Leases

12 Months Ended

Dec. 31, 2024

We have leases primarily for facilities, vehicles, and equipment.

The amounts recorded on the Consolidated Balance Sheets as of December 31, 2024 and 2023 related to our lease agreements are as follows (in millions):


		December 31,
Leases	Classification	2024		2023
Assets
Operating lease ROU assets, net	Operating lease assets, net	$	1,388	$	1,336
Finance lease assets, net	Property, plant and equipment, net	96		80
Total leased assets		$	1,484	$	1,416
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	237	$	224
Finance	Current portion of long-term obligations	28		26
Noncurrent
Operating	Long-term operating lease liabilities, excluding current portion	1,207		1,163
Finance	Long-term obligations, excluding current portion	72		57
Total lease liabilities		$	1,544	$	1,470

The components of lease expense are as follows (in millions):


	Year Ended December 31,
Lease Cost	2024		2023		2022
Operating lease cost	$	350	$	305	$	282
Short-term lease cost	19		20		16
Variable lease cost	135		113		96
Finance lease cost
Amortization of leased assets	25		19		12
Interest on lease liabilities	5		4		2
Sublease income	(5)		(6)		(5)
Net lease cost	$	529	$	455	$	403

The future lease commitments under our leases at December 31, 2024 are as follows (in millions):


Years Ending December 31,	Operating leases		Finance leases (1)		Total
2025	$	333	$	33	$	366
2026	298		27		325
2027	253		19		272
2028	207		12		219
2029	160		6		166
Thereafter	587		27		614
Future lease payments	1,838		124		1,962
Less: Interest	394		24		418
Present value of lease liabilities	$	1,444	$	100	$	1,544

(1) Amounts are included in the scheduled maturities of long-term obligations in Note 18, "Long-Term Obligations".

As of December 31, 2024, operating lease payments for leases that have not yet commenced totaled $41 million, which primarily includes the synthetic lease arrangements discussed below. These operating leases will commence in the next 21 months with lease terms of 3 to 15 years. Most of these leases have not commenced because the assets are in the process of being constructed.

Synthetic Lease Arrangements

In the fourth quarter of 2024, we entered into two synthetic leases to finance the construction of salvage yard facilities, with an aggregate estimated cost of approximately $100 million. These leases have an aggregate future lease commitment of approximately $35 million as of December 31, 2024. The leases will commence upon completion of construction of the facilities which are expected to be in the later part of 2026. Each lease term is five years after commencement. At the end of the leases' terms, we will be required to purchase the facilities or, in the event that option is not elected, to request to extend the leases, or vacate the property and relocate. Upon each lease commencement, the lease classification, right-of-use asset, and lease liability will be determined and recorded. Each lease arrangement contains a residual value guarantee of 100% of the total construction cost. The synthetic leases contain covenants that are consistent with our Senior Unsecured Credit Agreement. See Note 18, "Long-Term Obligations" for further information on our Senior Unsecured Credit Agreement.

Other information related to leases is as follows:


	December 31,
Lease Term and Discount Rate	2024		2023
Weighted-average remaining lease term (years)
Operating leases	7.7		8.2
Finance leases	7.2		6.7
Weighted-average discount rate
Operating leases	5.92	%	6.00	%
Finance leases	5.06	%	4.83	%


	Year Ended December 31,
Supplemental cash flows information (in millions)	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	328	$	299	$	284
Financing cash outflows from finance leases	28		19		14
Leased assets obtained in exchange for finance lease liabilities	49		49		15
Leased assets obtained in exchange for operating lease liabilities	384		310		159