Leases

12 Months Ended

Dec. 31, 2024

Lease Accounting

Components of Lease Cost


	2024		2023		2022
Operating lease cost	$	135	$	130	$	133
Finance lease cost
Amortization of right-of-use assets	7		6		7
Interest on lease liabilities	2		2		3
Total finance lease cost	$	9	$	8	$	10
Sublease income	$	(48)	$	(51)	$	(55)

Supplemental Cash Flow Information


	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	137	$	127	$	137
Operating cash flows from finance leases	2		2		3
Financing cash flows from finance leases	8		7		5
Right-of-use assets obtained in exchange for lease obligations(a)
Operating leases	247		127		93
Finance leases	26		6		10
Operating lease liabilities transferred through refranchising	(8)		(14)		(14)
Finance lease and other debt obligations transferred through refranchising	(1)		(5)		—

(a) The year ended December 31, 2024, includes $124 million and $22 million of operating and finance lease right-of-use assets, respectively, acquired as part of the U.K. and Ireland restaurant acquisition (see Note 3).

Supplemental Balance Sheet Information


	2024			2023			Consolidated Balance Sheet
Assets
Operating lease right-of-use assets	$	881		$	764		Other assets
Finance lease right-of-use assets	49			29			Property, plant and equipment, net
Total right-of-use assets(a)	$	930		$	793

Liabilities
Current
Operating	$	91		$	79		Accounts payable and other current liabilities
Finance	8			8			Short-term borrowings
Non-current
Operating	862			757			Other liabilities and deferred credits
Finance	59			42			Long-term debt
Total lease liabilities(a)	$	1,020		$	886

Weighted-average Remaining Lease Term (in years)
Operating leases	10.9			10.6
Finance leases	14.8			11.4

Weighted-average Discount Rate
Operating leases	5.3		%	5.3		%
Finance leases	5.5		%	5.7		%

(a) U.S. operating lease right-of-use assets and liabilities totaled $549 million and $615 million, respectively, as of December 31, 2024, and $541 million and $605 million, respectively, as of December 31, 2023. These amounts primarily related to Taco Bell U.S. and Habit Burger & Grill including leases related to Company-operated restaurants, leases related to franchise-operated restaurants we sublease and the Taco Bell and Habit Burger & Grill restaurant support center.

Maturity of Lease Payments and Receivables

Future minimum lease payments, including rental payments for lease renewal options we are reasonably certain to exercise, and amounts to be received as lessor or sublessor as of December 31, 2024, were as follows:


	Commitments				Lease Receivables
	Finance		Operating		Direct Financing		Operating
2025	$	11	$	137	$	3	$	70
2026	9		142		3		60
2027	8		134		2		60
2028	7		123		2		53
2029	6		110		2		49
Thereafter	50		618		14		340
Total lease payments/receipts	91		1,264		26		$	632
Less imputed interest/unearned income	(24)		(311)		(9)
Total lease liabilities/receivables	$	67	$	953	$	17

As of December 31, 2024, we have executed real estate leases that have not yet commenced with estimated future nominal lease payments of approximately $90 million, which are not included in the tables above. These leases are expected to commence in 2025 and 2026 with lease terms of up to 20 years.