LEASES

12 Months Ended

Dec. 31, 2025

Leases [Abstract]

LEASES

Leasing Activities – Lessee:

Lease arrangements with OWN Program participants: Under the OWN Program, the Company leases

equipment owned by participants. The Company accounts for these arrangements as a lease under Topic 842

whereby the Company is the lessee.

Lease arrangements with other parties: The Company, as a lessee, also leases properties, vehicles, certain

equipment used in its operations from parties not participating in the OWN Program, and aircraft under various

operating and finance leases.

The leases are noncancellable and expire on various terms through 2040. There are no material payments for

leases that have not yet commenced.

The tables below present financial information associated with the Company’s leases, as a lessee and including

the OWN Program, as of and for the years ended December 31, 2025, 2024, and 2023.

The following table presents the components of the Company’s ROU assets and liabilities related to leases

whereby the Company is the lessee and their classification in the consolidated balance sheets (In millions):


Component of Lease Balances	Balance Sheet Line Item	December 31, 2025	December 31, 2024
Assets:
Operating lease assets ..........................	Right of use assets, operating	$676	$569
Finance lease equipment assets ...........	Rental equipment, net	58	52
Finance lease property assets ..............	Property and other fixed assets, net	130	39
Total leased assets ..........................		$864	$660

Liabilities:
Operating lease liabilities, current .......	Current portion of operating lease liabilities	$69	$59
Finance lease liabilities, current ..........	Current portion of finance lease liabilities	19	17
Operating lease liabilities, long-term ..	Operating lease liabilities, net of current portion	655	555
Finance lease liabilities, long-term ......	Finance lease liabilities, net of current portion	169	71
Total lease liabilities ......................		$912	$702

The following table presents the components of the Company’s lease costs and the classification of such costs in

the consolidated statements of net income (In millions):


	Statements of Net Income	Years Ended December 31,
Component of Lease Cost	Line Item	2025	2024	2023
OWN Program lease payments (principal) .	OWN Program payouts	$714	$420	$209
Equipment and vehicle operating lease expense ....................................................	Direct operating costs	26	85	111
Real estate operating lease expense ............	Selling, general and administrative expenses	91	67	41
Finance lease expense:
Amortization of equipment leased assets ..................................................	Depreciation of rental equipment	11	20	21
Amortization of property leased assets ..	Selling, general and administrative expenses	5	–	–
Interest on lease liabilities .....................	Interest expense, net	9	12	9
Short-term lease cost ...................................	Selling, general and administrative expenses	3	1	2
Total lease expense .....................................		$859	$605	$393

The following table provides the supplemental cash flow information related to leases (In millions):


	Years Ended December 31,
	2025	2024	2023
Operating cash outflows from operating leases ..........................................	$116	$131	$143
Operating cash outflows from finance leases .............................................	7	8	6
Finance cash outflows from finance leases .................................................	17	27	20
Total .......................................................................................................	$140	$166	$169

The following table includes the weighted average lease terms and discount rates for operating and finance

leases (In millions):


	December 31, 2025	December 31, 2024
Weighted average remaining lease term (years):
Operating leases ....................................................................................................	9.83	10.73
Finance leases .......................................................................................................	10.73	7.67
Weighted average discount rate:
Operating leases ....................................................................................................	7.92%	8.49%
Finance leases .......................................................................................................	6.89%	7.38%

The following table includes a summary of right of use assets obtained in exchange for new lease obligations

for the years ended December 31, 2025 and 2024 (In millions):


	Years Ended December 31,
	2025	2024
Operating leases .........................................................................................................	$188	$228
Finance leases ............................................................................................................	135	57
Total ......................................................................................................................	$323	$285

The following table includes the future maturities of lease payments for operating leases and finance leases for

years subsequent to December 31, 2025 (In millions):


	Operating	Finance
2026 ...........................................................................................................................	$119	$31
2027 ...........................................................................................................................	115	24
2028 ...........................................................................................................................	113	28
2029 ...........................................................................................................................	107	24
2030 ...........................................................................................................................	99	24
Thereafter ...................................................................................................................	506	147
Total lease payments .............................................................................................	1,059	278
Less: liability accretion and imputed interest ............................................................	(335)	(90)
Total lease liabilities .............................................................................................	724	188
Less: current lease liabilities ......................................................................................	(69)	(19)
Total long-term lease liabilities ............................................................................	$655	$169

During the year ended December 31, 2024, the Company purchased fleet equipment previously under various

operating leases for $281 million, resulting in the derecognition of $155 million of operating lease right of use assets

and $156 million of operating lease liabilities, and purchased fleet equipment previously under various finance

leases for $118 million, resulting in the derecognition of $111 million of finance lease assets and $114 million of

finance lease liabilities. The Company’s purchases of leased equipment were not material during the years ended

December 31, 2025 and 2023.

Sale Leaseback Arrangements:

During the years ended December 31, 2025, 2024 and 2023, the Company recognized an aggregate gain on

various sales of properties of $1 million, $20 million, and $10 million, respectively, in connection with the sale

leaseback transactions. The gain on these transactions is included in other income on the consolidated statements of

net income. As of December 31, 2025 and 2024, the Company also had financing obligations included on the

consolidated balance sheets of $31 million and $34 million, respectively, in connection with sale leaseback

transactions where the sales price exceeded the fair value of the respective properties. The financing liability related

to sale leaseback transactions is being amortized over the respective lease terms as a reduction to rent expense

recorded within selling, general and administrative expenses on the consolidated statements of net income.

As of December 31, 2025 and 2024, the Company had financing obligations included on the consolidated

balance sheets of $39 million and $56 million, respectively, relating to arrangements that did not meet the criteria to

be accounted for as sale leaseback transactions, and $22 million and $30 million, respectively, relating to build-to-

suit lease arrangements where the underlying property and construction had not been completed and available for its

intended use. The Company will assess these build-to-suit arrangements to determine if they meet the criteria to be

accounted for as a sale leaseback transaction once construction is complete and the property is available for its

intended use. During the years ended December 31, 2025 and 2024, the Company satisfied its obligations under

certain agreements entered into during 2024 and 2023, resulting in the transactions qualifying as successful sale

leasebacks and the derecognition of $5 million and $36 million of financing obligations, respectively. During the

years ended December 31, 2025, 2024 and 2023, the Company made payments under these financing arrangements

of $19 million, $67 million, and $24 million, respectively.

The maturities of financing obligations that did not meet the criteria to be accounted for as sale leaseback

transactions as of December 31, are as follows (In millions):


2026 ......................................................................................................................................................	$7
2027 ......................................................................................................................................................	3
2028 ......................................................................................................................................................	4
2029 ......................................................................................................................................................	13
2030 ......................................................................................................................................................	–
Thereafter ..............................................................................................................................................	12
Total .................................................................................................................................................	$39