LEASES
The Company leases various real estate, including warehouses, office space and land. The Company also leases material handling equipment, vehicles and certain other equipment. The Company’s leases have a remaining lease term of up to 15 years.
COMPONENTS OF LEASE EXPENSE
In millions
202520242023
Operating lease costs
$27 $26 $21 
Variable lease costs
29 26 40 
Short-term lease costs
 — — 
Finance lease cost
Amortization of right-of-use assets
3 
Interest on lease liabilities
1 
Total lease cost, net
$60 $56 $65 
SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES
In millions 
Classification
20252024
Assets
  
Operating lease assets
Right of use assets$48 $58 
Finance lease assets
Plants, properties, and equipment, net (a)
20 20 
Total leased assets
$68 $78 
Liabilities
Current
Operating
Other current liabilities$21 $21 
Finance
Notes payable and current maturities of long-term debt3 
Noncurrent
Operating
Other Liabilities34 45 
Finance
Long-term debt12 12 
Total lease liabilities
$70 $80 
(a)Finance leases above are presented net of accumulated amortization of $20 million and $17 million as of December 31, 2025 and 2024, respectively.
LEASE TERM AND DISCOUNT RATE
20252024
Weighted average remaining lease term (years)
  
Operating leases
3.9 years4.4 years
Finance leases
7.6 years8.6 years
Weighted average discount rate
Operating leases
5.18 %5.25 %
Finance leases
4.09 %3.98 %
SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO LEASES
In millions
20252024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases
$28 $24 
Operating cash flows related to financing leases
1 
Financing cash flows related to finance leases
3 
Right of use assets obtained in exchange for lease liabilities
Operating leases
7 16 
Finance leases
3 — 
MATURITY OF LEASE LIABILITIES
In millions
Operating Leases
Financing Leases
Total
2026$24 $3 $27 
202715 3 18 
202811 3 14 
20294 3 7 
20302 1 3 
Thereafter
6 5 11 
Total lease payments
62 18 80 
Less: imputed interest
7 3 10 
Present value of lease liabilities
$55 $15 $70 

Historical Timeline

Fiscal YearFiled
2025Feb 20, 2026Showing above
2024Feb 20, 2025
2023Feb 21, 2024
2022Feb 22, 2023
2021Mar 2, 2022

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.