Kenvue Inc.KVUE
Kenvue Inc. Leases Disclosure
Leases
The Company has operating leases primarily for space, vehicles, and manufacturing equipment. In connection with the Separation, J&J and Kenvue also entered into various lease agreements, in which the Company subleased properties from J&J. The Company has finance leases, which primarily include the Company’s new global and North America corporate headquarters in Summit, New Jersey (as described in the “—Global and North America Headquarters Lease” section below). The Company did not have significant finance leases during the fiscal twelve months ended December 31, 2023. The Company’s lease agreements do not contain any significant residual value guarantees or restrictive covenants.
Global and North America Headquarters Lease
On April 20, 2023, the Company entered into a long-term lease for a newly renovated global and North America corporate headquarters building and a newly constructed research and development building in Summit, New Jersey (the “Global and North America Headquarters Lease”). In March 2025, the Company began operating out of the new global and North America corporate headquarters. The relocation to this new campus from multiple U.S.-based locations will continue through 2026 when the new research and development building is expected to be complete. When construction is completed, the campus will encompass approximately 290,000 square feet. The Global and North America Headquarters Lease collectively includes the lease associated with the global and North America corporate headquarters building (the “Corporate Office Lease”), the lease associated with the land where the research and development building is under construction (the “State-of-the-Art Lab Facility Lease”), and the lease associated with land used for amenities (the “Amenities Lease”).
The Corporate Office Lease and the State-of-the-Art Lab Facility Lease, each accounted for as a finance lease, commenced in January 2024 and May 2024, respectively. Each lease includes an initial term of 15 years as well as renewal options, which the Company is reasonably certain to exercise, that will extend the term of each lease through 2060. Each finance lease liability was calculated utilizing an incremental borrowing rate of 4.75% to discount lease payments over the expected term. The Amenities Lease, also accounted for as a finance lease, commenced in October 2025.
ROU Assets and Lease Liabilities
As of December 28, 2025 and December 29, 2024, ROU assets and lease liabilities associated with the Company’s operating leases and finance leases were included on the Consolidated Balance Sheets as follows:
| Operating Leases | Finance Leases | |||||||||||||||||||||||||
| (Dollars in Millions) | December 28, 2025(1) | December 29, 2024(2) | December 28, 2025 | December 29, 2024 | ||||||||||||||||||||||
| ROU assets included in: | ||||||||||||||||||||||||||
| Property, plant, and equipment, net | $ | — | $ | — | $ | 114 | $ | 111 | ||||||||||||||||||
| Other assets | 151 | 111 | — | — | ||||||||||||||||||||||
| Total ROU assets | $ | 151 | $ | 111 | $ | 114 | $ | 111 | ||||||||||||||||||
| Lease liabilities included in: | ||||||||||||||||||||||||||
| Accrued liabilities | $ | 43 | $ | 36 | $ | — | $ | — | ||||||||||||||||||
| Loans and notes payable | — | — | 2 | 2 | ||||||||||||||||||||||
| Long-term debt | — | — | 133 | 119 | ||||||||||||||||||||||
| Other liabilities | 107 | 76 | — | — | ||||||||||||||||||||||
| Total lease liabilities | $ | 150 | $ | 112 | $ | 135 | $ | 121 | ||||||||||||||||||
(1) Includes leases with J&J of $26 million of ROU assets, $11 million of current lease liabilities, and $15 million of non-current lease liabilities.
(2) Includes leases with J&J of $35 million of ROU assets, $11 million of current lease liabilities, and $24 million of non-current lease liabilities.
Lease Cost
The operating lease costs for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023 were as follows:
| Fiscal Twelve Months Ended | ||||||||||||||||||||
| (Dollars in Millions) | December 28, 2025 | December 29, 2024 | December 31, 2023 | |||||||||||||||||
| Operating lease costs | $ | 50 | $ | 48 | $ | 48 | ||||||||||||||
For the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023, sublease income and variable operating lease costs were not significant. For the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023, finance lease costs, including amortization of ROU assets and interest on lease liabilities, were not significant.
Maturity of Lease Liabilities
The schedule of payments required on the Company’s operating leases and finance leases for the five succeeding fiscal years, and thereafter, is as follows:
| Fiscal Twelve Months Ended | ||||||||||||||||||||
| (Dollars in Millions) | Operating Leases | Finance Leases | Total | |||||||||||||||||
| 2026 | $ | 48 | $ | 1 | $ | 49 | ||||||||||||||
| 2027 | 36 | 4 | 40 | |||||||||||||||||
| 2028 | 26 | 7 | 33 | |||||||||||||||||
| 2029 | 17 | 7 | 24 | |||||||||||||||||
| 2030 | 10 | 7 | 17 | |||||||||||||||||
| Thereafter | 32 | 253 | 285 | |||||||||||||||||
| Total | 169 | 279 | 448 | |||||||||||||||||
| Less: Imputed interest | 19 | 144 | 163 | |||||||||||||||||
| Total current and non-current lease liabilities | $ | 150 | $ | 135 | $ | 285 | ||||||||||||||
Other Information
Cash paid for amounts included in the measurement of lease liabilities related to operating leases for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023 was as follows:
| Fiscal Twelve Months Ended | ||||||||||||||||||||
| (Dollars in Millions) | December 28, 2025 | December 29, 2024 | December 31, 2023 | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||||||||
| Operating leases | $ | 59 | $ | 50 | $ | 49 | ||||||||||||||
For the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023, cash paid for amounts included in the measurements of lease liabilities related to finance leases was not significant.
ROU assets obtained in exchange for new lease liabilities related to operating leases and finance leases for the fiscal twelve months ended December 28, 2025, December 29, 2024, and December 31, 2023 was as follows:
| Fiscal Twelve Months Ended | ||||||||||||||||||||
| (Dollars in Millions) | December 28, 2025 | December 29, 2024 | December 31, 2023 | |||||||||||||||||
| ROU assets obtained in exchange for new lease liabilities: | ||||||||||||||||||||
| Operating leases | $ | 80 | $ | 27 | $ | 120 | ||||||||||||||
| Finance leases | $ | 9 | $ | 109 | * | |||||||||||||||
* The Company did not have significant finance leases during the fiscal twelve months ended December 31, 2023.
Lease Term and Discount Rate
The following table discloses the weighted-average remaining lease term and weighted-average discount rate for the Company’s operating and finance leases, excluding short-term leases, as of December 28, 2025, December 29, 2024, and December 31, 2023.
| December 28, 2025 | December 29, 2024 | December 31, 2023 | ||||||||||||||||||
| Weighted-average remaining lease term: | ||||||||||||||||||||
| Operating leases | 6 years | 5 years | 5 years | |||||||||||||||||
| Finance leases | 34 years | 35 years | * | |||||||||||||||||
| Weighted-average discount rate: | ||||||||||||||||||||
| Operating leases | 4.8 | % | 3.9 | % | 3.6 | % | ||||||||||||||
| Finance leases | 4.9 | % | 5.0 | % | * | |||||||||||||||
* The Company did not have significant finance leases during the fiscal twelve months ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Mar 1, 2024 | |
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.