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Leases

We are party to contracts where we lease property from others under contracts classified as operating leases. We primarily lease buildings, offices, facilities and equipment. Operating lease right-of-use assets are included in other assets and operating lease liabilities are included in accounts payable, accruals and other liabilities. Information related to our operating leases follows (dollars in millions).

 

 

Right-of-use assets

 

 

Lease liabilities

 

 

Weighted average
remaining term in
years

 

 

Weighted average
discount rate used to
measure liabilities

 

December 31, 2025

 

$

6,020

 

 

$

6,290

 

 

 

7.8

 

 

 

4.8

%

December 31, 2024

 

 

5,843

 

 

 

5,996

 

 

 

7.5

 

 

 

4.5

%

A summary of our remaining future operating lease payments reconciled to lease liabilities as of December 31, 2025 and December 31, 2024 follows (in millions).

 

Year 1

 

Year 2

 

Year 3

 

Year 4

 

Year 5

 

Thereafter

 

Total
lease
payments

 

Amount
representing
interest

 

Lease
liabilities

 

December 31:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

$

1,437

 

$

1,269

 

$

1,022

 

$

827

 

$

643

 

$

2,546

 

$

7,744

 

$

(1,454

)

$

6,290

 

2024

 

1,491

 

 

1,161

 

 

982

 

 

766

 

 

600

 

 

2,197

 

 

7,197

 

 

(1,201

)

 

5,996

 

Components of operating lease expense for each of the three years ending December 31, 2025 are summarized as follows (in millions).

 

 

2025

 

 

2024

 

 

2023

 

Operating lease expense

 

$

1,647

 

 

$

1,652

 

 

$

1,535

 

Short-term lease expense

 

 

170

 

 

 

171

 

 

 

219

 

Variable lease expense

 

 

209

 

 

 

225

 

 

 

216

 

 

 

$

2,026

 

 

$

2,048

 

 

$

1,970

 

 

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Feb 24, 2025
2023Feb 26, 2024
2022Feb 27, 2023
2021Feb 28, 2022
2020Mar 1, 2021
2019Feb 24, 2020
2017Feb 26, 2018
2016Feb 27, 2017
2015Feb 29, 2016

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.