LEASES

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

LEASES

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 35 years as at December 31, 2023.

For the years ended December 31, 2023, 2022 and 2021, we incurred operating lease expenses of $131 million, $118 million and $95 million, respectively. Operating lease expenses are reported under Operating and administrative expense in the Consolidated Statements of Earnings.

For the years ended December 31, 2023, 2022 and 2021, operating lease payments to settle lease liabilities were $129 million, $123 million and $118 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, 2023		December 31, 2022
(millions of Canadian dollars, except lease term and discount rate)
Operating leases1
Operating lease right-of-use assets, net2	669		680
Operating lease liabilities - current3	98		87
Operating lease liabilities - long-term3	652		677
Total operating lease liabilities	750		764
Finance leases
Finance lease right-of-use assets, net4	287		62
Finance lease liabilities - current5	19		17
Finance lease liabilities - long-term5	264		39
Total finance lease liabilities	283		56
Weighted average remaining lease term
Operating leases	12 years		12 years
Finance leases	31 years		5 years
Weighted average discount rate
Operating leases	4.5	%	4.2	%
Finance leases	5.7	%	4.4	%

1Affiliate ROU assets, current lease liabilities and long-term lease liabilities as at December 31, 2023 were $42 million (December 31, 2022 - $47 million), $5 million (December 31, 2022 - $5 million) and $38 million (December 31, 2022 - $43 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 lease liabilities are reported under Other current liabilities 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 and long-term finance lease liabilities are reported under Current portion of long-term debt and Long-term debt in the Consolidated Statements of Financial Position.

As at December 31, 2023, our operating and finance lease liabilities are expected to mature as follows:

	Operating leases	Finance  leases
(millions of Canadian dollars)
2024	130	31
2025	120	25
2026	106	25
2027	96	18
2028	75	18
Thereafter	459	502
Total undiscounted lease payments	986	619
Less imputed interest	(236)	(336)
Total	750	283

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 3 month to 28 years as at December 31, 2023.

Year ended December 31,	2023	2022	2021
(millions of Canadian dollars)
Operating lease income	241	266	263
Variable lease income	299	321	333
Total lease income1	540	587	596

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

As at December 31, 2023, 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)
2024	225
2025	206
2026	201
2027	199
2028	201
Thereafter	1,612
Future lease payments	2,644

LEASES

LEASES

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 35 years as at December 31, 2023.

For the years ended December 31, 2023, 2022 and 2021, we incurred operating lease expenses of $131 million, $118 million and $95 million, respectively. Operating lease expenses are reported under Operating and administrative expense in the Consolidated Statements of Earnings.

For the years ended December 31, 2023, 2022 and 2021, operating lease payments to settle lease liabilities were $129 million, $123 million and $118 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, 2023		December 31, 2022
(millions of Canadian dollars, except lease term and discount rate)
Operating leases1
Operating lease right-of-use assets, net2	669		680
Operating lease liabilities - current3	98		87
Operating lease liabilities - long-term3	652		677
Total operating lease liabilities	750		764
Finance leases
Finance lease right-of-use assets, net4	287		62
Finance lease liabilities - current5	19		17
Finance lease liabilities - long-term5	264		39
Total finance lease liabilities	283		56
Weighted average remaining lease term
Operating leases	12 years		12 years
Finance leases	31 years		5 years
Weighted average discount rate
Operating leases	4.5	%	4.2	%
Finance leases	5.7	%	4.4	%

1Affiliate ROU assets, current lease liabilities and long-term lease liabilities as at December 31, 2023 were $42 million (December 31, 2022 - $47 million), $5 million (December 31, 2022 - $5 million) and $38 million (December 31, 2022 - $43 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 lease liabilities are reported under Other current liabilities 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 and long-term finance lease liabilities are reported under Current portion of long-term debt and Long-term debt in the Consolidated Statements of Financial Position.

As at December 31, 2023, our operating and finance lease liabilities are expected to mature as follows:

	Operating leases	Finance  leases
(millions of Canadian dollars)
2024	130	31
2025	120	25
2026	106	25
2027	96	18
2028	75	18
Thereafter	459	502
Total undiscounted lease payments	986	619
Less imputed interest	(236)	(336)
Total	750	283

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 3 month to 28 years as at December 31, 2023.

Year ended December 31,	2023	2022	2021
(millions of Canadian dollars)
Operating lease income	241	266	263
Variable lease income	299	321	333
Total lease income1	540	587	596

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

As at December 31, 2023, 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)
2024	225
2025	206
2026	201
2027	199
2028	201
Thereafter	1,612
Future lease payments	2,644