LEASES
The Company's leasing activities primarily consist of operating leases for service centers, manufacturing facilities, sales and administrative offices, and certain equipment.
The following table presents operating lease expense:
| | | | | | | | | | | |
| Operating Lease Expense | 2025 | 2024 | 2023 |
| Short-term lease | $ | 492 | | $ | 511 | | $ | 503 | |
| Long-term fixed lease | 272 | | 292 | | 276 | |
| Long-term variable lease | 54 | | 76 | | 73 | |
| Total operating lease expense | $ | 818 | | $ | 879 | | $ | 852 | |
Cash flows used in operating activities for operating leases approximate lease expense for the years ended December 31, 2025, 2024, and 2023.
As of December 31, 2025, maturities of operating lease liabilities are as follows:
| | | | | | |
| Year | Operating Leases | |
| 2026 | $ | 204 | | |
| 2027 | 130 | | |
| 2028 | 92 | | |
| 2029 | 70 | | |
2030 | 47 | | |
| Thereafter | 201 | | |
| Total lease payments | 744 | | |
| Less: imputed interest | 129 | | |
| Total | $ | 615 | | |
Amounts recognized in the consolidated statements of financial position for operating leases consist of the following:
| | | | | | | | |
| 2025 | 2024 |
| All other current liabilities | $ | 173 | | $ | 198 | |
| All other liabilities | 442 | | 475 | |
| | |
| | |
| Total | $ | 615 | | $ | 673 | |
Right-of-use assets of $622 million and $678 million as of December 31, 2025 and 2024, respectively, are included in "All other assets" in the consolidated statements of financial position. The weighted-average remaining lease term for the Company's operating leases was approximately seven years for the years ended December 31, 2025 and 2024. The weighted-average discount rate used to determine the operating lease liability as of December 31, 2025 and 2024 was 4.6% and 4.3%, respectively.
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.