Keurig Dr Pepper Reports Q1 2024 Results and Reaffirms Fiscal 2024 Guidance
- Net sales increased by 3.4% to $3.47 billion in Q1 2024.
- Adjusted EPS grew by 11.8% to $0.38 compared to the prior year.
- U.S. Refreshment Beverages segment net sales increased by 4.3%.
- U.S. Coffee segment net sales decreased by 2.1%.
- International net sales grew by 11.8%.
- Company reaffirmed fiscal 2024 guidance for constant currency net sales and Adjusted EPS growth.
- Tim Cofer appointed as the new CEO of Keurig Dr Pepper.
- Operating cash flow for the quarter was $85 million.
- Free cash flow totaled $(73) million due to strategic reduction in supplier financing.
- GAAP operating income increased by 31.0% to $765 million.
- None.
Keurig Dr Pepper's Q1 2024 financial results demonstrate a solid start to the year, signaling stability and potential growth prospects. The reported 3.4% increase in net sales to $3.5 billion, compared to the previous year, is indicative of the company's effective pricing strategies and product demand. This performance aligns with the steady, albeit moderate, growth patterns typically observed in the mature beverage industry.
An 11.8% rise in adjusted diluted EPS is a positive indicator for profitability and efficiency, revealing that Keurig Dr Pepper managed to translate revenue growth into bottom-line results effectively. Such an EPS increase could suggest a healthy fiscal discipline and may enhance shareholder value.
The reaffirmation of the 2024 guidance with expected mid-single-digit net sales growth and high-single-digit adjusted diluted EPS growth is reassuring for investors. It signals consistent performance and confidence in the company's ongoing strategy and operational plans, although the lack of GAAP reconciliation for forward-looking non-GAAP measures leaves some uncertainty regarding potential adjustments.
The company's strategic pricing adjustments, resulting in a net price realization of 3.1%, show an adept response to inflationary pressures and shifts in consumer behavior. However, the 0.3% decrease in volume/mix could raise concerns about underlying demand and market saturation.
Particularly noteworthy is the strengthening K-Cup® Pod market share and the strong brewer shipments growth within the U.S. Coffee segment. These factors reveal Keurig Dr Pepper's robust position in the at-home coffee market—a growing trend benefiting from shifts in consumer habits due to remote work culture. The company's ability to navigate these dynamics is critical in sustaining its competitive edge.
Internationally, the impressive 11.8% growth in net sales is a clear signal of strong market momentum and diversification. Expansion into global markets can be a robust growth driver for the company, reducing the over-reliance on domestic sales and providing a buffer against potential market downturns in the U.S.
The completion of Keurig Dr Pepper's CEO succession process with the appointment of Tim Cofer and Bob Gamgort's transition to Executive Chairman is notable for long-term strategic planning. Leadership continuity and the promise of an 'evolved strategy' could point to sustained innovation and potential market differentiation. Nevertheless, actual impacts of these strategic shifts will take time to manifest in financial results.
The emphasis on marketing investment and productivity gains are strong levers that the executive team seems focused on pulling to drive future growth. This mindset is critical in a competitive industry where brand loyalty and market presence can significantly influence consumer choices.
Despite first-quarter free cash flow being negative at $(73) million, largely due to timing in capital expenditures, the operation's health appears robust. This short-term cash outflow can be a strategic move to foster growth, provided that it translates into positive long-term returns.
Tim Cofer Appointed CEO & Board Member Effective April 26; Bob Gamgort to Serve as Executive Chairman
Following Strong Q1, Company Continues to Expect On-Algorithm 2024 Net Sales and Adjusted EPS Growth
Reported GAAP Basis | Adjusted Basis1 | ||||
Q1 | Q1 | ||||
Net Sales | |||||
% vs prior year | 3.4 % | 2.8 % | |||
Diluted EPS | |||||
% vs prior year | — % | 11.8 % | |||
Commenting on this final step in the CEO transition, which began in Fall 2023, Chairman and CEO Bob Gamgort stated, "It has been a privilege to help establish Keurig Dr Pepper into the formidable company it is today, and I look forward to supporting its future growth as Executive Chairman. As KDP enters its next phase, Tim and his leadership team are activating an exciting, evolved strategy that I am confident will extend our track record of success and continue to differentiate KDP within the beverage industry."
Incoming CEO Tim Cofer added, "I am honored to lead the next chapter of value creation as CEO of Keurig Dr Pepper and excited to partner with Bob, our Board, and all 28,000 colleagues to unlock our full potential as a beverage industry leader. We have a unique and competitively advantaged business, with a significant growth opportunity that we intend to realize through our evolved strategy. I'm pleased with our strong first quarter results, which reflect consistent execution across the organization and demonstrate the health of our business. This performance underscores our confidence in our 2024 outlook, which is in-line with our long-term financial algorithm."
First Quarter Consolidated Results
Net sales for the first quarter increased
GAAP operating income increased
Adjusted operating income increased
GAAP net income for the quarter decreased
Adjusted net income for the quarter advanced
Operating cash flow for the first quarter was
First Quarter Segment Results
Net sales for the first quarter increased
GAAP operating income increased
Net sales for the first quarter decreased
K-Cup® Pod shipments declined
Brewer shipments totaled 10.0 million for the twelve months ending March 31, 2024, declining
GAAP operating income increased
Adjusted operating income increased
International
Net sales for the first quarter increased
GAAP operating income increased
Adjusted operating income increased
2024 Guidance
The 2024 guidance provided below is presented on a constant currency, non-GAAP basis. The Company does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures, due to the inability to predict the amount and timing of impacts outside of the Company's control on certain items, such as non-cash gains or losses resulting from mark-to-market adjustments of derivative instruments, among others, which could be material.
KDP reaffirmed its fiscal 2024 guidance for constant currency net sales growth in a mid-single-digit range and Adjusted diluted EPS growth in a high-single-digit range.
________________________________________ |
1 Adjusted financial metrics presented in this release are non-GAAP, excluding items affecting comparability and with growth rates presented on a constant currency basis. See reconciliations of GAAP results to Adjusted results on a constant currency basis in the accompanying tables. |
Investor Contacts:
Investor Relations
T: 888-340-5287 / IR@kdrp.com
Media Contact:
Katie Gilroy
T: 781-418-3345 / katie.gilroy@kdrp.com
ABOUT KEURIG DR PEPPER
Keurig Dr Pepper (Nasdaq: KDP) is a leading beverage company in
FORWARD LOOKING STATEMENTS
Certain statements contained herein are "forward-looking statements" within the meaning of applicable securities laws and regulations. These forward-looking statements can generally be identified by the use of words such as "outlook," "guidance," "anticipate," "expect," "believe," "could," "estimate," "feel," "forecast," "intend," "may," "plan," "potential," "project," "should," "target," "will," "would," and similar words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These statements are based on the current expectations of our management, are not predictions of actual performance, and actual results may differ materially.
Forward-looking statements are subject to a number of risks and uncertainties, including the factors disclosed in our Annual Report on Form 10-K and subsequent filings with the SEC. We are under no obligation to update, modify or withdraw any forward-looking statements, except as required by applicable law.
NON-GAAP FINANCIAL MEASURES
This release includes certain non-GAAP financial measures, which differ from results using
Adjusted gross profit. Adjusted gross profit is defined as Net sales less Cost of sales, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted gross profit is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.
Adjusted operating income. Adjusted operating income is defined as Income from operations, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted operating income is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.
Adjusted net income attributable to KDP. Adjusted net income attributable to KDP is defined as Net income attributable to KDP, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted net income is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.
Adjusted diluted EPS. Adjusted diluted EPS is defined as Diluted EPS, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted diluted EPS is useful for investors in providing period-to-period comparisons of the results of our operations since it adjusts for certain items affecting overall comparability.
Adjusted gross margin. Adjusted gross margin is defined as Adjusted gross profit divided by Net sales. Management believes that Adjusted gross margin is useful for investors as supplemental measures to evaluate our operating performance and ability to manage ongoing costs.
Adjusted operating margin. Adjusted operating margin is defined as Adjusted Income from operations divided by Net sales. Management believes that Adjusted operating margin is useful for investors as supplemental measures to evaluate our operating performance and ability to manage ongoing costs.
Adjusted interest expense. Adjusted interest expense is defined as Interest expense, net, as adjusted for items affecting comparability as described on page A-5. Management believes that Adjusted interest expense is useful for investors in evaluating our performance and establishing expectations for the impacts of interest expenses.
Adjusted EBITDA. Adjusted EBITDA is defined as EBITDA, as adjusted for items affecting comparability as described on page A-5. EBITDA is defined as Net income attributable to KDP as adjusted for interest expense, net; provision for income taxes; depreciation expense; amortization of intangibles; and other amortization. Management believes that Adjusted EBITDA is useful for investors in evaluating the Company's operating results and understanding the Company's operating trends by adjusting certain items that can vary significantly depending on specific underlying transactions or events, thereby affecting comparability.
Management leverage ratio. Management leverage ratio is defined as KDP's total principal amounts of debt less cash and cash equivalents, divided by Adjusted EBITDA. Management believes that the Management leverage ratio is useful for investors in evaluating the Company's liquidity and assessing the Company's ability to meet its financial obligations.
Free cash flow. Free cash flow is defined as net cash provided by operating activities adjusted for purchases of property, plant and equipment, proceeds from sales of property, plant and equipment, and certain items excluded for comparison to prior year periods. Management uses this measure to evaluate the company's performance and make resource allocation decisions.
Financial measures presented on a constant currency basis. Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability, calculated on a constant currency basis by converting our current period local currency financial results using the prior period foreign currency exchange rates. Because our reporting currency is the
KEURIG DR PEPPER INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||
First Quarter | |||
(in millions, except per share data) | 2024 | 2023 | |
Net sales | $ 3,468 | $ 3,353 | |
Cost of sales | 1,528 | 1,609 | |
Gross profit | 1,940 | 1,744 | |
Selling, general, and administrative expenses | 1,176 | 1,165 | |
Other operating income, net | (1) | (5) | |
Income from operations | 765 | 584 | |
Interest expense, net | 178 | 23 | |
Other income, net | (7) | (20) | |
Income before provision for income taxes | 594 | 581 | |
Provision for income taxes | 140 | 114 | |
Net income | $ 454 | $ 467 | |
Earnings per common share: | |||
Basic | $ 0.33 | $ 0.33 | |
Diluted | 0.33 | 0.33 | |
Weighted average common shares outstanding: | |||
Basic | 1,380.7 | 1,406.2 | |
Diluted | 1,387.7 | 1,417.0 | |
KEURIG DR PEPPER INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||
March 31, | December 31, | ||
(in millions, except share and per share data) | 2024 | 2023 | |
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 317 | $ 267 | |
Trade accounts receivable, net | 1,311 | 1,368 | |
Inventories | 1,204 | 1,142 | |
Prepaid expenses and other current assets | 735 | 598 | |
Total current assets | 3,567 | 3,375 | |
Property, plant and equipment, net | 2,695 | 2,699 | |
Investments in unconsolidated affiliates | 1,438 | 1,387 | |
Goodwill | 20,163 | 20,202 | |
Other intangible assets, net | 23,251 | 23,287 | |
Other non-current assets | 1,128 | 1,149 | |
Deferred tax assets | 44 | 31 | |
Total assets | $ 52,286 | $ 52,130 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | 3,187 | 3,597 | |
Accrued expenses | 1,169 | 1,242 | |
Structured payables | 111 | 117 | |
Short-term borrowings and current portion of long-term obligations | 1,908 | 3,246 | |
Other current liabilities | 629 | 714 | |
Total current liabilities | 7,004 | 8,916 | |
Long-term obligations | 12,929 | 9,945 | |
Deferred tax liabilities | 5,784 | 5,760 | |
Other non-current liabilities | 1,916 | 1,833 | |
Total liabilities | 27,633 | 26,454 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 14 | 14 | |
Additional paid-in capital | 19,661 | 20,788 | |
Retained earnings | 4,721 | 4,559 | |
Accumulated other comprehensive income | 257 | 315 | |
Total stockholders' equity | 24,653 | 25,676 | |
Total liabilities and stockholders' equity | $ 52,286 | $ 52,130 | |
KEURIG DR PEPPER INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||
First Quarter | |||
(in millions) | 2024 | 2023 | |
Operating activities: | |||
Net income | $ 454 | $ 467 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation expense | 101 | 107 | |
Amortization of intangibles | 33 | 34 | |
Other amortization expense | 36 | 45 | |
Provision for sales returns | 14 | 10 | |
Deferred income taxes | 21 | — | |
Employee stock-based compensation expense | 28 | 29 | |
Loss (gain) on disposal of property, plant, and equipment | 1 | (5) | |
Unrealized loss (gain) on foreign currency | 8 | (2) | |
Unrealized loss (gain) on derivatives | 10 | (95) | |
Equity in earnings of unconsolidated affiliates | (7) | (9) | |
Earned equity | (45) | (2) | |
Other, net | 3 | (2) | |
Changes in assets and liabilities: | |||
Trade accounts receivable | 42 | 28 | |
Inventories | (65) | (74) | |
Income taxes receivable and payables, net | (10) | 60 | |
Other current and non-current assets | (136) | (151) | |
Accounts payable and accrued expenses | (398) | (391) | |
Other current and non-current liabilities | (5) | 22 | |
Net change in operating assets and liabilities | (572) | (506) | |
Net cash provided by operating activities | 85 | 71 | |
Investing activities: | |||
Purchases of property, plant, and equipment | (158) | (62) | |
Proceeds from sales of property, plant, and equipment | — | 7 | |
Purchases of intangibles | (31) | (51) | |
Investments in unconsolidated affiliates | (6) | — | |
Other, net | 2 | 1 | |
Net cash used in investing activities | (193) | (105) | |
Financing activities: | |||
Proceeds from issuance of Notes | 3,000 | — | |
Repayments of Notes | (1,150) | — | |
Net proceeds from issuance of commercial paper | (188) | 265 | |
Proceeds from structured payables | 23 | 34 | |
Repayments of structured payables | (30) | (32) | |
Cash dividends paid | (299) | (281) | |
Repurchases of common stock | (1,105) | (231) | |
Tax withholdings related to net share settlements | (41) | (31) | |
Payments on finance leases | (31) | (24) | |
Other, net | (21) | (3) | |
Net cash provided by (used in) financing activities | 158 | (303) | |
Cash and cash equivalents: | |||
Net change from operating, investing and financing activities | 50 | (337) | |
Effect of exchange rate changes | — | 6 | |
Beginning balance | 267 | 535 | |
Ending balance | $ 317 | $ 204 | |
KEURIG DR PEPPER INC. RECONCILIATION OF SEGMENT INFORMATION (UNAUDITED) | |||
First Quarter | |||
(in millions) | 2024 | 2023 | |
Net Sales | |||
$ 2,093 | $ 2,007 | ||
911 | 931 | ||
International | 464 | 415 | |
Total net sales | $ 3,468 | $ 3,353 | |
Income from Operations | |||
$ 615 | $ 490 | ||
248 | 232 | ||
International | 112 | 80 | |
Unallocated corporate costs | (210) | (218) | |
Total income from operations | $ 765 | $ 584 | |
KEURIG DR PEPPER INC.
RECONCILIATION OF CERTAIN NON-GAAP INFORMATION
(UNAUDITED)
The Company reports its financial results in accordance with
Specifically, investors should consider the following with respect to our financial results:
Adjusted: Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability.
Items affecting comparability: Defined as certain items that are excluded for comparison to prior year periods, adjusted for the tax impact as applicable. Tax impact is determined based upon an approximate rate for each item. For each period, management adjusts for (i) the unrealized mark-to-market impact of derivative instruments not designated as hedges in accordance with
For the first quarter of 2024, the other certain items excluded for comparison purposes include (i) productivity expenses, (ii) restructuring expenses associated with the 2023 CEO Succession and Associated Realignment, (iii) costs related to significant non-routine legal matters, specifically the antitrust litigation, and (iv) restructuring expenses associated with the 2024 Network Optimization.
For the first quarter of 2023, the other certain items excluded for comparison purposes include productivity expenses.
Constant currency adjusted: Defined as certain financial statement captions and metrics adjusted for certain items affecting comparability, calculated on a constant currency basis by converting our current period local currency financial results using the prior period foreign currency exchange rates.
For the first quarter of 2024 and 2023, the supplemental financial data set forth below includes reconciliations of adjusted and constant currency adjusted financial measures to the applicable financial measure presented in the unaudited condensed consolidated financial statements for the same period.
KEURIG DR PEPPER INC. RECONCILIATION OF CERTAIN NON-GAAP INFORMATION (UNAUDITED) | |||||||
Gross profit | Gross | Income from | Operating | ||||
For the First Quarter of 2024 | |||||||
Reported | $ 1,940 | 55.9 % | $ 765 | 22.1 % | |||
Items Affecting Comparability: | |||||||
Mark to market | (3) | (19) | |||||
Amortization of intangibles | — | 33 | |||||
Stock compensation | — | 4 | |||||
Restructuring - 2023 CEO Succession and Associated Realignment | — | 2 | |||||
Productivity | 14 | 36 | |||||
Non-routine legal matters | — | 1 | |||||
Transaction costs | — | 1 | |||||
Restructuring - 2024 Network Optimization | — | 2 | |||||
Adjusted | $ 1,951 | 56.3 % | $ 825 | 23.8 % | |||
Impact of foreign currency | (0.1) % | — % | |||||
Constant currency adjusted | 56.2 % | 23.8 % | |||||
For the First Quarter of 2023 | |||||||
Reported | $ 1,744 | 52.0 % | $ 584 | 17.4 % | |||
Items Affecting Comparability: | |||||||
Mark to market | (14) | (2) | |||||
Amortization of intangibles | — | 34 | |||||
Stock compensation | — | 5 | |||||
Productivity | 38 | 78 | |||||
Adjusted | $ 1,768 | 52.7 % | $ 699 | 20.8 % | |||
Refer to pages A-8 and A-9 for reconciliations of reported net sales to constant currency net sales and adjusted income from operations to constant currency adjusted income from operations.
KEURIG DR PEPPER INC. RECONCILIATION OF CERTAIN NON-GAAP INFORMATION (UNAUDITED) | |||||||||||
Interest | Income before | Provision for | Effective tax | Net | Diluted | ||||||
For the First Quarter of 2024 | |||||||||||
Reported | $ 178 | $ 594 | $ 140 | 23.6 % | $ 454 | $ 0.33 | |||||
Items Affecting Comparability: | |||||||||||
Mark to market | (35) | 18 | 2 | 16 | 0.01 | ||||||
Amortization of intangibles | — | 33 | 9 | 24 | 0.02 | ||||||
Amortization of fair value debt adjustment | (4) | 4 | 1 | 3 | — | ||||||
Stock compensation | — | 4 | 1 | 3 | — | ||||||
Restructuring - 2023 CEO Succession and Associated Realignment | — | 2 | 1 | 1 | — | ||||||
Productivity | — | 36 | 10 | 26 | 0.02 | ||||||
Non-routine legal matters | — | 1 | — | 1 | — | ||||||
Transaction costs | — | 1 | — | 1 | — | ||||||
Restructuring - 2024 Network Optimization | — | 2 | 1 | 1 | — | ||||||
Adjusted | $ 139 | $ 695 | $ 165 | 23.7 % | $ 530 | $ 0.38 | |||||
Impact of foreign currency | — % | ||||||||||
Constant currency adjusted | 23.7 % | ||||||||||
For the First Quarter of 2023 | |||||||||||
Reported | $ 23 | $ 581 | $ 114 | 19.6 % | $ 467 | $ 0.33 | |||||
Items Affecting Comparability: | |||||||||||
Mark to market | 93 | (104) | (29) | (75) | (0.05) | ||||||
Amortization of intangibles | — | 34 | 10 | 24 | 0.02 | ||||||
Amortization of fair value of debt adjustment | (4) | 4 | 1 | 3 | — | ||||||
Stock compensation | — | 5 | 2 | 3 | — | ||||||
Productivity | — | 78 | 21 | 57 | 0.04 | ||||||
Adjusted | $ 112 | $ 598 | $ 119 | 19.9 % | $ 479 | $ 0.34 | |||||
Change - adjusted | 24.1 % | 10.6 % | 11.8 % | ||||||||
Impact of foreign currency | — % | (0.6) % | — % | ||||||||
Change - Constant currency adjusted | 24.1 % | 10.0 % | 11.8 % | ||||||||
Diluted earnings per common share may not foot due to rounding.
KEURIG DR PEPPER INC. RECONCILIATION OF CERTAIN FINANCIAL MEASURES BY SEGMENT TO CONSTANT CURRENCY ADJUSTED FINANCIAL MEASURES BY SEGMENT (UNAUDITED) | |||||||||
| International | Unallocated | Total | ||||||
For the First Quarter of 2024 | |||||||||
Reported - Income from Operations | $ 615 | $ 248 | $ 112 | $ (210) | $ 765 | ||||
Items Affecting Comparability: | |||||||||
Mark to market | — | — | (6) | (13) | (19) | ||||
Amortization of intangibles | 5 | 25 | 3 | — | 33 | ||||
Stock compensation | — | — | — | 4 | 4 | ||||
Restructuring - 2023 CEO Succession and Associated Realignment | — | — | — | 2 | 2 | ||||
Productivity | 2 | 14 | — | 20 | 36 | ||||
Non-routine legal matters | — | — | — | 1 | 1 | ||||
Transaction costs | — | — | — | 1 | 1 | ||||
Restructuring - 2024 Network Optimization | — | 2 | — | — | 2 | ||||
Adjusted - Income from Operations | $ 622 | $ 289 | $ 109 | $ (195) | $ 825 | ||||
Change - adjusted | 22.4 % | 1.4 % | 29.8 % | 9.6 % | 18.0 % | ||||
Impact of foreign currency | — % | — % | (4.8) % | — % | (0.5) % | ||||
Change - constant currency adjusted | 22.4 % | 1.4 % | 25.0 % | 9.6 % | 17.5 % | ||||
For the First Quarter of 2023 | |||||||||
Reported - Income from Operations | $ 490 | $ 232 | $ 80 | $ (218) | $ 584 | ||||
Items Affecting Comparability: | |||||||||
Mark to market | — | — | — | (2) | (2) | ||||
Amortization of intangibles | 4 | 26 | 4 | — | 34 | ||||
Stock compensation | — | — | — | 5 | 5 | ||||
Productivity | 14 | 27 | — | 37 | 78 | ||||
Adjusted - Income from Operations | $ 508 | $ 285 | $ 84 | $ (178) | $ 699 | ||||
KEURIG DR PEPPER INC. RECONCILIATION OF CERTAIN FINANCIAL MEASURES BY SEGMENT TO CONSTANT CURRENCY (UNAUDITED) | ||||||
Reported | Impact of Foreign | Constant Currency | ||||
For the first quarter of 2024: | ||||||
Net sales | ||||||
4.3 % | — % | 4.3 % | ||||
(2.1) | — | (2.1) | ||||
International | 11.8 | (4.8) | 7.0 | |||
Total net sales | 3.4 | (0.6) | 2.8 | |||
Reported | Items | Adjusted | Impact of | Constant | ||||||
For the first quarter of 2024: | ||||||||||
Operating margin | ||||||||||
29.4 % | 0.3 % | 29.7 % | — % | 29.7 % | ||||||
27.2 | 4.5 | 31.7 | — | 31.7 | ||||||
International | 24.1 | (0.6) | 23.5 | 0.1 | 23.6 | |||||
Total operating margin | 22.1 | 1.7 | 23.8 | — | 23.8 |
Reported | Items | Adjusted | ||||
For the first quarter of 2023: | ||||||
Operating margin | ||||||
24.4 % | 0.9 % | 25.3 % | ||||
24.9 | 5.7 | 30.6 | ||||
International | 19.3 | 0.9 | 20.2 | |||
Total operating margin | 17.4 | 3.4 | 20.8 |
KEURIG DR PEPPER INC. RECONCILIATION OF ADJUSTED EBITDA AND MANAGEMENT LEVERAGE RATIO (UNAUDITED) | |
(in millions, except for ratio) | |
ADJUSTED EBITDA RECONCILIATION - LAST TWELVE MONTHS | |
Net income | $ 2,168 |
Interest expense, net | 651 |
Provision for income taxes | 602 |
Depreciation expense | 396 |
Other amortization | 172 |
Amortization of intangibles | 136 |
EBITDA | $ 4,125 |
Items affecting comparability: | |
Impairment of intangible assets | $ 2 |
Restructuring - 2023 CEO Succession and Associated Realignment | 37 |
Productivity | 188 |
Restructuring - 2024 Network Optimization | 2 |
Non-routine legal matters | 6 |
Stock compensation | 16 |
Transaction costs | 3 |
Mark to market | (14) |
Adjusted EBITDA | $ 4,365 |
March 31, | |
2024 | |
Principal amounts of: | |
Commercial paper notes | $ 1,908 |
Senior unsecured notes | 13,093 |
Total principal amounts | 15,001 |
Less: Cash and cash equivalents | 317 |
Total principal amounts less cash and cash equivalents | $ 14,684 |
March 31, 2024 Management Leverage Ratio | 3.4 |
KEURIG DR PEPPER INC. RECONCILIATION OF ADJUSTED EBITDA - LAST TWELVE MONTHS (UNAUDITED) | |||||||||
(in millions) | SECOND | THIRD | FOURTH | FIRST | LAST TWELVE | ||||
Net income | $ 503 | $ 518 | $ 693 | $ 454 | $ 2,168 | ||||
Interest expense, net | 172 | 237 | 64 | 178 | 651 | ||||
Provision for income taxes | 110 | 146 | 206 | 140 | 602 | ||||
Depreciation expense | 94 | 98 | 103 | 101 | 396 | ||||
Other amortization | 46 | 45 | 45 | 36 | 172 | ||||
Amortization of intangibles | 35 | 34 | 34 | 33 | 136 | ||||
EBITDA | $ 960 | $ 1,078 | $ 1,145 | $ 942 | $ 4,125 | ||||
Items affecting comparability: | |||||||||
Impairment of intangible assets | — | $ 2 | $ — | $ — | $ 2 | ||||
Restructuring - 2023 CEO Succession | — | 27 | 8 | 2 | 37 | ||||
Productivity | 51 | 41 | 66 | 30 | 188 | ||||
Restructuring - 2024 Network | — | — | — | 2 | 2 | ||||
Nonroutine legal matters | 3 | 2 | — | 1 | 6 | ||||
Stock compensation | 4 | 4 | 4 | 4 | 16 | ||||
Transaction costs | — | 1 | 1 | 1 | 3 | ||||
Mark to market | (5) | (32) | 40 | (17) | (14) | ||||
Adjusted EBITDA | $ 1,013 | $ 1,123 | $ 1,264 | $ 965 | $ 4,365 | ||||
KEURIG DR PEPPER INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(UNAUDITED)
Free cash flow is defined as net cash provided by operating activities adjusted for purchases of property, plant and equipment, proceeds from sales of property, plant and equipment, and certain items excluded for comparison to prior year periods. For the first quarter of 2024 and 2023, there were no certain items excluded for comparison to prior year periods.
First Quarter | ||||
(in millions) | 2024 | 2023 | ||
Net cash provided by operating activities | $ 85 | $ 71 | ||
Purchases of property, plant and equipment | (158) | (62) | ||
Proceeds from sales of property, plant and equipment | — | 7 | ||
Free Cash Flow | $ (73) | $ 16 | ||
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SOURCE Keurig Dr Pepper Inc.
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What was Keurig Dr Pepper's net sales growth in Q1 2024?
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