|
16. Leases
We lease certain locomotives, freight cars, and other property for use in our rail operations.
The following are additional details related to our lease portfolio:
| |
|
|
Dec. 31, |
|
|
Dec. 31, |
|
| Millions |
Classification |
|
2021 |
|
|
2020 |
|
| Assets |
|
|
|
|
|
|
|
|
|
| Operating leases |
Operating lease assets |
|
$ |
1,787 |
|
|
$ |
1,610 |
|
| Finance leases |
Properties, net [a] |
|
|
366 |
|
|
|
370 |
|
| Total leased assets |
|
$ |
2,153 |
|
|
$ |
1,980 |
|
| Liabilities |
|
|
|
|
|
|
|
|
|
| Current |
|
|
|
|
|
|
|
|
|
| Operating |
Accounts payable and other current liabilities |
|
$ |
330 |
|
|
$ |
321 |
|
| Finance |
Debt due within one year |
|
|
92 |
|
|
|
109 |
|
| Noncurrent |
|
|
|
|
|
|
|
|
|
| Operating |
Operating lease liabilities |
|
|
1,429 |
|
|
|
1,283 |
|
| Finance |
Debt due after one year |
|
|
244 |
|
|
|
340 |
|
| Total lease liabilities |
|
$ |
2,095 |
|
|
$ |
2,053 |
|
| [a] |
Finance lease assets are recorded net of accumulated amortization of $687 million and $737 million as of December 31, 2021 and 2020, respectively. |
The lease cost components are classified as follows:
| Millions |
|
Dec 31, 2021 |
|
|
Dec 31, 2020 |
|
| Operating lease cost [a] |
|
$ |
303 |
|
|
$ |
317 |
|
| Short-term lease cost |
|
|
25 |
|
|
|
26 |
|
| Variable lease cost |
|
|
11 |
|
|
|
10 |
|
| Finance lease cost |
|
|
|
|
|
|
|
|
| Amortization of leased assets [b] |
|
|
69 |
|
|
|
66 |
|
| Interest on lease liabilities [c] |
|
|
20 |
|
|
|
27 |
|
| Net lease cost |
|
$ |
428 |
|
|
$ |
446 |
|
| [a] |
Operating lease cost is primarily reported in equipment and other rents in our Consolidated Statements of Income. |
| [b] |
Amortization of leased assets is reported in depreciation in our Consolidated Statements of Income. |
| [c] |
Interest on lease liabilities is reported in interest expense in our Consolidated Statements of Income. |
The following table presents aggregate lease maturities as of December 31, 2021:
| Millions |
|
Operating Leases |
|
|
Finance Leases |
|
|
Total |
|
| 2022 |
|
$ |
333 |
|
|
$ |
107 |
|
|
$ |
440 |
|
| 2023 |
|
|
293 |
|
|
|
81 |
|
|
|
374 |
|
| 2024 |
|
|
285 |
|
|
|
68 |
|
|
|
353 |
|
| 2025 |
|
|
285 |
|
|
|
45 |
|
|
|
330 |
|
| 2026 |
|
|
215 |
|
|
|
36 |
|
|
|
251 |
|
| After 2026 |
|
|
555 |
|
|
|
41 |
|
|
|
596 |
|
| Total lease payments |
|
$ |
1,966 |
|
|
$ |
378 |
|
|
$ |
2,344 |
|
| Less: Interest |
|
|
207 |
|
|
|
42 |
|
|
|
249 |
|
| Present value of lease liabilities |
|
$ |
1,759 |
|
|
$ |
336 |
|
|
$ |
2,095 |
|
The following table presents the weighted average remaining lease term and discount rate:
| |
|
Dec. 31, |
|
| |
|
2021 |
|
| Weighted-average remaining lease term (years) |
|
|
|
|
| Operating leases |
|
|
7.3 |
|
| Finance leases |
|
|
4.8 |
|
| Weighted-average discount rate (%) |
|
|
|
|
| Operating leases |
|
|
3.2 |
|
| Finance leases |
|
|
4.9 |
|
The following table presents other information related to our operating and finance leases for the years ended December 31:
| Millions |
|
2021 |
|
|
2020 |
|
| Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
|
|
| Operating cash flows from operating leases |
|
$ |
292 |
|
|
$ |
323 |
|
| Investing cash flows from operating leases |
|
|
27 |
|
|
|
30 |
|
| Operating cash flows from finance leases |
|
|
26 |
|
|
|
29 |
|
| Financing cash flows from finance leases |
|
|
106 |
|
|
|
113 |
|
| Leased assets obtained in exchange for finance lease liabilities |
|
|
- |
|
|
|
- |
|
| Leased assets obtained in exchange for operating lease liabilities |
|
|
442 |
|
|
|
93 |
|
|