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Leases
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Leases Leases
The Company recognizes a right of use (“ROU”) asset and a liability for all leases whose term is more than 12 months at the lease inception date. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, which includes any extension the Company reasonably expects to exercise. The Company assesses whether certain service arrangements contain embedded leases where the contract conveys the right to use an asset but is not explicitly identified as a lease arrangement; examples include information technology, third-party logistics and original equipment manufacturers. The Company uses incremental borrowing rates, updated quarterly, that reflect its own external unsecured borrowing rates that are risk-adjusted to approximate secured borrowing rates over similar terms.

For certain non-real estate leases, the portfolio approach is used. The Company also has lease agreements with lease and non-lease components, which are accounted for as a single lease component.

Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease assets and operating lease liabilities are reported as separate lines in the Consolidated Balance Sheets. The current portion of operating lease liabilities is reported in other accrued liabilities in the Consolidated Balance Sheets.

For finance leases, lease payments are allocated between interest expense and reduction of the liability in accordance with an amortization schedule. The corresponding asset is amortized on a straight-line basis over the lease term. Assets acquired under finance leases are reported in property, plant and equipment, net in the Consolidated Balance Sheets. The Company did not have finance leases at December 31, 2024 and 2023.

The depreciable life of leasehold improvements and other lease-related assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Supplemental consolidated balance sheet information for leases at December 31, is as follows (in millions):
Classification20242023
Assets
Operating leasesOperating lease assets$466 $515 
Total lease assets$466 $515 
Liabilities
Current
Operating leasesOther accrued liabilities$110 $122 
Noncurrent
Operating leasesOperating lease liabilities418 446 
Total lease liabilities$528 $568 
In June 2024, as part of optimizing the Company’s real estate footprint, the Company entered into a lease agreement for a new location of its corporate headquarters in Atlanta, Georgia. Upon control of the leased premises, the Company recorded the lease liability and right of use asset with an initial lease term of 14.5 years. See Footnote 4 for further information.
Components of lease expense for the years ended December 31, are as follows (in millions):
202420232022
Operating lease cost:
Operating lease cost (1)
$161 $172 $172 
Variable lease costs (2)
22 24 21 
Finance lease cost
Amortization of leased assets— 1 4 

(1)Includes short-term leases, which are immaterial.
(2)Consists primarily of additional payments for non-lease components, such as maintenance costs, payments of taxes and additional rent based on a level of the Company’s retail store sales.

Remaining lease term and discount rates for operating leases at December 31, are as follows:
20242023
Weighted-average remaining lease term (years)77
Weighted-average discount rate5.1%4.3%

Supplemental cash flow information related to leases for the years ended December 31, are as follows (in millions):
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$158 $162 $160 
Right of use assets obtained in exchange for lease liabilities:
Operating leases76 46 135 

Maturities of operating lease liabilities at December 31, 2024, are as follows (in millions):
2025$110 
2026108 
202783 
202875 
202963 
Thereafter207 
Total lease payments646 
Less: imputed interest(118)
Present value of lease liabilities$528 
Leases Leases
The Company recognizes a right of use (“ROU”) asset and a liability for all leases whose term is more than 12 months at the lease inception date. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term, which includes any extension the Company reasonably expects to exercise. The Company assesses whether certain service arrangements contain embedded leases where the contract conveys the right to use an asset but is not explicitly identified as a lease arrangement; examples include information technology, third-party logistics and original equipment manufacturers. The Company uses incremental borrowing rates, updated quarterly, that reflect its own external unsecured borrowing rates that are risk-adjusted to approximate secured borrowing rates over similar terms.

For certain non-real estate leases, the portfolio approach is used. The Company also has lease agreements with lease and non-lease components, which are accounted for as a single lease component.

Operating lease expense is recognized on a straight-line basis over the lease term. Operating lease assets and operating lease liabilities are reported as separate lines in the Consolidated Balance Sheets. The current portion of operating lease liabilities is reported in other accrued liabilities in the Consolidated Balance Sheets.

For finance leases, lease payments are allocated between interest expense and reduction of the liability in accordance with an amortization schedule. The corresponding asset is amortized on a straight-line basis over the lease term. Assets acquired under finance leases are reported in property, plant and equipment, net in the Consolidated Balance Sheets. The Company did not have finance leases at December 31, 2024 and 2023.

The depreciable life of leasehold improvements and other lease-related assets are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

Supplemental consolidated balance sheet information for leases at December 31, is as follows (in millions):
Classification20242023
Assets
Operating leasesOperating lease assets$466 $515 
Total lease assets$466 $515 
Liabilities
Current
Operating leasesOther accrued liabilities$110 $122 
Noncurrent
Operating leasesOperating lease liabilities418 446 
Total lease liabilities$528 $568 
In June 2024, as part of optimizing the Company’s real estate footprint, the Company entered into a lease agreement for a new location of its corporate headquarters in Atlanta, Georgia. Upon control of the leased premises, the Company recorded the lease liability and right of use asset with an initial lease term of 14.5 years. See Footnote 4 for further information.
Components of lease expense for the years ended December 31, are as follows (in millions):
202420232022
Operating lease cost:
Operating lease cost (1)
$161 $172 $172 
Variable lease costs (2)
22 24 21 
Finance lease cost
Amortization of leased assets— 1 4 

(1)Includes short-term leases, which are immaterial.
(2)Consists primarily of additional payments for non-lease components, such as maintenance costs, payments of taxes and additional rent based on a level of the Company’s retail store sales.

Remaining lease term and discount rates for operating leases at December 31, are as follows:
20242023
Weighted-average remaining lease term (years)77
Weighted-average discount rate5.1%4.3%

Supplemental cash flow information related to leases for the years ended December 31, are as follows (in millions):
202420232022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$158 $162 $160 
Right of use assets obtained in exchange for lease liabilities:
Operating leases76 46 135 

Maturities of operating lease liabilities at December 31, 2024, are as follows (in millions):
2025$110 
2026108 
202783 
202875 
202963 
Thereafter207 
Total lease payments646 
Less: imputed interest(118)
Present value of lease liabilities$528