Keurig Dr Pepper Inc

21. Related Parties

IDENTIFICATION OF RELATED PARTIES

Prior to August 19, 2020, we were indirectly controlled by JAB, a privately held investor group. Since August 19, 2020, JAB continues to hold a significant but non-controlling interest in KDP. As of December 31, 2024, JAB beneficially owned approximately 16% of our outstanding common stock. JAB and its affiliates also hold investments in a number of other companies that have commercial relationships with us. These commercial relationships may take the form of our purchase of raw materials, our license of the companies’ trademarks for use in the manufacturing of K-Cup pods, our sale of products for resale to retail customers, or our manufacture or distribution of products to, or on behalf of, these companies.

We hold investments in certain brand ownership companies, and in certain instances, we also have rights in specified territories to bottle and/or distribute the brands owned by such companies. We purchase inventory from these brand ownership companies and sell finished product to third-party customers, primarily in the U.S. Additionally, any transactions with significant partners in these investments, such as ABI, are considered related party transactions. ABI purchases Clamato from us and pays us a royalty for use of the brand name. Refer to Note 13 for additional information about our investments in unconsolidated affiliates.

OPERATING TRANSACTIONS WITH RELATED PARTIES

Trade accounts receivable, net from related parties were $30 million and $34 million as of December 31, 2024 and 2023, respectively, primarily related to product sales and royalty revenues. Accounts payable to related parties were $35 million and $21 million as of December 31, 2024 and 2023, respectively, primarily related to purchases of finished goods inventory for distribution.

Revenues from and expenses associated with these related parties were as follows:

(1)Expenses associated with related parties includes a reduction of $93 million and $42 million related to earned equity for the achievement of certain milestones included in our distribution agreement with related parties, which were recognized as a reduction of cost of sales on the Consolidated Statements of Income for the years ended December 31, 2024 and 2023, respectively.

OTHER TRANSACTIONS WITH RELATED PARTIES

In March 2024, JAB BevCo B.V., a subsidiary of JAB, sold 100 million shares of KDP’s common stock through an underwritten secondary offering. In connection with this offering, we repurchased 35 million shares at the per-share price paid by the underwriter, for a total of $1,012 million, which was effected under our existing share repurchase program.

Transactions with Related Parties for Distribution Rights

We executed an agreement between KDP, GHOST, and ABI, which terminates the distribution rights for certain GHOST products by ABI, effective March 3, 2025, for $225 million, which was accrued as of December 31, 2024, and is expected to be paid during the first quarter of 2025. Refer to Note 4 for additional information.

We made payments to Nutrabolt totaling $8 million and $52 million to acquire certain distribution rights during the years ended December 31, 2024 and 2023, respectively. Refer to Note 5 for additional information.