In addition to other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the following risk factors, which have been updated from the risk factors set forth in Part I, Item 1A in our Annual Report. RISK FACTORS SUMMARY •Disruption of our manufacturing and distribution operations or supply chain, including increased input costs, may adversely affect our financial condition or results of operations. •We operate in highly competitive categories, and any inability to compete effectively could adversely impact our business. •We may not effectively respond to changing consumer preferences and shopping behavior, which could impact our financial results. •Concerns about the safety, quality, or health effects of our products could negatively affect our business. •Damage to our reputation or brand image can adversely affect our business. •If we do not successfully manage our acquisitions of and investments in new businesses or brands, our operating results may be adversely affected. •Failure to realize benefits or successfully manage the potential negative consequences of our productivity initiatives can adversely affect our financial performance. •Our facilities and operations may require substantial investment and upgrading, and such investments may not achieve the intended financial benefits. •We depend on key information systems, and our use of information technology exposes us to business disruptions that could adversely affect us. •Our intellectual property rights could be infringed or we could infringe the intellectual property rights of others, and adverse events regarding licensed intellectual property could harm our business. •Failure to attract, retain, develop and motivate a highly skilled and diverse workforce, or failure to effectively manage changes in our workforce could significantly impact our operations. •We may not be able to renew collective bargaining agreements on satisfactory terms, or we could experience union activity, including new unionization, labor disputes, or work stoppages. •Increases in our cost of employee benefits in the future could reduce our profitability. •A significant interruption at one of our production facilities could disrupt our supply of the affected products. •Our efforts to secure an adequate supply of quality or sustainable coffee may be unsuccessful. •If we are unable to manage our inventory and forecasting systems effectively, our business, financial condition, or results of operations could be adversely affected. •We negotiate with our suppliers to optimize our terms and conditions, including payment terms, and reductions in our payment terms with our suppliers could adversely affect our liquidity. •An impairment of the value of our goodwill and other indefinite lived intangible assets could have a material adverse effect on our financial statements. •We depend on third-party bottling and distribution companies for a significant portion of our business. •Changes in the retail landscape or in sales to any key customer can adversely affect our business. •Failure to maintain strategic relationships with brand owners, operators and private label brands, including through licensing and distribution agreements, could adversely impact our future growth and business, potentially resulting in the termination of those agreements. •Equity method investments are managed independently of us and may have different interests than we do. Their decisions could impact our financial performance. 54 Table of Contents •The use of information technology by our third-party commercial partners and service providers exposes us to business disruptions or other negative impacts that could adversely affect us. •We rely on the performance of a limited number of suppliers, manufacturers and order fulfillment companies for our brewers and coffee machines, beverage concentrates, and syrups. •Our financial results may be negatively impacted by unfavorable economic and geopolitical conditions. •National and international laws and regulations could adversely affect our business. •Litigation or legal proceedings could expose us to significant liabilities and damage our reputation. •Increased concerns related to the use or disposal of plastics or other packaging materials can adversely affect our business and financial performance. •Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected products. •Our use of information technology and third-party service providers exposes us to cybersecurity breaches and other business disruptions that could adversely affect us. •Failure to comply with personal data protection and privacy laws can adversely affect our business. •Climate change or related legislation could adversely affect our business. •Water scarcity and quality could adversely affect our business. •Fluctuations in our effective tax rate may result in volatility in our financial results. •Fluctuations in foreign currency exchange rates relative to the U.S. dollar could have a material adverse effect on our financial results. •The market price of our common stock may decline if we do not achieve the expected benefits and synergies of the JDE Peet’s Acquisition. •Legal proceedings in connection with the JDE Peet's Acquisition could expose us to substantial costs. •If our due diligence investigation of JDE Peet's was inadequate, or if unexpected risks related to JDE Peet's and its business materialize, it could have a material adverse effect on our business. •The JDE Peet's Acquisition exposes us to inherent risks in JDE Peet's business and those geographies where JDE Peet's currently operates, which could adversely affect our business. •Our acquisition of JDE Peet’s exposes us to significant geopolitical, regulatory, and operational risks in Russia, including the potential loss of those operations, that could adversely affect our business. •We may not successfully integrate JDE Peet's into our business, or such integration may be more difficult, time-consuming, or costly than expected, which could adversely affect our business. •We are subject to business uncertainties related to the JDE Peet's Acquisition. •We have incurred and assumed significant debt as a result of the JDE Peet's Acquisition, which could adversely affect our financial performance. •In connection with the JDE Peet's Acquisition, we consummated the JV Investment, which could restrict our operational and corporate flexibility, impact our cash resources, and/or depress the market price of our common stock. •The issuance of Convertible Preferred Stock in connection with the JDE Peet's Acquisition may adversely affect the rights and market price of our common stock as well as our capital resources. •The Separation may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, expenses, and resources, which could adversely affect our business. •We may be unable to achieve some or all of the anticipated strategic and financial benefits from the Separation. •Following the Separation, we may not maintain a satisfactory credit rating, which could adversely affect the financial performance of our businesses. •Following the Separation, the price of our common stock may decline and may experience greater volatility. 55 Table of Contents RISKS RELATED TO OUR OPERATIONS Disruption of our manufacturing and distribution operations or supply chain, including increased input costs, may adversely affect our financial condition or results of operations. We have experienced, and could continue to experience, disruptions in our supply chain and our manufacturing and distribution operations, which could have a material adverse effect on our business. Some raw materials and supplies used in the production of our products, including packaging materials and green coffee, are available from a limited number of suppliers or could be in short supply when seasonal demand is at its peak or when international logistics are disrupted. Certain raw materials and supplies used in the production of our products are sourced from countries experiencing unfavorable economic conditions, civil unrest or political instability. Adverse weather conditions may affect the supply of agricultural commodities from which key ingredients for our products are derived. We may not be able to maintain favorable arrangements and relationships with suppliers, and our contingency plans may not be effective to mitigate disruptions that may arise from shortages or discontinuation of any raw materials and other supplies that we use in the manufacture and distribution of our products. In order to ensure a continuous supply of high-quality raw materials, some of our inventory purchase obligations include long-term purchase commitments for certain strategic raw materials; the timing of these may not always coincide with the period in which we need the supplies to fulfill customer demand. Any sustained or significant disruption to the manufacturing or sourcing of raw materials could increase our costs and interrupt product supply, which could adversely impact our business. Additionally, if demand increases beyond our production capabilities, we may need to expand our capacity. The raw materials and other supplies, including agricultural commodities (such as green coffee, including Arabica and Robusta beans, tea leaf, palm and coconut oil, milk, sugar, cocoa, corn and apples), fuel (crude oil, electricity and natural gas) and packaging materials (including aluminum, resins, paper products, and glass), transportation, and other supply chain inputs that we use for the manufacture, production, and distribution of our products are subject to price volatility and fluctuations in availability caused by many factors, including changes in supply and demand; supplier capacity constraints; inflation; weather conditions (including the effects of climate change); natural disasters; disease or pests; agricultural uncertainty; cost increases in farm inputs; health epidemics, pandemics, or other contagious outbreaks; labor shortages, strikes, or work stoppages; changes in or the enactment of new laws and regulations; governmental actions or controls (including import/export restrictions, such as new, increased, or retaliatory tariffs, sanctions, quotas, or trade barriers); port congestion or delays; transport capacity constraints; cybersecurity incidents or other disruptions; political uncertainties; acts of terrorism; governmental instability; speculation in global trading of commodities, such as green coffee; or fluctuations in foreign currency exchange rates. Many of these factors could also cause a significant disruption at our manufacturing and distribution facilities, or the facilities of our bottlers, contract manufacturers, or distributors, which could have a material adverse effect on our business. We have been affected by a number of these factors, led by inflationary pressures on input and other costs, which may continue. Many of our raw materials and supplies are purchased in the open market, and the prices we pay for such items are subject to fluctuation. Under many of our supply arrangements, the price we pay for raw materials fluctuates along with certain changes in underlying commodities costs. This could lead to higher and more variable inventory levels or higher raw material costs for us. The quality of the green coffee we seek tends to trade on a negotiated basis at a premium to or, at times, discount from, the underlying futures of green coffee, and can vary significantly. Single-origin, Arabica, and responsibly-sourced green coffee sell at higher prices than other green coffees, in part because producers cannot increase supply in the short run to meet rising demand. Volatility in green coffee prices can impact our ability to enter into fixed-price purchase commitments. We frequently enter into “price-to-be-fixed” supply contracts with defined quality, quantity, and other negotiated terms, but the date, and therefore price, at which the base coffee commodity price component will be fixed has not yet been established. We also enter into forward delivery contracts for physical green coffee and use futures to hedge our exposure to green coffee prices. 56 Table of Contents When input prices increase unexpectedly or significantly, we may be unwilling or unable to increase our finished product prices or unable to effectively hedge against price increases to offset these increased costs without suffering reduced volume, revenue, margins, and operating results. To the extent that price increases on finished products are not sufficient to offset higher costs adequately or in a timely manner, or if they result in significant decreases in sales volume, our financial condition or results of operations may be adversely affected. For example, if the price of green coffee were to increase significantly and we are unable to increase our prices sufficiently to an equivalent degree to compensate, we may be required to take additional measures in affected markets, including ceasing advertising campaigns or temporarily halting trading in such markets. In addition, if we have previously hedged a commodity at higher price levels and that commodity’s price then decreases rapidly, the resulting change in value of the derivative instruments could increase our cost of goods sold. We are also exposed to counterparty risk under our hedging and physical green coffee contracting arrangements and, because the terms of our fixed-price purchase commitments do not necessarily match the term of our agreements to sell products to customers, our hedging strategies may not effectively reduce our exposure to commodity price increases. In addition, there may be a time lag between when commodity costs increase and when we are able to increase our prices, which may compress our margins, and if commodity prices then decline before we have increased our prices, we may be unable to recover losses caused by such temporary increases in commodity costs. We operate in highly competitive categories, and any inability to compete effectively could adversely impact our business. The beverage industry is highly competitive and continues to evolve in response to changing consumer preferences. We compete with multinational corporations with established brands that can rapidly respond to competitive pressures and changes in consumer preferences by introducing new products, changing their route-to-market, reducing prices, or increasing promotional activities. We also compete with various smaller or regional companies and private label manufacturers, which may be more innovative, better able to bring new products to market, and better able to quickly serve niche markets or better meet continuously evolving consumer preferences. Additionally, we compete for contract manufacturing with other bottlers and manufacturers. A significant portion of our business is attributable to sales of single serve coffee formats, including K-Cup pods for use with Keurig brewing systems and other single serve coffee formats compatible with various third-party single serve coffee brewers. Continued acceptance of Keurig brewers and other single serve coffee brewers compatible with our products to further increase household penetration is a significant factor in our growth plans. Any substantial or sustained decline in the sale of brewers could materially and adversely affect our business. Keurig brewers and other single serve brewers related to our single serve offerings compete against all sellers and types of coffeemakers, as well as coffee stores. Our competitive position may be weakened if we do not succeed in differentiating our single serve brewers from our competitors’ products. Our portfolio spans across a broad range of brands, each subject to distinct competitive dynamics and consumer demand drivers. Across our product formats, our sales may be adversely affected by our inability to maintain or increase prices, effectively promote our products, or respond to new market entrants and competitive offerings. Our results may also be negatively impacted if wholesalers, retailers, or consumers choose competitors’ products over ours, or if we experience increased marketing costs, higher in-store placement costs or slotting fees. In addition, the continued growth of e-commerce may also create additional consumer price deflation by, among other things, facilitating comparison shopping and could potentially threaten the value of some of our legacy route to market strategies. If we are unable to compete effectively, our business and our financial results would be negatively affected. We may not effectively respond to changing consumer preferences and shopping behavior, which could impact our financial results. Consumers’ preferences continually evolve due to a variety of factors, including changes in demographics, social trends, consumer lifestyles and consumption patterns, and the use of weight loss drugs, concerns or perceptions regarding the health effects or environmental impact of our products or packaging, the pricing of our products, concerns regarding the location of origin or source of ingredients and products, changes in consumers’ spending habits, negative publicity, economic downturn, inflation or other factors. If we do not effectively anticipate and respond to changing trends and consumer preferences, including through innovation and renovation, our sales and growth could suffer. 57 Table of Contents Addressing changes in consumer preferences may require successful development, introduction, and marketing of new products and line extensions. There are also 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. In addition, because our consumer base is geographically dispersed, we must offer an array of products that satisfy a broad spectrum of consumer preferences, and if we fail to maintain or expand our product offerings successfully to satisfy such a broad spectrum of preferences, demand for our products could decrease. Failure to innovate successfully could compromise our competitive position and impact our product sales, financial condition, and operating results. The effectiveness of our marketing and advertising activities, on which we depend in part to drive awareness and sales, may not generate the consumer awareness or sales we anticipate, and we rely on a limited number of third-party providers to support these activities, some of which have longstanding relationships with us and historical knowledge of our business; any deterioration of these relationships could disrupt our marketing and advertising efforts. Consumers are increasingly focused on sustainability, with particular attention to the recyclability or reuse of product packaging, reducing consumption of single-use plastics and non-recyclable materials, the environmental impact of manufacturing operations, and the ethical standards of product sourcing and production. If we do not meet consumer demands by continuing to provide sustainable packaging options and focusing on sustainability throughout our manufacturing operations, our sales could suffer. Consumer shopping behavior is also rapidly evolving. Changes in mobility, travel, and leisure activity patterns, the acceleration of e-commerce, social media (including influencers), inflation and economic uncertainty, and pandemics, epidemics, or other disease outbreaks, among others, have impacted and could continue to impact consumer shopping behavior and demand for our products. If we are unable to meet consumers where and when they desire their products or if we are unable to respond effectively to changes in distribution channels, our financial results could be adversely impacted. Concerns about the safety, quality, or health effects of our products could negatively affect our business. The success of our business depends in part on our ability to maintain consumer confidence in the safety and quality of all of our products, including coffee and tea, and beverage products, their ingredients, their packaging, and our coffee machines and brewers. Failures or perceived failures to meet our quality, health, or safety standards, (including product contamination or tampering, undeclared allergens, or allegations of mislabeling) have occurred in the past and may occur again, whether in our own operations or those of our manufacturers, distributors, or suppliers. This risk may grow as we expand our product offerings through innovation, partnerships, or acquisitions into new beverage categories, including product contamination or tampering, undeclared allergens, or allegations of mislabeling, whether actual or perceived, has occurred, and may in the future occur, in our operations or those of our bottlers, manufacturers, distributors, or suppliers. This could result in time-consuming and expensive production interruptions, recalls, market withdrawals, product liability claims, and negative publicity. It could also result in the destruction of product inventory, lost sales due to the unavailability of products for a period of time, fines from applicable regulatory agencies, and higher-than-anticipated rates of warranty returns and product returns. Moreover, negative publicity may result from false, unfounded, or nominal liability claims, or from limited recalls. In addition, adverse public opinion, third-party studies, or other allegations, whether or not valid, regarding the perceived or potential negative health effects of processing or ingredients in some of our beverage products, such as concerns about the caloric intake associated with soft drinks, the caffeine content of certain of our beverages, or the use of synthetic colors, beverages sweetened with sugar or high-fructose corn syrup, nutritive and non-nutritive sweeteners or other additives in some of our products, or chemicals of concern or other substances in our ingredients or materials, may contribute to actual or threatened legal action, negative consumer perception of our products, new or increased taxes on our products, or additional government regulation, including new or increased restrictions on the inclusion of our products in benefit programs, such as the U.S. supplemental nutrition assistance program known as SNAP, any of which could result in decreased demand for our products or reformulations of existing products to remove such ingredients or substances, which may be costly and reduce their appeal. Such risks may be increased if government officials make public statements about alleged risks purportedly associated with processing particular ingredients used in some of our products, or unintentional contaminants that may be present in the water supply. 58 Table of Contents Any or all of these events may lead to a loss of consumer confidence and trust, could damage the reputation of our brands, and may cause consumers to choose other products, which could negatively affect our business and financial performance. Damage to our reputation or brand image can adversely affect our business. Our ability to maintain our reputation and the brand image of our products is important to our success. Our corporate image and reputation have in the past been, and could in the future be, adversely impacted by a variety of factors, including: any failure by us or our business partners to achieve goals or maintain high standards relating to ethical and business practices, including with respect to human rights, child labor laws, workplace conditions, employee health and safety, the nutrition profile of our products, packaging, water use, and impact on the environment; any failure to address health or other concerns about our products, products we distribute, or particular ingredients in our products, including concerns regarding whether certain of our products contribute to obesity or an increase in public health costs; our research and development efforts; any product quality or safety issues, including the recall of any of our products; any failure to comply with laws and regulations; and consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media, and our response to political and social issues or catastrophic events; or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing. Damage to our reputation or brand image could decrease demand for our products, thereby adversely affecting our business. If we do not successfully manage our acquisitions of and investments in new businesses or brands, our operating results may be adversely affected. From time to time, we acquire or invest in businesses or brands, form joint ventures and enter into licensing and distribution agreements. If we are unable to complete such transactions or successfully integrate and develop acquired businesses, we could fail to achieve the expected increases in revenues and operating results or the anticipated synergies and cost savings. Additional acquisition risks which could adversely affect our financial results include the diversion of management attention from our existing business, potential loss of key employees, suppliers, or customers from the acquired business, assumption of unforeseen risks and liabilities, and greater than anticipated operating costs of the acquired business, among others. Our quality management protocols, which are designed to ensure product quality and safety, may not be sufficiently robust to fully manage the expanded range of product offerings introduced through new investments or licensing or distribution agreements, which may increase our costs or subject us to negative publicity. In addition, we may also experience delays in extending our respective internal control over financial reporting to new acquisitions or investments, which may increase the risk of misstatements in our financial records and in our consolidated financial statements. In the past we have been, and in the future we may be, unable to realize the expected benefits of acquisitions, investments, or licensing or distribution agreements; it may also take longer than expected to realize the expected benefits. Our ability to manage and improve the performance of acquired businesses or brands and our other investments and ventures will impact our financial performance. If we are unable to achieve the strategic and financial objectives for such transactions, our consolidated results could be negatively affected. Refer to the Risks Related to the JDE Peet's Acquisition section for risks specific to the JDE Peet's Acquisition. Failure to realize benefits or successfully manage the potential negative consequences of our productivity initiatives can adversely affect our financial performance. We pursue strategic initiatives that are transformative in nature and are expected to generate significant cost savings or productivity, over time. These strategic initiatives have included investments in new technologies and the optimization of certain processes and of our manufacturing footprint. Some of our productivity initiatives may result in unintended consequences, such as business disruptions, distraction of management and employees, reduced morale and productivity, inability to obtain expected savings to reinvest into the business, an inability to attract or retain employees, negative publicity and disruption of the internal control structures of the affected business operations. If we are unable to successfully implement our productivity initiatives as planned or do not achieve expected savings as a result of these initiatives, we may not realize all or any of the anticipated benefits, resulting in adverse effects on our financial performance. 59 Table of Contents Our facilities and operations may require substantial investment and upgrading, and such investments may not achieve the intended financial benefits. We continue to incur significant costs to maintain or upgrade various technologies, facilities, and equipment or restructure our operations, including closing existing facilities or opening new ones. We invest in new and emerging technologies, including the use of automation, connected data, robotics, and artificial intelligence throughout our operations, including in our manufacturing and distribution facilities and our sales and marketing organization. If the cost of our investments is higher than anticipated, the investments and upgrades are not sufficient to meet our near-term future business needs, our business does not develop as anticipated to appropriately utilize new or upgraded facilities, or third parties fail to complete the construction or renovation of facilities or production equipment in a timely manner or in accordance with our specifications, we may be delayed in realizing the intended benefits or our costs and financial performance could be negatively affected. In addition, certain of our joint venture arrangements may require us to bear additional costs or provide additional funding if expenses, including capital expenditures, exceed agreed budget thresholds, which could increase our cash requirements and adversely affect our financial performance. We have ongoing programs to invest in and upgrade our manufacturing, distribution and other facilities. These investments require us to rely on third parties for the construction and renovation of our facilities and manufacturing of our production equipment. We have experienced delays related to the production equipment contained within our manufacturing facilities, including delays in receiving the equipment or in operating the equipment according to specifications outlined by the manufacturer, which have led to increased costs, and we may continue to experience such delays and cost increases. We depend on key information systems, and our use of information technology exposes us to business disruptions that could adversely affect us. Our information systems contain proprietary and other confidential information related to our business. These systems and services are vulnerable to interruptions or other failures resulting from, among other things, natural disasters, terrorist attacks, software, equipment or telecommunications failures, processing errors, computer viruses, other security issues or supplier defaults. Security, backup and disaster recovery measures may not be adequate or implemented properly to avoid such disruptions or failures. Any disruption or failure of these systems or services could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or other business disruptions, all of which could negatively affect our business and financial performance. Our users’ data and customer information may be improperly accessed, used or disclosed if we fail to adopt or adhere to adequate information security practices or in the event of a breach of our networks, which could subject us to legal action, reputational harm, or otherwise negatively impact our business and financial performance. Our intellectual property rights could be infringed or we could infringe the intellectual property rights of others, and adverse events regarding licensed intellectual property could harm our business. We possess intellectual property that is important to our business. This intellectual property includes proprietary blending and roasting processes and recipes, ingredient formulas, trademarks, copyrights, patents, business processes, and other trade secrets. We cannot be certain that the legal steps taken to protect our rights will be sufficient or that others will not infringe or misappropriate our rights. In addition, some of our production processes are not proprietary, and competitors may be able to duplicate them, which could harm our competitive position. If we fail to adequately protect our intellectual property rights, or if changes in laws diminish or remove the current legal protections available to them, the competitiveness of our products may be eroded and our business could suffer. We and third parties, including competitors, could come into conflict over intellectual property rights, resulting in disruptive and expensive litigation. If we are unable to protect our intellectual property rights, our brands, products, and business could be harmed. We also license various intellectual property rights from third parties and license certain intellectual property rights to third parties. Adverse events affecting those third parties or their products could also negatively impact our brands. In some countries, third parties own certain intellectual property that we own in other countries. For example, the Dr Pepper trademark and formula is owned by Coca-Cola in some countries outside North America. Adverse events affecting those third parties or their products could also negatively impact our brands. 60 Table of Contents Failure to attract, retain, develop and motivate a highly skilled and diverse workforce, or failure to effectively manage changes in our workforce could significantly impact our operations. The labor market has experienced and may continue to experience labor shortages, inflation in labor costs and increased employee turnover, which has impacted and may continue to impact our ability to attract and retain a highly skilled and diverse workforce. Competition in the labor market for qualified employees has increased alongside current and prospective employees’ changing expectations for compensation, benefits, and flexible work models. Unplanned turnover or failure to develop and implement succession plans for senior management and other key personnel could deplete our institutional knowledge base and erode our competitiveness. Failure to attract, retain, develop, and motivate a highly skilled and diverse workforce, including employees with specialized capabilities could impair our product quality, innovation, reputation and operations. We may not be able to renew collective bargaining agreements on satisfactory terms, or we could experience union activity, including new unionization, labor disputes, or work stoppages. Many of our employees that are involved in the manufacturing or distribution of our products are covered by collective bargaining agreements. Additional employees have sought and may continue to seek to be covered by collective bargaining agreements, which may be facilitated by changing labor laws and regulations. The terms and duration of these agreements vary by country and by the specific agreement. While some collective bargaining agreements may have terms of several years, others have shorter durations, and in certain jurisdictions, particular provisions may continue to apply even after expiration until a new agreement is reached. We may not be able to renew collective bargaining agreements on satisfactory terms or at all. This could result in labor disputes, strikes, or work stoppages, which could impair our ability to manufacture and distribute our products and result in a substantial loss of sales. The terms of new, existing, renewed, or expanded agreements could also significantly increase our costs or negatively affect our ability to increase operational efficiency. In addition, we have works councils in place in certain jurisdictions, and certain employment-related decisions affecting all or certain groups of employees may be implemented only with the relevant works council’s consent or after consultation with it. If we fail to obtain such consent or complete required consultation, we may be unable to implement certain changes in a timely manner or at all, which could increase our costs or disrupt our operations. Increases in our cost of employee benefits in the future could reduce our profitability. Our profitability is substantially affected by costs for employee health care, pension and other retirement programs and other benefits. In recent years, these costs have increased significantly due to factors such as increases in health care costs and changes to labor and retirement regulations. We sponsor defined benefit person and other post-employment benefit plans in certain jurisdictions outside the United States. The funded status and cost of these plans are sensitive to changes in interest rates and to the market value of plan assets, which can cause our net periodic benefit costs and required cash contributions to fluctuate significantly from period to period. The amount and timing of these contributions are subject to minimum funding requirements that vary by jurisdiction and that, in certain cases, are determined by trustees or other bodies acting independently of us, and in certain jurisdictions we could remain responsible for funding any future plan deficits. These factors will continue to put pressure on our business and financial performance. There can be no assurance that we will succeed in limiting future cost increases and continued upward cost pressure could have a material adverse effect on our business and financial performance. A significant interruption at one of our production facilities could disrupt our supply of the affected products. We have consolidated production capacity for certain products into a limited number of sites, and in some cases, a single site. A significant interruption at any such facility could disrupt our ability to manufacture or distribute the affected products and, for products that are made or roasted to order or held in limited inventory, could affect our sales almost immediately. Certain of our facilities are also located in areas subject to earthquakes or other natural hazards, which could amplify the impact of any such interruption. Because of the specialization of our manufacturing facilities, resuming operations at, or reconstructing, an affected facility may take an extended period of time and require significant capital expenditures. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more than existing facilities, or may take a significant time to start production, each of which could negatively affect our business and financial performance. 61 Table of Contents Our efforts to secure an adequate supply of quality or sustainable coffee may be unsuccessful. We are dependent on the availability of an adequate supply of green coffee, including Arabica and Robusta green coffee, at the required volumes and quality levels from our coffee suppliers, traders, exporters, cooperatives, and growers, as well as on the availability of an adequate supply of tea. We also seek to source green coffee and tea responsibly, relying both on third-party sustainability standards or certifications and on our own human rights and environmental due diligence processes across our supply chain. We may be unable to secure green coffee and tea of the quality, in the volumes, or with the sustainability certifications we require, and any failure to do so could disrupt our supply, increase our costs, or adversely affect our ability to meet customer demand. Certain of our offerings are particularly dependent on a continued supply of premium Arabica green coffee, including single-origin coffees sourced principally from Central and South America, which cannot be readily substituted with green coffee from other origins. As a result, disruptions affecting these sourcing regions, or our inability to obtain coffee of comparable quality or origin, could disproportionately affect these offerings. In addition, evolving sustainability-related regulations may affect our ability to source coffee and tea. For example, the EUDR, which is being phased in and remains subject to ongoing implementation developments and guidance, would restrict companies from placing products on, or exporting them from, the European Union unless they conduct extensive diligence on the value chain to ensure that the products do not result from recent deforestation, forest degradation or breaches of local laws, and they have a relevant due diligence statement confirming such compliance. The scope of products subject to the EUDR may also expand over time, including through implementing or delegated measures that bring additional coffee or other products within its scope. Compliance with the EUDR and similar regulations in other jurisdictions may increase our costs and administrative burden, require enhanced traceability and diligence across our supply chain and restrict the sources from which we can obtain coffee, and any failure to comply could result in penalties, loss of market access or reputational harm, any of which could have a material adverse effect on our business. If we are unable to manage our inventory and forecasting systems effectively, our business, financial condition, or results of operations could be adversely affected. We rely on our inventory management and forecasting systems to forecast demand, fulfill customer orders in a timely manner and operate our supply chain efficiently. Accurate demand forecasts are necessary to avoid losing sales of popular products and to avoid producing excess inventory that we are unable to sell without discounting. A failure to forecast demand accurately or to manage these systems effectively could impair our ability to fulfill customer orders efficiently and expose us to penalties, particularly in our consumer-packaged goods business, under certain of our customer arrangements for failing to meet specified delivery requirements, which could adversely affect our product sales and operating results. RISKS RELATED TO OUR FINANCIAL PERFORMANCE We negotiate with our suppliers to optimize our terms and conditions, including payment terms, and reductions in our payment terms with our suppliers could adversely affect our liquidity. We negotiate with our suppliers to optimize our terms and conditions, which includes the consideration of payment terms. 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. The length of our payment terms has been reduced in recent periods and may continue to be reduced, including as a result of regulatory developments to regulate payment terms, a supplier being replaced, renegotiation of a supplier's contract during the procurement process, through efforts to increase the overall pool of potential suppliers for selection, or in order to receive favorable pricing or other terms during commercial negotiations. Reductions in our payment terms have negatively affected, and could continue to negatively affect, our liquidity and our ability to maximize our working capital. Reduced payment terms have contributed to, and could continue to contribute to, our need to utilize various financing arrangements for short-term liquidity. We also rely on supply chain financing and similar arrangements with respect to certain of our payables. If these arrangements become unavailable or more costly, are scaled back, or are reclassified, or if related regulatory requirements change, our liquidity and working capital could be adversely affected. 62 Table of Contents An impairment of the value of our goodwill and other indefinite lived intangible assets could have a material adverse effect on our financial statements. As of June 30, 2026, we had $88 billion of total assets, of which approximately $30 billion were goodwill and approximately $38 billion were intangible assets. Intangible assets include both definite and indefinite lived intangible assets in connection with brands, trade names, acquired technology, customer relationships, contractual arrangements, and distribution rights. We conduct impairment tests on goodwill and all indefinite lived intangible assets annually, as of October 1, or more frequently if circumstances indicate that all or a portion of the carrying amount of an asset may not be recoverable. A portion of our goodwill and intangible assets was recognized in connection with the Acquisition. If we do not realize the anticipated benefits or synergies of the Acquisition, or if the performance of the acquired businesses falls short of the expectations reflected in our forecasts, the recoverable amount of this goodwill could decline, increasing the risk of a material impairment charge. In addition, definite lived intangible assets, property, plant, and equipment, and equity method investments are evaluated for impairment or accelerated depreciation as circumstances indicate. The impairment tests require us to make an estimate of the fair value of our reporting units and other intangible assets. We have in the past recorded impairments, including during the year ended December 31, 2025, and could do so again as a result of changes in assumptions, estimates or circumstances, some of which are beyond our control. Factors which could result in an impairment include changes in our financial and operating outlook and changes in our discount rates, which could change due to factors such as movement in risk-free interest rates, changes in general market interest rates and market beta volatility, and changes to management's view of forecasted risk, among others. Since a number of factors may influence determinations of fair value of intangible assets, we are unable to predict whether impairments of goodwill or other indefinite lived intangibles will occur in the future. Any such impairment would result in us recognizing a non-cash charge in our Consolidated Statements of Income, which could adversely affect our results of operations and our effective tax rate. RISKS RELATING TO OUR RELATIONSHIPS WITH THIRD PARTIES We depend on third-party bottling and distribution companies for a significant portion of our business. We license rights to third parties to bottle and distribute our products. A portion of our income from operations is generated from sales of beverage concentrates to third-party bottling companies that we do not own. Some of these bottlers are also our direct competitors, or also bottle and distribute products for our competitors. In addition, some of the finished products we manufacture are distributed by third parties. As independent companies, these bottlers and distributors may have the right to determine whether, and to what extent, they produce and distribute our products, our competitors' products and their own products. They may devote more resources to other products, prioritize their own products, or take other actions detrimental to our brands. In most cases, they are able to terminate their bottling and distribution arrangements with us without cause. In some cases, the license agreements include buy-out rights that allow us to exit for a fee, and we may have additional limited termination rights. The termination of any material license arrangement could adversely affect our business and financial performance, and any disputes could be costly and divert management attention. We may need to increase support for our brands in certain territories to maintain our route-to-market and may not be able to pass price increases through to third-party bottlers and distributors. Deteriorating economic conditions could negatively impact the financial viability of third-party bottlers. 63 Table of Contents Changes in the retail landscape or in sales to any key customer can adversely affect our business. The channels in which we sell our products, including retailers, grocery, mass merchandise, club, e-commerce, and other retail channels, are experiencing continued consolidation of ownership and purchasing power, resulting in large retailers or buying groups with increased purchasing power and leverage in negotiations, which impact our ability to compete. In particular, customer consolidation and the increasing prevalence of buying groups may heighten strategic pricing risk and make it more difficult for us to pass on cost increases to customers on a timely basis or in full. As customers increase their leverage through consolidation and the emergence of buying groups, there is greater downward pricing pressure on our products, and disagreements over pricing or trade terms with a major customer or buying group could lead it to reduce, suspend, or cease purchases of, or delist, our products, any of which may have a material adverse effect on our revenue and profitability. Retailers may seek lower prices from us, may demand increased marketing or promotional expenditures in support of their businesses, and may be more likely to use their distribution networks to introduce and develop private-label brands, any of which could negatively affect our profitability. In addition, our industry is being affected by rapid growth in discount retailers and in e-commerce retailers, including traditional retailers who are expanding their e-commerce capabilities, and our business will be adversely affected if we are unable to maintain and develop successful relationships with such retailers to secure appropriate shelf space or digital placement, execute promotional programs, or respond effectively to changes in customer requirements or consumer purchasing behavior. Changes in customer purchasing patterns, promotional activity, inventory levels, route-to-market arrangements or the timing of customer orders may cause our results to vary from period to period and may reduce the consistency of our operating results. Further, we must maintain mutually beneficial relationships with our key customers to compete effectively. In certain markets, particularly outside North America and Western Europe, we rely on third-party distributors to sell and distribute our products. Because these distributors control access to certain markets, if we are unable to maintain good relationships and acceptable trade terms with them, our ability to distribute and sell our products in those markets could be impaired. Any inability to resolve a significant dispute with any of our key customers, a change in the business condition (financial or otherwise) of any of our key customers, even if unrelated to us, a significant reduction in sales to any key customer, or the loss of any of our key customers may adversely affect our business. Failure to maintain strategic relationships with brand owners, operators and private label brands, including through licensing and distribution agreements, could adversely impact our future growth and business, potentially resulting in the termination of those agreements. We regularly enter into strategic relationships for the manufacturing, licensing, distribution, and sale of our products, including our single serve coffee formats and ready-to-drink offerings, with partner customers and brand owners, as well as with retailers for their private label brands. We also rely on licensing, distribution, and other commercial arrangements with third parties to access certain brands, products, channels, customers, or geographic markets. As our strategic partners are independent companies, they make their own business decisions, which may not align with our interests. If we are unable to provide an appropriate mix of incentives to our strategic partners through a combination of premium performance and service, pricing, and marketing and advertising support, or if these strategic partners are not satisfied with our technological or other development efforts, they may take actions that adversely impact us, including entering into agreements with competing contract manufacturers or vertically integrating to manufacture their own Keurig-compatible pods or other system formats or other competing single serve coffee products. Increasing competition among compatible manufacturers and moving to vertical integration may result in price compression, which could have an adverse effect on our gross margins. The loss of strategic partners could also adversely impact our future profitability and growth, awareness of our brewers, coffee systems and other offerings, our ability to attract additional brands or private label parties to do business with us or our ability to attract new consumers to buy our coffee products, including brewers. We also regularly enter into strategic relationships for the manufacturing and/or distribution of beverage products from partner brand owners, including in emerging or fast-growing segments in which we may not currently have a brand presence. If our partner brands terminate their agreements with us, it could negatively affect our revenues and results of operations. We also rely on franchisees and other independent operators of coffee stores under certain of our brands. Because these operators are independent businesses, the quality and consistency of the products and service they deliver are subject to factors beyond our control, and any failure by them to maintain our standards could harm the reputation of the associated brands. 64 Table of Contents Equity method investments are managed independently of us and may have different interests than we do. Their decisions could impact our financial performance. We regularly review our product portfolio and evaluate strategic transactions, such as equity method investments, generally to gain entry into categories where we do not participate or to expand our presence in areas where our participation is currently limited. The success of these transactions is dependent upon, among other things, our ability to realize the full extent of the expected returns and benefits as a result of the transaction, within the anticipated time frame, or at all. As these equity method investments are managed independently, we may be impacted by their business decisions or other actions, as they may have different interests than we do. We recognize a portion of our investees' financial results within our net income based upon our ownership interest, unless the investment agreement indicates an alternative allocation of earnings or losses. We also assess our equity method investments as and when required by U.S. GAAP to determine whether they are impaired and, if they are, we record appropriate impairment charges. Our equity method investees also perform similar recoverability and impairment tests, and we record our share of impairment charges recorded by them, if any, adjusted, as appropriate, for the impact of items such as basis differences, deferred taxes, and deferred gains. It is possible that we may be required to record significant impairment charges or our proportionate share of significant impairment charges recorded by equity method investees in the future and, if we do so, our net income could be materially adversely affected. The use of information technology by our third-party commercial partners and service providers exposes us to business disruptions or other negative impacts that could adversely affect us. We rely on third-party service providers, including cloud data service and other information technology service providers, suppliers, distributors, contractors, and other business partners, for certain areas of our business, including certain finance, accounting, and IT functions, workforce management, and payroll processing. Some of our commercial partners may also receive or store information provided by us or our users through their websites, including information entrusted to them by customers. Our users' data and customer information may be improperly accessed, used, or disclosed if these third-party commercial partners fail to adopt or adhere to adequate information security practices or fail to comply with their respective online policies, or in the event of a breach of our or their networks. If any of these third-party service providers or vendors do not perform effectively, or if we fail to adequately monitor their performance (including compliance with service level agreements or regulatory or legal requirements), we may experience business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches, or otherwise incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation, a negative impact on employee morale, or the loss of current or potential customers, all of which can adversely affect our business. These third parties are subject to similar risks as we are relating to cybersecurity, privacy violations, business interruption, and systems and employee failures, and are subject to legal, regulatory, and market risks of their own. We do not have control over their business operations or governance and compliance systems, practices and procedures, which increases our financial, legal, reputational, and operational risk. We have in the past, and may in the future, experience indirect impacts of events that take place at our third-party service providers and other business partners. If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or business partners fail to satisfactorily fulfill their commitments and responsibilities, our financial results could suffer. 65 Table of Contents We rely on the performance of a limited number of suppliers, manufacturers and order fulfillment companies for our brewers and coffee machines, beverage concentrates, and syrups. A small number of companies co-manufacture the vast majority of our brewers, and we rely on a limited number of third party manufacturers and appliance partners for certain of our coffee machines. Our manufacturers may not be able to scale or adapt their manufacturing operations to match increasing or changing consumer demand for our brewers and machines at competitive costs. If our manufacturers or appliance partners were to cease or interrupt production or otherwise fail to supply brewers or machines to us as agreed, we would be unable to obtain them for an indeterminate period of time, which could adversely affect our product sales and operating results. The majority of the distribution of our brewers, beverage concentrates, and syrups is handled by our appliance partners and third-party order fulfillment companies, as applicable. Our appliance partners, third-party manufacturers and order fulfillment companies are subject to disruption, including as a result of health epidemics, natural disasters, information technology failures, commercial or international trade disputes, governmental regulatory and enforcement actions, labor stoppages or strikes, financial issues, or otherwise. These issues could delay importation and increase the cost of products, delay the fulfillment of the brewers, beverage concentrates, and syrups to our customers or require us to locate alternative manufacturers or order fulfillment companies to avoid disruption, which could adversely affect our product sales and operating results. GENERAL RISK FACTORS Our financial results may be negatively impacted by unfavorable economic and geopolitical conditions. Changes in economic and financial conditions in North America, the European Union, or other geographies where we do business may negatively impact consumer confidence and consumer spending, which could result in a reduction in our sales volume and/or switching to lower price offerings. Similarly, disruptions in financial and credit markets worldwide have impacted and may impact our ability to manage normal commercial relationships with customers, suppliers, and creditors. These disruptions could have a negative impact on the ability of our customers to pay their obligations on time, the ability of our vendors to supply materials in a timely manner, or the risk of counterparty default, each of which could reduce our cash flow. We cannot predict how current or future economic conditions will affect our business partners, including financial institutions with whom we do business, and any negative impact on any of the foregoing may also have an adverse impact on our business. Increased volatility, further declines in the credit, equity, and foreign-currency markets of Europe, growing and emerging markets, and other markets where we operate, or geopolitical disruptions could cause delays in or cancellations of orders or have other negative impacts on our business operations. Disruptions in financial and credit markets could also have a negative effect on our ability to raise capital, including through the issuance of unsecured commercial paper or senior notes. In addition, declines in the securities and credit markets could affect our pension assets and obligations, which in turn could increase our funding requirements. Certain of these countries, such as Brazil, are particularly significant to our coffee business, and Brazil is a key source of green coffee for us. Economies in such markets can be subject to rapid and significant changes and are vulnerable to internal and external shocks, including potential domestic political uncertainty and changing investor sentiment due to monetary policy changes in developed countries, among other factors. In recent years, many of these economies, including Brazil, have undergone significant economic transitions and their respective governments have pursued economic reforms. Operating in emerging markets exposes us to risks relating to corrupt business environments, crime, a lack of law enforcement, inadequate upkeep of public infrastructure, local labor conditions and regulations, and financial risks such as illiquidity, currency convertibility and country default. These various factors could have a material adverse effect on our business, financial condition, or results of operations. 66 Table of Contents Unstable geopolitical conditions or events in certain markets, including civil unrest, acts of war, terrorism, or governmental changes, or changes in international relations could undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products. Product boycotts resulting from political activism could also reduce demand for our products. Restrictions on business activities, including restrictions on our ability to transfer earnings or capital across borders, price controls, limitations on profits, and import authorization requirements, which have been or may be imposed or expanded as a result of political and economic instability, deterioration of economic relations between countries, such as changes in or terminations of existing trade agreements, or the imposition of tariffs (including current or future U.S. tariffs imposed on or threatened to be imposed on Canada, Mexico, the European Union, China, Brazil and other countries, and any retaliatory actions taken by such countries), or otherwise, have and could continue to impact our profitability or otherwise have an adverse effect on our business. We have operations in Russia, Ukraine, and the Middle East, and due to the impact of the ongoing conflicts in those regions on the global economy, we have experienced and may continue to experience increased operational complexity; negative impacts on the value of our business; supply chain constraints; inflation in input costs, logistics, manufacturing, and labor costs; volatility in fuel and commodity prices; fluctuations in foreign exchange rates and interest rates; and increased risk of property damage, loss of inventory, business disruption, and expropriation, any of which could adversely impact our results of operations. National and international laws and regulations could adversely affect our business. We are subject to a variety of national, state, and local laws and regulations in the countries in which we conduct business. These laws and regulations apply to many aspects of our business, including the manufacture, safety, sourcing, packaging, labeling, storing, transportation, marketing, advertising, distribution, pricing, and sale of our products. Other laws and regulations that may impact our business relate to competition and antitrust, the environment, relations with distributors and retailers, employment, privacy, health, and trade practices (including product and marketing claims). Our international business will also expose us to economic factors, regulatory requirements, increasing competition, and other risks associated with doing business in foreign countries, including import or export restrictions and tariffs. Our international business is also subject to U.S. laws, regulations, and policies, including anti-corruption and export laws and regulations. These include anti-corruption and anti-bribery laws, including the U.S. Foreign Corrupt Practices Act and other laws with extraterritorial application, as well as U.S. economic sanctions, export control, anti-boycott, customs, import, and trade laws and regulations. Certain U.S. laws and enforcement authorities, including laws intended to prohibit improper payments or benefits to foreign government officials or to persons acting on behalf of foreign governments, may apply to conduct occurring outside the United States and to interactions with state-owned or state-controlled enterprises, public international organizations, political parties, candidates for political office, and other persons that may be treated as government officials under applicable law. Changes in these laws, or in the interpretation or enforcement of these laws, including the adoption or expansion of laws addressing foreign bribery, extortion, sanctions, forced labor, supply chain diligence, export controls, or national security, could increase our compliance costs and the risk of enforcement action. 67 Table of Contents Emerging laws and regulations governing the development and use of artificial intelligence, such as the European Union’s Artificial Intelligence Act, may impose new compliance, governance, and transparency obligations, restrict certain uses of these technologies, or increase our costs. We are also subject to scrutiny by various government agencies regarding antitrust and competition laws and regulations in the U.S. and internationally, including in connection with proposed or implemented business combinations, acquisitions, investments, partnerships, commercial agreements and business practices. Any significant change in laws or regulations or their interpretation, in any of these jurisdictions, or the introduction of higher standards or more stringent laws or regulations, could result in increased compliance costs or capital expenditures or significant challenges to our ability to continue to produce and sell products that generate a significant portion of our sales and profits. Certain jurisdictions in which our products are sold have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution, advertising or sale of certain of our products, particularly our beverages, as a result of certain ingredients (including sweeteners or alcohol) or packaging and packaging materials, which could increase the cost of certain of our products, reduce overall consumption of our products or lead to negative publicity, resulting in an adverse effect on our business and financial performance. Increasing governmental and societal attention to environmental, social, and governance matters has resulted and could continue to result in new laws or regulatory requirements, including new or expanded disclosure requirements that are expected to continue to expand the nature, scope, and complexity of matters on which we are required to report. For example, in the European Union, the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, which are being phased in and remain subject to ongoing legislative change, impose or would impose sustainability reporting, assurance, and value-chain environmental and human rights due diligence requirements on in-scope companies. In addition, the entry into new markets or categories has resulted in and could continue to result in our business being subject to additional regulations resulting in higher compliance costs. Violations of laws could damage our reputation and/or result in criminal, civil, or administrative actions with substantial financial penalties and operational limitations. Litigation or legal proceedings could expose us to significant liabilities and damage our reputation. We have been, and in the future may be, a party to various litigation, claims, legal (including regulatory) proceedings, inquiries, and investigations that may include employment, tort, contract, real estate, antitrust, environmental, recycling/sustainability, intellectual property, commercial, securities, false advertising, packaging, product labeling, consumer protection, discriminatory pricing, privacy, tax, insurance, and other claims. We have been, and in the future may be, a defendant in class action litigation, including litigation regarding employment practices, product labeling, including under California’s "Proposition 65,” public statements and disclosures under securities laws, antitrust, advertising, consumer protection, and wage and hour laws. Plaintiffs in class action litigation may seek to recover amounts that are large and may be indeterminable for some period of time. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses, and we establish an accrual as appropriate based upon assessments and estimates in accordance with our accounting policies. We base our assessments, estimates and disclosures on the information available to us at the time and rely on legal and management judgment. Actual outcomes or losses may differ materially from assessments and estimates. Costs to defend litigation claims and legal proceedings and the cost and any required actions arising out of actual settlements, judgments or resolutions of these claims and legal proceedings may negatively affect our business and financial performance. We and our subsidiaries are named as defendants in certain litigations, the outcomes of which are inherently uncertain, and we cannot predict the timing, outcome or ultimate cost of any such matters. We intend to vigorously defend against these claims, but we cannot assure you that we will be successful or that additional similar claims will not arise in the future. Any adverse publicity resulting from allegations made in litigation claims or legal proceedings may also adversely affect our reputation, which in turn could adversely affect our results of operations. Increased concerns related to the use or disposal of plastics or other packaging materials can adversely affect our business and financial performance. We rely on diverse packaging solutions to safely deliver products to our customers and consumers. Concern has grown with respect to the use and disposal of plastics and other packaging materials and their potential impact on health and the environment, which may contribute to actual or threatened legal action against us, negative consumer perception of our products, additional government regulation, fines, reputational harm or new or increased taxes on our products. In particular, single-serve coffee formats have attracted heightened regulatory and consumer scrutiny due to the availability of recycling facilities and the complexity of recycling for single serve packaging materials. 68 Table of Contents Various jurisdictions in which our products are sold have imposed or are considering imposing laws, regulations, or policies intended to encourage the use of sustainable packaging, promote circular economy principles, reduce waste, or increase recycling rates, or to restrict the sale of products with packaging that does not meet certain end-of-life criteria. These laws, regulations, and policies vary in form and scope between jurisdictions and include extended producer responsibility policies, plastic or packaging taxes, restrictions on certain products and materials, requirements for bottle caps to be tethered to bottles, restrictions or bans on the use of certain types of packaging, including single-use plastics and packaging containing PFAS, or other chemicals of concern, restrictions on labeling related to recyclability including harmonized EU-wide labeling requirements, requirements for minimum recycled content in plastic packaging, and requirements to charge deposit fees. For example, the PPWR establishes a harmonized EU-wide framework governing entire life cycle of packaging, from design and production to reuse, recycling, and waste management. The PPWR explicitly classifies coffee pods, discs, and capsules as packaging and introduces requirements that will directly affect single serve coffee formats, including mandatory compostability requirements for permeable single serve coffee formats by February 2028, requirements that all packaging be designed for material recycling by January 2030, minimum post-consumer recycled content targets for plastic packaging scaling from 2030 to 2040, and mandatory recyclability “at scale” by January 2035. In addition, individual EU Member States may impose additional requirements, including mandating that non-permeable coffee capsules composed of materials other than metal also be compostable. Although our research and development teams are developing innovative solutions working with industry partners and waste management providers to develop recyclable and otherwise circular materials and reduce packaging, there can be no assurance that our efforts to transition the packaging of our products to comply with evolving regulatory requirements, including those under the PPWR, will be successful or achieved within the required timelines. Additionally, not all packaging is recovered or handled as designed, whether due to lack of infrastructure, improper disposal or otherwise, and certain of our packaging is not currently recyclable, compostable, biodegradable or reusable. Packaging waste not properly disposed of that displays one or more of our brands has in the past resulted in and could continue to result in negative publicity, litigation, government investigations or other action or reduced consumer demand for our products, adversely affecting our financial performance. These laws and regulations have in the past and could continue to increase the cost of our products, impact demand for our products, result in negative publicity, and require us and our business partners to increase capital expenditures to comply, which can adversely affect our business and financial performance. Changes in legislation, including the PPWR and similar regulations in other jurisdictions, could restrict the sale of our products that do not meet applicable recyclability or compostability standards, which could reduce our sales and profits. Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may inhibit sales of affected products. Various jurisdictions have adopted and may seek to adopt bans or restrictions on the use of certain ingredients or substances in products, as well as significant additional product labeling or warning requirements or limitations on the marketing or sale of our products because of what they contain or allegations that they cause adverse health effects. For example, under one such law in California, known as Proposition 65, if the state has determined that a substance causes cancer or harms human reproduction or development, a warning must be provided for any product sold in the state that exposes consumers to that substance, unless the exposure falls under an established safe harbor level or another exemption is applicable. If we were required to add Proposition 65 warnings on the labels of one or more of our products produced for sale in California, the resulting consumer reaction to the warnings and potential adverse publicity could negatively affect our sales both in California and in other markets. Outside the United States, we are subject to a range of evolving labeling, warning, and marketing requirements, including front-of-pack nutritional labeling, ingredient and origin disclosure, and health-related warning or marketing restrictions, which differ across the jurisdictions in which we operate and may increase our costs, require packaging or formulation changes, or affect consumer perception of our products. Regulators have also expressed concerns about the processing and use of particular ingredients or additives in beverage products. The imposition or proposed imposition of bans or restrictions on the use of certain ingredients or substances in products, or of additional limitations on the marketing or sale of our products, has in the past and could continue to reduce overall consumption of our products, lead to negative publicity or leave consumers with the perception that our products do not meet their health and wellness needs, resulting in an adverse effect on our business and financial performance. 69 Table of Contents Our use of information technology and third-party service providers exposes us to cybersecurity breaches and other business disruptions that could adversely affect us. We, and our third-party service providers, use information technology to support our global business processes and activities, including supporting critical business operations; communicating with our suppliers, customers, and employees; maintaining financial information and effective accounting processes and financial and disclosure controls; engaging in mergers and acquisitions and other corporate transactions; conducting research and development activities; meeting regulatory, legal, and tax requirements; and executing various digital marketing and consumer promotion activities. Global shared service centers managed by third parties provide an increasing amount of services to conduct our business, including a number of accounting, internal control, procurement, information technology, human resources, and computing functions. Continuity of business applications and services has been, and may in the future be, disrupted by events such as infection by viruses or malware. In addition, our continuity of business applications and operations has been, and may in the future be, disrupted by other issues, including cybersecurity attacks (which may include social engineering, business email compromise, cyber extortion, denial of service, attempts to exploit vulnerabilities, hacking, website defacement, theft of passwords and other credentials, or unauthorized use of computing resources for digital currency mining); issues with or errors in systems' maintenance or security; migration of applications to the cloud; power outages; hardware or software failures; telecommunication failures; natural disasters; terrorist attacks; unintentional or malicious actions of employees or contractors; and fires and other catastrophic occurrences and other cyber incidents. Like most major corporations, we are regularly subject to cyberattacks and other cyber incidents, including the types of attacks and incidents described above. If we do not allocate and effectively manage the resources necessary to continue building and maintaining our information technology infrastructure, or if we fail to identify in a timely manner or appropriately respond to cyberattacks or other cyber incidents, including with respect to third-party service providers, our business has been and can continue to be adversely affected, which has resulted in and can continue to result in some or all of the following: business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data (including confidential information that we process and maintain about our employees or consumers through our e-commerce platform) through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation or a negative impact on employee morale or the loss of current or potential customers, all of which can adversely affect our business. In addition, these risks also exist in acquired businesses, joint ventures, or companies we invest in or partner with that use separate information systems or that have not yet been fully integrated into our information systems. We also depend on a limited number of core enterprise systems, including enterprise resource planning platforms that support key business functions across much of our operations and are managed in significant part through third parties. Because of the integrated nature of these platforms, a significant disruption, outage, or failure could affect multiple business processes simultaneously and result in a broad interruption of our operations. Similar risks exist with respect to our third-party service providers, including cloud data service and other information technology service providers, suppliers, distributors, contractors, and other business partners, that we rely upon for certain areas of our business, including payroll processing, supply chain, health and benefit plan administration, and certain finance and accounting functions. When risks such as these materialize, the need for us to coordinate with various third-party service providers, including with respect to timely notification and access to personnel and information concerning an incident, and for third-party service providers to coordinate amongst themselves might make it more challenging to resolve the related issues. As a result, we are subject to the risk that the activities associated with our third-party service providers can adversely affect our business even if the attack or breach does not directly impact our systems or information. Although the cybersecurity incidents that we have experienced, as well as those reported to us by our third-party service providers, have not had a material effect on our business, financial condition, or results of operations, such incidents could have a material adverse effect on us in the future. Security measures, including network security, backup and disaster recovery, upgrading systems and networks, enhanced training, and other security measures to protect our systems and data, cannot guarantee that we will be successful in preventing or responding to all cyber incidents, systems disruptions, system compromises, or misuses of data. In addition, due to the constantly evolving nature of security threats, we cannot predict the form and impact of any future incident, and the cost and operational expense of implementing, maintaining, and enhancing protective measures to guard against increasingly complex and sophisticated cyber threats could increase significantly. Although we maintain insurance coverage that may, subject to policy terms and conditions, cover certain aspects of a breach or disruption, such insurance coverage may be insufficient to cover all losses. 70 Table of Contents Failure to comply with personal data protection and privacy laws can adversely affect our business. We are subject to a variety of continuously evolving and developing laws and regulations in numerous jurisdictions regarding privacy, data protection, cybersecurity and data security, including those related to the collection, storage, handling, use, disclosure, transfer, and security and other processing of personal data. For example, the European Union has adopted the General Data Protection Regulation, which imposes requirements regarding the processing of personal data, including its use, protection, and transfer and the ability of individuals whose data is stored to correct or delete such data, and which confers a private right of action on certain individuals and associations. As a result of our operations in California, we are also subject to the California Consumer Privacy Act, as amended by the California Privacy Rights Act. Privacy and data protection laws may be interpreted and applied differently from one jurisdiction to another and may create inconsistent or conflicting requirements. In addition, new legislation in this area may be enacted in other jurisdictions at any time. The increasing adoption of artificial intelligence technologies has led, and may continue to lead, regulators and data protection authorities to adopt new or evolving interpretations of privacy, data protection, cybersecurity and data security laws, including with respect to notices, consents, opt-outs, automated decision-making, profiling and other processing of personal data. Our efforts to comply with privacy and data protection laws may impose significant costs and challenges that are likely to increase over time, and we could experience substantial penalties, litigation, claims, legal or regulatory proceedings, inquiries or investigations, damage to our reputation, and fines or penalties related to violation of existing or future data privacy laws and regulations. Further, as a company that accepts debit and credit cards for payment in our retail and e-commerce operations, as well as other digital payment tools, we are subject to industry data protection standards and protocols such as the Payment Card Industry Data Security Standard. In certain circumstances, our contracts with payment card processors and payment card networks generally require us to adhere to payment card network rules which could make us liable to payment card issuers and others if information in connection with payment cards and payment card transactions that we process is compromised, which liabilities could be substantial. Climate change or related legislation could adversely affect our business. Climate change may increase the frequency or severity of natural disasters and other extreme weather conditions, which could pose physical risks to our facilities, impair our production capabilities, disrupt our supply chain, or impact demand for our products. Climate change is already affecting the agricultural sector, and disruptions to crop growing conditions are expected to increase with extreme weather events, increasing temperatures, and changing water availability. Disruptions to crop growing conditions can cause changes in geographical ranges of crops, as well as weeds, diseases, and pests that affect those crops. These impacts have in the past limited and may in the future limit availability or increase the price volatility of key agricultural commodities, such as coffee, corn, citrus, cocoa, and apples, which are important sources of ingredients for our products. Concern over climate change, including global warming, has led to legislative and regulatory initiatives limiting greenhouse gas emissions and increasing disclosure obligations. Increased compliance costs due to legal or regulatory requirements, together with initiatives to meet our sustainability goals, may result in higher costs associated with, or cause disruptions in, the manufacture and distribution of our products. As a result, the effects of climate change and legal or regulatory initiatives to address climate change could have an adverse impact on our business and results of operations. In addition, any failure to achieve or properly report on our goals with respect to reducing our impact on the environment or perception of a failure to act responsibly with respect to the environment or to effectively respond to regulatory requirements concerning climate change can lead to adverse publicity, which could result in reduced demand for our products, damage to our reputation or increase the risk of litigation. Any of the foregoing can adversely affect our business. 71 Table of Contents Water scarcity and quality could adversely affect our business. Water is the primary ingredient in many of our products and is used across our operations. The competition for water among domestic, agricultural, and manufacturing users is increasing in the countries where we operate. Even where water is widely available, water purification and waste treatment infrastructure limitations and regulations could increase costs or constrain our operations. As water becomes scarcer, the quality of the water deteriorates, including due to the effects of climate change, or requirements on water purification or filtration increase, we may experience increased production costs; manufacturing constraints; supply chain disruption; higher compliance costs; increased capital expenditures; the interruption or cessation of operations at, or relocation of, our facilities or the facilities of our business partners; challenges to efficiency gains due to higher water usage in compliance with more stringent water quality standards; failure to achieve our water efficiency and conservation goals; perception of our failure to act responsibly with respect to water use or to effectively respond to legal or regulatory requirements concerning water scarcity and quality; or damage to our reputation, any of which can adversely affect our business. Fluctuations in our effective tax rate may result in volatility in our financial results. We are subject to income taxes and non-income-based taxes in many U.S. and foreign jurisdictions. Tax legislation may be enacted, domestically or abroad, that impacts our effective tax rate. Changes in tax laws, regulations, related interpretations, and tax accounting standards in the U.S. and various foreign jurisdictions in which we operate may impact our effective tax rate and adversely affect our financial results. For example, the global minimum tax rules under the OECD/G20 Inclusive Framework, also referred to as Pillar Two, which establish a minimum effective tax rate of 15% for large multinational groups and have been adopted by the European Union and implemented by the Netherlands and other jurisdictions, may increase our tax burden and the complexity and cost of our tax compliance. In addition, our effective tax rate in any given period may be significantly impacted by changes in the mix and level of earnings or by changes to existing accounting rules, tax regulations, or interpretations of existing law. Significant judgment is required in determining our annual income tax expense and in evaluating our tax positions. Although we believe our tax estimates, including intercompany transfer pricing policies, are reasonable, the final determination of tax audits and any related disputes could be materially different from our historical income tax provisions, estimates, and accruals. The results of audits or related disputes could have a material adverse effect on our financial statements for the period or periods for which the applicable final determinations are made and for periods for which the statute of limitations is open. Fluctuations in foreign currency exchange rates relative to the U.S. dollar could have a material adverse effect on our financial results. Because our consolidated financial statements are presented in U.S. dollars, the financial statements of our subsidiaries outside the United States, where the functional currency is other than the U.S. dollar, are translated into U.S. dollars. A significant portion of our revenue and operations is denominated in euros and other non-U.S. currencies, and as a result our reported results are materially affected by fluctuations in the value of those currencies against the U.S. dollar. In addition, we purchase green coffee and certain other commodities primarily in U.S. dollars while generating a substantial portion of our revenue in other currencies, and this mismatch can adversely affect our costs and margins when the U.S. dollar strengthens against those currencies. Given our global operations, we also pay for the ingredients, raw materials and commodities used in our business in numerous currencies. Although we use hedging arrangements to manage certain currency exposures, including exposures arising from commercial transactions, the purchase of commodities, recognized monetary assets and liabilities, debt instruments and net investments in foreign operations, these arrangements may not fully protect us against adverse currency movements. Fluctuations in exchange rates, including as a result of inflation, central bank monetary policies, currency controls or other currency exchange restrictions or geopolitical instability have had, and could continue to have, an adverse impact on our financial performance. RISKS RELATED TO THE JDE PEET'S ACQUISITION The market price of our common stock may decline if we do not achieve the expected benefits and synergies of the JDE Peet’s Acquisition. The market price of our common stock may decline if we do not achieve the expected benefits and synergies of the JDE Peet's Acquisition as rapidly or to the extent anticipated by management or financial or industry analysts, or if the effect of the JDE Peet's Acquisition on our financial position, results of operations, or cash flows is not consistent with the expectations of management or financial or industry analysts. 72 Table of Contents Legal proceedings in connection with the JDE Peet's Acquisition could expose us to substantial costs. Lawsuits may be brought against us, JDE Peet's, and/or the directors and officers of either company in connection with the JDE Peet’s Acquisition. Securities class action and derivative lawsuits are often brought against public companies that are party to such transactions. Even if such a lawsuit is unsuccessful, defending against these claims can result in substantial costs, and an adverse judgment could result in monetary damages. Both defense costs and any adverse judgment could have a negative impact on our liquidity, financial condition, and results of operations. The JDE Peet's Acquisition may also be subject to investigations, enforcement actions, or other proceedings by governmental or regulatory authorities in the jurisdictions in which we and JDE Peet's operate. Although the JDE Peet's Acquisition has been completed, such authorities may continue to scrutinize the transaction or the conduct of the combined business, impose fines or penalties, or require other remedies, any of which could result in substantial costs or otherwise materially and adversely affect our business, financial condition, and results of operations. If our due diligence investigation of JDE Peet's was inadequate, or if unexpected risks related to JDE Peet's and its business materialize, it could have a material adverse effect on our business. We conducted a due diligence review of JDE Peet's in connection with the JDE Peet's Acquisition. However, we cannot be sure that our diligence identified all material issues that may have been present within JDE Peet's or its business, that it was possible to uncover all material issues through a customary amount of due diligence, or that factors outside of JDE Peet's and its business, and outside of its control, will not arise. Because we have completed the JDE Peet's Acquisition, any liabilities, deficiencies, or other issues that were not identified in our due diligence, or that arise following the closing, are now our responsibility and could require us to incur unanticipated costs or charges. If any such issues materialize, they could have a material adverse effect on our business, financial condition, and results of operations. The JDE Peet's Acquisition exposes us to inherent risks in JDE Peet's business and those geographies where JDE Peet's currently operates, which could adversely affect our business. The JDE Peet’s Acquisition represents a significant transformation of our coffee business and has expanded our operations to those geographies where JDE Peet’s operates, including Russia, which represented 6% of consolidated revenue in both 2025 and 2024 and 2% and 1% of total assets for JDE Peet’s in 2025 and 2024, respectively. As a result of the JDE Peet’s Acquisition, we are subject to a variety of risks associated with JDE Peet’s business, in addition to those we already face in our current business. These risks include changes in consumer preferences, volatility in the prices of raw materials, consumer perceptions of the brands, competition in the retail market place, additional legal and regulatory regimes, and other risks. In addition, we are exposed to risks inherent in operating in a significant number of geographies in which we have not operated or have been less present in the past, including countries that are experiencing significant unstable geopolitical conditions, such as Russia and Ukraine. These risks include, among others: •the difficulty of managing and staffing foreign offices; •the increased travel, infrastructure, legal, and compliance costs associated with new international locations; •tariffs, sanctions, such as those imposed in response to the Russia and Ukraine conflict, trade barriers, trade disputes, and other regulatory or contractual limitations on our ability to operate in new foreign markets; •exposure to foreign currency exchange risk; •the risk of seizure of our assets in certain countries; •adaptation to different business cultures, languages, and market structures; and •military conflicts, such as the Russia and Ukraine conflict, and other geopolitical issues. As we expand our business, our success will depend, in large part, on our ability to anticipate and effectively manage these risks and other risks associated with growing international operations. We cannot predict how such conditions may affect our business, or those with whom we do business, and any ongoing or new conflicts could adversely impact our business. 73 Table of Contents Our acquisition of JDE Peet’s exposes us to significant geopolitical, regulatory, and operational risks in Russia, including the potential loss of those operations, that could adversely affect our business. Following our acquisition of JDE Peet’s, we are exposed to substantial geopolitical, sanctions, legal, operational, financial and reputational risks relating to its manufacturing operations and assets in Russia. These risks could result in the loss of our investments in Russia, significant disruption to the acquired business operations in Russia and adverse effects on our business, results of operations and financial condition. JDE Peet’s Russian operations represented approximately 6% of JDE Peet’s consolidated revenue in both 2025 and 2024 and approximately 2% and 1% of JDE Peet’s total assets in 2025 and 2024, respectively. The ongoing conflict in Ukraine and related international responses, including sanctions, export controls, financial restrictions and other measures targeting Russia, Russian entities and certain sectors of the Russian economy, as well as countersanctions measures adopted by the Russian government, have created uncertainty for companies operating in Russia. These measures, and any future changes to them, could be imposed or expanded at any time and could affect our ability to source materials, obtain equipment or services, make or receive payments, engage with customers or suppliers, access financial institutions, or otherwise conduct business in Russia. The legal and regulatory environment affecting foreign-owned businesses in Russia remains dynamic and unpredictable and may continue to change, potentially on short notice. New or expanded sanctions, export controls, Russian countermeasures or other restrictions could require us to modify, reduce, suspend or exit some or all of our Russian operations, potentially at substantial cost. In addition, the Russian government has adopted, and may continue to adopt, laws, regulations or administrative measures targeting foreign-owned businesses, including restrictions on transfers of funds, limitations on the payment of dividends, mandatory approvals for transactions involving foreign investors, the imposition of temporary external administration, and other measures that can in practice result in the seizure, nationalization or expropriation of assets. Any such measures could substantially impair, or result in the complete loss of, our control over and the value of the JDE Peet’s business in Russia. We may be unable to sell, transfer or otherwise exit our Russian operations on commercially reasonable terms, or at all, and any such disposition, or any seizure, nationalization or expropriation, could occur at a substantial discount to, or result in the complete write-off of, carrying value, resulting in significant losses, impairments, write-downs or restructuring charges. Compliance with these requirements may be complex, particularly as we integrate the acquired business into our compliance, governance and control frameworks. Any actual or alleged failure to comply with applicable sanctions, export controls, anti-corruption or other laws or regulations, as well as with any countersanctions measures adopted by the Russian government, could result in investigations, substantial civil or criminal penalties, business restrictions, litigation, reputational harm or other adverse consequences. JDE Peet’s Russian operations may also be affected by supply-chain disruption, logistics constraints, currency volatility, inflation, reduced demand, limitations on access to technology, software, equipment or professional services, and other operating challenges. In addition, our continued ownership of operations in Russia may subject us to heightened scrutiny and criticism from investors, customers, employees, business partners, governments, non-governmental organizations and other stakeholders, who may regard any continued Russian operations as inconsistent with their expectations regardless of scope, resulting in reputational harm, loss of customers, reduced access to capital, or shareholder activism and litigation. Any of the foregoing risks, individually or in the aggregate, could result in a loss of assets, significant business disruption, reduced revenues, increased costs, substantial impairment charges, reduced liquidity and could have an adverse effect on our business, results of operations, cash flows and financial condition. We may not successfully integrate JDE Peet's into our business, or such integration may be more difficult, time-consuming, or costly than expected, which could adversely affect our business. The combination of two businesses is a complex, costly, and time-consuming process. As a result, we will be required to devote significant management attention and resources to combining JDE Peet's operations, processes, policies, and systems with our business. The failure to meet the challenges involved in combining the businesses and to realize the anticipated benefits of the JDE Peet's Acquisition could cause an interruption of, or a loss of momentum in, our activities and could adversely affect the results of our operations. The overall combination of JDE Peet's and our businesses may also result in material unanticipated expenses, liabilities, competitive responses, losses of customer and other business relationships, and other unexpected issues. The difficulties of combining the operations of the businesses include, among others: •the diversion of management attention to integration matters; •difficulties in integrating operations and systems; 74 Table of Contents •challenges in conforming standards, controls, procedures, accounting and other policies, business cultures, and compensation structures between the two companies; •difficulties in assimilating employees and in attracting and retaining key personnel; •challenges in keeping existing customers and obtaining new customers; •difficulties in managing the expanded operations of a large company which operates in additional geographic markets; •integrating the companies' financial reporting and internal control systems, including compliance by the combined company with Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and the rules promulgated by the SEC; and •potential unknown liabilities, adverse consequences, and unforeseen increased expenses associated with the integration. Many of these factors may be outside of the control of KDP and JDE Peet's, and any one of them could result in increased costs, decreased expected revenues, and diversion of management time and energy, which could materially impact our business, financial condition, and results of operations. In addition, even if JDE Peet's business operations are successfully integrated with ours, the full benefits of the JDE Peet's Acquisition may not be realized, including expected cost synergies and sales or growth opportunities. Moreover, many of the integration expenses that we expect to incur are, by their nature, difficult to estimate accurately. These expenses could, particularly in the near term, exceed the savings that we expect to achieve. As a result, it cannot be assured that the integration of JDE Peet's will result in the realization of the full anticipated benefits anticipated from the JDE Peet's Acquisition within the anticipated time frames, or at all. Further, the success of the JDE Peet's Acquisition will depend in part on the retention of key employees. We may not be able to retain senior executives or key personnel. Furthermore, uncertainty about the effect of the JDE Peet's Acquisition on JDE Peet's employees may impair its ability to retain and motivate key personnel until and after the completion of the JDE Peet’s Acquisition. If such key employees are not retained, we may not realize the anticipated benefits of the JDE Peet’s Acquisition. We are subject to business uncertainties related to the JDE Peet's Acquisition. Uncertainty about the effects of the JDE Peet's Acquisition may have an adverse effect on us. These uncertainties could disrupt our business or the business of JDE Peet's, and cause our collective customers, suppliers, vendors, partners, among others, to defer entering into contracts with the two companies, seek to change or cancel existing business relationships, or make other decisions concerning us and JDE Peet's that may be unfavorable to us. These uncertainties about the various effects of the JDE Peet's Acquisition on our business have caused, and may continue to cause, declines and greater volatility in the price of our common stock. We cannot guarantee that our stock price will fully recover from any such declines. We have incurred and assumed significant debt as a result of the JDE Peet's Acquisition, which could adversely affect our financial performance. We currently maintain investment grade credit ratings with Moody's and S&P for both our long-term debt and commercial paper. However, we have taken on a significant amount of debt in order to complete the JDE Peet's Acquisition, as well as assumed the existing debt of JDE Peet's, which could impact our credit ratings. We cannot provide assurances that our current credit ratings will remain in effect or that the ratings will not be lowered by Moody's and S&P. Increased indebtedness and any actual or anticipated downgrade of our credit ratings may have adverse effects on our borrowing costs, access to capital markets, liquidity, flexibility in responding to changing market conditions in the event of a general downturn in economic conditions or our business, and, as a result, our financial performance. 75 Table of Contents Additionally, the agreements that govern any debt incurred or assumed in connection with the JDE Peet's Acquisition contain various covenants that may, subject to certain significant exceptions, restrict our ability to, among other things, respond to market conditions, take advantage of business opportunities, incur debt, have liens on our property, and/or sell or convey certain of our assets. Our ability to comply with these provisions may be affected by events beyond our control. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations and could result in a default and acceleration under other agreements containing cross-default provisions. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, which may adversely impact our business. In connection with the JDE Peet's Acquisition, we consummated the JV Investment, which could restrict our operational and corporate flexibility, impact our cash resources, and/or depress the market price of our common stock. In connection with the JDE Peet’s Acquisition, we consummated the JV Investment, pursuant to which we contributed certain coffee-related assets to the Pod Manufacturing JV, and the Pod JV Investors contributed, through the Pod JV Investor Partner, $4 billion in cash in exchange for a 49% interest in the Pod Manufacturing JV, with the remaining 51% ownership interest held by KDP. Following the Separation, the 51% ownership interest in the Pod Manufacturing JV will be held by the separated global coffee business. The Pod Manufacturing JV is governed by the A&R Limited Partnership Agreement, which sets forth each partner’s rights and responsibilities with respect to the Pod Manufacturing JV. A portion of all distributions by the Pod Manufacturing JV will be paid to the JV Investors, thereby reducing distributions to us. The JV Investor Partner also has certain governance and consent rights that restrict our operational and corporate flexibility with respect to the Pod Manufacturing JV. In addition, we may be required to contribute additional resources, including cash, to the Pod Manufacturing JV, which would reduce our cash available for other purposes. In the event of a change of control, the Pod Manufacturing JV would be required to redeem the interests of the JV Investors, which would reduce the cash available for distributions to us. Under certain circumstances, the interests of the JV Investors may be converted into shares of our common stock (or following the Separation, the common stock of the separated global coffee business), which could have a dilutive impact on holders of our existing common stock. Any sales of such common stock, or the perception that such shares may be sold, could depress the market price of our common stock. Furthermore, if we materially breach our obligations to the Pod Manufacturing JV, we may be required to pay monetary damages, or the JV Investors may be entitled to replace us as the operator of the Pod Manufacturing JV. The issuance of Convertible Preferred Stock in connection with the JDE Peet's Acquisition may adversely affect the rights and market price of our common stock as well as our capital resources. In connection with the JDE Peet’s Acquisition, we issued and sold shares of Convertible Preferred Stock to the Preferred Investors. The Convertible Preferred Stock ranks senior to our common stock, meaning that, in the event of our liquidation, dissolution, or winding up, holders of the Convertible Preferred Stock would be paid in full prior to any proceeds being paid to holders of our common stock. Preferred Investors are entitled to dividends at a rate of 4.75% per annum, subject to increase in certain cases. They are also entitled to participate in dividends paid to holders of our common stock on an as-converted basis, provided that any such dividends received on an as-converted basis will reduce, on a dollar-for-dollar basis, the dividends holders are entitled to receive on the Convertible Preferred Stock. Such dividends will reduce our cash available for other purposes, including working capital, strategic activities, and returning cash to holders of our common stock. Preferred Investors are entitled to vote, on an as-converted basis, together with holders of our common stock on all matters submitted to a vote of the holders of our common stock, effectively reducing the relative voting power of the holders of our common stock. 76 Table of Contents In addition, the conversion of the Convertible Preferred Stock to common stock would dilute the ownership interest of existing holders of our common stock, and any sales in the public market of the common stock issuable upon conversion of the Convertible Preferred Stock could adversely affect prevailing market prices of our common stock. We have granted certain Preferred Investors customary registration rights in respect of their Convertible Preferred Stock, and any shares of common stock issued upon conversion of the Convertible Preferred Stock. These registration rights would facilitate the resale of such securities into the public market, and any such resale would increase the number of shares available for public trading. Sales by the Preferred Investors of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock. In the event of a fundamental change, as defined in the document governing the Convertible Preferred Stock, we will be required to offer to repurchase the Convertible Preferred Stock, which would reduce the amount of cash available to us for other purposes. Certain Preferred Investors also have certain preemptive rights, which may impact our ability to raise capital in the future. Our obligations to the Preferred Investors could limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition. The rights of the Preferred Investors could also result in divergent interests between the Preferred Investors and holders of our common stock. In addition, the Preferred Investment Agreement provides that, without the prior written consent of the KKR Investor or the Apollo Investor (so long as the KKR Investor or the Apollo Investor owns at least 50% of its initial Preferred Investment), we will not permit the Separation to be consummated if (A) our pro forma total net leverage, as defined in the Preferred Investment Agreement, immediately following the Separation is greater than 4.00 to 1.00, if a Qualified IPO shall have been consummated on or prior to the Separation, or 4.25 to 1.00, if a Qualified IPO shall not have been consummated on or prior to the Separation, or (B) the corporate rating of either of the separated businesses, on a pro forma basis at the time of the Separation, would be less than investment grade from either Moody's or S&P. For so long as the Convertible Preferred Stock is outstanding, in the event of a ratings downgrade by either Moody's or S&P, we will be subject to additional negative covenants that would restrict our operational flexibility. RISKS RELATED TO THE SEPARATION The Separation may not be completed on the terms or timeline currently contemplated, if at all, and will involve significant time, expenses, and resources, which could adversely affect our business. On August 25, 2025, we announced our intention to separate our beverage and coffee portfolios into two independent, publicly traded companies via a tax-free spin-off of our coffee business. The anticipated Separation is expected to occur in early 2027, subject to market and other conditions. We cannot assure that the Separation will be completed on the anticipated timeline, if at all, or that the terms of the Separation will not change. The transaction will follow the satisfaction of customary conditions, including reviews and final approval by our Board, relevant tax opinions with respect to the tax-free nature of the transaction, effectiveness of appropriate filings with the SEC, and acceptance of the spin-off company for listing by a national securities exchange approved by our Board, the completion of audited financials of the new independent company, among others. The failure to satisfy any of the required conditions could delay the completion of the Separation for a significant period of time or prevent it from occurring at all. Unanticipated developments, including changes in the competitive conditions of our markets, possible delays in obtaining various tax opinions or rulings or failure of the spin-off transaction to qualify for non-recognition treatment for U.S. federal income tax purposes, the filing and effectiveness of appropriate filings with the SEC and the listing on a stock exchange, negotiating challenges, the uncertainty of the financial markets, changes in the law, and challenges in executing the Separation, could delay or prevent the completion of the Separation, or cause the Separation to occur on terms or conditions that are different or less favorable than initially expected. Any changes to the Separation or delay in completing the Separation could cause us not to realize some or all of the expected benefits, or realize them on a different timeline than initially expected. Further, our Board could decide, either because of a failure of conditions or because of market or other factors, to abandon the Separation. No assurance can be given as to whether and when the Separation will occur. Whether or not we complete the Separation, our ongoing business may be adversely affected, and we may be subject to certain risks and consequences as a result of pursuing the separation of our two businesses, including the following: 77 Table of Contents •We anticipate that the process of completing the Separation will be time-consuming and involve significant additional costs and expenses, which may not yield a discernible benefit if the Separation is not completed. Additionally, if the Separation is not completed, we will still be required to pay certain costs and expenses incurred in connection therewith, such as professional fees. •Executing the Separation will require significant time and attention from our senior management and employees, which may impact management's attention to operating and growing our business and could adversely affect our business. Our employees may also be distracted due to uncertainty about their future roles with the separate companies pending completion of the Separation. •We may also experience increased difficulties in attracting, retaining, and motivating employees leading up to, and following, completion of the Separation, which could harm our businesses. •Some of our customers or suppliers may delay or defer decisions or may end their relationships with us. •We may experience negative reactions from the financial markets if we fail to complete the Separation or fail to complete it on a timely basis. •We could incur substantial additional costs and experience temporary business interruptions. •Transfer or assignment to us of some contracts and other assets will require the consent of a third party. If such consent is not given, we may not be entitled to the benefit of such contracts, investments, and other assets in the future. •The announcement and pendency of the Separation may cause some investors to sell shares of our common stock, which could create greater volatility or decline in the price of our shares. Any of the above factors could cause the Separation, or the failure to execute the Separation, to have an adverse effect on our business and financial performance. We may be unable to achieve some or all of the anticipated strategic and financial benefits from the Separation. We may not realize the anticipated strategic, financial, operational, or other benefits from the Separation. We also cannot predict with certainty when the expected benefits will occur or the extent to which they will be achieved. If the Separation is completed, our operational and financial profile will change and we will face new risks. As two independent, publicly traded companies, our beverage and coffee businesses will each be smaller, less-diversified companies and may be more vulnerable to changing market conditions. There is no assurance that each separate company will be successful. The announcement and/or completion of the Separation may cause uncertainty for or disruptions with our customers, partners, suppliers, and employees, which may negatively impact these relationships or our operations. In addition, we will incur costs in connection with, or as a result of, the spin-offs, including costs of operating as independent, publicly-traded companies that the two businesses will no longer be able to share. Those costs may exceed our estimates or could negate some of the benefits we expect to realize. Significant unexpected costs or failure to realize the intended benefits of the Separation could result in a material adverse effect on the business, financial condition, results of operations, and trading price of us or the separated businesses. Following the Separation, we may not maintain a satisfactory credit rating, which could adversely affect the financial performance of our businesses. It is management's intent to structure each stand-alone business in a way to achieve investment grade credit ratings upon completion of the Separation. If we are not able to achieve or maintain satisfactory credit ratings post-separation, whether as a result of our actions or factors which are beyond our control, the independent businesses may face increased borrowing costs and limited access to raise funds in capital markets. A failure to achieve or maintain investment grade ratings could also impact business relationships with vendors, suppliers, regulators, and other business partners. There is no guarantee that we will be able to achieve or maintain our targeted credit ratings, and failure to do so may adversely affect the liquidity and financial performance of the businesses following the proposed Separation. 78 Table of Contents Following the Separation, the price of our common stock may decline and may experience greater volatility. Upon completion of the Separation, the price of our common stock may decline compared to its level immediately prior to, as it will no longer include the value of the separated business. In addition, the price of our common stock may experience greater volatility until the market has fully analyzed our value without the separated business. We cannot guarantee that the combined value of the shares of the two resulting companies will be equal to or greater than what the value of our common stock would have been had the proposed Separation not occurred.