Note 17 – Leases
Lessee
We are a lessee for non-cancelable operating and financing leases for cell sites, switch sites, retail stores, network equipment and office facilities with contractual terms that generally extend through 2040. The majority of cell site leases have a non-cancelable term of five to 15 years with several renewal options that can extend the lease term for five to 50 years. In addition, we have financing leases for network equipment that generally have a non-cancelable lease term of three to five years. The financing leases do not have renewal options and contain a bargain purchase option at the end of the lease.
The components of lease expense were as follows: | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| (in millions) | | | | | 2025 | | 2024 | | 2023 |
| Operating lease expense | | | | | $ | 4,945 | | | $ | 4,787 | | | $ | 4,987 | |
| Financing lease expense: | | | | | | | | | |
| Amortization of right-of-use assets | | | | | 794 | | | 787 | | | 684 | |
| Interest on lease liabilities | | | | | 126 | | | 111 | | | 79 | |
| Total financing lease expense | | | | | 920 | | | 898 | | | 763 | |
| Variable lease expense | | | | | 252 | | | 279 | | | 411 | |
| Total lease expense | | | | | $ | 6,117 | | | $ | 5,964 | | | $ | 6,161 | |
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Information relating to the lease term and discount rate is as follows:
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| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Weighted-Average Remaining Lease Term (Years) | | | | | |
| Operating leases | 8 | | 8 | | 9 |
| Financing leases | 2 | | 2 | | 2 |
| Weighted-Average Discount Rate | | | | | |
| Operating leases | 4.6 | % | | 4.4 | % | | 4.3 | % |
| Financing leases | 5.0 | % | | 5.3 | % | | 4.6 | % |
Maturities of lease liabilities as of December 31, 2025, were as follows: | | | | | | | | | | | |
| (in millions) | Operating Leases | | Finance Leases |
| Twelve Months Ending December 31, | | | |
| 2026 | $ | 5,060 | | | $ | 1,222 | |
| 2027 | 4,782 | | | 772 | |
| 2028 | 4,425 | | | 347 | |
| 2029 | 4,111 | | | 17 | |
| 2030 | 3,730 | | | 4 | |
| Thereafter | 13,987 | | | 7 | |
| Total lease payments | 36,095 | | | 2,369 | |
| Less: imputed interest | (5,910) | | | (99) | |
| Total | $ | 30,185 | | | $ | 2,270 | |
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Interest payments for financing leases were $126 million, $111 million and $79 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, we have additional operating leases for commercial properties that have not yet commenced with future lease payments of approximately $38 million.
As of December 31, 2025, we were contingently liable for future ground lease payments related to certain tower obligations. These contingent obligations are not included in the above table as the amounts owed are contractually owed by CCI based on the subleasing arrangement. See Note 10 – Tower Obligations for further information.
On the UScellular Acquisition Date, we entered into a master license agreement to lease space on at least 2,100 towers being retained by UScellular and extended our tenancy term on approximately 600 additional towers where we are already leasing space from UScellular for 15 years post-closing. In addition, through the master license agreement, we leased space on approximately 1,800 additional UScellular towers on an interim basis for up to 30 months after the UScellular Acquisition Date. As a result of entering into the master license agreement, we recorded right-of use assets and lease liabilities of $1.0 billion each on the UScellular Acquisition Date, with a corresponding increase to both deferred tax liabilities and assets of $261 million.
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.