Keurig Dr Pepper Inc. (NASDAQ:KDP)

Current assets and adjusted current assets exhibited a consistent growth trajectory over the four-year period ending December 31, 2021. While the increase was incremental between 2018 and 2020, there was a significant acceleration in asset accumulation during the 2021 fiscal year.

Trend in Current Assets

Current assets increased from US$ 2,159 million in 2018 to US$ 3,057 million by 2021. The growth rate remained relatively stable at approximately 5% annually from 2018 to 2020, before experiencing a sharp increase of roughly 28% in 2021.

Analysis of Adjusted Current Assets

Adjusted current assets followed a nearly identical growth pattern, rising from US$ 2,167 million in 2018 to US$ 3,064 million in 2021. The strong correlation between reported and adjusted figures suggests that the adjustments made to the current asset base are minimal in scale.

Variance Between Reported and Adjusted Assets

The variance between current assets and adjusted current assets remained low throughout the observed period. The difference ranged from a minimum of US$ 7 million in 2021 to a maximum of US$ 21 million in 2020. This indicates that the adjustments have a negligible impact on the overall liquidity profile and the total valuation of current assets.

A consistent upward trend is observed in both total and adjusted assets over the four-year period ending December 31, 2021. Total assets increased from 48,918 million US dollars in 2018 to 50,598 million US dollars in 2021, representing a cumulative growth of approximately 3.4%.

Asset Growth Trajectory

The expansion of the asset base occurred steadily, with the most significant annual increase recorded between 2020 and 2021, during which total assets rose by 819 million US dollars. This follows a period of slower growth between 2019 and 2020, where total assets increased by 261 million US dollars.

Analysis of Asset Adjustments

The variance between reported total assets and adjusted total assets remained minimal. In 2018, adjusted total assets exceeded reported assets by 228 million US dollars. However, a shift occurred starting in 2019, with adjusted total assets becoming slightly lower than reported assets. This negative variance expanded marginally from 20 million US dollars in 2019 to 35 million US dollars by 2021.

Correlation and Materiality

Adjusted total assets closely tracked the movements of reported total assets, increasing from 49,146 million US dollars in 2018 to 50,563 million US dollars in 2021. The negligible difference between the reported and adjusted figures indicates that the adjustments had an immaterial impact on the overall valuation of the asset base during the analyzed period.

Current liabilities exhibited a consistent growth trend from 2018 through 2020, peaking at 7,694 million US dollars, before experiencing a notable contraction in 2021. The adjusted current liabilities mirror this trajectory closely, indicating that the adjustments applied to these figures are consistently minimal across the reported period.

Liability Trend Dynamics

A steady increase in short-term obligations is observed between 2018 and 2020, with the most significant jump occurring in 2020. This growth was reversed in 2021, as current liabilities declined to 6,485 million US dollars, effectively returning the liability level to a position similar to that of 2019.

Adjustment Variance Analysis

The difference between reported current liabilities and adjusted current liabilities is marginal, ranging from 23 million to 37 million US dollars annually. This narrow gap suggests that the adjustments made to the current liabilities are non-material and do not significantly alter the perceived short-term financial obligations or the overall liquidity profile of the entity.

A consistent downward trend is observed in both total liabilities and adjusted total liabilities between December 31, 2018, and December 31, 2021. The steady reduction in these obligations suggests a focused effort toward debt reduction or the systemic settlement of financial liabilities over the analyzed four-year period.

Total Liabilities Trend

Total liabilities decreased from 26,385 million US$ in 2018 to 25,626 million US$ in 2021. This represents a total reduction of 759 million US$, with the most significant annual declines occurring between 2019 and 2021.

Adjusted Total Liabilities Trend

Adjusted total liabilities followed a similar trajectory, declining from 20,671 million US$ in 2018 to 19,608 million US$ in 2021. This reflects a total decrease of 1,063 million US$, indicating a more pronounced percentage reduction compared to the unadjusted figures.

Adjustment Variance Analysis

The difference between total liabilities and adjusted total liabilities remained relatively stable throughout the period. The variance began at 5,714 million US$ in 2018 and fluctuated slightly to end at 6,018 million US$ in 2021. The consistency of this gap suggests that the underlying factors necessitating the adjustment remained constant in nature and scale across the four fiscal years.

A consistent upward trend is observed in both stockholders' equity and adjusted total equity from December 31, 2018, through December 31, 2021. This progression indicates a steady increase in the net asset value and a strengthening of the equity base over the analyzed four-year period.

Stockholders' Equity Growth

Reported stockholders' equity increased from 22,533 million USD in 2018 to 24,972 million USD by 2021. The growth was incremental year-over-year, with the most pronounced expansion occurring between 2020 and 2021, representing an increase of approximately 4.8%.

Adjusted Total Equity Trends

Adjusted total equity followed a parallel trajectory, rising from 28,475 million USD in 2018 to 30,955 million USD in 2021. The growth pattern remains stable and aligns with the reported equity figures, reflecting a sustained increase in adjusted capital.

Analysis of Equity Adjustment Variance

A significant and stable variance is maintained between the reported stockholders' equity and the adjusted total equity. The difference between these two metrics remained remarkably consistent, fluctuating within a narrow range between 5,942 million USD in 2018 and 6,033 million USD in 2019. The persistence of this gap suggests that the adjustments are derived from non-volatile items or standardized accounting reconciliations that do not fluctuate significantly with annual operational performance.

Between 2018 and 2021, a consistent deleveraging trend is observed. Total reported debt decreased from US$ 15,990 million to US$ 12,582 million, while adjusted total debt followed a similar trajectory, declining from US$ 16,236 million to US$ 13,266 million. This indicates a sustained reduction in the company's total liabilities over the analyzed four-year period.

Equity Growth Patterns

Stockholders' equity grew steadily from US$ 22,533 million in 2018 to US$ 24,972 million in 2021. Adjusted total equity mirrored this upward trend, increasing from US$ 28,475 million to US$ 30,955 million. The adjusted equity figures remain consistently higher than the reported equity, suggesting the inclusion of significant adjustments to the capital base.

Impact of Financial Adjustments

A substantial variance is noted between reported and adjusted values. The adjusted total capital is significantly higher than the reported total capital in every period, beginning with a difference of US$ 6,188 million in 2018. These adjustments specifically elevate both the debt and equity components, though the impact on equity is more pronounced.

Total Capital Stability

While reported total capital declined from US$ 38,523 million to US$ 37,554 million, the adjusted total capital exhibited greater stability, moving from US$ 44,711 million to US$ 44,221 million. This stability indicates that the growth in adjusted equity has almost entirely offset the reduction in adjusted total debt over the period.

Both net income attributable to KDP and adjusted net income including non-controlling interests exhibit a strong overall upward trajectory between 2018 and 2021. While both metrics expanded significantly over the four-year period, the adjusted figures demonstrate greater volatility relative to the reported net income.

Net Income Growth Trend

Net income attributable to KDP increased consistently every year, rising from 586 million USD in 2018 to 2,146 million USD in 2021. A substantial acceleration is noted between 2018 and 2019, where income more than doubled, followed by a period of stabilization in 2020 and another significant surge in 2021.

Adjusted Net Income Performance

Adjusted net income including non-controlling interests grew from 305 million USD in 2018 to 2,067 million USD in 2021. In contrast to the steady climb of reported net income, the adjusted figure experienced a slight decline in 2020, dropping from 1,452 million USD to 1,260 million USD, before recovering sharply in 2021.

Variance Analysis between Reported and Adjusted Figures

The relationship between reported and adjusted income shifted throughout the period. In 2018, adjusted net income was significantly lower than reported net income. This trend inverted in 2019, when adjusted net income exceeded reported income by 198 million USD. For the 2020 and 2021 fiscal years, adjusted net income returned to a level below the reported net income attributable to KDP, though the margin of difference remained relatively small compared to the 2018 variance.