LEASES
Our operating leases consist primarily of properties and equipment for our administrative, manufacturing and R&D activities. Some of our leases contain options to extend the lease term, allowing for extensions of up to 15 additional years for certain leases, and some contain options to terminate the lease early with a sufficient number of months’ notice and/or if a given number of years have passed after the lease commencement date. We determine the lease term by assuming the exercise of any renewal and/or early-termination options that are reasonably certain. As of December 31, 2025 and 2024, we did not have material finance leases.
The following table summarizes balance sheet and other information related to our operating leases:
| | | | | | | | | | | | | | | | | | | | |
| | | | December 31, |
| (in millions, except weighted average amounts) | | Classification | | 2025 | | 2024 |
| Right-of-use assets, net | | Other long-term assets | | $ | 532 | | | $ | 515 | |
Lease liabilities – current | | Other current liabilities | | $ | 102 | | | $ | 113 | |
Lease liabilities – noncurrent | | Other long-term obligations | | $ | 503 | | | $ | 498 | |
| Weighted average remaining lease term | | | | 8.1 years | | 8.0 years |
| Weighted average discount rate | | | | 3.53 | % | | 3.37 | % |
The following table summarizes cost and other activity related to our operating leases:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| (in millions) | | 2025 | | 2024 | | 2023 |
| Operating lease cost, including variable lease and short-term lease cost | | $ | 169 | | | $ | 163 | | | $ | 165 | |
| Cash paid for amounts included in the measurement of lease liabilities | | $ | 127 | | | $ | 141 | | | $ | 88 | |
Right-of-use assets obtained in exchange for lease liabilities(1) | | $ | 106 | | | $ | 86 | | | $ | 214 | |
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(1) These represent noncash activities and were therefore not included on our Consolidated Statements of Cash Flows.
The following table is a maturity analysis of our operating lease liabilities as of December 31, 2025:
| | | | | | | | |
| (in millions) | | Amount |
| 2026 | | $ | 121 | |
| 2027 | | 99 | |
| 2028 | | 87 | |
| 2029 | | 75 | |
| 2030 | | 73 | |
| Thereafter | | 243 | |
| Total undiscounted lease payments | | 699 | |
| Less: imputed interest | | 94 | |
| Total discounted lease payments | | $ | 605 | |
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.