ADVANCE AUTO PARTS INC Leases Disclosure
Leases
Substantially all of the Company’s leases are for facilities, vehicles and equipment. The initial term for facilities is typically to ten years, with renewal options typically at five-year intervals, with the exercise of lease renewal options at the Company's sole discretion. The Company's vehicle and equipment lease terms are typically to six years. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating lease liabilities consisted of the following:
|
January 3, 2026 |
|
|
December 28, 2024 |
|
||
Total operating lease liabilities |
$ |
2,247 |
|
|
$ |
2,359 |
|
|
(435 |
) |
|
|
(462 |
) |
|
Non-current operating lease liabilities |
$ |
1,812 |
|
|
$ |
1,897 |
|
The current portion of operating lease liabilities is included in other current liabilities in the accompanying consolidated balance sheets.
Total lease cost is included in cost of sales and total selling, general and administrative expenses in the accompanying consolidated statements of operations and is recorded net of immaterial sublease income. Total lease cost is comprised of the following:
|
Year ended |
|
|||||
|
January 3, 2026 |
|
|
December 28, 2024 |
|
||
Operating lease cost |
$ |
501 |
|
|
$ |
542 |
|
Variable lease cost |
|
148 |
|
|
|
152 |
|
Total lease cost |
$ |
649 |
|
|
$ |
694 |
|
As of January 3, 2026 and December 28, 2024, the Company recorded $56 million and $65 million, respectively, primarily related to accelerated amortization on leases the Company expects to exit before the end of the contractual term, and non-cash asset impairment, net of gains on lease modifications and terminations. These amounts are recorded in restructuring and related expenses within the accompanying consolidated statements of operations. See Note 3. Restructuring, included herein.
The future maturity of lease liabilities are as follows:
Year |
Amount |
|
|
2026 |
$ |
535 |
|
2027 |
|
464 |
|
2028 |
|
384 |
|
2029 |
|
349 |
|
2030 |
|
282 |
|
Thereafter |
|
590 |
|
Total lease payments |
|
2,604 |
|
Less: Imputed interest |
|
(357 |
) |
Total operating lease liabilities |
$ |
2,247 |
|
Operating lease liabilities included $16 million related to options to extend lease terms that are reasonably certain of being exercised and excluded $78 million of legally binding lease obligations for leases signed, but not yet commenced.
The weighted average remaining lease term and weighted average discount rate for the Company’s operating leases were 6.4 years and 4.4% as of January 3, 2026. The Company calculated the weighted average discount rates using incremental borrowing rates, which equal the rates of interest that the Company would pay to borrow funds on a fully collateralized basis over a similar term.
Other information relating to the Company’s lease liabilities were as follows:
|
Year ended |
|
|||||
|
January 3, 2026 |
|
|
December 28, 2024 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
||
Operating cash flows from operating leases |
$ |
549 |
|
|
$ |
491 |
|
Right-of-use assets obtained in exchange for lease obligations: |
|
|
|
|
|
||
Operating leases |
$ |
345 |
|
|
$ |
340 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 13, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Mar 1, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.