This report does not constitute a rating action. Overview Key strengths Key risks Dominant player in single-serve coffee sector and non-cola carbonated soft drinks (CSD). Potential for escalating competition from financially solid CSD rivals or packaged food companies in coffee. Projected credit measure improvement due to EBITDA growth and strong cash flow generation. Public/social policy shift away from sugary drinks. Solid profit margins which we expect to expand. An inability to offset potentially higher input costs including green coffee or aluminum cans. Valuable direct store delivery (DSD) network reaches 80% of the U.S. population. Less geographically diverse than rival CSD firms. 2x-2.5x company-defined leverage target Medium term potential for additional large, debt-financed acquisition activity or share repurchases. KDP?s credit metrics
