Keurig Dr Pepper Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Keurig Dr. Pepper's earnings call for the second quarter of 2022. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. 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 Keurig Dr. Pepper's Vice President of Investor Relations, Mr. Steve Alexander. Mr. Alexander, please go ahead.

Thank you, and hello, everyone. Thanks for joining us. Let me start this morning by introducing our new Senior Director of IR, Chatham Mollella, who joined us in May. Many of you may know Chatham from his six years working on the sales side with Andrew Lazar of Barclays, followed by our roles over the past few years at American Eagle Outfitters and Peloton. He's a great addition to our team, and we believe you will enjoy working with him. Earlier this morning, we issued our press release for the second quarter of 2022. If you need a copy, you can get one on our website in the Investors section. Consistent with previous quarters, today we'll be discussing our performance on an adjusted basis, excluding items affecting comparability. Beginning last quarter, you may recall that we began excluding the impact of foreign currency translation from our adjusted results. The company believes that the adjusted basis provides investors with additional insight into our business and operating performance trends. While the exclusion of items affecting comparability is not in accordance with GAAP, we believe that the adjusted basis provides meaningful comparisons and an appropriate basis for discussion of our performance. Details of the excluded items are provided in the reconciliation tables included in our press release and our 10-Q, which will be filed later today. Due to the inability to predict the amount and timing of certain impacts outside of the company's control, we do not reconcile our guidance. Here with us today to discuss our results are KDP Chairman and CEO Bob Gangort and Ozan Dotmesioglu, our current CFO and President of International, who is transitioning to the CEO role effective tomorrow, at which time Bob will become Executive Chairman. Also with us is our Chief Corporate Affairs Officer, Maria Scappagurcio. And finally, our discussion this morning may include forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially and the company undertakes no obligation to update these statements based on subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. And with that, I'll hand it over to Bob.

Thanks, Steve, and good morning, everyone. The second quarter was one of significant progress for a company in a macro environment that continues to be challenging on many fronts. Broad-based inflation continues to impact industry margins, as pricing continues to increase but has not yet caught up to inflation. The good news is our brand strength has held up well in the face of new pricing, with modest elasticity impacts across our portfolio during the quarter. With concerns having shifted to the potential for recession, it's worth spending a moment on how our categories have performed during previous recessionary periods. During the last significant economic downturn in 2008 and 2009, Our lead segment, particularly carbonated soft drinks and coffee, were among the CPG categories that held up best. These categories are true staples, with regular consumption behaviors and few direct substitutes. And they have the benefit from the trade-down effect from out-of-home consumption to in-home consumption that frequently occurs during recession. As we've done successfully in the past, we will continue to manage KDP against a range of potential macro outcomes and believe that the all-weather business model we've created positions us well as we continue to operate in a challenging environment with significant uncertainty. Since the formation of KDP, we have delivered great returns for our shareholders with a four-year total shareholder return in excess of 100%. well above broad market indices, and nearly all food and beverage peers. More notable is that these returns were delivered during our transition from a closely held company to a widely held one, with the public market absorbing approximately 675 million new shares into the float, equivalent to $25 billion in market cap. With our inclusion last month in the S&P 500, along with our existing position in the NASDAQ 100, we continue to broaden our appeal. Let me take a few minutes to remind you how the KDP business model creates value, and then let Ozan apply that framework to our Q2 results. KDP is underpinned by an attractive and competitive organic total shareholder return algorithm, driven by a flexible and scalable strategy. Coffee systems, our strategy is focused on attracting about 2 million new households every year into the Keurig system, while also driving revenue and profit growth among our 36 million existing Keurig households through new platforms such as Connected Brewers and new beverage formats and occasions. Given the size of the remaining addressable new households for the Keurig system, which we estimate at more than 50 million, we have line of sight to household growth well beyond the next 10 years. In cold beverages, our strategy is focused on driving growth in core brands through marketing and brand renovation, filling white space in our portfolio through internal innovation and external partnership, and enhancing the effectiveness of our omni-channel selling and distribution system, including our company-owned direct store distribution system. The investments we have made in selling and distribution include have built a stronger go-to-market capability that has a multiplier effect on our brand investment, as evidenced by our consistent share growth. In addition to our core algorithm, KDP's extraordinary free cash flow enables the potential for incremental shareholder returns through strategic capital allocation. I will elaborate on this later in the call. Ozan, over to you. Good morning, everyone.