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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 | | 2023 | | | 2022 | |
| Assets | | | | | | | | | |
| Operating leases | Operating lease assets | | $ | 1,643 | | | $ | 1,672 | |
| Finance leases | Properties, net [a] | | | 244 | | | | 310 | |
| Total leased assets | | $ | 1,887 | | | $ | 1,982 | |
| Liabilities | | | | | | | | | |
| Current | | | | | | | | | |
| Operating | Accounts payable and other current liabilities | | $ | 355 | | | $ | 331 | |
| Finance | Debt due within one year | | | 49 | | | | 67 | |
| Noncurrent | | | | | | | | | |
| Operating | Operating lease liabilities | | | 1,245 | | | | 1,300 | |
| Finance | Debt due after one year | | | 109 | | | | 167 | |
| Total lease liabilities | | $ | 1,758 | | | $ | 1,865 | |
| [a] | Finance lease assets are recorded net of accumulated amortization of $497 million and $658 million as of December 31, 2023 and 2022, respectively. |
The lease cost components are classified as follows:
| Millions | Dec 31, 2023 | Dec 31, 2022 | |
| Operating lease cost [a] | | $ | 369 | | | $ | 338 | |
| Short-term lease cost | | | 24 | | | | 18 | |
| Variable lease cost | | | 41 | | | | 13 | |
| Finance lease cost | | | | | | | | |
| Amortization of leased assets [b] | | | 38 | | | | 52 | |
| Interest on lease liabilities [c] | | | 8 | | | | 12 | |
| Net lease cost | | $ | 480 | | | $ | 433 | |
| [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, 2023:
| Millions | Operating Leases | Finance Leases | Total | |
| 2024 | | $ | 361 | | | $ | 55 | | | $ | 416 | |
| 2025 | | | 375 | | | | 42 | | | | 417 | |
| 2026 | | | 296 | | | | 35 | | | | 331 | |
| 2027 | | | 237 | | | | 30 | | | | 267 | |
| 2028 | | | 199 | | | | 11 | | | | 210 | |
| After 2028 | | | 300 | | | | - | | | | 300 | |
| Total lease payments | | $ | 1,768 | | | $ | 173 | | | $ | 1,941 | |
| Less: Interest | | | 168 | | | | 15 | | | | 183 | |
| Present value of lease liabilities | | $ | 1,600 | | | $ | 158 | | | $ | 1,758 | |
The following table presents the weighted average remaining lease term and discount rate:
| | Dec. 31, | |
| | | 2023 | |
| Weighted-average remaining lease term (years) | | | | |
| Operating leases | | | 5.8 | |
| Finance leases | | | 3.5 | |
| Weighted-average discount rate (%) | | | | |
| Operating leases | | | 3.6 | |
| Finance leases | | | 4.5 | |
The following table presents other information related to our operating and finance leases for the years ended December 31:
| Millions | | 2023 | | | 2022 | |
| Cash paid for amounts included in the measurement of lease liabilities | | | | | | | | |
| Operating cash flows from operating leases | | $ | 323 | | | $ | 319 | |
| Investing cash flows from operating leases | | | 33 | | | | 31 | |
| Operating cash flows from finance leases | | | 9 | | | | 15 | |
| Financing cash flows from finance leases | | | 65 | | | | 91 | |
| Leased assets obtained in exchange for finance lease liabilities | | | - | | | | - | |
| Leased assets obtained in exchange for operating lease liabilities | | $ | 241 | | | $ | 173 | |
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