|
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 |
|
2022 |
|
|
2021 |
|
| Assets |
|
|
|
|
|
|
|
|
|
| Operating leases |
Operating lease assets |
|
$ |
1,672 |
|
|
$ |
1,787 |
|
| Finance leases |
Properties, net [a] |
|
|
310 |
|
|
|
366 |
|
| Total leased assets |
|
$ |
1,982 |
|
|
$ |
2,153 |
|
| Liabilities |
|
|
|
|
|
|
|
|
|
| Current |
|
|
|
|
|
|
|
|
|
| Operating |
Accounts payable and other current liabilities |
|
$ |
331 |
|
|
$ |
330 |
|
| Finance |
Debt due within one year |
|
|
67 |
|
|
|
92 |
|
| Noncurrent |
|
|
|
|
|
|
|
|
|
| Operating |
Operating lease liabilities |
|
|
1,300 |
|
|
|
1,429 |
|
| Finance |
Debt due after one year |
|
|
167 |
|
|
|
244 |
|
| Total lease liabilities |
|
$ |
1,865 |
|
|
$ |
2,095 |
|
| [a] |
Finance lease assets are recorded net of accumulated amortization of $658 million and $687 million as of December 31, 2022 and 2021, respectively. |
The lease cost components are classified as follows:
| Millions |
Dec 31, 2022 |
Dec 31, 2021 |
|
| Operating lease cost [a] |
|
$ |
338 |
|
|
$ |
303 |
|
| Short-term lease cost |
|
|
18 |
|
|
|
25 |
|
| Variable lease cost |
|
|
13 |
|
|
|
11 |
|
| Finance lease cost |
|
|
|
|
|
|
|
|
| Amortization of leased assets [b] |
|
|
52 |
|
|
|
69 |
|
| Interest on lease liabilities [c] |
|
|
12 |
|
|
|
20 |
|
| Net lease cost |
|
$ |
433 |
|
|
$ |
428 |
|
| [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, 2022:
| Millions |
Operating Leases |
Finance Leases |
Total |
|
| 2023 |
|
$ |
335 |
|
|
$ |
76 |
|
|
$ |
411 |
|
| 2024 |
|
|
318 |
|
|
|
63 |
|
|
|
381 |
|
| 2025 |
|
|
321 |
|
|
|
44 |
|
|
|
365 |
|
| 2026 |
|
|
248 |
|
|
|
35 |
|
|
|
283 |
|
| 2027 |
|
|
188 |
|
|
|
30 |
|
|
|
218 |
|
| After 2027 |
|
|
393 |
|
|
|
11 |
|
|
|
404 |
|
| Total lease payments |
|
$ |
1,803 |
|
|
$ |
259 |
|
|
$ |
2,062 |
|
| Less: Interest |
|
|
172 |
|
|
|
25 |
|
|
|
197 |
|
| Present value of lease liabilities |
|
$ |
1,631 |
|
|
$ |
234 |
|
|
$ |
1,865 |
|
The following table presents the weighted average remaining lease term and discount rate:
| |
Dec. 31, |
|
| |
|
2022 |
|
| Weighted-average remaining lease term (years) |
|
|
|
|
| Operating leases |
|
|
6.4 |
|
| Finance leases |
|
|
4.2 |
|
| Weighted-average discount rate (%) |
|
|
|
|
| Operating leases |
|
|
3.3 |
|
| Finance leases |
|
|
4.7 |
|
The following table presents other information related to our operating and finance leases for the years ended December 31:
| Millions |
|
2022 |
|
|
2021 |
|
| Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
|
|
| Operating cash flows from operating leases |
|
$ |
319 |
|
|
$ |
292 |
|
| Investing cash flows from operating leases |
|
|
31 |
|
|
|
27 |
|
| Operating cash flows from finance leases |
|
|
15 |
|
|
|
26 |
|
| Financing cash flows from finance leases |
|
|
91 |
|
|
|
106 |
|
| Leased assets obtained in exchange for finance lease liabilities |
|
|
- |
|
|
|
- |
|
| Leased assets obtained in exchange for operating lease liabilities |
|
|
173 |
|
|
|
442 |
|
|