Keurig Dr Pepper Inc.
For the period ended Dec 31, 2025. Filed Feb 24, 2026.
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FY2025 · Filed Feb 24, 2026
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8. Leases
- Leases
The following table presents the components of lease cost:
| For the Year Ended December 31, | |||
|---|---|---|---|
| (in millions) | 2025 | 2024 | 2023 |
| Operating lease cost | $182 | $170 | $159 |
| Finance lease cost | |||
| Amortization of right-of-use assets | 113 | 95 | 81 |
| Interest on lease liabilities | 38 | 33 | 25 |
| Variable lease cost(1) | 36 | 37 | 39 |
| Short-term lease cost | — | 2 | 1 |
| Sublease income | — | (1) | — |
| Total lease cost | $369 | $336 | $305 |
(1)Variable lease cost primarily consists of common area maintenance costs, property taxes, and adjustments for inflation.
The following tables present supplemental information about our leases:
| December 31, | |||
|---|---|---|---|
| (in millions) | Balance Sheet Location | 2025 | 2024 |
| Assets: | |||
| Operating lease right-of-use assets | Other non-current assets | $845 | $880 |
| Finance lease right-of-use assets(1) | Property, plant, and equipment, net | 919 | 784 |
| Liabilities: | |||
| Operating lease liability | Other current liabilities | $127 | $128 |
| Finance lease liability | Other current liabilities | 179 | 125 |
| Operating lease liability | Other non-current liabilities | 764 | 790 |
| Finance lease liability | Other non-current liabilities | 745 | 677 |
(1)Amounts are presented net of accumulated amortization of $426 million and $334 million as of December 31, 2025 and 2024, respectively.
| For the Year Ended December 31, | |||
|---|---|---|---|
| (in millions) | 2025 | 2024 | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | |||
| Operating cash flows from operating leases | $175 | $161 | $149 |
| Operating cash flows from finance leases | 38 | 32 | 25 |
| Financing cash flows from finance leases | 129 | 115 | 95 |
| Right-of-use assets obtained in exchange for lease obligations: | |||
| Operating leases(1) | $126 | $118 | $112 |
| Finance leases(2) | 278 | 196 | 109 |
(1)Includes impacts from lease modifications of $16 million during the year ended December 31, 2025.
(2)Includes impacts from lease modifications of $45 million during the year ended December 31, 2025.
The following table presents information about our weighted average discount rate and remaining lease term:
| December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Weighted average discount rate | ||
| Operating leases | 5.3% | 5.3% |
| Finance leases | 4.8% | 4.5% |
| Weighted average remaining lease term | ||
| Operating leases | 8 years | 9 years |
| Finance leases | 9 years | 9 years |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
Future minimum lease payments for non-cancellable leases that have commenced and are reflected in the Consolidated Balance Sheets as of December 31, 2025 were as follows:
| (in millions) | Operating Leases | Finance Leases |
|---|---|---|
| 2026 | $156 | $221 |
| 2027 | 155 | 135 |
| 2028 | 123 | 124 |
| 2029 | 116 | 118 |
| 2030 | 108 | 115 |
| Thereafter | 446 | 420 |
| Total future minimum lease payments | 1,104 | 1,133 |
| Less: imputed interest | (213) | (209) |
| Present value of minimum lease payments | $891 | $924 |
SIGNIFICANT LEASES THAT HAVE NOT YET COMMENCED
As of December 31, 2025, we have entered into leases that have not yet commenced with estimated aggregated future lease payments of approximately $157 million. These leases will commence in 2026 and 2027, with initial lease terms ranging from 5 years to 10 years.
ASSET SALE-LEASEBACK TRANSACTION
In 2023, we entered into an asset sale-leaseback transaction with the Veyron SPEs. A gain on the sale-leaseback of $6 million was recorded in Other operating (income) expense, net during the year ended December 31, 2023, and the leaseback is accounted for as an operating lease.
The initial term of the leaseback is 15 years, with two 10-year renewal options. The renewal options are not reasonably assured as (i) our position that the dynamic environment in which we operate precludes our ability to be reasonably certain of exercising the renewal options in the distant future and (ii) the options are contingent on us remaining investment grade and no change-in-control as of the end of the lease term. The leaseback has an RVG. Refer to Note 19 for additional information about RVGs associated with the asset sale-leaseback transaction.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.