Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Lease, Cost

Under ASC 842, the components of lease cost are shown below. Lease costs for operating leases are recognized on a straight line basis and are reflected in the income statement based on the leased asset’s use. Lease costs for finance leases are reflected in depreciation and amortization and in net interest and other financial costs.

(Millions of dollars)	2022		2021		2020
Finance lease cost:
Amortization of right of use assets	$	81	$	78	$	72
Interest on lease liabilities	29		31		35
Operating lease cost	490		565		658
Variable lease cost	59		62		60
Short-term lease cost	772		446		649
Total lease cost	$	1,431	$	1,182	$	1,474

Assets and Liabilities Lessee

Supplemental consolidated balance sheet data related to leases were as follows:

	December 31,
(Millions of dollars)	2022			2021
Operating leases
Assets
Right of use assets	$	1,214		$	1,372
Liabilities
Operating lease liabilities	$	368		$	438
Long-term operating lease liabilities	841			927
Total operating lease liabilities	$	1,209		$	1,365
Weighted average remaining lease term (in years)	5.1			5.0
Weighted average discount rate	3.55		%	3.11		%
Finance leases
Assets
Property, plant and equipment, gross	$	818		$	815
Less accumulated depreciation	412			336
Property, plant and equipment, net	$	406		$	479
Liabilities
Debt due within one year	$	79		$	73
Long-term debt	451			525
Total finance lease liabilities	$	530		$	598
Weighted average remaining lease term (in years)	9.9			10.3
Weighted average discount rate	5.09		%	5.04		%

Operating & Finance Leases, Liability, Maturity

As of December 31, 2022, maturities of lease liabilities for operating lease obligations and finance lease obligations having initial or remaining non-cancellable lease terms in excess of one year are as follows:

(Millions of dollars)	Operating		Finance
2023	$	403	$	104
2024	308		87
2025	228		78
2026	140		75
2027	72		59
2028 and thereafter	172		268
Gross lease payments	1,323		671
Less: imputed interest	114		141
Total lease liabilities	$	1,209	$	530

Operating Lease, Lease Income

Lease revenues are included in sales and other operating revenues on the consolidated statements of income. Lease revenues were as follows:

(Millions of dollars)	2022		2021		2020
Operating leases:
Rental income	$	327	$	376	$	398
Sales-type leases:
Interest income (Sales-type rental revenue-fixed minimum)	46		—		—
Interest income (Revenue from variable lease payments)	16		—		—
Sales-type lease revenue	$	62	$	—	$	—

Sales-type Lease, Lease Income

Lease revenues are included in sales and other operating revenues on the consolidated statements of income. Lease revenues were as follows:

(Millions of dollars)	2022		2021		2020
Operating leases:
Rental income	$	327	$	376	$	398
Sales-type leases:
Interest income (Sales-type rental revenue-fixed minimum)	46		—		—
Interest income (Revenue from variable lease payments)	16		—		—
Sales-type lease revenue	$	62	$	—	$	—

Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity

The following is a schedule of minimum future rentals on the non-cancelable operating leases as of December 31, 2022:

(Millions of dollars)
2023	$	97
2024	95
2025	64
2026	37
2027	16
2028 and thereafter	21
Total minimum future rentals	$	330

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

Annual minimum undiscounted lease payment receipts under our sales-type leases were as follows as of December 31, 2022:

(Millions of dollars)
2023	$	169
2024	156
2025	146
2026	137
2027	128
2028 and thereafter	970
Total minimum future rentals	1,706
Less: present value discount	765
Lease receivables(a)	$	941
Current lease receivables(b)	$	98
Long-term lease receivables(c)	843
Unguaranteed residual assets	66
Total sales-type lease assets	$	1,007

(a)    This amount does not include the unguaranteed residual assets.

(b)    Presented in receivables, net on the consolidated balance sheets.

(c)    Presented in other noncurrent assets on the consolidated balance sheets.

Capital expenditures related to assets subject to sales-type lease arrangements were $27 million for the year ended December 31, 2022. These amounts are reflected as additions to property, plant and equipment in the consolidated statements of cash flows.

Schedule of Property Subject to or Available for Operating Lease

The following schedule summarizes our investment in assets held under operating lease by major classes as of December 31, 2022 and 2021:

	December 31,
(Millions of dollars)	2022		2021
Gathering and transportation	$	94	$	991
Processing and fractionation	973		867
Terminals	128		128
Land, building and other	10		15
Property, plant and equipment	1,205		2,001
Less accumulated depreciation	330		523
Total property, plant and equipment, net	$	875	$	1,478