v3.26.1
Lessee
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Lessee Lessee
Operating Leases
We have operating leases for real estate and vehicles in our domestic and international operations, and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to thirty-three years and a variety of renewal and/or termination options. The components of lease expense are as follows:
Year Ended December 31,
202520242023
Operating lease expense$113 $70 $83 
Short-term lease expense16 14 16 
Variable lease expense(1)
61 57 53 
Sublease income(1)(1)(1)
Total Lease expense$189 $140 $151 
_____________
(1)Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.
As of December 31, 2025, we had no material operating leases that had not yet commenced.
Operating lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:
December 31,
20252024
Other long-term assets(1)
$311 $179 
Accrued expenses and other current liabilities$64 $45 
Other long-term liabilities263 143 
Total Operating lease liabilities$327 $188 
_____________
(1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating. Accordingly, we remeasured the right of use asset and the corresponding lease liability.
Supplemental information related to operating leases is as follows:
Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows$113 $72 $91 
Right-of-use assets obtained in exchange for new lease liabilities (1)
$60 $65 $23 
Weighted-average remaining lease term7 years4 years4 years
Weighted-average discount rate(2)
19.29 %7.70 %6.07 %
_____________
(1)Includes the impact of new leases as well as remeasurements and modifications to existing leases.
(2)Increase in 2025 rate reflects the increase in the Company's incremental borrowing rate, as well as the remeasurement of the leases associated with the Lexmark Acquisition.
Maturities and additional information related to operating lease liabilities are as follows:
December 31, 2025
12 months$122 
24 months96 
36 months77 
48 months60 
60 months45 
Thereafter296 
Total Lease payments696 
Less: Imputed interest369 
Total Operating lease liabilities$327 
Finance Leases
Xerox has finance leases for equipment in the U.S. and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S. These leases have remaining maturities up to six years.
The lease expense associated with our finance leases was $13, $13, and $8 for the three years ended December 31, 2025, 2024 or 2023, respectively.
As of December 31, 2025, we had no additional financing leases that had not yet commenced.
Finance lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:
December 31,
20252024
Land, buildings and equipment, net(1)
$11 $55 
Accrued expenses and other current liabilities$5 $15 
Other long-term liabilities3 38 
Total Finance lease liabilities$8 $53 
____________
(1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating. Accordingly, we remeasured the right of use asset and the corresponding lease liability.
Supplemental information related to finance leases is as follows:
Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities$13 $12 $8 
Finance lease assets obtained in exchange for new lease liabilities (1)
$— $42 $7 
Weighted-average remaining lease term2 years4 Years2 Years
Weighted-average discount rate9.45 %10.53 %7.28 %
_____________
(1)Includes the impact of new leases as well as remeasurements and modifications to existing leases.
Maturities and additional information related to finance lease liabilities are as follows:
December 31, 2025
12 months$6 
24 months2 
36 months1 
48 months— 
60 months— 
Thereafter— 
Total Lease payments9 
Less: Imputed interest1 
Total Finance Lease Liabilities$8 
Lessee Lessee
Operating Leases
We have operating leases for real estate and vehicles in our domestic and international operations, and for certain equipment in our domestic operations. Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations. Our leases have remaining terms of up to thirty-three years and a variety of renewal and/or termination options. The components of lease expense are as follows:
Year Ended December 31,
202520242023
Operating lease expense$113 $70 $83 
Short-term lease expense16 14 16 
Variable lease expense(1)
61 57 53 
Sublease income(1)(1)(1)
Total Lease expense$189 $140 $151 
_____________
(1)Variable lease expense is related to our leased real estate for offices and warehouses and primarily includes labor and operational costs, as well as taxes and insurance.
As of December 31, 2025, we had no material operating leases that had not yet commenced.
Operating lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:
December 31,
20252024
Other long-term assets(1)
$311 $179 
Accrued expenses and other current liabilities$64 $45 
Other long-term liabilities263 143 
Total Operating lease liabilities$327 $188 
_____________
(1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating. Accordingly, we remeasured the right of use asset and the corresponding lease liability.
Supplemental information related to operating leases is as follows:
Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities - Operating cash flows$113 $72 $91 
Right-of-use assets obtained in exchange for new lease liabilities (1)
$60 $65 $23 
Weighted-average remaining lease term7 years4 years4 years
Weighted-average discount rate(2)
19.29 %7.70 %6.07 %
_____________
(1)Includes the impact of new leases as well as remeasurements and modifications to existing leases.
(2)Increase in 2025 rate reflects the increase in the Company's incremental borrowing rate, as well as the remeasurement of the leases associated with the Lexmark Acquisition.
Maturities and additional information related to operating lease liabilities are as follows:
December 31, 2025
12 months$122 
24 months96 
36 months77 
48 months60 
60 months45 
Thereafter296 
Total Lease payments696 
Less: Imputed interest369 
Total Operating lease liabilities$327 
Finance Leases
Xerox has finance leases for equipment in the U.S. and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S. These leases have remaining maturities up to six years.
The lease expense associated with our finance leases was $13, $13, and $8 for the three years ended December 31, 2025, 2024 or 2023, respectively.
As of December 31, 2025, we had no additional financing leases that had not yet commenced.
Finance lease ROU assets, net and operating lease liabilities were reported in the Consolidated Balance Sheets as follows:
December 31,
20252024
Land, buildings and equipment, net(1)
$11 $55 
Accrued expenses and other current liabilities$5 $15 
Other long-term liabilities3 38 
Total Finance lease liabilities$8 $53 
____________
(1) During 2025, the Company modified a lease agreement for electric vehicles, which resulted in a change in the lease classification from financing to operating. Accordingly, we remeasured the right of use asset and the corresponding lease liability.
Supplemental information related to finance leases is as follows:
Year Ended December 31,
202520242023
Cash paid for amounts included in the measurement of lease liabilities$13 $12 $8 
Finance lease assets obtained in exchange for new lease liabilities (1)
$— $42 $7 
Weighted-average remaining lease term2 years4 Years2 Years
Weighted-average discount rate9.45 %10.53 %7.28 %
_____________
(1)Includes the impact of new leases as well as remeasurements and modifications to existing leases.
Maturities and additional information related to finance lease liabilities are as follows:
December 31, 2025
12 months$6 
24 months2 
36 months1 
48 months— 
60 months— 
Thereafter— 
Total Lease payments9 
Less: Imputed interest1 
Total Finance Lease Liabilities$8