Today, and welcome to the Keurig Dr Pepper announces acquisition of JDE Peet's and plans separation. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jane Gelfand, SVP Finance. Please go ahead. Good morning, everyone, and welcome. Before we get started, just a few quick reminders. This call is being recorded, and an accompanying live presentation can be viewed in real time on the live webcast. Certain statements made during this call will be forward-looking statements that speak only as of the date of this call. Although KDP believes that its assumptions regarding such forward-looking statements are reasonable, KDP can give no assurance that these forward-looking statements will prove to be correct. Forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from such forward-looking statements. For more information, please refer to the other risks and uncertainties discussed in KDP 's press release issued earlier today and filing with the SEC. Except as required by law, we do not undertake any obligation to update any forward-looking statements discussed today. In addition, during this call, we will refer to certain non-GAAP metrics. These measures should not be viewed in isolation or as substitutes for our GAAP results. Please refer to the accompanying presentation for additional information regarding these non-GAAP metrics. References during this call to JDE Peet's financial results have been converted to U.S. dollars using a euro-to-U.S. dollar exchange rate of 1.16. Here with us to discuss today's announcements are Keurig Dr Pepper's Chief Executive Officer, Tim Cofer, and Chief Financial Officer and President International, Sudhanshu Priyadarshi. I'll now turn it over to Tim. Thanks, Jane, and good morning, everyone. We appreciate you joining us today on short notice. This morning's exciting developments are transformational for KDP and for our shareholders. We're announcing a two-part transaction that will reshape the beverage industry and create value in the near term and over the long term. Let me take you through each of the steps. First, KDP has reached a definitive agreement to acquire JDE Peet's. This transaction represents a singular opportunity to establish a global coffee leader serving more than 100 countries with a powerful portfolio of iconic brands. Second, after the acquisition is complete, we plan to stand up two independent, publicly traded companies in the U.S. by separating the global coffee business and our North American refreshment beverage business via a tax-free spin-off. There is strong merit behind the acquisition. We have agreed to acquire 100% of JDE Peet's via an all-cash deal struck at an attractive valuation. The enterprise value of $23 billion represents an approximately 13 x EV to EBITDA multiple on a 2026 basis, or closer to 10.5 x, including expected synergies. At EUR 31.85 per JDE Peet's share, this represents a 20% premium to Friday's closing price. The logic behind this acquisition is both financial, with immediate expected EPS accretion plus healthy projected cost synergies, and strategic, with a unique opportunity to create a global coffee powerhouse. JDE Peet's and KDP 's Keurig businesses are almost entirely complementary. When combined, they create a powerful platform with an iconic stable of brands that will collectively reach much of the developed and emerging world. This combination will move our coffee and refreshment beverage operations toward distinct paths with unique growth vectors. We therefore have an opportunity and a responsibility to maximize value for our shareholders by setting up each business to win as an independent company. For now, we are calling these future companies Global Coffee Co. and Beverage Co., and we will announce official names closer to the separation. We're confident that this is the right time for transformational action at KDP, and we will execute this next step in our journey from a clear position of strength. Our business has momentum. Over the past several years, we have evolved our portfolio, strengthened capabilities and execution, and refreshed our leadership team. Our first half results are a testament to this progress, with robust growth across refreshment beverages and improving trends in coffee, thanks to a sharp strategy and an increasingly resilient category. We are leveraging this unique opportunity to take the right next steps for our business and our shareholders. We see JDE Peet's as the ideal target for KDP's next chapter. Simply said, our coffee businesses are better and stronger together, given the complementary fit, scale benefits, and the cost and operational efficiencies from the combination. The collective platform will be a true leader on the global coffee stage with enhanced growth and profit potential. This is indeed a case of one plus one equaling three. The subsequent separation will allow our strengthened global coffee business and leading North America refreshment beverage business to focus solely on the growth opportunities across their distinct categories and geographies. Each company will benefit from purpose-built strategies, operational independence, tailored resource allocation, and investor bases aligned with their attractive and differentiated shareholder value propositions. Importantly, each step of this transaction will generate value. The acquisition is compelling in isolation, and the separation will unlock further upside as the unique competitive advantages of each company become more apparent. Both Global Coffee Co. and Beverage Co. will operate in vast, total addressable markets with the right brands, assets, and talent to drive sustained outperformance. Let me expand on why JDE Peet's is so compelling to KDP. It's a clear global coffee leader with a powerful portfolio of iconic brands and a nearly 300-year legacy in the coffee industry. It's scaled and highly profitable, with over $11 billion in annual net sales and almost $2 billion in adjusted EBITDA. It's anchored by $3 billion trademarks, Jacobs, L’OR, and Peet’s, and a stable of beloved local brands across key markets. While JDE Peet's is truly global with leadership positions in 40 markets and reach across more than 100 countries, its U.S. business is largely limited to Peet’s, a premium trademark with origins in artisanal coffee shops and strong coffee credentials. As the world's largest coffee market, the U.S. is pivotal. The symbiotic nature of marrying Keurig, the leading force in single-serve coffee in North America, with JDE Peet's broad global portfolio, is why this is such an excellent strategic fit with our business. By joining together our complementary portfolios, we expect to unlock incremental growth potential. For example, pairing Keurig's innovation prowess with JDE Peet's unmatched reach will enable us to rapidly expand winning ideas across channels and formats around the globe. As I said earlier, the acquisition is also highly attractive from a financial perspective. We forecast $400 million in cost synergies through the combination of the two businesses, even accounting only for those cost reductions that we expect to be permanent when Global Coffee Co. is a standalone company. This is over and above any savings initiatives that either company has already announced, including JDE Peet's recently previewed multi-year productivity target. The deal will also be immediately EPS accretive in year one and more additive over time, driving value creation in the near term and long term. The JDE Peet's acquisition is also the foundational first step of value unlock because it establishes Keurig Dr Pepper as a platform for what will ultimately become two powerful and independent companies shortly thereafter. Following the separation, each standalone entity will lead its industry with a sharp strategic focus and with operating models that are finely calibrated to their unique categories and markets. As a result, the way they deliver shareholder value and drive growth will be tailored as well. Each business will have a distinct growth model or algorithm, and capital allocation priorities bespoke to its circumstances. Global Coffee Co. will be the number one global category pure play in the market, offering shareholders undiluted exposure to literally the world of coffee. Its growth model will be focused on steady, low single-digit revenue gains, with even stronger profit growth, which will be further enhanced by regular and compelling cash returns. Beverage Co. will be the most agile, scaled player in refreshment beverages. This business will deliver mid-single-digit revenue growth at industry-leading margins with free cash flow to be deployed in a dynamic way between strategic growth investments and cash returns. In other words, while each company will drive growth in its own way, the outcomes should be attractive across both, with strong earnings growth and dividend policies geared to consistently produce top-tier TSR, even before accounting for upside potential in valuation mode. Before turning to the portfolio positioning of each company, let me reemphasize a few points. There is clear and compelling logic to the transformational changes announced this morning, and we expect shareholder value creation in each step of this process. The acquisition of JDE Peet's has great merits, and in a complementary and synergistic combination with Keurig, forms an unparalleled global coffee platform. The potential of this business will be only enhanced by the planned tax-free separation into Global Coffee Co. In parallel, the refreshment beverages business will make for a vibrant standalone Beverage Co. on the other side. As the planned separation unlocks each company's ability to deliver growth and shareholder value, we expect investors will benefit from multiple ways to win. Sudhanshu and I, along with our KDP leadership team, are committed to delivering on every aspect of the acquisition case and setting each company up for success. There are some separation details we already know at this early stage, and some are still being worked out. For example, we have already determined that the global headquarters for Coffee Co. will be in Burlington, Massachusetts, with Amsterdam to serve as the international headquarters. Beverage Co. headquarters will be in Frisco, Texas. In the months ahead, as we prepare for the separation, we'll be ready to share more plans with you, including news on executive leadership teams and boards of directors. Before we continue, I'd like to add a personal note. It will be my privilege to serve as Beverage Co. CEO post-separation, and I'm excited to take this great, disruptive, growing business to new heights in the years ahead. I would also like to congratulate Sudhanshu on his upcoming appointment as CEO of Global Coffee Co. Sudhanshu has been a true partner of mine over the past two years, and I've seen firsthand that he's an ambitious strategic thinker, a financially minded operator, and an inspiring people leader. At KDP, he serves not just as our CFO but also as President of our international segment, building on the 25-year career across global CPG and multinational giants. With the benefit of this great experience and his unique merits, Sudhanshu will naturally step into the CEO role at Global Coffee Co. Along with the rest of the KDP Board of Directors, I am confident that his leadership will be instrumental in unlocking that company's future potential. Let's now talk in more depth about our vision for each standalone company, starting with Global Coffee Co. First, it's worth zooming out to put the global coffee category in greater context. We've been steadfast in our belief in the category, even as we've acknowledged that the last few years have been volatile. Here's why. It's a huge and vibrant space. Consumers spend approximately $400 billion every year to drink coffee, both inside and outside of the home. It's a ritual that they feel they cannot live without. Though developed market per capita consumption is impressive, premiumization is a strong tailwind for future growth. In developing markets, many consumers are increasing the amount of coffee that they drink. Together, these powerful dynamics have propelled steady, low single-digit volume growth in the category over many years, above the rate of population. Global coffee dollar growth has been even faster in the mid-single digits over the last 15 years, thanks to mix gains due to premiumization and innovation. We're confident in these structural growth drivers as we look to the future, and that our combined Global Coffee Co. will be a key contributor to the category's growth. With $16 billion in net sales, the standalone Global Coffee Co. will be a force in the coffee industry. As a clear category leader with a singular category focus, it will be well-positioned to take share in this huge addressable market. To do so, it will leverage consumer insights gleaned across the world and across every segment of coffee, a strong innovation engine focused on next-generation solutions, and a stable of scaled and local brands that can play differentiated roles across the portfolio. Thanks to a global supply chain and on-the-ground presence in over 100 markets, Global Coffee Co. will have the ability to quickly expand its winning ideas. Its global reach will be well-balanced, with 40% of sales in North America, another 40% in Europe, and a sizable 20% exposure to the rest of world, including faster-growing emerging markets. Its top brands will include $4 billion trademarks, plus six more $500 million local and regional jewels. Each brand has its own positioning and devoted consumer following, as well as the clear potential to source best ideas from across the enterprise. For instance, the Keurig brand is the clear single-serve leader in North America, whereas SENSEO and TASSIMO are sizable single-serve players in Europe. There is obvious potential to cross-pollinate technology, product ideas, and commercialization concepts for maximum impact across all three brands. Additionally, the breadth of the portfolio across formats and channels will allow Global Coffee Co. to align with and anticipate consumer preferences and trends. Putting each of these elements together, the result will be a portfolio with real ballast and resilience, and with the right to outperform in a tremendous category. These characteristics will support a steady, low single-digit top-line growth profile. Layering on margin upside and below-the-line leverage should enable high single-digit EPS gains. With modest CapEx needs, Global Coffee Co. will be strongly cash-generative, helping to support a healthy investment-grade profile. Over time, robust free cash flow will also allow for an emphasis on direct shareholder returns, including regular share buybacks and a compelling dividend. Turning now to KDP's refreshment beverage business, the future Beverage Co. At $11 billion in net sales, Beverage Co. sits in a sweet spot, combining both scale and agility, which translates into strong growth potential and disruptive optionality. Scale is pivotal in this $300 billion total addressable market. Brands matter, and distribution is a competitive differentiator. Beverage Co. will check the box on both fronts. In other words, the ingredients are in place for Beverage Co. to continue to challenge the status quo in the refreshment beverage industry while driving attractive value for shareholders. Let me remind you that Beverage Co. business has grown nearly 70% since the formation of KDP, thanks to both core momentum as well as a deliberate effort to evolve the portfolio towards consumer-preferred spaces over the last several years. Today, the refreshment beverage business is roughly the same size as the entirety of KDP at formation, and it has unmistakable momentum. Our build, buy, and partner approach has set the portfolio up to deliver attractive growth as currently configured, though the space is fragmented and dynamic, so there will be more opportunity to expand organically and inorganically. Our brands are formidable. Dr Pepper is the leader in flavored CSDs, approaching $6 billion in retail sales in the U.S. alone. In total, Beverage Co. will have $3 billion trademarks and 11 additional brands in the portfolio in excess of a $500 million of retail sales, including fast-growing disruptors like GHOST and C4, which anchor a 7% and climbing market share position in the large and attractive U.S. energy segment. Electrolit, which is quickly expanding in the sports hydration space, and Peñafiel, Mexico's number one mineral water brand. As I mentioned, distribution prowess is pivotal to winning in the refreshment beverage industry. Beverage Co. will have this power from scarce, competitively advantaged direct store delivery distribution systems in the U.S. and Mexico. In the U.S., we are proud to operate one of the three national non-alcoholic beverage DSD networks. Our maroon system serves nearly 80% of the U.S. population and covers a variety of channels, while strategic partners help us reach the balance. Over the past several years, we have closed on more than 30 transactions that have collectively strengthened our system and built both breadth and depth of coverage. Through capability investments, territory expansion, and ensuring the right brands go on the truck, our U.S. DSD network has impressive reach and delivers great results for our brands. We are similarly investing to expand our DSD footprint in Mexico. We see more potential to continue to strengthen our systems and expand our competitive advantages in DSD, both as part of KDP and when Beverage Co. becomes independent. Beverage Co. has another key growth lever: its preferred partner status in the industry. This reputation is backed by a track record of working with high-potential brands and founders to drive win-win commercial and economic outcomes for both us and them. We have a proven model of identifying disruptive brands, driving alignment with them through a variety of capital-efficient pathways, partnering to deliver results, and in the process, securing optionality to become bigger owners over time or to monetize the outcomes. Given the dynamic nature of the industry and consumer preferences, we will continue to put this model to use, evolving the portfolio to support strong growth objectives at Beverage Co. Beverage Co. has the brands, the assets, and the discipline to continue to win. In so doing, we see the potential for consistent mid-single-digit top-line and high single-digit EPS growth outcomes over the coming years. Our capital priorities will be maintaining a solid investment-grade balance sheet and investing in organic and inorganic opportunities to capitalize on emerging growth trends, supplemented by competitive direct shareholder returns through a dividend and opportunistic buybacks when appropriate. Clearly, this is a different model than Global Coffee Co., underscoring why unleashing each company to be able to drive growth and create value in its own distinctive way is so appealing. I'll now turn it over to Sudhanshu to discuss synergies, balance sheet, and next steps. Thanks, Tim, and good morning, everyone. I'll start with a few details on the JDE Peet's transaction and then provide an overview of the separation mechanics. Starting with JDE Peet's, we have agreed to purchase 100% of their shares outstanding for a total implied enterprise value of approximately $23 billion, including company debt and based on current exchange rates. This represents an approximately 13 x multiple on 2026 estimated adjusted EBITDA on a pre-synergy basis and 10.5 x on a post-synergy basis. We believe this is an attractive valuation for a high-potential combination that unlocks immediate EPS accretion and sets up for multi-year shareholder value creation. The acquisition is expected to close in the first half of 2026, and we plan to fund this deal with debt as well as cash on hand. Our chosen financing will deliver an optimized and attractive cost of capital and will support our expectation for a continued investment-grade rating for KDP. The funding structure will also enable our investment-grade commitment for each of the individual companies post-spin. As Tim mentioned earlier, the JDE Peet's acquisition will unlock meaningful cost synergies. We expect to generate $400 million in annual run-rate savings, which will accrue to the coffee portion of our business. These efficiencies will be sourced from multiple opportunity areas and are forecasted to be additive to the productivity that JDE Peet's recently identified at its capital markets event. Importantly, this synergy target is set with full clarity that we must simultaneously set up a Global Coffee Co. with resources and capabilities to perform as a standalone public company. For that reason, our savings target assumes that we will preserve some duplicative functions that would otherwise be eliminated in a typical acquisition. There are two key implications of this approach. First, our $400 million savings target would likely be even higher if we were not planning for a subsequent separation. Second, the functions we are preserving will reduce the need for incremental investment as we stand up a Global Coffee Company and Beverage Company. As a result, and in concert with other efficiency plans, we expect separation dis-synergies will be limited and manageable. Our plans contemplate financing the deal with debt and cash. A debt-weighted approach helps to secure attractive bottom-line accretion and more control as we embark on the next steps of this journey and begin to set up for the separation. At the same time, I want to acknowledge this means we are taking on more leverage as a result of the acquisition. We expect our management leverage ratio to measure approximately 5x by the end of 2026. We are comfortable with this outlook given the compelling nature of the transaction and our company's highly cash-generative nature. We have a strong track record of rapidly deleveraging, and we are focused on doing so again in keeping with our commitment to a healthy balance sheet and our investment-grade credit profile. Moving to the separation, we expect to effect the tax-free spin of Global Coffee Co. to KDP shareholders after the JDE Peet's deal closes. This will establish two independent companies that will be listed in the U.S. Our ambition is to carry out the separation shortly after the acquisition close date, though some time lag is possible. At the latest, we expect the separation to be complete by the year-end of 2026. We look forward to sharing additional information on each standalone entity as we approach the separation, including the full leadership team, board of directors, capital structures, and further detail on the growth strategies and opportunities for each entity. With that, I will turn it back to Tim. Before we turn it over to Q&A, I want to emphasize how excited we are about this bold, game-changing move for KDP and for our industry. Today, we're kickstarting the next chapter for the global beverage industry with the announced acquisition of JDE Peet's and the subsequent creation of two pure play platforms that will be positioned to win on day one. Taken together, we are confident these actions will create both near-term and long-term value for our shareholders. We thank you for your support and will now open the line for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the key. 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 Dara Mohsenian with Morgan Stanley. Please go ahead. Hey, good morning. Good morning, Dara. The commentary on strategic rationale was very helpful. Tim, just high level, can you discuss why now specifically was the right time for the coffee combination to happen? Just second, Sudhanshu, given the substantial cost synergies in coffee, can you give us a bit more detail on which of the functional areas you think will drive the bulk of cost savings, how confident you are in the level of savings, and then beyond cost synergies, just what can the two coffee organizations bring to each other in terms of incremental capabilities or strategically, again, incrementally to when they were on their own? Thanks. Thanks, Dara. Yeah, look, the announcements we made this morning are bold and transformative, and we absolutely think today's the right time, and this is the right target, and this is a great transaction. From a timing standpoint, I want to reemphasize we are doing this from a position of strength. KDP right now has great momentum. We've got an energized portfolio. We've built great capabilities over the last couple of years. The coffee category in North America is reaccelerating, and quite honestly, we're executing well. Our front half results underwrite that comment. We've grown revenue almost 7% in the front half and EPS growth almost 10%. This is also the right target at this time. I said it in my prepared remarks, this is a singular opportunity to permanently alter the global coffee landscape and a very compelling acquisition at a very attractive valuation, a 20% premium to Friday's close, a 10.5 x when you look at 2026 with synergies, and it's EPS accretive immediately. JDE Peet's is a business that's very complementary to our existing coffee business geographically and really transforms us into an advantaged pure play global coffee leader. Obviously, on the other side of that acquisition, it's the perfect moment to think about the next tranche of the value-enhancing element, and that's the separation, the opportunity to create two pure play beverage companies, each positioned for success, both operationally and financially, and as I shared, each positioned to deliver top-tier TSR. We have a long legacy here at KDP of challenging the status quo in the industry. Today's another great example, but we absolutely believe this is the right time and the right target and the right transaction. Thank you, Tim. Dara, we have identified roughly $400 million in cost synergies that will be unlocked through this combination of KDP and JDE Peet's. We expect to generate these over the course of three years post-combination, and there are multiple sources to this cost synergy, which primarily come from leveraging the coffee business in hand scale. We're going from roughly $5 billion to $16 billion of global business. We'll have opportunities across SG&A, logistics, procurement scale, and also in manufacturing. We will also look for improved portfolio efficiencies, for instance, across the Brewer portfolio and also assessing the tailor brand. We have a good line of sight to these savings and a high degree of confidence in our ability to achieve them. Also, note this is over and above any savings initiatives that either company has already announced. The next question comes from Kaumil Gajrawala with Jefferies. Please go ahead. Good morning, and thanks, congratulations. Maybe just a couple of things on the entities when they separate. Will there be any sort of operational agreements between the two? I'm thinking a little bit along the lines of RTDs and stuff like that. Maybe just some more details on if there's any disynergies or things like that we need to be aware of. Yeah, I'll take the morning, Kaumil. I'll take the first question, Sudhanshu. You can take the second. I think, you know, when you think about our partners, our customers, we have very strong and long-duration relationships with all of our partners on both what will be the Bev Co. and the Global Coffee Co. side. We will certainly honor and protect all of those contractual obligations and really expect to create new growth opportunities for our partners. We are already, as of today, actively engaging with each of our partners and making sure that we continue to exploit every opportunity to expand our business on both sides post-separation. Sudhanshu, you want to take the second one? Yes. To comment, the pre-concept is no, we don't expect any dissynergy because when you spin a company, you get the dissynergy because you have a true public company. In this case, we are merging in a way. We're buying JDE Peet's, so JDE Peet's will continue to have the public company cost. There's no dissynergy there. Also, as I said during the script, we will retain some of the JDE Peet's functions that normally when you acquire a company, that goes away. It means our $400 million cost synergy is not as large as would otherwise be possible. That's why our dissynergy will also be very minimal. As a reminder, as a percentage of sales, this is only 3%- 4%, but the industry standard is 7%. The next question comes from Peter Grom with UBS. Please go ahead. Thanks, operator, and good morning, everyone. Just a couple of questions on Beverage Co. Maybe first, just the mid-single-digit net sales algorithm, is that purely an organic outlook, or are you embedding M&A or future benefits from partnerships in that figure? You touched on the point of being the preferred partner of choice. As the company is undergoing this change, how should we think about the pace or size of deals or partnerships relative to what we've seen in the past several years? I guess related, as we go through this transition, are partnerships or deals off the table until the separation happens? Thanks. Thanks, Peter. I'm excited about the future of Beverage Co. and our ability to continue to be a disruptive player in this $300- billion ref bev business here in North America. As you've seen us pursue over the last few years, and we'll continue, we have multiple paths to win and to underwrite that algorithm that we shared with you today, MSD on the top and HSD in EPS. We really believe Beverage Co. is a pure play-focused company. We'll be in a sweet spot with a combination of significant scale and yet agility. That is, I think, the recipe for competitive advantage in a dynamic industry like beverage. Our portfolio right now is strong, as is. It's gaining market share. We've re-energized it in the last few years, a really deliberate strategy, you know, spanning both core positions, leadership positions, and market share expansion positions in places like CSDs, and then building out new positions in high-growth categories like energy, like sports hydration, et cetera. By the way, let me also mention Mexico as part of this. You know, Mexico, leading position, number one mineral water with Peñafiel, a great DSD operation down there, billion-dollar business that will also be part of Bev Co. and a continued chance to grow market share. Specifically to your point on partners, we've successfully evolved this portfolio the last few years by building exposure to these emerging growth areas I just mentioned. The billion-dollar business we have today in energy is, I think, a fabulous proof point of this. These actions really help to future-proof our business and put us in a position to sustainably deliver that MSD net sales growth. We also, and you know this, Peter, we have a proven buy-build-partner model. That means we don't take a one-size-fits-all approach. We stay agile and flexible in looking at where are the growth places, spaces, where are the opportunities to add positions, what's best for that partner, that entrepreneur, maybe that founder, and how can we do it in a highly capital-efficient way. That means in some cases, we do a minority equity investment. In some cases, it's full acquisition. In other cases, it's simply a distribution agreement. Electrolit is a great example of that. We're going to be flexible. We're going to be agile. We're going to be capital-efficient. We have confidence in our MSD HSD algo. The next question comes from Chris Carey with Wells Fargo. Please go ahead. Hi everybody. Just two questions from me, please. First, just from a strategic rationale for the transaction, can you give us some insight on some of the perhaps alternatives you may have been exploring as you thought to extract value from the coffee business, maybe in addition to this type of transaction? Why was this type of transaction the right path? From a leverage standpoint, you know, Sudhanshu, the slide has, I think, 5.25 x leverage by 2026. As you had discussed, I think that includes year-one cost synergies. I also wanted to confirm whether that includes any financing associated with any of the separation into the back half of 2026. Basically, just trying to understand what's embedded in that 5x leverage number and then what kind of leverage we should be expecting into the front half of 2026. Thanks for those two. Yeah, Chris, I'll take the first one on alternatives and Sudhanshu, take leverage. Look, it's obviously our job to look at every single path for potential value creation. We have done just that. We are highly confident today that the actions we just announced will maximize shareholder value and are superior to other alternatives we've considered. I think perhaps embedded in your question is, hey, could you think about an alternative to go the other way? Would you sell KDP coffee, you know, versus buying JDE Peet's? I'll speak to that. I'm on record. We like, and I like the coffee category. Why? It's huge. It's ubiquitous. It's a $400- billion TAM. It's a resilient grower. Let me give you some global data. Obviously, we've up to this point focused on North America, but global data, these last few decades, coffee is consistently growing on a volume basis above population, about 2% in volume and close to 4% in value, given premiumization and innovation. By the way, that growth category is resilient, irrespective of global economic cycles. The third thing I'd say in the coffee category is here in this country, we're seeing it begin to turn around. In fact, you know this, Chris, you look at year-to-date at-home coffee category, it's up double digits in sales, close to 15%, and volume is very resilient around flat. An alternative like selling KDP coffee, we would be selling a business that's just beginning to turn around at a low multiple. Instead, what do we announce today? We're buying a business with great structural characteristics, with upside potential. We're getting at a low multiple, a 10.5 x, 26x synergized, a very attractive valuation, a 20% premium to Friday's closing price, and very clear and achievable synergy that we have confidence in creating a singular opportunity to build the largest global pure play coffee company. Beyond that, I would say, look, we are excited about driving attractive immediate EPS accretion through this. We think on the other side of the separation, we'll find even more ways to drive growth, be even more resilient, be more focused, and really unleash the power of Global Coffee Co. and Beverage Co., one obviously being more cash flow-oriented, one being more growth-oriented. Sudhanshu. Thanks, Tim. As I mentioned, we are funding this with debt and cash on hand. The reason we're doing it is because it's giving us the best return. Total consideration will be $23 billion, $5 billion in rollover debt from JDE Peet's. Obviously, in the coming months, we will optimize this capital structure, types of debt structure, and which location we issue them. For example, part of our consideration is that Europe has a lower interest rate regime than the U.S. Post-acquisition, we expect KDP to remain investment-grade. The five times math you see is basically assuming we will close the deal next year. It has all the debt, and it has the EBITDA. As Tim mentioned, it's accretive day one, and it's a very compelling valuation, 10.5 x post-synergy. We feel comfortable that this balance sheet that we have, it will get much better with our combined cash flow, and we have a strong track record of deleveraging. If you recall, when KDP came together, it was 6x, and within two to three years, we came back to 3x. That's our immediate priority, and we feel we should be able to quickly reduce the leverage from 5x to where we are very soon. The next question comes from Filippo Falorni with Citi. Please go ahead. Hi, good afternoon, everyone. I wanted to ask about the accretion. You mentioned, Tim, that the deal and Sudhanshu both, you mentioned that it's a year one. It seems a pretty significant accretion. We're getting to about 10%. I know there's a lot of assumptions, but maybe you can give some parameters on the accretion that you're expecting. On the deleverage, can you give us some sense on the free cash flow that the business is expected to generate and the path to returning to below three times leverage, which I think Sudhanshu mentioned in two to three years after close, if I'm correct. Thank you. Let me give you the high-level EPS accretion math. JDE Peet's is a public company. You have their EBIT number, and you have the debt. High level, a couple of figures I'll give you you can use to think through the annualized accretion. JDE Peet's long LTM adjusted EBITDA is $1.7 billion, and you have to assume some growth to get to 2026 estimates. You also start to unlock some of the synergy then. You do the cost of the debt. I said we will roll over $5 billion of JDE Peet's debt that finance at a very attractive rate. Incremental debt will be around 5%, 5.5%. You also know interest rate is coming down in the next cycle. That is what it gives us. If you run the model, you will see it is immediate accretion on day one. Obviously, we will guide you exact EPS sense and dollar when the deal closes. Those details will get locked on also based on the exact capital structure. If you decide to finance more stuff in Europe, that will be at a much lower rate than the U.S. Free cash flow is accelerating. JDE Peet's, again, those numbers are public. G enerates a lot of cash. Right now, our cash conversion is also improving. If you just add those two cash and the synergy and our priorities are to rapid deleveraging, you will come to the conclusion that very soon we'll come back to where we are today. The next question comes from Steve Powers with Deutsche Bank. Please go ahead. Great. Sudhanshu, maybe following up on your deleveraging point. I know that both Coffee and Beverage Co. are expected to be investment-grade post-separation. As Tim mentioned, we have sort of more of a growth Co. and more of a cash Co. as we look out pro forma. Can we, is there any way to frame what the relative capital structures of the two companies are likely to be post-separation and the pace of deleveraging on each side of the equation? I addressed that to Sudhanshu, but Tim, I'm obviously welcome to have your thoughts as well. Thank you. Let me first tell you what the combined company right now is because it will take us six to nine months before we close the deal. Our current capital allocation priority will be deleveraging our balance sheet and also setting each business up for success. We have made a commitment to you and also to rating agencies that both companies will be investment-grade credit throughout. What will be the exact debt and division, those things, obviously it will take us time to know from now till when we close the deal. JDE Peete's will generate cash. We will generate cash. The numbers will come down. The one thing I want to say, we are committed to our current dividend policy, and I feel good that both companies can deliver the algorithm what we laid out today without any, at least for the few years till we deliver, without any M&A. Tim mentioned that in Bev Co., we can continue to do partnership like we did with Electrolit, and Coffee Co. will be a global company, and it has very minimal CapEx investments. Their capital allocation priority will be pay down debt. That will give you operating leverage below operating income, and after that, return cash to the shareholder through attractive dividend and regular share buyback. The next question comes from Robert Moskow with TD Cowen. Please go ahead. Hi, thanks for the question. Sudhanshu, can you tell us a little bit about where JDE Peet's is in their cycle? You said your coffee business is on the upswing. Where is theirs? Like we went back and you know profits for JDE Peet's really haven't changed in the last five years, but I would imagine you know you said free cash flow is accelerating. What's helping the business improve? What attracted you to that? Also, on their costs, you know in Europe, it's hard to get synergies. There are labor councils. Do you see any opportunities there, or will that be not where you're going after synergies? Thanks. Yeah, Rob, I'll start with this and then I'll hand it over to Sudhanshu. Obviously, we've spent quite a bit of time with this executive team at JDE Peet's, and there are a lot of elements that you're looking for in a CPG company that they possess and I think are at a point where we're seeing a trajectory change over there as well. They've got great brands. They've got an extensive reach. They've got strong manufacturing and route-to-market expertise. They recently held their own investor day. They refreshed their strategy. I think they're poised, and the momentum in their front half shows it, to better capitalize on their advantages. You know, they talk about fewer, bigger bets, leading more with the consumer at the center, a stronger attention to continuous improvement and productivity, a nice cost-out agenda that we've spent some time looking at and feel good about our ability to deliver that, and the synergies on top. Really enhanced focus. They made some good decisions in our judgment on discontinuing some initiatives that didn't make sense and really focusing that strategy. We think post-acquisition, we can supercharge that acquisition, that direction in combination with Keurig. We see the potential to drive these strong synergies, feel good about that $400 million number we talked about, but it's not just financial. It's also in the portfolio. It's kind of best of both cultural. I mean, this is, as we build, the world's largest pure play coffee company. There's a lot where you can think about 1 + 1 = 3. If you think about what we do at Keurig and our innovation capabilities with machines and brewers and how we can bring that and a lot of that knowledge and technology to places like SENSEO and TASSIMO. You know, on the other side, JDE Peet's has greater global scale, obviously, and gives us access to think about expanding big ideas, some of which are in our pipeline. I think together, it really will be an unparalleled portfolio that's stronger and more resilient. You want to talk a little bit more about their performance and opportunities to improve? Thank you, Tim. As you all can see, JDE Peet's recent performance has been solid in a challenging environment. Their organic sales have grown at a 5% CAGR over the past five years, enhanced by pass-through pricing. Operating income has also been stable over the same timeframe, with top-line benefits offset by green coffee inflation. First half 2025 results showed nice acceleration with a new strategy. Revenue grew 22%- 23%. 21% was pricing, but volume mix also grew 1%. EBIT growth is also accelerating. While it's a great performance, we continue to see opportunity to enhance this through refining JDE Peet's recently refreshed strategy in the context of a broader business as part of Global Coffee Co. Tim mentioned, we can also unlock incremental top and bottom-line opportunities that will be made possible by this combination, including the identified cost synergies and optimizing the operating model and ways of working to extract data efficiency and volume leverage. The next question comes from Lauren Lieberman with Barclays. Please go ahead. Great, thanks. I just wanted to know a little bit about, it struck me when you talked about on the, we'll go forward, Beverage Co. that this transaction or separating the businesses allows you to invest in ways that you hadn't been previously. I was just curious if there are things you could, maybe tangible examples you could give of things or areas in which you might have invested or, you know, behaved differently as a company without sort of the, let's call it what it's been, the challenge of the last couple of years of the slower performance in the coffee business. I'm interested in thinking about the unlock on beverage that you foresee. Thanks. Yeah, good morning, Lauren. Look, Beverage Co., as I've said on the call, will be, in our view, the most agile growth-oriented company in ref bev. We're going to bring that challenger mindset every day. As a pure play, I think the business will benefit from even greater strategic clarity than what was possible as part of KDP. Right? We can have tailored growth-oriented mindset and plans. We can have a purpose-built capital allocation policy and just a whole culture and operating mindset oriented fully around growth and challenging the status quo in beverage. We can develop really fit-for-purpose growth opportunities for our employees, for our suppliers, for our customers, our partners. At current state in KDP, there is no doubt. I mean, as a management team, occasionally we have to optimize for the enterprise. That's what we're paid to do. We will deliver per KDP. That's what Sudhanshu and I have done the last couple of years. Sometimes you have to optimize for enterprise outcomes versus an individual business. Sometimes that means we have to make some trade-offs in service of what's best for the enterprise. As a pure play Beverage Co., we'll be able to optimize differently. We can think about taking a closer look at, you know, can we run higher levels of brand investment just as one potential avenue? Than We do today, which could further accelerate that virtuous cycle. All of this should translate into what we've shared with you today, which is sustained outperformance in this attractive revenue market here in North America. That's why we're comfortable continuing to underwrite that MSD, HSD growth with a dynamic capital allocation policy. By the way, while your question focused on Bev Co. and I answered it that way, the same is true for Global Coffee Co. They will similarly benefit from tailored strategy and growth plans, appropriate investment spending, and capital allocation priorities tailored to its category and its markets. I think both will benefit from that. The last question today comes from Andrea Teixeira with JPMorgan. Please go ahead. Thank you. Good morning, everyone, and good afternoon for those on the other side. Just as you start to act in terms of how the long-term algorithm that you highlighted, especially for coffee at this point, how you're thinking strategically also has the shift, the consumer shifting to cold coffee. Within that time, I understand KDP has worked in a lot of different strategies to tap that opportunity. Of course, it's more challenging as you go. I was curious to see how JDE Peete's is thinking and how they're strategizing that. Separately, on the synergy side, I understand that obviously you're going to be closing the deal mid-next year. Thinking of the phasing and the bridges of that cost synergy and how we should be thinking of not only that, on the execution side, how to be thinking of timing and how the bridges will work out for modeling purposes. Thank you. Okay. Let me take the first one on kind of the new Coffee Co. strategy, Andrea, and Sudhanshu, you take the second part. So Global Coffee Co., as we've said a few times on this call, number one pure play global coffee player, and we think really uniquely positioned to win in that $400- billion TAM that you referenced in global coffee. A little connected to Lauren's question, I think as a focused, scaled, independent pure play, Global Coffee Co. will be able to optimize its operating and growth model to singularly focus on coffee, greater consumer focus, sharper execution, fit-for-purpose growth opportunities, and the ability to still deliver top-tier TSR through an approach that's really tailored to the coffee category and the global geographic profile. We feel very good we can deliver LSD sales growth on a consistent basis. We'll have enhanced scale and capabilities as a combined company. We'll now have four $1 billion brands, many other half a billion dollar brands across 40 markets where we're either number one or number two. Of course, we'll have the number one single-serve system here in North America, as well as a strong brewer park across Europe. We'll span every segment in coffee, from roast and ground to instant, obviously single-serve, ready to drink, and importantly, retail coffee shops. We'll have a terrific geographic footprint: 40/ 40/ 20, 40% North America, 40% Europe, 20% rest of world, including, by the way, Andrea, more than 10% from Brazil. I've already spoken earlier in the Q&A about the coffee per cap consumption that on a global basis is growing quickly, especially in developing markets. Overall, we think marrying JDE Peet's extensive global reach with Keurig's strong innovation track record and capabilities, including in some of the things we've talked about with you and others, next-generation solutions that we're preparing for the market, this all should put us in a position to deliver on that outlook that we've shared, underpinned by a strong cash flow to drive cash returns. I'll make one final point before I turn over to Sudhanshu, and that is, this two-step transaction we've announced today, the acquisition and then the separation, no doubt there's some complexity here. The one other point I'd like to land is both Sudhanshu and I have significant experience in this area. We've both done major acquisitions. We've led integrations. I've led global integrations. We've both been a part of successful separations. That gives us the confidence that we can, with the great team that we have, deliver on the premise of this. Sudhanshu? Andrea, I will give you the synergy. Phasing is $400 million, mostly cost. Let me first tell you what's the real benefit of bringing these two coffee businesses together and creating a global coffee company. I would give you four or five concrete points. One is geographic reach and expansion into technology platforms across each form of coffee, every form of coffee. Number one, single-serve, roasting ground, instant, et cetera. It's also, as Tim mentioned, it has the ability to share innovation globally, including our ALTA system and K-Rounds. The synergy buckets are, as I mentioned before, SG&A, procurement, manufacturing, logistics, and appliance cost savings across manufacturing and supply chain, also brewer. All of these things, as soon as we close, will start, but within two to three years, we should be able to achieve all of those $400 million synergy. For sure, as one global coffee company, we will target to do more than what we're promising right now. This concludes our question session. I would like to turn the conference back over for any closing remarks. Thank you, Bessie. Before we end this call, I just want to thank everyone for joining us on short notice to discuss this transformational transaction for us at KDP. We appreciate your support. The KDP IR team is here to answer your questions and do follow-ups. Thanks very much.