Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Keurig-Dr. Pepper's earnings call for the fourth quarter of 2025. This conference call is being recorded, and there will be a question and answer session at the end of the call. I would now like to introduce Chastin Malella, Senior Director of Investor Relations at Keurig-Dr. Pepper. Mr. Malella, please go ahead.

Thank you, and hello, everyone. One, earlier this morning, we issued a press release detailing our fourth quarter and full year results, which we will discuss during this conference call and in the accompanying slide presentation that can be tracked in real time on the live webcast. Before we get started, I'd like to remind you that our remarks will include forward-looking statements, which reflect KDP's judgment, assumptions, and analysis only as of today. Our actual results may differ materially from current expectations based on the number of factors affecting KDP's business. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. For more information, please refer to our earnings release and the risk factors discussed in our most recent Form 10 , which will be filed with the SEC later today. Consistent with previous quarters, we will be discussing our Q4 and full-year performance on a non-GAAP adjusted basis, which reflects constant currency growth rates and excludes items affecting comparability. Definitions and reconciliations to the most directly comparable GAAP metrics are included in our earnings materials. Here with us today to discuss the results are Keurig Dr. Pepper's Chief Executive Officer, Tim Cofer, Chief Financial Officer, Anthony DeSylvestro, and SVP of Strategic Finance and Capital Markets, Jane Gelfand. I'll now turn it over to Tim.

Thanks, Chafin, and good morning, everyone. 2025 was a strong year for KDP. We delivered healthy results that achieved our annual guidance. We drove winning innovation and commercial performance, generating the fastest U.S. retail sales growth among top food and beverage manufacturers, with market share gains across our portfolio. And we laid the groundwork for KDP's transformational next chapter through the announced acquisition of JDE Peets and planned separation into two leading pure play companies, Beverage Co. and Global Coffee Co. Said differently, we navigated a dynamic operating environment with agility while strengthening our foundation for the long term. And the same can be said for JDE Peets, which earlier this morning issued 2025 results that demonstrated solid financial performance and strong progress, advancing its refreshed strategy. In 2026, we will build upon our momentum with a focus on three objectives that should translate to shareholder value, creating our low double-digit full-year EPS growth guidance in a high-quality way. Second, closing and seamlessly integrating JDE Peets. And ultimately, third, establishing two advantaged standalone businesses. For recent Investor Day, we outlined our milestone-based approach to executing our transformation work streams. Let me share updates on a few of these milestones. Starting with the J.D.E. Pete's acquisition, we have secured key regulatory approvals and launched the tender offer, positioning us to close the acquisition in early April. We've already made significant progress on integration planning, including multiple active work streams spearheaded by leaders from both companies and capable advisors with deep and relevant experience. Our teams are collaborating well to establish joint ways of working and a unified operating philosophy, all while exhibiting strategic alignment, shared purpose, and a palpable excitement to build a global coffee leader. At the same time, we're taking steps to ensure operational readiness to separate by the end of 2026. We're ready to implement a combined KDP operating structure for the interim period between deal close and separation, which will facilitate near-term performance while supporting a steady transition towards our future state as standalones. Also, advancing work streams to deliver against key separation milestones, including capturing initial deal-related synergies, appointing independent leadership teams and boards, and establishing appropriate capital structures for the two pure-play companies. Our precise separation timing will depend on a number of considerations, including market conditions, but we are progressing well against all elements within our control to our results. We are pleased with our 2025 enterprise performance. Net sales increased almost 9%, driven by approximately 5 points of growth from our base business and a nearly four-point ghost contribution, and EPS grew 7%. On a segment basis, U.S. Refreshment Beverages was the standout performer, delivering double-digit net sales growth and high single-digit operating income growth. International was resilient in the face of dynamic macro trends growing on both a top and bottom line basis. And, as expected, U.S. coffee trends were softer in aggregate, but demonstrated underlying progress. KDP's 2025 included multiple noteworthy commercial achievements, to name just a few. We gained market share in Dr. Pepper for the ninth consecutive year, driven by the category-leading Dr. Pepper BlackBerry innovation, our college football Fansville activation, as well as the brand's continued broad consumer resonance, which was most recently demonstrated by the viral jingle, Dr. Pepper, baby, it's good and nice, that lit up social media and became a cultural moment. Our Agile marketing team quickly incorporated this user-generated creativity into a college football national championship ad spot, and Dr. Pepper strengthened its position as the most engaged CSD brand on TikTok. We seamlessly integrated Ghost and successfully transitioned it to our DSD network, accelerating the brand's market share as we expanded distribution and display while maintaining high on-shelf productivity. We elevated our agile, digitally-led approach to marketing, leveraging data and technology to enable more powerful real-time insights, more precise segmentation, and more effective marketing content across consumer and shopper media, as evident in emerging proof points that I will discuss shortly. And we significantly progressed the development of our disruptive Keurig-Alta next-generation coffee platform, completing a series of successful beta tests and building critical capabilities to support a targeted late-2026 launch. Collectively, these highlights not only mark substantial achievements for 2025, but also provide benefits that will carry forward into future years. Moving now to our Q4 results. Net sales grew 10%, led by mid-single-digit net price realization, including positive contributions from each segment. Volume mix grew against a difficult comparison, driven by an incremental contribution from ghost and modest base business growth. As we anticipated, profit flow through in the quarter was limited by cost pressures and higher reinvestment spending. These factors, along with modest below-the-line headwinds, more than offset strong productivity savings and continued overhead discipline. As a result, Q4 EPS grew 2%. Diving into the segments, U.S. refreshment beverages demonstrated continued top and bottom line momentum in the quarter. Net sales grew at a low double-digit rate through both volume mix and net price realization, and operating income increased at a high single-digit rate. We drove these results with a combination of healthy core portfolio trends and contributions from emerging growth areas. Starting with our core, the carbonated soft drink category remained strong despite the uneven consumer environment as innovation, brand activity, and an attractive value proposition resonated. Our portfolio performed well within the category, driven by several factors. We had winning innovations, not just for brand Dr. Pepper, but also through offerings. like 7-Ups, Seasonal Shirley Temple LTO, and Bloom Pump in the prebiotic CSD space. We leveraged our newly enhanced precision marketing capabilities to apply personalization at scale for our largest campaign, Fansville, generating more than 3,000 unique creative units, driving optimized consumer conversion paths and attracting new brand buyers for the Dr. Pepper franchise at a high ROI. And we managed a well-executed transition of Dr. Pepper to our DSD network in parts of California, Nevada, and the Midwest, quickly and effectively putting resources in place to ensure high quality service and continuity. Customer feedback and support has been positive. The near-term financial performance is tracking to our plans, and we will continue to unlock additional benefits from our enhanced scale. Beyond the core in Q4, we saw strong performances in some of our emerging growth areas. Our multi-branded energy platform of C4, Ghost, Bloom, and Black Rifle once again outperformed the category with market share increasing nearly 1.5 points. We are seeing momentum across brands supported by distribution gains, increased cold vault penetration and healthy velocities, and we remain on track to achieve our double-digit market share goal in the coming years. Outside of energy, we drove continued robust growth for Electrolite, which was the sports hydration category's largest share gainer in Q4, and Vitacoco, the established leader in coconut water that nonetheless grew retail sales in excess of 20%. Emerging categories and brands already contribute meaningfully to our U.S. refreshment beverages growth, and we expect them to play an even larger role as they scale. We also intend to deploy our flexible build-by-partner model to expand into additional white space areas over time, including through capital light structures. And this should further enhance our portfolio's growth potential. Moving now to U.S. coffee. While Q4 was a softer quarter, let me contextualize our performance with three observations. First, segment revenue increased 4%, reflecting solid category and market share trends. Second, we are managing through cyclical cost pressures, which is having a temporary but meaningful impact on profitability. And third, despite the cost backdrop, we are investing to position our business for long-term success. I'll unpack each of these in turn. First, coffee category trends remain resilient despite some challenges, with the Keurig-compatible pod category growing retail dollars at a mid-single-digit rate in Q4. While category growth admittedly remains pricing-led, elasticities have been manageable and consumers remain engaged, both of which bode well for volumes once cost pressures normalize. Within the category, both owned and licensed brands and Keurig-manufactured pods gained share in Q4, contributing to U.S. Coffee's solid top-line results. However, our top-line growth did not translate to Q4 operating income, which declined at a high single-digit rate. This brings me to the second point, cost pressure. Our intention to offset inflation over the commodity cycle is unchanged, but there are always periods when the timing of costs and implemented mitigations do not align. As expected, we saw this play out in Q4 when significant cost pressure flowed through our P&L without a proportionate offset weighing on profitability. As Anthony will discuss, we anticipate this temporary imbalance to persist in the first half of 2026 before easing over the course of the year. Moving to my third point, we recognize our current pricing-driven growth in coffee is more cyclical in nature. and we are actively investing to position our business for sustainable, long-term volume and mixed growth. Importantly, we have chosen to protect these investments even as we navigate an inflationary period, which is creating some additional near-term profit pressure, but should pay future dividends. Let me discuss a couple of our Q4 investment areas in more detail. During the quarter, we applied our enhanced marketing capabilities to launch a new Keurig brand equity campaign, the first such activation in multiple years. This data-driven Anthem campaign showcases the benefits of brewing coffee with the Keurig system and was delivered to consumers through targeted storytelling across thousands of ad permutations. informed by their coffee purchase history and our rich insight into demand spaces. The campaign exceeded our targets on key KPIs like brand attention and return on ad spend and produced halo benefits that we are beginning to see across our entire coffee business. We intend to extend this marketing approach as we step up our brand-building investment in 2026. We also advanced preparations for the upcoming launch of our next-generation Keurig Alta platform, including the development of our final brewer model and building out multi-year commercialization and go-to-market plans. Consumer testing has validated that this system delivers a great-tasting, superior experience across an unmatched variety of coffee and espresso-based beverages. We see significant long-term potential for this platform and have and will continue to invest ahead of scale to capture this opportunity. So to summarize the key themes we saw for U.S. coffee in Q4, resilient pod category and KDP top-line trends, elevated cost inflation, and continued investment to support long-term initiatives. While the same factors are also likely to translate into subdued financial results in 2026, particularly early in the year when cost headwinds peak and we manage through some retailer inventory adjustments, we have built our plans accordingly while pursuing the right actions to secure healthy, longer-term performance. Now to international. We delivered a very strong quarter with mid-teens constant currency net sales growth and 20% operating income growth, which was partly aided by timing. Momentum was led by our business in Mexico, where our cold drinks continued to outperform as the economy began to find its footing after a challenging 2025. Strong brands and effective commercial execution, including ongoing DSD expansion, translated to share gains across the portfolio. Pena Fial aids and twist extensions and Dr. Pepper all grew nicely. In Canada, performance was led by healthy coffee trends as our significant pricing actions in pods and traditional coffee have so far translated into only minimal volume elasticity. In 2026, we will continue to invest in this growth segment, including building capabilities that will help the business scale well beyond the current year. Though we'll need to navigate continued input cost inflation and new developments like an increased Mexico beverage tax early in the year, we remain focused on sustaining our relative strength in both Canada and Mexico. At the enterprise level, we have bold innovation plans for 2026 to power our continued portfolio momentum. In refreshment beverages, our slate is anchored by meaningful activity in CSDs. We will welcome back our record-setting Dr. Pepper Creamy Coconut LTO, extend our successful Canada Dry Fruit Splash line into a second flavor, strawberry, expand our presence in prebiotics with new Bloom Pop flavors, and activate other key brands with seasonal LTOs. In energy drinks, we are building off a very successful 2025 with exciting flavor innovation for C4, Ghost, Bloom, and Black Rifle, while also extending Ghost's portfolio into 8.4-ounce small cans, opening up new channels and new occasions for the brand. In still beverages, we have big plans for some of our icons, including a Snapple brand refresh and a first-ever zero-sugar beverage offering from Mott's. And in our fast-growing sports hydration segment, we have new flavors for our ElectroLeap partner brand. Moving to coffee, our innovation suite spans our full portfolio. In Brewers, along with the disruptive Keurig Alta system I mentioned earlier, we are launching a new version of our K Supreme, which will have additional features and a refreshed design, and introducing K Mini Mate Plus, a new model in our mini line. In pods, our big bet for 2026 is the Keurig Coffee Collective, which marks the Keurig brand's first entry into coffee. This expertly crafted premium offering has been enthusiastically embraced by retailers, and early consumer sell-through is encouraging. We also have significant product activity for the original donut shop, including a watermelon breeze variety of our popular Refreshers line and new innovation that extends the brand into Matcha, a consumer-preferred high-growth white space. Finally, in Ready to Drink, we will build on our partnership momentum with La Cologne through the introduction of great tasting seasonal draft latte flavors. We are partnering closely with retailers to help consumers find, engage with, and experience this great set of new products, including through incremental shelf space and compelling programming. In total, our innovation, in-store activations, and marketing investments are not only important to supporting our 2026 results, but also ensuring our refreshment beverage and coffee portfolios are healthy and well-positioned heading into separation. In closing, our 2025 performance was strong as we delivered on our commitments while laying the foundation for our exciting next chapter as two pure play companies. We intend to continue executing on this vision in 2026 while reinforcing our base business momentum with three key objectives for the year. Delivering on our low double-digit EPS growth plans, unlocking initial combination benefits as we integrate JDE Peets, and executing critical milestones as we drive towards a successful separation into Beverage Co. and Global Coffee Co. Now, before turning the call to our new CFO, Anthony DeSilvestro, let me first formally introduce him. Anthony is a seasoned consumer sector executive with over 40 years of industry experience, including in areas relevant to KDP's current priorities, such as M&A integrations, cost-saving programs, and balance sheet recapitalizations. He has hit the ground running in his first few months, quickly coming up to speed on our business and transformation work streams. And we are already benefiting from his financial leadership and acumen. I'm looking forward to continuing to partner closely with him as we guide KDP through an exciting and pivotal time for our company. With that, I'll pass it on to Anthony to walk through our financial performance and 2026 outlook before I return with closing thoughts.

Thanks, Tim, and good morning, everyone. It's a pleasure to be here with you today. I was drawn to KDP by its iconic brand portfolio, a leadership team and strategy I believe in, and what I see as a unique value creation opportunity. Over the past three months since I joined, my conviction in the company's direction, people, and potential has only grown. I'm energized to partner with Tim and the entire executive team to position both KDP and the forthcoming separate companies for future success. I'll now review our financial performance in more detail, beginning with the full year. We delivered healthy results consistent with our 2025 guidance. On a constant currency basis, we grew net sales 8.6 percent, operating income 4.9 percent, and EPS 7.3 percent, all while navigating a challenging industry backdrop and beginning to execute our transformation agenda to shape KDP's next chapter. Moving to the quarter, we finished the year with a solid Q4. Net sales increased 9.9% with growth in all three segments, led by strong performances in US refreshment beverages and international. Net price realization was a significant growth driver, contributing six percentage points to the top line. Volume mix added 3.9 points, reflecting 3.6 points from the addition of Ghost, as well as a modest increase on the base business. Rose margin contracted 150 basis points as elevated inflationary pressures or partly offset by net price realization and productivity savings. On the other hand, SG&A improved 80 basis points as a percent of sales, primarily due to overhead efficiencies. All-in, Q4 operating income grew 4.8%, and incorporating headwinds from interest expense and a slightly higher tax rate, EPS increased 1.7% to 60 cents. Moving on to our segments, U.S. refreshment beverages delivered a strong performance, growing net sales 11.5%. Volume mix contributed seven points, primarily driven by the addition of Ghost, coupled with modest gains on the base business. Net pricing added 4.5 points, led by CSD increases taken earlier in the year. Segment operating income increased 8.7 percent, driven by double-digit net sales growth and productivity savings, partly offset by cost inflation, higher SG&A costs, and the impact of elapping a C4 performance incentive in the prior year. Looking ahead with continued momentum in both our core and quickly scaling growth platforms, we expect U.S. refreshment beverages to deliver another year of strong top and bottom line growth in 2026. However, it is worth noting that our innovation cadence differs slightly from last year. Most notably, our Dr. Pepper Creamy Coconut LTO will launch in Q2, which compares to the Dr. Pepper BlackBerry line extension that launched in Q1 2025. This timing difference could impact Dr. Pepper's market share comparisons early in the year, but we expect good full-year performance. In U.S. coffee, net sales grew 3.9%. Net price realization added 8 percentage points, with inflation-driven increases across both pods and brewers. BioMix was a partial offset, declining 4.1 percentage points. Pod shipments were down a modest 2.8%, demonstrating resiliency as pricing increased. Brewer shipments declined 16.8%, reflecting higher price elasticity and reductions in retail inventory levels, similar to the last few quarters. Segment operating income declined 8.8%, as the impacts of cost inflation and volume mix decline were only partly offset by net price realization and productivity savings. The elevated inflation in the quarter reflects the meaningful lag before coffee market price changes and tariffs affect our cost of goods sold, given our hedging activity and the timeframe that inputs are held in inventory. Looking ahead, we expect profit to remain under some pressure for U.S. coffee in 2026, largely reflecting two factors. First, year-over-year cost headwinds, primarily due to increased coffee price and tariff impacts, which should be most pronounced in Q1, before easing over the course of the year, particularly in the back half. Second, we are also planning significant marketing and other investment spending in 2026 to support the growth initiative Tim discussed earlier, such as the Keurig Coffee Collective rollout and the launch of Keurig Alta. These planned investments, which are captured in our outlook, will help us to create a sustainable platform for stronger future segment performance. In the international segment, healthy trends across regions and categories drove a 16% constant currency net sales increase. Growth was balanced, with net price realization contributing 9.2 points and volume mix adding 6.8 points. Factoring in a favorable FX translation benefit, reported net sales increased 21%. Q4 segment operating income increased 20%, driven by sales growth and productivity savings, which more than offset continued inflationary pressures. These exceptional Q4 results reflected the combination of base business momentum as well as some timing benefits. For example, in Mexico, we saw some buying ahead of a significant beverage tax increase that took effect at the beginning of 2026. Though the reversal of these benefits will result in a softer start to the segment in Q1. Our full-year plan for international incorporate healthy top and bottom line delivery. Moving to the balance sheet and cash flow, we remain committed to a strong balance sheet with investment grade rating for total KDP and for the future beverage company and global coffee company upon separation. These objectives will first and foremost be underpinned by our ability to generate significant cash flow. In 2025, our free cash flow was $1,519,000. Notably, this included the unfavorable impact of one-time $225 million ghost distribution termination payments early in the year. We feel good about our underlying performance and expect standalone KDP free cash flow to increase in 2026 to approximately $2 billion. We will update this target to include expected JDE PEATS free cash flow when we report next in April. The free cash flow of the combined businesses should enable swift deleveraging post-deal close. As you saw in our announcement yesterday, we have also further refined the financing structure for the JDEP's acquisition to deliver targeted outcomes and facilitate a timely separation. First, based on strong demand, we have chosen to increase the size of our beverage company convertible preferred equity raise to $4.5 billion versus the previously announced $3 billion. Second, we have finalized and are preparing to close our $4 billion global coffee company pod manufacturing, KV. Third, we plan to fund the balance of the acquisition through debt. And fourth, we will continue to assess non-core asset divestitures to accelerate deleveraging. With the refined financing plans in place, we will no longer consider a partial IPO, a beverage company in the future. Turning now to our 2026 P&L guidance, which we are providing inclusive of the JDE PEATS acquisition based on the expectation of an early April close and using current FX rates. We expect net sales in a range of 25.9 to 26.4 billion dollars. This outlook assumes continued momentum in U.S. refreshing beverages and healthy trends in international, as well as growth in U.S. coffee. It also embeds an incremental contribution from JDE Peach beginning in Q2, which we expect to add approximately $8.5 to $8.7 billion to net sales. On the bottom line, we expect low double-digit EPS growth in constant currency. This includes an anticipated 6 to 7 percentage points contribution from JDE PEATS on a three-quarter basis, consistent with our unchanged outlook for approximately 10% accretion in the first year after acquisition close. For standalone KDP, our outlook embeds 4% to 6% net sales growth and 4% to 6% EPS growth, both in constant currency. Based on current rates, we anticipate that FX will represent an approximately one percentage point tailwind to standalone KDP net sales and EPS growth for the full year. To help with your below-the-line modeling, we expect the following for 2026. Interest expense of approximately $1.07 to $1.12 billion, an effective tax rate of approximately 22 to 23 percent, and approximately $1.37 billion diluted weighted average shares outstanding. Once the JDEP's acquisition closes, we will also have two new impacts on the P&L to reflect the pod manufacturing JV and the convertible preferred security. Assuming an early April deal close, we expect the following impacts over the last three quarters of 2026. Next, approximately $190 million in pre-tax coffee JV costs, which will flow through the non-controlling interest line, and convertible preferred costs that will flow through below net income and will be calculated each quarter as the greater of the roughly $53 million quarterly quarterly preferred dividend or the securities approximately 8% proportionate share of earnings. Pre-separation, we expect the calculation to default to the proportionate share of earnings. Now let's discuss quarterly phases. While we are planning for healthy EPS growth on a full-year basis, we expect Q1 EPS to be in the range of $0.36 to $0.37 compared to $0.42 in the year-ago quarter. This is due to three primary drivers. First, the unfavorable comparison of lapping a $0.02 per share Rydococo gain in Q1 2025. Second, a peak year-over-year cost headwind in Q1, driven by the impact of green coffee inflation and tariffs on cost of goods sold. And third, anticipated retailer inventory adjustments that will negatively impact top and bottom line performance in U.S. coffee. We expect these transitory EPS pressures to begin to ease after Q1, and in the case of coffee costs, more meaningfully improve in the back half. As a result, we have good visibility that stand-alone KDP EPS growth will be positive in Q2 and accelerate further in the second half. In addition, we will start to benefit from accretion once the JCEP to deal closes in early Q2, further enhancing EPS growth for our combined company. In closing, 2025 was an important year for KDP. We extended market share gains in key areas, made strides on multiple strategic initiatives, and set the stage for a transformative next chapter, all while delivering on our financial commitments. We will look to build on this performance in 2026 and are fully focused on executing with excellence to achieve our base business, integration, and separation objectives. With that, I will turn the call back to Tim for closing remarks.

Thank you, Anthony. As KDP transitions into a new chapter and we prepare for our separation into two pure play companies, our board and governance are also evolving. At the end of Q1, Pam Patsley, our lead independent director, will assume the role of board chair as Bob Gamgord steps off the board. Bob has been a core part of making KDP into the formidable company it is today and a mentor and partner to me for the last two and a half years. We are grateful to him for his many years of service and countless contributions to the company. At the same time, Pam is uniquely suited to step into the chair role. She knows KDP deeply and has very strong board and executive experience. While I look forward to working with her in this new capacity as we lead KDP through a transformative period, Pam has already been a great partner to me as chair of the nominating committee in director recruitment and board structure. In addition, as recently announced, we are pleased to add two new independent directors to our board in early March. Amy Tiener, Alphabet's corporate controller and chief accounting officer, and Bill Newlands, Constellation Brands president and chief executive officer. Amy and Bill are both highly accomplished and experienced executives who will bring valuable capabilities and perspectives to our boardroom. Finally, we are separating our existing remuneration and nominating committee into newly created nominating and governance and compensation committees, which will further align our governance. With each of these steps, we'll support the company's ongoing transformation and will help us to ultimately establish two world-class boards for Beverage Co. and Global Coffee Co., with more announcements to come over time. So in closing, I'd like to thank our more than 30,000 KDP colleagues for their focus and adaptability through a period of significant change. And I look forward to welcoming our more than 21,000 new JDE Peace teammates to the company in the coming months and to successfully executing on our shared vision in 2026 and beyond. With that, we're now happy to take your questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. We ask that you please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question today comes from Chris Carey with Wells Fargo. Please go ahead.

Hi. Good morning, everyone. Thanks so much for the question. I wanted to just start with some context on the top line performance for standalone KDP, specifically contribution from the U.S. refreshment business relative to the rest of your businesses. It does seem to imply a pretty solid outlook for the top line in us refreshment i wonder if you could just maybe help us understand pricing contribution of your partner assets and then kind of base business performance within the u.s refreshment business specifically and then just if i could add um you know follow-up it would be What are the assumptions that you're embedding for the GDEP business within this six to seven percentage point EPS contribution that you flagged when you think about 2026, whether top line or margins? Thank you.

Thank you. I'll start on that one. Let me go back to the overall guide. You know, we are expecting low double-digit EPS growth, and we're doing this on a combined basis, so obviously KDP-based for 12 months, and then adding three-quarters of the incremental impact of the JDEP's acquisition that we expect to close in early April. When you unpack that, the KDP standalone guidance is 4% to 6% top line and 4% to 6% EPS growth, all on a constant currency basis. And we look at the top line combination of pricing and vol mix gains with sales growth expected across each segment. The most significant driver is expected to be U.S. refreshment beverage. We expect a strong top and bottom line performance following equally strong results in 2025. And as Tim, you know, talks about, you know, we're seeing a lot of innovation. You know, we've been gaining share in CSDs, sports hydration, and energy. So, those growth vectors together with our core business, driven by, you know, innovation and some pricing, are expected to continue to grow into 2026. The second part of your question was around the contribution from JDE Peets. And, you know, what we said in the guidance is $8.5 to $8.7 billion of incremental revenue. and, you know, the related operating income contribution. We have, you know, this is all informed together with JDEP and their kind of baseline planning for, you know, 2026. We can't get too much into detail given that JDEP is still a, you know, a standalone business. But net-net, when you add the revenue, the operating income related to that, Early gains on our synergy capture towards the $400 million three-year target. When you incorporate the incremental financing costs across the convertible preferred, the pod manufacturing joint venture, and the incremental debt that we've talked about, it all nets down to a six- to seven-point EPS benefit in 2026, consistent with our previous ALVEC for 10% accretion on a full-year basis post-acquisition.

Question comes from Steve Powers with Deutsche Bank. Please go ahead.

Great, and good morning, Ben. Good morning, Anthony. A question for each of you, if I could. The first one, Anthony, with the updated capital structure news from overnight, I think a lot of the pieces are coming into view. One thing that I am left questioning, though, is the existing KDP debt and how that is to be allocated across FutureBev versus CoffeeCo. So any thoughts on that would be very helpful. And then, Tim, on energy, you talked about the strong momentum and the confidence going forward, including future space gains in 26. I guess I'm curious a bit of kind of where that space is coming from. Is it really a function of the category gaining space? Are you gaining disproportionate share within category expansions? And is there any element of the energy gains that you're foreseeing that might come out of other aspects of your portfolio?

I'll take the first part of that question. And, you know, as you saw, we did announce an updated, you know, financing plan yesterday. Yesterday, it included a few elements, an upsize on the beverage company convertible preferred equity to $4.5 billion, the finalization of the coffee pod manufacturing, JV, that's $4 billion, and then $9 billion of debt, which is a combination of senior debt, and we're going to draw under the existing term loan facility, and that will get repaid with junior subordinated notes at a future date. And then also, you know, we'll be assuming $5 billion of the existing JDP debts. Now, that $9 billion incremental and the $5 billion rollover will stay with Coffee Code. The existing KDP debt will stay with Beverage Company, together with the $4.5 billion convertible preferred.

Steve, I'll take your second question on energy. You know, you've heard us say before, we're big believers in this category. We like this category. It's why we did the ghost acquisition and have assembled this four great and quite has multiple structural growth drivers that will keep it fueled for growth for many years to come. I think there's continued distribution expansion for energy in aggregate at a category. I think there's household penetration gains that we can still capture at a category and brand level, occasion gains, price pack architecture, channel distribution opportunities. We're seeing with a couple other brands in our Bloom brand, the incremental female consumer coming into the category. So we continue to like this, and that's why it's a $28 billion category that's growing in the teens. You saw that in 25, and you see that continue into 2026. Portfolio, Ghost, C4, Bloom, and Black Rifle. We feel very good about our position. In fact, we added one and a half share points last year, and we believe we will continue to grow share this year. We've got a great innovation lineup across all four brands, some really exciting new flavors, some partner flavors, into 8.4-ounce cans, which I think opens up a lot of new occasions and good sell-in for our energy portfolio across our customer base, both C-Store and larger format, and we are expecting significant incremental distribution points, particularly in conveyor-specific shelves. I would expect both energy in aggregate as a category to gain shelf space relative to other LRBs, and KDP in particular. To the balance of our portfolio, no. I think you'll see that continue, too.

Thank you both. Appreciate it.

The question comes from Filippo Filorne with Citi. Please go ahead.

Hi, good morning, everyone. I wanted to ask more about the coffee business. Tim and Anthony, both you guys mentioned that the first half of the year, there's going to be more commodity headwinds given your hedging, but obviously the commodity has come in quite a bit from the peak. So when, based on your hedging, should we start to see some more relief from the commodity? Is it really late in 2026 or could it come in a little bit early, kind of like in Q3 timeframe? And then on the pricing side, some of your competitors have talked about potentially giving back some of the commodity benefit in the form of lower prices. What are your pricing plans in coffee? Do you think you can hold the price, take more price? if you can give us a sense there, that would be helpful. Thank you.

Yeah, I'll start on this one. You know, as we look at, you know, the coffee business for 2026, we do expect some, you know, phasing as we go through. I would start by saying, you know, we expect, you know, the year-over-year cost headwinds, both green coffee prices and tariffs, to be most impactful in the first quarter of the year, and it's part of the reason why we're guiding to what we are for the, you know, the first quarter. And it reflects a couple things. One is there is about a six- to nine-month time lag between market price changes and when you see it throw through our P&L. And that's a combination of two things. One, you know, the time that input costs sit in inventory. And second, our forward hedging activities. And, you know, so it will be probably the latter part of the second half before we see the current market prices come through. But should it sequentially improve, right, it'll be a headwind in Q1, a lesser headwind in Q2, and flip in the second half. And it's somewhat mechanical at this point because obviously we know the costs that are sitting in inventory. We know our forward hedging costs, and we can look to the forward market price for green coffee to see what will impact our P&L in the latter part of the year.

Yeah, and maybe I'll build on that, Filippo, just to say, look, we're certainly well aware that, you know, pricing's been a big topic, a conversation across the industry. And our goal, obviously, is to drive sustainable volume and mix-led growth across all of our categories. At the same time, it's important for us to offset inflation when it occurs to protect that ability to continue to reinvest in our business for the long term. And so if you think about U.S. coffee, there's no doubt that the category and KDP, we've taken some meaningful pricing in recent years and in 25. And we passed through some significant inflation as sea price hit, you know, unprecedented levels early last year and as tariffs. As you've seen, the consumers remain highly engaged with the coffee category. We feel very good about our elasticity. It's tracking to our expectations, and it remains healthy. And so, you know, we don't believe the category is overpriced, and we expect year-over-year cost headwinds, as Anthony just reinforced, to persist in that hedge and inventory timing lags. But that will ease as the year goes on and I think put us in a good position. The coffee category returned to solid top-line performance with volume and mix, meaning fleek.

Question comes from Peter Grom with UBS. Please, go ahead.

Good morning, everyone. Maybe two for me. Just first, on the phasing of the year, you provided some good color on what to expect in the first quarter from an earnings standpoint. But just given some of the retail inventory dynamics and some of the timing nuances you outlined in U.S. Beverages and International, curious how you see organic sales growth in the first quarter in the context of the full-year guidance and relatively strong 4Q exit rate. And then just a second question, just, you know, on the partner brands and the broader strategy, it's obviously been a strong driver of growth, but we'd love to get your perspective on this strategy as you go through this transition over the next, you know, several months. I guess that's another way. What's your willingness to add more brands as you go through this separation? Thanks. Thanks.

Yeah, so let me address the first part of the question and thinking about the gaining of our, you know, top line on a full year basis, you know, the base KDP business, 4 to 6 percent top line growth. And I would say fairly stable, a little bit of pressure in Q1 around retail inventory adjustments, particularly in coffee and pods. And it's, you know, that impact is one of the three reasons that the bottom line will be under a little bit of pressure in Q1. Obviously, we're wrapping the Vita Cocoa two-cent gain. We expect, you know, the cost headwinds in coffee in particular to be peaking in Q1 relative to the balance of the year. And secondly, there is some anticipated retail inventory adjustments in coffee, as I mentioned. So, obviously, that's a top line as well as a bottom line impact. That said, you know, we have very good visibility to EPS growth in Q2 and a further acceleration in the back half. Obviously, the vital cocoa issues behind us, the cost headwinds, as I just mentioned, are going to moderate as we move through the year. The inventory adjustments will impact the first quarter to a lesser extent Q2 and then kind of get more in balance as we go into the second half. And we should also benefit, you know, from the innovation and stepped-up marketing activities that Tim mentioned in his remarks.

Second question on think about space opportunities. And, you know, one of the reasons I love this beverage industry is how dynamic it is. consumer preferences. We've got a flexible model that allows us to capture those through buy, build, or partner. I think we also have a track record of creative and highly capital. A recent example that was, you know, produced meaningful growth last year and will again this year is our ElectroLeague partnership. That is a no capital partnership where we're the distribution partner of the largest share gainer in sports hydration and one that we've got continued confidence will grow. So I think you'll see that flexibility going forward and you'll see us continue to tap into white spaces and you'll see us continue to put a premium on a balanced approach of base business growth and partnership growth.

Great, thank you so much.

The next question comes from Lauren Lieberman with Barclays. Please go ahead.

Great, thanks so much. Two things I wanted to check in on. One was just the comments both on 1Q, then, you know, saying, yes, we'll get to growth in 2Q, implies a very, very big ramp on EPS growth for underlying KDP in the back half. So just wanted to kind of confirm that. And, you know, even with that, like, strong double digit, you'd have to do that in order to get to the low end of that 4 to 6. So I just wanted to make sure I was thinking about that the right way. And then just any update on leadership search for Coffee Co. and kind of what, you know, who the board is looking for profile-wise. You know, is this an endeavor that's, you know, underway and being led by the KDP board? I was just kind of curious on how that would fit. And then finally, our last thing, was just any thoughts on free cash flow? I know it's tough to kind of mush two companies together and comment on free cash before you're together. But just any thoughts on that for 26?

Okay, I'll start. I mean, just confirming, yes, we do expect accelerating EPS growth on the base KDP business as we go through the year, and the primary swing item does relate to coffee costs and tariff impacts on the P&L and the sequencing of those, you know, through the year. And also, the addition of JDEP and the six to seven points of accretion obviously is quarters Q2 through Q4, so obviously that's a back half-weighted impact. Before going back to Tim, I'll comment on, you know, free cash flow. So, first, you know, this is an important metric for us, a focus area, as we look to continue to delever post-acquisition. We did $1.5 billion of free cash flow in 2025 and are forecasting $2 billion of free cash flow in 2026, so a significant improvement. Part of that is we're lapping some distribution payments related to GOES, but also growth in EBITDA, better performance on working capital, particularly inventory will contribute to that. When we get to the next quarter, we'll be able to incorporate the JDP outlook. They had a very good year on free cash flow in 2025, exceeding 1.1 billion euros in terms of free cash flow generation. So both of these businesses are highly cash-generative, which gives it, obviously, a lot of strength and an ability to deliver going forward as well as post-separation.

Yeah, I'll take the second question, Lauren. Obviously, one of our top priorities, and as we signaled back on investor day, one of our separation prerequisites. Leadership teams and boards of directors for each of our future pure plate companies. Specific to the Global Coffee Coast CEO, I can tell you we're in the final stages of our internal and external search, and we will plan to have a public announcement by deal close by the KDP board, specifically by Pam Patsley, our incoming chair and chair of the non-gov committee, and me, and with involvement of the entire KDP board. And I am confident we will appoint a CEO with the right set of capabilities and background to position Global Coffee Co. for long-term success.

Comes from Peter Galbo with Bank of America. But please go ahead.

Hey, good morning, guys. Thanks for the question. And, Anthony, thanks for all the modeling detail. Tim, I wanted to maybe focus back on refreshment beverage and particularly just what's been happening through the start of the year on some of the SNAP waiver adjustments in certain states. Obviously, there's a few big states that start to roll on in the spring. So just any early reads on kind of what you have seen and whether or not the guidance, at least on the CSD side, incorporate any sort of disruption as Texas and Florida kind of start to roll into that waiver program. Thanks very much.

Yeah, Peter. As you can imagine, we are looking at that dynamic very closely, including, you know, a state-by-state analysis that I actually review with our teams every other week. And, you know, when it comes to SNAP restrictions, I would say, you know, kind of think about one is, you know, category eligibility of SNAP benefits, and the other is benefits in magnitude. As it relates to first bucket, we see changes to categories eligible for SNAP as more likely to drive really shifts in the payment method, resulting in a meaningful change. When you think about CSDs in particular, CSDs have a prominent grocery bills for both SNAP recipients and non-SNAP recipients. We've seen that there is often a reallocation, kind of left pocket, right pocket, as it relates to that. On the other hand, I think history would suggest that if there are meaningful changes in the magnitude aggregate, that can be more impactful and can merit some trade-off decisions. about it is obviously including the five or six states that have already implemented that eligibility, SNAP restrictions. We're monitoring that closely. I think it's too early to draw firm conclusions. We're seeing some mixed signals, fixed plans, but I think the overall impact on the business is going to be manageable, and you should explore more architecture and affordability options, you know, mini cans, two-liter value packs, certain promotions, et cetera. So we'll stay dynamic as we continue to monitor, but feel good that we've got our arms around this in the guide that we've shared today.

This concludes our question and answer session. I would like to turn the conference back over for any closing remarks.

Great. I just want to thank everybody for their time and attention this morning, and the IR team is around if you have any follow-ups. Thanks so much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.