Leases (Notes)

12 Months Ended

Dec. 31, 2025

Leases

For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term and

accretion of the lease liability, while finance leases include both an operating expense and an interest expense component. For

all leases with a term of 12 months or less, we recognize lease expense for these short-term leases on a straight-line basis over

the lease term.

We are a lessee for numerous operating leases, primarily related to real estate, transportation, and equipment. The vast

majority of our operating leases have remaining lease terms of 10 years or less, some of which include options to extend the

leases, and some of which include options to terminate the leases. We generally do not include renewal or termination options

in our assessment of the leases unless extension or termination for certain assets is deemed to be reasonably certain. The

accounting for some of our leases may require judgment, which includes determining whether a contract contains a lease,

determining the incremental borrowing rates to utilize in our net present value calculation of lease payments for lease

agreements which do not provide an implicit rate, and assessing the likelihood of renewal or termination options. We also have

some lease agreements with lease and non-lease components, which are generally accounted for as a single lease component.

For certain equipment leases, such as offshore vessels and drilling rigs, we account for the lease and non-lease components

separately.

The following tables illustrate the financial impact of our leases as of and for the years ended December 31, 2025,

2024, and 2023, along with other supplemental information about our existing leases:


	Year Ended December 31,
Millions of dollars	2025	2024	2023
Components of lease expense:
Finance lease cost:
Amortization of right-of-use assets	$47	$37	$30
Interest on lease liabilities	31	38	41
Operating lease cost	359	353	337
Short-term lease cost	41	42	35
Sublease income	(2)	(3)	(2)
Total lease cost	$476	$467	$441


	December 31,
Millions of dollars	2025	2024
Components of balance sheet:
Operating leases:
Operating lease right-of-use assets (non-current)	$938	$1,022
Current portion of operating lease liabilities	263	263
Operating lease liabilities (non-current)	712	798
Finance leases:
Other assets (non-current)	$161	$139
Other current liabilities	81	44
Other liabilities (non-current)	102	126


	Year Ended December 31,
Millions of dollars except years and percentages	2025	2024	2023
Other supplemental information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$394	$374	$354
Operating cash flows for finance leases	31	38	41
Financing cash flows for finance leases	48	33	37
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$281	$274	$487
Finance leases	74	57	64
Weighted-average remaining lease term:
Operating leases	7.3 years	7.9 years	8.2 years
Finance leases	3.8 years	4.6 years	5.3 years
Weighted-average discount rate for operating leases	5.4%	5.4%	5.3%

The following table summarizes the maturity of our operating and finance leases as of December 31, 2025:


Millions of dollars	Operating Leases	Finance Leases
2026	$315	$103
2027	199	59
2028	124	27
2029	99	14
2030	79	6
Thereafter	399	15
Total lease payments	1,215	224
Imputed interest	(240)	(41)
Total lease payments, net of imputed interest	$975	$183