12. LEASING
The following table presents our lease balances as of December 31:
| | | | | | | | | | | | | | | |
| In millions | Location in the Consolidated Balance Sheet | | December 31, 2025 | December 31, 2024 | |
| Assets | | | | | |
| Operating lease assets | Operating lease assets | | $ | 208 | | $ | 229 | | |
| Finance lease assets | Property, plant and equipment, net | | 100 | | 81 | | |
| Accumulated Amortization of Finance lease assets | Property, plant and equipment, net | | (81) | | (70) | | |
| Total leased assets | | | $ | 227 | | $ | 240 | | |
| Liabilities | | | | | |
| Current | | | | | |
| Operating lease liabilities | Other current liabilities | | $ | 38 | | $ | 40 | | |
| Finance lease liabilities | Other current liabilities | | 14 | | 11 | | |
| Noncurrent | | | | | |
| Operating lease liabilities | Operating lease liabilities | | 226 | | 248 | | |
| Finance lease liabilities | Other liabilities | | 5 | | 3 | | |
| Total lease liabilities | | | $ | 283 | | $ | 302 | | |
| | | | | |
The following table presents our lease costs for operating and finance leases:
| | | | | | | | | | | |
| In millions | For the year ended December 31, 2025 | For the year ended December 31, 2024 | For the year ended December 31, 2023 |
| Operating lease cost | $ | 51 | | $ | 63 | | $ | 72 | |
| Finance lease cost | | | |
| Amortization of leased assets | 11 | | 13 | | 13 | |
| Interest on lease liabilities | 1 | | 1 | | 1 | |
| | | |
| Variable lease cost | 19 | | 26 | | 27 | |
| Sublease income | (17) | | (5) | | (3) | |
| Total lease cost | $ | 65 | | $ | 98 | | $ | 110 | |
The following table presents the supplemental cash flow information:
| | | | | | | | | | | |
| In millions | For the year ended December 31, 2025 | For the year ended December 31, 2024 | For the year ended December 31, 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 56 | | $ | 66 | | $ | 76 | |
| Operating cash flows from finance leases | $ | 1 | | $ | 1 | | $ | 1 | |
| Financing cash flows from finance leases | $ | 13 | | $ | 14 | | $ | 14 | |
| Lease Assets Obtained in Exchange for Lease Obligations | | | |
| Operating Leases | $ | 8 | | $ | 29 | | $ | 16 | |
| Finance Leases | $ | 11 | | $ | 2 | | $ | (1) | |
The following table reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2025:
| | | | | | | | | | | | | | |
| In millions | | Operating Leases | | Finance Leases |
| 2026 | | 53 | | 15 |
| 2027 | | 50 | | 3 |
| 2028 | | 46 | | 2 |
| 2029 | | 41 | | — | |
| 2030 | | 41 | | — | |
| Thereafter | | 95 | | — | |
| Total lease payments | | 326 | | 20 |
| Less: Amount representing interest | | 62 | | 1 |
| Present value of lease liabilities | | 264 | | 19 |
As of December 31, 2025, all material operating leases had commenced.
The following table presents the weighted average remaining lease term and interest rates:
| | | | | | | | | | | | |
| | December 31, 2025 | December 31, 2024 | |
| Weighted average lease term: | | | | |
| Operating leases | | 6.8 years | 7.6 years | |
| Finance leases | | 3.2 years | 1.5 years | |
| Weighted average interest rates: | | | | |
| Operating leases | | 6.18 | % | 6.17 | % | |
| Finance leases | | 5.84 | % | 3.91 | % | |
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.