Leases

12 Months Ended

Dec. 31, 2023

LEASES

Our leased assets consist primarily of LNG vessels leased under 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 certain of our vessel charters, tug vessels and marine equipment, 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):


		December 31,

	Consolidated Balance Sheets Location	2023		2022
Right-of-use assets—Operating	Operating lease assets	$	2,641	$	2,625
Right-of-use assets—Financing	Property, plant and equipment, net of accumulated depreciation	469		511
Total right-of-use assets		$	3,110	$	3,136

Current operating lease liabilities	Current operating lease liabilities	$	655	$	616
Current finance lease liabilities	Other current liabilities	35		28
Non-current operating lease liabilities	Operating lease liabilities	1,971		1,971
Non-current finance lease liabilities	Finance lease liabilities	467		494
Total lease liabilities		$	3,128	$	3,109

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	Year Ended December 31,
			2023		2022		2021
Operating lease cost (a)	Operating costs and expenses (1)		$	783	$	828	$	621
Finance lease cost:
Amortization of right-of-use assets	Depreciation and amortization expense		50		12		3
Interest on lease liabilities	Interest expense, net of capitalized interest		35		14		9

Total lease cost			$	868	$	854	$	633

(a) Included in operating lease cost:
Short-term lease costs			$	33	$	122	$	139
Variable lease costs			17		18		21

(1)Presented in the appropriate line item within operating costs and expenses, consistent with the nature of the asset under lease.

Future annual minimum lease payments for operating and finance leases as of December 31, 2023 are as follows (in millions):


Years Ending December 31,	Operating Leases		Finance Leases
2024	$	752	$	67
2025	612		72
2026	480		75
2027	383		77
2028	228		73
Thereafter	638		355
Total lease payments (1)	3,093		719
Less: Interest	(467)		(217)
Present value of lease liabilities	$	2,626	$	502

(1)Does not include approximately $3.8 billion of legally binding minimum payments for vessel charters executed as of December 31, 2023 that will commence in future periods with fixed minimum lease terms of up to 15 years.

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


	December 31, 2023		December 31, 2022
	Operating Leases	Finance Leases	Operating Leases	Finance Leases
Weighted-average remaining lease term (in years)	6.3	9.7	5.9	10.6
Weighted-average discount rate (1)	4.7%	7.7%	4.2%	7.8%

(1)The weighted average discount rate is impacted by certain finance leases that 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):


	Year Ended December 31,
	2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	720	$	713	$	483
Operating cash flows from finance leases	35		14		10
Financing cash flows from finance leases	28		7		—
Right-of-use assets obtained in exchange for operating lease liabilities	646		1,220		1,736
Right-of-use assets obtained in exchange for finance lease liabilities (1)	8		473		—

(1) Includes $88 million reclassified from operating leases to finance leases during the year ended December 31, 2022 as a result of modification of the underlying vessel charters.

LNG Vessel Subcharters

We sublease certain LNG vessels under charter to third parties while retaining our existing obligation to the original lessor. All of our sublease arrangements have been assessed as operating leases. The following table shows the sublease income recognized in other revenues on our Consolidated Statements of Operations (in millions):


	Year Ended December 31,
		2023		2022		2021
Fixed income		$	446	$	371	$	72
Variable income		57		79		37
Total sublease income		$	503	$	450	$	109

Future annual minimum sublease payments to be received from LNG vessel subcharters as of December 31, 2023 are as follows (in millions):


Years Ending December 31,	Sublease Payments
2024	$	158
2025	5




Total sublease payments	$	163