Leases

9 Months Ended

Sep. 30, 2021

LEASES

Our leased assets consist primarily of LNG vessel time charters (“vessel charters”) and additionally include tug vessels, office space and facilities and land sites. All of our leases are classified as operating leases except for our tug vessels supporting the Corpus Christi LNG Terminal, which are classified as finance leases.

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Consolidated Balance Sheets (in millions):



		September 30,		December 31,
	Consolidated Balance Sheets Location	2021		2020
Right-of-use assets—Operating	Operating lease assets	$	2,064	$	759
Right-of-use assets—Financing	Property, plant and equipment, net of accumulated depreciation	51		53
Total right-of-use assets		$	2,115	$	812

Current operating lease liabilities	Current operating lease liabilities	$	458	$	161
Current finance lease liabilities	Other current liabilities	2		2
Non-current operating lease liabilities	Operating lease liabilities	1,590		597
Non-current finance lease liabilities	Finance lease liabilities	57		57
Total lease liabilities		$	2,107	$	817

The following table shows the classification and location of our lease costs on our Consolidated Statements of Operations (in millions):


	Consolidated Statements of Operations Location	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020
Operating lease cost (a)	Operating costs and expenses (1)	$	145	$	77	$	441	$	316
Finance lease cost:
Amortization of right-of-use assets	Depreciation and amortization expense	—		—		2		2
Interest on lease liabilities	Interest expense, net of capitalized interest	2		2		7		7

Total lease cost		$	147	$	79	$	450	$	325

(a) Included in operating lease cost:
Short-term lease costs		$	22	$	9	$	103	$	60
Variable lease costs		7		3		20		12

(1)Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.

Future annual minimum lease payments for operating and finance leases as of September 30, 2021 are as follows (in millions):


Years Ending December 31,	Operating Leases (1)		Finance Leases
2021	$	139	$	3
2022	515		10
2023	479		10
2024	433		10
2025	243		10
Thereafter	510		127
Total lease payments	2,319		170
Less: Interest	(271)		(111)
Present value of lease liabilities	$	2,048	$	59

(1)Does not include $758 million of legally binding minimum lease payments primarily for vessel charters which were executed as of September 30, 2021 but will commence in future periods primarily in the next year and have fixed minimum lease terms of up to seven years.

The following table shows the weighted-average remaining lease term and the weighted-average discount rate for our operating leases and finance leases:


	September 30, 2021		December 31, 2020
	Operating Leases	Finance Leases	Operating Leases	Finance Leases
Weighted-average remaining lease term (in years)	5.9	16.9	8.2	17.7
Weighted-average discount rate (1)	3.6%	16.2%	5.4%	16.2%

(1)The finance leases commenced prior to the adoption of the current leasing standard under GAAP. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.

The following table includes other quantitative information for our operating and finance leases (in millions):


	Nine Months Ended September 30,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	331	$	226
Operating cash flows used in finance leases	7		8

Right-of-use assets obtained in exchange for operating lease liabilities	1,575		412

LNG Vessel Subcharters

From time to time, we sublease certain LNG vessels under charter to third parties while retaining our existing obligation to the original lessor. As of both September 30, 2021 and December 31, 2020, we had no future minimum sublease payments to be received from LNG vessel subcharters. The following table shows the sublease income recognized in other revenues on our Consolidated Statements of Operations (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Fixed income	$	17	$	9	$	28	$	61
Variable income	15		1		21		24
Total sublease income	$	32	$	10	$	49	$	85