LEASES (Tables)

12 Months Ended

Dec. 31, 2025

The components of lease cost for the years ended December 31, 2025, 2024 and 2023 were:


(in millions)	2025		2024		2023
Operating lease cost	$	88	$	89	$	94
Finance lease cost
Amortization of right-of-use assets	3		4		3
Interest on lease liabilities	1		1		1
Variable lease cost	40		54		45
Lease cost	$	132	$	148	$	143

The following table contains supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023:


(in millions)	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	102	$	100	$	115
Operating cash flows from finance leases	3		5		3
Financing cash flows from finance leases	1		2		1

Right-of-use operating lease assets obtained in exchange for lease obligations	36		64		66
Right-of-use finance lease assets obtained in exchange for lease obligations	4		1		15

Lease term and discount rates as of December 31, 2025 and 2024 were:


	December 31, 2025		December 31, 2024
Weighted-average remaining lease term (years)
Operating leases	5		6
Finance leases	7		8
Weighted-average discount rate
Operating leases	3.6	%	3.1	%
Finance leases	4.5	%	4.2	%

Supplemental balance sheet information related to leases as of December 31, 2025 and 2024 include:


(in millions)	2025		2024
Operating leases
Operating lease right-of-use assets	$	276	$	306

Accrued expenses and other current liabilities	$	81	$	80
Operating lease liabilities	223		243
Total operating lease liabilities	$	304	$	323

Finance leases
Property, plant and equipment, at cost	$	39	$	33
Accumulated depreciation	(18)		(15)
Property, plant and equipment, net	$	21	$	18

Current maturities of long-term debt and finance lease obligations	$	2	$	2
Long-term debt and finance lease obligations	21		19
Total finance lease liabilities	$	23	$	21

Maturities of operating and finance lease liabilities as of December 31, 2025 were:


(in millions)	Finance Leases		Operating Leases
2026	$	4	$	93
2027	4		77
2028	4		53
2029	4		34
2030	4		20
Thereafter	10		60
Total minimum lease payments	30		337
Less: imputed interest	(7)		(33)
Present value of lease liabilities	$	23	$	304

Maturities of operating and finance lease liabilities as of December 31, 2025 were:


(in millions)	Finance Leases		Operating Leases
2026	$	4	$	93
2027	4		77
2028	4		53
2029	4		34
2030	4		20
Thereafter	10		60
Total minimum lease payments	30		337
Less: imputed interest	(7)		(33)
Present value of lease liabilities	$	23	$	304

The components of lease revenue for the years ended December 31, 2025, 2024 and 2023 were:

The components of our net investment in sales-type leases as of December 31, 2025 and 2024 were:


(in millions)	2025		2024
Minimum lease payments	$	30	$	38
Unguaranteed residual values	—		(1)
Net investment in leases	$	30	$	37

Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2025 and 2024:

Maturities of sales-type and operating leases as of December 31, 2025 were:


(in millions)	Sales-type Leases1		Operating Leases
2026	$	15	$	9
2027	9		9
2028	5		6
2029	3		3
2030	—		1
Thereafter	—		—
Total minimum lease payments	$	32	$	28

1 Unamortized imputed interest on minimum lease payments was $2 million as of December 31, 2025

Maturities of sales-type and operating leases as of December 31, 2025 were:


(in millions)	Sales-type Leases1		Operating Leases
2026	$	15	$	9
2027	9		9
2028	5		6
2029	3		3
2030	—		1
Thereafter	—		—
Total minimum lease payments	$	32	$	28

1 Unamortized imputed interest on minimum lease payments was $2 million as of December 31, 2025

BAXTER INTERNATIONAL INC 10-K