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LEASES

12 Months Ended

Dec. 31, 2022

LESSEE

We incur operating lease expenses related primarily to real estate, pipelines, storage and equipment. Our operating leases have remaining lease terms of 1 month to 24 years as at December 31, 2022.

For the years ended December 31, 2022, 2021 and 2020, we incurred operating lease expenses of $118 million, $95 million and $107 million, respectively. Operating lease expenses are reported under Operating and administrative expense in the Consolidated Statements of Earnings.

For the years ended December 31, 2022, 2021 and 2020, operating lease payments to settle lease liabilities were $123 million, $118 million and $133 million, respectively. Operating lease payments are reported under Operating activities in the Consolidated Statements of Cash Flows.

Supplemental Statements of Financial Position Information


	December 31, 2022		December 31, 2021
(millions of Canadian dollars, except lease term and discount rate)
Operating leases1
Operating lease right-of-use assets, net2	680		645

Operating lease liabilities - current3	87		92
Operating lease liabilities - long-term3	677		612
Total operating lease liabilities	764		704

Finance leases
Finance lease right-of-use assets, net4	62		49

Finance lease liabilities - current5	17		13
Finance lease liabilities - long-term3	39		33
Total finance lease liabilities	56		46

Weighted average remaining lease term
Operating leases	12 years		12 years
Finance leases	5 years		7 years

Weighted average discount rate
Operating leases	4.2	%	4.1	%
Finance leases	4.4	%	3.8	%

1Affiliate ROU assets, current lease liabilities and long-term lease liabilities as at December 31, 2022 were $47 million (December 31, 2021 - $51 million), $5 million (December 31, 2021 - $5 million) and $43 million (December 31, 2021 - $47 million), respectively.

2Operating lease ROU assets are reported under Deferred amounts and other assets in the Consolidated Statements of Financial Position.

3Current operating lease liabilities and long-term operating and finance lease liabilities are reported under Accounts payable and other and Other long-term liabilities, respectively, in the Consolidated Statements of Financial Position.

4Finance lease ROU assets are reported under Property, plant and equipment, net in the Consolidated Statements of Financial Position.

5Current finance lease liabilities are reported under Current portion of long-term debt in the Consolidated Statements of Financial Position.

As at December 31, 2022, our operating and finance lease liabilities are expected to mature as follows:


	Operating leases	Finance leases
(millions of Canadian dollars)
2023	109	19
2024	110	16
2025	104	8
2026	90	8
2027	82	1
Thereafter	489	10
Total undiscounted lease payments	984	62
Less imputed interest	(220)	(6)
Total	764	56

LESSOR

We receive revenues from operating leases primarily related to natural gas and crude oil storage and processing facilities, rail cars, and wind power generation assets. Our operating leases have remaining lease terms of 1 month to 29 years as at December 31, 2022.


Year ended December 31,	2022	2021	2020
(millions of Canadian dollars)
Operating lease income	266	263	265
Variable lease income	321	333	361
Total lease income1	587	596	626

1Lease income is recorded under Transportation and other services in the Consolidated Statements of Earnings.

As at December 31, 2022, our future lease payments to be received under operating lease contracts where we are the lessor are as follows:


			Operating leases
(millions of Canadian dollars)
2023			227
2024			215
2025			204
2026			198
2027			201
Thereafter			1,832
Future lease payments			2,877

LEASES