NOTE 11: LEASES
We enter into lease agreements for the use of real estate space, vehicles, IT equipment, and certain other equipment, including engines, under both operating and finance leases. The majority of our lease agreements are accounted for as operating leases. Operating lease expense was $495 million, $422 million, and $463 million for 2025, 2024, and 2023, respectively. Finance leases are not considered significant to our Consolidated Balance Sheet, Consolidated Statement of Operations, or Consolidated Statement of Cash Flows.
Leases under which we are the lessor are generally short-term leases that support our commercial aerospace customers during engine maintenance events. Our commercial aerospace customers have varying forms of aftermarket maintenance coverage that often provide a level of support for leased engines as part of the revenue arrangement. As such, leases where we are the lessor are not considered significant to our Consolidated Balance Sheet, Consolidated Statement of Operations, or Consolidated Statement of Cash Flows.
In 2025, 2024, and 2023, we entered into sale and leaseback transactions for the sale of new engines and related maintenance. We subsequently lease back the engines sold for a limited timeframe and account for them as operating leases. The proceeds
received as a result of sales of new engines are classified primarily in Other operating activities, net within our Consolidated Statement of Cash Flows. The net gains as a result of these transactions were not material.
Supplemental cash flow information related to operating leases were as follows:
| | | | | | | | | | | | | | | | | |
| (dollars in millions) | 2025 | | 2024 | | 2023 |
| Operating cash flows used in the measurement of operating lease liabilities | $ | 466 | | | $ | 417 | | | $ | 421 | |
| Operating lease right-of-use assets obtained in exchange for operating lease obligations | 429 | | | 707 | | | 373 | |
Future lease payments related to our operating lease liabilities as of December 31, 2025 are as follows:
| | | | | | | | | |
| (dollars in millions) | | | | | |
| 2026 | $ | 492 | | | | | |
| 2027 | 419 | | | | | |
| 2028 | 339 | | | | | |
| 2029 | 228 | | | | | |
| 2030 | 197 | | | | | |
| Thereafter | 754 | | | | | |
| Total undiscounted lease payments | 2,429 | | | | | |
| Less imputed interest | (377) | | | | | |
| Total discounted lease payments | $ | 2,052 | | | | | |
Our lease liabilities recognized in our Consolidated Balance Sheet were as follows as of December 31:
| | | | | | | | | | | |
| (dollars in millions) | 2025 | | 2024 |
| Operating lease liabilities, current (included in Other accrued liabilities) | $ | 450 | | | $ | 367 | |
| Operating lease liabilities, non-current | 1,602 | | | 1,632 | |
| Total operating lease liabilities | $ | 2,052 | | | $ | 1,999 | |
The weighted-average remaining lease term related to our operating leases was 9 years and 10 years as of December 31, 2025 and 2024, respectively. The weighted-average discount rate related to our operating leases was 4.3% as of December 31, 2025 and 2024.