The acquisition of GHOST, a lifestyle sports nutrition business, is expected to enhance KDP's portfolio in the ready-to-drink energy category. The agreement requires KDP to purchase the remaining equity interests in GHOST in 2028.

This move consolidates distribution control with KDP, potentially improving efficiency and alignment with KDP's overall strategy. The $225 million payment will impact profitability in the first quarter of 2025.

The acquisition of Kalil, an independent bottler in Arizona, is expected to strengthen KDP's distribution network in the region. The consideration was primarily allocated to property, plant, and equipment and other intangible assets.

The increase in SG&A expenses was led by increases in transportation and warehousing expenses and people costs, partially offset by reduced costs associated with productivity projects.

The restructuring program, which includes facility closures, is designed to improve efficiency and better meet the needs of consumers and customers. The charges are primarily asset-related costs.

This move is part of an organization realignment to ensure succession plans, reinforce enterprise capabilities, and control costs. The program is expected to incur charges of approximately $85 million.

The company has experienced, and could continue to experience, disruptions in its supply chain and its manufacturing and distribution operations, which could have a material adverse effect on its business. Some raw materials and supplies used in the production of its products, including packaging materials, are available from a limited number of suppliers or from a sole supplier or are in short supply when seasonal demand is at its peak.

The beverage industry is highly competitive and continues to evolve in response to changing consumer preferences. The company competes with multinational corporations 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.

The company is subject to a variety of federal, state, and local laws and regulations in the U.S., Canada, Mexico, and other countries in which it conducts business. These laws and regulations apply to many aspects of its business, including the manufacture, safety, sourcing, labeling, storing, transportation, marketing, advertising, distribution, pricing, and sale of its products.

The beverage industry is highly competitive, requiring KDP to compete with multinational corporations, smaller regional companies, and private label manufacturers. Success depends on factors like brand recognition, taste, quality, price, availability, and convenience.

A significant portion of KDP's business is attributable to sales of K-Cup pods for use with Keurig brewing systems. Any substantial or sustained decline in the sale of Keurig brewers could materially and adversely affect KDP's business.

Consumer preferences are constantly changing due to various factors, including demographics, social trends, and health concerns. KDP must effectively anticipate and respond to these changes through innovation and renovation.

Gross profit increased due to net sales growth, a net benefit from changes in ingredients, materials, and productivity, and earned equity from the achievement of milestones associated with certain distribution agreements, partially offset by net increases in other manufacturing costs.

The company faces risks related to the availability and cost of raw materials, packaging, energy, and transportation. These factors can be influenced by changes in supply and demand, supplier capacity constraints, inflation, weather conditions, and governmental actions.

SG&A expenses increased $101 million, or 2.1%, to $5,013 million for the year ended December 31, 2024 compared to $4,912 million in the prior year, led by increases in transportation and warehousing expenses and people costs, partially offset by reduced costs associated with productivity projects.

The launch of new brewers and the innovation agenda demonstrate KDP's commitment to technological advancements and providing a variety of options to suit individual consumer preferences.

This demonstrates KDP's ability to leverage partnerships to expand its product portfolio and reach new consumers.

KDP is investing in new technologies to improve efficiency and productivity throughout its operations, including manufacturing, distribution, and sales.

The share repurchase program demonstrates KDP's commitment to returning value to shareholders. As of December 31, 2024, $1.810 million remained available for repurchase under the authorized share repurchase program.

The consistent payment of dividends reflects KDP's commitment to returning capital to shareholders.

Capital expenditures primarily related to investments in manufacturing capabilities, both in the U.S. and internationally, indicating a focus on long-term growth and efficiency.

The company's report on its impact, which is issued annually, is available on its website at www.keurigdrpepper.com.

These areas are climate and nature action, water use and stewardship, packaging and circular economy, human rights, responsible sourcing, and supply chain livelihoods, consumer health and well-being, employee health, safety, and well-being, and corporate governance and ethics.

KDP measures Lost Time Incident Rate, a reliable indication of Total Recordable Injuries Rate severity, and uses a risk reduction process that thoroughly analyzes injuries and near misses.

Reliance on a single large retailer can present both opportunities and risks. Changes in the relationship with Walmart could significantly impact KDP's business.

This trend impacts KDP's ability to compete and negotiate favorable terms with retailers. Retailers may seek lower prices, demand increased marketing support, and favor private-label brands.

Restrictions on business activities, which have been or may be imposed or expanded as a result of political and economic instability, deterioration of economic relations between countries, or the imposition of tariffs, could impact KDP's profitability.