5. Commitments, Leases and Contingencies
The Company has various purchase commitments for raw materials, supplies and property and equipment incidental to the ordinary conduct of business.
Leases
The Company leases certain manufacturing facilities, warehouses, office space, manufacturing equipment, office equipment, and automobiles. Finance leases are not material for all periods presented.
Supplemental lease information is as follows:
| | | | | | | | | |
| Leases | Classification | | | 2025 | | | | 2024 | |
| Operating leases: | | | | | | | | | |
| Operating lease right-of-use assets | Right-of-use asset | | $ | 62 | | | $ | 49 | |
| Current operating lease liabilities | Other current liabilities | | | 18 | | | | 11 | |
| Noncurrent operating lease liabilities | Operating lease liabilities | | | 45 | | | | 39 | |
| | | | | | | | | |
| Lease Type | Cash Flow Classification | Lease Expense Category | | 2025 | | | | 2024 | |
| Operating leases | Operating cash flows | Lease cost | $ | 25 | | | $ | 15 | |
| | | | | | | | |
| | | | 2025 | | | | 2024 | |
| Weighted-average remaining lease term - operating leases | | | 5.6 years | | | | 6.5 years | |
| Weighted-average discount rate - operating leases | | | 4.5 | % | | | 3.5 | % |
Right-of-use assets obtained in exchange for new operating lease liabilities were $24 million for fiscal 2025.
Litigation
The Company is party to various legal proceedings involving routine claims which are incidental to its business. Although the Company’s legal and financial liability with respect to such proceedings cannot be estimated with certainty, the Company believes that any ultimate liability would not be material to its Consolidated and Combined Balance Sheet, Statements of Operations, or Cash Flows.
Environmental Claims
Over the next 30 years, we are primarily responsible for the reimbursement of government oversight costs associated with certain environmental claims regarding the Fox River located in Wisconsin. At September 27, 2025, the outstanding balance of the environmental liability and corresponding escrow asset was $18 million and $9 million, respectively.
Tax Claims
As part of a previous acquisition, the
Company acquired a liability related to certain tax claims. Depending on the
resolution of the tax claim, the final settlement calculated as of September
27, 2025 will range between $40 million and $59 million with an eventual
payment to the Brazilian government and/or the selling stockholders of the
previous acquisition. The Company has recorded an estimated tax liability
on the Consolidated and Combined Balance Sheets in Other long-term liabilities
as the settlement of existing and potential claims is expected to be greater
than one year.