14. LEASES
Total Lease Cost
Total lease cost is included in Product and Service costs in the consolidated statement of earnings and comprehensive income and is recorded net of immaterial sublease income. Total lease cost is comprised of the following:
| | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31 |
| $ in millions | | 2025 | | 2024 | | 2023 |
| Operating lease cost | | $ | 363 | | | $ | 370 | | | $ | 358 | |
| Variable lease cost | | 102 | | | 49 | | | 48 | |
| Short-term lease cost | | 47 | | | 51 | | | 69 | |
| Total lease cost | | $ | 512 | | | $ | 470 | | | $ | 475 | |
Supplemental Balance Sheet Information
Supplemental operating lease balance sheet information consists of the following: | | | | | | | | | | | | | | |
| | Year Ended December 31 |
| $ in millions | | 2025 | | 2024 |
| Operating lease right-of-use assets | | $ | 1,859 | | | $ | 1,770 | |
| | | | |
| Other current liabilities | | 331 | | | 324 | |
| Operating lease liabilities | | 1,857 | | | 1,798 | |
| Total operating lease liabilities | | $ | 2,188 | | | $ | 2,122 | |
Other Supplemental Information
Other supplemental operating lease information consists of the following: | | | | | | | | | | | | | | |
| | Year Ended December 31 |
| $ in millions | | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of operating lease liabilities | | $ | 386 | | | $ | 373 | |
| Right-of-use assets obtained in exchange for new lease liabilities | | 400 | | | 272 | |
| | | | |
| Weighted average remaining lease term | | 10.1 years | | 10.4 years |
| Weighted average discount rate | | 4.3 | % | | 4.0 | % |
| | | | |
Maturities of Lease Liabilities
Maturities of operating lease liabilities as of December 31, 2025 are as follows: | | | | | | | | |
| $ in millions | | |
| Year Ending December 31 | | |
| 2026 | | $ | 401 | |
| 2027 | | 364 | |
| 2028 | | 320 | |
| 2029 | | 286 | |
| 2030 | | 237 | |
| Thereafter | | 1,095 | |
| Total lease payments | | 2,703 | |
| Less: imputed interest | | (515) | |
| Present value of operating lease liabilities | | $ | 2,188 | |
As of December 31, 2025, we have approximately $1.3 billion in rental commitments for real estate leases that have not yet commenced. These leases are expected to commence in 2026 and 2027 with lease terms of 4 to
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.