XPO, Inc.XPO

XPO, Inc. Leases Disclosure

10-KFiled Feb 5, 20262 min read
Leases
Most of our leases are real estate leases. In addition, we lease trucks, trailers and material handling equipment.
The components of our lease expense were as follows:
Years Ended December 31,
(In millions)202520242023
Operating lease cost$225 $213 $199 
Short-term lease cost38 39 47 
Variable lease cost25 33 27 
Total operating lease cost
$288 $285 $273 
Finance lease cost:
Amortization of leased assets
$60 $61 $59 
Interest on lease liabilities
8 8 6 
Total finance lease cost
$68 $69 $65 
Total lease cost$356 $354 $338 
Supplemental balance sheet information related to leases was as follows:
December 31,
(In millions)20252024
Operating leases:
Operating lease assets$777 $727 
Short-term operating lease liabilities$166 $127 
Operating lease liabilities611 603 
Total operating lease liabilities
$777 $730 
Finance leases:
Property and equipment, gross$471 $408 
Accumulated depreciation(235)(205)
Property and equipment, net
$236 $203 
Short-term borrowings and current maturities of long-term debt$54 $52 
Long-term debt195 158 
Total finance lease liabilities
$248 $210 
Weighted-average remaining lease term:
Operating leases
6 years7 years
Finance leases
7 years8 years
Weighted-average discount rate:
Operating leases
5.46 %5.47 %
Finance leases
3.88 %3.69 %
Supplemental cash flow information related to leases was as follows:
Years Ended December 31,
(In millions)202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$247 $216 $201 
Operating cash flows for finance leases
8 8 6 
Financing cash flows for finance leases
63 72 68 
Leased assets obtained in exchange for new lease obligations:
Operating leases
220 207 118 
Finance leases
80 47 94 
Net operating lease activity, including the reduction of the operating lease asset and the accretion of the operating lease liability, are reflected in operating activities on our Consolidated Statements of Cash Flows.
Maturities of lease liabilities as of December 31, 2025 were as follows:
(In millions)Finance LeasesOperating Leases
2026$62 $204 
202759 188 
202846 145 
202936 105 
203028 78 
Thereafter63 220 
Total lease payments
294 941 
Less: interest(45)(163)
Present value of lease liabilities
$248 $777 
As of December 31, 2025, we had additional operating leases that have not yet commenced with future undiscounted lease payments of $75 million. These operating leases will commence in 2026 with initial lease terms of 4 years to 15 years.

Historical Timeline

Fiscal YearFiled
2025Feb 5, 2026Showing above
2024Feb 7, 2025
2023Feb 8, 2024
2022Feb 13, 2023
2021Feb 16, 2022
2020Feb 12, 2021
2019Feb 10, 2020

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.

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