate set of reportable segments, noting that all aggregation criteria must be met for an entity to aggregate two or more operating segments into a reportable segment. The Company performed an analysis of the criteria to aggregate any of the identified operating segments into a combined reportable segment, but none of the identified operating segments are consistent in terms of business activities or in assisting financial statement users in better understanding KDP’s activities and economic environment. Therefore, none of the Company’s revised operating segments were aggregated into a separate, combined reportable segment hierarchy. Furthermore, as a result of the quantitative threshold tests performed in accordance with ASC 280-10-50-12, the Company concluded that each of the three operating segments, U.S. Refreshment Beverages, U.S. Coffee and International, are considered reportable segments for the purposes of external reporting.

In future filings, the Company intends to clarify that the operating and reportable segments are the same.

7. Revenue Recognition, page 19

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We note that you have changed the level of disaggregation of revenue from five product lines (CSD, NCB, K-Cup pods, Appliances, and Other), to four product lines (LRB, K- Cup pods, Appliances and Other). Please explain to us why you believe it is no longer useful to disclose the CSD and NCB product lines, or any other product lines, but instead combine them into the LRB line item.

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As part of your response, please consider the guidance in ASC 606-10-55-89 through 55-91.

The Company respectfully acknowledges the Staff’s comment. As the SEC has noted in comment 5 above, effective January 1, 2023, we revised our segment structure to align with changes in how the CODM manages the business, assesses performance, and allocates resources. At that time, we considered the guidance in ASC 606-10-50-6, which requires an entity to disclose sufficient information to enable users of financial statements to understand the relationship between the disclosure of disaggregated revenue and revenue information that is disclosed for each reportable segment, and ASC

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606-10-55-90(b), which states that entities shall consider information regularly reviewed by the CODM for evaluating performance of operating segments when determining the appropriate level of disaggregation of revenue. In light of this guidance, we determined that it was appropriate to reconsider the categories selected for our disaggregation of revenue consistent with the change in our segment structure. We considered the guidance in ASC 606-10-55-89 through 55-91 in this assessment.

Specifically, we assessed the available information about our revenues and our financial performance, including disclosures presented outside of the financial statements in earnings releases, annual reports, and investor presentations; information made available to and reviewed by the CODM; and information available to analysts, including third-party point of sale data. As a result of this assessment, we concluded that the determining factor for analysis of our financial performance and for allocation of resources was our major product lines: liquid refreshment beverages (LRB or “cold” beverages), K-Cup pods (“hot” beverages), and Appliances (brewing systems). Other types of revenue are not material to KDP and are aggregated in Other.

In assessing our major product lines, we considered whether further disaggregation of these product lines was appropriate. The majority of our products in our LRB portfolio do not significantly differ in the nature, amount, timing, and uncertainty of revenues and cash flows, and there are generally no significant differences in their availability across markets, customers, or sales channels. We therefore concluded that further disaggregation of the LRB portfolio is neither relevant nor useful to users of our financial statements. We reached the same conclusion with the products in our K-Cup pod portfolio and our Appliances portfolio. We note that as the disaggregation of revenue is presented by reportable segment, each major product line is ultimately further disaggregated by the U.S. and International geographical regions.

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Your disclosure indicates that the non-GAAP measures you present are adjusted gross profit, adjusted operating income, adjusted net income, adjusted diluted EPS, and free cash flow. However, your reconciliations beginning on page A-6 also present adjusted amounts for cost of sales, gross margin, SG&A, other income income, net, operating margin, interest expense, loss on early extinguishment of debt, impairment of

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investments and note receivable, other (income) expense, net, income before provision for income taxes, provision (benefit) for income taxes, effective tax rate, EBITDA, Adjusted EBITDA, and Management Leverage Ratio. Please revise to identify all non-GAAP measures and ensure the relevant disclosures of Item 10(e)(1)(i) are provided for each, including a statement why management believes the presentation of the non-GAAP financial measure provides useful information to investors regarding your financial condition and results of operations.

The Company respectfully acknowledges the Staff’s comment. Presented below is the Company’s revised definition of non-GAAP measures, which will be included in future filings. The revisions are marked with underlines or strikethroughs to facilitate the Staff’s review.

NON-GAAP FINANCIAL MEASURES

This release includes certain non-GAAP financial measures including Adjusted gross profit, Adjusted gross margin, Adjusted income from operations operating income, Adjusted operating margin, Adjusted interest expense, Adjusted income before provision for income taxes, Adjusted provision for income

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taxes, Adjusted effective tax rate, Adjusted net income attributable to KDP, Adjusted diluted EPS, all of which are free cash flow and financial measures presented on a constant currency basis, in addition to free cash flow, EBITDA, and adjusted EBITDA. which These financial measures differ from results using U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures should be considered as supplements to the GAAP reported measures, should not be considered replacements for, or superior to, the GAAP measures and may not be comparable to similarly named measures used by other companies.

The Company also intends to revise its Reconciliation of Certain Non-GAAP Information to focus on the non-GAAP measures the Company includes in its revised definition of Non-GAAP Financial Measures shown above. Please see Appendix A to this letter for an illustrative form of our revised Reconciliation of Certain Non-GAAP Information for the third quarters ended September 30, 2023 and 2022. Further, the Company confirms that it intends to provide a statement as to why management believes the presentation of each non-GAAP financial measure provides useful information to investors in future filings.

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We note that on pages A-8 and A-12, you disclose adjusted income from operations by segment, which is reconciled to the reported income from operations segment measure, by presenting a column titled “Items Affecting Comparability.” However, we also note that although you detail the amounts included in Items Affecting Comparability earlier in the press release on a consolidated basis, you have not provided detail of

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these adjustments for each segment. For segments that have a material amount of items affecting comparability, please revise future filings to include detail of the nature and amount of these adjustments.

The Company respectfully acknowledges the Staff’s comment. The Company intends to include a detail of the “Items Affecting Comparability” for each segment and our unallocated corporate costs in future filings. Please see Appendix B to this letter for an illustrative form of our revised non-GAAP presentation for the third quarters ended September 30, 2023 and 2022. Read in the reply ↗

Please note that EBITDA, by definition, should only reflect adjustments for interest, taxes, depreciation and amortization. Either remove the Other (income) expense from your calculation of EBITDA or revise to include the adjustment in your Adjusted EBITDA calculation instead. Refer to Question 103.01 of the SEC's Compliance and Disclosure Interpretations on Non-GAAP Financial Measure for further guidance.

The Company respectfully acknowledges the Staff’s comment. The Company intends to exclude Other (income) expense from its calculation of EBITDA to the extent EBITDA is presented in future filings.

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If you should have any questions or comments, please contact the undersigned at (781) 418-7626 or by e-mail at Sudhanshu.Priyadarshi@kdrp.com or Anthony Shoemaker at (972) 673-7532 or by e-mail at Anthony.Shoemaker@kdrp.com.

Keurig Dr Pepper Inc.

/s/ Sudhanshu Priyadarshi

Sudhanshu Priyadarshi

Chief Financial Officer cc: Mr.

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Anthony Shoemaker, Chief Legal Officer, General Counsel and Secretary

Michael J. Zeidel

Skadden, Arps, Slate, Meagher & Flom LLP

Appendix A

KEURIG DR PEPPER INC.

RECONCILIATION OF CERTAIN NON-GAAP INFORMATION

(UNAUDITED)

Gross profit Gross margin Income from operations Operating margin

For the Third Quarter of 2023

Reported $ 2,111 55.5 % $ 896 23.5 %

Items Affecting Comparability:

Mark to market (13) (34)

Amortization of intangibles — 34

Stock compensation — 4

Restructuring - 2023 CEO Succession and Associated Realignment — 27

Productivity 25 52

Impairment of intangible assets — 2

Non-routine legal matters — 2

Transaction costs — 1

Adjusted $ 2,123 55.8 % $ 984 25.9 %

Impact of foreign currency — % — %

Constant currency adjusted 55.8 % 25.9 %

For the Third Quarter of 2022

Reported $ 1,901 52.5 % $ 394 10.9 %

Mark to market 51 106

Amortization of intangibles — 33

Stock compensation — 5

Restructuring and integration costs - DPS Merger — 33

Productivity 30 57

Impairment of intangible assets — 311

COVID-19 3 5

Foundational projects — 1

Adjusted $ 1,985 54.8 % $ 947 26.1 %

A-1

Interest expense Income before provision for income taxes Provision for income taxes Effective tax rate Net income attributable to KDP Diluted earnings per share

Reported $ 237 $ 664 $ 146 22.0 % $ 518 $ 0.37

Mark to market (114) 82 20 62 0.04

Amortization of intangibles — 34 9 25 0.02

Amortization of fair value debt adjustment (5) 5 1 4 —

Stock compensation — 4 3 1 —

Restructuring - 2023 CEO Succession and Associated Realignment — 27 6 21 0.01

Productivity — 52 12 40 0.03

Impairment of intangible assets — 2 — 2 —

Non-routine legal matters — 2 — 2 —

Transaction costs — 1 — 1 —

Change in deferred tax liabilities related to goodwill and other intangible assets — — 3 (3) —

Adjusted $ 118 $ 873 $ 200 22.9 % $ 673 $ 0.48

Impact of foreign currency (0.2) %

Constant currency adjusted 22.7 %

Reported $ 207 $ 183 $ 4 2.2 % $ 180 $ 0.13

Mark to market (113) 217 54 163 0.11

Amortization of intangibles — 33 8 25 0.02

Amortization of fair value of debt adjustment (5) 5 1 4 —

Stock compensation — 5 2 3 —

Restructuring and integration costs - DPS Merger — 33 8 25 0.02

Productivity — 57 10 47 0.03

Impairment of intangible assets — 311 77 234 0.16

COVID-19 — 5 1 4 —

Foundational projects — 1 1 — —

Change in deferred tax liabilities related to goodwill and other intangible assets — — 31 (31) (0.02)

Adjusted $ 89 $ 852 $ 197 23.1 % $ 656 $ 0.46

Change - adjusted 32.6 % 2.6 % 4.3 %

Impact of foreign currency — % (0.8) % — %

Change - constant currency adjusted 32.6 % 1.8 % 4.3 %

Diluted earnings per common share may not foot due to rounding.

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We note your response to prior comment three. Considering the costs in the response appear to be startup costs of new manufacturing lines and appear to represent normal, recurring, cash operating expenses necessary to operate your business, please remove these adjustments from future filings. Refer to Question 100.01 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations.

In your letter dated December 14, 2023, you requested that Keurig Dr Pepper Inc. (“KDP” or the “Company”) respond to your comments within ten business days or advise when the Company would provide a response.

As discussed by telephone between the Company’s counsel and the Staff of the Division of Corporation Finance, the Company requests an extension for its response. The Company intends to respond by January 19, 2024. Read in the reply ↗

You disclose that you entered into arrangements with third parties to allow the participating suppliers to sell payment obligations from you to financial institutions. You also state that your obligations to the related suppliers, including amounts due and scheduled payment terms, are not impacted by these arrangements.

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Please: • Describe the material terms of your accounts payable program arrangements as well as the payment terms with your suppliers. • Explain why your obligations to the suppliers are not impacted by these arrangements; • Provide us with your analysis of whether the accounts payable program should be considered as debt financing instead of accounts payable. Also, please address the classification of your payments made to participating financial institutions as well as the related disclosure of non-cash financing activities as required by ASC 230-10-503. • Tell us and disclose in MD&A how the accounts payable program arrangements have impacted your liquidity, including your account payable days outstanding during each period presented, and indicate whether or not that impact is expected to continue; and • Discuss in MD&A the factors that may limit the availability of your accounts payable program such as changes in interest rates and explain how any significant decrease in the amount settled via your accounts payable program would affect your liquidity.

In an effort to address certain suppliers' needs to meet a different cash flow timeline than they would otherwise have under the payment terms they have agreed to with the Company, the Company has entered into an agreement with a multi-bank supply chain financing administrator to allow our suppliers the opportunity to participate in a traditional supply chain financing program (the "Program").

Structure of the Program

The Program allows participating suppliers to track payment obligations from the Company on the administrator’s software platform, and if elected by the supplier to meet their

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cash flow needs, sell payment obligations from the Company to financial institutions receiving discounted funds. Under the Program, each party has specific roles and responsibilities:

◦

Buyer (KDP): As the buyer, KDP pays a fee to the accounts payable administrator to use its software platform. KDP is responsible for uploading the invoice to the administrator's software platform and confirming the accuracy of the invoice value and due date of the invoice on the administrator's software platform. The fee paid to the administrator is not impacted by supplier participation or any other elections of the suppliers.

Administrator: The accounts payable program administrator is an independent third-party who manages its software platform that brings together suppliers and financial institutions. The administrator is responsible for building the relationships with financial institutions and the enrollment of suppliers into the Program, ultimately matching a supplier and a financial institution to a one-on-one relationship. The administrator does not provide any funding to any supplier and receives no other financial benefits beyond the administration fee paid by the Company.

Supplier: Provides goods or services under trade terms customary to KDP. Supplier has the choice to participate in the Program. If supplier chooses to participate in the Program, the supplier independently enters into an agreement with the administrator and financial institution which sets out the terms and conditions upon which a supplier will sell payment obligations that they choose from the Company to financial institutions. A supplier would be required to obtain any necessary lien releases prior to the financial institutions filing of financing statements under Article 9 of the Uniform Commercial Code.

Financial institution: Provides discounted funds to suppliers to meet their cash flow needs once the supplier sells the payment obligations from the Company. The financial institution files financing statements on the supplier under Article 9 of the Uniform Commercial Code.

Participating suppliers can sell one or more of the Company’s payment obligations, on an invoice-by-invoice basis, at their sole discretion to the financial institutions in exchange for discounted funds and the contractual rights and obligations of the Company to its suppliers are not impacted. That is, specifically, the Company’s obligations to its suppliers are not legally extinguished if a supplier elects to sell the Company’s payment obligations to financial institutions. Under the supplier's agreement with the administrator and financial institution, each supplier is presented with a discount rate, which is primarily comprised of LIBOR plus a fixed margin earned by the financial institution based on our credit rating as determined by the financial institution.

The Company's original payment terms, timing or amount with respect to the Company's obligation to its supplier as negotiated with the supplier remain unchanged. Upon the original due date established on the supplier’s invoice, the Company will remit payment of the invoiced amount, less any applicable credit memos, either to the supplier or, if so directed by the administrator upon being notified that the supplier had elected to participate in the Program, to a financial institution.

The Company retains the continuing right to submit deductions in the form of credit memos to the administrator's software platform. These credit memos reduce the amount of the Company's payment obligations until the supplier sells the Company's payment obligations to a financial institution. If the Company submits a credit memo after the payment obligation has been sold, that credit memo will reduce the amount of other existing or future payment obligations the Company has to the same supplier.

The Company is indifferent as to whether suppliers participate in the Program. The Company is not a legal party to the agreements between the supplier and the financial institutions. The Company has no economic interest in a supplier’s decision to enter into agreements with the financial institutions as its payment terms remain unchanged whether or not a supplier participates. In relation to the transactions in the Program, the Company receives no financial benefit from the financial institution and has no direct financial relationship with the financial institutions to which the suppliers can sell one or more of the Company's payment obligations.

Payment Terms with Suppliers

On July 9, 2018, Maple Parent Holdings Corp. ("Maple"), a Delaware corporation and the direct parent company of Keurig Green Mountain, Inc. ("KGM"), completed its merger (the "Merger") with Salt Merger Sub, Inc., a Delaware corporation and wholly owned special purpose merger subsidiary of the Company (formerly known as Dr Pepper Snapple Group, Inc. ("DPS")). The Merger was accounted for as a reverse-merger under Accounting Standards Codification ("ASC") 805-40, Business Combinations, where Maple was the accounting acquirer.

Prior to the Merger, the legacy KGM business had commercially negotiated Net 360 day payment terms with a number of raw green coffee bean and other direct material suppliers, which is customary within the coffee industry. Specifically, KGM had implemented a payment extension initiative a number of years prior to the Merger, which was consistent with a broader lengthening of payables in days outstanding observed throughout the coffee industry. This observation was reinforced by information disclosed in public filings, media coverage, and experience with affiliated entities.

Following the Merger, the Company had numerous shared suppliers and began commercially negotiating similar terms across spend categories to achieve best price and commercial trade terms that were customary to KGM prior to the Merger. Additionally, based on the financial statements of various public registrants within the food and beverage industry, we have continued to observe a trend of increased days payable outstanding that indicates a lengthening of payment terms as companies seek to improve their cash conversion cycles. Therefore, consistent with industry trends, the Company, in the normal course of business, continues to engage with our current suppliers or evaluate new suppliers to maximize value opportunities and realize synergies from the Merger inclusive of negotiating the best possible trade terms customary to KDP, while considering a wide range of variables and pricing mechanisms such as, but not limited to, material inflation, commodity price index movement, quality, conversion costs, freight adjustments, productivity targets, minimum volume rebates, price protections, growth incentives, contract length, and working capital (including payment terms). As a result of the commercial negotiation, we believe the negotiated prices for products and services we purchase are comparable with prices we pay or would pay to other suppliers.

Excluding our suppliers who require cash at date of purchase or sale, our current payment terms with our suppliers generally range from 10 to 360 days, which results in a days payable outstanding reflected in the table below.

Explain why your obligations to the suppliers are not impacted by these arrangements.

Response: Please see explanation above in the first bullet.

Provide us with your analysis of whether the accounts payable program should be considered as debt financing instead of accounts payable. Also, please address the classification of your payments made to participating financial institutions as well as the related disclosures of non-cash financing activities as required by ASC 230-10-50-3.

Response: Upon the closing of the Merger, the Company established procedures to assess the commercially negotiated terms with our suppliers to ensure that the balances included in accounts payable on our Consolidated Balance Sheets were appropriate and in accordance with ASC 835-30, Interest. Factors considered in this analysis included, but were not limited to, the following:

Ensuring the agreement with the supply chain financing provider does not change the original payment terms, timing, or amount with respect to the Company’s obligation to its supplier;

Ensuring the Program arrangement does not relieve the Company of its obligation to its suppliers for payment of its outstanding invoices. That is, the supplier maintains recourse against the Company for any commercial disputes related to the invoice;

Ensuring payment terms were customary for the Company and industry as previously discussed;

Ensuring all suppliers were permitted to participate in the Program, participation in the Program was voluntary and participating suppliers in the Program have complete discretion on an invoice-by invoice basis to offer to sell all, a portion, or none of our payment obligations;

Ensuring the Company did not receive any kind of benefit or consequence by entering into the Program, as the Company is not a party to or specifically notified if the supplier chooses to sell one or more of the Company's payment obligations to financial institutions other than with respect to directing payment;

Ensuring a default on any invoiced amount does not cause any cross-defaults;

Ensuring the Company is not obligated to pay any interest;

Ensuring the Company is not required to post any collateral;

Ensuring the financial institutions do not have the right to draw down on the Company's other accounts without our permission if the designated bank account has insufficient funds; and

Ensuring the financial institutions have not obtained any rights other than the right to receive payment of the invoice amount on the original invoice due date. Specifically, the financial institutions do not decide which supplier invoices get paid.

When considering all of the factors above in their totality, we have concluded that the economic substance of our payment obligations in the Program remain that of accounts payable. Any transactions that did not meet the criteria above were classified as “Structured payables” separate from “Accounts payable” on the face of our Consolidated Balance Sheets disclosed on the Form 10-K for the year ended December 31, 2018 (the "Form 10-K"). Structured payables are treated as debt-like in our financial statement presentation and disclosed in Note 2 to the Consolidated Financial Statements on the Form 10-K as a significant accounting policy: “Structured payables have equal priority with accounts payable and are treated as non-recourse obligations. The Company records interest for the period the structured payables obligation is outstanding and reflects the proceeds and payments related to these transactions as a financing activity on the Consolidated Statements of Cash Flows.”

Transactions that met the criteria to remain classified as accounts payable are reflected as an operating activity and, as such, are not considered a non-cash financing activity and are not subject to ASC 230-10-50-3. Structured payables are reflected as gross proceeds and payments on the face of the Consolidated Statements of Cash Flows within the financing activities section and are not treated as a non-cash financing activity.

Tell us and disclose in MD&A how the accounts payable program arrangements have impacted your liquidity, including your account payable days outstanding during each period presented, and indicate whether or not that impact is expected to continue; and

Response: The Program has no direct impact on the Company's liquidity as we will remit funds in accordance with the original payment terms agreed with the applicable supplier. The suppliers' choice to sell the Company’s payment obligations to financial institutions has no impact on the timing or amount we will ultimately remit to either the supplier or the financial institution as directed by the administrator. However, the Company's liquidity is directly impacted by our supplier terms initiative, which results in negotiated commercial terms between the Company and our suppliers that lengthens our days payable outstanding. The availability of the Program to the supplier could be a factor in the supplier's negotiated decision to lengthen the commercial terms with the Company as we believe a driver for our suppliers that elected to participate in the Program was the ability to sell our payment obligations at rates more favorable than the suppliers could obtain otherwise.

At your request, we have provided the days payable outstanding in the table below for the periods presented in the Form 10-K. As these periods were not comparable, we have only provided the accounts payable days outstanding for each period presented.

Period Presented

Period End Date

Days Payable Outstanding

Second Quarter 2019(1)

June 30, 2019

120

2018(2)

December 31, 2018

136

Second Quarter 2018(3)

June 30, 2018

184

Transition 2017(3)

December 31, 2017

171

Fiscal 2017(3)

September 30, 2017

159

Successor 2016(3)(4)

September 24, 2016

Predecessor 2016(5)

March 2, 2016

(1)

The trailing twelve months ended June 30, 2019 reflected effectively twelve months of cost of sales and SG&A expenses for DPS and Maple on a combined basis. Following the Merger, the Company had numerous shared suppliers and began commercially negotiating similar terms across spend categories to achieve best price and commercial trade terms that were customary to KGM prior to the Merger. Legacy DPS operations during this period had significantly shorter terms than the legacy KGM business.

(2)

The trailing twelve months ended December 31, 2018 reflected six months of cost of sales and SG&A expenses for DPS and twelve months of cost of sales and SG&A expenses for Maple on a combined basis.

(3)

Following Maple's acquisition of KGM, KGM implemented a payment extension initiative a number of years prior to the Merger, which coincided with a broader lengthening of payables in days outstanding observed throughout the coffee industry. The legacy KGM business had commercially negotiated Net 360 day payment terms with a number of raw green coffee bean and other direct material suppliers, which is customary within the coffee industry. The trailing twelve month activity for Second Quarter 2018, Transition 2017 and Fiscal 2017 reflected twelve months of cost of sales and SG&A expenses for Maple and KGM on a combined basis.

(4)

For the Successor 2016 period, the cost of sales and SG&A expenses included in the trailing twelve months ended September 24, 2016 did not include a full twelve month period on a combined basis as a result of Maple's acquisition of KGM during the period. Maple reflected cost of sales and SG&A expenses between December 4, 2015 through September 24, 2016 and KGM reflected cost of sales and SG&A expenses between March 3, 2016 and September 24, 2016.

(5)

For the Predecessor 2016 period, the cost of sales and SG&A expenses for KGM included the trailing twelve months ended March 2, 2016. Prior to Maple's acquisition of KGM, the KGM business did not have a supplier terms initiative.

Additionally, in response to your comment, we have updated our analysis of our cash flows from operations within the liquidity discussion within our MD&A in our Form 10-Q for the quarter ended June 30, 2019, filed on August 8, 2019, in order to provide our investors with a more insightful liquidity analysis, which we have included below.

"Our cash conversion cycle is defined as days inventory outstanding ("DIO") and days sales outstanding ("DSO") less days of payables outstanding ("DPO"). The calculation of each component of the cash conversion cycle is provided below:

Component

Calculation (on a trailing twelve month basis)

DIO

(Average inventory divided by cost of sales) * Number of days in the period

DSO

(Accounts receivable divided by net sales) * Number of days in the period

DPO

(Accounts payable * Number of days in the period) divided by cost of sales and SG&A expenses

Our cash conversion cycle declined 42 days to approximately (36) days as of June 30, 2019 as compared to (78) days in the prior year period. The change was primarily driven by a reduction of 64 days in our DPO as the DPS operations had significantly shorter terms than the legacy KGM business. DIO improved 25 days as a result of the DPS Merger. DSO was relatively consistent as compared to the prior year period. In future periods, DPO will continue to have a positive impact on our cash conversion cycle as a result of our supplier terms initiative, which has set our customary terms as we integrate our legacy businesses."

The Company will continue to present its analysis of our cash flows from operations within the liquidity discussion within our MD&A consistently in future periods subject to any additional changes suggested by the Staff. Furthermore, we expect the supplier terms initiative, which may be impacted by the Program, to continue to positively impact our liquidity on a prospective basis in the near-term as discussed in our response above.

Discuss in MD&A the factors that may limit the availability of your accounts payable program such as changes in interest rates and explain how any significant decrease in the amount settled via your accounts payable program would affect your liquidity.

Response: The Company believes that the factors that may limit the availability of the Program may be more appropriately included within the Company's Risk Factors. The Company considered guidance in Item 303(a)(1) of Regulation S-K to "identify any known trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the registrant's liquidity increasing or decreasing in any material way." As discussed in our response to your first comment, if the participating supplier chooses to sell one or more of the Company's payment obligations at their sole discretion to the financial institutions, the Company's payment obligations remain unchanged. As such, since there is no change in the payment obligation, there would not be a direct change in our liquidity. Furthermore, the Company does not believe changes in interest rates are reasonably likely to result in our liquidity increasing or decreasing in any material way.

To appropriately expand our disclosures in response to your comment, we have included the following disclosure within Item 1A, Risk Factors in our Form 10-Q for the period ended June 30, 2019, which was filed with the Commission on August 8, 2019. The Company will include similar disclosures in its Risk Factors in future periods subject to any additional changes suggested by the Staff.

"Deterioration of general macro-economic conditions could have a negative impact on our business, financial condition, results of operations and liquidity due to impacts on our suppliers, customers and operating costs.

Our business depends on developing and maintaining close relationships with our suppliers and on our suppliers’ ability and willingness to sell quality products to us at favorable prices and terms. Many factors outside our control may harm these relationships and the ability or willingness of these suppliers to sell us products on favorable terms. Such factors include a general decline in the economy and economic conditions and prolonged recessionary conditions. These events could negatively affect our suppliers’ operations and make it difficult for them to obtain the credit lines or loans necessary to finance their operations in the short-term or long-term and meet our product requirements.

Financial or operational difficulties that some of our suppliers may face, including their ability to access working capital, could also increase the cost of the products we purchase from them, the timing of settlement of our obligations to the supplier or our ability to source product from them. We might not be able to pass our increased costs onto our customers and, to the extent these difficulties impact the timing of settlement for our obligation to the supplier, we may have a decrease in our cash flow from operations and may have to use our various financing arrangements for short-term liquidity needs."

Additionally, within the existing discussion of the Program within MD&A, we have included the following statement which highlights how the arrangements between participating suppliers and the financial institutions are impacted by changes to our credit ratings.

"A significant downgrade in our credit ratings could limit a financial institution's willingness to participate in the accounts payable program. In addition, a significant downgrade in our credit ratings could also reduce the attractiveness of the accounts payable program to participating suppliers who may sell payment obligations from us to financial institutions."

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We note that you disclose the amount of outstanding payment obligations that are payable to suppliers that utilize these third party services. Please clarify whether or not this is the outstanding balance classified as accounts payable at the end of each fiscal year that is owed to financial institutions rather than to your suppliers.

Rest of the question

Supplemental Unaudited Pro Forma Combined Financial Information and Non-GAAP Financial Measures Reconciliation of Certain Pro Forma Items to Certain Non-GAAP Adjusted Pro Forma Items,

As described above, the Company’s obligations to its suppliers are not legally extinguished or otherwise changed if a supplier elects to sell the Company’s payment obligations to financial institutions. As a result, all payment obligations to our suppliers remain with us. Upon the original due date established on the supplier’s invoice, the Company will remit payment of the invoiced amount to the supplier or to a financial institution if so directed by the supplier upon being notified that the supplier had elected to participate in the Program.

Rest of the answer

As such, the outstanding balance classified as accounts payable and disclosed at the end of each period represents those suppliers participating in the Program regardless of the supplier's election to sell the Company's payment obligations to financial institutions.

Supplemental Unaudited Pro Forma Combined Financial Information and Non-GAAP Financial

Measures

Reconciliation of Certain Pro Forma Items to Certain Non-GAAP Adjusted Pro Forma Items,

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It appears that you present full non-GAAP income statements for the twelve months ended December 31, 2018 and 2017 when reconciling non-GAAP measures to the most directly comparable pro forma measures. Please tell us how you considered the guidance in Question 102.10 of the Division’s Compliance and Disclosure Interpretations regarding Non-GAAP Financial Measures.

Rest of the question

This comment also applies to the disclosures in your Form 10-Q for the quarter ended March 31, 2019 and the Item 2.02 Form 8-K filed on May 9, 2019.

We respectfully acknowledge the Staff's comment and undertake that in future filings with the Commission and earnings releases, we will reconcile our non-GAAP measures to the most directly comparable GAAP measures without presenting full non-GAAP income statements. We have updated our presentation of our non-GAAP financial measures in both our Form 10-Q for the period ended June 30, 2019 and our Earnings Release for the same period, both filed with the Commission on August 8, 2019. Please see Appendix A to this letter for the form of our presentation of our non-GAAP measures.

Rest of the answer

The Company will continue to present its non-GAAP financial measures consistently in future periods subject to any further comments or questions of the Staff.

* * * * *

If you should have any questions or comments, please contact the undersigned at 972-673-7459 or by e-mail at jim.baldwin@kdrp.com or Ozan Dokmecioglu at 781-418-8038 or by e-mail at ozan.dokmecioglu@kdrp.com.

Keurig Dr Pepper Inc.

/s/ James L. Baldwin

James L. Baldwin

Chief Legal Officer,

General Counsel and Secretary cc: Mr. Ozan Dokmecioglu, Chief Financial Officer

Skadden, Arps, Slate, Meagher & Flom LLP

APPENDIX A

KEURIG DR PEPPER INC.

RECONCILIATION OF CERTAIN REPORTED ITEMS TO CERTAIN NON-GAAP ADJUSTED ITEMS

For the Second Quarter of 2019

(Unaudited, in millions, except per share data)

Cost of sales

Gross profit

Gross margin

Selling, general and administrative expenses

Other operating expense, net

Income from operations

Operating margin

Reported

$

1,186

1,626

57.8

%

1,028

587

20.9

Items Affecting Comparability:

Mark to market

(11

)

(3

—

(8

Amortization of intangibles

(32

Stock compensation

Restructuring and integration costs

(1

(37

Productivity

(23

(9

Transaction costs

Provision for settlements

Malware Incident

Adjusted GAAP

1,195

1,617

57.5

913

702

25.0

Interest expense

Other expense (income), net

Income before provision for income taxes

Provision for income taxes

Effective tax rate

Net income

Weighted Average Diluted shares

Diluted earnings per share

170

416

102

24.5

314

1,419.2

0.22

(16

(2

0.02

Amortization of deferred financing costs

Amortization of fair value debt adjustment

(6

(7

138

565

142

25.1

423

0.30

Diluted earnings per common share may not foot due to rounding.

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