Leases
The Company records right-of-use (ROU) assets and lease liabilities for non-cancelable operating leases primarily for real estate and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Expense related to leases is recorded on a straight-line basis over the lease term, including rent holidays. The Company recognized operating lease expense of $99 million and $108 million during the years ended December 31, 2025 and 2024, respectively.
The Company considers the existence of options to extend or terminate leases in its analysis of the lease term for the purposes of measuring its ROU assets and lease liabilities. The renewal options are not included in the measurement of the ROU assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods.
The following table sets forth the ROU assets and lease liabilities ($ in millions):
| | | | | | | | | | | |
| | December 31, 2025 | | December 31, 2024 |
| Assets | | | |
| | | |
| ROU assets (recorded within other long-term assets) | $ | 317 | | | $ | 359 | |
| | | |
| Liabilities | | | |
| Short-term (recorded within accounts payable and accrued expenses) | $ | 146 | | | $ | 158 | |
| Long-term (recorded within other long-term liabilities) | 615 | | | 738 | |
| Total lease liabilities | $ | 761 | | | $ | 896 | |
Cash paid for amounts included in the measurement of lease liabilities, recorded as operating cash flows in the Consolidated Statements of Cash Flows, was $195 million and $227 million during the years ended December 31, 2025 and 2024, respectively. New operating leases commenced resulting in the recognition of ROU assets and lease liabilities of $65 million and $69 million during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company had additional operating leases that have not yet commenced of $2 million. These operating leases will commence in 2026 with lease terms of approximately six years.
As of December 31, 2025, the weighted average remaining lease term for the Company was 6.9 years. The lease liabilities as of December 31, 2025, reflect a weighted average discount rate of 3.5%.
Lease payments over the next five years and thereafter are as follows ($ in millions):
| | | | | | | | |
| | | Lease Payments |
| 2026 | | $ | 169 | |
| 2027 | | 137 | |
| 2028 | | 116 | |
| 2029 | | 99 | |
| 2030 | | 86 | |
| Thereafter | | 247 | |
| Total lease payments | | 854 | |
| Less: imputed interest | | (93) | |
| Total lease liabilities | | $ | 761 | |
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.