Leases
PPG leases certain retail paint stores, warehouses, distribution facilities, office space, fleet vehicles and equipment.
The components of lease expense for the years ended December 31, 2025, 2024 and 2023 were as follows:
| | | | | | | | | | | | | | |
| ($ in millions) | Classification in the Consolidated Statement of Income | 2025 | 2024 | 2023 |
| Operating lease cost | Cost of sales, exclusive of depreciation and amortization | $49 | | $47 | | $45 | |
| Operating lease cost | Selling, general and administrative | 150 | | 141 | | 138 | |
| Total operating lease cost | | $199 | | $188 | | $183 | |
| Finance lease cost: | | | | |
| Amortization of right-of-use assets | Depreciation | $1 | | $1 | | $1 | |
| Interest on lease liabilities | Interest expense | 1 | | 1 | | 1 | |
| Total finance lease cost | | $2 | | $2 | | $2 | |
| Total lease cost | | $201 | | $190 | | $185 | |
Total operating lease cost for the years ended December 31, 2025, 2024 and 2023 is inclusive of the following:
| | | | | | | | | | | |
| ($ in millions) | 2025 | 2024 | 2023 |
| Variable lease costs | $10 | | $9 | | $9 | |
| Short-term lease costs | $19 | | $20 | | $19 | |
The lease amounts included in the consolidated balance sheet as of December 31, 2025 and 2024 were as follows:
| | | | | | | | | | | |
| ($ in millions) | Classification on the Consolidated Balance Sheet | 2025 | 2024 |
| Assets: | | | |
| Operating | Operating lease right-of-use assets | $604 | | $597 | |
Finance(1) | Property, plant, and equipment, net | 15 | | 12 | |
| Total leased assets | | $619 | | $609 | |
| Liabilities: | | | |
| Current | | | |
| Operating | Current portion of operating lease liabilities | $138 | | $126 | |
| Finance | Short-term debt and current portion of long-term debt | 2 | | 2 | |
| Noncurrent | | | |
| Operating | Operating lease liabilities | 450 | | 454 | |
| Finance | Long-term debt | 5 | | 5 | |
| Total lease liabilities | | $595 | | $587 | |
(1)Net of accumulated depreciation of $16 million and $14 million as of December 31, 2025 and 2024, respectively.
Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 was as follows:
| | | | | | | | | | | |
| ($ in millions) | 2025 | 2024 | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows paid for operating leases | $168 | | $157 | | $155 | |
| Operating cash flows paid for finance leases | $1 | | $1 | | $1 | |
| Financing cash flows paid for finance leases | $2 | | $2 | | $2 | |
| Right-of-use assets obtained in exchange for lease obligations: | | | |
| Operating leases | $109 | | $184 | | $119 | |
| Finance leases | $2 | | $1 | | $1 | |
Lease terms and discount rates as of December 31, 2025, 2024 and 2023 were as follows:
| | | | | | | | | | | |
| 2025 | 2024 | 2023 |
| Weighted-average remaining lease term (in years) | | | |
| Operating leases | 6.3 | 6.9 | 6.8 |
| Finance leases | 10.4 | 8.1 | 9.3 |
| Weighted-average discount rate | | | |
| Operating leases | 3.6 | % | 3.6 | % | 3.0 | % |
| Finance leases | 6.7 | % | 6.8 | % | 6.0 | % |
As of December 31, 2025, maturities of lease liabilities were as follows:
| | | | | | | | |
| ($ in millions) | Operating Leases | Finance Leases |
| 2026 | $156 | | $2 | |
| 2027 | 123 | | 2 | |
| 2028 | 98 | | 1 | |
| 2029 | 72 | | 1 | |
| 2030 | 59 | | 1 | |
| Thereafter | 150 | | 1 | |
| Total lease payments | $658 | | $8 | |
| Less: Interest | 70 | | 1 | |
| Total lease obligations | $588 | | $7 | |