Leases
The Company has operating leases for real estate, vehicles and equipment. Operating leases are included in operating lease right-of-use assets, operating lease liabilities - current, and operating lease liabilities in the Consolidated Balance Sheets. Amounts recognized for finance leases as of and for the years ended December 31, 2025 and 2024 were immaterial.
Lease costs incurred by lease type, and/or type of payment for the annual periods ending December 31 were as follows:
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| (in millions) | 2025 | | 2024 | | 2023 |
| Short-term lease cost | $ | 4 | | | $ | 2 | | | $ | 1 | |
| Operating lease cost | 52 | | | 50 | | | 55 | |
| Variable lease cost | 35 | | | 26 | | | 22 | |
| Total lease cost | $ | 91 | | | $ | 78 | | | $ | 78 | |
Other supplemental quantitative disclosures for the years ended December 31 are as follows:
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| (in millions) | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
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| Operating cash flows from operating leases | $ | 50 | | | $ | 50 | | | $ | 54 | |
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| Right-of-use assets obtained in exchange for operating lease liabilities | 27 | | | 82 | | | 42 | |
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| Weighted-average remaining lease term (in years) - operating leases | 6.48 | | 6.88 | | 6.28 |
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| Weighted-average discount rate - operating leases | 4.46 | % | | 4.11 | % | | 3.39 | % |
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Estimated undiscounted future lease payments under non-cancellable operating leases as of December 31, 2025, are as follows:
| | | | | | | |
| (in millions) | Operating Lease
Liabilities | | |
| 2026 | $ | 49 | | | |
| 2027 | 39 | | | |
| 2028 | 31 | | | |
| 2029 | 24 | | | |
| 2030 | 18 | | | |
| Thereafter | 63 | | | |
| Total undiscounted future cash flows | 224 | | | |
| Less: imputed interest | 32 | | | |
| Present value of future cash flows | $ | 192 | | | |
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.