Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Keurig Dr Pepper Inc., balance sheet: goodwill and intangible assets

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Goodwill	20,182)	20,184)	20,172)	20,011)
Brands	19,865)	19,874)	19,948)	19,712)
Trade names	2,480)	2,480)	2,479)	2,479)
Contractual arrangements	123)	123)	122)	119)
Distribution rights	85)	57)	16)	—)
Intangible assets other than goodwill with indefinite lives	22,553)	22,534)	22,565)	22,310)
Acquired technology	1,146)	1,146)	1,146)	1,146)
Customer relationships	638)	638)	638)	629)
Trade names	128)	127)	128)	127)
Distribution rights	29)	26)	24)	—)
Contractual arrangements	24)	24)	24)	26)
Brands	21)	21)	10)	9)
Favorable leases	—)	—)	—)	13)
Intangible assets other than goodwill with definite lives, gross amount	1,986)	1,982)	1,970)	1,950)
Accumulated amortization	(683)	(548)	(418)	(293)
Intangible assets other than goodwill with definite lives, net amount	1,303)	1,434)	1,552)	1,657)
Intangible assets other than goodwill	23,856)	23,968)	24,117)	23,967)
Goodwill and other intangible assets	44,038)	44,152)	44,289)	43,978)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Keurig Dr Pepper Inc. goodwill increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.
Intangible assets other than goodwill	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Keurig Dr Pepper Inc. intangible assets other than goodwill decreased from 2019 to 2020 and from 2020 to 2021.
Goodwill and other intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Keurig Dr Pepper Inc. goodwill and other intangible assets decreased from 2019 to 2020 and from 2020 to 2021.

Keurig Dr Pepper Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Total Assets
Total assets (as reported)	50,598)	49,779)	49,518)	48,918)
Less: Goodwill	20,182)	20,184)	20,172)	20,011)
Total assets (adjusted)	30,416)	29,595)	29,346)	28,907)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	24,972)	23,829)	23,257)	22,533)
Less: Goodwill	20,182)	20,184)	20,172)	20,011)
Stockholders’ equity (adjusted)	4,790)	3,645)	3,085)	2,522)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Keurig Dr Pepper Inc., Financial Data: Reported vs. Adjusted

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Keurig Dr Pepper Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Total Asset Turnover
Reported total asset turnover	0.25	0.23	0.22	0.15
Adjusted total asset turnover	0.42	0.39	0.38	0.26
Financial Leverage
Reported financial leverage	2.03	2.09	2.13	2.17
Adjusted financial leverage	6.35	8.12	9.51	11.46
Return on Equity (ROE)
Reported ROE	8.59%	5.56%	5.39%	2.60%
Adjusted ROE	44.80%	36.35%	40.65%	23.24%
Return on Assets (ROA)
Reported ROA	4.24%	2.66%	2.53%	1.20%
Adjusted ROA	7.06%	4.48%	4.27%	2.03%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Keurig Dr Pepper Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Keurig Dr Pepper Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Keurig Dr Pepper Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Keurig Dr Pepper Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Keurig Dr Pepper Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net sales	12,683)	11,618)	11,120)	7,442)
Total assets	50,598)	49,779)	49,518)	48,918)
Activity Ratio
Total asset turnover¹	0.25	0.23	0.22	0.15
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales	12,683)	11,618)	11,120)	7,442)
Adjusted total assets	30,416)	29,595)	29,346)	28,907)
Activity Ratio
Adjusted total asset turnover²	0.42	0.39	0.38	0.26

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2021 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 12,683 ÷ 50,598 = 0.25

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 12,683 ÷ 30,416 = 0.42

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Keurig Dr Pepper Inc. adjusted total asset turnover ratio improved from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Total assets	50,598)	49,779)	49,518)	48,918)
Stockholders’ equity	24,972)	23,829)	23,257)	22,533)
Solvency Ratio
Financial leverage¹	2.03	2.09	2.13	2.17
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets	30,416)	29,595)	29,346)	28,907)
Adjusted stockholders’ equity	4,790)	3,645)	3,085)	2,522)
Solvency Ratio
Adjusted financial leverage²	6.35	8.12	9.51	11.46

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 50,598 ÷ 24,972 = 2.03

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 30,416 ÷ 4,790 = 6.35

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Keurig Dr Pepper Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to KDP	2,146)	1,325)	1,254)	586)
Stockholders’ equity	24,972)	23,829)	23,257)	22,533)
Profitability Ratio
ROE¹	8.59%	5.56%	5.39%	2.60%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to KDP	2,146)	1,325)	1,254)	586)
Adjusted stockholders’ equity	4,790)	3,645)	3,085)	2,522)
Profitability Ratio
Adjusted ROE²	44.80%	36.35%	40.65%	23.24%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2021 Calculations

¹ ROE = 100 × Net income attributable to KDP ÷ Stockholders’ equity
= 100 × 2,146 ÷ 24,972 = 8.59%

² Adjusted ROE = 100 × Net income attributable to KDP ÷ Adjusted stockholders’ equity
= 100 × 2,146 ÷ 4,790 = 44.80%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Keurig Dr Pepper Inc. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to KDP	2,146)	1,325)	1,254)	586)
Total assets	50,598)	49,779)	49,518)	48,918)
Profitability Ratio
ROA¹	4.24%	2.66%	2.53%	1.20%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to KDP	2,146)	1,325)	1,254)	586)
Adjusted total assets	30,416)	29,595)	29,346)	28,907)
Profitability Ratio
Adjusted ROA²	7.06%	4.48%	4.27%	2.03%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2021 Calculations

¹ ROA = 100 × Net income attributable to KDP ÷ Total assets
= 100 × 2,146 ÷ 50,598 = 4.24%

² Adjusted ROA = 100 × Net income attributable to KDP ÷ Adjusted total assets
= 100 × 2,146 ÷ 30,416 = 7.06%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Keurig Dr Pepper Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021.

Keurig Dr Pepper Inc. (NASDAQ:KDP)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Keurig Dr Pepper Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Keurig Dr Pepper Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)