Leases, Codification Topic 842

12 Months Ended

Dec. 27, 2025

Operating Leases

The Company has entered into operating and finance leases for its corporate offices, data centers, research and development facilities and certain equipment. The leases expire at various dates through 2038, some of which include options to extend the lease for up to ten years.

For 2025, 2024 and 2023, the Company recorded $196 million, $147 million and $127 million, respectively, of operating lease expense, including short-term lease expense. For 2025, 2024, and 2023, the Company recorded $100 million, $83 million, and $46 million respectively, of variable lease expense, which primarily included operating expenses and property taxes associated with the usage of facilities under the operating leases. For 2025, 2024, and 2023 cash paid for operating leases included in operating cash flows was $176 million, $155 million, and $147 million respectively. Certain operating leases contain provisions for escalating lease payments subject to changes in the consumer price index. The Company’s finance and short-term leases are immaterial to the Company’s Consolidated Financial Statements.

Supplemental information as of and for the year December 27, 2025 related to leases is as follows:


	December 27, 2025		December 28, 2024
Weighted-average remaining lease term in years – operating leases	6.95		7.28
Weighted-average discount rate – operating leases	4.74	%	4.63	%

Future minimum lease payments under non-cancellable operating lease liabilities as of December 27, 2025 are as follows:


Fiscal Year	2026		2027		2028		2029		2031		2031 and thereafter		Total
	(In millions)
Minimum lease payments	$	192	$	149	$	120	$	113	$	100	$	263	$	937
Less: interest													(153)
Present value of net minimum lease payments													784
Less: current portion													159
Total long-term operating lease liabilities													$	625

As of December 27, 2025, the Company has data center and other real estate leases that have not yet commenced with future lease payments of $1.3 billion. These leases are expected to commence in 2026 with lease terms of 1 year to 10 years.