Leases
The Company has entered non-cancelable operating and finance leases primarily for office space and equipment with lease terms that range from less than one year to 11 years.
The components of lease costs were as follows: | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in millions) | | 2025 | | 2024 | | 2023 |
| Finance Lease Costs: | | | | | | |
| Amortization of right of use assets | | $ | 16 | | | $ | 12 | | | $ | 12 | |
| Interest on lease liabilities | | 4 | | | 3 | | | 2 | |
| Total Finance Lease Costs | | $ | 20 | | | $ | 15 | | | $ | 14 | |
| Operating lease costs: | | | | | | |
| Base rent | | $ | 58 | | | $ | 67 | | | $ | 75 | |
| Short-term lease costs | | 1 | | | 1 | | | 2 | |
Variable lease costs(1) | | 19 | | | 21 | | | 23 | |
| Sublease income | | (1) | | | (1) | | | — | |
| Total Operating Lease Costs | | $ | 77 | | | $ | 88 | | | $ | 100 | |
__________
(1)Primarily related to taxes, insurance and common area and other maintenance costs for real estate leases.
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in millions) | | 2025 | | 2024 | | 2023 |
| Cash paid for the amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows from operating leases | | $ | 69 | | | $ | 75 | | | $ | 83 | |
| Operating cash flows from finance leases | | 4 | | | 2 | | | 3 | |
| Total Cash Flow from Operating Activities | | $ | 73 | | | $ | 77 | | | $ | 86 | |
| | | | | | |
| Financing cash flow from finance leases | | $ | 13 | | | $ | 17 | | | $ | 16 | |
| | | | | | |
| Supplemental non-cash information on right of use assets obtained in exchange for new lease obligations: | | | | | | |
| Operating leases | | $ | 19 | | | $ | 41 | | | $ | 70 | |
| Finance leases | | $ | 35 | | | $ | 19 | | | $ | 21 | |
Supplemental balance sheet information related to leases was as follows:
| | | | | | | | | | | | | | |
| | December 31, |
| (in millions) | | 2025 | | 2024 |
| Operating lease assets: | | | | |
| Operating lease right-of-use assets | | $ | 136 | | | $ | 169 | |
| Operating lease liabilities: | | | | |
| Other current liabilities | | 52 | | | 52 | |
| Operating lease liabilities | | 102 | | | 138 | |
| Total Operating Lease Liabilities | | $ | 154 | | | $ | 190 | |
| | | | |
| Finance lease assets: | | | | |
| Land, buildings and equipment, net | | $ | 54 | | | $ | 37 | |
| Finance lease liabilities: | | | | |
| Current portion of long-term debt | | 13 | | | 8 | |
| Long-term debt | | 36 | | | 18 | |
| Total Finance Lease Liabilities | | $ | 49 | | | $ | 26 | |
The weighted average discount rates and weighted average remaining lease terms for operating and finance leases as of December 31, 2025 and 2024 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Operating Leases | | Finance Leases | | Operating Leases | | Finance Leases |
| Weighted average discount rates | 8.6 | % | | 8.1 | % | | 8.4 | % | | 8.7 | % |
| Weighted average remaining lease term (in years) | 4 | | 4 | | 4 | | 4 |
| | | | | | | |
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Maturities of operating and finance lease liabilities as of December 31, 2025 were as follows:
| | | | | | | | | | | | | | |
| | December 31, 2025 |
| (in millions) | | Operating Lease Payments | | Finance Lease Payments |
| 2026 | | $ | 61 | | | $ | 16 | |
| 2027 | | 50 | | | 15 | |
| 2028 | | 28 | | | 15 | |
| 2029 | | 18 | | | 9 | |
| 2030 | | 11 | | | 2 | |
| Thereafter | | 14 | | | — | |
| Total undiscounted lease payments | | 182 | | | 57 | |
| Less imputed interest | | 28 | | | 8 | |
| Present value of lease liabilities | | $ | 154 | | | $ | 49 | |
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As of December 31, 2025, the Company entered into additional operating lease agreements for equipment for $6 million, real estate for $19 million and finance leases for equipment for $16 million which have not commenced and have not been recognized on the Company's Consolidated Balance Sheets. These leases are expected to commence in 2026 and 2027 with average lease terms of 4, 9 and 5 years, 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.