Leases
Most of our leases are operating leases and consist of real estate leases. In addition, we lease trucks, tractors and trailers.
The following amounts are recorded in the Consolidated Balance Sheets related to leases: | | | | | | | | | | | | | | |
| | December 31, |
| (In millions) | | 2025 | | 2024 |
| Operating leases: | | | | |
| Operating lease assets | | $ | 238 | | | $ | 276 | |
| | | | |
| Short-term operating lease liabilities | | $ | 75 | | | $ | 81 | |
| Long-term operating lease liabilities | | 191 | | | 215 | |
| Total operating lease liabilities | | $ | 266 | | | $ | 296 | |
| | | | |
| Finance leases: | | | | |
| Property and equipment, gross | | $ | 9 | | | $ | 9 | |
| Accumulated depreciation | | (7) | | | (5) | |
| Property and equipment, net | | $ | 2 | | | $ | 4 | |
| | | | |
| Current portion of obligations under finance leases | | $ | 2 | | | $ | 2 | |
| Long-term portion of obligations under finance leases | | 1 | | | 2 | |
| Total finance lease liabilities | | $ | 3 | | | $ | 4 | |
Supplemental weighted-average information for leases is as follows: | | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Weighted-average remaining lease term (years) | | | | |
| Operating leases | | 4.5 | | 4.7 |
| Finance leases | | 1.4 | | 2.3 |
| Weighted-average discount rate | | | | |
| Operating leases | | 5.2 | % | | 5.5 | % |
| Finance leases | | 5.6 | % | | 5.6 | % |
The components of our lease expense are as follows: | | | | | | | | | | | | | | | | | | | | |
| | Years Ended December 31, |
| (In millions) | | 2025 | | 2024 | | 2023 |
| Operating lease cost | | $ | 99 | | | $ | 85 | | | $ | 59 | |
| Short-term lease cost | | 9 | | | 11 | | | 15 | |
| Variable lease cost | | 13 | | | 11 | | | 15 | |
| Total operating lease cost | | $ | 121 | | | $ | 107 | | | $ | 89 | |
| Finance lease cost: | | | | | | |
| Amortization of leased assets | | $ | 3 | | | $ | 3 | | | $ | 2 | |
| Interest on lease liabilities | | — | | | — | | | 1 | |
| Total finance lease cost | | $ | 3 | | | $ | 3 | | | $ | 3 | |
| Total lease cost | | $ | 124 | | | $ | 110 | | | $ | 92 | |
Supplemental cash flow information related to leases is as follows: | | | | | | | | | | | | | | | | | | | | |
| | Years Ended December 31, |
| (In millions) | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows for operating leases | | $ | 90 | | | $ | 70 | | | $ | 57 | |
| Financing cash flows for finance leases | | 2 | | | 2 | | | 2 | |
| Leased assets obtained in exchange for new lease obligations: | | | | | | |
| Operating leases | | 49 | | | 75 | | | 100 | |
| Finance leases | | — | | | — | | | 2 | |
Future minimum lease payments as of December 31, 2025 are as follows: | | | | | | | | | | | | | | |
| (In millions) | | Finance Leases | | Operating Leases |
| 2026 | | $ | 2 | | | $ | 85 | |
| 2027 | | 1 | | | 72 | |
| 2028 | | — | | | 55 | |
| 2029 | | — | | | 36 | |
| 2030 | | — | | | 22 | |
| Thereafter | | — | | | 31 | |
| Total lease payments | | 3 | | | 301 | |
| Less: interest | | — | | | (35) | |
| Present value of lease liabilities | | $ | 3 | | | $ | 266 | |
As of December 31, 2025, we had additional operating leases that have not yet commenced with future undiscounted lease payments of $52 million. These operating leases will commence in 2026, with initial lease terms ranging from 7 years to 11 years
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.