Leases
The components of lease expense for 2025, 2024 and 2023 were as follows:
| | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| Operating lease expense | | $ | 71 | | | $ | 67 | | | $ | 63 | |
| Variable operating lease expense | | 19 | | | 17 | | | 26 | |
| Short term lease expense | | 4 | | | 4 | | | 3 | |
| Total lease expense | | $ | 94 | | | $ | 88 | | | $ | 92 | |
We have operating leases for certain rail cars, office spaces, warehouses and machinery and equipment. We currently have no finance leases. The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities and the related operating lease assets as presented within Other non-current liabilities and Other non-current assets, on our Consolidated Balance Sheets as of December 31, 2025:
| | | | | |
| 2026 | $ | 68 | |
| 2027 | 50 | |
| 2028 | 29 | |
| 2029 | 19 | |
| 2030 | 8 | |
| Thereafter | 20 | |
| Total future lease payments | 194 | |
| Less: imputed interest | 13 | |
| Present value of future lease payments | 181 | |
| Less: current lease liabilities | 63 | |
| Non-current operating lease liabilities | $ | 118 | |
| Operating lease assets | $ | 177 | |
Supplemental cash flow information arising from lease transactions is as follows:
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | |
| Operating cash flows from operating leases | | $ | 72 | | | $ | 68 | |
| Right-of-use assets obtained in exchange for lease liabilities: | | | | |
| Operating leases | | $ | 40 | | | $ | 55 | |
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 |
| Lease term and discount rate | | | | |
| Weighted average remaining lease term | | 4.4 years | | 4.8 years |
| Weighted average discount rate | | 4.8 | % | | 4.6 | % |
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.